Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 02, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | FATE THERAPEUTICS INC | ||
Entity Central Index Key | 1,434,316 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Trading Symbol | FATE | ||
Entity Public Float | $ 122,330,000 | ||
Entity Common Stock, Shares Outstanding | 52,769,156 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 88,952 | $ 88,609 |
Short-term investments and related maturity receivables | 11,997 | 3,503 |
Prepaid expenses and other current assets | 1,647 | 1,211 |
Total current assets | 102,596 | 93,323 |
Property and equipment, net | 2,550 | 1,579 |
Restricted cash | 122 | 122 |
Other assets | 24 | 24 |
Total assets | 105,292 | 95,048 |
Current liabilities: | ||
Accounts payable | 1,678 | 934 |
Accrued expenses | 7,254 | 3,957 |
Current portion of deferred rent | 12 | 4 |
Current portion of deferred revenue | 2,105 | 2,105 |
Long–term debt, current portion | 8,187 | |
Total current liabilities | 11,049 | 15,187 |
Deferred rent | 1,347 | 101 |
Deferred revenue | 724 | 2,829 |
Accrued expenses | 175 | 1,276 |
Long–term debt, net of current portion | 14,808 | 2,501 |
Commitments and contingencies (Note 5) | ||
Stockholders’ Equity: | ||
Preferred stock, $0.001 par value; authorized shares—5,000,000 at December 31, 2017 and December 31, 2016; 2,819,549 Class A convertible preferred shares issued and outstanding at December 31, 2017 and December 31, 2016 | 3 | 3 |
Common stock, $0.001 par value; authorized shares—150,000,000 at December 31, 2017 and December 31, 2016; issued and outstanding—52,648,601 at December 31, 2017 and 41,386,506 at December 31, 2016 | 53 | 41 |
Additional paid–in capital | 295,934 | 248,957 |
Accumulated other comprehensive loss | (3) | (1) |
Accumulated deficit | (218,798) | (175,846) |
Total stockholders’ equity | 77,189 | 73,154 |
Total liabilities and stockholders’ equity | $ 105,292 | $ 95,048 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 150,000,000 | 150,000,000 |
Common stock issued | 52,648,601 | 41,386,506 |
Common stock, outstanding shares | 52,648,601 | 41,386,506 |
Class A Convertible Preferred Shares | ||
Preferred stock, issued shares | 2,819,549 | 2,819,549 |
Preferred stock, outstanding shares | 2,819,549 | 2,819,549 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Collaboration revenue | $ 4,106 | $ 4,402 | $ 2,431 |
Operating expenses: | |||
Research and development | 34,358 | 26,452 | 19,861 |
General and administrative | 11,873 | 9,913 | 10,352 |
Total operating expenses | 46,231 | 36,365 | 30,213 |
Loss from operations | (42,125) | (31,963) | (27,782) |
Other income (expense): | |||
Interest income | 559 | 138 | 10 |
Interest expense | (1,268) | (1,637) | (2,220) |
Loss on extinguishment of debt | (118) | ||
Total other expense, net | (827) | (1,499) | (2,210) |
Net loss | (42,952) | (33,462) | (29,992) |
Other comprehensive loss: | |||
Unrealized loss on available-for-sale securities, net | (2) | (1) | |
Comprehensive loss | $ (42,954) | $ (33,463) | $ (29,992) |
Net loss per common share, basic and diluted | $ (1.02) | $ (1.05) | $ (1.18) |
Weighted-average common shares used to compute basic and diluted net loss per share | 41,982,167 | 31,754,140 | 25,484,262 |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Convertible Preferred Stock |
Balance at Dec. 31, 2014 | $ 28,340 | $ 21 | $ 140,711 | $ (112,392) | ||
Balance (in shares) at Dec. 31, 2014 | 20,569,399 | |||||
Exercise of stock options, net of issuance costs | 420 | 420 | ||||
Exercise of stock options, net of issuance costs (in shares) | 227,215 | |||||
Repurchase liability for unvested equity awards | 44 | 44 | ||||
Stock–based compensation | 2,400 | 2,400 | ||||
Senior executive incentive bonuses paid in common stock | 97 | 97 | ||||
Senior executive incentive bonuses paid in common stock (in Shares) | 19,956 | |||||
Public offering of common stock, net of offering costs | 32,149 | $ 7 | 32,142 | |||
Public offering of common stock, net of offering costs (in shares) | 6,900,000 | |||||
Issuance of common stock to collaboration partner | 4,580 | $ 1 | 4,579 | |||
Issuance of common stock to collaboration partner (in Shares) | 1,000,000 | |||||
Net loss | (29,992) | (29,992) | ||||
Balance at Dec. 31, 2015 | 38,038 | $ 29 | 180,393 | (142,384) | ||
Balance (in shares) at Dec. 31, 2015 | 28,716,570 | |||||
Exercise of stock options, net of issuance costs | 187 | 187 | ||||
Exercise of stock options, net of issuance costs (in shares) | 136,368 | |||||
Repurchase liability for unvested equity awards | 1 | 1 | ||||
Stock–based compensation | 3,184 | 3,184 | ||||
Private placement issuances of common stock, net of offering costs | 28,797 | $ 12 | 28,785 | |||
Private placement issuances of common stock, net of offering costs (in shares) | 12,486,837 | |||||
Private placement issuance of Series A convertible preferred stock, net of offering costs | 36,289 | 36,286 | $ 3 | |||
Private placement issuance of Series A convertible preferred stock, net of offering costs (in shares) | 2,819,549 | |||||
Senior executive incentive bonuses paid in common stock | 121 | 121 | ||||
Senior executive incentive bonuses paid in common stock (in Shares) | 46,731 | |||||
Unrealized loss on short-term investments | (1) | $ (1) | ||||
Net loss | (33,462) | (33,462) | ||||
Balance at Dec. 31, 2016 | 73,154 | $ 41 | 248,957 | (1) | (175,846) | $ 3 |
Balance (in shares) at Dec. 31, 2016 | 41,386,506 | 2,819,549 | ||||
Exercise of stock options, net of issuance costs | 226 | 226 | ||||
Exercise of stock options, net of issuance costs (in shares) | 83,220 | |||||
Issuance of common stock upon vesting of restricted stock units | $ 1 | (1) | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 225,125 | |||||
Stock–based compensation | 3,606 | 3,606 | ||||
Issuance of warrants for common stock | 217 | 217 | ||||
Private placement issuances of common stock, net of offering costs | (13) | (13) | ||||
Private placement issuance of Series A convertible preferred stock, net of offering costs | (26) | (26) | ||||
Public offering of common stock, net of offering costs | 42,979 | $ 11 | 42,968 | |||
Public offering of common stock, net of offering costs (in shares) | 10,953,750 | |||||
Unrealized loss on short-term investments | (2) | (2) | ||||
Net loss | (42,952) | (42,952) | ||||
Balance at Dec. 31, 2017 | $ 77,189 | $ 53 | $ 295,934 | $ (3) | $ (218,798) | $ 3 |
Balance (in shares) at Dec. 31, 2017 | 52,648,601 | 2,819,549 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (42,952) | $ (33,462) | $ (29,992) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Depreciation and amortization | 971 | 881 | 687 |
Stock–based compensation | 3,606 | 3,184 | 2,400 |
Amortization of debt discounts and debt issuance costs | 81 | 139 | 176 |
Amortization of premiums and discounts on investments, net | (25) | 171 | |
Noncash interest expense | 321 | 492 | 651 |
Deferred rent | 1,085 | (7) | (24) |
Deferred revenue | (2,105) | (2,401) | 7,335 |
Loss on extinguishment of debt | 30 | ||
Changes in assets and liabilities: | |||
Prepaid expenses and other assets | (428) | (381) | (107) |
Accounts payable and accrued expenses | 2,511 | 1,561 | 477 |
Net cash used in operating activities | (36,905) | (29,823) | (18,397) |
Cash flows from investing activities | |||
Proceeds from sale of property and equipment | 18 | ||
Purchase of property and equipment | (1,725) | (457) | (1,498) |
Purchases of short-term investments | (39,971) | (19,675) | |
Maturities of short-term investments | 31,500 | 16,000 | |
Net cash used in investing activities | (10,196) | (4,114) | (1,498) |
Cash flows from financing activities | |||
Issuance of common stock from equity incentive plans, net of repurchases and issuance costs | 205 | 186 | 420 |
Proceeds from public offering of common stock, net of issuance costs | 43,206 | 32,149 | |
Proceeds from sale of common stock to collaboration partner | 4,580 | ||
Proceeds from long–term debt | 15,000 | ||
Payments on long–term debt | (10,764) | (7,689) | (1,546) |
Payments for the issuance of debt | (10) | ||
Net cash provided by financing activities | 47,444 | 57,737 | 35,603 |
Net change in cash, cash equivalents and restricted cash | 343 | 23,800 | 15,708 |
Cash, cash equivalents and restricted cash at beginning of the period | 88,731 | 64,931 | 49,223 |
Cash, cash equivalents and restricted cash at end of the period | 89,074 | 88,731 | 64,931 |
Supplemental disclosure of cash flow information | |||
Interest paid | 2,314 | 1,067 | $ 1,353 |
Supplemental schedule of noncash investing and financing activities | |||
Issuance of warrants for common stock in connection with long–term debt | 217 | ||
Common Stock | |||
Cash flows from financing activities | |||
Proceeds from private placement issuances of stock, net of issuance costs | (65) | 28,849 | |
Preferred Stock | |||
Cash flows from financing activities | |||
Proceeds from private placement issuances of stock, net of issuance costs | $ (128) | $ 36,391 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
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 dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders. The Company’s cell therapy pipeline is comprised of NK- and T-cell immuno-oncology programs, including off-the-shelf engineered product candidates derived from clonal master iPSC lines, and immuno-regulatory programs, including product candidates to prevent life-threatening complications in patients undergoing hematopoietic cell transplantation and to promote immune tolerance in patients with autoimmune disease. Its adoptive cell therapy programs are based on the Company’s novel ex vivo As of December 31, 2017, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure and has not generated any revenues from any sales of its therapeutic products. To date, the Company’s revenues have been derived from collaboration agreements and government grants. Public Equity Offerings In May 2015, the Company completed a public offering of common stock in which investors purchased 6,900,000 shares of its common stock at an offering price of $5.00 per share. Gross proceeds from the offering were $34.5 million. After giving effect to costs related to the offering, total net proceeds from the offering were $32.1 million. In December 2017, the Company completed a public offering of common stock in which investors purchased 10,953,750 shares of its common stock at a price of $4.20 per share under the Company’s shelf registration statement. Gross proceeds from the offering were $46.0 million, and after giving effect to an estimated $3.0 million of costs related to the offering (of which $0.2 million was not paid as of December 31, 2017), net proceeds are estimated to be $43.0 million. Private Placements of Common Stock and Convertible Preferred Stock In August 2016, the Company completed a private placement of common stock in which investors purchased 5,250,000 shares of the Company’s common stock at a price of $1.96 per share. Gross proceeds from the private placement were $10.3 million. After giving effect to costs related to the private placement, net proceeds were $10.2 million. The Company also registered all of the shares issued in the private placement transaction for resale on a Form S-3 filed with the Securities and Exchange Commission (the SEC), as required under a registration rights agreement entered into by the Company with the purchasers of the common stock, and the registration statement was declared effective in September 2016. In November 2016, the Company completed a private placement of common and preferred stock in which investors, including investors affiliated with the Company’s directors and officers, purchased convertible preferred stock and common stock of the Company. The Company issued 2,819,549 shares of non-voting Class A Preferred Stock at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions. The Company also issued 7,236,837 shares of common stock at $2.66 per share. Gross proceeds from the private placement were $56.7 million. After giving effect to costs related to the private placement, net proceeds were $54.9 million. The Company also entered into a registration rights agreement (the Registration Rights Agreement) with certain of the purchasers in the November 2016 placement, excluding those purchasers affiliated with the Company’s directors and officers, requiring the Company to register for the resale of the relevant shares. The Company registered all of the relevant shares issued in the placement for resale on a Form S-3 filed with the SEC, as required under the Registration Rights Agreement, and the registration statement was declared effective in January 2017. See Note 6 to the Consolidated Financial Statements for additional information related to this offering. 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 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 Therapeutics (Canada), Inc. or Fate Canada, incorporated in Canada and which was dissolved in November 2016, Fate Therapeutics Ltd., incorporated in the United Kingdom, and Tfinity Therapeutics, Inc., incorporated in the United States. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Fair Value of Financial Instruments 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 available to the Company for loans with similar terms, which is considered a Level 2 input as described below, and because of the relatively recent financing date, 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 and short-term investments. Cash equivalents consisted of money market funds and short-term investments consisted of U.S. treasuries. The following table presents the Company’s assets which were measured at fair value on a recurring basis as of December 31, 2017 and 2016 (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2017: Cash equivalents $ 88,952 $ 88,952 $ — $ — U.S. Treasury debt securities 11,997 11,997 — — Total assets $ 100,949 $ 100,949 $ — $ — As of December 31, 2016: Cash equivalents $ 88,609 $ 88,609 $ — $ — U.S. Treasury debt securities 3,503 3,503 — — Total assets $ 92,112 $ 92,112 $ — $ — The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bid and/or offers. 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 December 31, 2017 and 2016, the Company had no material liabilities measured at fair value on a recurring basis. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in readily available checking and savings 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. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows as of December 31, 2017 (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Cash and cash equivalents $ 88,952 $ 88,609 $ 64,809 Restricted cash 122 122 122 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 89,074 $ 88,731 $ 64,931 Amounts included in restricted cash represent security deposits required to secure the Company’s credit card limit and its facilities lease. Short-Term Investments Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in comprehensive income. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Concentration of Credit Risk Financial instruments, which potentially subject the Company to a significant concentration of credit risk, consist primarily of cash and cash equivalents, and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits and investments are held. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally two to five years) and generally consist of furniture and fixtures, computers, and scientific and office equipment. Repairs and maintenance costs are charged to expense as incurred. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. While the Company’s current and historical operating losses and negative cash flows are indicators of impairment, management believes that future cash flows to be received support the carrying value of its long-lived assets and, accordingly, has not recognized any impairment losses since inception. Deferred Rent Deferred rent consists of the difference between cash payments and the recognition of rent expense on a straight-line basis for the facilities the Company occupies. The Company’s lease for its facilities provides for fixed increases in minimum annual rental payments. The total amount of rental payments due over the lease term are charged to rent expense ratably over the life of the lease. 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. 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. 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. Research and Development Costs All research and development costs are expensed as incurred. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of employee stock option and restricted stock unit grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. 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 fair value of restricted stock units is based on the closing price of the Company’s common stock as reported on The NASDAQ Global Market on the date of grant. 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 is determined to be probable of achievement or when it has been achieved. Convertible Preferred Stock The Company applies the relevant accounting standards to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. The Company applies the relevant accounting standards for derivatives and hedging (in addition to distinguishing liabilities from equity) when accounting for hybrid contracts that contain conversion options. Conversion options must be bifurcated from the host instruments and accounted for as free standing financial instruments according to certain criteria. These criteria include circumstances when (i) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable accounting principles with changes in fair value reported in earnings as they occurred, and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently measured at fair value at each reporting date, with the changes in fair value reported in earnings. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more- likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive loss included unrealized losses on available-for-sale securities, which was the only difference between net loss and comprehensive loss for the applicable periods. Net Loss Per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares 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 zero shares, 3,284 shares, and 44,381 shares for the years ended December 31, 2017, 2016, and 2015, respectively. Dilutive common stock equivalents are comprised of convertible preferred stock, warrants for the purchase of common stock, and common stock options and restricted stock units outstanding under the Company’s stock option plans. For all periods presented, there is no difference in the number of common shares used to calculate basic and diluted common shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): As of December 31, 2017 2016 2015 Warrants for common stock 225,756 134,113 134,113 Common stock options 5,458,043 3,910,350 2,587,474 Restricted stock units 212,625 525,250 525,250 Series A convertible preferred stock (if converted) 14,097,745 14,097,745 — 19,994,169 18,667,458 3,246,837 Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2016-18 (ASU 2016-18). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017. As early adoption of this amendment is permitted, the Company has adopted the update retrospectively to each period presented. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. 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, ASU 2014-09 is effective beginning in the first quarter of 2018 using one of two prescribed transition methods: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company will adopt ASU 2014-09 in the first quarter of 2018 using the full retrospective method. The Company has evaluated the effect that the updated standard will have on its internal processes, financial statements and related disclosures, and has determined that the adoption will not have a material impact on the Company’s historical Consolidated Financial Statements. Going Concern Assessment Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern as of the date of the issuance of these financial statements. |
Juno Collaboration and License
Juno Collaboration and License Agreement | 12 Months Ended |
Dec. 31, 2017 | |
Collaboration And License Agreements Disclosure [Abstract] | |
Juno Collaboration and License Agreement | 2. Juno Collaboration and License Agreement On May 4, 2015, the Company entered into a strategic research collaboration and license agreement (the Agreement) with Juno Therapeutics, Inc. (Juno) to screen for and identify small molecules that enhance the therapeutic properties of Juno’s genetically-engineered T-cell immunotherapies. Pursuant to the terms of the Agreement, Juno paid the Company a non-refundable upfront payment of $5.0 million and purchased 1,000,000 shares of the Company’s common stock at a price of $8.00 per share. Additionally, Juno agreed to fund all of the Company’s collaboration research activities for an initial four-year research term beginning on the effective date of the Agreement, with minimum annual research payments of $2.0 million to the Company. Juno has the option to extend the exclusive research term for an additional two years beyond the initial four-year term, subject to the payment of an extension fee of $3.0 million and the continued funding of the Company’s activities under the collaboration during the extended term, with minimum annual research payments of $4.0 million to the Company during the two-year extension period. Upon exercise of the research term extension, the Company has the option to require Juno to purchase up to $10.0 million of the Company’s common stock at a premium equal to 120% of the then thirty-day trailing volume weighted average trading price of the Company’s common stock. The Company applied Accounting Standards Codification (ASC) 605-25, Revenue Recognition — Multiple Element Arrangements, Pursuant to the collaboration’s research plan under the Agreement, the Company is responsible for screening and identifying small molecule modulators of immunological cells, while Juno will be responsible for the development and commercialization of engineered T-cell immunotherapies incorporating the Company’s modulators. As the Company is principally responsible for the performance of the research services under the Agreement, revenue is recognized on a gross basis for such services when earned. Billings for research services will be recognized as deferred revenue until earned. Total revenue recognized under the Agreement for the years ended December 31, 2017, 2016, and 2015 was $4.1 million, $4.4 million, and $2.4 million, respectively. As of December 31, 2017, aggregate deferred revenue related to the Agreement was $2.8 million. Under the Agreement, the Company has granted Juno an exclusive worldwide license to certain of its intellectual property, including its intellectual property arising under the collaboration, to make, use, sell and otherwise exploit genetically-engineered T-cell immunotherapies using or incorporating small molecule modulators directed against certain designated tumor-associated antigen targets, subject to the selection of a target by Juno. The Company has retained exclusive rights to such intellectual property, including its intellectual property arising under the collaboration, for all other purposes, including its use outside of those targets selected by Juno. The Company is eligible under the Agreement to receive selection fees for each tumor-associated antigen target selected by Juno and bonus selection fees based on the aggregate number of tumor-associated antigen targets selected by Juno. In accordance with ASC 605-28, Revenue Recognition — Milestone Method, In connection with each Juno therapy that uses or incorporates the Company’s small molecule modulators, Juno has agreed to pay the Company non-refundable, non-creditable milestone payments totaling up to approximately $51.0 million in the aggregate per therapy upon the achievement of various clinical, regulatory and commercial milestones. Additionally, in connection with the third Juno therapy and the fifth Juno therapy that uses or incorporates the Company’s small molecule modulators, Juno has agreed to pay the Company additional non-refundable, non-creditable bonus milestone payments totaling up to approximately $116.0 million and $137.5 million, respectively, in the aggregate, per therapy upon the achievement of various clinical, regulatory, and commercial milestones. In accordance with ASU 2010-17, the Company determined that these contingent payments meet the definition of a milestone under ASU 2010-17, and that the milestones are substantive given that the milestones are commensurate with the Company’s performance, relate solely to the Company’s past performance, and are reasonable relative to other deliverables and payments under the Agreement. Accordingly, the milestones under the Agreement will be accounted for as revenue on the achievement date, if any. Beginning on the date of the first commercial sale (in each country) for each Juno therapy that uses or incorporates the Company’s small molecule modulators, and continuing until the later of: i) the expiration of the last valid patent claim, ii) ten years after such first commercial sale, or iii) the expiration of all data and other regulatory exclusivity periods afforded each therapy, Juno has agreed to pay the Company royalties in the low single-digits on net sales of each Juno therapy that uses or incorporates the Company’s small molecule modulators. The Agreement will end on the date that no further payments are due under the Agreement. |
Short-term Investments
Short-term Investments | 12 Months Ended |
Dec. 31, 2017 | |
Short Term Investments [Abstract] | |
Short-term Investments | 3. Short-term Investments The Company invests portions of excess cash in United States treasuries with maturities ranging from six to twelve months from the purchase date. These debt securities are classified as short-term investments in the accompanying consolidated balance sheets and are accounted for as available-for-sale securities. The following table summarizes the Company’s short-term investments accounted for as available-for-sale securities as of December 31, 2017 and 2016 (in thousands): Maturity (in years) Amortized Cost Unrealized Losses Unrealized Gains Estimated Fair Value December 31, 2017 U.S. Treasury debt securities 1 or less 12,000 (3 ) — 11,997 Total $ 12,000 $ (3 ) $ — $ 11,997 December 31, 2016 U.S. Treasury debt securities 1 or less 3,504 (1 ) — 3,503 Total $ 3,504 $ (1 ) $ — $ 3,503 The Company reviewed its investment holdings as of December 31, 2017 and determined that the unrealized losses were not other-than-temporary unrealized losses because the Company does not intend to sell the underlying securities prior to maturity and it is not more likely than not that the Company will be required to sell these securities before the recovery of their amortized cost basis. During the years ended December 31, 2017 and 2016, the Company did not recognize any impairment or gains or losses on sales of available-for-sale securities. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consist of the following (in thousands): December 31, 2017 2016 Furniture and fixtures $ 508 $ 324 Computer and office equipment 527 318 Software 103 103 Leasehold improvements—building 180 180 Scientific equipment 6,371 4,858 Property and equipment, gross 7,689 5,783 Less accumulated depreciation and amortization (5,139 ) (4,204 ) Property and equipment, net $ 2,550 $ 1,579 Depreciation expense related to property and equipment was $1.0 million, $0.9 million, and $0.7 million, for the years ended December 31, 2017, 2016, and 2015, respectively. No material gains or losses on the disposal of property and equipment have been recorded for the years ended December 31, 2017, 2016, and 2015. |
Accrued Expenses, Long-Term Deb
Accrued Expenses, Long-Term Debt, Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses Long Term Debt Commitments And Contingencies Disclosure [Abstract] | |
Accrued Expenses, Long-Term Debt, Commitments and Contingencies | 5. Accrued Expenses, Long-Term Debt, Commitments and Contingencies Accrued Expenses Current accrued expenses consist of the following (in thousands): December 31, 2017 December 31, 2016 Accrued payroll and other employee benefits $ 1,761 $ 1,505 Accrued clinical trial related costs 3,323 1,043 Accrued other 2,170 1,409 Accrued expenses $ 7,254 $ 3,957 Long-term accrued expenses consist primarily of accruals for the final payment fees associated with our long-term debt. Long-Term Debt Long-term debt and unamortized discount balances are as follows (in thousands): December 31, 2017 December 31, 2016 Long-term debt $ 15,000 $ 10,765 Less debt issuance costs and discount, net of current portion (192 ) (7 ) Long-term debt, net of long-term portion of debt issuance costs and discount 14,808 10,758 Less current portion of long-term debt — (8,257 ) Long-term debt, net $ 14,808 $ 2,501 Current portion of long-term debt $ — $ 8,257 Less current portion of debt issuance costs and discount — (70 ) Current portion of long-term debt, net $ — $ 8,187 SVB Loan Amendment On July 14, 2017 (the First Amendment Effective Date), the Company entered into the First Pursuant to the SVB Loan Amendment, SVB extended an additional term loan to the Company on July 14, 2017 in the principal amount of $15.0 million (2017 Term Loan), a portion of which was applied to repay in full the Company’s existing outstanding debt with SVB under the Restated LSA, which included outstanding principal, accrued interest, and final payment fees. Following such repayment in full of the Company’s existing outstanding debt with SVB under the Restated LSA, cash proceeds to the Company from the remaining portion of the 2017 Term Loan were $7.5 million. The net proceeds of the 2017 Term Loan are expected to be used for working capital purposes, including the advancement of the Company’s clinical and research programs. The 2017 Term Loan matures on January 1, 2022 (the Term Loan Maturity Date) and bears interest at a floating per annum rate equal to the greater of (i) 3.50% above the Prime Rate (as defined in the SVB Loan Amendment) or (ii) 7.25%; provided, however, that in no event shall such interest rate exceed 8.25%. Interest is payable on a monthly basis on the first day of each month . From August 1, 2017 through January 1, 2019 (the Interest-only Period), the Company is required to make monthly payments of interest only. Thereafter, the Company is required to repay the principal, plus monthly payments of accrued interest, in 36 equal monthly installments based on a 36-month amortization schedule. Notwithstanding the foregoing, subject to the achievement of a product development milestone by the Company before the expiration of the above-described Interest-only Period, at the Company’s election (i) the Interest-only Period shall be extended from January 1, 2019 through and including to July 1, 2019 and (ii) the Company shall thereafter repay the principal, plus monthly payments of accrued interest, in 30 equal monthly installments based on a 30-month amortization schedule. The Company’s final payment, due on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the 2017 Term Loan, plus a 7.5%, or $1.1 million, final payment fee. This final payment fee is accrued as interest expense over the term of the 2017 Term Loan and recorded in accrued expenses. In connection with the SVB Loan Amendment, the Company issued to SVB on the First Amendment Effective Date a fully exercisable warrant (the 2017 Warrant) to purchase up to an aggregate of 91,463 shares of the Company’s common stock, subject to adjustment, at an exercise price equal to $3.28 per share. The 2017 Warrant expires in July 2024. The aggregate fair value of the 2017 Warrant was determined to be $0.2 million using the Black-Scholes option pricing model and was recorded as a debt discount on the 2017 Term Loan. This debt discount is amortized to interest expense over the term of the 2017 Term Loan using the effective interest method. The Company determined the effective interest rate of the 2017 Term Loan to be 10.2% as of the First Amendment Effective Date. The Company determined the repayment of the Restated LSA and issuance of the 2017 Term Loan was a debt extinguishment, and accounted for the 2017 Term Loan at fair value as of the First Amendment Effective Date, accordingly. During the year ended December 31, 2017, the Company recorded a loss on debt extinguishment of $0.1 million, which was primarily related to the unaccrued amount of the final payment fee under the Restated LSA that was paid in connection with the 2017 Term Loan. The Company is required under its loan agreement with SVB to maintain its deposit and securities accounts with SVB and to comply with various operating covenants and default clauses. A breach of any of these covenants or clauses could result in a default under the agreement, which would cause all of the outstanding indebtedness under the facility to become immediately due and payable. The Company is in compliance with all such covenants and clauses. For the year ended December 31, 2017, the Company recorded $0.8 million in aggregate interest expense related to the 2017 Term Loan. Restated LSA On July 30, 2014, the Company entered into the Restated LSA with SVB, collateralized by substantially all of the Company’s assets, excluding certain intellectual property. Pursuant to the Restated LSA, SVB 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 (Term A Loan) and (ii) subject to the achievement of a specified clinical milestone, additional term loans totaling up to $10.0 million in the aggregate, which were available until December 31, 2014 (Term B Loan). On December 24, 2014, the Company elected to draw on the full $10.0 million under a Term B Loan. The Term A Loan and the Term B Loan were scheduled to mature on January 1, 2018 and June 1, 2018, respectively. The Company was required to make a final payment fee of 7.5%, equaling $0.8 million, of the funded amount for each of the Term A Loan and Term B Loan on the respective maturity dates. These final payment fees were accrued as interest expense over the terms of the loans and recorded in accrued expenses. In connection with the funding of the Term B Loan, the Company issued SVB and one of its affiliates fully-exercisable warrants to purchase an aggregate of 98,039 shares of the Company’s common stock (the 2014 Warrants) at an exercise price of $4.08 per share. The 2014 Warrants expire in December 2021 and remain outstanding as of December 31, 2017. For the years ended December 2017, 2016, and 2015, the Company recorded $0.5 million, $1.6 million and $2.2 million, respectively, in aggregate interest expense related to the Term A and Term B Loans. Warrants to purchase 36,074 shares of the Company’s common stock at a weighted average exercise price of $7.21 per share issued in connection with a prior debt agreement between the Company and SVB in 2009 remain outstanding as of December 31, 2017, with 5,305 and 30,769 of such warrants having expiration dates in January 2019 and August 2021, respectively. Facility Lease The Company leases certain office and laboratory space, comprising approximately 48,000 square feet, under a non-cancelable operating lease through June 2023. 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 December 31, 2017, future minimum payments under the operating lease are $12.9 million. In January 2015, the Company entered into a sublease for additional laboratory space. The sublease was accounted for as an operating lease and expired in September 2017. No future payments remain under the sublease. Aggregate contractual rent expense was $2.3 million, $1.3 million, and $1.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. License Agreements The Company has entered into exclusive license agreements with certain academic institutions and universities pursuant to which the Company acquired certain intellectual property. Pursuant to each agreement, as consideration for an exclusive license to the intellectual property, the Company paid a license fee, reimbursed the institution for historical patent costs and, in certain instances, issued the institution shares of restricted common stock. Additionally, under each agreement, the institution is generally eligible to receive future consideration including, but not limited to, annual maintenance fees, royalties, milestone payments and sublicensing fees. Each of the license agreements is generally cancelable by the Company, given appropriate prior written notice. Minimum annual payments to maintain these cancelable licenses total an aggregate of $0.2 million. Commitments Future minimum payments under the long-term debt and the non-cancelable operating leases as of December 31, 2017 are as follows (in thousands): Long–Term Debt Operating Leases Total Years Ending December 31, 2018 1,215 2,116 3,331 2019 5,645 2,278 7,923 2020 5,661 2,346 8,007 2021 5,253 2,417 7,670 2022 1,545 2,489 4,034 2023 — 1,282 1,282 Total $ 19,319 $ 12,928 $ 32,247 Less interest (3,194 ) Less additional payments due upon maturity (1,125 ) Less unamortized debt discount and debt issuance costs (192 ) Long–term debt, net of current portion $ 14,808 The Company’s long-term debt bears interest at a floating per annum rate equal to the greater of (i) 3.50% above the Prime Rate (as defined in the SVB Loan Amendment) or (ii) 7.25%; provided, however, that in no event shall such interest rate exceed 8.25%. The amounts in the table above assume payment at the current interest rate, which is subject to change. The amounts in the above table also assume the Interest-only Period to be from August 1, 2017 through January 1, 2019. |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Preferred Stock And Stockholders Deficit Disclosure [Abstract] | |
Convertible Preferred Stock and Stockholders’ Equity | 6. Convertible Preferred Stock and Stockholders’ Equity Convertible Preferred Stock In November 2016, the Company completed a private placement of stock in which investors, certain of which are affiliated with the directors and officers of the Company, purchased convertible preferred stock and common stock of the Company (the November 2016 Placement). The Company issued 2,819,549 shares of non-voting Class A Convertible Preferred Stock (the Class A Preferred) at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions defined in the Certificate of Designation of Preferences, Rights and Limitations of the Class A Preferred filed with the Delaware Secretary of State on November 22, 2016 (the CoD). The Class A Preferred were purchased exclusively by entities affiliated with Redmile Group, LLC (collectively, Redmile). The terms of the CoD prohibited Redmile from converting the Class A Preferred into shares of the Company’s common stock if, as a result of conversion, Redmile, together with its affiliates, would own more than 9.99% of the Company’s common stock then issued and outstanding (the Redmile Percentage Limitation), which percentage could change at Redmile’s election upon 61 days’ notice to the Company to i) any other number less than or equal to 19.99% or (ii) subject to approval of the Company’s stockholders to the extent required in accordance with the NASDAQ Global Market rules, any number in excess of 19.99%. On May 2, 2017, the Company’s stockholders approved the issuance of up to an aggregate of 14,097,745 shares of common stock upon the conversion of the outstanding shares of Class A Preferred. As a result, Redmile has the right to increase the Redmile Percentage Limitation to any percentage in excess of 19.99% at its election. The Company also issued 7,236,837 shares of common stock at $2.66 per share as part of the November 2016 Placement. Gross proceeds from the November 2016 Placement were $56.7 million, and after giving effect to costs related to placement, net proceeds were $54.9 million. The rights of the Class A Preferred issued in November 2016 are set forth in the CoD. The Class A Preferred are non-voting shares and have a stated par value of $0.001 per share and are convertible into five shares of the Company’s common stock at a conversion price of $2.66 per share, which was the fair value of the Company’s common stock on the date of issuance. Holders of the Class A Preferred have the same dividend rights as holders of the Company’s common stock. Additionally, the liquidation preferences of the Class A Preferred are pari passu The Company evaluated the Class A Preferred for liability or equity classification under ASC 480, Distinguishing Liabilities from Equity, The Company has also evaluated the Class A Preferred in accordance with the provisions of ASC 815, Derivatives and Hedging, The issuance of convertible preferred stock could generate a beneficial conversion feature (BCF), which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor (or in-the-money) at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock on the commitment date. The Class A Preferred have an effective conversion price of $2.66 per common share, which was equal to the market price of the Company’s stock on the commitment date. Therefore, no BCF is present. The Company also entered into a registration rights agreement (the Registration Rights Agreement) with certain of the purchasers in the November 2016 Placement, excluding those purchasers affiliated with the Company’s directors and officers, requiring the Company to register for the resale of the relevant shares. The Company registered all of the relevant shares issued in the November 2016 Placement for resale on a Form S-3 filed with the SEC, as required under the Registration Rights Agreement, and the registration statement was declared effective in January 2017. Description of Securities Dividends As of December 31, 2017, the Board of Directors of the Company has not declared any dividends. 2007 Equity Incentive Plan, 2013 Stock Option and Incentive Plan, and Inducement Equity Plan The Company adopted an Equity Incentive Plan in 2007 (the 2007 Plan) under which, as amended in August 2013, 2,423,072 shares of common stock were reserved for issuance to employees, nonemployee directors and consultants of the Company. The 2007 Plan provides for the grant of incentive stock options, non-statutory stock options, rights to purchase restricted stock, stock appreciation rights, dividend equivalents, stock payments, and restricted stock units to eligible recipients. In connection with the issuance of restricted common stock, the Company maintains a repurchase right where shares of restricted common stock are released from such repurchase right over a period of time of continued service by the recipient. Effective upon the completion of the Company’s IPO, the board of directors determined not to grant any further awards under the 2007 Plan. On August 28, 2013, the Company’s board of directors and stockholders approved and adopted the 2013 Stock Option and Incentive Plan (the 2013 Plan and collectively with the 2007 Plan, the Plans). The 2013 Plan became effective immediately prior to the Company’s IPO. Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then employees, officers, directors or consultants of the Company or its subsidiaries. A total of 1,020,000 shares of common stock were initially reserved for issuance under the 2013 Plan, and in May 2017, stockholders approved an additional 2,500,000 shares of common stock for issuance under the 2013 Plan. The shares issuable pursuant to awards granted under the 2013 Plan will be authorized, but unissued shares. The shares of common stock underlying any awards from the 2013 Plan and the 2007 Plan that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of common stock, expire or are otherwise terminated (other than by exercise) under the 2013 Plan and the 2007 Plan will be added back to the shares of common stock available for issuance under the 2013 Plan. In addition, the number of shares of stock available for issuance under the 2013 Plan will be automatically increased each January 1 by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or such lesser number as determined by the compensation committee of the Company’s board of directors. Recipients of stock options under the Plans shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair value of such stock on the date of grant. Under the Plans, stock options generally vest 25% on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years, or vest monthly over four years, unless they contain specific performance and/or market-based vesting provisions. The maximum term of stock options granted under the Plans is ten years. Restricted stock units under the 2013 Plan generally vest 50% on the second anniversary of the grant date, and 50% on the fourth anniversary of the grant date. Inducement Plan On May 10, 2016, the Company’s board of directors approved the Fate Therapeutics, Inc. Inducement Equity Plan (the Inducement Plan), the purpose of which is to enable the Company to grant equity awards to induce highly-qualified prospective officers and employees who are not employed by the Company to accept employment with the Company. Under the Inducement Plan, the Company may grant non-qualified stock options and restricted stock units. A total of 500,000 shares of common stock were initially reserved for issuance under the Inducement Plan, and in January 2018 an additional 400,000 shares of common stock were reserved for issuance under the Inducement Plan. The shares of common stock underlying any awards from the Inducement Plan that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of common stock, expire or are otherwise terminated (other than by exercise) under the Inducement Plan will be added back to the shares of common stock available for issuance under the Inducement Plan. Employee Stock Purchase Plan On September 13, 2013, the Company’s board of directors approved and adopted the 2013 Employee Stock Purchase Plan (the ESPP). A total of 729,000 shares of common stock were initially reserved for issuance under the ESPP. In addition, the number of shares of stock available for issuance under the ESPP will be automatically increased each January 1, beginning on January 1, 2015, by the lesser of (i) 2% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31, (ii) 450,000 shares, or (iii) such lesser number as determined by the compensation committee of the Company’s board of directors. No purchases have been made to date under the ESPP. Stock Options and Restricted Stock Unit Awards Stock Options. The following table summarizes stock option activity and related information under all equity plans for the years ended December 31, 2017, 2016 and 2015: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in 000s) Outstanding at December 31, 2014 2,425,969 $ 3.83 8.06 $ 4,839 Granted 1,345,744 5.23 Exercised (227,215 ) 1.85 Cancelled (957,024 ) 4.20 Outstanding at December 31, 2015 2,587,474 $ 4.59 6.92 $ 1,486 Granted 2,245,240 2.62 Exercised (136,368 ) 1.44 Cancelled (785,996 ) 3.58 Outstanding at December 31, 2016 3,910,350 $ 3.77 8.28 $ 682 Granted 2,522,920 3.09 Exercised (83,220 ) 2.79 Cancelled (892,007 ) 3.50 Outstanding at December 31, 2017 5,458,043 $ 3.52 7.99 $ 14,754 Options vested and expected to vest at December 31, 2017 5,300,033 $ 3.53 8.02 $ 14,267 Options exercisable at December 31, 2017 2,479,556 $ 3.92 7.16 $ 5,972 As of December 31, 2017, 2016 and 2015, the outstanding options included 73,600, 73,600, and 14,769, respectively, of 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 options at December 31, 2017, 2016 and 2015, was $0.1 million, $0.1 million and $0.1 million, respectively. For the years ended December 31, 2017, 2016, and 2015, the Company granted its employees and directors 2.5 million, 2.2 million and 1.2 million stock options, respectively, at a weighted-average grant date fair value per share equal to $2.29, $1.80 and $3.54, respectively. As of December 31, 2017, 2016 and 2015, the unrecognized compensation cost related to outstanding options (excluding those with unachieved performance- based conditions) was $5.8 million, $4.9 million and $3.8 million, respectively, which was expected to be recognized as expense over approximately 2.6 years, 2.6 years and 2.8 years, respectively. The total intrinsic value, which is the amount by which the exercise price was exceeded by the price of the Company’s common stock on the date of exercise, of stock options exercised during the year ended December 31, 2017 was $0.1 million. Total cash received upon the exercise of stock options was $0.2 million for the year ended December 31, 2017. Restricted Stock Units. The following table summarizes Restricted Stock Unit activity and related information under all equity plans for the years ended December 31, 2017, 2016 and 2015: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Vesting Period Aggregate Intrinsic Value (in 000s) Outstanding at December 31, 2014 — $ — — $ — Granted 525,250 4.89 Vested — — Cancelled — — Outstanding at December 31, 2015 525,250 $ 4.89 3.80 $ 1,770 Granted — — Vested — — Cancelled — — Outstanding at December 31, 2016 525,250 $ 4.89 2.80 $ 1,318 Granted — — Vested (225,125 ) 4.89 Cancelled (87,500 ) 4.89 Outstanding at December 31, 2017 212,625 $ 4.89 1.80 $ 1,299 Restricted Stock Units expected to vest at December 31, 2017 212,625 $ 4.89 1.80 $ 1,299 As of December 31, 2017, 2016, and 2015, the unrecognized compensation cost related to outstanding restricted stock units was $0.9 million, $1.8 million, and $2.4 million respectively, which was expected to be recognized as expense over approximately 1.8 years, 2.8 years, and 3.8 years respectively. Stock-Based Compensation Expense The allocation of stock-based compensation for all stock awards is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Research and development $ 2,095 $ 1,802 $ 1,241 General and administrative 1,511 1,382 1,159 Total stock-based compensation expense $ 3,606 $ 3,184 $ 2,400 Employee Stock Option Grants. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2017 2016 2015 Risk–free interest rate 2.0 % 1.6 % 1.6 % Expected volatility 90 % 80 % 81 % Expected term (in years) 6.0 6.0 6.0 Expected dividend yield 0.0 % 0.0 % 0.0 % Risk-free interest rate. The Company bases the risk-free interest rate assumption on observed interest rates appropriate for the expected term of the stock option grants. Expected dividend yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility. Due to the Company’s limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption is based on historical volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biotechnology industry. Expected term. The expected term represents the period of time that options are expected to be outstanding. As the Company does not have sufficient historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its vesting period. Non-Employee Stock Option Grants. 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: Years Ended December 31, 2017 2016 2015 Risk–free interest rate 2.1 % 1.5 % 0.8 % Expected volatility 87 % 83 % 72 % Expected term (in years) 8.5 6.4 2.7 Expected dividend yield 0.0 % 0.0 % 0.0 % Warrants to Purchase Common Stock in Connection with Debt Issuance As a result of the financing of the Loan Amendment on July 14, 2017, the Company issued SVB fully-exercisable warrants to purchase an aggregate of 91,463 shares of the Company’s common stock at an exercise price of $3.28 per share. The warrants expire in July 2024. See Note 5 of the Notes to the Consolidated Financial Statements for additional information on the debt issuance. The fair value of the warrants was determined to be $0.2 million, which was recorded to additional paid-in capital as a debt discount. The weighted- average assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrants issued were as follows: As of July 14, 2017 Risk–free interest rate 2.1 % Expected volatility 88 % Expected term (in years) 7.0 Expected dividend yield 0.0 % Common Stock Reserved for Future Issuance Common stock reserved for future issuance is as follows: December 31, 2017 2016 Common stock warrants 225,756 134,113 Convertible preferred stock (if converted) 14,097,745 14,097,745 Common stock options 5,458,043 3,910,350 Restricted stock units 212,625 525,250 Awards available under the 2013 Plan 3,572,112 760,065 Awards available under the Inducement Plan 100,000 300,000 Employee stock purchase plan 729,000 729,000 24,395,281 20,456,523 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The following is a reconciliation of the Company’s expected federal income tax provision (benefit) to the actual income tax provision (in thousands): Years Ended December 31, 2017 2016 2015 Tax computed at federal statutory rate $ (14,603 ) $ (11,377 ) $ (10,198 ) State tax, net of federal tax benefit (1,315 ) (2,089 ) 2,226 Permanent differences 795 292 43 Stock compensation 539 968 213 R&D tax credits (2,934 ) (971 ) (594 ) Reserve for uncertain tax positions 1,326 2,076 1,733 Tax attribute limitation — 54 2,727 Tax Cuts and Jobs Act 25,280 — — Other 46 (74 ) (37 ) Valuation allowance (9,134 ) 11,121 3,887 Income tax expense $ — $ — $ — Significant components of the Company’s deferred tax assets are summarized as follows (in thousands): As of December 31, 2017 2016 Deferred tax assets: Section 59e amortization $ 14,365 $ 17,699 Net operating losses 27,699 35,049 R&D tax credits 5,421 2,175 Depreciation and amortization 581 1,020 Deferred revenue 594 1,677 Stock compensation 876 1,222 Other 96 (76 ) Deferred tax assets 49,632 58,766 Valuation allowance (49,632 ) (58,766 ) Net deferred tax assets $ — $ — A valuation allowance of $49.6 million and $58.8 million at December 31, 2017 and 2016, respectively, has been established to offset the deferred tax assets, as realization of such assets is uncertain. At December 31, 2017, the Company had federal and California net operating loss (NOL) carryforwards of $121.2 million and $120.8 million, respectively, which may be available to offset future taxable income. The federal and California NOL carryforwards begin to expire in 2027 and 2028, respectively, unless previously utilized. At December 31, 2017, the Company had federal and California research and development (R&D) credit carryforwards of $5.7 million and $4.2 million, respectively. The federal R&D tax credit carryforwards will begin to expire in 2035 unless previously utilized. The California R&D credit carryforwards will carry forward indefinitely. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, (the Code), substantial changes in the Company’s ownership may limit the amount of net operating loss and research and development credit carryforwards that could be used annually in the future to offset taxable income. The tax benefits related to future utilization of federal and state net operating loss carryforwards, credit carryforwards, and other deferred tax assets may be limited or lost if cumulative changes in ownership exceeds 50% within any three-year period. The Company completed a study to assess whether an ownership change, as defined by Section 382 of the Code, had occurred from the Company’s formation through December 31, 2015. Based upon this study, the Company determined that several ownership changes had occurred. Accordingly, the Company reduced its deferred tax assets related to the federal NOL carryforwards and the federal R&D credit carryforwards that are anticipated to expire unused as a result of these ownership changes. These tax attributes were excluded from deferred tax assets with a corresponding reduction of the valuation allowance with no net effect on income tax expense or the effective tax rate. The Company updated the study through December 31, 2017 and concluded there were no ownership changes during 2016 and 2017. Future ownership changes may further limit the Company’s ability to utilize its remaining tax attributes. The Company files income tax returns in the United States and California, and has historically filed income tax returns in Canada. The Company currently has no years under examination by any jurisdiction; however, the Company is subject to income tax examination by federal, Californian and Canadian tax authorities for years beginning in 2014, 2013, and 2013, respectively. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where NOLs and tax credits were generated and carried forward, and make adjustments up to the amount of the carryforwards. The change in the Company’s unrecognized tax benefits is summarized as follows (in thousands): Balance at December 31, 2014 $ 1,820 Increase related to current year tax positions 374 Increase related to prior year tax positions 2,624 Decrease related to prior year tax positions (949 ) Balance at December 31, 2015 $ 3,869 Increase related to current year tax positions 2,268 Increase related to prior year tax positions 1,625 Decrease related to prior year tax positions (32 ) Balance at December 31, 2016 $ 7,730 Increase related to current year tax positions 4,077 Increase related to prior year tax positions 6 Decrease related to prior year tax positions (13 ) Balance at December 31, 2017 $ 11,800 The Company does not anticipate that the amount of unrecognized tax benefits as of December 31, 2017 will significantly change within the next twelve months. Due to the valuation allowance recorded against the Company’s deferred tax assets, none of the total unrecognized tax benefits as of December 31, 2017 would reduce the effective tax rate if recognized. The Company has not recognized interest or penalties in its consolidated statements of operations and comprehensive loss since inception. The Company adopted ASU No. 2016-09 on January 1, 2017. ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements. The Company had excess tax benefits for which a benefit could not be previously recognized of $0.1 million. Due to the full valuation allowance on the deferred tax assets, there was no impact to the Company’s consolidated financial statements as a result of the adoption. The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 34% to 21%. The reduction in the rate caused the Company to remeasure its deferred tax assets and liabilities at December 31, 2017. This resulted in a provisional reduction of the Company’s deferred tax balance by $25.3 million, offset by an equal change in the valuation allowance. On December 22, 2017, SEC Staff Accounting Bulletin No. 118 (SAB 118) was issued to address the application of US 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 effect of the Act. In accordance with SAB 118, the Company has determined that $25.3 million of the deferred tax expense recorded in connection with remeasuring certain deferred tax assets and liabilities is a provisional amount and reasonable estimate at December 31, 2017. Additional work is necessary to do a more detailed analysis. Any subsequent adjustment to these amounts will be recorded to current tax expense in the period the analysis is complete. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefits | 8. Employee Benefits Effective January 1, 2009, the Company adopted a defined contribution 401(k) plan for employees who are at least 21 years of age. Employees are eligible to participate in the plan beginning on the first day of the calendar quarter following date of hire. Under the terms of the plan, employees may make voluntary contributions as a percent of compensation. No matching contributions have been made by the Company since the adoption of the 401(k) plan. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data | 9. Selected Quarterly Financial Data (in thousands, except per share data) (unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter 2017 Revenues $ 1,027 $ 1,026 $ 1,026 $ 1,027 Total operating expenses 10,998 10,596 11,366 13,271 Net loss (10,126 ) (9,645 ) (10,684 ) (12,497 ) Basic and diluted net loss per common share $ (0.24 ) $ (0.23 ) $ (0.26 ) $ (0.29 ) 2016 Revenues $ 1,322 $ 1,027 $ 1,026 $ 1,027 Total operating expenses 9,238 9,031 9,415 8,681 Net loss (8,377 ) (8,408 ) (8,737 ) (7,940 ) Basic and diluted net loss per common share $ (0.29 ) $ (0.29 ) $ (0.27 ) $ (0.21 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events On February 22, 2018, the California Institute for Regenerative Medicine (CIRM) announced that it awarded the Company a $4.0 million grant to advance the Company’s FT516 product candidate into a first-in-human clinical trial. FT516 is being developed by the Company as an off-the-shelf engineered NK cell cancer immunotherapy. |
Organization and Summary of S17
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Public Equity Offerings | Public Equity Offerings In May 2015, the Company completed a public offering of common stock in which investors purchased 6,900,000 shares of its common stock at an offering price of $5.00 per share. Gross proceeds from the offering were $34.5 million. After giving effect to costs related to the offering, total net proceeds from the offering were $32.1 million. In December 2017, the Company completed a public offering of common stock in which investors purchased 10,953,750 shares of its common stock at a price of $4.20 per share under the Company’s shelf registration statement. Gross proceeds from the offering were $46.0 million, and after giving effect to an estimated $3.0 million of costs related to the offering (of which $0.2 million was not paid as of December 31, 2017), net proceeds are estimated to be $43.0 million. |
Private Placement of Common Stock and Convertible Preferred Stock | Private Placements of Common Stock and Convertible Preferred Stock In August 2016, the Company completed a private placement of common stock in which investors purchased 5,250,000 shares of the Company’s common stock at a price of $1.96 per share. Gross proceeds from the private placement were $10.3 million. After giving effect to costs related to the private placement, net proceeds were $10.2 million. The Company also registered all of the shares issued in the private placement transaction for resale on a Form S-3 filed with the Securities and Exchange Commission (the SEC), as required under a registration rights agreement entered into by the Company with the purchasers of the common stock, and the registration statement was declared effective in September 2016. In November 2016, the Company completed a private placement of common and preferred stock in which investors, including investors affiliated with the Company’s directors and officers, purchased convertible preferred stock and common stock of the Company. The Company issued 2,819,549 shares of non-voting Class A Preferred Stock at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions. The Company also issued 7,236,837 shares of common stock at $2.66 per share. Gross proceeds from the private placement were $56.7 million. After giving effect to costs related to the private placement, net proceeds were $54.9 million. The Company also entered into a registration rights agreement (the Registration Rights Agreement) with certain of the purchasers in the November 2016 placement, excluding those purchasers affiliated with the Company’s directors and officers, requiring the Company to register for the resale of the relevant shares. The Company registered all of the relevant shares issued in the placement for resale on a Form S-3 filed with the SEC, as required under the Registration Rights Agreement, and the registration statement was declared effective in January 2017. See Note 6 to the Consolidated Financial Statements for additional information related to this offering. |
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 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 Therapeutics (Canada), Inc. or Fate Canada, incorporated in Canada and which was dissolved in November 2016, Fate Therapeutics Ltd., incorporated in the United Kingdom, and Tfinity Therapeutics, Inc., incorporated in the United States. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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 available to the Company for loans with similar terms, which is considered a Level 2 input as described below, and because of the relatively recent financing date, 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 and short-term investments. Cash equivalents consisted of money market funds and short-term investments consisted of U.S. treasuries. The following table presents the Company’s assets which were measured at fair value on a recurring basis as of December 31, 2017 and 2016 (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2017: Cash equivalents $ 88,952 $ 88,952 $ — $ — U.S. Treasury debt securities 11,997 11,997 — — Total assets $ 100,949 $ 100,949 $ — $ — As of December 31, 2016: Cash equivalents $ 88,609 $ 88,609 $ — $ — U.S. Treasury debt securities 3,503 3,503 — — Total assets $ 92,112 $ 92,112 $ — $ — The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bid and/or offers. 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 December 31, 2017 and 2016, the Company had no material liabilities measured at fair value on a recurring basis. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in readily available checking and savings 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. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows as of December 31, 2017 (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Cash and cash equivalents $ 88,952 $ 88,609 $ 64,809 Restricted cash 122 122 122 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 89,074 $ 88,731 $ 64,931 Amounts included in restricted cash represent security deposits required to secure the Company’s credit card limit and its facilities lease. |
Short-Term Investments | Short-Term Investments Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in comprehensive income. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to a significant concentration of credit risk, consist primarily of cash and cash equivalents, and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits and investments are held. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally two to five years) and generally consist of furniture and fixtures, computers, and scientific and office equipment. Repairs and maintenance costs are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. While the Company’s current and historical operating losses and negative cash flows are indicators of impairment, management believes that future cash flows to be received support the carrying value of its long-lived assets and, accordingly, has not recognized any impairment losses since inception. |
Deferred Rent | Deferred Rent Deferred rent consists of the difference between cash payments and the recognition of rent expense on a straight-line basis for the facilities the Company occupies. The Company’s lease for its facilities provides for fixed increases in minimum annual rental payments. The total amount of rental payments due over the lease term are charged to rent expense ratably over the life of the lease. |
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. 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. 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. |
Research and Development Costs | Research and Development Costs All research and development costs are expensed as incurred. |
Patent Costs | Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of employee stock option and restricted stock unit grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. 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 fair value of restricted stock units is based on the closing price of the Company’s common stock as reported on The NASDAQ Global Market on the date of grant. 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 is determined to be probable of achievement or when it has been achieved. |
Convertible Preferred Stock | Convertible Preferred Stock The Company applies the relevant accounting standards to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. The Company applies the relevant accounting standards for derivatives and hedging (in addition to distinguishing liabilities from equity) when accounting for hybrid contracts that contain conversion options. Conversion options must be bifurcated from the host instruments and accounted for as free standing financial instruments according to certain criteria. These criteria include circumstances when (i) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable accounting principles with changes in fair value reported in earnings as they occurred, and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently measured at fair value at each reporting date, with the changes in fair value reported in earnings. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more- likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive loss included unrealized losses on available-for-sale securities, which was the only difference between net loss and comprehensive loss for the applicable periods. |
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 common shares 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 zero shares, 3,284 shares, and 44,381 shares for the years ended December 31, 2017, 2016, and 2015, respectively. Dilutive common stock equivalents are comprised of convertible preferred stock, warrants for the purchase of common stock, and common stock options and restricted stock units outstanding under the Company’s stock option plans. For all periods presented, there is no difference in the number of common shares used to calculate basic and diluted common shares outstanding due to the Company’s net loss position. Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): As of December 31, 2017 2016 2015 Warrants for common stock 225,756 134,113 134,113 Common stock options 5,458,043 3,910,350 2,587,474 Restricted stock units 212,625 525,250 525,250 Series A convertible preferred stock (if converted) 14,097,745 14,097,745 — 19,994,169 18,667,458 3,246,837 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (ASU) No. 2016-18 (ASU 2016-18). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017. As early adoption of this amendment is permitted, the Company has adopted the update retrospectively to each period presented. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. 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, ASU 2014-09 is effective beginning in the first quarter of 2018 using one of two prescribed transition methods: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company will adopt ASU 2014-09 in the first quarter of 2018 using the full retrospective method. The Company has evaluated the effect that the updated standard will have on its internal processes, financial statements and related disclosures, and has determined that the adoption will not have a material impact on the Company’s historical Consolidated Financial Statements. |
Going Concern Assessment | Going Concern Assessment Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern as of the date of the issuance of these financial statements. |
Organization and Summary of S18
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Assets Measured at Fair Value on Recurring Basis | The following table presents the Company’s assets which were measured at fair value on a recurring basis as of December 31, 2017 and 2016 (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of December 31, 2017: Cash equivalents $ 88,952 $ 88,952 $ — $ — U.S. Treasury debt securities 11,997 11,997 — — Total assets $ 100,949 $ 100,949 $ — $ — As of December 31, 2016: Cash equivalents $ 88,609 $ 88,609 $ — $ — U.S. Treasury debt securities 3,503 3,503 — — Total assets $ 92,112 $ 92,112 $ — $ — |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows as of December 31, 2017 (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Cash and cash equivalents $ 88,952 $ 88,609 $ 64,809 Restricted cash 122 122 122 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 89,074 $ 88,731 $ 64,931 |
Schedule of Anti-Dilutive Securities not Included in Calculation of Diluted Net Loss Per Common Share | Potentially dilutive securities not included in the calculation of diluted net loss per common share because to do so would be anti-dilutive are as follows (in common stock equivalent shares): As of December 31, 2017 2016 2015 Warrants for common stock 225,756 134,113 134,113 Common stock options 5,458,043 3,910,350 2,587,474 Restricted stock units 212,625 525,250 525,250 Series A convertible preferred stock (if converted) 14,097,745 14,097,745 — 19,994,169 18,667,458 3,246,837 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short Term Investments [Abstract] | |
Summary of Short-term Investments | The following table summarizes the Company’s short-term investments accounted for as available-for-sale securities as of December 31, 2017 and 2016 (in thousands): Maturity (in years) Amortized Cost Unrealized Losses Unrealized Gains Estimated Fair Value December 31, 2017 U.S. Treasury debt securities 1 or less 12,000 (3 ) — 11,997 Total $ 12,000 $ (3 ) $ — $ 11,997 December 31, 2016 U.S. Treasury debt securities 1 or less 3,504 (1 ) — 3,503 Total $ 3,504 $ (1 ) $ — $ 3,503 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following (in thousands): December 31, 2017 2016 Furniture and fixtures $ 508 $ 324 Computer and office equipment 527 318 Software 103 103 Leasehold improvements—building 180 180 Scientific equipment 6,371 4,858 Property and equipment, gross 7,689 5,783 Less accumulated depreciation and amortization (5,139 ) (4,204 ) Property and equipment, net $ 2,550 $ 1,579 |
Accrued Expenses, Long-Term D21
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses Long Term Debt Commitments And Contingencies Disclosure [Abstract] | |
Schedule of accrued expenses | Current accrued expenses consist of the following (in thousands): December 31, 2017 December 31, 2016 Accrued payroll and other employee benefits $ 1,761 $ 1,505 Accrued clinical trial related costs 3,323 1,043 Accrued other 2,170 1,409 Accrued expenses $ 7,254 $ 3,957 |
Schedule of long-term debt and unamortized discount balances | Long-term debt and unamortized discount balances are as follows (in thousands): December 31, 2017 December 31, 2016 Long-term debt $ 15,000 $ 10,765 Less debt issuance costs and discount, net of current portion (192 ) (7 ) Long-term debt, net of long-term portion of debt issuance costs and discount 14,808 10,758 Less current portion of long-term debt — (8,257 ) Long-term debt, net $ 14,808 $ 2,501 Current portion of long-term debt $ — $ 8,257 Less current portion of debt issuance costs and discount — (70 ) Current portion of long-term debt, net $ — $ 8,187 |
Schedule of future minimum payments under the long-term debt and the non-cancelable operating leases | Future minimum payments under the long-term debt and the non-cancelable operating leases as of December 31, 2017 are as follows (in thousands): Long–Term Debt Operating Leases Total Years Ending December 31, 2018 1,215 2,116 3,331 2019 5,645 2,278 7,923 2020 5,661 2,346 8,007 2021 5,253 2,417 7,670 2022 1,545 2,489 4,034 2023 — 1,282 1,282 Total $ 19,319 $ 12,928 $ 32,247 Less interest (3,194 ) Less additional payments due upon maturity (1,125 ) Less unamortized debt discount and debt issuance costs (192 ) Long–term debt, net of current portion $ 14,808 |
Convertible Preferred Stock a22
Convertible Preferred Stock and Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Summary of stock option activity and related information under all equity plans | The following table summarizes stock option activity and related information under all equity plans for the years ended December 31, 2017, 2016 and 2015: Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in 000s) Outstanding at December 31, 2014 2,425,969 $ 3.83 8.06 $ 4,839 Granted 1,345,744 5.23 Exercised (227,215 ) 1.85 Cancelled (957,024 ) 4.20 Outstanding at December 31, 2015 2,587,474 $ 4.59 6.92 $ 1,486 Granted 2,245,240 2.62 Exercised (136,368 ) 1.44 Cancelled (785,996 ) 3.58 Outstanding at December 31, 2016 3,910,350 $ 3.77 8.28 $ 682 Granted 2,522,920 3.09 Exercised (83,220 ) 2.79 Cancelled (892,007 ) 3.50 Outstanding at December 31, 2017 5,458,043 $ 3.52 7.99 $ 14,754 Options vested and expected to vest at December 31, 2017 5,300,033 $ 3.53 8.02 $ 14,267 Options exercisable at December 31, 2017 2,479,556 $ 3.92 7.16 $ 5,972 |
Summary of restricted stock unit activity and related information under all equity plans | The following table summarizes Restricted Stock Unit activity and related information under all equity plans for the years ended December 31, 2017, 2016 and 2015: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Vesting Period Aggregate Intrinsic Value (in 000s) Outstanding at December 31, 2014 — $ — — $ — Granted 525,250 4.89 Vested — — Cancelled — — Outstanding at December 31, 2015 525,250 $ 4.89 3.80 $ 1,770 Granted — — Vested — — Cancelled — — Outstanding at December 31, 2016 525,250 $ 4.89 2.80 $ 1,318 Granted — — Vested (225,125 ) 4.89 Cancelled (87,500 ) 4.89 Outstanding at December 31, 2017 212,625 $ 4.89 1.80 $ 1,299 Restricted Stock Units expected to vest at December 31, 2017 212,625 $ 4.89 1.80 $ 1,299 |
Schedule of common stock reserved for future issuance | Common stock reserved for future issuance is as follows: December 31, 2017 2016 Common stock warrants 225,756 134,113 Convertible preferred stock (if converted) 14,097,745 14,097,745 Common stock options 5,458,043 3,910,350 Restricted stock units 212,625 525,250 Awards available under the 2013 Plan 3,572,112 760,065 Awards available under the Inducement Plan 100,000 300,000 Employee stock purchase plan 729,000 729,000 24,395,281 20,456,523 |
Warrant | |
Stockholders' Equity | |
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | The weighted- average assumptions used in the Black-Scholes option pricing model to determine the fair value of the warrants issued were as follows: As of July 14, 2017 Risk–free interest rate 2.1 % Expected volatility 88 % Expected term (in years) 7.0 Expected dividend yield 0.0 % |
Employee Stock Option | |
Stockholders' Equity | |
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Years Ended December 31, 2017 2016 2015 Risk–free interest rate 2.0 % 1.6 % 1.6 % Expected volatility 90 % 80 % 81 % Expected term (in years) 6.0 6.0 6.0 Expected dividend yield 0.0 % 0.0 % 0.0 % |
Non Employee Stock Option | |
Stockholders' Equity | |
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | 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: Years Ended December 31, 2017 2016 2015 Risk–free interest rate 2.1 % 1.5 % 0.8 % Expected volatility 87 % 83 % 72 % Expected term (in years) 8.5 6.4 2.7 Expected dividend yield 0.0 % 0.0 % 0.0 % |
Stock Option And Incentive Plan 2007 And 2013 | |
Stockholders' Equity | |
Summary of outstanding restricted stock awards granted under the plan | The allocation of stock-based compensation for all stock awards is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Research and development $ 2,095 $ 1,802 $ 1,241 General and administrative 1,511 1,382 1,159 Total stock-based compensation expense $ 3,606 $ 3,184 $ 2,400 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of the Company's expected federal income tax provision (benefit) to the actual income tax provision | The following is a reconciliation of the Company’s expected federal income tax provision (benefit) to the actual income tax provision (in thousands): Years Ended December 31, 2017 2016 2015 Tax computed at federal statutory rate $ (14,603 ) $ (11,377 ) $ (10,198 ) State tax, net of federal tax benefit (1,315 ) (2,089 ) 2,226 Permanent differences 795 292 43 Stock compensation 539 968 213 R&D tax credits (2,934 ) (971 ) (594 ) Reserve for uncertain tax positions 1,326 2,076 1,733 Tax attribute limitation — 54 2,727 Tax Cuts and Jobs Act 25,280 — — Other 46 (74 ) (37 ) Valuation allowance (9,134 ) 11,121 3,887 Income tax expense $ — $ — $ — |
Summary of significant components of the Company's deferred tax assets | Significant components of the Company’s deferred tax assets are summarized as follows (in thousands): As of December 31, 2017 2016 Deferred tax assets: Section 59e amortization $ 14,365 $ 17,699 Net operating losses 27,699 35,049 R&D tax credits 5,421 2,175 Depreciation and amortization 581 1,020 Deferred revenue 594 1,677 Stock compensation 876 1,222 Other 96 (76 ) Deferred tax assets 49,632 58,766 Valuation allowance (49,632 ) (58,766 ) Net deferred tax assets $ — $ — |
Summary of the change in the Company's unrecognized tax benefits | The change in the Company’s unrecognized tax benefits is summarized as follows (in thousands): Balance at December 31, 2014 $ 1,820 Increase related to current year tax positions 374 Increase related to prior year tax positions 2,624 Decrease related to prior year tax positions (949 ) Balance at December 31, 2015 $ 3,869 Increase related to current year tax positions 2,268 Increase related to prior year tax positions 1,625 Decrease related to prior year tax positions (32 ) Balance at December 31, 2016 $ 7,730 Increase related to current year tax positions 4,077 Increase related to prior year tax positions 6 Decrease related to prior year tax positions (13 ) Balance at December 31, 2017 $ 11,800 |
Selected Quarterly Financial 24
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected quarterly financial data | (in thousands, except per share data) (unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter 2017 Revenues $ 1,027 $ 1,026 $ 1,026 $ 1,027 Total operating expenses 10,998 10,596 11,366 13,271 Net loss (10,126 ) (9,645 ) (10,684 ) (12,497 ) Basic and diluted net loss per common share $ (0.24 ) $ (0.23 ) $ (0.26 ) $ (0.29 ) 2016 Revenues $ 1,322 $ 1,027 $ 1,026 $ 1,027 Total operating expenses 9,238 9,031 9,415 8,681 Net loss (8,377 ) (8,408 ) (8,737 ) (7,940 ) Basic and diluted net loss per common share $ (0.29 ) $ (0.29 ) $ (0.27 ) $ (0.21 ) |
Organization and Summary of S25
Organization and Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017USD ($)$ / sharesshares | Nov. 30, 2016USD ($)$ / sharesshares | Aug. 31, 2016USD ($)$ / sharesshares | May 31, 2015USD ($)$ / sharesshares | Dec. 31, 2017USD ($)item$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)shares | |
Equity transactions | |||||||
Gross proceeds from issuance of shares | $ 4,580 | ||||||
Net proceeds from issuance of shares after related cash costs | $ 205 | $ 186 | $ 420 | ||||
Segment Reporting | |||||||
Number of operating segments | item | 1 | ||||||
Common Stock | |||||||
Equity transactions | |||||||
Shares sold | shares | 10,953,750 | 6,900,000 | |||||
Public Equity Offerings | |||||||
Equity transactions | |||||||
Shares sold | shares | 10,953,750 | 6,900,000 | |||||
Share issue price (in dollars per share) | $ / shares | $ 4.20 | $ 5 | $ 4.20 | ||||
Gross proceeds from issuance of shares | $ 46,000 | $ 34,500 | |||||
Net proceeds from issuance of shares after related cash costs | 43,000 | $ 32,100 | |||||
Costs related to equity offering | 3,000 | ||||||
Costs related to equity offering not paid | $ 200 | $ 200 | |||||
Private Placement | Non-Voting Class A Preferred Stock | |||||||
Equity transactions | |||||||
Share issue price (in dollars per share) | $ / shares | $ 13.30 | ||||||
Preferred stock, issued shares | shares | 2,819,549 | ||||||
Preferred stock convertible into common stock, shares | shares | 5 | ||||||
Private Placement | Common Stock | |||||||
Equity transactions | |||||||
Shares sold | shares | 7,236,837 | 5,250,000 | |||||
Share issue price (in dollars per share) | $ / shares | $ 2.66 | $ 1.96 | |||||
Gross proceeds from issuance of shares | $ 10,300 | ||||||
Net proceeds from issuance of shares after related cash costs | $ 54,900 | $ 10,200 | |||||
Gross proceeds from issuance of shares | $ 56,700 |
Organization and Summary of S26
Organization and Summary of Significant Accounting Policies (Details 2) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 88,952 | $ 88,609 |
Total assets | 100,949 | 92,112 |
U.S. Treasury debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
U.S. Treasury debt securities | 11,997 | 3,503 |
Quoted prices in Active Market for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 88,952 | 88,609 |
Total assets | 100,949 | 92,112 |
Quoted prices in Active Market for Identical Assets (Level 1) | U.S. Treasury debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
U.S. Treasury debt securities | $ 11,997 | $ 3,503 |
Organization and Summary of S27
Organization and Summary of Significant Accounting Policies (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
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 Nonrecurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Non-financial assets | 0 | |
Non-financial liabilities | 0 | |
Fair Value Measurements Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | $ 0 | $ 0 |
Organization and Summary of S28
Organization and Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 88,952 | $ 88,609 | $ 64,809 | |
Restricted cash | 122 | 122 | 122 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 89,074 | $ 88,731 | $ 64,931 | $ 49,223 |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies (Details 5) | 12 Months Ended |
Dec. 31, 2017 | |
Furniture And Fixtures | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Furniture And Fixtures | Maximum | |
Property and equipment | |
Estimated useful lives | 5 years |
Computer Equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Computer Equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 5 years |
Scientific Equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Scientific Equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 5 years |
Office Equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Office Equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 5 years |
Organization and Summary of S30
Organization and Summary of Significant Accounting Policies (Details 6) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue Recognition [Abstract] | |||
Four criteria needed for Company to recognize revenue | (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. | ||
Uncertain tax position description | more than 50 percent | ||
Anti-dilutive securities (in shares) | 19,994,169 | 18,667,458 | 3,246,837 |
Series A Convertible Preferred Stock (if converted) | |||
Revenue Recognition [Abstract] | |||
Anti-dilutive securities (in shares) | 14,097,745 | 14,097,745 | |
Employee Stock Option | |||
Revenue Recognition [Abstract] | |||
Anti-dilutive securities (in shares) | 0 | 3,284 | 44,381 |
Warrants For Common Stock | |||
Revenue Recognition [Abstract] | |||
Anti-dilutive securities (in shares) | 225,756 | 134,113 | 134,113 |
Stock Compensation Plan | |||
Revenue Recognition [Abstract] | |||
Anti-dilutive securities (in shares) | 5,458,043 | 3,910,350 | 2,587,474 |
Restricted Stock Units (RSUs) | |||
Revenue Recognition [Abstract] | |||
Anti-dilutive securities (in shares) | 212,625 | 525,250 | 525,250 |
Juno Collaboration and Licens31
Juno Collaboration and License Agreement (Details) - USD ($) | May 04, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Collaboration agreement | ||||
Issuance of common stock | $ 4,580,000 | |||
Juno Therapeutics, Inc | ||||
Collaboration agreement | ||||
Common stock issued | 1,000,000 | |||
Research term | 4 years | |||
Minimum annual research payments receivable | $ 2,000,000 | |||
Extended term of research | 2 years | |||
Extension fee | $ 3,000,000 | |||
Minimum annual payments receivable for extended term of research | $ 4,000,000 | |||
Common stock premium percentage on trading price upon exercise of extension | 120.00% | |||
Trailing trading period considered for premium | 30 days | |||
Upfront payments recorded as deferred revenue | $ 5,000,000 | |||
Recognition period of deferred revenue | 4 years | |||
Proceeds from sale of common stock | $ 8,000,000 | |||
Premium on share price (in dollars per share) | $ 3.40 | |||
Aggregate premium on shares issued recorded as deferred revenue | $ 3,400,000 | |||
Issuance of common stock | $ 4,600,000 | |||
Term of royalties payable after first commercial sale | 10 years | |||
Juno Therapeutics, Inc | Maximum | ||||
Collaboration agreement | ||||
Common stock issued upon exercise of extension | $ 10,000,000 | |||
Aggregate milestone payments | 51,000,000 | |||
Juno Therapeutics, Inc | Maximum | Third Juno Product | ||||
Collaboration agreement | ||||
Additional aggregate milestone payments | 116,000,000 | |||
Juno Therapeutics, Inc | Maximum | Fifth Juno Product | ||||
Collaboration agreement | ||||
Additional aggregate milestone payments | 137,500,000 | |||
Juno Therapeutics, Inc | Collaborative Arrangement | ||||
Collaboration agreement | ||||
Proceeds from non refundable upfront fee | $ 5,000,000 | |||
Share Price | $ 8 | |||
Revenue recognized | $ 4,100,000 | $ 4,400,000 | $ 2,400,000 | |
Aggregate deferred revenue | $ 2,800,000 |
Short-term Investments (Details
Short-term Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Available-for-sale securities, impairment | $ 0 | |
Available-for-sale securities, gains (losses) on sales | $ 0 | $ 0 |
U.S. Treasury debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Short term investments, maturity start range | 6 months | |
Short term investments, maturity end range | 12 months |
Short-term Investments (Detai33
Short-term Investments (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 12,000 | $ 3,504 |
Unrealized Losses | (3) | (1) |
Estimated Fair Value | $ 11,997 | $ 3,503 |
U.S. Treasury debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Maturity (in years) | 1 or less | 1 or less |
Amortized Cost | $ 12,000 | $ 3,504 |
Unrealized Losses | (3) | (1) |
Estimated Fair Value | $ 11,997 | $ 3,503 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment | |||
Property and equipment, gross | $ 7,689 | $ 5,783 | |
Less accumulated depreciation and amortization | (5,139) | (4,204) | |
Property, Plant and Equipment, Net | 2,550 | 1,579 | |
Depreciation expense | 971 | 881 | $ 687 |
Furniture And Fixtures | |||
Property and equipment | |||
Property and equipment, gross | 508 | 324 | |
Computer And Office Equipment | |||
Property and equipment | |||
Property and equipment, gross | 527 | 318 | |
Software And Software Development Costs | |||
Property and equipment | |||
Property and equipment, gross | 103 | 103 | |
Leasehold Improvements | |||
Property and equipment | |||
Property and equipment, gross | 180 | 180 | |
Scientific Equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 6,371 | $ 4,858 |
Accrued Expenses, Long-Term D35
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current accrued expenses | ||
Accrued payroll and other employee benefits | $ 1,761 | $ 1,505 |
Accrued clinical trial related costs | 3,323 | 1,043 |
Accrued other | 2,170 | 1,409 |
Accrued expenses | $ 7,254 | $ 3,957 |
Accrued Expenses, Long-Term D36
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Long-term debt | $ 15,000 | $ 10,765 |
Less debt issuance costs and discount, net of current portion | (192) | (7) |
Long-term debt, net of long-term portion of debt issuance costs and discount | 14,808 | 10,758 |
Less current portion of long-term debt | (8,257) | |
Long-term debt, net | $ 14,808 | 2,501 |
Current portion of long-term debt | 8,257 | |
Less current portion of debt issuance costs and discount | (70) | |
Current portion of long-term debt, net | $ 8,187 |
Accrued Expenses, Long-Term D37
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details 3) | Jul. 14, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)ft²$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 24, 2014USD ($) | Jul. 30, 2014USD ($) |
Current accrued expenses | ||||||
Loss on extinguishment of debt | $ (118,000) | |||||
Cash-collateralized irrevocable standby letter of credit | 100,000 | |||||
Future minimum payments | 12,928,000 | |||||
Rent expense | 2,300,000 | $ 1,300,000 | $ 1,200,000 | |||
Minimum annual payments to maintain cancelable licenses | $ 200,000 | |||||
Non-Cancelable Operating Lease | ||||||
Current accrued expenses | ||||||
Lease expiration period | 2023-06 | |||||
Leased space of office and laboratory | ft² | 48,000 | |||||
Future minimum payments | $ 12,900,000 | |||||
Sublease Lease | ||||||
Current accrued expenses | ||||||
Future minimum payments | $ 0 | |||||
Sublease expiration date | 2017-09 | |||||
Term B Loan | Warrant | ||||||
Current accrued expenses | ||||||
Fair values of warrants issued | $ 200,000 | |||||
SVB Loan Amendment | ||||||
Current accrued expenses | ||||||
First amendment effective date | Jul. 14, 2017 | |||||
Debt instrument, variable rate description | The Company’s long-term debt bears interest at a floating per annum rate equal to the greater of (i) 3.50% above the Prime Rate (as defined in the SVB Loan Amendment) or (ii) 7.25%; provided, however, that in no event shall such interest rate exceed 8.25%. | |||||
Debt instrument interest only payment period | August 1, 2017 through January 1, 2019 | |||||
SVB Loan Amendment | Greater of 7.25% | ||||||
Current accrued expenses | ||||||
Debt instrument, floating rate | 7.25% | |||||
SVB Loan Amendment | Minimum | Prime Rate | Greater of 3.50% Above Prime Rate | ||||||
Current accrued expenses | ||||||
Debt instrument, floating rate | 3.50% | |||||
SVB Loan Amendment | Maximum | ||||||
Current accrued expenses | ||||||
Debt instrument, floating rate | 8.25% | |||||
SVB Loan Amendment | 2017 Term Loan | ||||||
Current accrued expenses | ||||||
Principal amount | 15,000,000 | |||||
Cash proceeds from remaining portion of debt | $ 7,500,000 | |||||
Debt instrument, maturity date | Jan. 1, 2022 | |||||
Debt instrument, variable rate description | The 2017 Term Loan matures on January 1, 2022 (the Term Loan Maturity Date) and bears interest at a floating per annum rate equal to the greater of (i) 3.50% above the Prime Rate (as defined in the SVB Loan Amendment) or (ii) 7.25%; provided, however, that in no event shall such interest rate exceed 8.25%. | |||||
Debt instrument, interest payment terms | Interest is payable on a monthly basis on the first day of each month. | |||||
Debt instrument, frequency of periodic payment | monthly | |||||
Interest rate (as a percent) | 8.00% | |||||
Debt instrument interest only payment period | August 1, 2017 through January 1, 2019 | |||||
Number of equal monthly installments to repay principal and accrued interest | 36 months | |||||
Debt instrument extended interest only payment period | January 1, 2019 through and including to July 1, 2019 | |||||
Final payment fee | 7.50% | |||||
Final payment fee (amounts in dollars) | $ 1,100,000 | |||||
Effective interest rate | 10.20% | |||||
Loss on extinguishment of debt | (100,000) | |||||
Aggregate interest expense | 800,000 | |||||
SVB Loan Amendment | 2017 Term Loan | 2017 Warrant | ||||||
Current accrued expenses | ||||||
Exercise price (in dollars per share) | $ / shares | $ 3.28 | |||||
Warrants expiration date | 2024-07 | |||||
Fair values of warrants issued | $ 200,000 | |||||
SVB Loan Amendment | 2017 Term Loan | Product Development Milestone Achievement | ||||||
Current accrued expenses | ||||||
Number of equal monthly installments to repay principal and accrued interest | 30 months | |||||
SVB Loan Amendment | 2017 Term Loan | Minimum | Greater of 7.25% | ||||||
Current accrued expenses | ||||||
Debt instrument, floating rate | 7.25% | |||||
SVB Loan Amendment | 2017 Term Loan | Minimum | Prime Rate | Greater of 3.50% Above Prime Rate | ||||||
Current accrued expenses | ||||||
Debt instrument, floating rate | 3.50% | |||||
SVB Loan Amendment | 2017 Term Loan | Maximum | ||||||
Current accrued expenses | ||||||
Debt instrument, floating rate | 8.25% | |||||
SVB Loan Amendment | 2017 Term Loan | Maximum | 2017 Warrant | ||||||
Current accrued expenses | ||||||
Warrants to purchase shares of common stock issued on conversion | shares | 91,463 | |||||
Amended And Restated Loan And Security Agreement | ||||||
Current accrued expenses | ||||||
Aggregate interest expense | $ 500,000 | $ 1,600,000 | $ 2,200,000 | |||
Amended And Restated Loan And Security Agreement | Warrants Expiration Period January 2019 | ||||||
Current accrued expenses | ||||||
Warrants to purchase shares of common stock issued on conversion | shares | 5,305 | |||||
Warrants expiration date | 2019-01 | |||||
Amended And Restated Loan And Security Agreement | Warrants Expiration Period August 2021 | ||||||
Current accrued expenses | ||||||
Warrants to purchase shares of common stock issued on conversion | shares | 30,769 | |||||
Warrants expiration date | 2021-08 | |||||
Amended And Restated Loan And Security Agreement | Warrant | ||||||
Current accrued expenses | ||||||
Warrants to purchase shares of common stock issued on conversion | shares | 36,074 | |||||
Exercise price (in dollars per share) | $ / shares | $ 7.21 | |||||
Amended And Restated Loan And Security Agreement | Maximum | ||||||
Current accrued expenses | ||||||
Principal amount | $ 20,000,000 | |||||
Amended And Restated Loan And Security Agreement | Term A Loan | ||||||
Current accrued expenses | ||||||
Principal amount | 10,000,000 | |||||
Debt instrument, maturity date | Jan. 1, 2018 | |||||
Final payment fee | 7.50% | |||||
Final payment fee (amounts in dollars) | $ 800,000 | |||||
Amended And Restated Loan And Security Agreement | Term B Loan | ||||||
Current accrued expenses | ||||||
Debt instrument, maturity date | Jun. 1, 2018 | |||||
Final payment fee | 7.50% | |||||
Final payment fee (amounts in dollars) | $ 800,000 | |||||
Amended And Restated Loan And Security Agreement | Term B Loan | 2014 Warrants | ||||||
Current accrued expenses | ||||||
Warrants to purchase shares of common stock issued on conversion | shares | 98,039 | |||||
Exercise price (in dollars per share) | $ / shares | $ 4.08 | |||||
Warrants expiration date | 2021-12 | |||||
Amended And Restated Loan And Security Agreement | Term B Loan | Maximum | ||||||
Current accrued expenses | ||||||
Principal amount | $ 10,000,000 | |||||
Amended And Restated Loan And Security Agreement | Term B Loan Tranche 1 | Minimum | ||||||
Current accrued expenses | ||||||
Principal amount | $ 10,000,000 |
Accrued Expenses, Long-Term D38
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details 4) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-Term Debt | ||
Years Ending December 31, 2018 | $ 1,215 | |
Years Ending December 31, 2019 | 5,645 | |
Years Ending December 31, 2020 | 5,661 | |
Years Ending December 31, 2021 | 5,253 | |
Years Ending December 31, 2022 | 1,545 | |
Long-term debt | 19,319 | |
Less interest | (3,194) | |
Less additional payments due upon maturity | (1,125) | |
Less unamortized debt discount and debt issuance costs | (192) | |
Long–term debt, net of current portion | 14,808 | $ 2,501 |
Operating Leases | ||
Years Ending December 31, 2018 | 2,116 | |
Years Ending December 31, 2019 | 2,278 | |
Years Ending December 31, 2020 | 2,346 | |
Years Ending December 31, 2021 | 2,417 | |
Years Ending December 31, 2022 | 2,489 | |
Years Ending December 31, 2023 | 1,282 | |
Total | 12,928 | |
Total | ||
Years Ending December 31, 2018 | 3,331 | |
Years Ending December 31, 2019 | 7,923 | |
Years Ending December 31, 2020 | 8,007 | |
Years Ending December 31, 2021 | 7,670 | |
Years Ending December 31, 2022 | 4,034 | |
Years Ending December 31, 2023 | 1,282 | |
Total | $ 32,247 |
Convertible Preferred Stock a39
Convertible Preferred Stock and Stockholders' Equity (Details) - USD ($) | Jul. 14, 2017 | Sep. 13, 2013 | Nov. 30, 2016 | Aug. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Jan. 31, 2018 | May 31, 2017 | May 02, 2017 | May 10, 2016 | Dec. 31, 2014 | Aug. 31, 2013 | Aug. 28, 2013 |
Convertible preferred stock | |||||||||||||||
Net proceeds from issuance of shares after related cash costs | $ 205,000 | $ 186,000 | $ 420,000 | ||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Dividends declared | $ 0 | ||||||||||||||
Shares reserved for issuance | 24,395,281 | 20,456,523 | 24,395,281 | ||||||||||||
Stock purchases under the plan (in shares) | 0 | ||||||||||||||
SVB Loan Amendment | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Warrants to purchase shares of common stock issued on conversion | 91,463 | ||||||||||||||
Employee And Non Employee Stock Option | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Total intrinsic value of stock options exercised | $ 100,000 | ||||||||||||||
Cash received upon exercise of options (in dollars per share) | $ 200,000 | ||||||||||||||
Employee Stock | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Shares reserved for issuance | 729,000 | 729,000 | 729,000 | 729,000 | |||||||||||
Additional shares authorized (as a percent) | 2.00% | ||||||||||||||
Additional shares authorized | 450,000 | ||||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Shares reserved for issuance | 212,625 | 525,250 | 212,625 | ||||||||||||
Expected recognition period of unrecognized compensation cost | 1 year 9 months 18 days | 2 years 9 months 18 days | 3 years 9 months 18 days | ||||||||||||
Unrecognized compensation cost related to unvested restricted shares | $ 900,000 | $ 1,800,000 | $ 2,400,000 | $ 900,000 | |||||||||||
Equity Incentive Plan 2007 | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Shares authorized | 2,423,072 | ||||||||||||||
Stock Option And Incentive Plan 2013 | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Shares reserved for issuance | 2,500,000 | 1,020,000 | |||||||||||||
Additional shares authorized (as a percent) | 4.00% | ||||||||||||||
Stock Option And Incentive Plan 2013 | Restricted Stock | Second Year Anniversary Vesting Date | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Stock options generally vested on anniversary grant date (as a percent) | 50.00% | ||||||||||||||
Stock Option And Incentive Plan 2013 | Restricted Stock | Fourth Year Anniversary Vesting Date | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Stock options generally vested on anniversary grant date (as a percent) | 50.00% | ||||||||||||||
Stock Option And Incentive Plan 2007 And 2013 | Employee And Non Employee Stock Option | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Stock options generally vested on anniversary grant date (as a percent) | 25.00% | ||||||||||||||
General vesting period after first year | 3 years | ||||||||||||||
Monthly vesting period | 4 years | ||||||||||||||
Term of stock awards | 10 years | ||||||||||||||
Outstanding options | 5,458,043 | 3,910,350 | 2,587,474 | 5,458,043 | 2,425,969 | ||||||||||
Granted | 2,522,920 | 2,245,240 | 1,345,744 | ||||||||||||
Unrecognized compensation cost related to outstanding options | $ 5,800,000 | $ 4,900,000 | $ 3,800,000 | $ 5,800,000 | |||||||||||
Expected recognition period of unrecognized compensation cost | 2 years 7 months 6 days | 2 years 7 months 6 days | 2 years 9 months 18 days | ||||||||||||
Stock Option And Incentive Plan 2007 And 2013 | Employee And Non Employee Stock Option | Vesting Based On Performance | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Outstanding options | 73,600 | 73,600 | 14,769 | 73,600 | |||||||||||
Aggregate grant date fair value | $ 100,000 | $ 100,000 | $ 100,000 | ||||||||||||
Stock Option And Incentive Plan 2007 And 2013 | Employee and Directors Stock Option | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Granted | 2,500,000 | 2,200,000 | 1,200,000 | ||||||||||||
Weighted-average grant date fair value per share of employee options granted | $ 2.29 | $ 1.80 | $ 3.54 | ||||||||||||
Inducement Plan | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Shares reserved for issuance | 100,000 | 300,000 | 100,000 | 500,000 | |||||||||||
Inducement Plan | Subsequent Event | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Additional shares reserved for issuance | 400,000 | ||||||||||||||
Common Stock | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Common stock issued | 10,953,750 | 6,900,000 | |||||||||||||
Warrant | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Shares reserved for issuance | 225,756 | 134,113 | 225,756 | ||||||||||||
Warrant | SVB Loan Amendment | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Exercise price (in dollars per share) | $ 3.28 | ||||||||||||||
Warrant | Term B Loan | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Fair values of warrants issued | $ 200,000 | ||||||||||||||
Non-Voting Class A Preferred Stock | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||||||
Conversion price | $ 2.66 | ||||||||||||||
Non-Voting Class A Preferred Stock | Redmile Group, LLC and Affiliates | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Terms of conversion | The Class A Preferred were purchased exclusively by entities affiliated with Redmile Group, LLC (collectively, Redmile). The terms of the CoD prohibited Redmile from converting the Class A Preferred into shares of the Company’s common stock if, as a result of conversion, Redmile, together with its affiliates, would own more than 9.99% of the Company’s common stock then issued and outstanding (the Redmile Percentage Limitation), which percentage could change at Redmile’s election upon 61 days’ notice to the Company to i) any other number less than or equal to 19.99% or (ii) subject to approval of the Company’s stockholders to the extent required in accordance with the NASDAQ Global Market rules, any number in excess of 19.99%. On May 2, 2017, the Company’s stockholders approved the issuance of up to an aggregate of 14,097,745 shares of common stock upon the conversion of the outstanding shares of Class A Preferred. As a result, Redmile has the right to increase the Redmile Percentage Limitation to any percentage in excess of 19.99% at its election. | ||||||||||||||
Non-Voting Class A Preferred Stock | Maximum | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Number of shares to be issued upon conversion | 14,097,745 | ||||||||||||||
Non-Voting Class A Preferred Stock | Maximum | Redmile Group, LLC and Affiliates | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Percentage of common stock ownership upon preferred stock conversion | 9.99% | ||||||||||||||
Preferred shares converted into common stock percentage of ownership change upon notice | 19.99% | ||||||||||||||
Private Placement | Common Stock | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Share issue price (in dollars per share) | $ 2.66 | $ 1.96 | |||||||||||||
Common stock issued | 7,236,837 | 5,250,000 | |||||||||||||
Net proceeds from issuance of shares after related cash costs | $ 54,900,000 | $ 10,200,000 | |||||||||||||
Gross proceeds from issuance of shares | $ 56,700,000 | ||||||||||||||
Private Placement | Non-Voting Class A Preferred Stock | |||||||||||||||
Convertible preferred stock | |||||||||||||||
Preferred stock, issued shares | 2,819,549 | ||||||||||||||
Share issue price (in dollars per share) | $ 13.30 | ||||||||||||||
Number of shares to be issued upon conversion | 5 |
Convertible Preferred Stock a40
Convertible Preferred Stock and Stockholders' Equity (Details 2) - Stock Option And Incentive Plan 2007 And 2013 - Employee And Non Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options | ||||
Balance at the beginning of the period | 3,910,350 | 2,587,474 | 2,425,969 | |
Granted | 2,522,920 | 2,245,240 | 1,345,744 | |
Exercised | (83,220) | (136,368) | (227,215) | |
Cancelled | (892,007) | (785,996) | (957,024) | |
Balance at the end of the period | 5,458,043 | 3,910,350 | 2,587,474 | 2,425,969 |
Vested and expected to vest at the end of the period | 5,300,033 | |||
Exercisable at the end of the period | 2,479,556 | |||
Weighted-Average Price | ||||
Balance at the beginning of the period | $ 3.77 | $ 4.59 | $ 3.83 | |
Granted | 3.09 | 2.62 | 5.23 | |
Exercised | 2.79 | 1.44 | 1.85 | |
Cancelled | 3.50 | 3.58 | 4.20 | |
Balance at the end of the period | 3.52 | $ 3.77 | $ 4.59 | $ 3.83 |
Vested and expected to vest at the end of the period | 3.53 | |||
Exercisable at the end of the period | $ 3.92 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding at the end of the period | 7 years 11 months 26 days | 8 years 3 months 11 days | 6 years 11 months 1 day | 8 years 22 days |
Vested and expected to vest at the end of the period | 8 years 7 days | |||
Exercisable at the end of the period | 7 years 1 month 28 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the period | $ 14,754 | $ 682 | $ 1,486 | $ 4,839 |
Vested and expected to vest at the end of the period | 14,267 | |||
Exercisable at the end of the period | $ 5,972 |
Convertible Preferred Stock a41
Convertible Preferred Stock and Stockholders' Equity (Details 3) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Restricted Stock Units | |||
Balance at the beginning of the period | 525,250 | 525,250 | |
Granted | 525,250 | ||
Vested | (225,125) | ||
Cancelled | (87,500) | ||
Balance at the end of the period | 212,625 | 525,250 | 525,250 |
Expected to vest at the end of the period | 212,625 | ||
Weighted-Average Grant Date Fair Value per Share | |||
Balance at the beginning of the period | $ 4.89 | $ 4.89 | |
Granted | $ 4.89 | ||
Vested | 4.89 | ||
Cancelled | 4.89 | ||
Balance at the end of the period | 4.89 | $ 4.89 | $ 4.89 |
Expected to vest at the end of the period | $ 4.89 | ||
Weighted Average Remaining Vesting Period | |||
Outstanding at the end of the period | 1 year 9 months 18 days | 2 years 9 months 18 days | 3 years 9 months 18 days |
Expected to vest at the end of the period | 1 year 9 months 18 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | $ 1,299 | $ 1,318 | $ 1,770 |
Restricted Stock Units expected to vest at December 31, 2017 | $ 1,299 |
Convertible Preferred Stock a42
Convertible Preferred Stock and Stockholders' Equity (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Convertible preferred stock | |||
Total stock-based compensation expense | $ 3,606 | $ 3,184 | $ 2,400 |
Research And Development | |||
Convertible preferred stock | |||
Total stock-based compensation expense | 2,095 | 1,802 | 1,241 |
General And Administrative | |||
Convertible preferred stock | |||
Total stock-based compensation expense | $ 1,511 | $ 1,382 | $ 1,159 |
Convertible Preferred Stock a43
Convertible Preferred Stock and Stockholders' Equity (Details 5) | Jul. 14, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Warrant | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Risk–free interest rate | 2.10% | |||
Expected volatility | 88.00% | |||
Expected term (in years) | 7 years | |||
Expected dividend yield | 0.00% | |||
Employee Stock Option | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Risk–free interest rate | 2.00% | 1.60% | 1.60% | |
Expected volatility | 90.00% | 80.00% | 81.00% | |
Expected term (in years) | 6 years | 6 years | 6 years | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Non Employee Stock Option | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Risk–free interest rate | 2.10% | 1.50% | 0.80% | |
Expected volatility | 87.00% | 83.00% | 72.00% | |
Expected term (in years) | 8 years 6 months | 6 years 4 months 24 days | 2 years 8 months 12 days | |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Convertible Preferred Stock a44
Convertible Preferred Stock and Stockholders' Equity (Details 6) - shares | Dec. 31, 2017 | Dec. 31, 2016 | May 10, 2016 | Sep. 13, 2013 |
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 24,395,281 | 20,456,523 | ||
Convertible Preferred Stock (if converted) | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 14,097,745 | 14,097,745 | ||
Inducement Plan | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 100,000 | 300,000 | 500,000 | |
Employee Stock Option | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 5,458,043 | 3,910,350 | ||
Stock Compensation Plan | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 3,572,112 | 760,065 | ||
Restricted Stock Units (RSUs) | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 212,625 | 525,250 | ||
Employee Stock | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 729,000 | 729,000 | 729,000 | |
Warrant | ||||
Weighted-average assumptions to determine fair value of stock options | ||||
Shares reserved for issuance | 225,756 | 134,113 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the Company's expected federal income tax provision (benefit) to the actual income tax provision | |||
Tax computed at federal statutory rate | $ (14,603) | $ (11,377) | $ (10,198) |
State tax, net of federal tax benefit | (1,315) | (2,089) | 2,226 |
Permanent differences | 795 | 292 | 43 |
Stock compensation | 539 | 968 | 213 |
R&D tax credits | (2,934) | (971) | (594) |
Reserve for uncertain tax positions | 1,326 | 2,076 | 1,733 |
Tax attribute limitation | 54 | 2,727 | |
Tax Cuts and Jobs Act | 25,280 | ||
Other | 46 | (74) | (37) |
Valuation allowance | (9,134) | 11,121 | $ 3,887 |
Deferred tax assets: | |||
Section 59e amortization | 14,365 | 17,699 | |
Net operating losses | 27,699 | 35,049 | |
R&D tax credits | 5,421 | 2,175 | |
Depreciation and amortization | 581 | 1,020 | |
Deferred revenue | 594 | 1,677 | |
Stock compensation | 876 | 1,222 | |
Other | 96 | (76) | |
Deferred tax assets | 49,632 | 58,766 | |
Valuation allowance | $ (49,632) | $ (58,766) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 49,632 | $ 58,766 |
U.S. Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 121,200 | |
Net operating loss carryforward expiration year | 2,027 | |
California | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 120,800 | |
Net operating loss carryforward expiration year | 2,028 |
Income Taxes (Details 3)
Income Taxes (Details 3) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Tax Credit Carryforward [Line Items] | |
Cumulative changes in ownership percentage | 50.00% |
Period of change in ownership | 3 years |
U.S. Federal | Research and development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforwards | $ 5.7 |
Tax credit carryforward expiration year | 2,035 |
California | Research and development | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforwards | $ 4.2 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in the Company's unrecognized tax benefits | |||
Balance at the beginning of the period | $ 7,730,000 | $ 3,869,000 | $ 1,820,000 |
Increase related to current year tax positions | 4,077,000 | 2,268,000 | 374,000 |
Increase related to prior year tax positions | 6,000 | 1,625,000 | 2,624,000 |
Decrease related to prior year tax positions | (13,000) | (32,000) | (949,000) |
Balance at the end of the period | 11,800,000 | $ 7,730,000 | $ 3,869,000 |
Income Taxes | |||
Unrecognized tax benefit | 0 | ||
Unrecognized tax benefits that, if recognized, would reduce the effective tax rate | $ 0 |
Income Taxes (Details 5)
Income Taxes (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | |||||
Excess tax benefit previously not recognized | $ 11,800 | $ 7,730 | $ 3,869 | $ 1,820 | |
Corporate tax rate | 34.00% | ||||
Tax cuts and jobs act of 2017 incomplete accounting change in tax rate deferred tax liability provisional income tax benefit | $ 25,300 | ||||
Remeasurement of deferred tax assets and liabilities | 25,300 | ||||
Scenario Plan | |||||
Income Tax Contingency [Line Items] | |||||
Corporate tax rate | 21.00% | ||||
ASU No. 2016-09 | |||||
Income Tax Contingency [Line Items] | |||||
Excess tax benefit previously not recognized | $ 100 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) | Jan. 02, 2009 | Dec. 31, 2017 |
Compensation And Retirement Disclosure [Abstract] | ||
Minimum age of employees | 21 years | |
Matching contributions under 401(k) plan | $ 0 |
Selected Quarterly Financial 51
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 1,027 | $ 1,026 | $ 1,026 | $ 1,027 | $ 1,027 | $ 1,026 | $ 1,027 | $ 1,322 | |||
Total operating expenses | 13,271 | 11,366 | 10,596 | 10,998 | 8,681 | 9,415 | 9,031 | 9,238 | $ 46,231 | $ 36,365 | $ 30,213 |
Net loss | $ (12,497) | $ (10,684) | $ (9,645) | $ (10,126) | $ (7,940) | $ (8,737) | $ (8,408) | $ (8,377) | $ (42,952) | $ (33,462) | $ (29,992) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.29) | $ (0.26) | $ (0.23) | $ (0.24) | $ (0.21) | $ (0.27) | $ (0.29) | $ (0.29) | $ (1.02) | $ (1.05) | $ (1.18) |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Feb. 22, 2018USD ($) |
California Institute for Regenerative Medicine | FT516 | Subsequent Event | |
Subsequent Event [Line Items] | |
Grants for first-in-human clinical trial | $ 4 |