Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 07, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | CATABASIS PHARMACEUTICALS INC | ||
Entity Central Index Key | 0001454789 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 63,319,764 | ||
Entity Common Stock, Shares Outstanding | 11,495,742 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 15,294 | $ 16,369 |
Short-term investments | 22,276 | 0 |
Prepaid expenses and other current assets | 1,345 | 1,094 |
Total current assets | 38,915 | 17,463 |
Property and equipment, net | 56 | 321 |
Restricted cash | 113 | 113 |
Other assets | 85 | |
Total assets | 39,169 | 17,897 |
Current liabilities: | ||
Accounts payable | 1,408 | 773 |
Accrued expenses | 2,763 | 2,432 |
Current portion of notes payable, net of discount | 2,479 | |
Other liability | 332 | |
Total current liabilities | 4,171 | 6,016 |
Deferred rent, net of current portion | 9 | 89 |
Other liability | 47 | |
Total liabilities | 4,227 | 6,105 |
Commitments (Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized and no shares issued and outstanding | ||
Common stock, $0.001 par value per share, 150,000,000 shares authorized; 7,141,996 and 2,364,526 shares issued and outstanding at December 31, 2018 and 2017, respectively | 7 | 2 |
Additional paid-in capital | 232,243 | 183,224 |
Accumulated other comprehensive loss | (4) | |
Accumulated deficit | (197,304) | (171,434) |
Total stockholders' equity | 34,942 | 11,792 |
Total liabilities and stockholders' equity | $ 39,169 | $ 17,897 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in Shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 7,141,996 | 2,364,526 |
Common stock, outstanding (in shares) | 7,141,996 | 2,364,526 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Operations | ||
Revenue | $ 0 | $ 500 |
Operating expenses: | ||
Research and development | 17,042 | 18,682 |
General and administrative | 9,329 | 8,912 |
Total operating expenses | 26,371 | 27,594 |
Loss from operations | (26,371) | (27,094) |
Other income (expense): | ||
Interest expense | (100) | (462) |
Interest and investment income | 425 | 160 |
Other income, net | 176 | 32 |
Total other income (expense), net | 501 | (270) |
Net loss | $ (25,870) | $ (27,364) |
Net loss per share - basic and diluted (in dollars per share) | $ (5.12) | $ (12.62) |
Weighted-average common shares outstanding used in net loss per share - basic and diluted (in shares) | 5,054,823 | 2,168,153 |
Consolidated Statements Compreh
Consolidated Statements Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements Comprehensive Loss | ||
Net loss | $ (25,870) | $ (27,364) |
Other comprehensive (loss) income: | ||
(Loss) gain on short-term investments | (4) | 4 |
Total other comprehensive (loss) income: | (4) | 4 |
Comprehensive loss | $ (25,874) | $ (27,360) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Gain | Total |
Balance at Dec. 31, 2016 | $ 2 | $ 173,158 | $ (144,070) | $ (4) | $ 29,086 |
Balance (in shares) at Dec. 31, 2016 | 1,881,758 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock for at-the-market offerings, net of issuance costs of $0.4 million and $0.6 million for the years 2018 and 2017 respectively | 8,036 | 8,036 | |||
Issuance of common stock for at-the-market offerings, net of issuance costs of $0.4 million and $0.6 million for the years 2018 and 2017 respectively (in shares) | 480,480 | ||||
Proceeds from exercises of common stock options | 23 | 23 | |||
Proceeds from exercises of common stock options (in shares) | 2,288 | ||||
Stock-based compensation expense | 2,007 | 2,007 | |||
Unrealized losses on short-term investments | 4 | ||||
Realized gain on short-term investments | 4 | 4 | |||
Net loss | (27,364) | (27,364) | |||
Balance at Dec. 31, 2017 | $ 2 | 183,224 | (171,434) | $ 11,792 | |
Balance (in shares) at Dec. 31, 2017 | 2,364,526 | 2,364,526 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock and warrants in public offerings, net of $3.1 million in issuance costs | $ 4 | 38,882 | $ 38,886 | ||
Issuance of common stock and warrants in public offerings, net of $3.1 million in issuance costs (in shares) | 4,200,000 | ||||
Issuance of common stock for at-the-market offerings, net of issuance costs of $0.4 million and $0.6 million for the years 2018 and 2017 respectively | $ 1 | 8,362 | 8,363 | ||
Issuance of common stock for at-the-market offerings, net of issuance costs of $0.4 million and $0.6 million for the years 2018 and 2017 respectively (in shares) | 577,195 | ||||
Proceeds from exercises of common stock options | 4 | $ 4 | |||
Proceeds from exercises of common stock options (in shares) | 291 | 291 | |||
Stock-based compensation expense | 1,771 | $ 1,771 | |||
Fractional shares eliminated pursuant to reverse stock split | (16) | ||||
Unrealized losses on short-term investments | (4) | (4) | |||
Net loss | (25,870) | (25,870) | |||
Balance at Dec. 31, 2018 | $ 7 | $ 232,243 | $ (197,304) | $ (4) | $ 34,942 |
Balance (in shares) at Dec. 31, 2018 | 7,141,996 | 7,141,996 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Initial public offering | ||
Stock issuance costs | $ 0.4 | $ 0.6 |
Common stock warrants | ||
Stock issuance costs | $ 3.1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | ||
Net loss | $ (25,870) | $ (27,364) |
Reconciliation of net loss to net cash used in operating activities: | ||
Depreciation and amortization | 119 | 304 |
Stock-based compensation expense | 1,771 | 2,007 |
Accretion of discount/premium on investment securities | (6) | 26 |
Non-cash interest expense | 37 | 155 |
Gain on sale of fixed assets | (297) | (30) |
Services received in non-monetary exchange | 19 | |
Changes in assets and liabilities: | ||
Prepaid expenses and other current assets | (177) | (93) |
Other assets | (85) | |
Accounts payable | 662 | (632) |
Accrued expenses | 396 | (1,215) |
Deferred rent | (81) | 6 |
Other liabilities | 47 | |
Net cash used in operating activities | (23,465) | (26,836) |
Investing activities | ||
Purchases of short-term investments | (70,364) | |
Sales and maturities of short-term investments | 48,090 | 14,910 |
Purchases of property and equipment | (57) | |
Sale of property and equipment | 369 | 30 |
Net cash (used in) provided by investing activities | (21,905) | 14,883 |
Financing activities | ||
Proceeds from public offerings, net of issuance costs | 38,886 | |
Proceeds from at-the-market offering, net of issuance costs | 8,253 | 8,036 |
Proceeds from exercise of common stock options and warrants | 4 | 23 |
Payments on borrowing | (2,848) | (3,333) |
Net cash provided by financing activities | 44,295 | 4,726 |
Net decrease in cash, cash equivalents and restricted cash | (1,075) | (7,227) |
Cash, cash equivalents and restricted cash, beginning of period | 16,482 | 23,709 |
Cash, cash equivalents and restricted cash, end of period | 15,407 | 16,482 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 79 | $ 327 |
Non-cash investing activities: | ||
Fixed asset purchases included in accounts payable | 18 | |
Non-cash financing activities | ||
At-the-market issuance costs included in accounts payable and accrued expenses | $ 110 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Operations | |
Organization and Operations | 1. Organization and Operations The Company Catabasis Pharmaceuticals, Inc. (the "Company") is a clinical-stage biopharmaceutical company. The Company’s lead program is edasalonexent, formerly known as CAT-1004, an oral small molecule designed to inhibit NF- kB, or nuclear factor kappa-light-chain-enhancer of activated B cells, in development for the treatment of Duchenne muscular dystrophy (“DMD”). The Company believes edasalonexent has the potential to be a foundational therapy for all patients affected by DMD, regardless of the underlying dystrophin mutation. DMD is an ultimately fatal genetic disorder involving progressive muscle degeneration. The United States Food and Drug Administration has granted orphan drug, fast track and rare pediatric disease designations to edasalonexent for the treatment of DMD. The European Commission has granted orphan medicinal product designation to edasalonexent for the treatment of DMD. The Company was incorporated in the State of Delaware on June 26, 2008. Liquidity The Company has entered into various sales agreements with Cowen and Company LLC, (“Cowen”), pursuant to which the Company could issue and sell shares of common stock under at-the-market offering programs (the “ATM Programs”). Shares sold pursuant to these sales agreements were sold pursuant to a shelf registration statement, which became effective on July 19, 2016. The Company pays Cowen 3% of the gross proceeds from any common stock sold through these sales agreements. The Company has $22.6 million remaining available under its current sales agreement. During the year ended December 31, 2018, the Company sold an aggregate of 577,195 shares of common stock pursuant to the ATM Programs, at an average price of $15.27 per share, for gross proceeds of $8.8 million, resulting in net proceeds of $8.4 million after deducting sales commissions and offering expenses. On June 19, 2018, the Company entered into an underwriting agreement with Oppenheimer & Co. Inc. relating to an underwritten public offering (the “June 2018 Financing”) of 4,200,000 shares of the Company’s common stock, par value $0.001 per share, and accompanying warrants to purchase up to 4,200,000 shares of common stock, at a combined price to the public of $10.00 per unit, for gross proceeds of $42.0 million, and net proceeds of $38.9 million. As of December 31, 2018, the Company had an accumulated deficit of $197.3 million. The Company has been primarily involved with research and development activities and has incurred operating losses and negative cash flows from operations since its inception. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and regulatory approval and market acceptance of the Company’s products. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates. As of December 31, 2018, the Company had available cash, cash equivalents and short-term investments of $37.6 million. Subsequent to year end, the Company raised net proceeds of $20.5 million through 2019 equity financings. Based on the Company’s current operating plan, the Company believes it has sufficient cash, cash equivalents and short-term investments to fund operations into the fourth quarter of 2020. The Company will require substantial additional capital to fund operations. The Company has not generated any product revenues and has financed its operations primarily through public offerings and private placements of its equity securities. There can be no assurance that the Company will be able to obtain additional debt or equity financing or generate product revenue or revenues from collaborative partners, on terms acceptable to the Company, on a timely basis or at all. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations, and financial condition. Reverse Stock Split On December 28, 2018, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-for-ten pursuant to a Certificate of Amendment to its Certificate of Incorporation filed with the Secretary of State of the State of Delaware. The reverse stock split was reflected on Nasdaq beginning with the opening of trading on December 31, 2018. The primary purpose of the reverse stock split, which was approved by the Company’s stockholders at the Company’s Special Meeting of Stockholders on December 12, 2018, was to enable the Company to regain compliance with the $1.00 minimum bid price requirement for continued listing on Nasdaq. Pursuant to the reverse stock split, every ten shares of the Company’s issued and outstanding shares of common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share of the common stock. All share and per share amounts of the common stock included in the accompanying consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split for all periods presented, including reclassifying an amount equal to the reduction in par value to additional paid-in capital. Amounts of common stock resulting from the reverse stock split were rounded down to the nearest whole share and any resulting fractional shares were cancelled for cash. The number of authorized shares of the Company’s common stock remained unchanged. The reverse stock split affected all issued and outstanding shares of the Company’s common stock, and the respective numbers of shares of common stock underlying outstanding stock options, outstanding warrants and the Company’s equity incentive plans were proportionately adjusted. |
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 and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Catabasis Securities Corporation. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from such estimates. The Company utilizes certain estimates to record expenses relating to research and development contracts. These contract estimates, which are primarily related to the length of service of each contract and the amount of service provided as of each measurement date, are determined by the Company based on input from internal project management, as well as from third-party service providers. Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements. Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents, short-term investments and restricted cash. The primary objectives for the Company's investment portfolio are the preservation of capital and the maintenance of liquidity. The Company's investment policy includes guidelines on the quality of the institutions and financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentration of credit risk. Cash and Cash Equivalents and Restricted Cash The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents, which consist of money market funds, corporate debt securities and reverse repurchase agreements are stated at fair value. Cash and cash equivalents consist of the following (in thousands): December 31, 2018 2017 Cash $ 4,390 $ 2,781 Money market fund 5,956 13,588 Corporate debt securities 1,948 — Reverse repurchase agreements 3,000 — Total $ 15,294 $ 16,369 The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amount shown in the statement of cash flows is as follows: December 31, 2018 2017 Cash and cash equivalents $ 15,294 $ 16,369 Restricted cash 113 113 Total $ 15,407 $ 16,482 Short-Term Investments The Company classifies all corporate debt securities with a remaining maturity of greater than three months and reverse repurchase agreements with a remaining maturity of greater than one business day at the time of purchase as short-term investments. Short-term investments are recorded at fair value, with the unrealized gains and losses reported in other comprehensive loss. The amortized cost of debt securities is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest and investment income. Realized gains and losses, interest, dividends and declines in value judged to be other-than-temporary are included in interest and investment income. The cost of securities sold is based on the specific identification method for purposes of recording realized gains and losses. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. Fair Value of Financial Instruments The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reflected in the balance sheets for cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at December 31, 2018 and 2017, due to their short-term nature. There have been no changes to the valuation methods during the years ended December 31, 2018 and 2017. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between levels during the year ended December 31, 2018 and 2017. The Company’s investment portfolio may include fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company apply other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations. The Company validates the prices provided by its third party pricing services by obtaining market values from other pricing sources and analyzing pricing data in certain instances. The Company also invests in certain reverse repurchase agreements which are collateralized by deposits in the form of U.S. Government Securities and Obligations for an amount no less than 102% of their value. The Company does not record an asset or liability for the collateral as the Company is not permitted to sell or re-pledge the collateral. The collateral has at least the prevailing credit rating of U.S. Government Treasuries and Agencies. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the reverse repurchase agreements on a daily basis. Property and Equipment Property and equipment consist of computer equipment, leasehold improvements and furniture and fixtures. Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. Costs of major additions and betterments are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. Impairment of Long-Lived Assets The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company has not recognized any significant impairment charges from inception through December 31, 2018. Research and Development Expenses Research and development costs are expensed as incurred. Research and development costs include salaries and personnel-related costs, stock-based compensation, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities and other external costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred. The deferred amounts are expensed as the related goods are delivered or the services are performed. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”), Revenue from Contracts with Customers, (“ASC 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under the agreement, 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. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ( “ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their grant date fair values. For stock options granted to employees and to members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected term of the option, risk-free interest rates and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company expenses restricted stock awards based on the fair value of the award on a straight-line basis over the associated service period of the award. During the years ended December 31, 2018 and 2017, the Company recorded stock-based compensation expense for employee and non-employee stock options and restricted stock, which was allocated as follows in the statements of operations (in thousands): Year Ended December 31, 2018 2017 Research and development $ 673 $ 784 General and administrative 1,098 1,223 Total $ 1,771 $ 2,007 No related tax benefits were recognized for the years ended December 31, 2018 and 2017. Grant Awards In the year ended December 31, 2017, the Company received $124,000 in grants from the Muscular Dystrophy Association and Friedreich's Ataxia Research Alliance. No such grants were received in the year ended December 31, 2018. In the years ended December 31, 2018 and 2017, the Company utilized $8,000 and $205,000 of the grants received to offset related expenses incurred in the Company’s statements of operations. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average shares outstanding during the period, without consideration for Common Stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of Common Stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the Company’s dilutive net loss per share calculation, stock options and warrants to purchase Common Stock were considered to be Common Stock equivalents but were excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for all periods presented. The following Common Stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2018 2017 Stock options 433,389 283,277 Common stock warrants 4,202,449 2,454 4,635,838 285,731 Income Taxes The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company's financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic 740, Expenses—Income Taxes . When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company did not have any significant uncertain tax positions for any periods presented. Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment. The Company operates in one geographic segment. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the years ended December 31, 2018 and 2017 amounts in accumulated other comprehensive loss were comprised of unrealized gains and losses on short-term investments. Recent Accounting Pronouncements-Adopted In October 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows- Restricted Cash (Topic 230), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash or restricted cash equivalents. Therefore, amounts described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 in the period beginning January 1, 2018. Upon adoption of ASU 2016-18 the Company revised the presentation as well as caption of certain items within the audited consolidated statements of cash flows to conform to the current period presentation. These revisions had no impact on the net cash used in operating activities or cash, cash equivalents and restricted cash at the end of the period. In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718) . This standard simplifies several areas of the accounting for non-employee share-based payment transactions. This amendment is effective for annual reporting periods beginning after December 15, 2018, and the Company early adopted this standard on October 1, 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements-Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In February 2016, the FASB issued ASU 2016-02, Leases . This standard amends the existing guidance to require lessees to present most leases on their balance sheets but recognize corresponding expenses on their statements of operations. The FASB added a transition option to the new leases standard that allows entities to not apply the new guidance in the comparative periods they present in their financial statements in the year of adoption. The FASB also provided a practical expedient that gives lessors an option to combine non-lease and associated lease components when certain criteria are met and requires a lessor to account for the combined component in accordance with the new revenue standard if the associated non-lease components are the predominant component. This standard is effective for annual reporting periods beginning after December 15, 2018. The Company will adopt this standard as of January 1, 2019 using the modified retrospective approach recording any cumulative adjustment to retained earnings. The adoption of this standard is expected to have a material impact on lease assets and lease liabilities but will not materially impact consolidated net losses. The Company will elect a package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classification. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) . This standard includes amendments regarding changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and disclosure requirements of measurement uncertainty. This amendment is effective for annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments | |
Financial Instruments | 3. Financial Instruments The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value. Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands): As of December 31, 2018 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 5,956 $ — $ — $ 5,956 Corporate debt securities — 1,948 — 1,948 Reverse repurchase agreements — 3,000 — 3,000 Short-term investments: Corporate debt securities — 7,276 — 7,276 Reverse repurchase agreements — 15,000 — 15,000 Total assets $ 5,956 $ 27,224 $ — $ 33,180 As of December 31, 2017 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 13,588 $ — $ — $ 13,588 Total assets $ 13,588 $ — $ — $ 13,588 As of December 31, 2018, the Company’s cash equivalents consisted of money market funds, corporate debt securities, and reverse repurchase agreements. As of December 31, 2017, the Company’s cash equivalents consisted of money market funds. All cash equivalents in both periods approximated their fair value due to their short-term nature. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2018 | |
Short-Term Investments | |
Short-Term Investments | 4. Short-Term Investments As of December 31, 2017, the Company held no short-term investments. The following table summarizes the short-term investments held at December 31, 2018 (in thousands): Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value December 31, 2018 Corporate debt securities $ 7,280 $ — $ (4) $ 7,276 Reverse repurchase agreements 15,000 — — 15,000 Total $ 22,280 $ — $ (4) $ 22,276 The contractual maturities of all short-term investments held at December 31, 2018 were one year or less. There were seven short-term investments in an unrealized loss position at December 31, 2018, none of which had been in an unrealized loss position for more than 12 months. The aggregate fair value of these securities at December 31, 2018 was approximately $7.3 million. The Company did not hold any securities with other-than-temporary impairments at December 31, 2018. Gross realized gains and losses on the sales of short-term investments are included in other income, net. Unrealized holding gains or losses for the period that have been included in accumulated other comprehensive income, as well as gains and losses reclassified out of accumulated other comprehensive income into other income, net were not material to the Company’s consolidated results of operations. During the years ended December 31, 2018 and 2017 all proceeds related to maturities of underlying securities. The gains on proceeds of maturities of short-term investments were not material to the Company’s consolidated results of operations for the years ended December 31, 2018 and 2017. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2018 | |
Restricted Cash | |
Restricted Cash | 5. Restricted Cash At December 31, 2018 and 2017, the Company had an outstanding letter of credit for $0.1 million as a security deposit for its operating lease agreement for office space (Note 9). The Company is required to maintain this deposit for the duration of the lease agreement. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment and related accumulated depreciation were as follows (in thousands): December 31, Estimated Useful Life (Years) 2018 2017 Lab equipment 3 $ — $ 1,470 Computer equipment 3 100 165 Furniture and fixtures 5 75 77 Leasehold improvements Lesser of useful life or remaining lease term 202 264 377 1,976 Less accumulated depreciation and amortization (321) (1,655) Total property and equipment, net $ 56 $ 321 Depreciation and amortization expense was $0.1 million and $0.3 million for the years ended December 31, 2018 and 2017, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses | |
Accrued Expenses | 7. Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2018 2017 Accrued compensation $ 1,241 $ 632 Accrued contracted research costs 680 1,357 Accrued professional fees 393 298 Accrued severence 109 — Accrued franchise fee 168 — Accrued other 172 145 Total $ 2,763 $ 2,432 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable | |
Notes Payable | 8. Notes Payable The Company had a credit facility with MidCap Financial Trust, Flexpoint MCLS SPV LLC and Square 1 Bank pursuant to which the Company received total proceeds of $10.0 million under term loans (the “Credit Facility”). All amounts outstanding under the Credit Facility were due on October 1, 2018 and were collateralized by substantially all of the Company’s personal property, other than its intellectual property. The Credit Facility has expired. The Company recognized $0.1 million and $0.5 million of interest expense related to the Credit Facility in the years ended December 31, 2018 and 2017, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments | |
Commitments | 9. Commitments In November 2010, the Company entered into an operating lease for office and laboratory space, which has been amended multiple times. Based on the latest amendment, the lease agreement includes escalating rent payments and is effective through June 30, 2020. The Company is recognizing rent expense on a straight-line basis over the lease term. Future minimum payments required under the non-cancelable operating lease as of December 31, 2018 are summarized as follows (in thousands): Period Ending December 31, Amount 2019 1,421 2020 721 Total minimum lease payments $ 2,142 Rent expense was $1.1 million and $1.3 million for the years ended December 31, 2018 and 2017, respectively. On October 15, 2018, the Company entered into a short-term lease with Inzen Therapeutics (“Inzen”), to sublease a portion of the Company’s facility (the “Sublease”). The sublease term is from October 15, 2018 through June 30, 2020. Inzen is obligated to pay the Company approximately $1.1 million and $0.5 million in base rent during the years ended December 31, 2019 and 2020, respectively. The Company is still obligated to all payment terms pursuant to the lease agreement, as amended. During the year ended December 31, 2018, the Company received $0.3 million in payments from Inzen which was recorded as a deduction to rent expense in the accompanying consolidated statement of operations. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition | |
Revenue Recognition | 10. Revenue Recognition In August 2017, the Company entered into an option agreement ("Option Agreement") with an unaffiliated party ("Recipient"), which is within the scope of ASC Topic 606: Revenue from Contracts with Customers. Under the terms of the Option Agreement, the Company agreed to provide compound material for certain of its product candidates and the right for the Recipient to use the material to perform research during the term of the Option Agreement in exchange for $500 thousand. In December 2017, the Recipient terminated the agreement and there are no remaining performance obligations. In the future, the Company will seek to generate additional revenue primarily from a combination of product sales and collaborations with strategic partners. During the year ended December 31, 2017, the Company recognized $0.5 million in revenue related to the Option Agreement. The Company did not recognize revenue in the year ended December 31, 2018. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity Preferred Stock As of December 31, 2018, the Company had 5,000,000 shares of preferred stock authorized for issuance, $0.001 par value per share, with none issued or outstanding. Preferred stock may be issued from time to time in one or more series, each series to have such terms as stated or expressed in the resolutions providing for the issue of such series adopted by the board of directors of the Company. Preferred stock which may be redeemed, purchased or acquired by the Company may be reissued except as otherwise provided by law. Common Stock Warrants June 2018 Warrants In the June 2018 financing, the Company issued warrants to purchase 4,200,000 shares of common stock with an exercise price of $12.00 per share, which were immediately exercisable upon issuance and will expire five years from the date of issuance. The terms of the warrants include certain provisions related to fundamental transactions, a cashless exercise provision in the event registered shares are not available and do not include any mandatory redemption provisions. Therefore, the warrants have been classified in stockholders’ equity. Any changes to fair value of the warrants will not be recognized so long as the warrants continue to be equity classified. As of December 31, 2018, all warrants related to this transaction were outstanding with a remaining contractual life of 4.47 years. Warrants Associated with the Credit Facility In conjunction with the credit facility (Note 8), the Company issued warrants to purchase 2,454 shares of Common Stock with an exercise price of $122.12 per share. As of December 31, 2018, all warrants related to this transaction were outstanding with a weighted average contractual life of 2.95 years. Common Stock As of December 31, 2018, the Company had 150,000,000 shares of Common Stock authorized for issuance, $0.001 par value per share, with 7,141,996 shares issued and outstanding. The voting, dividend and liquidation rights of holders of Common Stock are subject to and qualified by the rights, powers and preferences of the holders of any outstanding Preferred Stock. The Company's Common Stock has the following characteristics: Voting The holders of Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders and written actions in lieu of meetings. Dividends The holders of Common Stock are entitled to receive dividends, if and when declared by the board of directors. Cash dividends may not be declared or paid to holders of Common Stock until paid on each series of outstanding Preferred Stock in accordance with their respective terms. No dividends have been declared or paid from the Company's inception through December 31, 2018. Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Common Stock are entitled to share ratably in the Company’s assets available for distribution to stockholders, subject to any preferential or other rights of any then-outstanding Preferred Stock. Reserved for Future Issuance The Company has reserved for future issuance the following shares of Common Stock: As of December 31, 2018 2017 Warrants for the purchase of Common Stock 4,202,449 2,454 Options outstanding to purchase Common Stock 433,389 283,277 Options reserved to purchase Common Stock 877,917 83,739 Employee Stock Purchase Plan 76,011 52,365 Total 5,589,766 421,835 |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 2018 | |
Stock Incentive Plans | |
Stock Incentive Plans | 12. Stock Incentive Plans Prior to the IPO, the Company granted awards to eligible participants under its 2008 Equity Incentive Plan (“2008 Plan”). In May 2015, the Company’s board of directors adopted and, in June 2015, the Company’s stockholders approved the 2015 Stock Incentive Plan (“2015 Plan”), which became effective immediately prior to the effectiveness of the IPO. Subsequent to the IPO, option grants are awarded to eligible participants only under the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based awards. The Company’s employees, officers, directors and consultants and advisors are eligible to receive awards under the 2015 Plan. As of December 31, 2018, the Company had reserved 65,587 shares of Common Stock under the 2008 Plan, of which none remained available for future issuance. As of December 31, 2018, the Company had reserved 1,245,719 shares of Common Stock under the 2015 Plan, of which 877,917 shares remained available for future issuance. Under the 2015 Plan, stock options may not be granted with exercise prices at less than fair value on the date of the grant. Terms of stock option agreements, including vesting requirements, are determined by the Company's board of directors, subject to the provisions of the applicable stock incentive plan. Options granted by the Company generally vest ratably over four years, with a one-year cliff, and options are exercisable from the date of grant for a period of ten years. For options granted through December 31, 2018, the exercise price or purchase price, as applicable, equaled the estimated fair value of the Common Stock as determined by the Company's board of directors on the date of grant. A summary of the Company’s stock option activity and related information for employees and non-employees follows: Weighted Average Weighted- Remaining Aggregate Average Exercise Contractual Instrinsic Value Shares Price Term (years) (in thousands) Outstanding at December 31, 2017 283,277 $ 45.42 7.75 $ 216 Granted 213,384 $ 9.84 Exercised (291) $ 12.40 Cancelled or forfeited (62,981) $ 37.64 Outstanding at December 31, 2018 433,389 $ 29.05 7.97 $ — Vested and Exercisable at December 31, 2018 168,566 $ 50.91 6.31 $ — The total intrinsic value of options exercised for the years ended December 31, 2018 and 2017 was $1 thousand and $40 thousand, respectively. The total adjusted fair value of employee options vested for the years ended December 31, 2018 and 2017 was $1.7 million and $2.2 million, respectively. The weighted-average grant date fair value of options granted to employees and non-employees for the years ended December 31, 2018 and 2017 was $6.64 and $8.48, respectively. At December 31, 2018, the total unrecognized compensation expense related to unvested stock option awards was $2.3 million. The Company expects to recognize that cost over a weighted-average period of approximately 1.7 years. Stock-Based Compensation Expense The fair value of stock options granted to employees and non-employees was estimated using the Black-Scholes option-pricing model based on the following assumptions: Year Ended December 31, 2018 2017 Weighted-average expected volatility 73.7 - 76.9 % 76.1 - 81.9 % Expected term (in years) 5.75 - 6.25 6.25 - 9.77 Risk-free interest rate 2.67 - 2.84 % 2.00 - 2.38 % Expected dividend yield 0 % 0 % Volatility Due to the lack of company-specific historical and implied volatility data of its Common Stock, the Company does not have relevant historical data to support its expected volatility. As such, the Company has used a weighted average of expected volatility based on the volatilities of a representative group of publicly traded biopharmaceutical companies. For purposes of identifying representative companies, the Company considered characteristics such as number of product candidates in early stages of product development, area of therapeutic focus, and length of trading history. The expected volatility was determined using an average of the historical volatilities of the representative group of companies for a period equal to the expected term of the option grant. The Company intends to continue to consistently apply this process using the same representative companies until a sufficient amount of historical information regarding the volatility of the Company's own share price becomes available or until circumstances change, such that the identified entities are no longer representative companies. In the latter case, more suitable, similar entities whose share prices are publicly available would be utilized in the calculation. Expected Term The Company uses the “simplified method” to estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term (ten years) and the vesting term (generally four years) of the Company's stock options, taking into consideration multiple vesting tranches. The Company utilizes this method due to lack of historical exercise data and the plain-vanilla nature of the Company's share-based awards. Risk-Free Rate The risk-free rate was based on the yield curve of U.S. Treasury securities with periods commensurate with the expected term of the options being valued. Employee Stock Purchase Plan In June 2015, the Company’s board of directors adopted and the Company’s stockholders approved the 2015 Employee Stock Purchase Plan (the “2015 ESPP”) which became effective upon closing of the IPO. The 2015 ESPP initially authorized the issuance of up to a total of 18,235 shares of Common Stock to participating eligible employees. The number of authorized shares increases each January 1, commencing on January 1, 2016 and ending on December 31, 2026, by an amount equal to the lesser of one percent of the Company’s outstanding shares as of the first day of the applicable year, 36,470 shares and any lower amount determined by the Company’s board of directors. As of December 31, 2018, there had been no shares issued under the 2015 ESPP. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 13. Income Taxes For the years ended December 31, 2018 and 2017, the Company did not record a provision for federal or state income taxes as it has incurred cumulative net operating losses since inception. On December 22, 2017, the Tax Cuts and Jobs Act (the “ Tax Act”) was enacted in the United States. The Tax Act reduces the U.S. federal corporate tax rate from a graduated rate of 35% to a flat rate of 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The Company does not currently have any foreign subsidiaries and the international aspects of the Tax Act are not applicable. In connection with the Tax Act, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of the Company's deferred tax balance was primarily offset by application of its valuation allowance. As of December 31, 2018, the Company has completed its accounting for all of the tax effects of the enactment of the Tax Act, including the effects on its existing deferred tax balances. The Company has not recognized any material adjustment to the provisional estimate that was previously recorded related to the Tax Act. A reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as follows for the years ended December 31, 2018 and 2017: Year Ended December 31, 2018 2017 Federal income tax (benefit) at statutory rate 21.00 % 34.00 % Permanent differences (0.68) (1.16) Federal research and development credits and adjustments 4.25 2.36 State income tax, net of federal benefit 6.84 5.80 Tax reform deferred rate change — (72.21) Other (1.41) (0.36) Change in valuation allowance (30.00) 31.57 Effective income tax rate — % — % The Company's deferred tax assets consisted of the following (in thousands): Year Ended December 31, 2018 2017 Deferred tax assets Net operating loss carryforwards $ 48,107 $ 41,436 Tax credit carryforwards 7,174 5,896 Capitalized research and development 1,394 1,879 Capitalized legal expenses 1,132 1,156 Other differences 1,370 1,048 Total deferred tax assets 59,177 51,415 Valuation allowance (59,177) (51,415) Net deferred tax assets $ — $ — The Company recorded an increase to the valuation allowance of $7.8 million during the year ended December 31, 2018 due primarily to the federal and state net operating losses and tax credits generated.The Company recorded a decrease to the valuation allowance of $8.4 million during the year ended December 31, 2017 primarily due to the federal rate reduction from 34% to 21% as a result of the Tax Act. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible. Due to the Company's history of losses and expectation of future losses, the deferred tax assets were fully offset by a valuation allowance at December 31, 2018 and 2017. As of December 31, 2018, the Company had approximately $176.3 million of federal and $175.4 million of state net operating loss respectively, which may be available to offset future taxable income. Federal net operating loss carryforwards of $150.5 million and state net operating loss carryforwards of $175.4 million will expire at various dates from 2023 through 2037, $25.8 million of the federal net operating loss carryforward can be carried forward indefinitely. The Company had approximately $5.6 million of federal and $2.0 million of state tax credit carryforwards available to reduce future tax liabilities as of December 31, 2018, which will expire at varying times through the year 2038. The Internal Revenue Code of 1986, as amended (the “Code”), provides for a limitation of the annual use of net operating losses and other tax attributes (such as research and development tax credit carryforwards) following certain ownership changes (as defined by the Code) that could limit the Company's ability to utilize these carryforwards. At this time, the Company has not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since the Company's formation, due to the costs and complexities associated with such a study. The Company may have experienced various ownership changes, as defined by the Code, as a result of past financing transactions. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, the Company may not be able to take full advantage of these carryforwards for federal or state income tax purposes. As of December 31, 2018 and 2017, the Company did not have any significant unrecognized tax benefits. The Company had not accrued interest or penalties related to uncertain tax positions. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 2015 through December 31, 2018. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state taxing authorities to the extent utilized in a future period. |
Defined Contribution Benefit Pl
Defined Contribution Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Defined Contribution Benefit Plan | |
Defined Contribution Benefit Plan | 14. Defined Contribution Benefit Plan The Company sponsors a 401(k) retirement plan, in which substantially all of its full-time employees are eligible to participate. Participants may contribute a percentage of their annual compensation to this plan, subject to statutory limitations. The Company did not provide any contributions to this plan during the years ended December 31, 2018 or 2017. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | 15. Subsequent Events The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates and to identify matters that require additional disclosure. Subsequent events have been evaluated as required. Sales Agreement Subsequent to December 31, 2018, the Company sold an aggregate of 353,746 shares of common stock pursuant to its current ATM program, at an average price of $5.96 per share, for gross proceeds of $2.1 million, resulting in net proceeds of $2.0 million after deducting sales commissions and offering expenses. On February 6, 2019, the Company sold 4,000,000 shares of the Company’s common stock, par value $0.001 per share, and accompanying warrants with an exercise price of $6.25 to purchase up to 2,000,000 shares of common stock, at a combined price to the public of $5.00 per unit (each unit consisting of one share of common stock and 0.5 of a warrant to purchase one share of common stock), for gross proceeds of approximately $20.0 million, and net proceeds of $18.5 million after deducting sales commissions and offering expenses. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information (unaudited) | |
Quarterly Financial Information (unaudited) | 16. Quarterly Financial Information (unaudited, in thousands, except share and per share data) Three Months Ended March 31, June 30, September 30, December 31, 2018 2018 2018 2018 Operating expenses $ 7,639 $ 6,636 $ 6,008 $ 6,088 Net loss (7,652) (6,479) (5,679) (6,060) Net loss per share: Basic and Diluted $ (2.88) $ (1.98) $ (0.80) $ (0.85) Weighted-average common shares outstanding used in net loss per share: Basic and Diluted 2,655,584 3,272,877 7,103,841 7,115,507 Three Months Ended March 31, June 30, September 30, December 31, 2017 2017 2017 2017 Revenue $ — $ — $ 250 $ 250 Operating expenses 7,761 6,919 7,202 5,712 Net loss (7,876) (6,974) (7,017) (5,497) Net loss per share: Basic and Diluted $ (4.13) $ (3.20) $ (3.11) $ (2.37) Weighted-average common shares outstanding used in net loss per share: Basic and Diluted 1,909,327 2,179,619 2,256,317 2,321,847 |
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 and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Catabasis Securities Corporation. All intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from such estimates. The Company utilizes certain estimates to record expenses relating to research and development contracts. These contract estimates, which are primarily related to the length of service of each contract and the amount of service provided as of each measurement date, are determined by the Company based on input from internal project management, as well as from third-party service providers. |
Off-Balance Sheet Risk and Concentrations of Credit Risk | Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements. Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents, short-term investments and restricted cash. The primary objectives for the Company's investment portfolio are the preservation of capital and the maintenance of liquidity. The Company's investment policy includes guidelines on the quality of the institutions and financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentration of credit risk. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents, which consist of money market funds, corporate debt securities and reverse repurchase agreements are stated at fair value. Cash and cash equivalents consist of the following (in thousands): December 31, 2018 2017 Cash $ 4,390 $ 2,781 Money market fund 5,956 13,588 Corporate debt securities 1,948 — Reverse repurchase agreements 3,000 — Total $ 15,294 $ 16,369 The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet that sum to the total of the same such amount shown in the statement of cash flows is as follows: December 31, 2018 2017 Cash and cash equivalents $ 15,294 $ 16,369 Restricted cash 113 113 Total $ 15,407 $ 16,482 |
Short-Term Investments | Short-Term Investments The Company classifies all corporate debt securities with a remaining maturity of greater than three months and reverse repurchase agreements with a remaining maturity of greater than one business day at the time of purchase as short-term investments. Short-term investments are recorded at fair value, with the unrealized gains and losses reported in other comprehensive loss. The amortized cost of debt securities is adjusted for the amortization of premiums and accretion of discounts to maturity. Such amortization is included in interest and investment income. Realized gains and losses, interest, dividends and declines in value judged to be other-than-temporary are included in interest and investment income. The cost of securities sold is based on the specific identification method for purposes of recording realized gains and losses. To determine whether an other-than-temporary impairment exists, the Company considers whether it has the ability and intent to hold the investment until a market price recovery, and whether evidence indicating the recoverability of the cost of the investment outweighs evidence to the contrary. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reflected in the balance sheets for cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at December 31, 2018 and 2017, due to their short-term nature. There have been no changes to the valuation methods during the years ended December 31, 2018 and 2017. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between levels during the year ended December 31, 2018 and 2017. The Company’s investment portfolio may include fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company apply other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations. The Company validates the prices provided by its third party pricing services by obtaining market values from other pricing sources and analyzing pricing data in certain instances. The Company also invests in certain reverse repurchase agreements which are collateralized by deposits in the form of U.S. Government Securities and Obligations for an amount no less than 102% of their value. The Company does not record an asset or liability for the collateral as the Company is not permitted to sell or re-pledge the collateral. The collateral has at least the prevailing credit rating of U.S. Government Treasuries and Agencies. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the reverse repurchase agreements on a daily basis. |
Property and Equipment | Property and Equipment Property and equipment consist of computer equipment, leasehold improvements and furniture and fixtures. Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. Costs of major additions and betterments are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company has not recognized any significant impairment charges from inception through December 31, 2018. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred. Research and development costs include salaries and personnel-related costs, stock-based compensation, consulting fees, fees paid for contract research services, the costs of laboratory equipment and facilities and other external costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred. The deferred amounts are expensed as the related goods are delivered or the services are performed. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”), Revenue from Contracts with Customers, (“ASC 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under the agreement, 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. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation—Stock Compensation ( “ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their grant date fair values. For stock options granted to employees and to members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected term of the option, risk-free interest rates and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company expenses restricted stock awards based on the fair value of the award on a straight-line basis over the associated service period of the award. During the years ended December 31, 2018 and 2017, the Company recorded stock-based compensation expense for employee and non-employee stock options and restricted stock, which was allocated as follows in the statements of operations (in thousands): Year Ended December 31, 2018 2017 Research and development $ 673 $ 784 General and administrative 1,098 1,223 Total $ 1,771 $ 2,007 No related tax benefits were recognized for the years ended December 31, 2018 and 2017. |
Grant Awards | Grant Awards In the year ended December 31, 2017, the Company received $124,000 in grants from the Muscular Dystrophy Association and Friedreich's Ataxia Research Alliance. No such grants were received in the year ended December 31, 2018. In the years ended December 31, 2018 and 2017, the Company utilized $8,000 and $205,000 of the grants received to offset related expenses incurred in the Company’s statements of operations. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average shares outstanding during the period, without consideration for Common Stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of Common Stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the Company’s dilutive net loss per share calculation, stock options and warrants to purchase Common Stock were considered to be Common Stock equivalents but were excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for all periods presented. The following Common Stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2018 2017 Stock options 433,389 283,277 Common stock warrants 4,202,449 2,454 4,635,838 285,731 |
Income Taxes | Income Taxes The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company's financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic 740, Expenses—Income Taxes . When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company did not have any significant uncertain tax positions for any periods presented. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment. The Company operates in one geographic segment. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the years ended December 31, 2018 and 2017 amounts in accumulated other comprehensive loss were comprised of unrealized gains and losses on short-term investments. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents | Cash and cash equivalents consist of the following (in thousands): December 31, 2018 2017 Cash $ 4,390 $ 2,781 Money market fund 5,956 13,588 Corporate debt securities 1,948 — Reverse repurchase agreements 3,000 — Total $ 15,294 $ 16,369 |
Schedule of reconciliation of cash, cash equivalents and restricted cash | December 31, 2018 2017 Cash and cash equivalents $ 15,294 $ 16,369 Restricted cash 113 113 Total $ 15,407 $ 16,482 |
Schedule of stock-based compensation expense | During the years ended December 31, 2018 and 2017, the Company recorded stock-based compensation expense for employee and non-employee stock options and restricted stock, which was allocated as follows in the statements of operations (in thousands): Year Ended December 31, 2018 2017 Research and development $ 673 $ 784 General and administrative 1,098 1,223 Total $ 1,771 $ 2,007 |
Schedule of anti-dilutive common stock equivalents excluded from calculation of diluted net loss per share | Year Ended December 31, 2018 2017 Stock options 433,389 283,277 Common stock warrants 4,202,449 2,454 4,635,838 285,731 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments | |
Schedule of assets and liabilities measures at fair value on a recurring basis | Below is a summary of assets and liabilities measured at fair value on a recurring basis (in thousands): As of December 31, 2018 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 5,956 $ — $ — $ 5,956 Corporate debt securities — 1,948 — 1,948 Reverse repurchase agreements — 3,000 — 3,000 Short-term investments: Corporate debt securities — 7,276 — 7,276 Reverse repurchase agreements — 15,000 — 15,000 Total assets $ 5,956 $ 27,224 $ — $ 33,180 As of December 31, 2017 Quoted Prices Significant Significant in Active Observable Unobservable Markets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Cash and cash equivalents: Money market funds $ 13,588 $ — $ — $ 13,588 Total assets $ 13,588 $ — $ — $ 13,588 |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Short-Term Investments | |
Summary of short-term investments securities | The following table summarizes the short-term investments held at December 31, 2018 (in thousands): Gross Unrealized Gross Unrealized Amortized Cost Gains Losses Fair Value December 31, 2018 Corporate debt securities $ 7,280 $ — $ (4) $ 7,276 Reverse repurchase agreements 15,000 — — 15,000 Total $ 22,280 $ — $ (4) $ 22,276 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment | |
Summary of property and equipment and related accumulated depreciation | Property and equipment and related accumulated depreciation were as follows (in thousands): December 31, Estimated Useful Life (Years) 2018 2017 Lab equipment 3 $ — $ 1,470 Computer equipment 3 100 165 Furniture and fixtures 5 75 77 Leasehold improvements Lesser of useful life or remaining lease term 202 264 377 1,976 Less accumulated depreciation and amortization (321) (1,655) Total property and equipment, net $ 56 $ 321 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses | |
Schedule of components of accrued expenses | Accrued expenses consisted of the following (in thousands): December 31, 2018 2017 Accrued compensation $ 1,241 $ 632 Accrued contracted research costs 680 1,357 Accrued professional fees 393 298 Accrued severence 109 — Accrued franchise fee 168 — Accrued other 172 145 Total $ 2,763 $ 2,432 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments | |
Schedule of future minimum payments under non-cancelable operating lease | Future minimum payments required under the non-cancelable operating lease as of December 31, 2018 are summarized as follows (in thousands): Period Ending December 31, Amount 2019 1,421 2020 721 Total minimum lease payments $ 2,142 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Reserved for Future Issuance | |
Schedule of Common Stock reserved for future issuance | As of December 31, 2018 2017 Warrants for the purchase of Common Stock 4,202,449 2,454 Options outstanding to purchase Common Stock 433,389 283,277 Options reserved to purchase Common Stock 877,917 83,739 Employee Stock Purchase Plan 76,011 52,365 Total 5,589,766 421,835 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Incentive Plans | |
Summary of stock option activity | Weighted Average Weighted- Remaining Aggregate Average Exercise Contractual Instrinsic Value Shares Price Term (years) (in thousands) Outstanding at December 31, 2017 283,277 $ 45.42 7.75 $ 216 Granted 213,384 $ 9.84 Exercised (291) $ 12.40 Cancelled or forfeited (62,981) $ 37.64 Outstanding at December 31, 2018 433,389 $ 29.05 7.97 $ — Vested and Exercisable at December 31, 2018 168,566 $ 50.91 6.31 $ — |
Schedule of assumptions made based on the Black-Scholes option pricing model | Year Ended December 31, 2018 2017 Weighted-average expected volatility 73.7 - 76.9 % 76.1 - 81.9 % Expected term (in years) 5.75 - 6.25 6.25 - 9.77 Risk-free interest rate 2.67 - 2.84 % 2.00 - 2.38 % Expected dividend yield 0 % 0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of reconciliation of U.S. statutory income tax rate to effective tax rate | Year Ended December 31, 2018 2017 Federal income tax (benefit) at statutory rate 21.00 % 34.00 % Permanent differences (0.68) (1.16) Federal research and development credits and adjustments 4.25 2.36 State income tax, net of federal benefit 6.84 5.80 Tax reform deferred rate change — (72.21) Other (1.41) (0.36) Change in valuation allowance (30.00) 31.57 Effective income tax rate — % — % |
Schedule of components of deferred tax assets | The Company's deferred tax assets consisted of the following (in thousands): Year Ended December 31, 2018 2017 Deferred tax assets Net operating loss carryforwards $ 48,107 $ 41,436 Tax credit carryforwards 7,174 5,896 Capitalized research and development 1,394 1,879 Capitalized legal expenses 1,132 1,156 Other differences 1,370 1,048 Total deferred tax assets 59,177 51,415 Valuation allowance (59,177) (51,415) Net deferred tax assets $ — $ — |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information (unaudited) | |
Summary of unaudited quarterly results of operations | Quarterly Financial Information (unaudited, in thousands, except share and per share data) Three Months Ended March 31, June 30, September 30, December 31, 2018 2018 2018 2018 Operating expenses $ 7,639 $ 6,636 $ 6,008 $ 6,088 Net loss (7,652) (6,479) (5,679) (6,060) Net loss per share: Basic and Diluted $ (2.88) $ (1.98) $ (0.80) $ (0.85) Weighted-average common shares outstanding used in net loss per share: Basic and Diluted 2,655,584 3,272,877 7,103,841 7,115,507 Three Months Ended March 31, June 30, September 30, December 31, 2017 2017 2017 2017 Revenue $ — $ — $ 250 $ 250 Operating expenses 7,761 6,919 7,202 5,712 Net loss (7,876) (6,974) (7,017) (5,497) Net loss per share: Basic and Diluted $ (4.13) $ (3.20) $ (3.11) $ (2.37) Weighted-average common shares outstanding used in net loss per share: Basic and Diluted 1,909,327 2,179,619 2,256,317 2,321,847 |
Organization and Operations - L
Organization and Operations - Liquidity (Details) $ / shares in Units, $ in Thousands | Feb. 06, 2019USD ($)$ / sharesshares | Dec. 28, 2018 | Jun. 19, 2018USD ($)$ / sharesshares | Jul. 16, 2016USD ($) | Feb. 28, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Dec. 12, 2018$ / shares |
Common Stock | ||||||||
Additional common stock issued | $ 8,363 | $ 8,036 | ||||||
Reverse stock split ratio (as a percent) | 0.1 | |||||||
Minimum bid price requirement for continued listing on NASDAQ | $ / shares | $ 1 | |||||||
Accumulated deficit | (197,304) | $ (171,434) | ||||||
Cash, cash equivalents and short-term investments | $ 37,600 | |||||||
Common Stock | ||||||||
Common Stock | ||||||||
Number of shares issued | shares | 577,195 | 480,480 | ||||||
Additional common stock issued | $ 1 | |||||||
Common Stock | Subsequent Events | ||||||||
Common Stock | ||||||||
Number of shares issued | shares | 4,000,000 | |||||||
Additional common stock issued | $ 20,000 | |||||||
Number of warrants issued | shares | 2,000,000 | |||||||
Warrants price (in dollars per unit) | $ / shares | $ 5 | |||||||
Proceeds from public offering, net of issuance costs | $ 18,500 | $ 20,500 | ||||||
Common Stock | Cowen | ||||||||
Common Stock | ||||||||
Percentage of commission paid to underwriter based on proceeds from common stock | 3.00% | |||||||
Common Stock | ATM | ||||||||
Common Stock | ||||||||
Number of shares issued | shares | 577,195 | |||||||
Share price (in dollars per share) | $ / shares | $ 15.27 | |||||||
Additional common stock issued | $ 8,800 | |||||||
Proceeds from public offering, net of issuance costs | $ 8,400 | |||||||
Common Stock | ATM | Cowen | Subsequent Events | ||||||||
Common Stock | ||||||||
Number of shares issued | shares | 353,746 | |||||||
Share price (in dollars per share) | $ / shares | $ 5.96 | |||||||
Additional common stock issued | $ 2,100 | |||||||
Proceeds from public offering, net of issuance costs | $ 2,000 | |||||||
Common Stock | First ATM Program | Cowen | ||||||||
Common Stock | ||||||||
Remaining current sales agreement | $ 22,600 | |||||||
Common Stock | June 2018 Financing | Oppenheimer & Co. Inc | ||||||||
Common Stock | ||||||||
Number of shares issued | shares | 4,200,000 | |||||||
Share price (in dollars per share) | $ / shares | $ 0.001 | |||||||
Additional common stock issued | $ 42,000 | |||||||
Number of warrants issued | shares | 4,200,000 | |||||||
Warrants price (in dollars per unit) | $ / shares | $ 10 | |||||||
Proceeds from public offering, net of issuance costs | $ 38,900 |
Summary of Significant Accoun_4
Summary of Significant Accounting Polices - Cash and Cash Equivalents and Restricted Cash and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents | $ 15,294 | $ 16,369 | |
Restricted cash | 113 | 113 | |
Total | 15,407 | 16,482 | $ 23,709 |
Fair Value of Financial Instruments | |||
Transfers of assets or liabilities between levels | 0 | 0 | |
Money market funds | |||
Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents | 5,956 | 13,588 | |
Corporate debt securities | |||
Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents | 1,948 | ||
Reverse repurchase agreements | |||
Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents | 3,000 | ||
Cash | |||
Cash and Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents | $ 4,390 | $ 2,781 | |
Minimum | Government Securities and Obligations | Repurchase agreements | |||
Fair Value of Financial Instruments | |||
Percentage of investment amount to collateralized deposits value | 102.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | ||
Stock-based compensation expense | $ 1,771 | $ 2,007 |
Tax benefits recognized from stock-based compensation expense | 0 | 0 |
Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation expense | 673 | 784 |
General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation expense | $ 1,098 | $ 1,223 |
Summary of Significant Accoun_6
Summary of Significant Accounting Polices - Grant Awards (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies | ||
Grants revenue | $ 0 | $ 124,000 |
Grants utilized to offset related expenses | $ 8,000 | $ 205,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Net Loss Per Share and Segment Information (Details) | 12 Months Ended | |
Dec. 31, 2018segmentshares | Dec. 31, 2017shares | |
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 4,635,838 | 285,731 |
Segment Information | ||
Number of operating segments | segment | 1 | |
Stock options | ||
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 433,389 | 283,277 |
Common stock warrants | ||
Antidilutive common stock equivalents excluded from computation of diluted net loss per share | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share (in shares) | 4,202,449 | 2,454 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents: | ||
Cash and cash equivalents | $ 15,294 | $ 16,369 |
Short-term investments: | ||
Short-term investments | 22,276 | 0 |
Money market funds | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 5,956 | 13,588 |
Corporate debt securities | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 1,948 | |
Short-term investments: | ||
Short-term investments | 7,276 | |
Reverse repurchase agreements | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 3,000 | |
Short-term investments: | ||
Short-term investments | 15,000 | |
Recurring | ||
Assets: | ||
Total assets | 33,180 | 13,588 |
Recurring | Money market funds | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 5,956 | 13,588 |
Recurring | Corporate debt securities | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 1,948 | |
Short-term investments: | ||
Short-term investments | 7,276 | |
Recurring | Reverse repurchase agreements | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 3,000 | |
Short-term investments: | ||
Short-term investments | 15,000 | |
Recurring | Level 1 | ||
Assets: | ||
Total assets | 5,956 | 13,588 |
Recurring | Level 1 | Money market funds | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 5,956 | $ 13,588 |
Recurring | Level 2 | ||
Assets: | ||
Total assets | 27,224 | |
Recurring | Level 2 | Corporate debt securities | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 1,948 | |
Short-term investments: | ||
Short-term investments | 7,276 | |
Recurring | Level 2 | Reverse repurchase agreements | ||
Cash and cash equivalents: | ||
Cash and cash equivalents | 3,000 | |
Short-term investments: | ||
Short-term investments | $ 15,000 |
Short-Term Investments (Details
Short-Term Investments (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)instrument | Dec. 31, 2017USD ($) | |
Short-Term Investments | ||
Amortized Cost | $ 22,280 | |
Gross Unrealized Losses | (4) | |
Fair Value | $ 22,276 | $ 0 |
Number of short term investments in unrealized loss position | instrument | 7 | |
Number of short term investments in an unrealized loss position more than 12 months | instrument | 0 | |
Aggregate fair value of the investments in an unrealized loss position | $ 7,300 | |
Corporate debt securities | ||
Short-Term Investments | ||
Amortized Cost | 7,280 | |
Gross Unrealized Losses | (4) | |
Fair Value | 7,276 | |
Reverse repurchase agreements | ||
Short-Term Investments | ||
Amortized Cost | 15,000 | |
Fair Value | $ 15,000 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Restricted Cash | ||
Security deposit held for operating lease agreement | $ 0.1 | $ 0.1 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment | ||
Property and equipment, gross | $ 377 | $ 1,976 |
Less accumulated depreciation and amortization | (321) | (1,655) |
Total property and equipment, net | 56 | 321 |
Depreciation and amortization expense | $ 119 | 304 |
Lab equipment | ||
Property and Equipment | ||
Property and equipment, gross | $ 1,470 | |
Estimated Useful Life | 3 years | 3 years |
Computer equipment | ||
Property and Equipment | ||
Property and equipment, gross | $ 100 | $ 165 |
Estimated Useful Life | 3 years | 3 years |
Furniture and fixtures | ||
Property and Equipment | ||
Property and equipment, gross | $ 75 | $ 77 |
Estimated Useful Life | 5 years | 5 years |
Leasehold improvements | ||
Property and Equipment | ||
Property and equipment, gross | $ 202 | $ 264 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Expenses | ||
Accrued compensation | $ 1,241 | $ 632 |
Accrued contracted research costs | 680 | 1,357 |
Accrued professional fees | 393 | 298 |
Accrued severance | 109 | |
Accrued franchise fee | 168 | |
Accrued other | 172 | 145 |
Total | $ 2,763 | $ 2,432 |
Notes Payable - (Details)
Notes Payable - (Details) - Credit Facility - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Line of Credit Facility | ||
Total proceeds from issuance of promissory notes | $ 10 | |
Interest expense | $ 0.1 | $ 0.5 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating leases | ||||
Rent expense | $ 1,100 | $ 1,300 | ||
Future minimum payments required under the non-cancelable operating lease | ||||
2019 | 1,421 | |||
2020 | 721 | |||
Total minimum lease payments | $ 2,142 | |||
Amount of base rent from sub-lease | $ 500 | $ 1,100 | ||
Sublease income | $ 300 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2017 | |
Revenue recognition | |||||
Quarterly payments | $ 500 | ||||
Revenue recognized related to a Option agreement | $ 250 | $ 250 | $ 0 | $ 500 | |
Option agreement | |||||
Revenue recognition | |||||
Remaining performance obligation | $ 0 | 0 | |||
Revenue recognized related to a Option agreement | $ 500 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) | 12 Months Ended | |
Dec. 31, 2018series$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Preferred Stock | ||
Preferred stock, authorized (in Shares) | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Minimum number of series used to issue preferred stock | series | 1 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Warrants (Details) - $ / shares | 1 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2018 | |
Convertible Preferred Stock | ||
Number of shares after conversion of issued warrants (in shares) | 2,454 | |
June 2018 common stock warrants | ||
Convertible Preferred Stock | ||
Number of warrants issued | 4,200,000 | |
Exercise price of warrants (in dollars per share) | $ 12 | |
Warrants term | 5 years | |
Weighted average remaining contractual life | 4 years 5 months 19 days | |
Initial public offering | Credit Facility | ||
Convertible Preferred Stock | ||
Number of shares after conversion of issued warrants (in shares) | 122.12 | |
Weighted average contractual life | 2 years 11 months 12 days |
Stockholders' Equity - Common_2
Stockholders' Equity - Common Stock (Details) | 12 Months Ended | |
Dec. 31, 2018Vote$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Common Stock | ||
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Par value of common stock (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 |
Common stock, issued (in shares) | 7,141,996 | 2,364,526 |
Common Stock, outstanding (in shares) | 7,141,996 | 2,364,526 |
Number of votes entitled to each common stock share | Vote | 1 | |
Common stock dividends, declared or paid (in dollars per share) | $ / shares | $ 0 | |
Shares reserved for future issuance (in shares) | 5,589,766 | 421,835 |
Common stock warrants | ||
Common Stock | ||
Shares reserved for future issuance (in shares) | 4,202,449 | 2,454 |
Common stock options outstanding | ||
Common Stock | ||
Shares reserved for future issuance (in shares) | 433,389 | 283,277 |
Common stock options reserved | ||
Common Stock | ||
Shares reserved for future issuance (in shares) | 877,917 | 83,739 |
Employee Stock Purchase Plan | ||
Common Stock | ||
Shares reserved for future issuance (in shares) | 76,011 | 52,365 |
Stock Incentive Plans - Plan In
Stock Incentive Plans - Plan Information and Valuation Assumptions (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | ||
Shares reserved for future issuance (in shares) | 5,589,766 | 421,835 |
2015 Plan | ||
Stock-Based Compensation | ||
Shares reserved for future issuance (in shares) | 1,245,719 | |
Shares available for future issuance (in shares) | 877,917 | |
2008 Plan | ||
Stock-Based Compensation | ||
Shares reserved for future issuance (in shares) | 65,587 | |
Shares available for future issuance (in shares) | 0 | |
Stock options | ||
Stock-Based Compensation | ||
Vesting period | 4 years | |
Cliff period for vesting | 1 year | |
Exercisable period | 10 years |
Stock Incentive Plans - Stock O
Stock Incentive Plans - Stock Option Plan Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock options | ||
Outstanding at beginning of year (in shares) | 283,277 | |
Granted (in shares) | 213,384 | |
Exercised (in shares) | (291) | |
Cancelled or forfeited (in shares) | (62,981) | |
Outstanding at end of year (in shares) | 433,389 | 283,277 |
Vested and Exercisable to vest at end of year (in shares) | 168,566 | |
Weighted-Average Exercise Price | ||
Outstanding at beginning of year (in dollars per share) | $ 45.42 | |
Granted (in dollars per share) | 9.84 | |
Exercised (in dollars per share) | 12.40 | |
Cancelled or forfeited (in dollars per share) | 37.64 | |
Outstanding at end of year (in dollars per share) | 29.05 | $ 45.42 |
Vested and Exercisable at end of year (in dollars per share) | $ 50.91 | |
Weighted Average Remaining Contractual Term (years) | ||
Outstanding at end of year | 7 years 11 months 19 days | 7 years 9 months |
Vested and Exercisable at end of year | 6 years 3 months 22 days | |
Aggregate Intrinsic Value | ||
Outstanding at the beginning of the year | $ 216 | |
Outstanding at the end of the year | $ 216 | |
Weighted average of the assumptions used to compute employee stock based compensation | ||
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Stock options | ||
Unrecognized stock-based compensation expense | ||
Intrinsic value of options exercised | $ 1 | $ 40 |
Adjusted fair value of options vested | $ 1,700 | $ 2,200 |
Weighted average grant date fair value of options granted (in dollars per share) | $ 6.64 | $ 8.48 |
Unrecognized compensation expense related to unvested stock option awards | $ 2,300 | |
Weighted-average amortization period over which cost is expected to be recognized | 1 year 8 months 12 days | |
Minimum | ||
Weighted average of the assumptions used to compute employee stock based compensation | ||
Weighted-average expected volatility (as a percent) | 73.70% | 76.10% |
Expected term (in years) | 5 years 9 months | 6 years 3 months |
Risk-free interest rate (as a percent) | 2.67% | 2.00% |
Maximum | ||
Weighted average of the assumptions used to compute employee stock based compensation | ||
Weighted-average expected volatility (as a percent) | 76.90% | 81.90% |
Expected term (in years) | 6 years 3 months | 9 years 9 months 7 days |
Risk-free interest rate (as a percent) | 2.84% | 2.38% |
Stock Incentive Plans - Employe
Stock Incentive Plans - Employee Stock Purchase Plan (Details) - shares | 1 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Common Stock, Issued, (in shares) | 7,141,996 | 2,364,526 | |
Common Stock | 2015 ESPP | |||
Stock-Based Compensation | |||
Common Stock, Issued, (in shares) | 0 | ||
Shares available for grant (in shares) | 18,235 | ||
Common Stock | 2015 ESPP | Annual minimum increase | |||
Stock-Based Compensation | |||
Percentage of outstanding Common Stock available for issuance (as a percent) | 1.00% | ||
Potential increase in shares available for issuance as determined by the Board of Directors (in shares) | 36,470 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the U.S. statutory income tax rate to the effective income tax rate | ||
Federal income tax (benefit) at statutory rate | 21.00% | 34.00% |
Permanent differences | (0.68%) | (1.16%) |
Federal research and development credits and adjustments | 4.25% | 2.36% |
State income tax benefit, net of federal benefit | 6.84% | 5.80% |
Tax reform deferred rate change | (72.21) | |
Other (as a percent) | (1.41%) | (0.36%) |
Change in valuation allowance | (30.00%) | 31.57% |
Deferred tax assets | ||
Net operating loss carryforwards | $ 48,107 | $ 41,436 |
Tax credit carryforwards | 7,174 | 5,896 |
Capitalized research and development | 1,394 | 1,879 |
Capitalized legal expenses | 1,132 | 1,156 |
Other differences | 1,370 | 1,048 |
Total deferred tax assets | 59,177 | 51,415 |
Valuation allowance | (59,177) | (51,415) |
Valuation allowance | ||
Recorded increase (decrease) in valuation allowance | 7,800 | $ (8,400) |
Federal | ||
Valuation allowance | ||
Net operating loss | 176,300 | |
Net operating loss carryforwards that will expire from 2023 through 2037 | 150,500 | |
Net operating loss carryforwards, carried forward indefinitely | 25,800 | |
Tax credit carryforwards | 5,600 | |
State | ||
Valuation allowance | ||
Net operating loss | 175,400 | |
Net operating loss carryforwards that will expire from 2023 through 2037 | 175,400 | |
Tax credit carryforwards | $ 2,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 06, 2019 | Feb. 28, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Events | ||||
Par value of common stock (in dollars per share) | $ 0.001 | $ 0.001 | ||
Additional common stock issued | $ 8,363 | $ 8,036 | ||
Subsequent Events | ||||
Subsequent Events | ||||
Common stock per unit | 1 | |||
Warrants per common stock | 0.5 | |||
Common Stock | ||||
Subsequent Events | ||||
Number of shares issued | 577,195 | 480,480 | ||
Additional common stock issued | $ 1 | |||
Common Stock | Subsequent Events | ||||
Subsequent Events | ||||
Number of shares issued | 4,000,000 | |||
Proceeds from public offering, net of issuance costs | $ 18,500 | $ 20,500 | ||
Par value of common stock (in dollars per share) | $ 0.001 | |||
Exercise price of warrants (in dollars per share) | $ 6.25 | |||
Number of warrants issued | 2,000,000 | |||
Warrants price (in dollars per unit) | $ 5 | |||
Additional common stock issued | $ 20,000 | |||
ATM | Common Stock | ||||
Subsequent Events | ||||
Number of shares issued | 577,195 | |||
Share price (in dollars per share) | $ 15.27 | |||
Proceeds from public offering, net of issuance costs | $ 8,400 | |||
Additional common stock issued | $ 8,800 | |||
ATM | Cowen | Common Stock | Subsequent Events | ||||
Subsequent Events | ||||
Number of shares issued | 353,746 | |||
Share price (in dollars per share) | $ 5.96 | |||
Proceeds from public offering, net of issuance costs | $ 2,000 | |||
Additional common stock issued | $ 2,100 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (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 | |
Quarterly Financial Information (Unaudited) | ||||||||||
Revenue | $ 250 | $ 250 | $ 0 | $ 500 | ||||||
Operating expenses | $ 6,088 | $ 6,008 | $ 6,636 | $ 7,639 | 5,712 | 7,202 | $ 6,919 | $ 7,761 | 26,371 | 27,594 |
Net loss | $ (6,060) | $ (5,679) | $ (6,479) | $ (7,652) | $ (5,497) | $ (7,017) | $ (6,974) | $ (7,876) | $ (25,870) | $ (27,364) |
Net loss per share: | ||||||||||
Basic and Diluted (in dollars per share) | $ (0.85) | $ (0.80) | $ (1.98) | $ (2.88) | $ (2.37) | $ (3.11) | $ (3.20) | $ (4.13) | $ (5.12) | $ (12.62) |
Weighted-average common shares outstanding used in net loss per share: | ||||||||||
Basic and Diluted (in shares) | 7,115,507 | 7,103,841 | 3,272,877 | 2,655,584 | 2,321,847 | 2,256,317 | 2,179,619 | 1,909,327 | 5,054,823 | 2,168,153 |