Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Ardelyx, Inc. | ||
Entity Central Index Key | 1,437,402 | ||
Trading Symbol | ARDX | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Amendment Flag | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 62,599,673 | ||
Entity Public Float | $ 171,401,057 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 78,768 | $ 75,383 |
Short-term investments | 89,321 | 58,593 |
Accounts receivable | 85 | 10,796 |
Unbilled license revenue | 5,000 | |
Prepaid expenses and other current assets | 3,197 | 4,940 |
Total current assets | 176,371 | 149,712 |
Property and equipment, net | 5,611 | 8,032 |
Other assets | 1,350 | 159 |
Total assets | 183,332 | 157,903 |
Current liabilities: | ||
Accounts payable | 1,148 | 3,933 |
Accrued compensation and benefits | 2,723 | 3,229 |
Uncharged license fees | 1,000 | |
Accrued and other liabilities | 12,857 | 10,709 |
Total current liabilities | 17,728 | 17,871 |
Loan payable, long term | 49,209 | |
Other long-term liabilities | 582 | 720 |
Total liabilities | 67,519 | 18,591 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively. | ||
Common stock, $0.0001 par value; 300,000,000 shares authorized; 62,516,627 and 47,534,979 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively. | 6 | 5 |
Additional paid-in capital | 481,357 | 417,568 |
Accumulated deficit | (365,512) | (278,214) |
Accumulated other comprehensive loss | (38) | (47) |
Total stockholders' equity | 115,813 | 139,312 |
Total liabilities and stockholders' equity | $ 183,332 | $ 157,903 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
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 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 62,516,627 | 47,534,979 |
Common stock, shares outstanding | 62,516,627 | 47,534,979 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Total revenues | $ 2,607 | $ 42,000 | |
Cost of revenue | 466 | 8,400 | |
Gross profit | 2,141 | 33,600 | |
Operating expenses: | |||
Research and development | 69,373 | 75,484 | $ 94,161 |
General and administrative | 23,715 | 23,231 | 18,734 |
Total operating expenses | 93,088 | 98,715 | 112,895 |
Loss from operations | (90,947) | (65,115) | (112,895) |
Interest expense | (3,534) | ||
Other income (expense), net | 3,187 | 1,955 | 508 |
Loss before provision for income taxes | (91,294) | (63,160) | (112,387) |
Provision for income taxes | 4 | 1,179 | |
Net loss | $ (91,298) | $ (64,339) | $ (112,387) |
Net loss per common share, basic and diluted | $ (1.62) | $ (1.36) | $ (2.80) |
Shares used in computing net loss per share - basic and diluted | 56,219,919 | 47,435,331 | 40,118,522 |
Comprehensive loss: | |||
Net loss | $ (91,298) | $ (64,339) | $ (112,387) |
Unrealized gain (loss) on available-for-sale securities, net of tax | 9 | 24 | (71) |
Comprehensive loss | (91,289) | (64,315) | $ (112,458) |
Licensing | |||
Revenues: | |||
Total revenues | 2,320 | $ 42,000 | |
Other | |||
Revenues: | |||
Total revenues | $ 287 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member]Public Offering [Member] | Common Stock [Member]Private Investment in Public Equity (PIPE) [Member] | Common Stock [Member]Underwriters' option | Common Stock [Member]Restricted Stock Units (RSUs) [Member] | Common Stock [Member] | Additional Paid-In Capital [Member]Public Offering [Member] | Additional Paid-In Capital [Member]Private Investment in Public Equity (PIPE) [Member] | Additional Paid-In Capital [Member]Underwriters' option | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Other Comprehensive Income (Loss) [Member] | Public Offering [Member] | Private Investment in Public Equity (PIPE) [Member] | Underwriters' option | Total |
Shares, Outstanding | 25,964,886 | ||||||||||||||
Issuance of common stock, value | $ 1 | $ 1 | $ 80,836 | $ 109,735 | $ 80,837 | $ 109,736 | |||||||||
Balance, amount at Dec. 31, 2015 | $ 3 | $ 210,386 | $ (101,488) | $ 108,901 | |||||||||||
Shares, Outstanding | 47,309,422 | ||||||||||||||
Issuance of common stock, shares | 8,625,000 | 12,600,230 | 5,000 | ||||||||||||
Issuance of common stock under employee stock purchase plan, amount | 576 | 576 | |||||||||||||
Issuance of common stock under employee stock purchase plan, shares | 69,054 | ||||||||||||||
Issuance of common stock for services, amount | 187 | $ 187 | |||||||||||||
Issuance of common stock for services, shares | 20,118 | 20,118 | |||||||||||||
Exercise of stock options, amount | 55 | $ 55 | |||||||||||||
Exercise of stock options, shares | 25,134 | 25,134 | |||||||||||||
Stock-based compensation | 5,317 | $ 5,317 | |||||||||||||
Other comprehensive income (loss) | $ (71) | (71) | |||||||||||||
Net loss | (112,387) | (112,387) | |||||||||||||
Balance, amount at Dec. 31, 2016 | $ 5 | 407,092 | (213,875) | (71) | 193,151 | ||||||||||
Balance, shares at Dec. 31, 2016 | 47,309,422 | ||||||||||||||
Shares, Outstanding | 47,309,422 | ||||||||||||||
Shares, Outstanding | 47,534,979 | ||||||||||||||
Issuance of common stock, shares | 43,597 | ||||||||||||||
Issuance of common stock under employee stock purchase plan, amount | 623 | 623 | |||||||||||||
Issuance of common stock under employee stock purchase plan, shares | 99,343 | ||||||||||||||
Issuance of common stock for services, amount | 201 | $ 201 | |||||||||||||
Issuance of common stock for services, shares | 46,858 | 46,858 | |||||||||||||
Exercise of stock options, amount | 62 | $ 62 | |||||||||||||
Exercise of stock options, shares | 35,759 | 35,759 | |||||||||||||
Stock-based compensation | 9,590 | $ 9,590 | |||||||||||||
Other comprehensive income (loss) | 24 | 24 | |||||||||||||
Net loss | (64,339) | (64,339) | |||||||||||||
Balance, amount at Dec. 31, 2017 | $ 5 | 417,568 | (278,214) | (47) | 139,312 | ||||||||||
Balance, shares at Dec. 31, 2017 | 47,534,979 | ||||||||||||||
Shares, Outstanding | 47,534,979 | ||||||||||||||
Issuance of common stock, value | $ 1 | $ 53,769 | $ 53,770 | ||||||||||||
Shares, Outstanding | 62,516,627 | ||||||||||||||
Issuance of common stock, shares | 14,375,000 | 410,506 | |||||||||||||
Issuance of common stock under employee stock purchase plan, amount | 491 | $ 491 | |||||||||||||
Balance, shares at Dec. 31, 2017 | 47,534,979 | ||||||||||||||
Issuance of common stock under employee stock purchase plan, shares | 120,959 | ||||||||||||||
Issuance of common stock for services, amount | 303 | $ 303 | |||||||||||||
Issuance of common stock for services, shares | 75,183 | 75,183 | |||||||||||||
Stock-based compensation | 9,226 | $ 9,226 | |||||||||||||
Other comprehensive income (loss) | 9 | 9 | |||||||||||||
Adoption of ASU No. 2014-09 on January 1, 2018 (ASU 2014-09) at Dec. 31, 2018 | 4,000 | 4,000 | |||||||||||||
Net loss | (91,298) | (91,298) | |||||||||||||
Balance, amount at Dec. 31, 2018 | $ 6 | $ 481,357 | $ (365,512) | $ (38) | $ 115,813 | ||||||||||
Balance, shares at Dec. 31, 2018 | 62,516,627 | ||||||||||||||
Shares, Outstanding | 62,516,627 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Private Placement [Member] | |
Stock issuance costs | $ 263 |
Public Offering [Member] | |
Stock issuance costs | $ 5,413 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net loss | $ (91,298) | $ (64,339) | $ (112,387) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation expense | 2,678 | 2,639 | 1,295 |
Amortization of deferred financing costs | 236 | 375 | 346 |
Amortization of deferred compensation for services | 253 | 192 | 194 |
Amortization of premium on investment securities | (1,136) | 11 | (86) |
Stock-based compensation | 9,226 | 9,590 | 5,317 |
Change in derivative liabilities | 111 | ||
Non-cash interest associated with debt discount accretion | 303 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 10,711 | (10,796) | |
Prepaid expenses and other assets | 525 | (2,148) | 1,562 |
Accounts payable | (2,730) | (1,027) | 2,148 |
Accrued compensation and benefits | (506) | 68 | 795 |
Accrued and other liabilities | 1,353 | 245 | 8,282 |
Net cash used in operating activities | (70,274) | (65,190) | (92,534) |
Investing activities | |||
Proceeds from maturities of investments | 138,600 | 133,701 | 7,600 |
Sales and redemptions of investments | 850 | 17,957 | |
Purchases of investments | (169,033) | (84,013) | (133,810) |
Purchases of property and equipment | (311) | (2,355) | (4,866) |
Net cash (used in) provided by investing activities | (29,894) | 65,290 | (131,076) |
Financing activities | |||
Proceeds from loan payable, net of issuance costs | 49,292 | ||
Proceeds from issuance of common stock, net of issuance costs | 53,770 | 190,573 | |
Proceeds from issuance of common stock under stock plans | 491 | 685 | 631 |
Net cash provided by financing activities | 103,553 | 685 | 191,204 |
Net decrease in cash and cash equivalents | 3,385 | 785 | (32,406) |
Cash and cash equivalents at beginning of period | 75,383 | 74,598 | 107,004 |
Cash and cash equivalents at end of period | 78,768 | 75,383 | 74,598 |
Supplementary disclosure of cash flow information: | |||
Income taxes paid | 4 | 3 | |
Supplementary disclosure of non-cash financing information: | |||
Issuance of derivative in connection with issuance of loan payable | 546 | ||
Acquisition of property and equipment included in accounts payable and accrued liabilities | 55 | 730 | |
Services settled through the issuance of common stock | $ 303 | $ 201 | $ 187 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | 1. ORGANIZATION AND BASIS OF PRESENTATION Ardelyx, Inc., or “the Company,” is a specialized biopharmaceutical company focused on developing first-in-class medicines to improve treatment choices for people with cardiorenal disease. Tenapanor, a first-in-class inhibitor of NHE3, is being evaluated in a second Phase 3 clinical trial for the treatment of hyperphosphatemia in patients with end-stage renal disease, or ESRD, who are on dialysis and in an additional Phase 3 clinical trial as an adjunctive therapy with phosphate binders in the same patient population. The Company is also advancing a small molecule potassium secretagogue program, RDX013, for the potential treatment of hyperkalemia. In November 2018, the Company obtained acceptance of its New Drug Application, or NDA, from the United States Food and Drug Administration, or FDA, for tenapanor for the treatment of people with irritable bowel syndrome with constipation, or IBS-C. The Company operates in only one business segment, which is the development of biopharmaceutical products. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ardelyx and its wholly-owned subsidiary, Ardelyx Cayman Islands, which was placed into voluntary liquidation in December 2017. Intercompany transactions and balances have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to recognition of revenue, clinical trial accruals, contract manufacturing accruals, fair value of assets and liabilities, income taxes and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. Liquidity The Company has never been profitable on an annual basis and, as of December 31, 2018, the Company has an accumulated deficit of $365.5 million. The Company has incurred net losses of approximately $91.3 million, $64.3 million and $112.4 million in the years ended December 31, 2018, 2017 and 2016, respectively. The Company expects to continue to incur net operating losses for the foreseeable future, as the Company continues the development of, seeks regulatory approval for, and if approved, begins to commercialize and manufacture tenapanor, either directly by the Company or through one or more of its collaboration partners. The Company will need additional funding to support its future operating activities and adequate funding may not be available to the Company on acceptable terms, or at all. The Company’s failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the business, results of operations, and financial condition. The Company will need to generate significant revenues to achieve profitability and may never do so. The Company believes that its current available cash, cash equivalents and short-term investments will be sufficient to fund its planned expenditures and meet the Company’s obligations for at least 12 months following its financial statement issuance date. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity date of 90 days or less on the date of purchase to be cash equivalents. Short-Term Investments Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than one year, from the date of acquisition. Short-term investments are carried at fair value based upon quoted market prices. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported as a component of accumulated other comprehensive loss. The cost of available-for-sale securities sold is based on the specific-identification method. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company is exposed to credit risks in the event of default by the counterparties to the extent of the amount recorded in its consolidated balance sheet. Cash, cash equivalents and short-term investments are invested through banks and other financial institutions in the United States. Accounts Receivable An allowance for doubtful accounts will be recorded based on a combination of historical experience, aging analysis, and information on specific accounts. Account balances will be written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. No provision was made for doubtful accounts as of December 31, 2018 or 2017. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, generally three to five years. Leasehold improvements are amortized over the lesser of the estimated useful lives or the related remaining lease term. Impairment of Long-Lived Assets The carrying value of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future undiscounted cash flows, expected to result from the use of the asset and its eventual disposition, are less than its carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Through December 31, 2018, there have been no such impairment losses. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Revenue Recognition On January 1, 2018 the Company adopted the new standard for Revenue from Contracts with Customers, ASC 606, on a modified retrospective method as an adjustment to the opening balance of retained earnings of the annual reporting period. As a result of the adoption of the new standard, on January 1, 2018, the Company recorded the following: (i) an increase in current assets of $5.0 million representing a future receivable related to the first milestone under the Company’s license agreement with Kyowa Hakko Kirin Co., Ltd., or KHK, that KHK achieved in February 2019, (ii) an increase in current liabilities of $1.0 million representing a future payable related to the corresponding payment to AstraZeneca AB, or AstraZeneca, in accordance with the Company’s termination agreement with AstraZeneca and (iii) a related decrease in its accumulated deficit of approximately $4.0 million as the new standard permits revenue from milestones that possess certain criteria to be recognized earlier as the new standard contains different recognition criteria related to milestones than under the previous standard, Revenue Recognition, Multiple-Element Arrangements - Licensing revenues , ASC 605. The Company enters into licensing agreements which are within the scope of ASC 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; and future royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any payments are recorded in other revenues when the customer obtains control of the goods, which is upon delivery. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements. Research and Development Costs Research and development costs are charged to expense as incurred and consist of costs incurred to further the Company’s research and development activities including salaries and related employee benefits, costs associated with clinical trials, costs related to pre-commercialization manufacturing activities such as manufacturing process validation activities and the manufacturing of clinical drug supply, nonclinical research and development activities, regulatory activities, research-related overhead expenses and fees paid to external service providers and contract research and manufacturing organizations that conduct certain research and development activities on behalf of the Company. Accrued Research and Development Expenses As part of the process of preparing its financial statements, the Company is required to estimate its accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with its personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers submit its monthly invoices in arrears for services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to the Company at that time. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued research and development expenses include fees paid to: · contract research organizations, or CROs, in connection with clinical studies; · investigative sites in connection with clinical studies; · vendors related to product manufacturing, development and distribution of clinical supplies; and · vendors in connection with preclinical development activities. The Company records expenses related to clinical studies and manufacturing development activities based on its estimates of the services received and efforts expended pursuant to contracts with multiple CROs and manufacturing vendors that conduct and manage these activities on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical trial milestones. In accruing service fees, the Company estimates the time period over which services will be performed, enrollment of subjects, number of sites activated and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the Company will adjust the accrued or prepaid expense balance accordingly. To date, there have been no material differences from the Company’s estimates to the amounts actually incurred. Stock-Based Compensation The Company recognizes compensation expense for all stock-based payment awards made to employees and directors based on estimated fair values. For employee stock options, the Company determines the grant date fair value of the awards using the Black-Scholes option-pricing model and generally recognizes the fair value as stock-based compensation expense on a straight-line basis over the vesting period of the respective awards. For restricted stock and performance-based restricted stock, to the extent they are probable, the compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company’s stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for equity instruments issued to nonemployees based on their fair values on the measurement dates using the Black-Scholes option-pricing model. The estimated fair values of the options granted to nonemployees are remeasured as they vest. As a result, the noncash charge to operations for nonemployee options with vesting conditions is affected each reporting period by changes in the fair value of the Company’s common stock. Derivatives and Hedging Activities The Company accounts for its derivative instruments as either assets or liabilities on the consolidated balance sheet and measures them at fair value. Derivatives are adjusted to fair value through other (expense) income, net in the consolidated statements of operations and comprehensive loss. Comprehensive Loss Comprehensive loss is composed of two components: net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity, but are excluded from net loss. Net Loss per Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted net loss per common share in the periods presented is the same as basic net loss per common share, since the effects of potentially dilutive securities are antidilutive due to the net loss for all periods presented. Recent Accounting Pronouncements New Accounting Pronouncements - Recently Adopted In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. These amendments eliminate, modify, or integrate into other SEC requirements certain disclosure rules. Among the amendments is the requirement to present an analysis of changes in stockholders’ equity in the interim financial statements included in quarterly reports on Form 10-Q. The analysis, which can be presented as a footnote or separate statement, is required for the current and comparative quarter and year-to-date interim periods. The amendments are effective for all filings made on or after November 5, 2018. In light of the anticipated timing of effectiveness of the amendments and expected proximity of effectiveness to the filing date for most filers’ quarterly reports, the SEC’s Division of Corporate Finance issued a Compliance and Disclosure Interpretation related to Exchange Act Forms, or CDI – Question 105.09, that provides transition guidance related to this disclosure requirement. CDI – Question 105.09 states that the SEC would not object if the filer’s first presentation of the changes in shareholders’ equity is included in its Form 10-Q for the quarter that begins after the effective date of the amendments. As such, the Company adopted these SEC amendments on November 5, 2018 and will present the analysis of changes in stockholders’ equity in its interim financial statements in its March 31, 2019 Form 10-Q. The Company does not anticipate that the adoption of these SEC amendments will have a material effect on the Company’s financial position, results of operations, cash flows or shareholders’ equity. In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and creates a new Topic 606, Revenue from Contracts with Customers. In 2015 and 2016, the FASB issued additional ASUs related to Topic 606 that delayed the effective date of the guidance and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identifying performance obligations, and licensing, and they include other improvements and practical expedients. The Company adopted this new standard on January 1, 2018 using the modified retrospective transition method. Impact of Adoption The Company, on adopting Topic 606 on January 1, 2018, has used the modified retrospective transition method with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application. The following adjustments were recorded in the opening balance on January 1, 2018. December 31, Adjustments January 1, 2017 Due to Topic 606 2018 Total current assets $ — 5,000 $ 5,000 Total current liabilities — 1,000 1,000 Accumulated deficit $ — 4,000 $ 4,000 As a result of adopting Topic 606 on January 1, 2018, the following financial statement line items in the Company’s Consolidated Balance Sheet at December 31, 2018 and the Consolidated Statement of Income for the year ended December 31, 2018 were affected. December 31, 2018 As Reported Under Topic 605 Effect of Change Total current assets $ 176,371 171,371 $ 5,000 Total current liabilities 17,728 16,728 1,000 Accumulated deficit (365,512) (369,512) 4,000 Year Ended December 31, 2018 As Reported Under Topic 605 Effect of Change Revenue: Licensing revenue $ 2,320 2,320 $ — Other revenue 287 287 — Cost of revenue 466 466 — In May 2017, FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718) - Scope of Modification Accounting (ASU 2017-09) . The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. New Accounting Pronouncements – Adoption on January 1, 2019 In February 2016, the FASB issued ASU No. 2016-02—Leases, (Topic 842) (ASU 2016-02), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, or ASU No. 2018-11. In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We will elect this transition method and package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the statements of operations on a straight-line basis over the lease term. We will adopt the ASU on January 1, 2019 using a modified retrospective approach and are finalizing our assessment of the impact of the adoption of the ASU and expect to record a right-of-use asset and a corresponding lease liability to account for our facility lease as a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption . In June 2018, the FASB issued ASU No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. ASU 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity-Based Payments to Non-Employees. ASU 2018-07 is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year and early adoption is permitted. The Company assessed there will be no material impact of this standard on its consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . ASU 2018-13 considers cost and benefits, and removes, modifies and adds disclosure requirements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty is to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments are to be applied retrospectively to all periods presented. ASU 2018-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year and early adoption is permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements. The Company has reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or no material effect is expected on its consolidated financial statements as a result of future adoption. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents and Investments | |
Cash, Cash Equivalents and Investments | 3. CASH, CASH EQUIVALENTS AND INVESTMENTS Securities classified as cash, cash equivalents and short-term investments as of December 31, 2018 and December 31, 2017 are summarized below (in thousands). Estimated fair value is based on quoted market prices for these investments. December 31, 2018 Gross Unrealized Amortized Cost Gains Losses Fair Value Cash and cash equivalents: Cash $ 3,733 — — $ 3,733 Money market funds 73,238 — — 73,238 Commercial paper 1,797 — — 1,797 Total cash and cash equivalents $ 78,768 $ — $ — $ 78,768 Short-term investments U.S. treasury securities 3,996 — — 3,996 Corporate bonds 34,611 — (21) 34,590 Commercial paper 41,371 — (14) 41,357 Asset-backed securities 9,381 — (3) 9,378 Total short-term investments $ 89,359 $ — $ (38) $ 89,321 Total cash equivalents and investments $ 168,127 $ — $ (38) $ 168,089 December 31, 2017 Gross Unrealized Amortized Cost Gains Losses Fair Value Cash and cash equivalents: Cash $ 5,882 $ — $ — $ 5,882 Money market funds 68,651 — — 68,651 Commercial paper 850 — — 850 Total cash equivalents and investments $ 75,383 $ — $ — $ 75,383 Short-term investments U.S. treasury securities $ 3,994 — (1) $ 3,993 Corporate bonds 26,853 — (26) 26,827 Commercial paper 19,584 — (14) 19,570 Asset-backed securities 8,209 — (6) 8,203 Total short-term investments $ 58,640 $ — $ (47) $ 58,593 Total cash equivalents and investments $ 134,023 $ — $ (47) $ 133,976 Cash equivalents consist of money market funds and other debt securities with original maturities of three months or less at the time of purchase, and the carrying amount is a reasonable approximation of fair value. The Company invests its cash in high quality securities of financial and commercial institutions. These securities are carried at fair value, which is based on readily available market information, with unrealized gains and losses included in “accumulated other comprehensive loss” within stockholders’ equity on the Company’s consolidated balance sheets. The Company uses the specific identification method to determine the amount of realized gains or losses on sales of marketable securities. Realized gains or losses have been insignificant and are included in “other income (expense), net” in the consolidated statement of operations . All available-for-sale securities held as of December 31, 2018 and 2017, had contractual maturities of less than one year. The Company’s available-for-sale securities are subject to a periodic impairment review. The Company considers a debt security to be impaired when its fair value is less than its carrying cost, in which case the Company would further review the investment to determine whether it is other-than-temporarily impaired. When the Company evaluates an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, intent to sell, and whether it is more likely than not the Company will be required to sell the investment before the recovery of its cost basis. If an investment is other-than-temporarily impaired, the Company writes it down through the statement of operations to its fair value and establishes that value as a new cost basis for the investment. The Company did not identify any of its available-for-sale securities as other-than-temporarily impaired in any of the periods presented. As of December 31, 2018 and 2017, no investment was in a continuous unrealized loss position for more than one year and the Company believes that it is more likely than not that the investments will be held until maturity or a forecasted recovery of fair value . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 4. FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1 – Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by the Company at the reporting date. Examples of assets and liabilities utilizing Level 1 inputs are certain money market funds, U.S. treasuries and trading securities with quoted prices on active markets. Level 2 – Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Examples of assets and liabilities utilizing Level 2 inputs are corporate bonds, commercial paper, certificates of deposit and over-the-counter derivatives . Level 3 – Valuations based on unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. The following table sets forth the fair value of the Company’s financial assets measured on a recurring basis by level within the fair value hierarchy: December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 73,238 $ 73,238 $ — $ — U.S. treasury securities 3,996 3,996 — — Corporate bonds 34,590 — 34,590 — Commercial paper 43,154 — 43,154 — Asset-backed securities 9,378 — 9,378 — Total $ 164,356 $ 77,234 $ 87,122 $ — Liabilities: Derivative liability for exit fee $ 533 $ — $ — $ 533 Foreign currency derivative contracts 52 $ — $ 52 $ — Total $ 585 $ — $ 52 $ 533 December 31, 2017 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 68,651 $ 68,651 $ — $ — U.S. treasury securities 3,993 3,993 — — Corporate bonds 26,827 — 26,827 — Commercial paper 20,420 — 20,420 — Asset-backed securities 8,203 — 8,203 — Total $ 128,094 $ 72,644 $ 55,450 $ — Where quoted prices are available in an active market, securities are classified as Level 1. The Company classifies money market funds and U.S. treasury securities as Level 1. When quoted market prices are not available for the specific security, the Company estimates fair value by using benchmark yields, reported trades, broker/dealer quotes and issuer spreads. The Company classifies corporate bonds, commercial paper, asset-backed securities and foreign currency derivative contracts as Level 2. In certain cases, where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3. There were no transfers between Level 1 and Level 2 during the periods presented. In May 2018, pursuant to the loan and security agreement with Solar Capital Ltd. and Western Alliance Bank (see “Note 6. Borrowings”), the Company entered into an Exit Fee Agreement under which the Company agreed to pay $1.5 million in cash, or the Exit Fee, upon any change of control transaction in respect of the Company or if the Company obtains both (i) FDA approval of tenapanor in the treatment of hyperphosphatemia in ESRD patients on dialysis and (ii) FDA approval of tenapanor for the treatment of patients with IBS-C. Notwithstanding the prepayment or termination of the Term Loan, the Company’s obligation to pay the Exit Fee will expire May 16, 2028. The Company evaluated that the Exit Fee is a freestanding derivative which should be accounted for at fair value on a recurring basis. The estimated fair value of the Exit Fee is recorded as a derivative liability and included in accrued and other liabilities on the accompanying consolidated balance sheet. As of December 31, 2018, the estimated fair value of the Exit Fee was determined to be $533,000, a decrease of $13,000 compared with $546,000, the initial estimated fair value in May 2018, primarily as a result of changes to the inputs in the calculation including the estimated timing of payment and the time value of money, which is presented as a component of change in derivative liabilities in the Company’s consolidated statements of operations. The fair value of the derivative liability was determined using a discounted cash flow analysis and is classified as a Level 3 measurement within the fair value hierarchy since the Company’s valuation utilized significant unobservable inputs. Specifically, the key assumptions included in the calculation of the estimated fair value of the derivative instrument include: i) the Company’s estimates of both the probability and timing of a potential $1.5 million payment to Solar Capital Ltd. and Western Alliance Bank as a result of the FDA approvals, and ii) a discount rate which was derived from the Company's estimated cost of debt. Generally, increases or decreases in the probability of occurrence would result in a directionally similar impact in the fair value measurement of the derivative instrument and it is estimated that a 10% increase (decrease) in the probability of occurrence would result in a fair value fluctuation of approximately $0.1 million. Changes in the fair value of recurring measurements included in Level 3 of the fair value hierarchy are presented as changes in derivative liabilities for Exit Fee in the Company's consolidated statements of operations and were as follows for the year ended December 31, 2018 (in thousands): Estimated Fair Value of Derivative Liability Balance of Level 3 Liabilities at December 31, 2017 $ — Initial estimated fair value of derivative liability for exit fee 546 Change in estimated fair value of derivative liability for exit fee (13) Balance of Level 3 Liabilities at December 31, 2018 $ 533 The carrying amounts reflected in the balance sheets for cash equivalents, short-term investments, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at both December 31, 2018 and December 31, 2017, due to their short-term nature. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 5. Foreign Currency Exchange Rate Exposure The Company uses forward foreign currency exchange contracts to secure a foreign currency exchange rate when a contract is executed involving payment in a foreign currency in order to minimize cash flow exposure to fluctuating exchange rates. Such exposure results from portions of the Company’s forecasted cash outflows being denominated in currencies other than the U.S. dollar, primarily the Swiss franc. The derivative instruments the Company uses to hedge this exposure are not designated as cash flow hedges, and as a result, changes in their fair value are recorded in other income (expense), net, on the Company's consolidated statements of operations and comprehensive loss. The fair values of forward foreign currency exchange contracts are estimated using current exchange rates and interest rates and take into consideration the current creditworthiness of the counterparties. Information regarding the specific instruments used by the Company to hedge its exposure to foreign currency exchange rate fluctuations is provided below. The following table summarizes the Company’s forward foreign currency exchange contracts outstanding as of December 31, 2018 (notional amounts in thousands): Aggregate Notional Amount in Foreign Foreign Exchange Contracts Number of Contracts Currency Maturity Swiss francs 1 3,281 March 2019 Total 1 The maximum length of time over which the Company is hedging its exposure to changes in exchange rates is March 2019. The derivative liability balance of $51,756 is recorded in accrued and other liabilities on the consolidated balance sheet as of December 31, 2018, and the net loss associated with the Company's derivative instruments of $124,194 is recognized in other (expense) income, net on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2018. There were no expenses related to such derivative instruments during 2017 and 2016. As of December 31, 2018, we had open forward foreign currency exchange contracts with notional amounts of $3.4 million. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Borrowings | |
Borrowings | 6. Solar Capital and Western Alliance Bank Loan Agreement On May 16, 2018, Borrowings under the Term Loan bear interest at a floating per annum rate equal to 7.45% plus the one-month LIBOR. The Company is permitted to make interest-only payments on the Term Loan through June 1, 2020, unless the Company achieves its primary endpoint in the Phase 3 study of tenapanor for the treatment of hyperphosphatemia in end-stage renal disease patients on dialysis, prior to June 1, 2020, in which case The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants. Additionally, if the Company elects to enter into an exclusive license agreement for the use of its intellectual property in the United States (other than for tenapanor for hyperphosphatemia or for our FXR and TGR5 agonist programs) and has not obtained the written consent of the Lenders to enter into such license agreement, the Company has agreed to maintain unrestricted cash and cash equivalents of at least $50.0 million, until the Company achieves its primary endpoint in the second Phase 3 study of tenapanor for the treatment of hyperphosphatemia in end-stage renal disease patients on dialysis. As of December 31, 2018, the Company was in compliance with all of the covenants set forth in the Loan Agreement. In addition, the Loan Agreement contains customary events of default that entitle the Lender to cause the Company’s indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Term Loan, including our cash. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 4.0% per annum will apply to all obligations owed under the Loan Agreement. As of December 31, 2018, to the Company’s knowledge, there were no facts or circumstances in existence giving rise to an event of default. As of December 31, 2018, assuming the principal payments start on December 1, 2020, the Company’s future debt payment obligations towards the principal and final fee, excluding interest payments and exit fee, for the respective fiscal years are as follows (in thousands): 2019 $ — 2020 2,083 2021 25,000 2022 24,892 Total principal and final fee payments 51,975 Less: Unamortized discount and debt issuance costs (1,094) Less: Unaccreted value of final fee (1,672) Loan payable, long term $ 49,209 |
Shareholders Equity
Shareholders Equity | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders Equity | |
Shareholders Equity | 7. On May 22, 2018, the Company entered into an underwriting agreement with Jefferies LLC and Leerink Partners LLC, as representatives of several underwriters, or collectively the Underwriters, pursuant to which the Company agreed to issue and sell 12,500,000 shares of its common stock, par value $0.0001 per share, or Common Stock, to the Underwriters, or the Offering. The shares were sold at a public offering price of $4.00 per share and were purchased by the Underwriters from the Company at a price of $3.76 per Share. Under the terms of the underwriting agreement, the Company granted the Underwriters the option, for 30 days, to purchase up to 1,875,000 additional shares of Common Stock at the public offering price. On May 25, 2018, the Offering closed and the Company completed the sale and issuance of 12,500,000 shares of Common Stock. The Company received net proceeds from the Offering of approximately $46.7 million, after deducting the Underwriters’ discounts and commissions and offering expenses payable by the Company. Subsequently, on June 25, 2018, the Underwriters exercised their option to purchase the full 1,875,000 shares of Common Stock at the public offering price of $4.00 per share that were purchased by the Underwriters from the Company at a price of $3.76 per Share and the Company received additional net proceeds of $7.1 million, after deducting the Underwriters’ commissions. In aggregate, the Company completed the sale and issuance of 14,375,000 shares of Common Stock and received net proceeds from the Offering of approximately $53.8 million, after deducting the Underwriters’ discounts, commissions and offering expenses. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Property and Equipment | 8 . PROPERTY AND EQUIPMENT Property and equipment consist of the following: December 31, 2018 2017 (in thousands) Laboratory equipment $ 6,965 $ 6,857 Office equipment and furniture 889 815 Leasehold improvements 7,949 7,949 Property and equipment, gross 15,803 15,621 Less: accumulated depreciation (10,192) (7,589) Total property and equipment, net $ 5,611 $ 8,032 Depreciation expense totaled $2.7 million, $2.6 million and $1.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
Accrued and Other Liabilities
Accrued and Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued and Other Liabilities | |
Accrued and Other Liabilities | 9. ACCRUED AND OTHER LIABILITIES Accrued and other liabilities consist of the following (in thousands): December 31, 2018 2017 Accrued clinical and non-clinical expenses $ 9,790 $ 5,447 Accrued contract manufacturing expenses 1,971 3,980 Derivative liability for exit fee 533 — Accrued professional and consulting services 112 530 Foreign currency derivative contract 52 — Other 399 752 $ 12,857 $ 10,709 |
Collaboration and Licensing Agr
Collaboration and Licensing Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Collaboration and Licensing Agreements | |
Collaboration and Licensing Agreements | 10. COLLABORATION AND LICENSING AGREEMENTS Kyowa Hakko Kirin Co., Ltd., or KHK In November 2017, the Company entered into an exclusive license agreement with KHK, or the KHK Agreement, for the development, commercialization and distribution of tenapanor in Japan for cardiorenal indications. The Company assessed these arrangements in accordance with Topic 606 and concluded that the contract counterparty, KHK, is a customer. Under the terms of the KHK Agreement, the Company received $30.0 million in up-front license fees which was recognized as revenue when the agreement was executed. Based on the Company’s assessment, it identified that the license and the manufacturing supply services were its material performance obligations at the inception of the agreement, and as such each of the performance obligations are distinct. Additionally, on January 1, 2018, the Company recorded an increase in current assets of $5.0 million and an increase in current liabilities of $1.0 million related to the first milestone under the KHK Agreement that KHK achieved in February 2019, reflecting revenues and cost of revenue, respectively, that would have been recognized in the fourth quarter 2017 if the Company had adopted Topic 606 prior to January 1, 2018. In addition to the up-front license fee of $30.0 million, the Company may be entitled to receive up to $55.0 million in total development milestones, of which $5.0 million has been recognized to date and 8.5 billion yen in commercialization milestones, worth up to $77.5 million at the currency exchange rate on December 31, 2018, as well as reimbursement of cost, plus a reasonable overhead for the supply of product and high-teen royalties on net sales throughout the term of the agreement. For the year ended December 31, 2018, $0.3 million of other revenue was recorded for manufacturing supply of tenapanor and other materials to KHK, for KHK’s product development and clinical trials in Japan, in accordance with the Company’s agreement with KHK, and a negligible cost of revenue was recorded pursuant to the AstraZeneca Termination Agreement. Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd., or Fosun Pharma In December 2017, the Company entered into an exclusive license agreement with Fosun Pharma, or the Fosun Agreement, for the development, commercialization and distribution of tenapanor in China for both hyperphosphatemia and irritable bowel syndrome with constipation, or IBS-C. The Company assessed these arrangements in accordance with Topic 606 and concluded that the contract counterparty, Fosun Pharma, is a customer. Under the terms of the Fosun Agreement, the Company received $12.0 million in up-front license fees which was recognized as revenue when the agreement was executed. Based on the Company’s assessment, it identified that the license and the manufacturing supply services were its material performance obligations at the inception of the agreement, and as such each of the performance obligations are distinct. In addition, the Company may be entitled to additional development and commercialization milestones of up to $113.0 million, as well as reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to 20%. For the year ended December 31, 2018, there was no revenue recorded related to the Fosun Agreement. Knight Therapeutics, Inc., or Knight In March 2018, the Company entered into an exclusive license agreement with Knight Therapeutics, Inc., or the Knight Agreement, for the development, commercialization and distribution of tenapanor in Canada for hyperphosphatemia and IBS-C. The Company assessed these arrangements in accordance with Topic 606 and concluded that the contract counterparty, Knight, is a customer. Based on the Company’s assessment, it identified that the license and the manufacturing supply services were its material performance obligations at the inception of the agreement, and as such each of the performance obligations are distinct. Under the terms of the agreement, the Company is eligible to receive up to CAD 25 million in total payments including an up-front payment and development and sales milestones, reimbursement of supply costs on a schedule specifying cost per tablet, with a reasonable mark up for overhead, as well as tiered royalty rates on net sales ranging from the mid-single digits to the low twenties. For the year ended December 31, 2018, $2.3 million of revenue was recorded related to the Knight Agreement, and $0.5 million of cost of revenue was recorded pursuant to the AstraZeneca Termination Agreement. AstraZeneca In June 2015, the Company entered into a termination agreement with AstraZeneca, or the AstraZeneca Termination Agreement, pursuant to which the Company remains liable to pay AstraZeneca license fees for (i) future royalties at a royalty rate of 10% of net sales of tenapanor or other NHE3 products by the Company or its licensees, and (ii) 20% of non-royalty revenue received from a new collaboration partner should the Company elect to license, or otherwise provide rights to develop and commercialize tenapanor or another NHE3 inhibitor, up to a maximum of $75.0 million in aggregate for (i) and (ii). To date in aggregate, the Company has recognized $9.9 million of the $75.0 million, recorded as cost of revenue comprising (i) $6.0 million and $2.4 million related to the KHK Agreement and Fosun Agreement, respectively, recorded in 2017 (ii) $0.5 million related to the Knight Agreement recorded in the year ended December 31, 2018 and (iii) $1.0 million related to the KHK Agreement associated with a future milestone that KHK achieved in February 2019 for which the Company recorded an increase in current liabilities in the year ended December 31, 2018 reflecting the amount that is owed to AstraZeneca upon achievement of the KHK milestone in February 2019 . |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2018 | |
Equity Incentive Plans | |
Equity Incentive Plans | 11. EQUITY INCENTIVE PLANS 2008 Plan The Company granted options under its 2008 Stock Incentive Plan (the “2008 Plan”) until June 2014 when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding under the 2008 Plan. The 2008 Plan provided for the granting of incentive and non-qualified stock options, and stock purchase rights to employees, directors and consultants at the discretion of the Board of Directors. Stock options granted generally vest over a period of four years from the date of grant. In connection with the Board of Directors and stockholders’ approval of the 2014 Plan, all remaining shares available for future award under the 2008 Plan were transferred to 2014 Plan, and the 2008 Plan was terminated. 2014 Plan The 2014 Equity Incentive Award Plan (the “2014 Plan”) became effective on June 18, 2014. Under the 2014 Plan, 1,419,328 shares of common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, or SARs, restricted stock awards, service-based restricted stock unit (“RSU”) awards, performance-based restricted stock unit (“PRSU”) awards, deferred stock awards, deferred stock unit awards, dividend equivalent awards, stock payment awards and performance awards. In addition, 35,221 shares that had been available for future awards under the 2008 Plan as of June 18, 2014, were added to the initial reserve available under the 2014 Plan, bringing the total reserve upon the effective date of the 2014 Plan to 1,454,549. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2014 Plan will be increased by (i) the number of shares represented by awards outstanding under 2008 Plan on June 18, 2014, that are either forfeited or lapse unexercised or that are repurchased for the original purchase price thereof, up to a maximum of 1,153,279 shares, and (ii) if approved by the Administrator of the 2014 Plan, an annual increase on the first day of each fiscal year ending in 2024 equal to the lesser of (A) four percent (4.0%) of the shares of stock outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by our board of directors; provided, however, that no more than 10,683,053 shares of stock may be issued upon the exercise of incentive stock options. Effective January 1, 2019, the 2014 Plan share reserve was increased by 2,490,417 shares. 2016 Plan In November 2016, the Company’s board of directors approved the 2016 Employment Commencement Incentive Plan (the “Inducement Plan”) under which 1,000,000 shares were reserved. As of December 31, 2018, no shares of the Company’s common stock were subject to inducement grants that were issued pursuant to the Inducement Plan. Stock Plan Activity The following table summarizes activity under the 2008 Plan and the 2014 Plan, including grants issued to nonemployees, in the three years ended December 31, 2018: Options Issued and Outstanding Weighted Weighted-Average Average Shares Available Exercise Price per Remaining Aggregate for Grant Number of Shares Share Contractual Term Intrinsic Value (in Years) (in thousands) Balance at December 31, 2015 1,634,420 1,281,086 $ 9.78 Options authorized 1,038,595 — $ — Options granted (1,524,014) 1,524,014 $ 11.42 Options exercised — (25,134) $ 2.19 Options canceled 67,743 (67,743) $ 16.67 Issuance of common stock for services and restricted stock units, net of 5,000 forfeitures (189,507) — — Balance at December 31, 2016 1,027,237 2,712,223 $ 10.60 Options authorized 1,892,376 — $ — Options granted (1,723,906) 1,723,906 $ 11.73 Options exercised — (35,759) $ 1.70 Options canceled 445,029 (445,029) $ 14.15 Issuance of common stock for services and restricted stock units, net of 79,850 forfeitures (601,008) — — Balance at December 31, 2017 1,039,728 3,955,341 $ 10.78 Options authorized 1,901,339 — $ — Options granted (2,566,339) 2,566,339 $ 6.01 Options exercised — — $ — Options canceled 1,014,920 (1,014,920) $ 12.05 Issuance of common stock for services and restricted stock units, net of 197,437 forfeitures (781,120) — — Balance at December 31, 2018 608,528 5,506,760 $ 8.32 7.44 $ 648 Vested and expected to vest at December 31, 2018 5,015,765 $ 8.45 7.28 $ 648 Exercisable at December 31, 2018 2,916,825 $ 8.92 6.19 $ 648 The aggregate intrinsic value represents the difference between the total pre-tax value (i.e., the difference between the Company’s stock price and the exercise price) of stock options outstanding as of December 31, 2018, based on the Company’s common stock closing price of $1.79 per share, which would have been received by the option holders had all their in-the-money options been exercised as of that date. For the year ended December 31, 2018, zero options were exercised to purchase shares of the Company's common stock. The intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016, was zero, $0.3 million and $0.3 million, respectively. The weighted-average grant-date estimated fair value of options granted during the years ended December 31, 2018, 2017 and 2016 was $4.29, $8.19 and $7.69 per share, respectively. The estimated grant date fair value of employee stock options was calculated using the Black-Scholes option-pricing model, based on the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016 Expected term (years) 6.01 5.93 5.99 Expected volatility 83 % 82 % 77 % Risk-free interest rate 2.60 % 2.08 % 1.62 % Dividend yield — % — % — % Expected Term —The Company has limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock-option grants. As such, the expected term was estimated using the simplified method whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. Expected Volatility —Since January 1, 2017, the Company has used the historic volatility of its own stock over the retrospective period corresponding to the expected remaining term of the options, or the period since its shares were first quoted on The Nasdaq Global Market, if that is shorter, to compute its expected stock price volatility . Prior to December 31, 2016, the expected stock price volatility was calculated based on the average historical volatility for comparable publicly traded pharmaceutical companies, and the Company selected companies with comparable characteristics, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the Company’s stock-based awards. Risk-Free Interest Rate —The risk-free interest rate assumption is based on the zero-coupon U.S. treasury instruments on the date of grant with a maturity date consistent with the expected term of the Company’s stock option grants. Dividend Yield —To date, the Company has not declared or paid any cash dividends and does not have any plans to do so in the future. Therefore, the Company used an expected dividend yield of zero. Restricted Stock Units The following table summarizes restricted stock unit activity under the 2014 Plan in the three years ended December 31, 2018, and includes restricted stock units with time or service based vesting, or RSUs, and those restricted stock units with performance based vesting, or PRSUs: Weighted- Weighted-Average Number of Average Grant Number of Service- Grant Date Fair Performance- Date Fair Value Based RSUs Value Per Share Based RSUs Per Share Non-vested restricted stock units at December 31, 2015 10,000 $ 18.04 — $ — Granted 174,389 $ 14.34 — $ — Vested (5,000) $ 18.04 — $ — Forfeited (5,000) $ 18.04 — $ — Non-vested restricted stock units at December 31, 2016 174,389 $ 14.34 — $ — Granted 472,135 $ 4.70 161,865 $ 13.90 Vested (43,597) $ 14.34 — $ — Forfeited (61,865) $ 13.36 (17,985) $ 13.90 Non-vested restricted stock units at December 31, 2017 541,062 $ 6.04 143,880 $ 13.90 Granted — $ — 903,374 $ 4.30 Vested (284,611) $ 5.55 (125,895) $ 13.90 Forfeited (170,842) $ 7.53 (26,595) $ 10.79 Non-vested restricted stock units at December 31, 2018 85,609 $ 4.70 894,764 $ 4.30 RSUs and PRSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The related compensation expense, which is based on the grant date fair value of the Company’s common stock multiplied by the number of units granted, is recognized ratably over the period during which the vesting restrictions lapse. In January 2017, the Company granted 161,865 PRSUs to certain employees that vest upon the achievement of specified performance conditions, subject to the employees’ continued service relationship with the Company through the date of achievement, of which 125,895 PRSUs vested in November 2018. None of the PRSUs vested during the year ended December 31, 2017. The related compensation cost was recognized as an expense over the estimated vesting period ratably when achievement of the milestone was considered probable. The expense recognized for these awards is based on the grant date fair value of the Company’s common stock multiplied by the number of units granted. The Company recognized $0.6 million, $1.0 million and zero of related expense during the year ended December 31, 2018, 2017 and 2016, respectively. In July 2018, the Company granted 903,374 PRSUs to its employees that vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with the Company through the achievement date. At December 31, 2018, 894,764 of these PRSUs were outstanding and none vested. Based on the evaluation of the performance conditions at December 31, 2018, the Company has not recorded stock-based compensation expense for the year ended December 31, 2018 related to these PRSUs. The Company will continue to evaluate the performance conditions for these PRSUs at each reporting period and will record compensation expense related to the PRSUs accordingly. With respect to RSUs, we recognize expense over the estimated vesting period ratably, contingent on continued service. The Company recognized $0.9 million, $0.9 million and $0.4 million of related expense during the year ended December 31, 2018, 2017 and 2016, respectively. The total estimated fair value of RSUs vested during the years ended December 31, 2018, 2017 and 2016 was $0.6 million, $0.4 million and $0.1 million, respectively. Issuance of Common Stock for Services During the years ended December 31, 2018, 2017 and 2016, the Company issued 75,183, 46,858 and 20,118 shares , respectively, of its common stock to members of the board of directors who elected to receive stock in lieu of their cash fees under the Company’s Non-Employee Director Compensation Program. The shares issued were valued at $0.3 million, $0.2 million and $0.2 million, respectively, based on the fair value of the common stock on the date of grant. Employee Stock Purchase Plan The Company adopted the 2014 Employee Stock Purchase Plan (“ESPP”) and initially reserved 202,762 shares of common stock as of its effective date of June 18, 2014. If approved by the Administrator of the ESPP, on the first day of each calendar year, ending in 2024, the number of shares in the reserve will increase by an amount equal to the lesser of (i) one percent (1.0%) of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such number of shares of common stock as determined by the board of directors; provided, however, no more than 2,230,374 shares of our common stock may be issued under the ESPP. Effective January 1, 2019, the ESPP Plan share reserve was increased by 622,604 shares. The following table summarizes ESPP activity in the three years ended December 31, 2018: Shares Available Number of Shares Purchase Price for Grant Purchased per Share Gross Proceeds (in thousands) Balance at December 31, 2015 347,074 41,580 Shares purchased (69,054) 69,054 $ 8.34 $ 576 Balance at December 31, 2016 278,020 110,634 Shares purchased (99,343) 99,343 $ 6.27 $ 623 Balance at December 31, 2017 178,677 209,977 Shares authorized 622,604 — Shares purchased (120,959) 120,959 $ 4.06 $ 492 Balance at December 31, 2018 680,322 330,936 The following table illustrates the weighted-average assumptions for the Black-Scholes option-pricing model used in determining the fair value of ESPP purchase rights granted to employees: Year Ended December 31, 2018 2017 2016 Expected term (years) 0.5 0.5 0.5 Expected volatility 76 % 80 % 76 % Risk-free interest rate 2.08 % 0.97 % 0.48 % Dividend yield — % — % — % Stock-based Compensation Total stock-based compensation recognized was as follows (in thousands): Year Ended December 31, 2018 2017 2016 (in thousands) Research and development $ 3,666 $ 4,585 $ 2,786 General and administrative 5,560 5,005 2,531 Total $ 9,226 $ 9,590 $ 5,317 As of December 31, 2018, the Company had $11.1 million, $0.3 million, zero and immaterial amount of total unrecognized compensation expense, net of estimated forfeitures, related to stock options, RSUs, PRSUs and ESPP, respectively, that will be recognized over an average vesting period of 3.0 years, 1.9 years, zero years and 0.2 years, respectively. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants | |
Warrants | 12. WARRANTS Offering of Common Stock and Warrants In June 2015, the Company sold and issued an aggregate of 7,242,992 shares of its common stock and warrants to purchase 2,172,899 shares of common stock for aggregate gross proceeds of approximately $77.8 million or net proceeds, after deducting issuance costs, of approximately $74.3 million. The purchase price for the common stock was $10.70 per share and the purchase price for the warrants was $0.125 per warrant. The warrants are exercisable for an exercise price of $13.91 per share at any time prior to the earlier of (i) 5 years from the date of issuance or (ii) certain changes in control of the Company. The Company has determined that the warrants should be classified as equity. In July 2015, the Company filed a registration statement with the SEC with respect to the common stock and warrants. Other than with respect to warrants issued to holders affiliated with New Enterprise Associates, the warrants contain limitations that prevent each holder of warrants from acquiring shares upon exercise of the warrants that would cause the number of shares beneficially owned by it and its affiliates to exceed 9.99% of the total number of shares of the Company’s common stock then issued and outstanding. In addition, upon certain changes in control of the Company, each holder of a warrant can elect to receive, subject to certain limitations and assumptions, securities in a successor entity. None of the warrants issued in June 2015 have been exercised during each of the years ended December 31, 2016, 2017 and 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 13. INCOME TAXES The components of the provision for income taxes for the year ended December 31, 2018, 2017 and 2016, are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ — $ — $ — State 4 5 — Foreign — 1,204 — Total current 4 1,209 — Deferred: Federal (30) — State — — — Foreign — — — Total deferred — (30) — Provision for (benefit from) income taxes $ 4 $ 1,179 $ — The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate: December 31, 2018 2017 2016 Income tax at the federal statutory rate 21.0 % 35.0 % 35.0 % State taxes, net of federal benefit 0.6 0.5 0.3 Net impact related to foreign subsidiary — (1.2) — Change in valuation allowance (22.5) 19.9 (36.2) Impact of tax reform rate change — (56.4) — Tax credits 1.4 1.0 0.3 Stock Based Compensation (1.2) (0.8) 0.1 Other 0.7 0.1 0.5 Income tax provision — % (1.9) % — % Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows as of December 31, 2018 and 2017 (in thousands): December 31, 2018 2017 (in thousands) Deferred tax assets: Fixed assets and intangibles $ 38,376 $ 30,804 Net operating loss carryforwards 31,621 22,355 Tax credits 8,200 5,209 Stock-based compensation 3,763 3,159 Other 888 754 Gross deferred tax assets 82,848 62,281 Valuation allowance (81,645) (61,911) Deferred tax assets net of valuation allowance 1,203 370 Deferred tax liabilities Adoption of New Accounting Standards (1,054) — Other (149) (370) Net deferred tax assets $ — $ — The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year periods ended December 31, 2018, December 31, 2017 and December 31, 2016. Such objective evidence limits the ability to consider other subjective evidence, such as the Company’s projections for future growth. On the basis of this evaluation, as of December 31, 2018, December 31, 2017 and December 31, 2016, full valuation allowance has been recorded against Company’s net deferred tax asset. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth . Realization of deferred tax assets is dependent on future taxable income, if any, the timing and the amount of which are uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $19.7 million for the year ended December 31, 2018, decreased by approximately $12.6 million for the year ended December 31, 2017, and increased by approximately $40.7 million for the year ended December 31, 2016. The increase in the valuation allowance in the year ended December 31, 2018 primarily relates to the Company's net operating loss and research and development tax credit generated in the current year . The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective January 1, 2018. The Company is able to determine a reasonable estimate of certain effects of the TCJA and has therefore recognized the provisional tax impacts related to the revaluation of deferred tax assets and liabilities. As a result, the Company has recorded a decrease related to net deferred tax assets of $35.6 million, with an offsetting change in valuation allowance of $35.6 million for the year ended December 31, 2017. The Securities and Exchange Commission has provided accounting and reporting guidance that allows the Company to report provisional amounts within a measurement period of up to one year from the date of enactment due to the complexities inherent in adopting the TCJA. The Company completed its analysis during the measurement period and there were no measurement period adjustments recognized during the reporting period . As of December 31, 2018, the Company has net operating loss carryforwards for federal income tax purposes of approximately $193.3 million, of which approximately $47.0 million can be carried forward indefinitely and the remaining net operating losses expire beginning in 2030 if not utilized. Federal research and development tax credit carryforwards of approximately $8.7 million that expire beginning in 2027 if not utilized, and foreign tax credit carryforwards of approximately $1.2 million that expire in 2027 if not utilized. In addition, the Company had net operating loss carryforwards for California income tax purposes of approximately $88.3 million that expire beginning of 2030 if not utilized, and state research and development tax credit carryforwards of approximately $6.9 million which can be carried forward indefinitely. The Company had other state net operating losses of approximately $2.5 million that begin to expire in 2025. The Company had approximately $0.1 million of minimum tax credit carryovers for California income tax purposes. The minimum tax credits have no expiration date. The future utilization of net operating loss and tax credit carryforwards and credits may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that may have occurred previously or that could occur in the future. Due to the existence of the valuation allowance, limitations under Section 382 and 383 will not impact the Company’s effective tax rate . A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 20,734 $ 3,892 $ 3,298 Additions (subtractions) based on tax positions related to prior year 1,634 16,103 45 Additions based on tax positions related to current year 684 739 549 Balance at end of year $ 23,052 $ 20,734 $ 3,892 The unrecognized tax benefits, if recognized and in absence of full valuation allowance, would impact the income tax provision by $9.8 million, $8.6 million and $3.5 million as of December 31, 2018, 2017 and 2016, respectively. The Company has elected to include interest and penalties as a component of tax expense. During the years ended December 31, 2018, 2017 and 2016, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits. Although the timing and outcome of an income tax audit is highly uncertain, the Company does not anticipate that the amount of existing unrecognized tax benefits will change significantly during the next 12 months. The Company files income tax returns in the U.S. federal, California, Maryland, Massachusetts, New Hampshire, New Jersey and Oregon tax jurisdictions. Due to the Company’s net operating loss and tax credit carryforwards, the income tax returns remain open to U.S. federal and California state tax examinations. The Company is not currently under examination in any tax jurisdiction. |
Geographic Information and Conc
Geographic Information and Concentrations | 12 Months Ended |
Dec. 31, 2018 | |
Geographic Information and Concentrations | |
Geographic Information and Concentrations | 14. GEOGRAPHIC INFORMATION AND CONCENTRATIONS Revenue by geographic areas for the years ended December 31, 2018, 2017 and 2016, are as follows (in thousands): Year Ended December 31, 2018 2017 2016 United States $ — $ — $ — International: North America (1) 2,320 — — Asia Pacific (2, 3) 287 42,000 — Total revenue $ 2,607 $ 42,000 $ — (1) (2) Asia Pacific in 2018 comprised $0.3 million from Japan in accordance with the KHK Agreement. (3) Revenues from Asia Pacific in 2017 included $30.0 million from Japan in accordance with the KHK Agreement and $12.0 million from China in accordance with the Fosun Agreement. Revenues are attributed to geographical areas based on the domicile of the Company’s collaboration partners. Revenues recorded in the years ended December 31, 2018, 2017 and 2016, were wholly from collaboration partnerships. Collaboration partnerships accounting for more than 10% of total revenues during the years ended December 31, 2018, 2017 and 2016, are as follows: Year Ended December 31, 2018 2017 2016 Knight 89 % — — KHK 11 % 71 % — Fosun Pharma — 29 % — |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Share | |
Net Loss Per Share | 15. NET LOSS PER SHARE Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per common share is computed giving effect to all potential dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the years ended December 31, 2018, 2017 and 2016, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share (in thousands, except share and per share amounts): Year Ended December 31, 2018 2017 2016 Numerator: Net loss $ (91,298) $ (64,339) $ (112,387) Denominator: Weighted average common shares outstanding - basic and diluted 56,219,919 47,435,331 40,118,522 Net loss per share - basic and diluted $ (1.62) $ (1.36) $ (2.80) For the years ended December 31, 2018, 2017 and 2016, the total numbers of securities that could potentially dilute net income per share in the future that were not considered in the diluted net loss per share calculations because the effect would have been anti-dilutive were as follows: Year Ended December 31, 2018 2017 2016 Options to purchase common stock 5,378,008 3,977,160 2,464,089 Warrants to purchase common stock 2,172,899 2,172,899 2,172,899 Restricted stock units 199,135 323,819 87,079 Performance-based restricted stock units 395,791 148,216 — ESPP shares issuable 63,413 60,524 37,227 Total 8,209,246 6,682,618 4,761,294 The number of potential common shares that would have been included in diluted income per share were it not for the anti-dilutive effect caused by the net loss, computed by converting these securities using the treasury stock method during the years ended December 31, 2018, 2017 and 2016, was approximately 1.0 million, 1.0 million and 0.8 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 16. COMMITMENTS AND CONTINGENCIES Leases The Company has a lease agreement for a facility in Fremont, California that was amended in December 2012 to extend the lease agreement to September 2016. In September 2014, the Company signed the second amendment to its facility lease agreement in Fremont, California to add space and to extend the lease term through September 2019. In addition, the amended lease agreement provides for a tenant improvement allowance of up to $0.6 million. In May 2016, the Company signed a third amendment to its facility lease agreement in Fremont, California to add space and to extend the lease term through September 2021 (the “Third Amendment”). The Third Amendment provides for a tenant improvement allowance of up to $0.4 million and the extended lease has rent escalation clauses throughout the lease term. It also provides a lease extension option for five years on the entire premises at the higher of (i) a 3% annual escalation of the then-current base rent and (ii) the then-current fair market value for comparable premises. Rent increases, including the impact of a rent holiday and leasehold improvement allowance from the landlord, will be recognized as deferred rent and amortized on a straight-line basis over the term of the lease. Under the terms of the lease agreement, the Company provided the lessor with a security deposit in the amount of $0.1 million. The lessor shall be entitled to draw on the security deposit in the event of any uncured default by the Company under the terms of the lease. The Company had a lease agreement for a facility in Boston, Massachusetts for 16 months commencing March 1, 2017 and terminating June 30, 2018, with no extension option. On July 26, 2018 the Company entered into a new lease agreement for 36 months effective October 1, 2018 with an annual rent of $0.1 million as well as a separate agreement that extended the previous lease until the new lease was made available. The future minimum payments under noncancelable operating leases at December 31, 2018, are as follows (in thousands): Year Ended December 31, Amounts 2019 $ 2,697 2020 3,116 2021 2,213 2022 — 2023 — Thereafter — Total $ 8,026 Rent expense under operating leases was $1.8 million, $1.7 million and $1.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. Guarantees and Indemnifications The Company indemnifies each of its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at our request in such capacity, as permitted under Delaware law and in accordance with our certificate of incorporation and bylaws. The term of the indemnification period lasts as long as an officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director and officer liability insurance. This insurance allows the transfer of risk associated with our exposure and may enable the Company to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented. Legal Proceedings and Claims From time to time the Company may be involved in claims arising in connection with its business. Based on information currently available, the Company believes that the amount, or range, of reasonably possible losses in connection with any pending actions against it in excess of established reserves, in the aggregate, not to be material to its consolidated financial condition or cash flows. However, losses may be material to the Company’s operating results for any particular future period, depending on the level of income or loss for such period. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | 17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Selected quarterly financial results from operations for the years ended December 31, 2018 and 2017 are as follows (in thousands, except per share amounts): 2018 Quarter End March 31 June 30 September 30 December 31 Total revenue $ 2,320 $ 30 $ 172 $ 85 Gross profit 1,856 30 170 85 Operating expenses 19,541 22,184 23,902 27,461 Net loss (17,019) (22,291) (24,126) (27,862) Net loss per share - basic and diluted $ (0.36) $ (0.42) $ (0.39) $ (0.45) 2017 Quarter End March 31 June 30 September 30 December 31 Total revenue $ — $ — $ — $ 42,000 Gross profit — — — 33,600 Operating expenses 28,434 26,418 21,225 22,638 Net income (loss) (28,008) (25,721) (20,724) 10,114 Net income (loss) per share - basic $ (0.59) $ (0.54) $ (0.44) $ 0.21 Net income (loss) per share - diluted $ (0.59) $ (0.54) $ (0.44) $ 0.21 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | 18. In February 2019, the company received a $5.0 million milestone payment from KHK in accordance with the terms of the license agreement with KHK, pursuant to KHK’s announcement in February 2019 of its initiation of a Phase 2 clinical study of tenapanor for the treatment of hyperphosphatemia in ESRD patients on dialysis. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ardelyx and its wholly-owned subsidiary, Ardelyx Cayman Islands, which was placed into voluntary liquidation in December 2017. Intercompany transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to recognition of revenue, clinical trial accruals, contract manufacturing accruals, fair value of assets and liabilities, income taxes and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. |
Liquidity | Liquidity The Company has never been profitable on an annual basis and, as of December 31, 2018, the Company has an accumulated deficit of $365.5 million. The Company has incurred net losses of approximately $91.3 million, $64.3 million and $112.4 million in the years ended December 31, 2018, 2017 and 2016, respectively. The Company expects to continue to incur net operating losses for the foreseeable future, as the Company continues the development of, seeks regulatory approval for, and if approved, begins to commercialize and manufacture tenapanor, either directly by the Company or through one or more of its collaboration partners. The Company will need additional funding to support its future operating activities and adequate funding may not be available to the Company on acceptable terms, or at all. The Company’s failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the business, results of operations, and financial condition. The Company will need to generate significant revenues to achieve profitability and may never do so. The Company believes that its current available cash, cash equivalents and short-term investments will be sufficient to fund its planned expenditures and meet the Company’s obligations for at least 12 months following its financial statement issuance date. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity date of 90 days or less on the date of purchase to be cash equivalents. |
Short-Term Investments | Short-Term Investments Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than one year, from the date of acquisition. Short-term investments are carried at fair value based upon quoted market prices. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are reported as a component of accumulated other comprehensive loss. The cost of available-for-sale securities sold is based on the specific-identification method. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. The Company is exposed to credit risks in the event of default by the counterparties to the extent of the amount recorded in its consolidated balance sheet. Cash, cash equivalents and short-term investments are invested through banks and other financial institutions in the United States. |
Accounts Receivable | Accounts Receivable An allowance for doubtful accounts will be recorded based on a combination of historical experience, aging analysis, and information on specific accounts. Account balances will be written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. No provision was made for doubtful accounts as of December 31, 2018 or 2017. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, generally three to five years. Leasehold improvements are amortized over the lesser of the estimated useful lives or the related remaining lease term. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future undiscounted cash flows, expected to result from the use of the asset and its eventual disposition, are less than its carrying amount. Impairment, if any, would be assessed using discounted cash flows or other appropriate measures of fair value. Through December 31, 2018, there have been no such impairment losses. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred and consist of costs incurred to further the Company’s research and development activities including salaries and related employee benefits, costs associated with clinical trials, costs related to pre-commercialization manufacturing activities such as manufacturing process validation activities and the manufacturing of clinical drug supply, nonclinical research and development activities, regulatory activities, research-related overhead expenses and fees paid to external service providers and contract research and manufacturing organizations that conduct certain research and development activities on behalf of the Company. |
Accrued Research and Development Expenses | Accrued Research and Development Expenses As part of the process of preparing its financial statements, the Company is required to estimate its accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with its personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers submit its monthly invoices in arrears for services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to the Company at that time. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued research and development expenses include fees paid to: · contract research organizations, or CROs, in connection with clinical studies; · investigative sites in connection with clinical studies; · vendors related to product manufacturing, development and distribution of clinical supplies; and · vendors in connection with preclinical development activities. The Company records expenses related to clinical studies and manufacturing development activities based on its estimates of the services received and efforts expended pursuant to contracts with multiple CROs and manufacturing vendors that conduct and manage these activities on its behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of subjects and the completion of clinical trial milestones. In accruing service fees, the Company estimates the time period over which services will be performed, enrollment of subjects, number of sites activated and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the Company will adjust the accrued or prepaid expense balance accordingly. To date, there have been no material differences from the Company’s estimates to the amounts actually incurred. |
Revenue Recognition | Revenue Recognition On January 1, 2018 the Company adopted the new standard for Revenue from Contracts with Customers, ASC 606, on a modified retrospective method as an adjustment to the opening balance of retained earnings of the annual reporting period. As a result of the adoption of the new standard, on January 1, 2018, the Company recorded the following: (i) an increase in current assets of $5.0 million representing a future receivable related to the first milestone under the Company’s license agreement with Kyowa Hakko Kirin Co., Ltd., or KHK, that KHK achieved in February 2019, (ii) an increase in current liabilities of $1.0 million representing a future payable related to the corresponding payment to AstraZeneca AB, or AstraZeneca, in accordance with the Company’s termination agreement with AstraZeneca and (iii) a related decrease in its accumulated deficit of approximately $4.0 million as the new standard permits revenue from milestones that possess certain criteria to be recognized earlier as the new standard contains different recognition criteria related to milestones than under the previous standard, Revenue Recognition, Multiple-Element Arrangements - Licensing revenues , ASC 605. The Company enters into licensing agreements which are within the scope of ASC 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; and future royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any payments are recorded in other revenues when the customer obtains control of the goods, which is upon delivery. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all stock-based payment awards made to employees and directors based on estimated fair values. For employee stock options, the Company determines the grant date fair value of the awards using the Black-Scholes option-pricing model and generally recognizes the fair value as stock-based compensation expense on a straight-line basis over the vesting period of the respective awards. For restricted stock and performance-based restricted stock, to the extent they are probable, the compensation cost for these awards is based on the closing price of the Company’s common stock on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company’s stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for equity instruments issued to nonemployees based on their fair values on the measurement dates using the Black-Scholes option-pricing model. The estimated fair values of the options granted to nonemployees are remeasured as they vest. As a result, the noncash charge to operations for nonemployee options with vesting conditions is affected each reporting period by changes in the fair value of the Company’s common stock. |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company accounts for its derivative instruments as either assets or liabilities on the consolidated balance sheet and measures them at fair value. Derivatives are adjusted to fair value through other (expense) income, net in the consolidated statements of operations and comprehensive loss. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is composed of two components: net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity, but are excluded from net loss. |
Net Loss per Share | Net Loss per Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted net loss per common share in the periods presented is the same as basic net loss per common share, since the effects of potentially dilutive securities are antidilutive due to the net loss for all periods presented. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Pronouncements - Recently Adopted In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification. These amendments eliminate, modify, or integrate into other SEC requirements certain disclosure rules. Among the amendments is the requirement to present an analysis of changes in stockholders’ equity in the interim financial statements included in quarterly reports on Form 10-Q. The analysis, which can be presented as a footnote or separate statement, is required for the current and comparative quarter and year-to-date interim periods. The amendments are effective for all filings made on or after November 5, 2018. In light of the anticipated timing of effectiveness of the amendments and expected proximity of effectiveness to the filing date for most filers’ quarterly reports, the SEC’s Division of Corporate Finance issued a Compliance and Disclosure Interpretation related to Exchange Act Forms, or CDI – Question 105.09, that provides transition guidance related to this disclosure requirement. CDI – Question 105.09 states that the SEC would not object if the filer’s first presentation of the changes in shareholders’ equity is included in its Form 10-Q for the quarter that begins after the effective date of the amendments. As such, the Company adopted these SEC amendments on November 5, 2018 and will present the analysis of changes in stockholders’ equity in its interim financial statements in its March 31, 2019 Form 10-Q. The Company does not anticipate that the adoption of these SEC amendments will have a material effect on the Company’s financial position, results of operations, cash flows or shareholders’ equity. In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and creates a new Topic 606, Revenue from Contracts with Customers. In 2015 and 2016, the FASB issued additional ASUs related to Topic 606 that delayed the effective date of the guidance and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identifying performance obligations, and licensing, and they include other improvements and practical expedients. The Company adopted this new standard on January 1, 2018 using the modified retrospective transition method. Impact of Adoption The Company, on adopting Topic 606 on January 1, 2018, has used the modified retrospective transition method with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application. The following adjustments were recorded in the opening balance on January 1, 2018. December 31, Adjustments January 1, 2017 Due to Topic 606 2018 Total current assets $ — 5,000 $ 5,000 Total current liabilities — 1,000 1,000 Accumulated deficit $ — 4,000 $ 4,000 As a result of adopting Topic 606 on January 1, 2018, the following financial statement line items in the Company’s Consolidated Balance Sheet at December 31, 2018 and the Consolidated Statement of Income for the year ended December 31, 2018 were affected. December 31, 2018 As Reported Under Topic 605 Effect of Change Total current assets $ 176,371 171,371 $ 5,000 Total current liabilities 17,728 16,728 1,000 Accumulated deficit (365,512) (369,512) 4,000 Year Ended December 31, 2018 As Reported Under Topic 605 Effect of Change Revenue: Licensing revenue $ 2,320 2,320 $ — Other revenue 287 287 — Cost of revenue 466 466 — In May 2017, FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718) - Scope of Modification Accounting (ASU 2017-09) . The amendments included in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in this update will be applied prospectively to an award modified on or after the adoption date. New Accounting Pronouncements – Adoption on January 1, 2019 In February 2016, the FASB issued ASU No. 2016-02—Leases, (Topic 842) (ASU 2016-02), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, or ASU No. 2018-11. In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We will elect this transition method and package of practical expedients permitted under the transition guidance, which allows us to carryforward our historical lease classification, our assessment on whether a contract is or contains a lease, and our initial direct costs for any leases that exist prior to adoption of the new standard. We will also elect to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the statements of operations on a straight-line basis over the lease term. We will adopt the ASU on January 1, 2019 using a modified retrospective approach and are finalizing our assessment of the impact of the adoption of the ASU and expect to record a right-of-use asset and a corresponding lease liability to account for our facility lease as a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption . In June 2018, the FASB issued ASU No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. ASU 2018-07 expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. ASU 2018-07 supersedes Subtopic 505-50, Equity-Based Payments to Non-Employees. ASU 2018-07 is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year and early adoption is permitted. The Company assessed there will be no material impact of this standard on its consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . ASU 2018-13 considers cost and benefits, and removes, modifies and adds disclosure requirements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty is to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments are to be applied retrospectively to all periods presented. ASU 2018-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year and early adoption is permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements. The Company has reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or no material effect is expected on its consolidated financial statements as a result of future adoption. |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash, Cash Equivalents and Investments | |
Schedule of Securities Classified as Cash, Cash Equivalents and Short-Term Investments | Securities classified as cash, cash equivalents and short-term investments as of December 31, 2018 and December 31, 2017 are summarized below (in thousands). Estimated fair value is based on quoted market prices for these investments. December 31, 2018 Gross Unrealized Amortized Cost Gains Losses Fair Value Cash and cash equivalents: Cash $ 3,733 — — $ 3,733 Money market funds 73,238 — — 73,238 Commercial paper 1,797 — — 1,797 Total cash and cash equivalents $ 78,768 $ — $ — $ 78,768 Short-term investments U.S. treasury securities 3,996 — — 3,996 Corporate bonds 34,611 — (21) 34,590 Commercial paper 41,371 — (14) 41,357 Asset-backed securities 9,381 — (3) 9,378 Total short-term investments $ 89,359 $ — $ (38) $ 89,321 Total cash equivalents and investments $ 168,127 $ — $ (38) $ 168,089 December 31, 2017 Gross Unrealized Amortized Cost Gains Losses Fair Value Cash and cash equivalents: Cash $ 5,882 $ — $ — $ 5,882 Money market funds 68,651 — — 68,651 Commercial paper 850 — — 850 Total cash equivalents and investments $ 75,383 $ — $ — $ 75,383 Short-term investments U.S. treasury securities $ 3,994 — (1) $ 3,993 Corporate bonds 26,853 — (26) 26,827 Commercial paper 19,584 — (14) 19,570 Asset-backed securities 8,209 — (6) 8,203 Total short-term investments $ 58,640 $ — $ (47) $ 58,593 Total cash equivalents and investments $ 134,023 $ — $ (47) $ 133,976 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Summary of Fair Value Measurements of Company's Financial Assets and Liabilities | The following table sets forth the fair value of the Company’s financial assets measured on a recurring basis by level within the fair value hierarchy: December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 73,238 $ 73,238 $ — $ — U.S. treasury securities 3,996 3,996 — — Corporate bonds 34,590 — 34,590 — Commercial paper 43,154 — 43,154 — Asset-backed securities 9,378 — 9,378 — Total $ 164,356 $ 77,234 $ 87,122 $ — Liabilities: Derivative liability for exit fee $ 533 $ — $ — $ 533 Foreign currency derivative contracts 52 $ — $ 52 $ — Total $ 585 $ — $ 52 $ 533 December 31, 2017 Total Level 1 Level 2 Level 3 Assets: Money market funds $ 68,651 $ 68,651 $ — $ — U.S. treasury securities 3,993 3,993 — — Corporate bonds 26,827 — 26,827 — Commercial paper 20,420 — 20,420 — Asset-backed securities 8,203 — 8,203 — Total $ 128,094 $ 72,644 $ 55,450 $ — |
Summary of Changes in the Fair Value of Recurring Measurements | Changes in the fair value of recurring measurements included in Level 3 of the fair value hierarchy are presented as changes in derivative liabilities for Exit Fee in the Company's consolidated statements of operations and were as follows for the year ended December 31, 2018 (in thousands): Estimated Fair Value of Derivative Liability Balance of Level 3 Liabilities at December 31, 2017 $ — Initial estimated fair value of derivative liability for exit fee 546 Change in estimated fair value of derivative liability for exit fee (13) Balance of Level 3 Liabilities at December 31, 2018 $ 533 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Financial Instruments | |
Summary of Derivative Instruments | The following table summarizes the Company’s forward foreign currency exchange contracts outstanding as of December 31, 2018 (notional amounts in thousands): Aggregate Notional Amount in Foreign Foreign Exchange Contracts Number of Contracts Currency Maturity Swiss francs 1 3,281 March 2019 Total 1 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Borrowings | |
Schedule of Future Debt Payment Obligations | As of December 31, 2018, assuming the principal payments start on December 1, 2020, the Company’s future debt payment obligations towards the principal and final fee, excluding interest payments and exit fee, for the respective fiscal years are as follows (in thousands): 2019 $ — 2020 2,083 2021 25,000 2022 24,892 Total principal and final fee payments 51,975 Less: Unamortized discount and debt issuance costs (1,094) Less: Unaccreted value of final fee (1,672) Loan payable, long term $ 49,209 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Summary of Property and Equipment | December 31, 2018 2017 (in thousands) Laboratory equipment $ 6,965 $ 6,857 Office equipment and furniture 889 815 Leasehold improvements 7,949 7,949 Property and equipment, gross 15,803 15,621 Less: accumulated depreciation (10,192) (7,589) Total property and equipment, net $ 5,611 $ 8,032 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued and Other Liabilities | |
Schedule of Accrued Liabilities and Other Liabilities | Accrued and other liabilities consist of the following (in thousands): December 31, 2018 2017 Accrued clinical and non-clinical expenses $ 9,790 $ 5,447 Accrued contract manufacturing expenses 1,971 3,980 Derivative liability for exit fee 533 — Accrued professional and consulting services 112 530 Foreign currency derivative contract 52 — Other 399 752 $ 12,857 $ 10,709 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Activity Under 2008 Plan, 2014 Plan and Inducement Plan Including Grants to Nonemployees Issued | The following table summarizes activity under the 2008 Plan and the 2014 Plan, including grants issued to nonemployees, in the three years ended December 31, 2018: Options Issued and Outstanding Weighted Weighted-Average Average Shares Available Exercise Price per Remaining Aggregate for Grant Number of Shares Share Contractual Term Intrinsic Value (in Years) (in thousands) Balance at December 31, 2015 1,634,420 1,281,086 $ 9.78 Options authorized 1,038,595 — $ — Options granted (1,524,014) 1,524,014 $ 11.42 Options exercised — (25,134) $ 2.19 Options canceled 67,743 (67,743) $ 16.67 Issuance of common stock for services and restricted stock units, net of 5,000 forfeitures (189,507) — — Balance at December 31, 2016 1,027,237 2,712,223 $ 10.60 Options authorized 1,892,376 — $ — Options granted (1,723,906) 1,723,906 $ 11.73 Options exercised — (35,759) $ 1.70 Options canceled 445,029 (445,029) $ 14.15 Issuance of common stock for services and restricted stock units, net of 79,850 forfeitures (601,008) — — Balance at December 31, 2017 1,039,728 3,955,341 $ 10.78 Options authorized 1,901,339 — $ — Options granted (2,566,339) 2,566,339 $ 6.01 Options exercised — — $ — Options canceled 1,014,920 (1,014,920) $ 12.05 Issuance of common stock for services and restricted stock units, net of 197,437 forfeitures (781,120) — — Balance at December 31, 2018 608,528 5,506,760 $ 8.32 7.44 $ 648 Vested and expected to vest at December 31, 2018 5,015,765 $ 8.45 7.28 $ 648 Exercisable at December 31, 2018 2,916,825 $ 8.92 6.19 $ 648 |
Summary of Weighted-Average Assumptions to Estimate Fair Value of Stock Option Awards and Employee Stock Purchase Plan | Year Ended December 31, 2018 2017 2016 Expected term (years) 6.01 5.93 5.99 Expected volatility 83 % 82 % 77 % Risk-free interest rate 2.60 % 2.08 % 1.62 % Dividend yield — % — % — % |
Summary of Non-Vested RSU Activity | Weighted- Weighted-Average Number of Average Grant Number of Service- Grant Date Fair Performance- Date Fair Value Based RSUs Value Per Share Based RSUs Per Share Non-vested restricted stock units at December 31, 2015 10,000 $ 18.04 — $ — Granted 174,389 $ 14.34 — $ — Vested (5,000) $ 18.04 — $ — Forfeited (5,000) $ 18.04 — $ — Non-vested restricted stock units at December 31, 2016 174,389 $ 14.34 — $ — Granted 472,135 $ 4.70 161,865 $ 13.90 Vested (43,597) $ 14.34 — $ — Forfeited (61,865) $ 13.36 (17,985) $ 13.90 Non-vested restricted stock units at December 31, 2017 541,062 $ 6.04 143,880 $ 13.90 Granted — $ — 903,374 $ 4.30 Vested (284,611) $ 5.55 (125,895) $ 13.90 Forfeited (170,842) $ 7.53 (26,595) $ 10.79 Non-vested restricted stock units at December 31, 2018 85,609 $ 4.70 894,764 $ 4.30 |
Summary of Stock-Based Compensation Expense Recognized | Total stock-based compensation recognized was as follows (in thousands): Year Ended December 31, 2018 2017 2016 (in thousands) Research and development $ 3,666 $ 4,585 $ 2,786 General and administrative 5,560 5,005 2,531 Total $ 9,226 $ 9,590 $ 5,317 |
2014 Employee Stock Purchase Plan [Member] | |
Summary of Activity Under 2008 Plan, 2014 Plan and Inducement Plan Including Grants to Nonemployees Issued | Shares Available Number of Shares Purchase Price for Grant Purchased per Share Gross Proceeds (in thousands) Balance at December 31, 2015 347,074 41,580 Shares purchased (69,054) 69,054 $ 8.34 $ 576 Balance at December 31, 2016 278,020 110,634 Shares purchased (99,343) 99,343 $ 6.27 $ 623 Balance at December 31, 2017 178,677 209,977 Shares authorized 622,604 — Shares purchased (120,959) 120,959 $ 4.06 $ 492 Balance at December 31, 2018 680,322 330,936 |
Summary of Weighted-Average Assumptions to Estimate Fair Value of Stock Option Awards and Employee Stock Purchase Plan | Year Ended December 31, 2018 2017 2016 Expected term (years) 0.5 0.5 0.5 Expected volatility 76 % 80 % 76 % Risk-free interest rate 2.08 % 0.97 % 0.48 % Dividend yield — % — % — % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Summary of Components of the Provision for Income Taxes | The components of the provision for income taxes for the year ended December 31, 2018, 2017 and 2016, are as follows (in thousands): Year Ended December 31, 2018 2017 2016 Current: Federal $ — $ — $ — State 4 5 — Foreign — 1,204 — Total current 4 1,209 — Deferred: Federal (30) — State — — — Foreign — — — Total deferred — (30) — Provision for (benefit from) income taxes $ 4 $ 1,179 $ — |
Reconciliation of Statutory Federal Income Tax Rate to the Company's Effective Tax Rate | December 31, 2018 2017 2016 Income tax at the federal statutory rate 21.0 % 35.0 % 35.0 % State taxes, net of federal benefit 0.6 0.5 0.3 Net impact related to foreign subsidiary — (1.2) — Change in valuation allowance (22.5) 19.9 (36.2) Impact of tax reform rate change — (56.4) — Tax credits 1.4 1.0 0.3 Stock Based Compensation (1.2) (0.8) 0.1 Other 0.7 0.1 0.5 Income tax provision — % (1.9) % — % |
Significant Components of the Company's Deferred Tax Assets | December 31, 2018 2017 (in thousands) Deferred tax assets: Fixed assets and intangibles $ 38,376 $ 30,804 Net operating loss carryforwards 31,621 22,355 Tax credits 8,200 5,209 Stock-based compensation 3,763 3,159 Other 888 754 Gross deferred tax assets 82,848 62,281 Valuation allowance (81,645) (61,911) Deferred tax assets net of valuation allowance 1,203 370 Deferred tax liabilities Adoption of New Accounting Standards (1,054) — Other (149) (370) Net deferred tax assets $ — $ — |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 20,734 $ 3,892 $ 3,298 Additions (subtractions) based on tax positions related to prior year 1,634 16,103 45 Additions based on tax positions related to current year 684 739 549 Balance at end of year $ 23,052 $ 20,734 $ 3,892 |
Geographic Information and Co_2
Geographic Information and Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Geographic Information and Concentrations | |
Summary of Revenue by Geographic Areas | Revenue by geographic areas for the years ended December 31, 2018, 2017 and 2016, are as follows (in thousands): Year Ended December 31, 2018 2017 2016 United States $ — $ — $ — International: North America (1) 2,320 — — Asia Pacific (2, 3) 287 42,000 — Total revenue $ 2,607 $ 42,000 $ — (1) (2) Asia Pacific in 2018 comprised $0.3 million from Japan in accordance with the KHK Agreement. (3) Revenues from Asia Pacific in 2017 included $30.0 million from Japan in accordance with the KHK Agreement and $12.0 million from China in accordance with the Fosun Agreement. |
Schedule of Collaboration Partnerships | Year Ended December 31, 2018 2017 2016 Knight 89 % — — KHK 11 % 71 % — Fosun Pharma — 29 % — |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Share | |
Computation of Basic and Diluted Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of net loss per common share (in thousands, except share and per share amounts): Year Ended December 31, 2018 2017 2016 Numerator: Net loss $ (91,298) $ (64,339) $ (112,387) Denominator: Weighted average common shares outstanding - basic and diluted 56,219,919 47,435,331 40,118,522 Net loss per share - basic and diluted $ (1.62) $ (1.36) $ (2.80) |
Calculation of Anti-Dilutive Potentially Dilutive Securities Not Included in Diluted Per Share | Year Ended December 31, 2018 2017 2016 Options to purchase common stock 5,378,008 3,977,160 2,464,089 Warrants to purchase common stock 2,172,899 2,172,899 2,172,899 Restricted stock units 199,135 323,819 87,079 Performance-based restricted stock units 395,791 148,216 — ESPP shares issuable 63,413 60,524 37,227 Total 8,209,246 6,682,618 4,761,294 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies. | |
Schedule of Future Minimum Payments Under the Noncancelable Operating Lease | The future minimum payments under noncancelable operating leases at December 31, 2018, are as follows (in thousands): Year Ended December 31, Amounts 2019 $ 2,697 2020 3,116 2021 2,213 2022 — 2023 — Thereafter — Total $ 8,026 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Selected Quarterly Financial Data (Unaudited) | |
Schedule of Selected Quarterly Financial Results from Operations | Selected quarterly financial results from operations for the years ended December 31, 2018 and 2017 are as follows (in thousands, except per share amounts): 2018 Quarter End March 31 June 30 September 30 December 31 Total revenue $ 2,320 $ 30 $ 172 $ 85 Gross profit 1,856 30 170 85 Operating expenses 19,541 22,184 23,902 27,461 Net loss (17,019) (22,291) (24,126) (27,862) Net loss per share - basic and diluted $ (0.36) $ (0.42) $ (0.39) $ (0.45) 2017 Quarter End March 31 June 30 September 30 December 31 Total revenue $ — $ — $ — $ 42,000 Gross profit — — — 33,600 Operating expenses 28,434 26,418 21,225 22,638 Net income (loss) (28,008) (25,721) (20,724) 10,114 Net income (loss) per share - basic $ (0.59) $ (0.54) $ (0.44) $ 0.21 Net income (loss) per share - diluted $ (0.59) $ (0.54) $ (0.44) $ 0.21 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Organization and Basis of Presentation | |
Number of operating segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Impact of Adoption | ||||||||||||
Net loss | $ (27,862) | $ (24,126) | $ (22,291) | $ (17,019) | $ 10,114 | $ (20,724) | $ (25,721) | $ (28,008) | $ (91,298) | $ (64,339) | $ (112,387) | |
Cash and cash equivalents original maturity dates | 90 days | |||||||||||
Short-term investments maturity period description | Short-term investments consist of debt securities classified as available-for-sale and have maturities greater than 90 days, but less than one year, from the date of acquisition. | |||||||||||
Provision for doubtful accounts | $ 0 | 0 | ||||||||||
Impairment loss of long-lived assets | 0 | |||||||||||
Current assets | 176,371 | 149,712 | 176,371 | 149,712 | $ 5,000 | |||||||
Current liabilities | 17,728 | 17,871 | 17,728 | 17,871 | 1,000 | |||||||
Accumulated deficit | (365,512) | (278,214) | (365,512) | (278,214) | 4,000 | |||||||
Total revenues | 85 | $ 172 | $ 30 | $ 2,320 | $ 42,000 | 2,607 | 42,000 | |||||
Cost of revenue | $ 466 | 8,400 | ||||||||||
Minimum [Member] | ||||||||||||
Impact of Adoption | ||||||||||||
Estimated useful lives | 3 years | |||||||||||
Maximum [Member] | ||||||||||||
Impact of Adoption | ||||||||||||
Estimated useful lives | 5 years | |||||||||||
Licensing | ||||||||||||
Impact of Adoption | ||||||||||||
Total revenues | $ 2,320 | $ 42,000 | ||||||||||
Other | ||||||||||||
Impact of Adoption | ||||||||||||
Total revenues | 287 | |||||||||||
ASU 2014-09 | Adjustments | ||||||||||||
Impact of Adoption | ||||||||||||
Current assets | 5,000 | 5,000 | 5,000 | |||||||||
Current liabilities | 1,000 | 1,000 | 1,000 | |||||||||
Accumulated deficit | 4,000 | 4,000 | $ 4,000 | |||||||||
ASU 2014-09 | Before topic 606 | ||||||||||||
Impact of Adoption | ||||||||||||
Current assets | 171,371 | 171,371 | ||||||||||
Current liabilities | 16,728 | 16,728 | ||||||||||
Accumulated deficit | $ (369,512) | (369,512) | ||||||||||
Cost of revenue | 466 | |||||||||||
ASU 2014-09 | Before topic 606 | Licensing | ||||||||||||
Impact of Adoption | ||||||||||||
Total revenues | 2,320 | |||||||||||
ASU 2014-09 | Before topic 606 | Other | ||||||||||||
Impact of Adoption | ||||||||||||
Total revenues | $ 287 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investments - Schedule of Securities Classified as Cash, Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | $ 78,768 | $ 75,383 | $ 74,598 | $ 107,004 |
Cash and cash equivalents, Fair Value | 78,768 | 75,383 | ||
Short-term investments, Amortized Cost | 89,359 | 58,640 | ||
Short-term investments, Gross Unrealized Losses | (38) | (47) | ||
Short-term investments, Fair Value | 89,321 | 58,593 | ||
Cash equivalents and short-term investments, Amortized Cost | 168,127 | 134,023 | ||
Cash equivalents and short-term investments, Gross Unrealized Losses | (38) | (47) | ||
Cash equivalents and short-term investments, Fair Value | 168,089 | 133,976 | ||
Cash [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 3,733 | 5,882 | ||
Cash and cash equivalents, Fair Value | 3,733 | 5,882 | ||
Money Market Funds [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 73,238 | 68,651 | ||
Cash and cash equivalents, Fair Value | 73,238 | 68,651 | ||
Commercial Paper (Cash Equivalents) [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 1,797 | 850 | ||
Cash and cash equivalents, Fair Value | 1,797 | 850 | ||
U.S. Treasury Securities [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Cash and cash equivalents, Amortized Cost | 3,996 | 3,994 | ||
Cash and cash equivalents, Gross Unrealized Losses | (1) | |||
Cash and cash equivalents, Fair Value | 3,996 | 3,993 | ||
Corporate Bonds (Investments) [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Short-term investments, Amortized Cost | 34,611 | 26,853 | ||
Short-term investments, Gross Unrealized Losses | (21) | (26) | ||
Short-term investments, Fair Value | 34,590 | 26,827 | ||
Commercial Paper (Investments) [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Short-term investments, Amortized Cost | 41,371 | 19,584 | ||
Short-term investments, Gross Unrealized Losses | (14) | (14) | ||
Short-term investments, Fair Value | 41,357 | 19,570 | ||
Asset-Backed Securities [Member] | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Short-term investments, Amortized Cost | 9,381 | 8,209 | ||
Short-term investments, Gross Unrealized Losses | (3) | (6) | ||
Short-term investments, Fair Value | $ 9,378 | $ 8,203 |
Cash, Cash Equivalents and In_4
Cash, Cash Equivalents and Investments - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Investment in continuous unrealized loss position for more than one year | $ 0 | $ 0 |
Maximum [Member] | ||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||
Available for sale securities contractual maturity period | 1 year | 1 year |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value Measurements of Company's Financial Assets and Liabilities (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Assets at fair value | $ 164,356 | $ 128,094 |
Liabilities: | ||
Derivative liability | 585 | |
Level 1 [Member] | ||
Assets: | ||
Assets at fair value | 77,234 | 72,644 |
Level 2 [Member] | ||
Assets: | ||
Assets at fair value | 87,122 | 55,450 |
Liabilities: | ||
Derivative liability | 52 | |
Level 3 [Member] | ||
Liabilities: | ||
Derivative liability | 533 | |
Derivative Liability Exit Fee [Member] | ||
Liabilities: | ||
Derivative liability | 533 | |
Derivative Liability Exit Fee [Member] | Level 3 [Member] | ||
Liabilities: | ||
Derivative liability | 533 | |
Foreign Exchange Contract [Member] | ||
Liabilities: | ||
Derivative liability | 52 | |
Foreign Exchange Contract [Member] | Level 2 [Member] | ||
Liabilities: | ||
Derivative liability | 52 | |
Money Market Funds [Member] | ||
Assets: | ||
Assets at fair value | 73,238 | 68,651 |
Money Market Funds [Member] | Level 1 [Member] | ||
Assets: | ||
Assets at fair value | 73,238 | 68,651 |
U.S. Treasury Securities [Member] | ||
Assets: | ||
Assets at fair value | 3,996 | 3,993 |
U.S. Treasury Securities [Member] | Level 1 [Member] | ||
Assets: | ||
Assets at fair value | 3,996 | 3,993 |
Corporate Bonds [Member] | ||
Assets: | ||
Assets at fair value | 34,590 | 26,827 |
Corporate Bonds [Member] | Level 2 [Member] | ||
Assets: | ||
Assets at fair value | 34,590 | 26,827 |
Commercial Paper [Member] | ||
Assets: | ||
Assets at fair value | 43,154 | 20,420 |
Commercial Paper [Member] | Level 2 [Member] | ||
Assets: | ||
Assets at fair value | 43,154 | 20,420 |
Asset-Backed Securities [Member] | ||
Assets: | ||
Assets at fair value | 9,378 | 8,203 |
Asset-Backed Securities [Member] | Level 2 [Member] | ||
Assets: | ||
Assets at fair value | $ 9,378 | $ 8,203 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Fair Value Measurements | |
Transfer of assets from Level 1 to Level 2 | $ 0 |
Transfer of assets from Level 2 to Level 1 | $ 0 |
Fair Value Measurements - Loan
Fair Value Measurements - Loan and Security Agreement (Details) - Solar Capital and Western Alliance Bank Loan Agreement [Member] - USD ($) $ in Thousands | 1 Months Ended | 7 Months Ended | 12 Months Ended |
May 31, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | |
Fair Value Measurements | |||
Exit Fee | $ 1,500 | ||
Level 3 [Member] | |||
Fair Value Measurements | |||
Potential payment to Solar Capital Ltd. and Western Alliance Bank | $ 1,500 | ||
Percentage of increase in risk component | 10.00% | 10.00% | |
Percentage decrease in risk component | 10.00% | 10.00% | |
Fair value fluctuation due to increase in risk component | $ 100 | $ 100 | |
Fair value fluctuation due to decrease in risk component | 100 | 100 | |
Derivative Liability Exit Fee [Member] | |||
Fair Value Measurements | |||
Decrease in estimated fair value of Exit Fee | 13 | ||
Derivative Liability Exit Fee [Member] | Accrued and other liabilities | |||
Fair Value Measurements | |||
Estimated fair value of Exit Fee | $ 546 | $ 533 | $ 533 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in fair value of recurring measurements (Details) - Derivative Liability Exit Fee [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Beginning Balance | $ 546 |
Change in estimated fair value of derivative liability for exit fee | (13) |
Ending Balance | $ 533 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Schedule of Derivative Instruments) (Details) - Foreign Exchange Contract [Member] SFr in Thousands | 12 Months Ended |
Dec. 31, 2018CHF (SFr)contract | |
Derivative [Line Items] | |
Number of Contracts | contract | 1 |
Aggregate Notional Amount in Foreign Currency | SFr | SFr 3,281 |
Maturity Date | Mar. 1, 2019 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Additional Information) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | |||
Notional amount | $ 51,756 | ||
Gain (loss) on derivative instruments | (124,194) | $ 0 | $ 0 |
Foreign Exchange Contract [Member] | |||
Derivative [Line Items] | |||
Notional amount | $ 3,400,000 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | May 16, 2018 | Dec. 31, 2018 |
Term Loans | ||
Amount of term loan facility | $ 50,000 | |
Net proceeds from the loan | $ 49,300 | $ 49,292 |
Percentage of premium payable on redemption of the term loan | 1.00% | |
Amount of fee payable upon closing of the term loan | $ 500 | |
Exit fee (as a percent) | 3.00% | |
Expiration term of exit fee | 10 years | |
Minimum unrestricted cash and cash equivalents to be maintained | $ 50,000 | |
Additional default interest rate | 4.00% | |
Future debt payment obligations | ||
2,020 | 2,083 | |
2,021 | 25,000 | |
2,022 | 24,892 | |
Total | 51,975 | |
Less: Unamortized discount and debt issuance costs | (1,094) | |
Less: Unaccreted value of final fee | (1,672) | |
Loan payable, long term | $ 49,209 | |
At Maturity | ||
Term Loans | ||
Final payment fee (as a percent) | 3.95% | |
Prior to first anniversary of closing date | ||
Term Loans | ||
Prepayment fee (as a percent) | 3.00% | |
After first anniversary of closing date | ||
Term Loans | ||
Prepayment fee (as a percent) | 2.00% | |
After second anniversary to maturity date | ||
Term Loans | ||
Prepayment fee (as a percent) | 1.00% | |
LIBOR | ||
Term Loans | ||
Floating interest rate | 7.45% |
Shareholders Equity (Details)
Shareholders Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 25, 2018 | May 25, 2018 | May 22, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock issued | 14,375,000 | 62,516,627 | 47,534,979 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
Net proceeds | $ 53.8 | ||||
Offering | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock issued | 12,500,000 | ||||
Common stock, par value | $ 0.0001 | ||||
Public offering price | $ 4 | ||||
Net proceeds | $ 46.7 | ||||
Underwriters' option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock issued | 1,875,000 | 1,875,000 | |||
Public offering price | $ 4 | ||||
Purchase price | $ 3.76 | $ 3.76 | |||
Number of days to underwriters to sell additional common shares | 30 days | ||||
Net proceeds | $ 7.1 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 15,803 | $ 15,621 |
Less: accumulated depreciation | (10,192) | (7,589) |
Total property and equipment, net | 5,611 | 8,032 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,965 | 6,857 |
Office Equipment And Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 889 | 815 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,949 | $ 7,949 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and Equipment | |||
Depreciation and amortization expense | $ 2.7 | $ 2.6 | $ 1.3 |
Accrued and Other Liabilities -
Accrued and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued and Other Liabilities | ||
Accrued clinical and non-clinical expenses | $ 9,790 | $ 5,447 |
Accrued contract manufacturing expenses | 1,971 | 3,980 |
Derivative liability for exit fee | 533 | |
Accrued professional and consulting services | 112 | 530 |
Foreign currency derivative contract | 52 | |
Other | 399 | 752 |
Total accrued and other liabilities | $ 12,857 | $ 10,709 |
Collaboration and Licensing A_2
Collaboration and Licensing Agreements - Additional Information (Details) $ in Thousands, $ in Millions, ¥ in Billions | Nov. 02, 2018USD ($) | Dec. 31, 2017USD ($) | Nov. 30, 2017USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018JPY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2018USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Current assets | $ 149,712 | $ 176,371 | $ 149,712 | $ 176,371 | $ 149,712 | $ 5,000 | ||||||||
Current liabilities | 17,871 | 17,728 | 17,871 | 17,728 | 17,871 | 1,000 | ||||||||
Revenues | 85 | $ 172 | $ 30 | $ 2,320 | $ 42,000 | 2,607 | 42,000 | |||||||
Cost of revenue | 466 | 8,400 | ||||||||||||
Other | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Revenues | 287 | |||||||||||||
Adjustments | ASU 2014-09 | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Current assets | 5,000 | 5,000 | 5,000 | |||||||||||
Current liabilities | $ 1,000 | 1,000 | $ 1,000 | |||||||||||
Kyowa Hakko Kirin [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Upfront payment received | $ 30,000 | |||||||||||||
Kyowa Hakko Kirin [Member] | Product supply | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Revenues | 300 | |||||||||||||
Kyowa Hakko Kirin [Member] | Development and Commercialization [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Development milestones | 55,000 | |||||||||||||
Commercialization milestones recognized | 5,000 | |||||||||||||
Commercialization milestones | ¥ 8.5 | 77,500 | ||||||||||||
Shanghai Fosun Pharmaceutical Industrial Development [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Upfront payment received | $ 12,000 | |||||||||||||
Revenues | 0 | |||||||||||||
Future development milestones | $ 113,000 | |||||||||||||
Threshold percentage of net sales for tiered royalties | 20.00% | |||||||||||||
Shanghai Fosun Pharmaceutical Industrial Development [Member] | Development and Commercialization [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Cost of revenue | 2,400 | |||||||||||||
AstraZeneca [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Upfront payment received | $ 75,000 | |||||||||||||
AstraZeneca [Member] | Development and Commercialization [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Cost of revenue | 1,000 | |||||||||||||
AstraZeneca [Member] | Termination Agreement [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Cost of revenue | 500 | |||||||||||||
Knight | Development and Commercialization [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Revenues | 2,300 | |||||||||||||
Total payments, including an up-front payment and development and sales milestones to be received | $ 25 | |||||||||||||
Cost of revenue | $ 500 | $ 6,000 | ||||||||||||
Knight | Termination Agreement [Member] | ||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||||
Cost of revenue | $ 9,900 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2019 | Jun. 25, 2018 | Jun. 18, 2014 | Jul. 31, 2018 | Jan. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
Common stock reserved | 1,454,549 | ||||||||||
Maximum shares to be issued up on exercise of incentive stock options | 1,153,279 | ||||||||||
Number of options granted during the period | 2,566,339 | 1,723,906 | 1,524,014 | ||||||||
Weighted-average grant-date estimated fair value of options granted | $ 4.29 | $ 8.19 | $ 7.69 | ||||||||
Estimated fair value of common stock | $ 1.79 | ||||||||||
Estimated fair value of options exercised during period | $ 0 | $ 300 | $ 300 | ||||||||
Estimated fair value of restricted stock vested during period | 600 | 400 | 100 | ||||||||
Stock-based compensation | $ 9,226 | $ 9,590 | $ 5,317 | ||||||||
Shares available for future grant | 608,528 | 1,039,728 | 1,027,237 | 1,634,420 | |||||||
Proceeds from issuance of common stock, net of issuance costs | $ 53,800 | ||||||||||
Purchase price of common shares | $ 10.70 | ||||||||||
Warrants issued to purchase common stock | 2,172,899 | ||||||||||
Exercise price for warrants | $ 13.91 | $ 13.91 | |||||||||
Issuance of common stock for services, shares | 75,183 | 46,858 | 20,118 | ||||||||
Issuance of common stock for services, amount | $ 303 | $ 201 | $ 187 | ||||||||
Number of vested shares | 0 | ||||||||||
Subsequent Event [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Maximum shares to be issued up on exercise of incentive stock options | 2,490,417 | ||||||||||
Employee Stock Purchase Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized stock-based compensation expense, weighted-average remaining recognition period | 2 months 12 days | ||||||||||
2014 Equity Incentive Award Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved | 1,419,328 | ||||||||||
Maximum shares to be issued up on exercise of incentive stock options | 10,683,053 | ||||||||||
Possible increase in shares reserved for issuance as percentage of outstanding stock | 4.00% | ||||||||||
2008 Stock Incentive Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Increase in shares reserved for issuance | 35,221 | ||||||||||
2014 Employee Stock Purchase Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved | 202,762 | ||||||||||
Maximum shares to be issued up on exercise of incentive stock options | 622,604 | 2,230,374 | |||||||||
Possible increase in shares reserved for issuance as percentage of outstanding stock | 1.00% | ||||||||||
Shares available for future grant | 680,322 | 178,677 | 278,020 | 347,074 | |||||||
2016 Employment Commencement Incentive Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of options granted during the period | 0 | ||||||||||
2016 Employment Commencement Incentive Plan [Member] | Board of Directors [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock reserved | 1,000,000 | ||||||||||
Options to Purchase Common Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized stock-based compensation expense | $ 11,100 | ||||||||||
Unrecognized stock-based compensation expense, weighted-average remaining recognition period | 3 years | ||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation | $ 900 | $ 900 | $ 400 | ||||||||
Unrecognized stock-based compensation expense | $ 300 | ||||||||||
Unrecognized stock-based compensation expense, weighted-average remaining recognition period | 1 year 10 months 24 days | ||||||||||
Service Based Restricted Stock Units [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of Shares, Granted | 472,135 | 174,389 | |||||||||
Number of Shares, Outstanding | 85,609 | 541,062 | 174,389 | 10,000 | |||||||
Number of vested shares | 284,611 | 43,597 | 5,000 | ||||||||
Performance-Based Restricted Stock Units (PRSUs) [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized stock-based compensation expense | $ 0 | ||||||||||
Unrecognized stock-based compensation expense, weighted-average remaining recognition period | 0 years | ||||||||||
Number of Shares, Granted | 903,374 | 161,865 | 903,374 | 161,865 | |||||||
Number of Shares, Outstanding | 894,764 | 125,895 | 894,764 | 143,880 | |||||||
Number of vested shares | 0 | 125,895 | |||||||||
Recognized stock-based compensation related expense in connection with vesting of award granted | $ 600 | $ 1,000 | $ 0 |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of Activity Under 2008 Plan, 2014 Plan and Inducement Plan Including Grants to Nonemployees Issued (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | |||
Shares Available for Grant, Beginning balance | 1,039,728 | 1,027,237 | 1,634,420 |
Shares Available for Grant, Options authorized | 1,901,339 | 1,892,376 | 1,038,595 |
Shares Available for Grant, Options granted | (2,566,339) | (1,723,906) | (1,524,014) |
Shares Available for Grant, Options exercised | 0 | 0 | 0 |
Shares Available for Grant, Options canceled | 1,014,920 | 445,029 | 67,743 |
Issuance of common stock for services and restricted stock units, net of forfeitures | 781,120 | 601,008 | 189,507 |
Shares Available for Grant, Issuance of common stock for services | (75,183) | (46,858) | (20,118) |
Shares Available for Grant, Ending balance | 608,528 | 1,039,728 | 1,027,237 |
Options Issued and Outstanding Number of Shares, Beginning balance | 3,955,341 | 2,712,223 | 1,281,086 |
Options Issued and Outstanding Number of Shares, Options authorized | 0 | 0 | 0 |
Options Issued and Outstanding Number of Shares, Options granted | 2,566,339 | 1,723,906 | 1,524,014 |
Options Issued and Outstanding Number of Shares, Options exercised | (35,759) | (25,134) | |
Options Issued and Outstanding Number, Options canceled | (1,014,920) | (445,029) | (67,743) |
Options Issued and Outstanding Number of Shares, Issuance of common stock for services | 0 | 0 | 0 |
Options Issued and Outstanding Number of Shares, Ending balance | 5,506,760 | 3,955,341 | 2,712,223 |
Options Issued and Outstanding Average Exercise Price per Share, Beginning balance | $ 10.78 | $ 10.60 | $ 9.78 |
Options Issued and Outstanding Number of Shares, Expected to vest | 5,015,765 | ||
Options Issued and Outstanding Number of Shares, Exercisable | 2,916,825 | ||
Options Issued and Outstanding Average Exercise Price per Share, Options granted | $ 6.01 | 11.73 | 11.42 |
Options Issued and Outstanding Average Exercise Price per Share, Options exercised | 1.70 | 2.19 | |
Options Issued and Outstanding Average Exercise Price per Share, Options canceled | 12.05 | 14.15 | 16.67 |
Options Issued and Outstanding Average Exercise Price per Share, Issuance of common stock for services | 0 | 0 | 0 |
Options Issued and Outstanding Average Exercise Price per Share, Ending balance | 8.32 | $ 10.78 | $ 10.60 |
Options Issued and Outstanding Average Exercise Price per Share, Expected to vest | 8.45 | ||
Options Issued and Outstanding Average Exercise Price per Share, Exercisable | $ 8.92 | ||
Weighted Average Remaining Contractual Term, Ending Balance | 7 years 5 months 9 days | ||
Weighted Average Remaining Contractual Term, Vested and Expected to Vest | 7 years 3 months 11 days | ||
Weighted Average Remaining Contractual Term, Exercisable | 6 years 2 months 9 days | ||
Aggregate Intrinsic Value, Ending balance | $ 648 | ||
Aggregate Intrinsic Value, Expected to Vest | 648 | ||
Aggregate Intrinsic Value, Exercisable | $ 648 | ||
Shares available for grant, forfeitures | 197,437 | 79,850 | 5,000 |
Equity Incentive Plans - Summ_2
Equity Incentive Plans - Summary of Non-Vested RSU Activity (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2018 | Jan. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Shares, Vested | 0 | ||||
Service Based Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Shares, Beginning balance | 174,389 | 541,062 | 174,389 | 10,000 | |
Number of Shares, Granted | 472,135 | 174,389 | |||
Number of Shares, Vested | (284,611) | (43,597) | (5,000) | ||
Number of Shares, Forfeited | (170,842) | (61,865) | (5,000) | ||
Number of Shares, Ending balance | 85,609 | 541,062 | 174,389 | ||
Weighted-Average Grant Date Fair Value Per Share, Beginning balance | $ 14.34 | $ 6.04 | $ 14.34 | $ 18.04 | |
Weighted-Average Grant Date Fair Value Per Share, Granted | 4.70 | 14.34 | |||
Weighted-Average Grant Date Fair Value Per Share, Vested | 5.55 | 14.34 | 18.04 | ||
Weighted-Average Grant Date Fair Value Per Share, Forfeited | 7.53 | 13.36 | 18.04 | ||
Weighted-Average Grant Date Fair Value Per Share, Ending balance | $ 4.70 | $ 6.04 | $ 14.34 | ||
Performance-Based Restricted Stock Units (PRSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Shares, Beginning balance | 143,880 | ||||
Number of Shares, Granted | 903,374 | 161,865 | 903,374 | 161,865 | |
Number of Shares, Vested | 0 | (125,895) | |||
Number of Shares, Forfeited | (26,595) | (17,985) | |||
Number of Shares, Ending balance | 894,764 | 125,895 | 894,764 | 143,880 | |
Weighted-Average Grant Date Fair Value Per Share, Beginning balance | $ 13.90 | ||||
Weighted-Average Grant Date Fair Value Per Share, Granted | 4.30 | $ 13.90 | |||
Weighted-Average Grant Date Fair Value Per Share, Vested | 13.90 | ||||
Weighted-Average Grant Date Fair Value Per Share, Forfeited | 10.79 | 13.90 | |||
Weighted-Average Grant Date Fair Value Per Share, Ending balance | $ 4.30 | $ 13.90 |
Equity Incentive Plans - Summ_3
Equity Incentive Plans - Summary of Weighted-Average Assumptions to Estimate Fair value of Stock Option Awards and Employee Stock Purchase Plan (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 6 years 4 days | 5 years 11 months 5 days | 5 years 11 months 27 days |
Volatility | 83.00% | 82.00% | 77.00% |
Risk-free interest rate | 2.60% | 2.08% | 1.62% |
2014 Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 6 months | 6 months | 6 months |
Volatility | 76.00% | 80.00% | 76.00% |
Risk-free interest rate | 2.08% | 0.97% | 0.48% |
Equity Incentive Plans - Employ
Equity Incentive Plans - Employee Stock Purchase Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares Available for Grant, Beginning balance | 1,039,728 | 1,027,237 | 1,634,420 | |
Shares Available for Grant, Shares authorized | 1,901,339 | 1,892,376 | 1,038,595 | |
Shares Available for Grant, Ending balance | 608,528 | 1,039,728 | 1,027,237 | 1,634,420 |
Options Issued and Outstanding Number of Shares, Beginning balance | 3,955,341 | 2,712,223 | 1,281,086 | |
Options Issued and Outstanding Number of Shares, Ending balance | 5,506,760 | 3,955,341 | 2,712,223 | 1,281,086 |
2014 Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares Available for Grant, Beginning balance | 178,677 | 278,020 | 347,074 | |
Shares Available for Grant, Shares authorized | 622,604 | |||
Shares Available of Grant, Shares purchased | (120,959) | (99,343) | (69,054) | |
Shares Available for Grant, Ending balance | 680,322 | 178,677 | 278,020 | 347,074 |
Options Issued and Outstanding Number of Shares, Beginning balance | 209,977 | 110,634 | 41,580 | |
Number of shares issued under ESPP | 120,959 | 99,343 | 69,054 | |
Options Issued and Outstanding Number of Shares, Ending balance | 330,936 | 209,977 | 110,634 | 41,580 |
Purchase Price per Share | $ 4.06 | $ 6.27 | $ 8.34 | |
Gross Proceeds | $ 492 | $ 623 | $ 576 |
Equity Incentive Plans - Summ_4
Equity Incentive Plans - Summary of Stock-Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | $ 9,226 | $ 9,590 | $ 5,317 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 3,666 | 4,585 | 2,786 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | $ 5,560 | $ 5,005 | $ 2,531 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Warrant [Abstract] | ||||
Warrants sold and issued | 7,242,992 | |||
Common stock to be issued if warrants are exercised (in shares) | 2,172,899 | |||
Gross proceeds | $ 77.8 | |||
Net proceeds | $ 74.3 | |||
Purchase price of common shares | $ 10.70 | |||
Purchase price of warrants | 0.125 | |||
Exercise price for warrants | $ 13.91 | $ 13.91 | ||
Warrant exercise period | 5 years | |||
Maximum beneficial ownership percentage | 9.99% | |||
Warrants exercised | 0 | 0 | 0 |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||
State | $ 4 | $ 5 |
Foreign | 1,204 | |
Total current | 4 | 1,209 |
Deferred: | ||
Federal | (30) | |
Total deferred | (30) | |
Provision for (benefit from) income taxes | $ 4 | $ 1,179 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate to the Company's Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes | |||
Income tax at the federal statutory rate | 21.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 0.60% | 0.50% | 0.30% |
Net impact related to foreign subsidiary | (1.20%) | ||
Change in valuation allowance | (22.50%) | 19.90% | (36.20%) |
Impact of tax reform rate change | (56.40%) | ||
Tax credits | 1.40% | 1.00% | 0.30% |
Stock Based Compensation | (1.20%) | (0.80%) | 0.10% |
Other | 0.70% | 0.10% | 0.50% |
Income tax provision | 0.00% | (1.90%) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of the Company's Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets, Net [Abstract] | ||
Fixed assets and intangibles | $ 38,376 | $ 30,804 |
Net operating loss carryforwards | 31,621 | 22,355 |
Tax credits | 8,200 | 5,209 |
Stock-based compensation | 3,763 | 3,159 |
Other | 888 | 754 |
Gross deferred tax assets | 82,848 | 62,281 |
Valuation allowance | (81,645) | (61,911) |
Total deferred tax assets net of valuation allowance | 1,203 | 370 |
Deferred Tax Liabilities, Net [Abstract] | ||
Adoption of New Accounting Standards | (1,054) | 0 |
Other | (149) | (370) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Line Items] | |||
Increase (decrease) in deferred tax valuation allowance | $ 19.7 | $ (12.6) | $ 40.7 |
Income tax, federal statutory rate | 21.00% | 35.00% | 35.00% |
Decrease related to net federal deferred tax assets | $ 35.6 | ||
Offsetting change in valuation allowance | 35.6 | ||
Accrued interest and penalties related to unrecognized tax benefits | 0 | $ 0 | $ 0 |
Federal Tax Authority [Member] | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | $ 193.3 | ||
Operating loss carryforward expiration year | 2,030 | ||
Tax credit carryforwards | $ 47 | ||
Federal Tax Authority [Member] | Research and Development Tax Credit [Member] | |||
Income Tax Disclosure [Line Items] | |||
Tax credit carryforwards | $ 8.7 | ||
Tax credit carryforward expiration year | 2,027 | ||
State Tax Authority [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforward expiration year | 2,025 | ||
Other net operating losses | $ 2.5 | ||
State Tax Authority [Member] | California | |||
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | $ 88.3 | ||
Operating loss carryforward expiration year | 2,030 | ||
State Tax Authority [Member] | Research and Development Tax Credit [Member] | |||
Income Tax Disclosure [Line Items] | |||
Tax credit carryforwards | $ 6.9 | ||
State Tax Authority [Member] | Minimum Tax Credit Carryforward [Member] | |||
Income Tax Disclosure [Line Items] | |||
Tax credit carryforwards | $ 0.1 | ||
Foreign Tax Authority [Member] | |||
Income Tax Disclosure [Line Items] | |||
Foreign tax credit carryforwards | $ 1.2 | ||
Operating loss carryforward expiration year | 2,027 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes | |||
Balance at beginning of year | $ 20,734 | $ 3,892 | $ 3,298 |
Additions (subtractions) based on tax positions related to prior year | 1,634 | 16,103 | 45 |
Additions based on tax positions related to current year | 684 | 739 | 549 |
Balance at end of year | 23,052 | 20,734 | 3,892 |
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ 9,800 | $ 8,600 | $ 3,500 |
Geographic Information and Co_3
Geographic Information and Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Total revenues | $ 85 | $ 172 | $ 30 | $ 2,320 | $ 42,000 | $ 2,607 | $ 42,000 |
North America | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Total revenues | 2,320 | ||||||
Asia Pacific | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Total revenues | $ 287 | 42,000 | |||||
Japan | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Total revenues | 30,000 | ||||||
China | |||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||
Total revenues | $ 12,000 |
Geographic Information and Co_4
Geographic Information and Concentrations - Concentration Risk (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Knight | ||
Concentration Risk [Line Items] | ||
Percentage of revenue | 89.00% | |
KHK | ||
Concentration Risk [Line Items] | ||
Percentage of revenue | 11.00% | 71.00% |
Fosun Pharma | ||
Concentration Risk [Line Items] | ||
Percentage of revenue | 29.00% |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||||||||||
Net loss | $ (27,862) | $ (24,126) | $ (22,291) | $ (17,019) | $ 10,114 | $ (20,724) | $ (25,721) | $ (28,008) | $ (91,298) | $ (64,339) | $ (112,387) |
Denominator: | |||||||||||
Weighted average common shares outstanding - basic and diluted | 56,219,919 | 47,435,331 | 40,118,522 | ||||||||
Net loss per share - basic and diluted | $ (0.45) | $ (0.39) | $ (0.42) | $ (0.36) | $ (1.62) | $ (1.36) | $ (2.80) |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net loss per share attributable to common stockholders | 8,209,246 | 6,682,618 | 4,761,294 |
Potential common shares that would have been included in diluted income per share were not anti-dilutive effect caused by the net loss, computed by converting these securities using the treasury stock method | 1,000,000 | 1,000,000 | 800,000 |
Options to Purchase Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net loss per share attributable to common stockholders | 5,378,008 | 3,977,160 | 2,464,089 |
Warrants to Purchase Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net loss per share attributable to common stockholders | 2,172,899 | 2,172,899 | 2,172,899 |
Restricted Stock Units (RSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net loss per share attributable to common stockholders | 199,135 | 323,819 | 87,079 |
Performance-Based Restricted Stock Units (PRSUs) [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net loss per share attributable to common stockholders | 395,791 | 148,216 | |
Employee Stock Purchase Plan [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net loss per share attributable to common stockholders | 63,413 | 60,524 | 37,227 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | Oct. 01, 2018 | May 31, 2016 | Sep. 30, 2014 | Dec. 31, 2012 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 |
Loss Contingencies [Line Items] | ||||||||
Security deposit provided to lessor | $ 100,000 | |||||||
Rent expense under operating leases | $ 1,800,000 | $ 1,700,000 | $ 1,300,000 | |||||
Lease Agreements [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Lease term | 36 months | 16 months | ||||||
Annual rent | $ 100,000 | |||||||
December 2012, Amended Facility Lease Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Lease expiration date | Sep. 30, 2016 | |||||||
September 2014, Amended Facility Lease Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Lease expiration date | Sep. 30, 2019 | |||||||
Lease improvement allowance maximum amount | $ 600,000 | |||||||
May 2016, Amended Facility Lease Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Lease expiration date | Sep. 30, 2021 | |||||||
Lease improvement allowance maximum amount | $ 400,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Payments Under the Noncancelable Operating Lease (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies. | |
2,019 | $ 2,697 |
2,020 | 3,116 |
2,021 | 2,213 |
Total | $ 8,026 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Schedule of Selected Quarterly Financial Results from Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Total revenues | $ 85 | $ 172 | $ 30 | $ 2,320 | $ 42,000 | $ 2,607 | $ 42,000 | ||||
Gross profit | 85 | 170 | 30 | 1,856 | 33,600 | 2,141 | 33,600 | ||||
Operating expenses | 27,461 | 23,902 | 22,184 | 19,541 | 22,638 | $ 21,225 | $ 26,418 | $ 28,434 | 93,088 | 98,715 | $ 112,895 |
Net income (loss) | $ (27,862) | $ (24,126) | $ (22,291) | $ (17,019) | $ 10,114 | $ (20,724) | $ (25,721) | $ (28,008) | $ (91,298) | $ (64,339) | $ (112,387) |
Net (loss) income per share: | |||||||||||
Net loss per share - basic and diluted | $ (0.45) | $ (0.39) | $ (0.42) | $ (0.36) | $ (1.62) | $ (1.36) | $ (2.80) | ||||
Net income (loss) per share - basic | $ 0.21 | $ (0.44) | $ (0.54) | $ (0.59) | |||||||
Net income (loss) per share - diluted | $ 0.21 | $ (0.44) | $ (0.54) | $ (0.59) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | 1 Months Ended |
Feb. 28, 2019USD ($) | |
License Agreement Terms [Member] | Kyowa Hakko Kirin [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Milestone payment | $ 5 |