Esperion Therapeutics (ESPR) 10-Q 2 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 01, 2018
Document and Entity Information
Entity Registrant Name	Esperion Therapeutics, Inc.
Entity Central Index Key	1,434,868
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		26,803,675
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 24,380	$ 34,468
Short-term investments	155,793	165,731
Prepaid clinical development costs	7,650	2,072
Other prepaid and current assets	1,060	1,653
Total current assets	188,883	203,924
Property and equipment, net	311	435
Intangible assets	56	56
Long-term investments	21,631	73,420
Total assets	210,881	277,835
Current liabilities:
Accounts payable	22,482	20,375
Current portion of long-term debt	152	1,045
Accrued clinical development costs	9,524	10,506
Other accrued liabilities	2,806	1,218
Total current liabilities	34,964	33,144
Total liabilities	34,964	33,144
Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized and no shares issued or outstanding as of June 30, 2018 and December 31, 2017
Common stock, $0.001 par value; 120,000,000 shares authorized as of June 30, 2018 and December 31, 2017; 26,801,717 shares issued and outstanding at June 30, 2018 and 26,304,669 shares issued and outstanding at December 31, 2017	27	26
Additional paid-in capital	664,817	641,801
Accumulated other comprehensive loss	(776)	(845)
Accumulated deficit	(488,151)	(396,291)
Total stockholders' equity	175,917	244,691
Total liabilities and stockholders' equity	$ 210,881	$ 277,835

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	26,801,717	26,304,669
Common stock, shares outstanding	26,801,717	26,304,669

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating expenses:
Research and development	$ 39,524	$ 38,248	$ 80,464	$ 74,108
General and administrative	6,956	5,412	12,910	10,441
Total operating expenses	46,480	43,660	93,374	84,549
Loss from operations	(46,480)	(43,660)	(93,374)	(84,549)
Other income, net	750	323	1,514	671
Net loss	$ (45,730)	$ (43,337)	$ (91,860)	$ (83,878)
Net loss per common share (basic and diluted) (in dollars per share)	$ (1.71)	$ (1.92)	$ (3.44)	$ (3.72)
Weighted-average shares outstanding (basic and diluted)	26,786,796	22,591,326	26,696,495	22,577,317
Other comprehensive loss:
Unrealized gain (loss) on investments	$ 187	$ (11)	$ 69	$ (67)
Total comprehensive loss	$ (45,543)	$ (43,348)	$ (91,791)	$ (83,945)

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating activities
Net loss	$ (91,860)	$ (83,878)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	124	134
Amortization of premiums and discounts on investments	(57)	251
Stock-based compensation expense	11,644	9,130
Changes in assets and liabilities:
Prepaids and other assets	(4,985)	(1,546)
Accounts payable	2,107	14,119
Other accrued liabilities	608	1,246
Net cash used in operating activities	(82,419)	(60,544)
Investing activities
Purchases of investments	(20,540)	(36,769)
Proceeds from sales/maturities of investments	82,393	80,059
Purchase of property and equipment		(19)
Net cash provided by investing activities	61,853	43,271
Financing activities
Proceeds from exercise of common stock options	11,374	322
Payments on long-term debt	(896)	(841)
Net cash provided by (used in) financing activities	10,478	(519)
Net decrease in cash and cash equivalents	(10,088)	(17,792)
Cash and cash equivalents at beginning of period	34,468	38,165
Cash and cash equivalents at end of period	$ 24,380	$ 20,373

The Company and Basis of Presen

The Company and Basis of Presentation	6 Months Ended
	Jun. 30, 2018
The Company and Basis of Presentation
The Company and Basis of Presentation	1. The Company and Basis of Presentation The Company is the Lipid Management Company, a late-stage pharmaceutical company focused on developing and commercializing complementary, convenient, cost-effective, once-daily, oral therapies for the treatment of patients with elevated low density lipoprotein cholesterol (“LDL-C”). Through scientific and clinical excellence, and a deep understanding of cholesterol biology, the experienced lipid management team at Esperion is committed to developing new LDL-C lowering therapies that will make a substantial impact on reducing global cardiovascular disease (“CVD”); the leading cause of death around the world. Bempedoic acid and the Company’s lead product candidate, the bempedoic acid / ezetimibe combination pill, are targeted therapies that have been shown to significantly lower elevated LDL-C levels in patients with hypercholesterolemia, including patients inadequately treated with current lipid-modifying therapies. The clinical development program for the bempedoic acid / ezetimibe combination pill consists of a single pivotal Phase 3 clinical study (1002FDC-053) in patients with hypercholesterolemia and with atherosclerotic cardiovascular disease (“ASCVD”) and/or heterozygous familial hypercholesterolemia (“HeFH”), including high CVD risk primary prevention patients, whose LDL-C is not adequately controlled despite receiving maximally tolerated lipid-modifying background therapy. 1002FDC-053 initiated in November 2017 and fully enrolled 382 patients in March 2018, and the Company expects to report top-line results in August 2018. The global pivotal Phase 3 clinical development program for bempedoic acid, consisting of four clinical studies, is substantially complete with approximately 3,600 high CVD risk patients with hypercholesterolemia and ASCVD and/or HeFH, or who are high CVD risk primary prevention, on optimized background lipid-modifying therapy and with elevated levels of LDL-C. These patients are on two distinct types of background lipid-modifying therapy: 1) patients on their maximally tolerated statin therapy, and 2) patients who are only able to tolerate less than the lowest approved daily starting dose of a statin, and can be considered stain intolerant. In March 2018, the Company reported top-line results from the first of the Phase 3 studies, Study 4 (1002-048). In May 2018, the Company reported top-line results from the 52-week long-term safety study, Study 1 (1002-040), and from Study 3 (1002-046). The Company expects to report top-line results from Study 2 (1002-047) in September 2018. The Company intends to use positive results from the Phase 3 bempedoic acid / ezetimibe combination pill and bempedoic acid programs with a total of 4,000 patients to support global regulatory submissions for tandem LDL-C lowering indications in the U.S. no later than the first quarter of 2019 and in Europe no later than the second quarter of 2019. The Company is also conducting a global cardiovascular outcomes trial (“CVOT”)—known as C holesterol L owering via B E mpedoic Acid, an A CL-inhibiting R egimen (CLEAR) Outcomes, for bempedoic acid in patients with hypercholesterolemia and high CVD risk and who can be considered statin intolerant. The Company initiated the CLEAR Outcomes CVOT in December 2016 and expects the study to be fully enrolled in 2019, and intends to use positive results from this CVOT to support submissions for a CV risk reduction indication in the U.S. and Europe by 2022. The Company’s primary activities since incorporation have been conducting research and development activities, including nonclinical, preclinical and clinical testing, performing business and financial planning, recruiting personnel, and raising capital. Accordingly, the Company has not commenced principal operations and is subject to risks and uncertainties which include the need to research, develop, and clinically test potential therapeutic products; obtain regulatory approvals for its products and commercialize them, if approved; expand its management and scientific staff; and finance its operations with an ultimate goal of achieving profitable operations. The Company has sustained operating losses since inception and expects such losses to continue over the foreseeable future. Management plans to continue to fund operations through public or private equity or debt financings or through other sources, which may include collaborations with third parties. If adequate funds are not available, the Company may not be able to continue the development of its current or future product candidates, or to commercialize its current or future product candidates, if approved. Basis of Presentation The accompanying condensed financial statements are unaudited and were prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”). In the opinion of management, the Company has made all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations for the interim periods presented. Certain prior year amounts have been reclassified to conform with current year presentation. Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2017, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01 which includes provisions to accounting for equity investments, financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. The updated guidance requires equity investments with determinable fair values to be measured at fair value with changes in fair value recognized in income. Equity investments without determinable fair values are to be measured at cost, less any impairment determined to be other than temporary. The Company adopted ASU 2016-01 effective January 1, 2018. Prospectively, unrealized gains or losses from equity investments with readily determinable fair values will be reflected in earnings through “Other income, net” on the statement of operations and any equity investments owned by the Company without readily determinable fair values will be measured at cost, less any impairment determined to be other than temporary. The adoption of the ASU did not have a material impact to the Company’s balance sheets, statements of operations or statements of cash flows. In May 2017, the FASB issued ASU 2017-09 which includes provisions to clarify when to account for a change to terms or conditions of a share-based payment award as a modification. Under the updated guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. The Company adopted ASU 2017-09 effective January 1, 2018. The adoption of the ASU did not have a material impact to the Company’s balance sheets, statements of operations or statements of cash flows. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Debt

Debt	6 Months Ended
	Jun. 30, 2018
Debt
Debt	3. Debt In June 2014, the Company entered into a loan and security agreement (the “Credit Facility”) with Oxford Finance LLC which provided for initial borrowings of $5.0 million under the term loan (the “Term A Loan”). On June 30, 2014, the Company received proceeds of $5.0 million from the issuance of secured promissory notes under the Term A Loan. The secured promissory notes issued under the Credit Facility bear interest at an annual rate of 6.40% and are due on July 1, 2018. A final payment equal to 8.0% of the Term A Loan is due upon the earlier of the maturity date or prepayment of the term loan. The Company is recognizing the final payment as interest expense using the effective interest method over the life of the Credit Facility. The Term A Loan was fully repaid in July 2018. In connection with the borrowing of the Term A Loan, the Company issued a warrant to purchase 8,230 shares of common stock at an exercise price of $15.19 (see Note 4). The warrant resulted in a debt discount of $0.1 million which is amortized into interest expense using the effective interest method over the life of the Term A Loan. In addition, the Company incurred debt issuance costs of $0.1 million in connection with the borrowing of the Term A Loan. The debt issuance costs were capitalized and included in long-term debt on the balance sheet at the inception of the Term A Loan, and are amortized to interest expense using the effective interest method over the same term. Estimated future principal payments due under the Credit Facility as of June 30, 2018, are as follows: Years Ending December 31, (in thousands) 2018 $ Total $

Warrants

Warrants	6 Months Ended
	Jun. 30, 2018
Warrants
Warrants	4. Warrants In connection with the Credit Facility entered into in June 2014, the Company issued a warrant to purchase 8,230 shares of common stock at an exercise price of $15.19. The warrant will terminate on the earlier of June 30, 2019, and the closing of a merger or consolidation transaction in which the Company is not the surviving entity. The warrant was recorded at fair value of $0.1 million to additional-paid-in-capital in accordance with ASC 815-10 based upon the allocation of the debt proceeds. Upon the closing of the Company’s Initial Public Offering, all warrants exercisable for 1,940,000 shares of Series A preferred stock, at an exercise price of $1.00 per share (unadjusted for stock splits), were automatically converted into warrants exercisable for 277,690 shares of common stock, at an exercise price of $6.99 per share. During the six months ended June 30, 2018, the remaining 177,123 warrants were net exercised for 159,944 shares of the Company’s common stock. During the year ended December 31, 2017, 71,237 warrants were net exercised for 62,525 shares of the Company’s common stock. As of June 30, 2018, the Company had warrants outstanding that were exercisable for a total of 8,230 shares of common stock at a weighted-average exercise price of $15.19 per share.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	5. Commitments and Contingencies On January 12, 2016, a purported stockholder of the Company filed a putative class action lawsuit in the United States District Court for the Eastern District of Michigan, against the Company and Tim Mayleben, captioned Kevin L. Dougherty v. Esperion Therapeutics, Inc., et al. (No. 16-cv-10089). The lawsuit alleges that the Company and Mr. Mayleben violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by allegedly failing to disclose in an August 17, 2015, public statement that the FDA would require a cardiovascular outcomes trial before approving the Company’s lead product candidate. The lawsuit seeks, among other things, compensatory damages in connection with an allegedly inflated stock price between August 18, 2015 and September 28, 2015, as well as attorneys’ fees and costs. On May 20, 2016, an amended complaint was filed in the lawsuit and on July 5, 2016, the Company filed a motion to dismiss the amended complaint. On December 27, 2016, the court granted the Company’s motion to dismiss with prejudice and entered judgment in the Company’s favor. On January 24, 2017, the plaintiffs in this lawsuit filed a motion to alter or amend the judgment. In May 2017, the court denied the plaintiff’s motion to alter or amend the judgment. On June 19, 2017, the plaintiffs filed a notice of appeal to the Sixth Circuit Court of Appeals and on September 14, 2017, they filed their opening brief in support of the appeal. The appeal was fully briefed on December 7, 2017, and it was argued before the Sixth Circuit on March 15, 2018. On May 7, 2018, a purported stockholder of the Company filed a putative class action lawsuit in the United States District Court for the Eastern District of Michigan, against the Company, Tim Mayleben, and Richard Bartram, captioned Kevin Bailey v. Esperion Therapeutics, Inc., et al. (No. 18-cv-11438). The lawsuit alleges that the Company, Mr. Mayleben and Mr. Bartram violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 by allegedly making false and misleading statements about the facts and circumstances surrounding the Phase 3 trial results for bempedoic acid that the Company announced on May 2, 2018. The lawsuit seeks, among other things, compensatory damages in connection with an allegedly inflated stock price between February 22, 2017, and May 1, 2018, as well as attorneys’ fees and costs. The Company is unable to predict the outcome of these matters and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome. On July 6, 2018, the Company entered into the first amendment of the lease for the Company’s principal executive office in Ann Arbor, Michigan. The amended lease is to increase the current 7,941 rentable square feet of office space by 11,471 rentable square feet, together with the right to use common areas and facilities in common with the landlord and other tenants. The term of the lease commences with respect to all of the space in the leased premises on the later to occur of (i) the date upon which landlord delivers the premises to the Company under the terms of the lease with the delivery conditions set forth in the lease satisfied and (ii) November 1, 2018 (the “Lease Commencement Date”). The term of the lease shall end 60 months after the Lease Commencement Date. Under the terms of the lease, following the first month (during which the base rent is $0) and the second month (during which the base rent is $15,990), the base rent, subject to certain adjustments, for the leased premises will start at approximately $19,412 per month, plus certain operating expenses and taxes, and shall increase on an annual basis and/or as otherwise provided in the lease agreement. In addition, on May 14, 2018, the Company provided notice of early lease termination for its second Ann Arbor lease of 5,500 square feet to end its tenancy effective November 15, 2018. There have been no other material changes to the Company’s contractual obligations and commitments and contingencies outside the ordinary course of business from those previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Investments

Investments	6 Months Ended
	Jun. 30, 2018
Investments
Investments	6. Investments The following table summarizes the Company’s cash equivalents and investments: June 30, 2018 Amortized Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ $ — $ — $ Short-term investments: Certificates of deposit — ) U.S. treasury notes — ) U.S. government agency securities — ) Long-term investments: Certificates of deposit — ) U.S. treasury notes — ) U.S. government agency securities — ) Total $ $ — $ ) $ December 31, 2017 Amortized Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ $ — $ — $ U.S. treasury notes — — Short-term investments: Certificates of deposit ) U.S treasury notes — ) U.S. government agency securities — ) Long-term investments: Certificates of deposit — ) U.S. treasury notes — ) U.S. government agency securities — ) Total $ $ $ ) $ At June 30, 2018, remaining contractual maturities of investments classified as current on the balance sheets were less than 12 months and remaining contractual maturities of investments classified as long-term were less than two years. During the three and six months ended June 30, 2018, other income, net in the statements of operations includes interest income on investments of $0.7 million and $1.5 million, and income for the accretion of premiums and discounts on investments of $0.1 million and $0.1 million, respectively. During the three and six months ended June 30, 2017, other income, net in the statements of operations includes interest income on available-for-sale investments of $0.4 million and $1.0 million, and expense for the amortization of premiums and discounts on investments of approximately $0.2 million and $0.3 million, respectively. There were no unrealized gains or losses on investments reclassified from accumulated other comprehensive loss to other income in the statements of operations during the three and six months ended June 30, 2018 and 2017.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Fair Value Measurements	7. Fair Value Measurements The Company follows accounting guidance that emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements are defined on a three level hierarchy: Level 1 inputs: Quoted prices for identical assets or liabilities in active markets; Level 2 inputs: Observable inputs other than Level 1 prices, such as quoted market prices for similar assets or liabilities or other inputs that are observable or can be corroborated by market data; and Level 3 inputs: Unobservable inputs that are supported by little or no market activity and require the reporting entity to develop assumptions that market participants would use when pricing the asset or liability. The following table presents the Company’s financial assets and liabilities that have been measured at fair value on a recurring basis: Description Total Level 1 Level 2 Level 3 (in thousands) June 30, 2018 Assets: Money market funds $ $ $ — $ — Investments: Certificates of deposit — — U.S. treasury notes — — U.S. government agency securities — — Total assets at fair value $ $ $ $ — December 31, 2017 Assets: Money market funds $ $ $ — $ — Available-for-sale securities: Certificates of deposit — — U.S. treasury notes — — U.S. government agency securities — — Total assets at fair value $ $ $ $ — There were no transfers between Levels 1, 2 or 3 during the three and six months ended June 30, 2018 and 2017.

Stock Compensation

Stock Compensation	6 Months Ended
	Jun. 30, 2018
Stock Compensation
Stock Compensation	8. Stock Compensation 2017 Inducement Equity Plan In May 2017, the Company’s board of directors approved the 2017 Inducement Equity Plan (the “2017 Plan”). The number of shares of common stock available for awards under the 2017 Plan was set to 750,000, with any shares of common stock that are forfeited, cancelled, held back upon the exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock, or otherwise terminated (other than by exercise) under the 2017 Plan added back to the shares of common stock available for issuance under the 2017 Plan. 2013 Stock Option and Incentive Plan In May 2015, the Company’s stockholders approved the amended and restated 2013 Stock Option and Incentive Plan (as amended, the “2013 Plan”). The number of shares of common stock available for awards under the 2013 Plan was set to 2,975,000 shares, plus (i) shares of common stock that are forfeited, cancelled, held back upon the exercise or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock or otherwise terminated (other than by exercise) under the 2013 Plan and the Company’s 2008 Incentive Stock Option and Restricted Stock Plan are added back to the shares of common stock available for issuance under the 2013 Plan, and (ii) on January 1, 2016, and each January 1, thereafter, the number of shares of common stock reserved and available for issuance under the 2013 Plan will be cumulatively increased by 2.5% of the number of shares of common stock outstanding on the immediately preceding December 31, or such lesser number of shares of common stock determined by the compensation committee. The 2017 Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), unrestricted stock awards and dividend equivalent rights. The 2013 Plan provides for the granting of stock options, stock appreciation rights, restricted stock awards, RSUs, unrestricted stock awards, cash-based awards, performance share awards and dividend equivalent rights. The Company incurs stock-based compensation expense related to stock options and RSUs. The fair value of RSUs is determined by the closing market price of the Company’s common stock on the date of grant. The fair value of stock options is calculated using a Black-Scholes option pricing model. The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation. Accordingly, compensation costs related to equity instruments granted are recognized over the requisite service periods of the awards on a straight-line basis at the grant-date fair value. In accordance with the adoption of ASU 2016-09, the Company accounts for forfeitures as they occur. The following table summarizes the activity relating to the Company’s options to purchase common stock for the six months ended June 30, 2018: Number of Weighted-Average Weighted-Average Aggregate (in thousands) Outstanding at December 31, 2017 $ $ Granted $ Forfeited or expired ) $ Exercised ) $ Outstanding at June 30, 2018 $ $ The following table summarizes information about the Company’s stock option plan as of June 30, 2018: Weighted-Average Weighted-Average Exercise Remaining Aggregate Number of Price Contractual Intrinsic Options Per Share Term (Years) Value (in thousands) Vested and expected to vest at June 30, 2018 4,493,209 $ 34.40 $ 63,261 Exercisable at June 30, 2018 2,566,334 $ 27.61 $ 46,098 During the three and six months ended June 30, 2018, the Company recognized $5.5 million and $11.3 million, respectively, of stock-based compensation expense related to stock options. During the three and six months ended June 30, 2017, the Company recognized $4.8 million and $8.9 million, respectively, of stock-based compensation expense related to stock options. As of June 30, 2018, there was $50.0 million of unrecognized stock-based compensation expense related to unvested options, which will be recognized over a weighted-average period of 3.0 years. The following table summarizes the activity relating to the Company’s RSUs for the six months ended June 30, 2018: Number of Weighted-Average Outstanding and unvested at December 31, 2017 $ Granted $ Forfeited or expired ) $ Vested ) $ Outstanding and unvested at June 30, 2018 $ During the three and six months ended June 30, 2018, the Company recognized $0.2 million and $0.3 million, respectively, of stock-based compensation expense related to RSUs. During the three and six months ended June 30, 2017, the Company recognized $0.1 million and $0.2 million, respectively, of stock-based compensation expense recognized related to RSUs. As of June 30, 2018, there was $2.1 million of unrecognized stock-based compensation expense related to unvested RSUs, which will be recognized over a weighted-average period of 3.5 years.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Taxes
Income Taxes	9. Income Taxes There was no provision for income taxes for the three and six months ended June 30, 2018 and 2017, because the Company has incurred operating losses since inception. At June 30, 2018, the Company concluded that it is not more likely than not that the Company will realize the benefit of its deferred tax assets due to its history of losses. Accordingly, a full valuation allowance has been applied against the net deferred tax assets.

Net Loss Per Common Share

Net Loss Per Common Share	6 Months Ended
	Jun. 30, 2018
Net Loss Per Common Share
Net Loss Per Common Share	10. Net Loss Per Common Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, warrants for common stock, stock options and unvested RSUs are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The shares outstanding at the end of the respective periods presented below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: June 30, December 31, Warrants for common stock Common shares under option Unvested RSUs Total potential dilutive shares

The Company and Basis of Pres16

The Company and Basis of Presentation (Policies)	6 Months Ended
	Jun. 30, 2018
The Company and Basis of Presentation
Basis of Presentation	Basis of Presentation The accompanying condensed financial statements are unaudited and were prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“GAAP”). In the opinion of management, the Company has made all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations for the interim periods presented. Certain prior year amounts have been reclassified to conform with current year presentation. Certain information and disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2017, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the interim periods are not necessarily indicative of the results to be expected for a full year, any other interim periods or any future year or period.

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jun. 30, 2018
Debt
Schedule of estimated future principal payments due	Years Ending December 31, (in thousands) 2018 $ Total $

Investments (Tables)

Investments (Tables)	6 Months Ended
	Jun. 30, 2018
Investments
Summary of the Company's cash equivalents and investments	June 30, 2018 Amortized Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ $ — $ — $ Short-term investments: Certificates of deposit — ) U.S. treasury notes — ) U.S. government agency securities — ) Long-term investments: Certificates of deposit — ) U.S. treasury notes — ) U.S. government agency securities — ) Total $ $ — $ ) $ December 31, 2017 Amortized Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ $ — $ — $ U.S. treasury notes — — Short-term investments: Certificates of deposit ) U.S treasury notes — ) U.S. government agency securities — ) Long-term investments: Certificates of deposit — ) U.S. treasury notes — ) U.S. government agency securities — ) Total $ $ $ ) $

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Schedule of the Company's financial assets and liabilities that have been measured at fair value on a recurring basis	Description Total Level 1 Level 2 Level 3 (in thousands) June 30, 2018 Assets: Money market funds $ $ $ — $ — Investments: Certificates of deposit — — U.S. treasury notes — — U.S. government agency securities — — Total assets at fair value $ $ $ $ — December 31, 2017 Assets: Money market funds $ $ $ — $ — Available-for-sale securities: Certificates of deposit — — U.S. treasury notes — — U.S. government agency securities — — Total assets at fair value $ $ $ $ —

Stock Compensation (Tables)

Stock Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Stock Compensation
Summary of activity relating to the Company's options to purchase common stock	Number of Weighted-Average Weighted-Average Aggregate (in thousands) Outstanding at December 31, 2017 $ $ Granted $ Forfeited or expired ) $ Exercised ) $ Outstanding at June 30, 2018 $ $
Summary of information about the stock option plan	Weighted-Average Weighted-Average Exercise Remaining Aggregate Number of Price Contractual Intrinsic Options Per Share Term (Years) Value (in thousands) Vested and expected to vest at June 30, 2018 4,493,209 $ 34.40 $ 63,261 Exercisable at June 30, 2018 2,566,334 $ 27.61 $ 46,098
Summary of activity relating to the Company's RSUs	Number of Weighted-Average Outstanding and unvested at December 31, 2017 $ Granted $ Forfeited or expired ) $ Vested ) $ Outstanding and unvested at June 30, 2018 $

Net Loss Per Common Share (Tabl

Net Loss Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2018
Net Loss Per Common Share
Schedule of anti-dilutive securities excluded from the calculation of diluted net loss per share	June 30, December 31, Warrants for common stock Common shares under option Unvested RSUs Total potential dilutive shares

Debt (Details)

Debt (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 30, 2014	Jun. 30, 2018
Warrants for common stock
Debt
Exercise price (in dollars per share)		$ 15.19
Credit Facility
Debt
Percentage of final payment equal to amount drawn under the Credit Facility		8.00%
Estimated future principal payments due under the Credit Facility
2,018		$ 152
Total		$ 152
Term A Loan
Debt
Maximum borrowing capacity	$ 5,000
Interest rate (as a percent)	6.40%
Debt issuance costs	$ 100
Term A Loan | Warrants for common stock
Debt
Warrants exercisable into stock (in shares)	8,230
Exercise price (in dollars per share)	$ 15.19
Unamortized discount	$ 100
Term A Loan | Secured promissory notes
Debt
Proceeds from issuance of debt	$ 5,000

Warrants (Details)

Warrants (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2014	Jul. 31, 2013
Warrants for common stock
Warrants
Exercise price (in dollars per share)	$ 15.19
Warrants exercised	177,123	71,237
Number of shares of common stock to be purchased against outstanding warrants	8,230
Series A preferred stock warrant
Warrants
Warrants exercised/exercisable into stock (in shares)				1,940,000
Exercise price (in dollars per share)				$ 1
Common stock
Warrants
Exercise price (in dollars per share)			$ 15.19
Common stock | Warrants for common stock
Warrants
Warrants exercised/exercisable into stock (in shares)	159,944	62,525	8,230	277,690
Fair value of warrants			$ 0.1
Share price of common stock (in dollars per share)				$ 6.99

Commitments and contingencies (

Commitments and contingencies (Details) - Office space in Ann Arbor, Michigan	Jul. 06, 2018USD ($)ft²	May 14, 2018ft²
Commitments and contingencies
Current rentable square feet of office space | ft²	7,941
Increase in rentable square feet of office space | ft²	11,471
Operating Lease Term	60 months
Base rent in first month | $	$ 0
Base rate in second month | $	15,990
Base rent thereafter | $	$ 19,412
Early lease termination for its second Ann Arbor lease | ft²		5,500

Investments (Details)

Investments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Cash equivalents and investments
Gross Unrealized Gains					$ 1
Gross Unrealized Losses	$ (776)		$ (776)		(846)
Total, Amortized Cost	195,599		195,599		270,297
Total, Estimated Fair Value	194,823		194,823		269,452
Amortization of premiums and discounts on investments			57	$ (251)
Other income (expense), net	750	$ 323	1,514	671
Other income, net
Cash equivalents and investments
Interest income on investments	700	400	1,500	1,000
Amortization of premiums and discounts on investments	100	(200)	100	(300)
Reclassification out of accumulated other comprehensive income (loss)
Cash equivalents and investments
Other income (expense), net	0	$ 0	0	$ 0
U.S. treasury notes
Cash equivalents and investments
Investments, Amortized Cost					2,999
Investments, Estimated Fair Value					2,999
Short-term investments | U.S. treasury notes
Cash equivalents and investments
Investments, Amortized Cost	74,381		74,381		97,537
Gross Unrealized Losses	(248)		(248)		(225)
Investments, Estimated Fair Value	74,133		74,133		97,312
Short-term investments | U.S. government agency securities
Cash equivalents and investments
Investments, Amortized Cost	71,515		71,515		56,143
Gross Unrealized Losses	(256)		(256)		(141)
Investments, Estimated Fair Value	71,259		71,259		56,002
Long-term investments | U.S. treasury notes
Cash equivalents and investments
Investments, Amortized Cost	7,980		7,980		27,983
Gross Unrealized Losses	(96)		(96)		(209)
Investments, Estimated Fair Value	7,884		7,884		27,774
Long-term investments | U.S. government agency securities
Cash equivalents and investments
Investments, Amortized Cost	13,167		13,167		42,041
Gross Unrealized Losses	(149)		(149)		(248)
Investments, Estimated Fair Value	13,018		13,018		41,793
Money market funds
Cash equivalents and investments
Cash equivalents, Estimated Fair Value	17,399		17,399		27,302
Investments, Amortized Cost	17,399		17,399		27,302
Certificates of deposit | Short-term investments
Cash equivalents and investments
Investments, Amortized Cost	10,422		10,422		12,429
Gross Unrealized Gains					1
Gross Unrealized Losses	(21)		(21)		(13)
Investments, Estimated Fair Value	10,401		10,401		12,417
Certificates of deposit | Long-term investments
Cash equivalents and investments
Investments, Amortized Cost	735		735		3,863
Gross Unrealized Losses	(6)		(6)		(10)
Investments, Estimated Fair Value	$ 729		$ 729		$ 3,853

Fair Value Measurements - Recur

Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Assets:
Available-for-sale-securities	$ 21,631		$ 21,631		$ 73,420
Total, Estimated Fair Value	194,823		194,823		269,452
Transfer of assets between levels	0	$ 0	0	$ 0
Transfer of liabilities between levels	0	$ 0	0	$ 0
Recurring fair value measurement
Assets:
Money market funds	17,399		17,399		27,302
Total, Estimated Fair Value	194,823		194,823		269,452
Recurring fair value measurement | U.S. treasury notes
Assets:
Available-for-sale-securities	82,017		82,017		128,085
Recurring fair value measurement | U.S. government agency securities
Assets:
Available-for-sale-securities	84,277		84,277		97,795
Recurring fair value measurement | Certificates of deposit
Assets:
Available-for-sale-securities	11,130		11,130		16,270
Recurring fair value measurement | Level 1
Assets:
Money market funds	17,399		17,399		27,302
Total, Estimated Fair Value	110,546		110,546		171,657
Recurring fair value measurement | Level 1 | U.S. treasury notes
Assets:
Available-for-sale-securities	82,017		82,017		128,085
Recurring fair value measurement | Level 1 | Certificates of deposit
Assets:
Available-for-sale-securities	11,130		11,130		16,270
Recurring fair value measurement | Level 2
Assets:
Total, Estimated Fair Value	84,277		84,277		97,795
Recurring fair value measurement | Level 2 | U.S. government agency securities
Assets:
Available-for-sale-securities	$ 84,277		$ 84,277		$ 97,795

Stock Compensation (Details)

Stock Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 31, 2015	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	May 31, 2017
Stock compensation
Stock-based compensation expense		$ 5,500	$ 4,800	$ 11,300	$ 8,900
Weighted-average period over which remaining unrecognized compensation cost will be recognized				3 years
Number of Options
Outstanding at the beginning of period (in shares)				4,159,151
Granted (in shares)				929,327
Forfeited or expired (in shares)				(260,352)
Exercised (in shares)				(334,917)
Outstanding at the end of the period (in shares)		4,493,209		4,493,209		4,159,151
Weighted-Average Exercise Price Per Share
Outstanding at the beginning of period (in dollars per share)				$ 28.13
Granted (in dollars per share)				62.83
Forfeited or expired (in dollars per share)				36.22
Exercised (in dollars per share)				33.96
Outstanding at the end of the period (in dollars per share)		$ 34.40		$ 34.40		$ 28.13
Weighted-Average Remaining Contractual Term (Years)
Outstanding at the end of the period				7 years 5 months 12 days		7 years 4 months 21 days
Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars)		$ 63,261		$ 63,261		$ 165,385
Information about the stock option plan
Number of Options, vested and expected to vest (in shares)		4,493,209		4,493,209
Number of Options, exercisable (in shares)		2,566,334		2,566,334
Weighted-Average Exercise Price Per Share, vested and expected to vest (in dollars per share)		$ 34.40		$ 34.40
Weighted-Average Exercise Price Per Share, exercisable (in dollars per share)		$ 27.61		$ 27.61
Weighted-Average Remaining Contractual Term, vested and expected to vest				7 years 5 months 12 days
Weighted-Average Remaining Contractual Term, exercisable				6 years 4 months 21 days
Aggregate Intrinsic Value, vested and expected to vest (in dollars)		$ 63,261		$ 63,261
Aggregate Intrinsic Value, exercisable (in dollars)		46,098		46,098
Additional disclosures
Unrecognized stock-based compensation expense (in dollars)		50,000		50,000
RSUs
Stock compensation
Stock-based compensation expense		200	$ 100	300	$ 200
Unrecognized stock-based compensation expense		$ 2,100		$ 2,100
Weighted-average period over which remaining unrecognized compensation cost will be recognized				3 years 6 months
Number of Options
Outstanding and unvested at the beginning of period (in shares)				10,003
Granted (in shares)				30,000
Forfeited or expired (in shares)				(4,691)
Vested (in shares)				(2,187)
Outstanding and unvested at the ending of period (in shares)		33,125		33,125		10,003
Weighted-Average Exercise Price Per Share
Outstanding and unvested at the beginning of period (in dollars per share)				$ 57.54
Granted (in dollars per share)				70.84
Forfeited or expired (in dollars per share)				57.54
Vested (in dollars per share)				57.54
Outstanding and unvested at the at the end of the period (in dollars per share)		$ 69.59		$ 69.59		$ 57.54
2017 Inducement Equity Plan | Maximum
Stock compensation
Shares reserved and approved for issuance							750,000
2013 Stock Option and Incentive Plan
Stock compensation
Percentage of increase in the number of shares reserved and available for issuance	2.50%
2013 Stock Option and Incentive Plan | Maximum
Stock compensation
Shares reserved and approved for issuance	2,975,000

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Provision for income taxes
Provision for income taxes	$ 0	$ 0	$ 0	$ 0

Net Loss Per Common Share (Deta

Net Loss Per Common Share (Details) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Net Loss Per Common Share
Total potential dilutive shares	4,534,564	4,354,507
Warrants for common stock
Net Loss Per Common Share
Total potential dilutive shares	8,230	185,353
Common shares under option
Net Loss Per Common Share
Total potential dilutive shares	4,493,209	4,159,151
Unvested RSUs
Net Loss Per Common Share
Total potential dilutive shares	33,125	10,003