Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 10, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NOVN | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Security Exchange Name | NASDAQ | |
Entity Registrant Name | NOVAN, INC. | |
Entity Central Index Key | 0001467154 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding (in shares) | 137,468,382 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 35,458 | $ 13,711 |
Contracts and grants receivable | 221 | 419 |
Deferred offering costs | 58 | 49 |
Prepaid expenses and other current assets | 1,014 | 1,545 |
Assets held for sale | 977 | 0 |
Total current assets | 37,728 | 15,724 |
Restricted cash | 539 | 540 |
Intangible assets | 75 | 75 |
Other assets | 359 | 419 |
Property and equipment, net | 6,340 | 10,506 |
Right-of-use lease assets | 1,816 | 1,833 |
Total assets | 46,857 | 29,097 |
Current liabilities: | ||
Accounts payable | 1,269 | 1,602 |
Accrued compensation | 626 | 437 |
Accrued outside research and development services | 468 | 1,013 |
Accrued legal and professional fees | 258 | 616 |
Other accrued expenses | 738 | 553 |
Deferred revenue, current portion | 4,401 | 4,428 |
Research and development service obligation liability, current portion | 559 | 3,088 |
Lease liabilities, current portion | 1,172 | 1,162 |
Total current liabilities | 9,491 | 12,899 |
Deferred revenue, net of current portion | 4,860 | 7,076 |
Paycheck Protection Program loan | 956 | 0 |
Lease liabilities, net of current portion | 4,782 | 5,100 |
Research and development service obligation liability, net of current portion | 1,374 | 727 |
Research and development funding arrangement liability, related party | 25,000 | 25,000 |
Other long-term liabilities | 431 | 578 |
Total liabilities | 46,894 | 51,380 |
Commitments and contingencies (Note 8) | ||
Stockholders’ deficit | ||
Common stock $0.0001 par value; 200,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 119,431,547 and 26,744,300 shares issued as of June 30, 2020 and December 31, 2019, respectively; 119,422,047 and 26,734,800 shares outstanding as of June 30, 2020 and December 31, 2019, respectively | 12 | 3 |
Additional paid-in capital | 234,343 | 197,853 |
Treasury stock at cost, 9,500 shares as of June 30, 2020 and December 31, 2019 | (155) | (155) |
Accumulated deficit | (234,237) | (219,984) |
Total stockholders’ deficit | (37) | (22,283) |
Total liabilities and stockholders’ deficit | $ 46,857 | $ 29,097 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 119,431,547 | 26,744,300 |
Common stock, shares outstanding (in shares) | 119,422,047 | 26,734,800 |
Treasury stock (in shares) | 9,500 | 9,500 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Total revenue | $ 1,321 | $ 1,101 | $ 2,534 | $ 2,201 |
Operating expenses: | ||||
Research and development | 3,761 | 6,189 | 8,677 | 11,016 |
General and administrative | 3,232 | 3,311 | 5,739 | 6,305 |
Impairment loss on long-lived assets | 2,421 | 0 | 2,421 | 0 |
Total operating expenses | 9,414 | 9,500 | 16,837 | 17,321 |
Operating loss | (8,093) | (8,399) | (14,303) | (15,120) |
Other income (expense), net: | ||||
Interest income | 10 | 68 | 45 | 96 |
Interest expense | 0 | (1) | 0 | (1) |
Other income (expense) | (3) | 36 | 5 | 92 |
Total other income (expense), net | 7 | 103 | 50 | 187 |
Net loss | (8,086) | (8,296) | (14,253) | (14,933) |
Comprehensive loss | $ (8,086) | $ (8,296) | $ (14,253) | $ (14,933) |
Net loss per share, basic and diluted (in USD per share) | $ (0.10) | $ (0.32) | $ (0.24) | $ (0.57) |
Weighted-average common shares outstanding, basic and diluted (in shares) | 80,603,166 | 26,069,734 | 58,823,521 | 26,067,909 |
License and collaboration revenue | ||||
Revenue | $ 1,100 | $ 1,101 | $ 2,124 | $ 2,201 |
Government research contracts and grants revenue | ||||
Revenue | $ 221 | $ 0 | $ 410 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Common Warrant | Common WarrantCommon Stock | Common WarrantAdditional Paid-In Capital | Public OfferingPre Funded Warrant | Public OfferingPre Funded WarrantCommon Stock | Public OfferingPre Funded WarrantAdditional Paid-In Capital | Common Stock Purchase Agreement | Common Stock Purchase AgreementCommon Stock | Common Stock Purchase AgreementAdditional Paid-In Capital | Registered Direct OfferingPre Funded Warrant | Registered Direct OfferingPre Funded WarrantCommon Stock | Registered Direct OfferingPre Funded WarrantAdditional Paid-In Capital | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentAccumulated Deficit |
Beginning balance, in shares (in shares) at Dec. 31, 2018 | 26,056,735 | ||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 6,438 | $ 3 | $ 195,483 | $ (155) | $ (188,893) | $ (714) | $ (714) | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Share-based compensation | 168 | 168 | |||||||||||||||||
Exercise of stock options (in shares) | 12,999 | ||||||||||||||||||
Exercise of stock options | 10 | $ 0 | 10 | ||||||||||||||||
Net loss | (6,637) | (6,637) | |||||||||||||||||
Ending balance, in shares (in shares) at Mar. 31, 2019 | 26,069,734 | ||||||||||||||||||
Ending balance at Mar. 31, 2019 | (735) | $ 3 | 195,661 | (155) | (196,244) | ||||||||||||||
Beginning balance, in shares (in shares) at Dec. 31, 2018 | 26,056,735 | ||||||||||||||||||
Beginning balance at Dec. 31, 2018 | 6,438 | $ 3 | 195,483 | (155) | (188,893) | $ (714) | $ (714) | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Net loss | (14,933) | ||||||||||||||||||
Ending balance, in shares (in shares) at Jun. 30, 2019 | 26,069,734 | ||||||||||||||||||
Ending balance at Jun. 30, 2019 | (8,786) | $ 3 | 195,906 | (155) | (204,540) | ||||||||||||||
Beginning balance, in shares (in shares) at Mar. 31, 2019 | 26,069,734 | ||||||||||||||||||
Beginning balance at Mar. 31, 2019 | (735) | $ 3 | 195,661 | (155) | (196,244) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Share-based compensation | 245 | 245 | |||||||||||||||||
Net loss | (8,296) | (8,296) | |||||||||||||||||
Ending balance, in shares (in shares) at Jun. 30, 2019 | 26,069,734 | ||||||||||||||||||
Ending balance at Jun. 30, 2019 | $ (8,786) | $ 3 | 195,906 | (155) | (204,540) | ||||||||||||||
Beginning balance, in shares (in shares) at Dec. 31, 2019 | 26,734,800 | 26,734,800 | |||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (22,283) | $ 3 | 197,853 | (155) | (219,984) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Share-based compensation | 385 | 385 | |||||||||||||||||
Common stock issued during period (in shares) | 15,498,602 | 700,000 | 10,550,000 | ||||||||||||||||
Common stock issued during period | $ 5,158 | $ 2 | $ 5,156 | $ 442 | $ 0 | $ 442 | $ 7,225 | $ 1 | $ 7,224 | ||||||||||
Exercise of warrants (in shares) | 9,600,000 | 4,333,334 | 4,602,326 | ||||||||||||||||
Exercise of warrants | $ 2,880 | $ 1 | $ 2,879 | $ 0 | $ 0 | $ 0 | 0 | $ 0 | 0 | ||||||||||
Net loss | (6,167) | (6,167) | |||||||||||||||||
Ending balance, in shares (in shares) at Mar. 31, 2020 | 72,019,062 | ||||||||||||||||||
Ending balance at Mar. 31, 2020 | $ (12,360) | $ 7 | 213,939 | (155) | (226,151) | ||||||||||||||
Beginning balance, in shares (in shares) at Dec. 31, 2019 | 26,734,800 | 26,734,800 | |||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (22,283) | $ 3 | 197,853 | (155) | (219,984) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Exercise of stock options (in shares) | 0 | ||||||||||||||||||
Net loss | $ (14,253) | ||||||||||||||||||
Ending balance, in shares (in shares) at Jun. 30, 2020 | 119,422,047 | 119,422,047 | |||||||||||||||||
Ending balance at Jun. 30, 2020 | $ (37) | $ 12 | 234,343 | (155) | (234,237) | ||||||||||||||
Beginning balance, in shares (in shares) at Mar. 31, 2020 | 72,019,062 | ||||||||||||||||||
Beginning balance at Mar. 31, 2020 | (12,360) | $ 7 | 213,939 | (155) | (226,151) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||
Share-based compensation | 335 | 335 | |||||||||||||||||
Common stock issued during period (in shares) | 35,339,992 | ||||||||||||||||||
Common stock issued during period | $ 17,491 | $ 4 | $ 17,487 | ||||||||||||||||
Exercise of warrants (in shares) | 8,610,667 | 3,452,326 | |||||||||||||||||
Exercise of warrants | $ 2,583 | $ 1 | $ 2,582 | $ 0 | $ 0 | $ 0 | |||||||||||||
Net loss | $ (8,086) | (8,086) | |||||||||||||||||
Ending balance, in shares (in shares) at Jun. 30, 2020 | 119,422,047 | 119,422,047 | |||||||||||||||||
Ending balance at Jun. 30, 2020 | $ (37) | $ 12 | $ 234,343 | $ (155) | $ (234,237) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flow from operating activities: | ||
Net loss | $ (14,253) | $ (14,933) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 987 | 1,021 |
Impairment loss on long-lived assets | 2,421 | 0 |
Share-based compensation | 691 | 1,754 |
Shares issued to Aspire Capital as commitment fee | 848 | 0 |
Loss on disposal and write-offs of property and equipment | 44 | 32 |
Changes in operating assets and liabilities: | ||
Contracts and grants receivable | 198 | 0 |
Prepaid expenses and other current assets | 531 | (130) |
Accounts payable | (333) | (293) |
Accrued compensation | 189 | (55) |
Accrued outside research and development services | (545) | 226 |
Accrued legal and professional fees | (358) | (162) |
Other accrued expenses | 264 | (238) |
Deferred revenue | (2,243) | 2,259 |
Advanced payment for research and development service obligation | 0 | 12,000 |
Research and development service obligation liabilities | (1,882) | (2,193) |
Other long-term assets and liabilities | (349) | (214) |
Net cash used in operating activities | (13,790) | (926) |
Cash flow from investing activities: | ||
Purchases of property and equipment | (357) | (33) |
Proceeds from the sale of property and equipment | 15 | 0 |
Net cash used in investing activities | (342) | (33) |
Cash flow from financing activities: | ||
Proceeds from research and development funding arrangement | 0 | 25,000 |
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | 12,577 | 0 |
Proceeds from exercise of common stock warrants | 5,463 | 0 |
Proceeds from Paycheck Protection Program loan | 956 | 0 |
Proceeds from issuance of common stock under common stock purchase agreement | 17,085 | 0 |
Payments related to public offering costs | (178) | 0 |
Payments of offering costs related to new registration statement | (25) | 0 |
Proceeds from exercise of stock options | 0 | 10 |
Net cash provided by financing activities | 35,878 | 25,010 |
Net increase in cash, cash equivalents and restricted cash | 21,746 | 24,051 |
Cash, cash equivalents and restricted cash as of beginning of period | 14,251 | 8,733 |
Cash, cash equivalents and restricted cash as of end of period | 35,997 | 32,784 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Deferred offering costs reclassified to additional paid-in capital | 16 | 0 |
Reconciliation to condensed consolidated balance sheets: | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 35,997 | $ 32,784 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Business Description and Basis of Presentation Novan, Inc. (“Novan” and together with its subsidiaries, the “Company”), is a North Carolina-based clinical development-stage biotechnology company focused on leveraging nitric oxide’s naturally occurring anti-viral, anti-bacterial, anti-fungal and immunomodulatory mechanisms of action to treat a range of diseases with significant unmet needs. Novan was incorporated in January 2006 under the state laws of Delaware. Its wholly-owned subsidiary, Novan Therapeutics, LLC was organized in 2015 under the state laws of North Carolina. On March 14, 2019, the Company completed registration of a wholly-owned Ireland-based subsidiary, Novan Therapeutics, Limited. The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The December 31, 2019 year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. Additionally, the Company’s independent registered public accounting firm report for the December 31, 2019 financial statements included an explanatory paragraph indicating that there is substantial doubt about the Company’s ability to continue as a going concern. Basis of Consolidation The accompanying condensed consolidated financial statements reflect the operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Liquidity and Ability to Continue as a Going Concern The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. The Company has evaluated principal conditions and events, in the aggregate, that may raise substantial doubt about its ability to continue as a going concern within one year from the date that these financial statements are issued. The Company identified the following conditions: • The Company has reported a net loss in all fiscal periods since inception and, as of June 30, 2020 , the Company had an accumulated deficit of $234,237 . • As of June 30, 2020 , the Company had a total cash and cash equivalents balance of $35,458 . • As described in Note 10—Stockholders’ Equity (Deficit), in June 2020 the Company entered into a common stock purchase agreement (the “ June 2020 Aspire CSPA ”) with Aspire Capital Fund, LLC (“Aspire Capital”). The June 2020 Aspire CSPA replaced the prior common stock purchase agreement, dated as of August 30, 2019, between the Company and Aspire Capital (the “ 2019 Aspire CSPA ”). During the six months ended June 30, 2020 , the Company received aggregate net proceeds of $17,085 from the August 2019 CSPA and June 2020 Aspire CSPA. • As described in Note 10—Stockholders’ Equity (Deficit), in early March 2020 the Company completed a public offering of its common stock (or pre-funded warrants to purchase common stock in lieu thereof) and common warrants to purchase common stock pursuant to the Company’s then effective shelf registration statement (the “March 2020 Public Offering”). Net proceeds from the offering were approximately $5,158 after deducting underwriting discounts and commissions and offering expenses of approximately $791 . The Company has also received proceeds from the exercises of common warrants issued in the March 2020 Public Offering of approximately $5,463 through June 30, 2020. • As described in Note 10—Stockholders’ Equity (Deficit), in late March 2020 the Company completed a registered direct offering of its common stock (or pre-funded warrants to purchase common stock in lieu thereof) pursuant to the Company’s then effective shelf registration statement (the “March 2020 Registered Direct Offering”). Net proceeds from the offering were approximately $7,225 after deducting fees and commissions and offering expenses of approximately $774 . The evaluation is also based on other relevant conditions that are known or reasonably knowable at the date that the financial statements are issued, including ongoing liquidity risks faced by the Company, the Company’s conditional and unconditional obligations due or anticipated within one year, the funds necessary to maintain the Company’s operations considering its current financial condition, obligations, and other expected cash flows, and other conditions and events that, when considered in conjunction with the above, may adversely affect the Company’s ability to meet its obligations. Based on the assessment of management’s plan, the Company has concluded that there are no conditions or events, in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date the financial statements are issued. The Company will continue to evaluate this going concern assessment in connection with the preparation of its quarterly and annual financial statements based upon relevant facts and circumstances, including but not limited to, its cash and cash equivalents balance and its operating forecast and related cash projection. The Company believes that its existing cash and cash equivalents balance as of June 30, 2020, plus (i) approximately $13,071 of proceeds received in July 2020 from the further sale of common stock under the Company’s common stock purchase agreements with Aspire Capital, including the common stock purchase agreement entered into in July 2020 (the “July 2020 Aspire CSPA”), described in Note 15—Subsequent Events, and (ii) expected contractual payments to be received in connection with existing licensing agreements, will provide it with adequate liquidity to fund its operating needs through at least the fourth quarter of 2021. This operating forecast and related cash projection includes the expected costs associated with an additional confirmatory Phase 3 trial for SB206 as a treatment for molluscum (the “B-SIMPLE4 trial”), and development activities in certain priority therapeutic areas, but excludes any potential costs associated with other new late-stage clinical development programs and proceeds from any potential future sales of common stock under the July 2020 Aspire CSPA. Further advancement of the SB206 molluscum program beyond the conduct and completion of the B-SIMPLE4 trial, or advancement of any other late-stage clinical development program across the Company’s platform, is subject to securing significant additional funding or strategic partnering, and has been and may be further impacted by the COVID-19 pandemic. However, the Company will need significant additional funding to continue its operating activities and make further advancements in its product development programs beyond those currently included in its operating forecast and related cash projection. The Company does not currently have sufficient funds to complete development and commercialization of any of its product candidates. The inability of the Company to obtain significant additional funding on acceptable terms, including through the utilization of the remaining amount available under the July 2020 Aspire CSPA, could have a material adverse effect on the Company’s business and cause the Company to alter or reduce its planned operating activities, including but not limited to delaying, reducing, terminating or eliminating planned product candidate development activities, to conserve its cash and cash equivalents. The Company needs and intends to pursue additional capital through equity or debt financings, including potential sales under the July 2020 Aspire CSPA, or from non-dilutive sources, including partnerships, collaborations, licensing, grants or other strategic relationships. The Company’s recent equity issuances during the six month period ended June 30, 2020, have resulted in significant dilution to its existing stockholders. Any future additional issuances of equity, or debt that could be convertible into equity, would result in further significant dilution to the Company’s existing stockholders. Alternatively, the Company may seek to engage in one or more potential transactions, such as the sale of the Company, or sale or divestiture of some of its assets, such as a sale of its dermatology platform assets, but there can be no assurance that the Company will be able to enter into such a transaction or transactions on a timely basis or at all on terms that are favorable to the Company. Under these circumstances, the Company could instead determine to dissolve and liquidate its assets or seek protection under the bankruptcy laws. If the Company decides to dissolve and liquidate its assets or to seek protection under the bankruptcy laws, it is unclear to what extent the Company will be able to pay its obligations, and, accordingly, it is further unclear whether and to what extent any resources will be available for distributions to stockholders. COVID-19 In December 2019, the novel strain of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), which causes novel coronavirus disease 2019 (“COVID-19”) was reported in China, and in March 2020, the World Health Organization declared it a pandemic. The extent to which COVID-19 and global efforts to contain its spread will impact the Company’s business including its operations, preclinical studies, clinical trials, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken by other parties, such as governmental authorities, to contain and treat COVID-19. The timetable for development of the Company’s product candidates has been impacted and may face further disruption and the Company’s business could be further adversely affected by the outbreak of COVID-19. In particular, COVID-19 has impacted the trial execution plans of the Company’s B-SIMPLE4 Phase 3 trial for SB206, and while the Company is targeting enrolling the first patient in the trial in September 2020, the Company is continuing to assess any further impact of COVID-19 on the B-SIMPLE4 Phase 3 trial for SB206, including any potential delay, postponement or other impacts to the trial. Despite disruptions to the Company’s business operations and the business operations of third parties on which the Company relies, the COVID-19 pandemic has not significantly impacted the Company’s operating results and financial condition to date. However, at this time, the extent to which COVID-19 may impact the Company’s financial condition or results of operations is uncertain. Classification of Warrants Issued in Connection with Offerings of Common Stock The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and remeasured each balance sheet date thereafter. Changes in the estimated fair value of liability-classified warrants are recognized as a non-cash gain or loss on the consolidated statements of operations and comprehensive loss. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. Unaudited Interim Condensed Consolidated Financial Statements The accompanying interim condensed consolidated financial statements and the related footnote disclosures are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the Securities and Exchange Commission’s (“SEC”) Rule 10-01 of Regulation S-X for interim financial information. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and in the opinion of management, reflect all adjustments (consisting of adjustments of a normal, recurring nature and the impact of the Company’s restatement of its consolidated financial statements for the Affected Periods (as defined below)) that are necessary for the fair statement of the Company’s financial position and its results of operations and cash flows. The results of operations for interim periods are not necessarily indicative of the results expected for the full fiscal year or any future period. These interim financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2019 set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as amended, filed with the SEC as discussed below. Restatement of Previously Issued Financial Statements On May 14, 2020, the Company revised its prior position on accounting for warrants and concluded that its previously issued consolidated financial statements for the year ended December 31, 2018, and all quarterly periods of 2019 and 2018 (the “Affected Periods”) should not be relied upon because of a misapplication in the guidance on warrant accounting. On May 20, 2020, the Company restated its consolidated financial statements for all Affected Periods in its Annual Report on Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2019. As such, the comparative information provided for the three and six months ended June 30, 2019 contained in the preceding condensed consolidated financial statements and the accompanying footnotes reflect these previously restated amounts. Restricted Cash Restricted cash as of June 30, 2020 and December 31, 2019 includes funds maintained in a separate deposit account to secure a letter of credit for the benefit of the lessor of facility space leased by the Company. Assets Held for Sale The Company generally considers assets to be held for sale when (i) the Company commits to a plan to sell the assets, (ii) the assets are available for immediate sale in their present condition, (iii) the Company has initiated an active program to locate a buyer and other actions required to complete the plan to sell the assets, (iv) consummation of the planned sale transaction is probable, (v) the assets are being actively marketed for sale at a price that is reasonable in relation to their current fair value, (vi) the transaction is expected to qualify for recognition as a completed sale, within one year, and (vii) significant changes to or withdrawal of the plan is unlikely. Following the classification of any depreciable assets within a disposal group as held for sale, the Company discontinues depreciating the asset and writes down the asset to the lower of carrying value or fair market value less cost to sell, if needed. As described in Note 14—Assets Held for Sale, Impairment Charges, on June 29, 2020, actions taken by the Company caused certain property and equipment assets to meet the relevant criteria for classification and reporting as held for sale. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for an amount by which the carrying amount of the asset exceeds the fair value of the asset. As described in Note 15—Subsequent Events, on July 16, 2020, the Company entered into a lease termination agreement, which provided for the early termination of the existing lease for the Company’s corporate headquarters and sole research, development and manufacturing facility. In contemplation of this transaction, during June 2020, the Company decommissioned the areas within the facility, as well as the associated equipment, that supported the Company’s large scale cGMP drug manufacturing capability in preparation for execution of the lease termination agreement. The performance of decommissioning activities as noted above was considered to be a triggering event that caused the Company to evaluate its long-lived assets for impairment as of June 29, 2020, principally its right of use lease asset and its property, plant and equipment, including leasehold improvements. See Note 14—Assets Held for Sale, Impairment Charges for a discussion of the Company’s evaluation of its long-lived assets for impairment. Net Loss Per Share Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock. 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. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are anti-dilutive for all periods presented. The following securities, presented on a common stock equivalent basis, have been excluded from the calculation of weighted average common shares outstanding for the three and six months ended June 30, 2020 and 2019 because the effect is anti-dilutive due to the net loss reported in each of those periods. All share amounts presented in the table below represent the total number outstanding as of the end of each period. June 30, 2020 2019 Warrants to purchase common stock associated with January 2018 public offering (Note 10) 10,000,000 10,000,000 Warrants to purchase common stock associated with March 2020 public offering (Note 10) 3,467,625 — Warrants to purchase common stock associated with March 2020 registered direct offering (Note 10) 558,140 — Stock options outstanding under the 2008 and 2016 Plans (Note 11) 1,900,329 1,522,300 Stock appreciation rights outstanding under the 2016 Plan (Note 11) 600,000 — Inducement stock options outstanding (Note 11) 94,000 100,500 Segment and Geographic Information The Company has determined that it operates in one segment. The Company uses its nitric oxide-based technology to develop product candidates. The Chief Executive Officer, who is the Company’s chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company has only had limited revenue since its inception, but substantially all revenue was derived from licensing agreements originating in the United States. All of the Company’s long-lived assets are maintained in the United States. Although all operations are based in the United States, the Company generated revenue from its licensing partner in Japan of $1,100 , or approximately 83% of total revenue, and $2,124 or 84% of total revenue, during the three and six months ended June 30, 2020 , respectively. During the three and six months ended June 30, 2019 , 100% of revenue was generated from the Company’s licensing partner in Japan. Recently Issued Accounting Standards Accounting Pronouncements Adopted In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. This guidance is intended to improve the effectiveness of disclosure requirements on fair value measurements in Topic 820. The new standard modifies certain disclosure requirements and is effective for annual reporting periods beginning after December 15, 2019. This ASU was effective for the Company as of January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This guidance is intended to improve the accounting for variable interest entities and whether the entity should be consolidated. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU was effective for the Company as of January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 . This guidance is intended to reduce diversity in practice and clarify the interaction between Topic 808, Collaborative Arrangements , and Topic 606, Revenue from Contracts with Customers . This ASU provided guidance on whether certain transactions between collaborative arrangement participants should be accounted for with revenue under Topic 606. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU was effective for the Company as of January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements Being Evaluated In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance is intended to improve consistent application and simplify the accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance. This standard is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adoption of this ASU and does not expect the adoption of this new standard to have a material impact on its consolidated financial statements. |
KNOW Bio, LLC
KNOW Bio, LLC | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
KNOW Bio, LLC | KNOW Bio, LLC On December 30, 2015, the Company completed the distribution of 100% of the outstanding member interests of KNOW Bio, LLC (“KNOW Bio”), a former wholly owned subsidiary of the Company, to Novan’s stockholders (the “Distribution”), pursuant to which KNOW Bio became an independent privately held company. KNOW Bio is an independent, privately held company with a portfolio of operating subsidiaries that are advancing nitric oxide-based therapies using technology that is proprietary and/or in fields where they have exclusive intellectual property rights. The Company does not own any equity interest in KNOW Bio, has no common management or board representation at KNOW Bio, and the contractual arrangements between the two entities do not provide the Company with decision-making authority or power to influence KNOW Bio’s drug and medical device development activities. The Company conducted an initial assessment of KNOW Bio under the variable interest consolidation model pursuant to FASB ASC 810, Consolidation , at the time of the Distribution in 2015 and has monitored KNOW Bio during each subsequent reporting period, including two required ASC 810 reassessments performed during 2017. The Company has consistently determined that KNOW Bio should not be consolidated in its consolidated financial statements. In the fourth quarter of 2018, KNOW Bio and its operating subsidiaries received significant additional equity investments that enable progression of their technology. These events required the Company to conduct another reassessment of variable interest entity characteristics, pursuant to FASB ASC 810-10, Consolidation , in which it determined that KNOW Bio should not be consolidated in its consolidated financial statements. KNOW Bio Technology Agreements In connection with the Distribution, the Company entered into exclusive license agreements and sublicense agreements with KNOW Bio, as described below. The agreements will continue for so long as there is a valid patent claim under the respective agreement, unless earlier terminated, and upon expiration, will continue as perpetual non-exclusive licenses. KNOW Bio has the right to terminate each such agreement, for any reason upon 90 days advance written notice to the Company. License of existing and potential future intellectual property to KNOW Bio. The Company and KNOW Bio entered into an exclusive license agreement dated December 29, 2015 (the “KNOW Bio License Agreement”). Pursuant to the terms of the KNOW Bio License Agreement, the Company granted to KNOW Bio exclusive licenses, with the right to sublicense, under certain United States and foreign patents and patent applications that were controlled by the Company as of December 29, 2015 or that became controlled by the Company between that date and December 29, 2018, directed towards nitric-oxide releasing compositions and methods of manufacturing thereof, including methods of manufacturing Nitricil compounds and other nitric oxide-based therapeutics. Sublicense of UNC and other third party intellectual property to KNOW Bio. The Company and KNOW Bio also entered into sublicense agreements dated December 29, 2015 (the “KNOW Bio Sublicense Agreements” and together with the KNOW Bio License Agreement, the “Original KNOW Bio Agreements”). Pursuant to the terms of the KNOW Bio Sublicense Agreements, the Company granted to KNOW Bio exclusive sublicenses, with the ability to further sublicense, under certain of the United States and foreign patents and patent applications exclusively licensed to the Company from the University of North Carolina at Chapel Hill (“UNC”) under the Amended, Restated and Consolidated License Agreement dated June 27, 2012, as amended (the “UNC License Agreement”), and another third party directed towards nitric oxide-releasing compositions, to develop and commercialize products utilizing the licensed technology. Under the exclusive sublicense to the UNC patents and applications (the “UNC Sublicense Agreement”), KNOW Bio is subject to the terms and conditions under the UNC License Agreement, including milestone and diligence payment obligations. However, pursuant to the terms of the UNC License Agreement, the Company is directly obligated to pay UNC any future milestones or royalties, including those resulting from actions conducted by the Company’s sublicensees, including KNOW Bio. Therefore, in the event of KNOW Bio non-performance with respect to its obligations under the UNC Sublicense Agreement, the Company would be obligated to make such payments to UNC. KNOW Bio would then become obligated to repay the Company pursuant to the UNC Sublicense Agreement, otherwise KNOW Bio would be in breach of its agreements with the Company and intellectual property rights would revert back to the Company. There were no milestone or royalty payments required during the six months ended June 30, 2020 and 2019 . Amendments to License and Sublicense Agreements with KNOW Bio On October 13, 2017, the Company and KNOW Bio entered into certain amendments to the Original KNOW Bio Agreements (the “KNOW Bio Amendments”). Pursuant to the terms of the KNOW Bio Amendments, the Company re-acquired from KNOW Bio exclusive, worldwide rights under certain United States and foreign patents and patent applications controlled by the Company as of December 29, 2015, and that became controlled by the Company between December 29, 2015 and December 29, 2018, directed towards nitric oxide-releasing compositions and methods of manufacturing thereof, including methods of manufacturing Nitricil compounds, and other nitric oxide-based therapeutics, to develop and commercialize products for all diagnostic, therapeutic, prophylactic and palliative uses for any disease, condition or disorder caused by certain oncoviruses (the “Oncovirus Field”). The Company also obtained a three -year exclusive option, subject to payment of separate option exercise fees, to include up to four additional specified oncoviruses in the Oncovirus Field. KNOW Bio also granted to the Company an exclusive license, with the right to sublicense, under any patents and patent applications which became controlled by KNOW Bio during the three -year period between December 29, 2015 and December 29, 2018 and directed towards nitric oxide-releasing compositions and methods of manufacturing thereof, including methods of manufacturing Nitricil compounds, and other nitric oxide-based therapeutics, but not towards medical devices, to develop and commercialize products for use in the Oncovirus Field. Upon execution of the KNOW Bio Amendments, in exchange for the Oncovirus Field rights, the Company paid a non-refundable upfront payment of $250 . Products the Company develops in the Oncovirus Field based on Nitricil will not be subject to any further milestones, royalties or sublicensing payment obligations to KNOW Bio under the KNOW Bio Amendments. However, if the Company develops products in the Oncovirus Field that incorporate a certain nitric oxide-releasing composition specified in the KNOW Bio Amendments and (i) are covered by KNOW Bio patents; or (ii) materially use or incorporate know-how of KNOW Bio or the Company related to such composition that was created between December 29, 2015 and December 29, 2018, the Company would be obligated to make the certain contingent milestone and royalty payments to KNOW Bio under the KNOW Bio Amendments. The rights granted to the Company in the Oncovirus Field in the KNOW Bio Amendments continue for so long as there is a valid patent claim under the Original KNOW Bio Agreements, and upon expiration continue on a perpetual non-exclusive basis, and are subject to the termination rights of KNOW Bio and the Company that are set forth in the Original KNOW Bio Agreements. In addition, under the KNOW Bio Amendments, KNOW Bio may terminate the rights granted to the Company in the Oncovirus Field if: (i) the Company does not file a first investigational new drug (“IND”) application with the FDA for a product in the Oncovirus Field by October 2020; or (ii) the Company does not file a first new drug application (“NDA”) with the FDA by October 2025 for a product in the Oncovirus Field and does not otherwise have any active clinical programs related to the Oncovirus Field at such time. The KNOW Bio Amendments also provide a mechanism whereby either party can cause a new chemical entity (“NCE”) covered by the Original KNOW Bio Agreements to become exclusive to such party by filing an IND on the NCE. An NCE that becomes exclusive to a party under this provision may not be commercialized by the other party until the later of expiration of patents covering the NCE or regulatory exclusivity covering the NCE. A party who obtains exclusivity for an NCE must advance development of the NCE pursuant to terms of the KNOW Bio Amendments in order to maintain such exclusivity; otherwise, such exclusivity will expire. The terms of the KNOW Bio Amendments were negotiated at arms-length and do not provide the Company with an ability to significantly influence KNOW Bio or its operations. |
Research and Development Licens
Research and Development Licenses | 6 Months Ended |
Jun. 30, 2020 | |
Research and Development [Abstract] | |
Research and Development Licenses | Research and Development Licenses The Company has entered into various licensing agreements with universities and other research institutions under which the Company receives the rights, and in some cases substantially all of the rights, of the inventors, assignees or co-assignees to produce and market technology protected by certain patents and patent applications. The Company’s primary license agreement is with UNC and has been described in further detail within the subsection below. The counterparties to the Company’s various other licensing agreements are the University of Akron Research Foundation, Hospital for Special Surgery, Strakan International S.a.r.l., which is a licensee of the University of Aberdeen, KIPAX AB and KNOW Bio. The Company is generally required to make milestone payments based on development milestones and will be required to make royalty payments based on a percentage of future sales of covered products or a percentage of sublicensing revenue. As future royalty payments are directly related to future revenues (either sales or sublicensing), future commitments cannot be determined. No accrual for future payments under these agreements has been recorded, as the Company cannot estimate if, when or in what amount payments may become due. UNC License Agreement The UNC License Agreement provides the Company with an exclusive license to issued patents and pending applications directed to the Company’s library of Nitricil compounds, including patents issued in the United States, Japan and Australia, with claims intended to cover NVN1000, the NCE for the Company’s current product candidates. The UNC License Agreement requires the Company to pay UNC up to $425 in regulatory and commercial milestones on a licensed product by licensed product basis and a running royalty percentage in the low single digits on net sales of licensed products. Licensed products include any products being developed by the Company or by its sublicensees. Unless earlier terminated by the Company at its election, or if the Company materially breaches the agreement or becomes bankrupt, the UNC License Agreement remains in effect on a country by country and licensed product by licensed product basis until the expiration of the last to expire issued patent covering such licensed product in the applicable country. The projected date of expiration of the last to expire of the patents issued under the UNC License Agreement is 2033. |
Licensing Arrangements
Licensing Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Collaboration Arrangements [Abstract] | |
Licensing Arrangements | Licensing Arrangements Sato License Agreement Significant Terms On January 12, 2017, the Company entered into a license agreement, and related first amendment, with Sato Pharmaceutical Co., Ltd. (“Sato”), relating to SB204, its drug candidate for the treatment of acne vulgaris in Japan (the “Sato Agreement”). Pursuant to the Sato Agreement, the Company granted to Sato an exclusive, royalty-bearing, non-transferable right and license under certain of the Company’s intellectual property rights, with the right to sublicense with the Company’s prior written consent, to develop, use and sell products in Japan that incorporate SB204 in certain topical dosage forms for the treatment of acne vulgaris, and to make the finished form of such products. On October 5, 2018, the Company and Sato entered into the second amendment (the “Sato Amendment”) to the Sato Agreement (collectively, the “Amended Sato Agreement”). The Sato Amendment expanded the Sato Agreement to include SB206, the Company’s drug candidate for the treatment of viral skin infections. Pursuant to the Amended Sato Agreement, the Company granted to Sato an exclusive, royalty-bearing, non-transferable license under certain of its intellectual property rights, with the right to sublicense with the Company’s prior written consent, to develop, use and sell products in Japan that incorporate SB204 or SB206 in certain topical dosage forms for the treatment of acne vulgaris or viral skin infections, respectively, and to make the finished form of such products. The Company or its designated contract manufacturer will supply finished product to Sato for use in the development of SB204 and SB206 in the licensed territory. The rights granted to Sato do not include the right to manufacture the active pharmaceutical ingredient (“API”) of SB204 or SB206; rather, the parties agreed to negotiate a commercial supply agreement pursuant to which the Company or its designated contract manufacturer would be the exclusive supplier to Sato of the API for the commercial manufacture of licensed products in the licensed territory. Under the terms of the Amended Sato Agreement, the Company also has exclusive rights to certain intellectual property that may be developed by Sato in the future, which the Company could choose to use for its own development and commercialization of SB204 or SB206 outside of Japan. Under the Amended Sato Agreement, in exchange for the SB204 and SB206 license rights granted to Sato, Sato agreed to pay the Company the following: • An upfront payment of 1.25 billion Japanese Yen (“JPY”) payable in installments of 0.25 billion JPY, 0.5 billion JPY and 0.5 billion JPY on October 5, 2018, February 14, 2019 and September 13, 2019 , respectively. This is in addition to the 1.25 billion JPY (approximately $ 10,813 USD) paid on January 19, 2017 following the execution of the Sato Agreement on January 12, 2017. On October 23, 2018, the Company received the first installment from the Amended Sato Agreement of 0.25 billion JPY (approximately $2,224 USD). On March 14, 2019, the Company received the second installment payment related to the Amended Sato Agreement of 0.5 billion JPY (approximately $4,460 USD). On November 7, 2019, the Company received the third installment payment related to the Amended Sato Agreement of 0.5 billion JPY (approximately $4,554 USD). • Up to an aggregate of 1.75 billion JPY (adjusted from 2.75 billion JPY in the Sato Agreement) upon the achievement of various development and regulatory milestones, including (i) a 0.25 billion JPY (approximately $2,162 USD) milestone payment received during the fourth quarter of 2018 following Sato’s initiation of a Phase 1 trial in Japan; and (ii) an aggregate of 1.0 billion JPY that becomes payable upon the earlier occurrence of specified fixed future dates or the achievement of milestone events. • Up to an aggregate of 3.9 billion JPY (adjusted from 0.9 billion JPY in the Sato Agreement) upon the achievement of various commercial milestones. • A tiered royalty ranging from a mid-single digit to a low-double digit percentage (adjusted from a mid-single digit percentage in the Sato Agreement) of net sales of licensed products in the licensed territory, subject to a reduction in the royalty payments in certain circumstances. The term of the Amended Sato Agreement (and the period during which Sato must pay royalties under the amended license agreement) expires on the twentieth anniversary of the first commercial sale of a licensed product in the licensed field in the licensed territory (adjusted from the tenth anniversary of the first commercial sale in the Sato Agreement). The term of the Amended Sato Agreement may be renewed with respect to a licensed product by mutual written agreement of the parties for additional two -year periods following expiration of the initial term. All other material terms of the Sato Agreement remain unchanged by the Sato Amendment. Sato is responsible for funding the development and commercial costs for the program that are specific to Japan. The Company is obligated to perform certain oversight, review and supporting activities for Sato, including: (i) using commercially reasonable efforts to obtain marketing approval of SB204 and SB206 in the United States; (ii) sharing all future scientific information the Company may obtain during the term of the Amended Sato Agreement pertaining to SB204 and SB206; (iii) performing certain additional preclinical studies if such studies are deemed necessary by the Japanese regulatory authority, up to and not to exceed a total cost of $1,000 ; and (iv) participating in a joint committee that oversees, reviews and approves Sato’s development and commercialization activities under the Amended Sato Agreement. Additionally, the Company has granted Sato the option to use the Company’s trademarks in connection with the commercialization of licensed products in the licensed territory for no additional consideration, subject to the Company’s approval of such use. The Amended Sato Agreement may be terminated by (i) Sato without cause upon 120 days ’ advance written notice to the Company; (ii) either party in the event of the other party’s uncured material breach upon 60 days ’ advance written notice; (iii) force majeure; (iv) either party in the event of the other party’s dissolution, liquidation, bankruptcy or insolvency; and (v) the Company immediately upon written notice if Sato challenges the validity, patentability, or enforceability of any of the Company’s patents or patent applications licensed to Sato under the Amended Sato Agreement. In the event of a termination, no portion of the upfront fees received from Sato are refundable. Research and Development Arrangements Royalty and Milestone Payments Purchase Agreement with Reedy Creek Investments LLC On April 29, 2019, the Company entered into a royalty and milestone payments purchase agreement (the “Purchase Agreement”) with Reedy Creek Investments LLC (“Reedy Creek”), pursuant to which Reedy Creek provided funding to the Company in an initial amount of $25,000 , for the Company to use primarily to pursue the development, regulatory approval and commercialization (including through out-license agreements and other third-party arrangements) activities for SB206, a topical anti-viral gel being developed for the treatment of molluscum contagiosum, and advancing programmatically such activities with respect to SB204, a once-daily, topical monotherapy being developed for the treatment of acne vulgaris, and SB414, a topical cream-based product candidate being developed for the treatment of atopic dermatitis. Reedy Creek was to provide additional funding to the Company of $10,000 contingent upon the achievement by the Company of SB206 clinical trial success, defined as (i) the achievement, no later than March 31, 2020, of statistically significant rates of complete clearance of lesions for molluscum contagiosum in humans at week 12 in each of the two Phase 3 clinical trials or any other primary endpoint required or accepted by the FDA for the SB206 product; or (ii) equivalent achievement (as agreed upon by the parties). On January 2, 2020, the Company announced top-line results from two pivotal Phase 3 clinical trials of SB206 for the treatment of molluscum contagiosum. SB206 did not achieve statistically significant results in the primary endpoint in both trials, which was the complete clearance of all molluscum lesions at Week 12. Based on such results, the Company understands that Reedy Creek will not be paying the Company the contingent $10,000 of additional funding. Pursuant to the Purchase Agreement, the Company will pay Reedy Creek ongoing quarterly payments, calculated based on an applicable percentage per product of any upfront fees, milestone payments, royalty payments or equivalent payments received by the Company pursuant to any out-license agreement for SB204, SB206 or SB414 in the United States, Mexico or Canada, net of any upfront fees, milestone payments, royalty payments or equivalent payments paid by the Company to third parties pursuant to any agreements under which the Company has in-licensed intellectual property with respect to such products in the United States, Mexico or Canada. The applicable percentage used for determining the ongoing quarterly payments, applied to amounts received directly by the Company pursuant to any out-license agreement for each product, ranges from 10% for SB206 to 20% for SB204 and SB414. However, the agreement provides that the applicable percentage for each product will be 25% for fees or milestone payments received by the Company (but not royalty payments received by the Company) until Reedy Creek has received payments under the Purchase Agreement equal to the total funding amount provided by Reedy Creek under the Purchase Agreement. If the Company decides to commercialize any product on its own following regulatory approval, as opposed to commercializing through an out-license agreement or other third-party arrangement, the Company will be obligated to pay Reedy Creek a low single digits royalty on net sales of such products. The Company determined that the Reedy Creek Purchase Agreement is within the scope of ASC 730-20, Research and Development Arrangements . The Company concluded that there has not been a substantive and genuine transfer of risk related to the Purchase Agreement as (i) Reedy Creek has the opportunity to recover its investment regardless of the outcome of the research and development programs within the scope of the agreement (prior to commercialization of any in scope assets through potential out-licensing agreements and related potential future milestone payments); and (ii) there is a presumption that the Company is obligated to pay Reedy Creek amounts equal to its investment based on the related party relationship at the time the parties entered into the Purchase Agreement. The Purchase Agreement is a broad funding arrangement, due to (i) the multi-asset, or portfolio approach including three developmental assets that are within the scope of the arrangement; and (ii) Reedy Creek’s approximate 5% ownership of the outstanding shares of common stock of the Company at the time of entry into the Purchase Agreement. As such, the Company determined that the appropriate accounting treatment under ASC 730-20 was to record the initial proceeds of $25,000 as cash and cash equivalents, as the Company had the ability to direct the usage of funds, and a long-term liability within its classified balance sheet. The long-term liability will remain until the Company receives future milestones from other potential third parties, as defined within the Purchase Agreement, of which 25% will be contractually owed to Reedy Creek. If potential future milestones are received by the Company, and become partly due to Reedy Creek, the corresponding partial repayment to Reedy Creek will result in a ratable reduction of the total long-term obligation to repay the initial purchase price. Development Funding and Royalties Agreement with Ligand Pharmaceuticals Incorporated On May 4, 2019, the Company entered into a development funding and royalties agreement (the “Funding Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”), pursuant to which Ligand provided funding to the Company of $12,000 , for the Company to use to pursue the development and regulatory approval of SB206, a topical anti-viral gel being developed for the treatment of molluscum contagiosum. Pursuant to the Funding Agreement, the Company will pay Ligand up to $20,000 in milestone payments upon the achievement by the Company of certain regulatory and commercial milestones associated with SB206 or any product that incorporates or uses NVN1000, the active pharmaceutical ingredient for the Company’s clinical stage product candidates, for the treatment of molluscum contagiosum. In addition to the milestone payments, the Company will pay Ligand tiered royalties ranging from 7% to 10% based on annual aggregate net sales of such products in the United States, Mexico or Canada. The Company determined that the Ligand transaction is within the scope of ASC 730-20 as it represents an obligation to perform contractual services for the development of SB206 using commercially reasonable efforts. In addition, the Funding Agreement also states that if all development of SB206 is ceased prior to the first regulatory approval, the Company must pay to Ligand an amount equal to the purchase price less the amount spent in accordance with the development budget on development activities conducted prior to such cessation. As such, the Company concluded that the appropriate accounting treatment under ASC 730-20 was to record the initial proceeds of $12,000 , as a liability and as restricted cash on its consolidated balance sheet, as the funds could only be used for the progression of SB206. The Company amortizes the liability ratably during each reporting period, based on the Ligand funding as a percentage of the total direct costs incurred by the Company during the reporting period related to the estimated total cost to progress the SB206 program to a regulatory approval in the United States The ratable Ligand funding is presented within the consolidated statement of operations as an offset to research and development expenses associated with the SB206 program. During the quarter ended June 30, 2020 , the Company completed a reassessment of the estimated total cost to progress the SB206 program to a potential United States regulatory approval, including consideration of how such estimated costs may potentially be affected by various regulatory, clinical development, and drug manufacturing and supply factors. During this reassessment, the Company concluded that the incremental costs associated with the conduct of the additional B-SIMPLE4 clinical trial would be excluded from the total cost basis used to amortize the liability because they were not contemplated within the Ligand Funding Agreement. The reassessment also concluded that the other projected costs to progress SB206 to a planned regulatory approval in the United States, most of which are regulatory costs associated with the NDA submission process, did not materially change and did not have a material effect on the amortization of the liability. The initial restricted cash balance was also reduced ratably during interim reporting periods in 2019 in a manner consistent with the amortization method for the Ligand funding liability balance. As of December 31, 2019, the aggregate amount spent in accordance with the SB206 development budget on SB206 development activities had exceeded the $12,000 purchase price, causing the aforementioned repayment provision provided for in the Funding Agreement to no longer be enforceable. Therefore, the Company reported no restricted cash balance related to the Funding Agreement, as of December 31, 2019 or June 30, 2020 in its condensed consolidated balance sheet. For the three and six months ended June 30, 2020 , the Company recorded $369 and $1,882 , respectively, as contra-research and development expense related to the SB206 developmental program, funded by Ligand. For each of the three and six month periods ended June 30, 2019 , the Company recorded $2,193 as contra-research and development expense related to the SB206 developmental program, funded by Ligand. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Sato Agreement The Company assessed the Sato Agreement in accordance with Topic 606 and concluded that the contract counterparty, Sato, is a customer within the scope of Topic 606. The Company identified the following promises under the Sato Agreement: (i) the grant of the intellectual property license to Sato; (ii) the obligation to participate in a joint committee that oversees, reviews, and approves Sato’s research and development activities and provides advisory support during Sato’s development process; (iii) the obligation to manufacture and supply Sato with all quantities of licensed product required for development activities in Japan; and (iv) the stand-ready obligation to perform any necessary repeat preclinical studies, up to $1,000 in cost. The Company determined that these promises were not individually distinct because Sato can only benefit from these licensed intellectual property rights and services when bundled together; they do not have individual benefit or utility to Sato. As a result, all promises have been combined into a single performance obligation. The Sato Agreement also provides that the two parties agree to negotiate in good faith the terms of a commercial supply agreement pursuant to which the Company or a third-party manufacturer would be the exclusive supplier to Sato of the API for the commercial manufacture of licensed products in the licensed territory. The Company concluded this obligation to negotiate the terms of a commercial supply agreement does not create (i) a legally enforceable obligation under which the Company may have to perform and supply Sato with API for commercial manufacturing; or (ii) a material right because the incremental commercial supply fee consideration framework in the Sato Agreement is representative of a stand-alone selling price for the supply of API and does not represent a discount. Therefore, this contract provision is not considered to be a promise to deliver goods or services and is not a performance obligation or part of the combined single performance obligation described above. Amended Sato Agreement On October 5, 2018, the Company and Sato entered into the Amended Sato Agreement. The Sato Amendment expanded the Sato Agreement to include SB206, the Company’s drug candidate for the treatment of viral skin infections. The Company assessed the Amended Sato Agreement in accordance with Topic 606 and concluded the contract modification should incorporate the additional goods and services provided for in the Amendment into the existing, partially satisfied single bundled performance obligation that will continue to be delivered to Sato over the remaining development period. This contract modification accounting is concluded to be appropriate as the additional goods and services conveyed under the Sato Amendment were determined to not be distinct from the single performance obligation, and the additional consideration provided did not reflect the standalone selling price of those additional goods and services. As such, the Company recorded a cumulative adjustment as of the amendment execution date to reflect revenue that would have been recognized cumulatively for the partially completed bundled performance obligation. The Company concluded that the following consideration would be included in the transaction price as they were (i) received prior to June 30, 2020 ; or (ii) payable upon specified fixed dates in the future and are not contingent upon clinical or regulatory success in Japan: • The 1.25 billion JPY (approximately $10,813 USD) original upfront payment received on January 19, 2017 following the execution of the Sato Agreement on January 12, 2017. • A milestone payment of 0.25 billion JPY (approximately $2,162 USD) received during the fourth quarter of 2018 following Sato’s initiation of a Phase 1 trial in Japan. • The Sato Amendment upfront payment of 1.25 billion JPY, payable in installments of 0.25 billion JPY, 0.5 billion JPY and 0.5 billion JPY on October 5, 2018, February 14, 2019 and September 13, 2019, respectively. On October 23, 2018, the Company received the first installment from the Amended Sato Agreement of 0.25 billion JPY (approximately $2,224 USD). On March 14, 2019, the Company received the second installment payment related to the Amended Sato Agreement of 0.5 billion JPY (approximately $4,460 USD). On November 7, 2019, the Company received the third installment payment related to the Amended Sato Agreement of 0.5 billion JPY (approximately $4,554 USD). • An aggregate of 1.0 billion JPY in non-contingent milestone payments that become payable upon the earlier occurrence of specified fixed dates in the future or the achievement of specified milestone events. The following table presents the Company’s contract assets and contract liabilities balances for the periods indicated. Contract Asset Contract Liability Net Deferred Revenue December 31, 2019 $ 8,974 $ 20,478 $ 11,504 June 30, 2020 $ 8,895 $ 18,156 $ 9,261 Short-term Deferred Revenue Long-term Deferred Revenue Net Deferred Revenue December 31, 2019 $ 4,428 $ 7,076 $ 11,504 June 30, 2020 $ 4,401 $ 4,860 $ 9,261 The Company has recorded the Sato Agreement and Amended Sato Agreement transaction price, including the upfront payments received and the unconstrained variable consideration, as deferred revenue (comprised of (i) a contract liability; net of (ii) a contract asset). The change in the net deferred revenue balance during the three and six months ended June 30, 2020 was associated with the recognition of license and collaboration revenue associated with the Company’s performance during the period (continued amortization of deferred revenue). During the three and six months ended June 30, 2020 , the Company recognized $1,100 and $2,124 , respectively, in license and collaboration revenue under this agreement. During the three and six months ended June 30, 2019 , Company recognized $1,101 and $2,201 , respectively, in license and collaboration revenue under this agreement. The Company has concluded that the above consideration is probable of not resulting in a significant revenue reversal and therefore included in the transaction price and is allocated to the single performance obligation. No other variable consideration under the Amended Sato Agreement is probable of not resulting in a significant revenue reversal as of June 30, 2020 and therefore, is currently fully constrained and excluded from the transaction price. The Company evaluated the timing of delivery for each of the obligations and concluded that a time-based input method is most appropriate because Sato is accessing and benefiting from the intellectual property and technology (the predominant items of the combined performance obligation) ratably over the duration of Sato’s estimated development period in Japan. Although the Company concluded that the intellectual property is functional rather than symbolic, the services provided under the performance obligation are provided over time. Therefore, the allocated transaction price will be recognized using a time-based input method that results in straight-line recognition over the Company’s performance period. Prior to the Sato Amendment, the Company estimated the Sato Agreement development timeline for the SB204 product candidate to be approximately 5 years , starting in February 2017 and completing in the first quarter of 2022. With the Amended Sato Agreement, the Company and Sato are now developing both the SB204 and SB206 product candidates for the Japan territory. The parties continue to work collaboratively to reach agreement, but have not yet reached agreement, with respect to the combined SB204 and SB206 development plan for the Japan territory, including a corresponding timeline and estimated duration for the combined development program. The Company’s current estimated timeline is 7.5 years , starting in February 2017 and completing in the third quarter of 2024. The Company monitors and reassesses the estimated performance period for purposes of revenue recognition during each reporting period. The Company expects to complete its reassessment of the estimated performance period during the second half of 2020, as the Company and Sato continue to evaluate how the combined SB204 and SB206 development program timeline in Japan may potentially be affected by various factors, including (i) the results from the Company’s SB206 Phase 3 trials in the United States, including but not limited to top-line efficacy results announced in January 2020, (ii) the Company’s plans and timelines for the B-SIMPLE4 trial in the United States, which has been and may be further impacted by the COVID-19 pandemic, and (iii) the Company’s in-house drug manufacturing capabilities and the progression of the Company’s manufacturing technology transfer projects with third-party contract manufacturing organizations. Therefore, if the duration of the combined SB204 and SB206 development program timeline is affected by the establishment or subsequent adjustments to a mutually agreed upon SB204 and SB206 development plan in the Japan territory, the Company will adjust its estimated performance period for revenue recognition purposes accordingly, as needed. In future periods, the Company will lift the variable consideration constraint from each contingent payment when there is no longer a probable likelihood of significant revenue reversal. When the constraint is lifted from a milestone payment, the Company will recognize the incremental transaction price using the same time-based input method that is being used to recognize the revenue, which results in straight-line recognition over the performance period. If the Company’s performance is not yet completed at the time that the constraint is lifted, a cumulative catch-up adjustment will be recognized in the period. If no other performance is required by the Company at the time the constraint is lifted, the Company expects to recognize all revenue associated with such milestone payments at the time that the constraint is lifted. Contract Costs—Sato Agreement The Company has incurred certain fees and costs in the process of obtaining the Amended Sato Agreement that were payable upon contract execution and, therefore, have been recognized as other assets and amortized as general and administrative expense on a straight-line basis over the same estimated performance period being used to recognize the associated revenue. These fees are associated with the following two arrangements and are described as follows: • The Company entered into an agreement with a third party to assist the Company in exploring the licensing opportunity which led to the execution of the Sato Agreement. The Company is obligated to pay the third party a low-single-digit percentage of all upfront and milestone payments the Company receives from Sato under the Amended Sato Agreement. • The intellectual property rights granted to Sato under the Sato Agreement include certain intellectual property rights which the Company has licensed from UNC. Under the UNC License Agreement described in Note 3—Research and Development Licenses, the Company is obligated to pay UNC a running royalty percentage in the low single digits on net sales of licensed products, including net sales that may be generated by Sato. Additionally, the Company is obligated to make payments to UNC that represent the portion of the Sato upfront and milestone payments that were estimated to be directly attributable to the UNC intellectual property rights included in the license to Sato. Performance Obligations under the Sato Agreement The net amount of existing performance obligations under long-term contracts unsatisfied as of June 30, 2020 was $9,261 . The Company expects to recognize approximately 24% of the remaining performance obligations as revenue over the next 12 months , and the balance thereafter. The Company applied the practical expedient and does not disclose information about variable consideration related to sales-based or usage-based royalties promised in exchange for a license of intellectual property. This expedient specifically applied to the sales-based milestone payments that are present in the Amended Sato Agreement ( 3.9 billion JPY), as well as percentage-based royalty payments in the Amended Sato Agreement that are contingent upon future sales. Government Contracts and Grant Revenue The Company assessed the following federal grants in accordance with Topic 958 and concluded that both represent conditional non-exchange transactions. In August 2019, the Company received a Phase 1 federal grant of approximately $223 (the “NIH Phase 1 Grant”) from the National Institutes of Health (the “NIH”). The funds are to be used to advance formulation development of a nitric oxide-containing intravaginal gel (WH602) designed to treat high-risk human papilloma virus (“HPV”) infections that can lead to cervical intraepithelial neoplasia (“CIN”). The specific focus is to ensure the nitric oxide delivery from the gel replicates doses of nitric oxide previously demonstrated to be effective against HPV in the Company’s clinical and in vitro studies. Revenue recognized under the NIH Phase 1 Grant was $5 and $29 during the three and six months ended June 30, 2020 , respectively. In February 2020, following the successful progression of the NIH Phase 1 Grant, the Company was awarded a Phase 2 federal grant of approximately $997 from the NIH (the “NIH Phase 2 Grant”) that will enable the conduct of IND-enabling toxicology and pharmacology studies and other preclinical activity with respect to WH602. The NIH Phase 2 Grant funds will be received by the Company in the form of periodic cost reimbursements as the underlying research and development activities are performed. The Company may be eligible to receive additional funding as part of the NIH Phase 2 Grant, subject to availability of NIH funds and satisfactory progress of the project during the initial 12-month term. No revenue was recognized under the NIH Phase 2 Grant during the three and six months ended June 30, 2020 . In September 2019, the Company received a grant from the United States Department of Defense’s Congressionally Directed Medical Research Programs of approximately $1,113 as part of its Peer Reviewed Cancer Research Program. The grant will support the development of a non-gel formulation product candidate (WH504) designed to treat high-risk HPV infections that can lead to CIN, with well-characterized physical chemical properties suitable for intravaginal administration. In addition, the grant will support the evaluation of the effect of varying concentrations and treatment durations of berdazimer sodium (NVN1000) against HPV-18 in human raft cell culture in vitro studies. Revenue recognized under this grant was $216 and $381 during the three and six months ended June 30, 2020 , respectively. |
Research and Development Arrang
Research and Development Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Collaboration Arrangements [Abstract] | |
Research and Development Arrangements | Licensing Arrangements Sato License Agreement Significant Terms On January 12, 2017, the Company entered into a license agreement, and related first amendment, with Sato Pharmaceutical Co., Ltd. (“Sato”), relating to SB204, its drug candidate for the treatment of acne vulgaris in Japan (the “Sato Agreement”). Pursuant to the Sato Agreement, the Company granted to Sato an exclusive, royalty-bearing, non-transferable right and license under certain of the Company’s intellectual property rights, with the right to sublicense with the Company’s prior written consent, to develop, use and sell products in Japan that incorporate SB204 in certain topical dosage forms for the treatment of acne vulgaris, and to make the finished form of such products. On October 5, 2018, the Company and Sato entered into the second amendment (the “Sato Amendment”) to the Sato Agreement (collectively, the “Amended Sato Agreement”). The Sato Amendment expanded the Sato Agreement to include SB206, the Company’s drug candidate for the treatment of viral skin infections. Pursuant to the Amended Sato Agreement, the Company granted to Sato an exclusive, royalty-bearing, non-transferable license under certain of its intellectual property rights, with the right to sublicense with the Company’s prior written consent, to develop, use and sell products in Japan that incorporate SB204 or SB206 in certain topical dosage forms for the treatment of acne vulgaris or viral skin infections, respectively, and to make the finished form of such products. The Company or its designated contract manufacturer will supply finished product to Sato for use in the development of SB204 and SB206 in the licensed territory. The rights granted to Sato do not include the right to manufacture the active pharmaceutical ingredient (“API”) of SB204 or SB206; rather, the parties agreed to negotiate a commercial supply agreement pursuant to which the Company or its designated contract manufacturer would be the exclusive supplier to Sato of the API for the commercial manufacture of licensed products in the licensed territory. Under the terms of the Amended Sato Agreement, the Company also has exclusive rights to certain intellectual property that may be developed by Sato in the future, which the Company could choose to use for its own development and commercialization of SB204 or SB206 outside of Japan. Under the Amended Sato Agreement, in exchange for the SB204 and SB206 license rights granted to Sato, Sato agreed to pay the Company the following: • An upfront payment of 1.25 billion Japanese Yen (“JPY”) payable in installments of 0.25 billion JPY, 0.5 billion JPY and 0.5 billion JPY on October 5, 2018, February 14, 2019 and September 13, 2019 , respectively. This is in addition to the 1.25 billion JPY (approximately $ 10,813 USD) paid on January 19, 2017 following the execution of the Sato Agreement on January 12, 2017. On October 23, 2018, the Company received the first installment from the Amended Sato Agreement of 0.25 billion JPY (approximately $2,224 USD). On March 14, 2019, the Company received the second installment payment related to the Amended Sato Agreement of 0.5 billion JPY (approximately $4,460 USD). On November 7, 2019, the Company received the third installment payment related to the Amended Sato Agreement of 0.5 billion JPY (approximately $4,554 USD). • Up to an aggregate of 1.75 billion JPY (adjusted from 2.75 billion JPY in the Sato Agreement) upon the achievement of various development and regulatory milestones, including (i) a 0.25 billion JPY (approximately $2,162 USD) milestone payment received during the fourth quarter of 2018 following Sato’s initiation of a Phase 1 trial in Japan; and (ii) an aggregate of 1.0 billion JPY that becomes payable upon the earlier occurrence of specified fixed future dates or the achievement of milestone events. • Up to an aggregate of 3.9 billion JPY (adjusted from 0.9 billion JPY in the Sato Agreement) upon the achievement of various commercial milestones. • A tiered royalty ranging from a mid-single digit to a low-double digit percentage (adjusted from a mid-single digit percentage in the Sato Agreement) of net sales of licensed products in the licensed territory, subject to a reduction in the royalty payments in certain circumstances. The term of the Amended Sato Agreement (and the period during which Sato must pay royalties under the amended license agreement) expires on the twentieth anniversary of the first commercial sale of a licensed product in the licensed field in the licensed territory (adjusted from the tenth anniversary of the first commercial sale in the Sato Agreement). The term of the Amended Sato Agreement may be renewed with respect to a licensed product by mutual written agreement of the parties for additional two -year periods following expiration of the initial term. All other material terms of the Sato Agreement remain unchanged by the Sato Amendment. Sato is responsible for funding the development and commercial costs for the program that are specific to Japan. The Company is obligated to perform certain oversight, review and supporting activities for Sato, including: (i) using commercially reasonable efforts to obtain marketing approval of SB204 and SB206 in the United States; (ii) sharing all future scientific information the Company may obtain during the term of the Amended Sato Agreement pertaining to SB204 and SB206; (iii) performing certain additional preclinical studies if such studies are deemed necessary by the Japanese regulatory authority, up to and not to exceed a total cost of $1,000 ; and (iv) participating in a joint committee that oversees, reviews and approves Sato’s development and commercialization activities under the Amended Sato Agreement. Additionally, the Company has granted Sato the option to use the Company’s trademarks in connection with the commercialization of licensed products in the licensed territory for no additional consideration, subject to the Company’s approval of such use. The Amended Sato Agreement may be terminated by (i) Sato without cause upon 120 days ’ advance written notice to the Company; (ii) either party in the event of the other party’s uncured material breach upon 60 days ’ advance written notice; (iii) force majeure; (iv) either party in the event of the other party’s dissolution, liquidation, bankruptcy or insolvency; and (v) the Company immediately upon written notice if Sato challenges the validity, patentability, or enforceability of any of the Company’s patents or patent applications licensed to Sato under the Amended Sato Agreement. In the event of a termination, no portion of the upfront fees received from Sato are refundable. Research and Development Arrangements Royalty and Milestone Payments Purchase Agreement with Reedy Creek Investments LLC On April 29, 2019, the Company entered into a royalty and milestone payments purchase agreement (the “Purchase Agreement”) with Reedy Creek Investments LLC (“Reedy Creek”), pursuant to which Reedy Creek provided funding to the Company in an initial amount of $25,000 , for the Company to use primarily to pursue the development, regulatory approval and commercialization (including through out-license agreements and other third-party arrangements) activities for SB206, a topical anti-viral gel being developed for the treatment of molluscum contagiosum, and advancing programmatically such activities with respect to SB204, a once-daily, topical monotherapy being developed for the treatment of acne vulgaris, and SB414, a topical cream-based product candidate being developed for the treatment of atopic dermatitis. Reedy Creek was to provide additional funding to the Company of $10,000 contingent upon the achievement by the Company of SB206 clinical trial success, defined as (i) the achievement, no later than March 31, 2020, of statistically significant rates of complete clearance of lesions for molluscum contagiosum in humans at week 12 in each of the two Phase 3 clinical trials or any other primary endpoint required or accepted by the FDA for the SB206 product; or (ii) equivalent achievement (as agreed upon by the parties). On January 2, 2020, the Company announced top-line results from two pivotal Phase 3 clinical trials of SB206 for the treatment of molluscum contagiosum. SB206 did not achieve statistically significant results in the primary endpoint in both trials, which was the complete clearance of all molluscum lesions at Week 12. Based on such results, the Company understands that Reedy Creek will not be paying the Company the contingent $10,000 of additional funding. Pursuant to the Purchase Agreement, the Company will pay Reedy Creek ongoing quarterly payments, calculated based on an applicable percentage per product of any upfront fees, milestone payments, royalty payments or equivalent payments received by the Company pursuant to any out-license agreement for SB204, SB206 or SB414 in the United States, Mexico or Canada, net of any upfront fees, milestone payments, royalty payments or equivalent payments paid by the Company to third parties pursuant to any agreements under which the Company has in-licensed intellectual property with respect to such products in the United States, Mexico or Canada. The applicable percentage used for determining the ongoing quarterly payments, applied to amounts received directly by the Company pursuant to any out-license agreement for each product, ranges from 10% for SB206 to 20% for SB204 and SB414. However, the agreement provides that the applicable percentage for each product will be 25% for fees or milestone payments received by the Company (but not royalty payments received by the Company) until Reedy Creek has received payments under the Purchase Agreement equal to the total funding amount provided by Reedy Creek under the Purchase Agreement. If the Company decides to commercialize any product on its own following regulatory approval, as opposed to commercializing through an out-license agreement or other third-party arrangement, the Company will be obligated to pay Reedy Creek a low single digits royalty on net sales of such products. The Company determined that the Reedy Creek Purchase Agreement is within the scope of ASC 730-20, Research and Development Arrangements . The Company concluded that there has not been a substantive and genuine transfer of risk related to the Purchase Agreement as (i) Reedy Creek has the opportunity to recover its investment regardless of the outcome of the research and development programs within the scope of the agreement (prior to commercialization of any in scope assets through potential out-licensing agreements and related potential future milestone payments); and (ii) there is a presumption that the Company is obligated to pay Reedy Creek amounts equal to its investment based on the related party relationship at the time the parties entered into the Purchase Agreement. The Purchase Agreement is a broad funding arrangement, due to (i) the multi-asset, or portfolio approach including three developmental assets that are within the scope of the arrangement; and (ii) Reedy Creek’s approximate 5% ownership of the outstanding shares of common stock of the Company at the time of entry into the Purchase Agreement. As such, the Company determined that the appropriate accounting treatment under ASC 730-20 was to record the initial proceeds of $25,000 as cash and cash equivalents, as the Company had the ability to direct the usage of funds, and a long-term liability within its classified balance sheet. The long-term liability will remain until the Company receives future milestones from other potential third parties, as defined within the Purchase Agreement, of which 25% will be contractually owed to Reedy Creek. If potential future milestones are received by the Company, and become partly due to Reedy Creek, the corresponding partial repayment to Reedy Creek will result in a ratable reduction of the total long-term obligation to repay the initial purchase price. Development Funding and Royalties Agreement with Ligand Pharmaceuticals Incorporated On May 4, 2019, the Company entered into a development funding and royalties agreement (the “Funding Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”), pursuant to which Ligand provided funding to the Company of $12,000 , for the Company to use to pursue the development and regulatory approval of SB206, a topical anti-viral gel being developed for the treatment of molluscum contagiosum. Pursuant to the Funding Agreement, the Company will pay Ligand up to $20,000 in milestone payments upon the achievement by the Company of certain regulatory and commercial milestones associated with SB206 or any product that incorporates or uses NVN1000, the active pharmaceutical ingredient for the Company’s clinical stage product candidates, for the treatment of molluscum contagiosum. In addition to the milestone payments, the Company will pay Ligand tiered royalties ranging from 7% to 10% based on annual aggregate net sales of such products in the United States, Mexico or Canada. The Company determined that the Ligand transaction is within the scope of ASC 730-20 as it represents an obligation to perform contractual services for the development of SB206 using commercially reasonable efforts. In addition, the Funding Agreement also states that if all development of SB206 is ceased prior to the first regulatory approval, the Company must pay to Ligand an amount equal to the purchase price less the amount spent in accordance with the development budget on development activities conducted prior to such cessation. As such, the Company concluded that the appropriate accounting treatment under ASC 730-20 was to record the initial proceeds of $12,000 , as a liability and as restricted cash on its consolidated balance sheet, as the funds could only be used for the progression of SB206. The Company amortizes the liability ratably during each reporting period, based on the Ligand funding as a percentage of the total direct costs incurred by the Company during the reporting period related to the estimated total cost to progress the SB206 program to a regulatory approval in the United States The ratable Ligand funding is presented within the consolidated statement of operations as an offset to research and development expenses associated with the SB206 program. During the quarter ended June 30, 2020 , the Company completed a reassessment of the estimated total cost to progress the SB206 program to a potential United States regulatory approval, including consideration of how such estimated costs may potentially be affected by various regulatory, clinical development, and drug manufacturing and supply factors. During this reassessment, the Company concluded that the incremental costs associated with the conduct of the additional B-SIMPLE4 clinical trial would be excluded from the total cost basis used to amortize the liability because they were not contemplated within the Ligand Funding Agreement. The reassessment also concluded that the other projected costs to progress SB206 to a planned regulatory approval in the United States, most of which are regulatory costs associated with the NDA submission process, did not materially change and did not have a material effect on the amortization of the liability. The initial restricted cash balance was also reduced ratably during interim reporting periods in 2019 in a manner consistent with the amortization method for the Ligand funding liability balance. As of December 31, 2019, the aggregate amount spent in accordance with the SB206 development budget on SB206 development activities had exceeded the $12,000 purchase price, causing the aforementioned repayment provision provided for in the Funding Agreement to no longer be enforceable. Therefore, the Company reported no restricted cash balance related to the Funding Agreement, as of December 31, 2019 or June 30, 2020 in its condensed consolidated balance sheet. For the three and six months ended June 30, 2020 , the Company recorded $369 and $1,882 , respectively, as contra-research and development expense related to the SB206 developmental program, funded by Ligand. For each of the three and six month periods ended June 30, 2019 , the Company recorded $2,193 as contra-research and development expense related to the SB206 developmental program, funded by Ligand. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment consisted of the following: June 30, December 31, Computer equipment $ 575 $ 575 Furniture and fixtures 305 305 Laboratory equipment 8,077 7,898 Office equipment 339 339 Leasehold improvements 7,053 7,068 Property and equipment, gross 16,349 16,185 Less: Accumulated depreciation and amortization (6,611 ) (5,679 ) Property and equipment, net of accumulated depreciation and amortization 9,738 $ 10,506 Less: Impairment charges on assets held and used or upon classification of assets held for sale (2,421 ) — Property and equipment, net of accumulated depreciation and impairment charge 7,317 10,506 Less: Property and equipment reclassified to assets held for sale, net (977 ) — Property and equipment, net of assets classified as held for sale $ 6,340 $ 10,506 Depreciation and amortization expense was $492 and $987 for the three and six months ended June 30, 2020 , respectively, and $518 and $1,021 for the three and six months ended June 30, 2019 , respectively. As discussed in Note 14—Assets Held for Sale, Impairment Charges, the Company met the relevant criteria for reporting certain property and equipment as held for sale on June 29, 2020, and as a result, the Company stopped recording depreciation expense on that date and assessed the property and equipment assets for impairment pursuant to FASB Topic 360, Property, Plant, and Equipment . The Company also assessed its remaining property and equipment held for use for potential impairment as of June 29, 2020, as discussed in Note 14—Assets Held for Sale, Impairment Charges. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Obligations The Company leases office space and certain equipment under non-cancelable lease agreements. Pursuant to the Company’s accounting policy and applicable guidance in ASC 842, Leases, the Company assesses all arrangements that convey the right to control the use of property, plant and equipment, at inception, to determine if each such arrangement is, or contains, a lease based on the unique facts and circumstances present in that arrangement. For those leases identified, the Company determines the lease classification, recognition, and measurement at the lease commencement date. For arrangements that contain a lease the Company: (i) identifies lease and non-lease components; (ii) determines the consideration in the contract; (iii) determines whether the lease is an operating or financing lease; and (iv) recognizes lease Right of Use (“ROU”) assets and corresponding lease liabilities. Lease liabilities are recorded based on the present value of lease payments over the expected lease term. The corresponding ROU asset is measured from the initial lease liability, adjusted by (i) accrued or prepaid rents; (ii) remaining unamortized initial direct costs and lease incentives; and (iii) any impairments of the ROU asset. The Company separates lease components (fixed rent payments) from non-lease components (common-area maintenance costs) on its real estate assets. Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are expensed as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within the Company’s condensed consolidated statements of operations. The Company does not recognize an ROU asset or corresponding liability for lease arrangements with an original term of 12 months or less. The interest rate implicit in the Company’s lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. The weighted average discount rate utilized on the Company’s operating lease liabilities as of June 30, 2020 was 9.85% . The weighted average remaining lease term for the Company’s operating leases as of June 30, 2020 was 6 years. Primary Facility Lease In August 2015, the Company entered into a lease agreement for approximately 51,000 rentable square feet of facility space in Morrisville, North Carolina, commencing in April 2016 (the “Primary Facility Lease”). The initial term of the Primary Facility Lease extends through June 30, 2026 . The Company has an option to extend the Primary Facility Lease by five years upon completion of the initial lease term; however, the renewal period was not included in the calculation of the lease obligation. Current contractual base rent payments are $95 per month, subject to a three percent increase annually over the term of the Primary Facility Lease. Rent expense, including both short-term and variable lease components associated with the primary facility lease, was $171 and $395 for the three and six months ended June 30, 2020 , and $273 and $430 for the three and six months ended June 30, 2019 , respectively. See Note 14—Assets Held for Sale, Impairment Charges for the Company’s assessment of the right of use asset for potential impairment as of June 29, 2020. See Note 15—Subsequent Events regarding the Company's termination of the Primary Facility Lease in July 2020, and the concurrent execution of a sublease agreement. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. See Legal Proceedings below for further discussion of pending legal claims. The Company has entered into, and expects to continue to enter into, contracts in the normal course of business with various third parties who support its clinical trials, preclinical research studies and other services related to its development activities. The scope of the services under these agreements can generally be modified at any time, and these agreements can generally be terminated by either party after a period of notice and receipt of written notice. There have been no material contract terminations as of June 30, 2020 . See Note 3—Research and Development Licenses regarding the Company’s research and development license agreements. See Note 6—Research and Development Arrangements regarding the Purchase Agreement with Reedy Creek and the Funding Agreement with Ligand. See Note 10—Stockholders’ Equity (Deficit) regarding outstanding warrants relating to the January 2018 Public Offering, the March 2020 Public Offering and the March 2020 Registered Direct Offering. Legal Proceedings The Company is not currently a party to any material legal proceedings and is not aware of any claims or actions pending or threatened against the Company that the Company believes could have a material adverse effect on the Company’s business, operating results, cash flows or financial statements. In the future, the Company might from time to time become involved in litigation relating to claims arising from its ordinary course of business. Compensatory Obligations In conjunction with the departures of two former Company officers in 2019, the Company entered into separation and general release agreements that included separation benefits consistent with the Company’s obligations under their previously existing employment agreements for “separation from service” for “good reason.” The Company recognized related severance expense of $0 and $878 , during the six months ended June 30, 2020 and 2019 , respectively. The accrued severance obligation in respect of the two former officers was $33 as of December 31, 2019 and was fully paid as of June 30, 2020 . As part of a strategic objective to reduce the Company’s costs related to internal resources, facilities, and infrastructure capabilities, the Company took actions in February 2020 to reduce the Company’s internal resources. Employee severance costs associated with this action were $59 , which were expensed during the first quarter of 2020. As of June 30, 2020 , there were no severance costs accrued in the accompanying condensed consolidated balance sheet. See Note 11—Share-Based Compensation regarding the Stock Appreciation Rights granted in January 2020. See Note 12—Tangible Stockholder Return Plan regarding the Tangible Stockholder Return Plan adopted in August 2018. |
Paycheck Protection Program
Paycheck Protection Program | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Paycheck Protection Program | Paycheck Protection Program On April 22, 2020, the Company entered into a promissory note (the “Note”) evidencing an unsecured loan in the amount of approximately $956 made to the Company (the “Loan”) under the Paycheck Protection Program (the “PPP”). The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the United States Small Business Administration (the “SBA”). The Loan to the Company was made through PNC Bank, National Association. Subject to the terms of the Note, the Loan bears interest at a fixed rate of one percent ( 1% ) per annum, with the first six months of interest deferred. Principal and interest are payable monthly commencing on the first day of the next month after the expiration of the initial six -month deferment period and may be prepaid by the Company at any time prior to the April 22, 2022 maturity date without penalty. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of loan proceeds for payment of permitted and eligible payroll costs, mortgage interest, rent and utilities. Interest payable on the Note may be forgiven only if the SBA agrees to pay such interest on the forgiven principal amount of the Note. No assurance is provided that the Company will obtain forgiveness of the Loan in whole or in part. The Company will be obligated to repay any portion of the principal amount of the Note that is not forgiven, together with interest accrued and accruing thereon at the rate set forth above, until such unforgiven portion is paid in full. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Stockholders’ Equity (Deficit) Capital Structure In conjunction with the completion of the Company’s initial public offering in September 2016, the Company further amended its amended and restated certificate of incorporation and amended and restated its bylaws. The amendment provides for 210,000,000 authorized shares of capital stock, of which 200,000,000 shares have been designated as $0.0001 par value common stock and 10,000,000 shares have been designated as $0.0001 par value preferred stock. March 2020 Public Offering On February 27, 2020, the Company entered into an underwriting agreement with H.C. Wainwright, as underwriter, relating to the offering, issuance and sale of 14,000,000 shares of common stock, pre-funded warrants to purchase 4,333,334 shares of common stock (the “CMPO Pre-Funded Warrants”), and accompanying common warrants to purchase up to an aggregate of 18,333,334 shares of common stock (the “firm warrants”). The Company also granted H.C. Wainwright, as underwriter, a 30 -day option to purchase up to 2,750,000 additional shares of common stock and/or common warrants to purchase up to an aggregate of 2,750,000 shares of common stock, which H.C. Wainwright partially exercised on March 2, 2020 to purchase 1,498,602 shares of common stock and common warrants to purchase 2,750,000 shares of common stock (the “option warrants,” and together with the firm warrants, the “CMPO Common Warrants”). The combined price to the public in this offering for each share of common stock and accompanying common warrants was $0.30 , and the combined price to the public in this offering for each pre-funded warrant and accompanying common warrant was $0.2999 . The March 2020 Public Offering closed on March 3, 2020. At closing, the Company also issued to designees of H.C. Wainwright, as underwriter, warrants to purchase an aggregate of up to 594,958 shares of common stock (the “CMPO UW Warrants”) representing 3.0% of the aggregate number of shares of common stock sold and shares of common stock underlying the pre-funded warrants sold in the March 2020 Public Offering. The CMPO Pre-Funded Warrants have an exercise price of $0.0001 per share and continue in effect until such warrants are exercised in full. The CMPO Common Warrants have an exercise price of $0.30 per share and expire five years from the date of issuance. The CMPO UW Warrants have an exercise price of $0.375 per share and expire five years from the date of issuance. Through June 30, 2020 , warrant holders exercised a total of 4,333,334 CMPO Pre-Funded Warrants and 18,210,667 CMPO Common Warrants. As of June 30, 2020 , there were 2,872,667 CMPO Common Warrants and 594,958 CMPO UW Warrants outstanding. As of June 30, 2020 , all of the CMPO Pre-Funded Warrants had been exercised in full, such that there were no more CMPO Pre-Funded Warrants outstanding as of such date. Net proceeds from the offering were approximately $5,158 after deducting underwriting discounts and commissions and offering expenses of approximately $791 . Offering costs were netted against the offering proceeds and recorded to additional paid-in capital. In addition, proceeds from the exercises of CMPO Common Warrants were approximately $5,463 through June 30, 2020 . Common warrants and underwriter warrants. The CMPO Common Warrants and CMPO UW Warrants include certain provisions that establish warrant holder settlement rights that take effect upon the occurrence of certain fundamental transactions. The CMPO Common Warrants and the CMPO UW Warrants define a fundamental transaction to generally include any consolidation, merger or other transaction whereby another entity acquires more than 50% of the Company’s outstanding common stock or the sale of all or substantially all of the Company’s assets. The fundamental transaction provision provides the warrant holders with the option to settle any unexercised warrants for cash in the event of certain fundamental transactions that are within the control of the Company. For any fundamental transaction that is not within the control of the Company, including a fundamental transaction not approved by the Company’s board of directors, the warrant holder will only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the stockholders of the Company in connection with the fundamental transaction, whether that consideration be in the form of cash, stock or any combination thereof. In the event of any fundamental transaction, and regardless of whether it is within the control of the Company, the settlement amount of the CMPO Common Warrants and the CMPO UW Warrants (whether in cash, stock or a combination thereof) is determined based upon a Black-Scholes value that is calculated using inputs as specified in the CMPO Common Warrants and the CMPO UW Warrants, including a defined volatility input equal to the greater of the Company’s 100 -day historical volatility or 100% . The CMPO Common Warrants and CMPO UW Warrants also include a separate provision whereby the exercisability of such warrants may be limited if, upon exercise, the warrant holder or any of its affiliates would beneficially own more than 4.99% (or an amount up to 9.99% if the holder so elects) of the Company’s common stock. The Company has assessed the CMPO Common Warrants and the CMPO UW Warrants for appropriate equity or liability classification pursuant to the Company’s accounting policy described in Note 1—Organization and Significant Accounting Policies. During this assessment, the Company determined (i) the CMPO Common Warrants and the CMPO UW Warrants do not constitute a liability under ASC 480; (ii) the CMPO Common Warrants and the CMPO UW Warrants meet the definition of a derivative under ASC 815; (iii) the warrant holder’s option to receive a net cash settlement payment under the CMPO Common Warrants and the CMPO UW Warrants only becomes exercisable upon the occurrence of certain specified fundamental transactions that are within the control of the Company; (iv) upon the occurrence of a fundamental transaction that is not within the control of the Company, the warrant holder would receive the same type or form of consideration offered and paid to common stockholders; (v) the CMPO Common Warrants and the CMPO UW Warrants are indexed to the Company’s common stock; and (vi) the CMPO Common Warrants and the CMPO UW Warrants meet all other conditions for equity classification under ASC 480 and ASC 815. Based on the results of this assessment, the Company concluded that the CMPO Common Warrants and the CMPO UW Warrants are freestanding equity-linked derivative instruments that meet the criteria for the own-equity scope exception to derivative accounting under ASC 815. Accordingly, the CMPO Common Warrants and the CMPO UW Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. Pre-funded warrants . The CMPO Pre-Funded Warrants’ fundamental transaction provision does not provide the warrant holders with the option to settle any unexercised warrants for cash in the event of any fundamental transactions; rather, in all fundamental transaction scenarios, the warrant holder will only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the stockholders of the Company in connection with the fundamental transaction, whether that consideration be in the form of cash, stock or any combination thereof. The CMPO Pre-Funded Warrants also include a separate provision whereby the exercisability of the warrants may be limited if, upon exercise, the warrant holder or any of its affiliates would beneficially own more than 4.99% (or an amount up to 9.99% if the holder so elects) of the Company’s common stock. The Company has assessed the CMPO Pre-Funded Warrants for appropriate equity or liability classification pursuant to the Company’s accounting policy described in Note 1—Organization and Significant Accounting Policies. During this assessment, the Company determined the CMPO Pre-Funded Warrants are freestanding instruments that do not meet the definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to ASC 815. The CMPO Pre-Funded Warrants are indexed to the Company’s common stock and meet all other conditions for equity classification under ASC 480 and ASC 815. Based on the results of this assessment, the Company concluded that the CMPO Pre-Funded Warrants are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. Accordingly, the CMPO Pre-Funded Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. March 2020 Registered Direct Offering On March 24, 2020, the Company entered into a securities purchase agreement with several institutional and accredited investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering priced at the market, an aggregate of 10,550,000 shares of the Company’s common stock and pre-funded warrants to purchase 8,054,652 shares of common stock (the “RDO Pre-Funded Warrants”). The purchase price for each share of common stock was $0.43 , and the price for each pre-funded warrant was $0.4299 . The March 2020 Registered Direct Offering closed on March 26, 2020. At closing, the Company also issued to designees of H.C. Wainwright, as placement agent, warrants to purchase an aggregate of up to 558,140 shares of common stock (the “RDO PA Warrants”) representing 3.0% of the aggregate number of shares of common stock sold and shares of common stock underlying the pre-funded warrants sold in the March 2020 Registered Direct Offering. Net proceeds from the offering were approximately $7,225 after deducting fees and commissions and offering expenses of approximately $774 . Offering costs were netted against the offering proceeds and recorded to additional paid-in capital. The RDO Pre-Funded Warrants have an exercise price of $0.0001 per share and continue in effect until such warrants are exercised in full. The RDO PA Warrants have an exercise price of $0.5375 per share and expire five years from the date of issuance. Through June 30, 2020 , warrant holders exercised all of the 8,054,652 RDO Pre-Funded Warrants that were issued. As of June 30, 2020 , there were no RDO Pre-Funded Warrants and 558,140 RDO PA Warrants outstanding. Placement agent warrants. The RDO PA Warrants contain substantially similar terms as the CMPO UW Warrants, including fundamental transaction settlement provisions. The Company conducted an assessment of the RDO PA Warrants for appropriate equity or liability classification pursuant to the Company’s accounting policy described in Note 1—Organization and Significant Accounting Policies. The Company reached the same determinations as described above for the CMPO UW Warrants, and the Company concluded that the RDO PA Warrants are freestanding equity-linked derivative instruments that meet the criteria for the own-equity scope exception to derivative accounting under ASC 815. Accordingly, the RDO PA Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. Pre-funded warrants . The RDO Pre-Funded Warrants contain substantially similar terms as the CMPO Pre-Funded Warrants, including fundamental transaction settlement provisions that do not provide the warrant holders with the option to settle any unexercised warrants for cash in the event of any fundamental transactions; rather, in all fundamental transaction scenarios, the warrant holder will only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the stockholders of the Company in connection with the fundamental transaction, whether that consideration be in the form of cash, stock or any combination thereof. The Company conducted an assessment of the RDO Pre-Funded Warrants for appropriate equity or liability classification pursuant to the Company’s accounting policy described in Note 1—Organization and Significant Accounting Policies. The Company reached the same determinations as described above for the CMPO Pre-Funded Warrants, and the Company concluded that the RDO Pre-Funded Warrants are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. Accordingly, the RDO Pre-Funded Warrants are classified as equity and are accounted for as a component of additional paid-in capital at the time of issuance. January 2018 Offering On January 9, 2018, the Company completed a public offering of its common stock and warrants pursuant to the Company’s effective shelf registration statement (the “January 2018 Offering”). The Company sold an aggregate of 10,000,000 shares of common stock and warrants to purchase up to 10,000,000 shares of the Company’s common stock at a public offering price of $3.80 per share of common stock and accompanying warrant. The warrant exercise price is $4.66 per share and will expire four years from the date of issuance. Net proceeds from the offering were approximately $35,194 after deducting underwriting discounts and commissions and offering expenses of approximately $2,806 . The warrants issued in connection with the January 2018 Offering are freestanding equity-linked derivative instruments that meet the criteria for the own-equity scope exception to derivative accounting under ASC 815. Accordingly, such warrants have been classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. Offering costs were netted against the offering proceeds and recorded to additional paid-in capital. Aspire Common Stock Purchase Agreements June 2020 Aspire CSPA On June 15, 2020, the Company entered into the June 2020 Aspire CSPA with Aspire Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $20,000 of shares of the Company’s common stock at the Company’s request from time to time during the 30 -month term of the Purchase Agreement. The June 2020 Aspire CSPA replaced the prior common stock purchase agreement, dated as of August 30, 2019, between the Company and Aspire Capital (the “2019 Aspire CSPA”), which was terminated under the terms of the June 2020 Aspire CSPA . See below for terms of the 2019 Aspire CSPA. Concurrently with entering into the June 2020 Aspire CSPA , the Company also entered into a registration rights agreement with Aspire Capital, in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended (the “Securities Act”), registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the June 2020 Aspire CSPA . On June 17, 2020, the Company filed with the SEC, a prospectus supplement to the Company’s effective shelf Registration Statement on Form S-3 (File No. 333-236583) registering all of the shares of common stock that may be offered to Aspire Capital from time to time. Under the terms of the June 2020 Aspire CSPA , on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “June 2020 Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 300,000 shares of the Company’s common stock per business day, up to an aggregate of $20,000 of the Company’s common stock, at a per share price (the “June 2020 Purchase Price”) equal to the lesser of (i) the lowest sale price of the Company’s common stock on the purchase date; or (ii) the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the purchase date. The aggregate purchase price payable by Aspire Capital on any one purchase date may not exceed $500 , unless otherwise mutually agreed. The parties may mutually agree to increase the number of shares of the Company’s common stock that may be purchased per trading day pursuant to the terms of the June 2020 Aspire CSPA to up to 2,000,000 shares. In addition, on any date on which the Company submits a June 2020 Purchase Notice to Aspire Capital in an amount equal to 300,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “June 2020 VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “June 2020 VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such June 2020 VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the June 2020 VWAP Purchase Date. The June 2020 Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the June 2020 Purchase Price. The Company may deliver multiple June 2020 Purchase Notices and June 2020 VWAP Purchase Notices to Aspire Capital from time to time during the term of the June 2020 Aspire CSPA , so long as the most recent purchase has been completed. The June 2020 Aspire CSPA provides that the Company and Aspire Capital shall not effect any sales under the June 2020 Aspire CSPA on any purchase date where the closing sale price of the Company’s common stock is less than $0.15 . There are no trading volume requirements or restrictions under the June 2020 Aspire CSPA , and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the June 2020 Aspire CSPA . There are no limitations on use of proceeds, financial or business covenants, restrictions on future financing transactions, rights of first refusal, participation rights, penalties or liquidated damages in the June 2020 Aspire CSPA . The June 2020 Aspire CSPA may be terminated by the Company at any time, at its discretion, without any penalty or additional cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the June 2020 Aspire CSPA . Any proceeds the Company receives under the June 2020 Aspire CSPA are expected to be used for working capital and general corporate purposes. The June 2020 Aspire CSPA provides that the number of shares that may be sold pursuant to the June 2020 Aspire CSPA will be limited to 15,859,487 shares (the “June 2020 Exchange Cap”), which represents 19.99% of the Company’s outstanding shares of common stock on June 15, 2020, unless stockholder approval or an exception pursuant to the rules of the Nasdaq Global Market is obtained to issue more than 19.99% . This limitation will not apply if, at any time the June 2020 Exchange Cap is reached and at all times thereafter, the average price paid for all shares issued under the June 2020 Aspire CSPA is equal to or greater than $0.414 , which is the price equal to the closing sale price of the Company’s common stock immediately preceding the execution of the June 2020 Aspire CSPA . The Company is not required or permitted to issue any shares of common stock under the June 2020 Aspire CSPA if such issuance would breach its obligations under the rules or regulations of the Nasdaq Global Market. The Company may, in its sole discretion, determine whether to obtain stockholder approval to issue more than 19.99% of its outstanding shares of Common Stock hereunder if such issuance would require stockholder approval under the rules or regulations of the Nasdaq Global Market. In consideration for entering into the June 2020 Aspire CSPA , upon satisfaction of certain conditions under the June 2020 Aspire CSPA , the Company issued to Aspire Capital 1,449,275 shares of the Company’s common stock (the “June 2020 Commitment Shares”). These June 2020 Commitment Shares valued at approximately $848 were recorded in June 2020 as non-cash costs of equity financing. As of June 30, 2020 , the Company has sold 30,025,000 shares of common stock at an average price of $0.49 per share under the June 2020 Aspire CSPA , for total proceeds of $14,805 . As of June 30, 2020, the Company had remaining availability for sales of its common stock under the June 2020 Aspire CSPA of up to $5,195 . See Note 15—Subsequent Events regarding the Company's entering into another common stock purchase agreement with Aspire Capital dated July 21, 2020, which replaced the June 2020 Aspire CSPA. 2019 Aspire CSPA On August 30, 2019, the Company entered into the 2019 Aspire CSPA , which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $25,000 of shares of the Company’s common stock at the Company’s request from time to time during the 30 -month term of the Purchase Agreement. Concurrently with entering into the 2019 Aspire CSPA , the Company also entered into a registration rights agreement with Aspire Capital, in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act, registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the 2019 Aspire CSPA . On September 16, 2019, the Company filed with the SEC, a prospectus to the effective Registration Statement on Form S-1 (File No. 333-233632) registering 7,032,630 shares of common stock that have been and may be offered to Aspire Capital from time to time under the 2019 Aspire CSPA . Under the terms of the 2019 Aspire CSPA , on any trading day selected by the Company, the Company had the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “2019 Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 100,000 shares of the Company’s common stock per business day, up to $25,000 of the Company’s common stock in the aggregate at a per share price (the “2019 Purchase Price”) equal to the lesser of (i) the lowest sale price of the Company’s common stock on the purchase date, or (ii) the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the purchase date. The aggregate purchase price payable by Aspire Capital on any one purchase date could not exceed $500 . In addition, on any date on which the Company submitted a 2019 Purchase Notice to Aspire Capital in an amount equal to 100,000 shares, the Company also had the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “2019 VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “2019 VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice was generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. The 2019 Purchase Price would have been adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the 2019 Purchase Price. The Company could deliver multiple 2019 Purchase Notices and 2019 VWAP Purchase Notices to Aspire Capital from time to time during the term of the 2019 Aspire CSPA , so long as the most recent purchase has been completed. The 2019 Aspire CSPA provided that the Company and Aspire Capital would not effect any sales under the 2019 Aspire CSPA on any purchase date where the closing sale price of the Company’s common stock was less than $0.25 . There were no trading volume requirements or restrictions under the 2019 Aspire CSPA , and the Company controlled the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to make purchases from the Company as directed by the Company in accordance with the 2019 Aspire CSPA . There were no limitations on use of proceeds, financial or business covenants, restrictions on future financing transactions, rights of first refusal, participation rights, penalties or liquidated damages in the 2019 Aspire CSPA . The 2019 Aspire CSPA could be terminated by the Company at any time, at its discretion, without any penalty or additional cost to the Company. Aspire Capital agreed that neither it nor any of its agents, representatives and affiliates would engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the 2019 Aspire CSPA . Any proceeds the Company received under the 2019 Aspire CSPA were used for working capital and general corporate purposes. The 2019 Aspire CSPA provided that the number of shares that may be sold pursuant to the 2019 Aspire CSPA will be limited to 5,211,339 shares (the “2019 Exchange Cap”), which represented 19.99% of the Company’s outstanding shares of common stock on August 30, 2019, unless stockholder approval or an exception pursuant to the rules of the Nasdaq Global Market was obtained to issue more than 19.99% . This limitation did not apply if, at any time the 2019 Exchange Cap was reached and at all times thereafter, the average price paid for all shares issued under the 2019 Aspire CSPA was equal to or greater than $2.17 , which was the closing sale price of the Company’s common stock immediately preceding the execution of the 2019 Aspire CSPA . The Company was not required or permitted to issue any shares of common stock under the 2019 Aspire CSPA if such issuance would breach its obligations under the rules or regulations of the Nasdaq Global Market. The Company may, in its sole discretion, determine whether to obtain stockholder approval to issue more than 19.99% of its outstanding shares of Common Stock hereunder if such issuance would require stockholder approval under the rules or regulations of the Nasdaq Global Market. In consideration for entering into the 2019 Aspire CSPA , concurrently with the execution of the 2019 Aspire CSPA , the Company issued to Aspire Capital 345,622 shares of the Company’s common stock (the “Commitment Shares”). These Commitment Shares valued at $750 were recorded in 2019 as non-cash costs of equity financing. In addition to the limitations noted above, pursuant to the securities purchase agreement relating to the March 26, 2020 Registered Direct Offering, the Company was prohibited from issuing additional securities in any variable rate transaction (as defined in the securities purchase agreement), including under the 2019 Aspire CSPA for a period of one year , unless, following the 60th day of the date of the securities purchase agreement, the VWAP (as defined in the securities purchase agreement) was greater than the per share purchase price of the March 2020 Registered Direct Offering for five consecutive trading days. In early June 2020, the Company’s stock price achieved a VWAP greater than the per share purchase price of the March 2020 Registered Direct Offering for five consecutive trading days. As such, in early June 2020, the prohibition related to issuing additional securities in any variable rate transaction, including the 2019 Aspire CSPA, was no longer applicable. During the quarter ended June 30, 2020 , the Company sold an aggregate of 3,865,717 shares of common stock to Aspire Capital under the 2019 Aspire CSPA, generating aggregate proceeds of $1,838 . This is in addition to the 700,000 shares of common stock sold to Aspire Capital in the first quarter of 2020, for an aggregate of 4,565,717 shares sold under the 2019 Aspire CSPA for the six months ended June 30, 2020 . From the inception of the 2019 Aspire CSPA through the termination of the 2019 Aspire CSPA on June 15, 2020 in connection with the Company entering into the June 2020 Aspire CSPA, the Company sold a total of 4,865,717 shares of common stock at an average price of $0.62 per share under the 2019 Aspire CSPA, for total proceeds of $3,026 . There was no remaining availability for sales of its common stock under the 2019 Aspire CSPA when it was replaced by the June 2020 Aspire CSPA. Common Stock The Company’s common stock has a par value of $0.0001 per share and consists of 200,000,000 authorized shares as of June 30, 2020 and December 31, 2019 . There were 119,422,047 and 26,734,800 shares of voting common stock outstanding as of June 30, 2020 and December 31, 2019 , respectively. The Company had reserved shares of common stock for future issuance as follows: June 30, 2020 December 31, 2019 Outstanding stock options (Note 11) 1,994,329 1,789,303 Warrants to purchase common stock issued in January 2018 Offering (Note 10) 10,000,000 10,000,000 Warrants to purchase common stock issued in March 2020 Public Offering (Note 10) 3,467,625 — Warrants to purchase common stock issued in March 2020 Registered Direct Offering (Note 10) 558,140 — Outstanding stock appreciation rights (Note 11) 600,000 1,000,000 For possible future issuance under 2016 Stock Plan (Note 11) 549,437 388,463 17,169,531 13,177,766 Preferred Stock The Company’s amended and restated certificate of incorporation provides the Company’s board of directors with the authority to issue $0.0001 par value preferred stock from time to time in one or more series by adopting a resolution and filing a certificate of designations. Voting powers, designations, preferences, dividend rights, conversion rights and liquidation preferences shall be stated and expressed in such resolutions. There were 10,000,000 shares designated as preferred stock and no shares outstanding as of June 30, 2020 and December 31, 2019 . |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation 2016 Stock Plan During the six months ended June 30, 2020 , the Company continued to administer and grant awards under the 2016 Incentive Award Plan (the “2016 Plan”), the Company’s only active equity incentive plan. Certain of the Company’s outstanding and exercisable stock options remain subject to the terms of the Company’s 2008 Stock Plan (the “2008 Plan”), which is the predecessor to the 2016 Plan and became inactive upon adoption of the 2016 Plan effective September 20, 2016. On July 31, 2019, the Company’s stockholders approved an amendment to the 2016 Plan (“the 2016 Plan Amendment”), to increase the number of shares reserved under the 2016 Plan by 1,000,000 and to increase the award limit on the maximum aggregate number of shares of the Company’s common stock that may be granted to any one person during any calendar year from 250,000 to 1,000,000 shares of the Company’s common stock. All other material terms of the 2016 Plan otherwise remain unchanged. Stock Appreciation Rights On August 8, 2018 , the Company entered into an employment agreement with G. Kelly Martin (the “Martin Employment Agreement”). The Employment Agreement provided for 1,000,000 stock appreciation rights (“SARs”) (the “Martin SAR Award”) granted on a contingent basis that would have been irrevocably forfeited and voided in full if the Company had failed to obtain stockholder approval for the 2016 Plan Amendment. If such approval had not been obtained, the Company would have been required to pay Mr. Martin the cash equivalent of the value of the Martin SAR Award. Following stockholder approval of the 2016 Plan Amendment, the Martin SAR Award was no longer considered to be granted on a contingent basis. The Martin SAR Award entitled Mr. Martin to a payment (in cash, shares of common stock or a combination of both) equal to the fair market value of one share of the Company’s common stock on the date of exercise less the exercise price of $3.80 per share. The SARs were to be deemed automatically exercised and settled as of February 1, 2020, provided Mr. Martin remained continuously employed with the Company through such date unless vesting was otherwise expressly accelerated pursuant to the Martin SAR Award. The Martin SAR Award vested in full on February 1, 2020. On February 1, 2020, the fair market value of the Company’s common stock was $0.52 per share, and as such, the Martin SAR Award expired unexercised and 1,000,000 shares became available to be granted under the 2016 Plan. Effective December 17, 2019, the Company entered into an amended and restated employment agreement with Paula Brown Stafford (the “Amended and Restated Stafford Employment Agreement”). On January 6, 2020, following the release of top-line results of the Company’s Phase 3 molluscum clinical program as provided in the Amended and Restated Stafford Employment Agreement, 600,000 SARs were granted to Ms. Stafford with an exercise price of $0.82 per share (the fair market value of the Company’s common stock on the grant date) and with a ten year term (the “Stafford SAR Award”). The Stafford SAR Award was granted on a contingent basis and would have been considered irrevocably forfeited and voided in full if sufficient shares of the Company’s common stock were not available under the 2016 Plan or if the Company failed to obtain stockholder approval for amendments to the 2016 Plan at the next annual stockholders’ meeting to provide sufficient shares for the Stafford SAR Award. Such shares became available under the 2016 Plan on February 1, 2020, and the Stafford SAR Award was no longer considered granted on a contingent basis. During the three and six months ended June 30, 2020 , the Company recorded employee share-based compensation expense related to both SAR awards, of $29 and $91 , respectively. During the three and six months ended June 30, 2019 , the Company recorded employee share-based compensation expense related to the Martin SAR Award, of $409 and $416 , respectively. Inducement Grants During the years ended 2019 and 2018, the Company awarded nonstatutory stock options to purchase shares of common stock to newly-hired employees, as inducements material to the individuals’ entering into employment with the Company within the meaning of Nasdaq Listing Rule 5635(c)(4) (the “Inducement Grants”). On May 31, 2018, the Company awarded 100,500 Inducement Grants with an exercise price of $3.15 per share, and on September 6, 2019, the Company awarded 25,000 Inducement Grants with an exercise price of $2.62 per share. The Inducement Grants were awarded outside of the Company’s 2016 Plan, pursuant to Nasdaq Listing Rule 5635(c)(4), but have terms and conditions generally consistent with the Company’s 2016 Plan and vest over three years, subject to the employee’s continued service as an employee or consultant through the vesting period. During the first quarter of 2020, the 25,000 Inducement Grants related to the September 6, 2019 award were forfeited in their entirety. Stock Compensation Expense During the three and six months ended June 30, 2020 , the Company recorded employee share-based compensation expense of $419 and $691 , respectively. During the three and six months ended June 30, 2019, the Company recorded employee share-based compensation expense of $1,540 and $1,754 , respectively. Total share-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 303 $ 520 $ 511 $ 581 General and administrative 116 1,020 180 1,173 $ 419 $ 1,540 $ 691 $ 1,754 Stock option activity for the six months ended June 30, 2020 is as follows: Shares Subject to Outstanding Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding as of December 31, 2019 1,789,303 $ 3.89 Options granted 417,000 0.46 Options forfeited (211,974 ) 3.79 Options exercised — — Options outstanding as of June 30, 2020 1,994,329 $ 3.18 7.89 $ 11 On February 13, 2020, the Company issued 383,000 stock options from the 2016 Plan, (the “Retention Grants”). These Retention Grants were issued to certain employees, vest quarterly and will be fully vested on December 31, 2020, provided that the grantee remains an employee or consultant to the Company as of each vesting date. As of June 30, 2020 , there were a total of 1,994,329 stock options outstanding, including 94,000 inducement grants. In addition, there were 549,437 shares available for future issuance under the 2016 Plan as of June 30, 2020 . Tangible Stockholder Return Plan Performance Plan On August 2, 2018, the Company’s board of directors approved and established the Tangible Stockholder Return Plan, which is a performance-based long-term incentive plan (the “Performance Plan”). The Performance Plan was effective immediately upon approval and expires on March 1, 2022 . The Performance Plan covers all employees, including the Company’s executive officers, consultants and other persons deemed eligible by the Company’s compensation committee. The core underlying metric of the Performance Plan is the achievement of two share price goals for the Company’s common stock, which if achieved, would represent measurable increases in stockholder value. The Performance Plan is tiered, with two separate tranches, each of which has a distinct share price target (measured as the average publicly traded share price of the Company’s common stock on the Nasdaq stock exchange for a 30 consecutive trading day period) that will, if achieved, trigger a distinct fixed bonus pool. The share price target for the first tranche and related bonus pool are $11.17 per share and $25,000 , respectively. The share price target for the second tranche and related bonus pool are $25.45 per share and $50,000 , respectively. The compensation committee has discretion to distribute the bonus pool related to each tranche among eligible participants by establishing individual minimum bonus amounts before, as well as by distributing the remainder of the applicable pool after, the achievement of each tranche specific share price target. Otherwise, if the Company does not achieve one or both related share price targets, as defined, no portion of the bonus pools will be paid. The Performance Plan provides for the distinct fixed bonus pools to be paid in the form of cash. However, the compensation committee has discretion to pay any bonus due under the Performance Plan in the form of cash, shares of the Company’s common stock or a combination thereof, provided that the Company’s stockholders have approved the reservation of shares of the Company’s common stock for such payment. The Performance Plan permits the compensation committee to make bonus awards subject to varying payment terms, including awards that vest and are payable immediately upon achieving an applicable share price target as well as awards that pay over an extended period (either with or without ongoing employment requirements). The Performance Plan contemplates that no bonus award payments will be delayed beyond 24 months for named executive officers or more than 12 months for all other participants. For purposes of determining whether a share price target has been met, the share price targets will be adjusted in the event of any stock splits, cash dividends, stock dividends, combinations, reorganizations, reclassifications or similar events. In the event of a change in control, as defined in the Performance Plan, during the term of the Performance Plan, a performance bonus pool will become due and payable to participants on a pro-rata basis, as calculated and determined by the compensation committee based on the Company’s progress toward the share price target as of the date of the change in control and subject to adjustment by the compensation committee as permitted under the Performance Plan. The Company has concluded that the Performance Plan is within the scope of ASC 718 , Compensation — Stock Compensation as the underlying plan obligations are based on the potential attainment of certain market share price targets of the Company’s common stock. Any awards under the Performance Plan would be payable, at the discretion of the Company’s compensation committee following the achievement of the applicable share price target, in cash, shares of the Company’s common stock, or a combination thereof, provided that, prior to any payment in common stock, the Company’s stockholders have approved the reservation of shares of the Company’s common stock for such payment. ASC 718 requires that a liability-based award should be classified as a liability on the Company’s condensed consolidated balance sheets and the amount of compensation cost recognized should be based on the fair value of the liability. When a liability-based award includes both a service and market condition, the market condition is taken into account when determining the appropriate method to estimate fair value and the compensation cost is amortized over the estimated service period. Therefore, the liability associated with the Performance Plan obligation is recorded within other long-term liabilities on the Company’s condensed consolidated balance sheets at the estimated fair value on the date of issuance and is re-valued each subsequent reporting period end. The Company recognizes share-based compensation expense within operating expenses in the condensed consolidated statements of operations, including adjustments to the fair value of the liability-based award, on a straight-line basis over the requisite service period. The fair value of obligations under the Performance Plan are estimated using a Monte Carlo simulation approach. The Company’s common stock price is simulated under the Geometric Brownian Motion framework under each simulation path. The other assumptions for the Monte Carlo simulation include the risk-free interest rate, estimated volatility and the expected term. Expected stock price volatility is based on the Company’s actual historical volatility over a historical period equal to the expected remaining life of the plan. The fair value of the underlying common stock is the published closing market price on the Nasdaq Global Market as of each reporting date, as adjusted for significant results, as necessary (if applicable). The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the plan. The dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the plan. The expected life of bonus awards under the Performance Plan is assumed to be equivalent to the remaining contractual term based on the estimated service period including the service inception date of the plan participants and the contractual end of the Performance Plan. During the three and six months ended June 30, 2020 , the Company recorded adjustments to the fair value of the Performance Plan obligation in share-based compensation expense of an increase of $84 and a reduction of $29 , respectively. During the three and six months ended June 30, 2019 , the Company recorded employee share-based compensation expense related to the Performance Plan obligation of $885 and $924 , respectively. |
Tangible Stockholder Return Pla
Tangible Stockholder Return Plan | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Tangible Shareholder Return Plan | Share-Based Compensation 2016 Stock Plan During the six months ended June 30, 2020 , the Company continued to administer and grant awards under the 2016 Incentive Award Plan (the “2016 Plan”), the Company’s only active equity incentive plan. Certain of the Company’s outstanding and exercisable stock options remain subject to the terms of the Company’s 2008 Stock Plan (the “2008 Plan”), which is the predecessor to the 2016 Plan and became inactive upon adoption of the 2016 Plan effective September 20, 2016. On July 31, 2019, the Company’s stockholders approved an amendment to the 2016 Plan (“the 2016 Plan Amendment”), to increase the number of shares reserved under the 2016 Plan by 1,000,000 and to increase the award limit on the maximum aggregate number of shares of the Company’s common stock that may be granted to any one person during any calendar year from 250,000 to 1,000,000 shares of the Company’s common stock. All other material terms of the 2016 Plan otherwise remain unchanged. Stock Appreciation Rights On August 8, 2018 , the Company entered into an employment agreement with G. Kelly Martin (the “Martin Employment Agreement”). The Employment Agreement provided for 1,000,000 stock appreciation rights (“SARs”) (the “Martin SAR Award”) granted on a contingent basis that would have been irrevocably forfeited and voided in full if the Company had failed to obtain stockholder approval for the 2016 Plan Amendment. If such approval had not been obtained, the Company would have been required to pay Mr. Martin the cash equivalent of the value of the Martin SAR Award. Following stockholder approval of the 2016 Plan Amendment, the Martin SAR Award was no longer considered to be granted on a contingent basis. The Martin SAR Award entitled Mr. Martin to a payment (in cash, shares of common stock or a combination of both) equal to the fair market value of one share of the Company’s common stock on the date of exercise less the exercise price of $3.80 per share. The SARs were to be deemed automatically exercised and settled as of February 1, 2020, provided Mr. Martin remained continuously employed with the Company through such date unless vesting was otherwise expressly accelerated pursuant to the Martin SAR Award. The Martin SAR Award vested in full on February 1, 2020. On February 1, 2020, the fair market value of the Company’s common stock was $0.52 per share, and as such, the Martin SAR Award expired unexercised and 1,000,000 shares became available to be granted under the 2016 Plan. Effective December 17, 2019, the Company entered into an amended and restated employment agreement with Paula Brown Stafford (the “Amended and Restated Stafford Employment Agreement”). On January 6, 2020, following the release of top-line results of the Company’s Phase 3 molluscum clinical program as provided in the Amended and Restated Stafford Employment Agreement, 600,000 SARs were granted to Ms. Stafford with an exercise price of $0.82 per share (the fair market value of the Company’s common stock on the grant date) and with a ten year term (the “Stafford SAR Award”). The Stafford SAR Award was granted on a contingent basis and would have been considered irrevocably forfeited and voided in full if sufficient shares of the Company’s common stock were not available under the 2016 Plan or if the Company failed to obtain stockholder approval for amendments to the 2016 Plan at the next annual stockholders’ meeting to provide sufficient shares for the Stafford SAR Award. Such shares became available under the 2016 Plan on February 1, 2020, and the Stafford SAR Award was no longer considered granted on a contingent basis. During the three and six months ended June 30, 2020 , the Company recorded employee share-based compensation expense related to both SAR awards, of $29 and $91 , respectively. During the three and six months ended June 30, 2019 , the Company recorded employee share-based compensation expense related to the Martin SAR Award, of $409 and $416 , respectively. Inducement Grants During the years ended 2019 and 2018, the Company awarded nonstatutory stock options to purchase shares of common stock to newly-hired employees, as inducements material to the individuals’ entering into employment with the Company within the meaning of Nasdaq Listing Rule 5635(c)(4) (the “Inducement Grants”). On May 31, 2018, the Company awarded 100,500 Inducement Grants with an exercise price of $3.15 per share, and on September 6, 2019, the Company awarded 25,000 Inducement Grants with an exercise price of $2.62 per share. The Inducement Grants were awarded outside of the Company’s 2016 Plan, pursuant to Nasdaq Listing Rule 5635(c)(4), but have terms and conditions generally consistent with the Company’s 2016 Plan and vest over three years, subject to the employee’s continued service as an employee or consultant through the vesting period. During the first quarter of 2020, the 25,000 Inducement Grants related to the September 6, 2019 award were forfeited in their entirety. Stock Compensation Expense During the three and six months ended June 30, 2020 , the Company recorded employee share-based compensation expense of $419 and $691 , respectively. During the three and six months ended June 30, 2019, the Company recorded employee share-based compensation expense of $1,540 and $1,754 , respectively. Total share-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 303 $ 520 $ 511 $ 581 General and administrative 116 1,020 180 1,173 $ 419 $ 1,540 $ 691 $ 1,754 Stock option activity for the six months ended June 30, 2020 is as follows: Shares Subject to Outstanding Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding as of December 31, 2019 1,789,303 $ 3.89 Options granted 417,000 0.46 Options forfeited (211,974 ) 3.79 Options exercised — — Options outstanding as of June 30, 2020 1,994,329 $ 3.18 7.89 $ 11 On February 13, 2020, the Company issued 383,000 stock options from the 2016 Plan, (the “Retention Grants”). These Retention Grants were issued to certain employees, vest quarterly and will be fully vested on December 31, 2020, provided that the grantee remains an employee or consultant to the Company as of each vesting date. As of June 30, 2020 , there were a total of 1,994,329 stock options outstanding, including 94,000 inducement grants. In addition, there were 549,437 shares available for future issuance under the 2016 Plan as of June 30, 2020 . Tangible Stockholder Return Plan Performance Plan On August 2, 2018, the Company’s board of directors approved and established the Tangible Stockholder Return Plan, which is a performance-based long-term incentive plan (the “Performance Plan”). The Performance Plan was effective immediately upon approval and expires on March 1, 2022 . The Performance Plan covers all employees, including the Company’s executive officers, consultants and other persons deemed eligible by the Company’s compensation committee. The core underlying metric of the Performance Plan is the achievement of two share price goals for the Company’s common stock, which if achieved, would represent measurable increases in stockholder value. The Performance Plan is tiered, with two separate tranches, each of which has a distinct share price target (measured as the average publicly traded share price of the Company’s common stock on the Nasdaq stock exchange for a 30 consecutive trading day period) that will, if achieved, trigger a distinct fixed bonus pool. The share price target for the first tranche and related bonus pool are $11.17 per share and $25,000 , respectively. The share price target for the second tranche and related bonus pool are $25.45 per share and $50,000 , respectively. The compensation committee has discretion to distribute the bonus pool related to each tranche among eligible participants by establishing individual minimum bonus amounts before, as well as by distributing the remainder of the applicable pool after, the achievement of each tranche specific share price target. Otherwise, if the Company does not achieve one or both related share price targets, as defined, no portion of the bonus pools will be paid. The Performance Plan provides for the distinct fixed bonus pools to be paid in the form of cash. However, the compensation committee has discretion to pay any bonus due under the Performance Plan in the form of cash, shares of the Company’s common stock or a combination thereof, provided that the Company’s stockholders have approved the reservation of shares of the Company’s common stock for such payment. The Performance Plan permits the compensation committee to make bonus awards subject to varying payment terms, including awards that vest and are payable immediately upon achieving an applicable share price target as well as awards that pay over an extended period (either with or without ongoing employment requirements). The Performance Plan contemplates that no bonus award payments will be delayed beyond 24 months for named executive officers or more than 12 months for all other participants. For purposes of determining whether a share price target has been met, the share price targets will be adjusted in the event of any stock splits, cash dividends, stock dividends, combinations, reorganizations, reclassifications or similar events. In the event of a change in control, as defined in the Performance Plan, during the term of the Performance Plan, a performance bonus pool will become due and payable to participants on a pro-rata basis, as calculated and determined by the compensation committee based on the Company’s progress toward the share price target as of the date of the change in control and subject to adjustment by the compensation committee as permitted under the Performance Plan. The Company has concluded that the Performance Plan is within the scope of ASC 718 , Compensation — Stock Compensation as the underlying plan obligations are based on the potential attainment of certain market share price targets of the Company’s common stock. Any awards under the Performance Plan would be payable, at the discretion of the Company’s compensation committee following the achievement of the applicable share price target, in cash, shares of the Company’s common stock, or a combination thereof, provided that, prior to any payment in common stock, the Company’s stockholders have approved the reservation of shares of the Company’s common stock for such payment. ASC 718 requires that a liability-based award should be classified as a liability on the Company’s condensed consolidated balance sheets and the amount of compensation cost recognized should be based on the fair value of the liability. When a liability-based award includes both a service and market condition, the market condition is taken into account when determining the appropriate method to estimate fair value and the compensation cost is amortized over the estimated service period. Therefore, the liability associated with the Performance Plan obligation is recorded within other long-term liabilities on the Company’s condensed consolidated balance sheets at the estimated fair value on the date of issuance and is re-valued each subsequent reporting period end. The Company recognizes share-based compensation expense within operating expenses in the condensed consolidated statements of operations, including adjustments to the fair value of the liability-based award, on a straight-line basis over the requisite service period. The fair value of obligations under the Performance Plan are estimated using a Monte Carlo simulation approach. The Company’s common stock price is simulated under the Geometric Brownian Motion framework under each simulation path. The other assumptions for the Monte Carlo simulation include the risk-free interest rate, estimated volatility and the expected term. Expected stock price volatility is based on the Company’s actual historical volatility over a historical period equal to the expected remaining life of the plan. The fair value of the underlying common stock is the published closing market price on the Nasdaq Global Market as of each reporting date, as adjusted for significant results, as necessary (if applicable). The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the plan. The dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the plan. The expected life of bonus awards under the Performance Plan is assumed to be equivalent to the remaining contractual term based on the estimated service period including the service inception date of the plan participants and the contractual end of the Performance Plan. During the three and six months ended June 30, 2020 , the Company recorded adjustments to the fair value of the Performance Plan obligation in share-based compensation expense of an increase of $84 and a reduction of $29 , respectively. During the three and six months ended June 30, 2019 , the Company recorded employee share-based compensation expense related to the Performance Plan obligation of $885 and $924 , respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Members of the Company’s board of directors held 1,104,776 and 1,002,776 shares of the Company’s common stock as of June 30, 2020 and December 31, 2019 , respectively. Health Decisions On October 25, 2018, the Company announced the formation of a dedicated women’s health business unit as well as a foundational collaboration with Health Decisions, Inc. (“Health Decisions”). Health Decisions is a full-service contract research organization specializing in clinical studies of therapeutics for women’s health indications. The Company’s women’s health business unit is led by Paula Brown Stafford, who also is a shareholder and serves on the board of directors of Health Decisions. Reedy Creek Reedy Creek previously beneficially owned greater than 5% of the Company’s outstanding common stock and still holds approximately 3.9 million warrants, all of which was acquired during the Company’s January 2018 Offering. Accordingly, Reedy Creek was a related party of the Company at the time the Company entered into the purchase agreement with Reedy Creek described in Note 6— Research and Development Arrangements . The purchase agreement with Reedy Creek was evaluated and approved pursuant to the Company’s existing related party transactions policy. 2020 Registered Direct Offering Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”), a greater than 5% stockholder, purchased 6,200,000 shares of common stock and pre-funded warrants to purchase up to 2,602,326 shares of common stock for approximately $3,800 in the March 2020 Registered Direct Offering described in Note 10—Stockholders’ Equity (Deficit). Sabby’s participation in the March 2020 Registered Direct Offering was evaluated and approved pursuant to the Company’s existing related party transactions policy. Joseph Moglia, a greater than 5% stockholder, purchased 1,000,000 shares of common stock for $430 in the March 2020 Registered Direct Offering described in Note 10—Stockholders’ Equity (Deficit). Mr. Moglia’s participation in the March 2020 Registered Direct Offering was evaluated and approved pursuant to the Company’s existing related party transactions policy. |
Assets Held for Sale, Impairmen
Assets Held for Sale, Impairment Charges | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale, Impairment Charges | Assets Held for Sale, Impairment Charges The Company has been pursuing a broader strategic plan since 2019 to shift its operating cost structure characteristics from fixed to variable, including efforts to reduce or offset its remaining fixed Primary Facility Lease obligation. The Morrisville, North Carolina facility underlying the Primary Facility Lease (the “Facility”) has served as the Company’s corporate headquarters and its sole research, development and manufacturing facility. Following the completion of a large-scale manufacturing campaign that produced clinical trial materials for the Company’s B-SIMPLE4 Phase 3 trial for SB206 in May 2020, and in contemplation of the lease termination transaction described in Note 15—Subsequent Events below, the Company initiated decommissioning of the Facility in June 2020, and on June 29, 2020, the physical removal of the primary components of the large-scale manufacturing process equipment from the Facility was deemed substantially complete. As a result of these decommissioning actions, the Company determined that as of June 29, 2020, the Company had fundamentally changed its intended use of the Facility and certain related assets, including (i) the removal of the Company’s large-scale cGMP drug manufacturing capability and (ii) the conditioning of the Facility to facilitate a transaction that reduces or offsets the Company’s remaining fixed Primary Facility Lease obligation. This fundamental change in the intended use of certain assets required the Company to reassess its historical asset groupings, which resulted in a change from a single, entity-level asset group to multiple asset groups based on the lowest level of separately identifiable cash flows. The multiple new asset groups identified during the reassessment are described in detail below. As of June 30, 2020, the Company continued to utilize the Facility as its corporate headquarters, research and development laboratories and pilot scale cGMP manufacturing activities. On July 16, 2020, the Company entered into the lease termination transaction as described in Note 15—Subsequent Events. Subsequent to July 16, 2020, the Company intends to continue to utilize its sublet premises within the Facility as its corporate headquarters and for the aforementioned activities through March 31, 2021 pursuant to the sublease agreement between the Company and an unrelated third party that is now leasing the Facility from the Landlord (the “New Tenant”). As of June 29, 2020, the Company evaluated all of its long-lived assets for potential held for sale classification pursuant to policies described in Note 1—Organization and Significant Accounting Policies. The Company identified the following two disposal groups that met the criteria to be classified as held for sale within its condensed consolidated balance sheets as of June 30, 2020: • The first disposal group consists of furniture and equipment to be sold to the New Tenant pursuant to a bill of sale described in Note 15—Subsequent Events. The disposal group’s carrying value of $454 was compared to its estimated fair value less costs to sell of $265 , resulting in an impairment charge of $189 recorded during the quarter ended June 30, 2020. The selling price expected to be paid by the New Tenant to acquire the furniture and equipment disposal group was the best estimate of fair value, which the Company concluded was a Level 2 input within the fair value measurement hierarchy in FASB ASC 820, Fair Value Measurements . • The second disposal group consists of certain manufacturing and laboratory equipment associated with the Company’s large-scale drug manufacturing capability that the Company intends to sell through a consignment seller. The disposal group’s carrying value of $1,510 was compared to its estimated fair value less costs to sell of $712 , resulting in an impairment charge of $798 recorded during the quarter ended June 30, 2020. The estimated selling prices provided by the consignment seller were determined to be the best estimate of fair value, which the Company concluded were Level 3 inputs within the fair value measurement hierarchy. The Company assessed its remaining long-lived assets classified as held and used for potential impairment as of June 29, 2020 pursuant to the Company’s policy described in Note 1—Organization and Significant Accounting Policies, including those long-lived assets in the following two asset groups: • Right-of-use asset, leasehold improvements and other property affixed to the Facility. This asset group, which had an aggregate carrying value of $8,227 as of June 29, 2020, consists of a right-of-use asset associated with the Primary Facility Lease of $1,816 , leasehold improvements and other property affixed to the Facility of $5,872 , and restricted cash that secures a letter of credit associated with the Primary Facility Lease of $539 . Due to actions taken as of June 29, 2020, the Company committed to no longer use the asset group to support the Company’s future revenue-producing drug development operations. This significant change in the intended use of this asset group was considered an indicator of impairment that resulted in the performance of a recoverability test. The Company concluded that the asset group was not recoverable because the asset group’s carrying value exceeded its expected future undiscounted net cash flows, which were based on Company-specific facts and circumstances and included the economics of and costs associated with the lease termination transaction described in Note 15—Subsequent Events, and thus, the Company identified a potential impairment. The Company then estimated the fair value of the asset group, which is based on fair value principles in FASB ASC 820, Fair Value Measurements and generally focuses on the value that a market participant would be willing to pay for the highest and best use of the asset group. The Company determined that the lease terms established in the New Tenant’s prime lease of the Facility were representative of the asset group’s highest and best use and were consistent with market terms; therefore, such terms were considered to be the best available valuation inputs for the fair value estimate. Using a market average borrowing rate to discount the New Tenant’s prime lease payments, the Company estimated the fair value of the asset group to be $7,298 and, as a result, measured and recorded an impairment charge of $929 during the quarter ended June 30, 2020. The inputs to the fair value estimate of this asset group were determined to be Level 3 inputs within the fair value measurement hierarchy. The Company determined that the June 30, 2020 carrying value of this asset group, as adjusted for the aforementioned impairment charge, is representative of its value to a market participant for its highest and best use, as required under the ASC 820 fair value model. The Company expects to incur an additional loss during the quarter ended September 30, 2020 as the asset group, and the associated right of use lease liability, is disposed of in connection with the occurrence of the lease termination transaction described in Note 15—Subsequent Events. This additional loss on lease termination will be based upon Company-specific facts and circumstances associated with the July 2020 transaction, rather than the market participant valuation model that was required to be used during the impairment assessment as of June 29, 2020. • Other assets held and used. This asset group, which had an aggregate carrying value of $505 as of June 29, 2020, consists of equipment and other property that is not directly associated with the Company’s continuing research, development and pilot scale drug manufacturing capabilities. The Company tested this asset group for recoverability because the Company intends to dispose of these assets significantly before the end of their previously estimated useful life, which is an impairment indicator. However, this asset group has not met the criteria to be classified as held for sale because the Company has not yet established a plan to sell these assets and is uncertain whether it will do so within the next twelve months. During the recoverability test, the Company determined this asset group is unlikely to generate any material future cash flows for the Company. The Company further determined that a market participant was unlikely to pay any material value for such assets and therefore concluded the fair value of this asset group was zero. As a result, the Company measured and recorded an impairment charge of $505 during the quarter ended June 30, 2020. The inputs to the fair value estimate of this asset group were determined to be Level 3 inputs within the fair value measurement hierarchy. The Company’s remaining long-lived assets, which include retained manufacturing and laboratory equipment with a carrying value of $744 that will continue to support and enable the Company’s continuing research, development and pilot scale drug manufacturing capabilities, had no change to their intended use, no impairment indicators were identified, and no further assessment of recoverability was required. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Primary Facility Lease On July 16, 2020, the Company entered into a Lease Termination Agreement (the “Termination Agreement”) with Durham Hopson, LLC (as successor-in-interest to Durham Hopson Road, LLC) (the “Landlord”), which provides for the early termination of the Company’s Primary Facility Lease, whereby the Company leased 51,350 square feet for the Company’s corporate headquarters and sole research, development and manufacturing facility, subject to certain conditions. As disclosed in Note 8—Commitments and Contingencies, the initial term of the Primary Facility Lease was scheduled to expire in 2026. As of June 30, 2020, the Company had approximately $7,900 in remaining minimum lease payments under the Primary Facility Lease. Pursuant to the terms of the Termination Agreement, the Primary Facility Lease was terminated in connection with the Landlord entering into a lease with the New Tenant for the premises in the building covered by the Primary Facility Lease (the “New Tenant Lease”), which commenced on July 16, 2020. As consideration for the early termination of the Primary Facility Lease pursuant to the Termination Agreement, the Company will pay $600 to the Landlord, $539 of which will be paid through the Company forfeiting an existing security deposit under the Primary Facility Lease to the Landlord, and $61 of which will be paid in cash. In connection with the termination of the Primary Facility Lease pursuant to the Termination Agreement, the Company entered into a sublease agreement, which was effective upon the termination of the Primary Facility Lease and the commencement of the New Tenant Lease, through which the Company will sublease from the New Tenant approximately 12,000 square feet (to be reduced to approximately 10,000 square feet after August 31, 2020) in the building that was covered by the Primary Facility Lease (the “Sublease”). The New Tenant and the Landlord entering into the New Tenant Lease was a condition precedent to the effectiveness of the termination of the Primary Facility Lease pursuant to the Termination Agreement, and, in connection with the termination of the Primary Facility Lease, the Landlord consented to the Sublease. The Sublease will expire on March 31, 2021, if not earlier terminated, and is terminable, in part or in whole, by the Company upon 30 days’ written notice with no penalty. The Company currently expects to operate its corporate headquarters, research and development laboratories and pilot scale cGMP manufacturing activities within the Facility pursuant to the Sublease, however the Company decommissioned the areas within the facility, as well as the associated equipment, that supported the Company’s large scale cGMP drug manufacturing capability in preparation for execution of the Termination Agreement. The Company expects to incur certain costs in connection with the transactions contemplated by the Termination Agreement, including, (i) broker commissions of approximately $400 , (ii) facility decommissioning and environmental remediation costs of approximately $300 , in addition to the (iii) lease termination costs of approximately $600 mentioned above. The Company anticipates these costs will result in approximately $1,300 in cash expenditures, of which approximately $800 will be paid from the Company’s existing cash and cash equivalents and approximately $500 will be paid through the forfeit of a security deposit as described above that had been classified as restricted cash on the Company’s balance sheets. As a partial offset to these cash expenditures, the Company will receive approximately $300 from the New Tenant pursuant to a bill of sale executed in conjunction with the Termination Agreement and Sublease. All of the decommissioning activities described herein are expected to be completed prior to the end of the quarterly period ending September 30, 2020. In connection with the contemplated execution of the Termination Agreement and the associated performance of decommissioning activities mentioned above, the Company evaluated its long-lived assets for impairment, principally its right of use lease asset and its property, plant and equipment, including leasehold improvements. See Note 14—Assets Held for Sale, Impairment Charges for a discussion of the Company’s evaluation of its long-lived assets and the resulting impairment charges recorded during the quarter ended June 30, 2020. June 2020 Aspire Common Stock Purchase Agreement After June 30, 2020, the Company sold 7,739,280 shares of common stock at an average price of $0.67 per share under the June 2020 Aspire CSPA for total proceeds of $5,195 . As of July 21, 2020, the Company had no remaining availability for sales of its common stock under the June 2020 Aspire CSPA . July 2020 Aspire Common Stock Purchase Agreement On July 21, 2020, the Company entered into a common stock purchase agreement (the “ July 2020 Aspire CSPA ”) with Aspire Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $30,000 of shares of the Company’s common stock at the Company’s request from time to time during the 30 -month term of the July 2020 Aspire CSPA . Upon execution of the July 2020 Aspire CSPA , the Company agreed to sell to Aspire Capital 5,555,555 shares of common stock at $0.90 per share for proceeds of $5,000 . In consideration for entering into the July 2020 Aspire CSPA , upon satisfaction of certain conditions under the July 2020 Aspire CSPA , the Company issued to Aspire Capital 1,000,000 shares of the Company’s common stock (the “July 2020 Commitment Shares”). The July 2020 Aspire CSPA replaced the June 2020 Aspire CSPA , which was terminated under the terms of the July 2020 Aspire CSPA . See Note 10—Stockholders’ Equity (Deficit) for terms of the June 2020 Aspire CSPA . Concurrently with entering into the July 2020 Aspire CSPA , the Company also entered into a registration rights agreement with Aspire Capital, in which the Company agreed to file with the SEC one or more registration statements, as necessary, and to the extent permissible and subject to certain exceptions, to register under the Securities Act, the sale of the shares of the Company’s common stock that may be issued to Aspire Capital under the July 2020 Aspire CSPA . On July 23, 2020, the Company filed with the SEC a prospectus supplement to the Company’s effective shelf Registration Statement on Form S-3 (File No. 333-236583) registering all of the shares of common stock that may be offered to Aspire Capital from time to time. Under the terms of the July 2020 Aspire CSPA , on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “July 2020 Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 300,000 shares of the Company’s common stock per business day, up to an aggregate of $30,000 (including the initial purchase shares) of the Company’s common stock in the aggregate at a per share price (the “July 2020 Purchase Price”) equal to the lesser of (i) the lowest sale price of the Company’s common stock on the purchase date; or (ii) the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the purchase date. The aggregate purchase price payable by Aspire Capital on any one purchase date may not exceed $500 , unless otherwise mutually agreed. The parties may mutually agree to increase the number of shares of the Company’s common stock that may be purchased per trading day pursuant to the terms of the July 2020 Aspire CSPA to up to 2,000,000 shares. In addition, on any date on which the Company submits a July 2020 Purchase Notice to Aspire Capital in an amount equal to 300,000 shares, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “July 2020 VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “July 2020 VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such July 2020 VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the July 2020 VWAP Purchase Date. The July 2020 Purchase Price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the July 2020 Purchase Price. The Company may deliver multiple July 2020 Purchase Notices and July 2020 VWAP Purchase Notices to Aspire Capital from time to time during the term of the July 2020 Aspire CSPA , so long as the most recent purchase has been completed. The July 2020 Aspire CSPA provides that the Company and Aspire Capital shall not effect any sales under the July 2020 Aspire CSPA on any purchase date where the closing sale price of the Company’s common stock is less than $0.15 . There are no trading volume requirements or restrictions under the July 2020 Aspire CSPA , and the Company will control the timing and amount of sales of the Company’s common stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the July 2020 Aspire CSPA . There are no limitations on use of proceeds, financial or business covenants, restrictions on future financing transactions, rights of first refusal, participation rights, penalties or liquidated damages in the July 2020 Aspire CSPA . The July 2020 Aspire CSPA may be terminated by the Company at any time, at its discretion, without any penalty or additional cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of the Company’s common stock during any time prior to the termination of the July 2020 Aspire CSPA . Any proceeds the Company receives under the July 2020 Aspire CSPA are expected to be used for working capital and general corporate purposes. The July 2020 Aspire CSPA provides that the number of shares that may be sold pursuant to the July 2020 Aspire CSPA will be limited to 25,433,642 shares (the “July 2020 Exchange Cap”), which represents 19.99% of the Company’s outstanding shares of common stock on July 21, 2020, unless stockholder approval or an exception pursuant to the rules of the Nasdaq Global Market is obtained to issue more than 19.99% . This limitation will not apply if, at any time the July 2020 Exchange Cap is reached and at all times thereafter, the average price paid for all shares issued under the July 2020 Aspire CSPA is equal to or greater than $0.5907 , which is the arithmetic average of the five closing sale prices of the Company’s common stock immediately preceding the execution of the July 2020 Aspire CSPA . The Company is not required or permitted to issue any shares of common stock under the July 2020 Aspire CSPA if such issuance would breach its obligations under the rules or regulations of the Nasdaq Global Market. The Company may, in its sole discretion, determine whether to obtain stockholder approval to issue more than 19.99% of its outstanding shares of Common Stock hereunder if such issuance would require stockholder approval under the rules or regulations of the Nasdaq Global Market. As of the date of this report, since July 21, 2020, the Company sold 9,055,555 shares of common stock at an average price of $0.87 per share under the July 2020 Aspire CSPA , including 5,555,555 shares of common stock at $0.90 which the Company agreed to sell to Aspire Capital upon execution of the July 2020 Aspire CSPA , for total proceeds of $7,876 . Board of Directors On July 28, 2020, the Company announced the appointment of Paula Brown Stafford, the Company’s President and Chief Executive Officer, as Chairman of the Company’s board of directors in advance of the Company’s annual meeting of stockholders. Concurrently, Robert Ingram retired as Executive Chairman although he will continue to serve as a member of the Company’s board of directors. These changes were effective as of July 28, 2020. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Unaudited Interim Condensed Consolidated Financial Statements | The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The December 31, 2019 year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. Additionally, the Company’s independent registered public accounting firm report for the December 31, 2019 financial statements included an explanatory paragraph indicating that there is substantial doubt about the Company’s ability to continue as a going concern. Unaudited Interim Condensed Consolidated Financial Statements The accompanying interim condensed consolidated financial statements and the related footnote disclosures are unaudited. These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the Securities and Exchange Commission’s (“SEC”) Rule 10-01 of Regulation S-X for interim financial information. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and in the opinion of management, reflect all adjustments (consisting of adjustments of a normal, recurring nature and the impact of the Company’s restatement of its consolidated financial statements for the Affected Periods (as defined below)) that are necessary for the fair statement of the Company’s financial position and its results of operations and cash flows. The results of operations for interim periods are not necessarily indicative of the results expected for the full fiscal year or any future period. These interim financial statements should be read in conjunction with the financial statements and notes for the year ended December 31, 2019 set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as amended, filed with the SEC as discussed below. Restatement of Previously Issued Financial Statements On May 14, 2020, the Company revised its prior position on accounting for warrants and concluded that its previously issued consolidated financial statements for the year ended December 31, 2018, and all quarterly periods of 2019 and 2018 (the “Affected Periods”) should not be relied upon because of a misapplication in the guidance on warrant accounting. On May 20, 2020, the Company restated its consolidated financial statements for all Affected Periods in its Annual Report on Form 10-K/A (Amendment No. 1) for the fiscal year ended December 31, 2019. As such, the comparative information provided for the three and six months ended June 30, 2019 contained in the preceding condensed consolidated financial statements and the accompanying footnotes reflect these previously restated amounts. |
Basis of Consolidation | Basis of Consolidation The accompanying condensed consolidated financial statements reflect the operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Liquidity and Ability to Continue as a Going Concern | Liquidity and Ability to Continue as a Going Concern The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. The Company has evaluated principal conditions and events, in the aggregate, that may raise substantial doubt about its ability to continue as a going concern within one year from the date that these financial statements are issued. The Company identified the following conditions: • The Company has reported a net loss in all fiscal periods since inception and, as of June 30, 2020 , the Company had an accumulated deficit of $234,237 . • As of June 30, 2020 , the Company had a total cash and cash equivalents balance of $35,458 . • As described in Note 10—Stockholders’ Equity (Deficit), in June 2020 the Company entered into a common stock purchase agreement (the “ June 2020 Aspire CSPA ”) with Aspire Capital Fund, LLC (“Aspire Capital”). The June 2020 Aspire CSPA replaced the prior common stock purchase agreement, dated as of August 30, 2019, between the Company and Aspire Capital (the “ 2019 Aspire CSPA ”). During the six months ended June 30, 2020 , the Company received aggregate net proceeds of $17,085 from the August 2019 CSPA and June 2020 Aspire CSPA. • As described in Note 10—Stockholders’ Equity (Deficit), in early March 2020 the Company completed a public offering of its common stock (or pre-funded warrants to purchase common stock in lieu thereof) and common warrants to purchase common stock pursuant to the Company’s then effective shelf registration statement (the “March 2020 Public Offering”). Net proceeds from the offering were approximately $5,158 after deducting underwriting discounts and commissions and offering expenses of approximately $791 . The Company has also received proceeds from the exercises of common warrants issued in the March 2020 Public Offering of approximately $5,463 through June 30, 2020. • As described in Note 10—Stockholders’ Equity (Deficit), in late March 2020 the Company completed a registered direct offering of its common stock (or pre-funded warrants to purchase common stock in lieu thereof) pursuant to the Company’s then effective shelf registration statement (the “March 2020 Registered Direct Offering”). Net proceeds from the offering were approximately $7,225 after deducting fees and commissions and offering expenses of approximately $774 . The evaluation is also based on other relevant conditions that are known or reasonably knowable at the date that the financial statements are issued, including ongoing liquidity risks faced by the Company, the Company’s conditional and unconditional obligations due or anticipated within one year, the funds necessary to maintain the Company’s operations considering its current financial condition, obligations, and other expected cash flows, and other conditions and events that, when considered in conjunction with the above, may adversely affect the Company’s ability to meet its obligations. Based on the assessment of management’s plan, the Company has concluded that there are no conditions or events, in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date the financial statements are issued. The Company will continue to evaluate this going concern assessment in connection with the preparation of its quarterly and annual financial statements based upon relevant facts and circumstances, including but not limited to, its cash and cash equivalents balance and its operating forecast and related cash projection. The Company believes that its existing cash and cash equivalents balance as of June 30, 2020, plus (i) approximately $13,071 of proceeds received in July 2020 from the further sale of common stock under the Company’s common stock purchase agreements with Aspire Capital, including the common stock purchase agreement entered into in July 2020 (the “July 2020 Aspire CSPA”), described in Note 15—Subsequent Events, and (ii) expected contractual payments to be received in connection with existing licensing agreements, will provide it with adequate liquidity to fund its operating needs through at least the fourth quarter of 2021. This operating forecast and related cash projection includes the expected costs associated with an additional confirmatory Phase 3 trial for SB206 as a treatment for molluscum (the “B-SIMPLE4 trial”), and development activities in certain priority therapeutic areas, but excludes any potential costs associated with other new late-stage clinical development programs and proceeds from any potential future sales of common stock under the July 2020 Aspire CSPA. Further advancement of the SB206 molluscum program beyond the conduct and completion of the B-SIMPLE4 trial, or advancement of any other late-stage clinical development program across the Company’s platform, is subject to securing significant additional funding or strategic partnering, and has been and may be further impacted by the COVID-19 pandemic. However, the Company will need significant additional funding to continue its operating activities and make further advancements in its product development programs beyond those currently included in its operating forecast and related cash projection. The Company does not currently have sufficient funds to complete development and commercialization of any of its product candidates. The inability of the Company to obtain significant additional funding on acceptable terms, including through the utilization of the remaining amount available under the July 2020 Aspire CSPA, could have a material adverse effect on the Company’s business and cause the Company to alter or reduce its planned operating activities, including but not limited to delaying, reducing, terminating or eliminating planned product candidate development activities, to conserve its cash and cash equivalents. The Company needs and intends to pursue additional capital through equity or debt financings, including potential sales under the July 2020 Aspire CSPA, or from non-dilutive sources, including partnerships, collaborations, licensing, grants or other strategic relationships. The Company’s recent equity issuances during the six month period ended June 30, 2020, have resulted in significant dilution to its existing stockholders. Any future additional issuances of equity, or debt that could be convertible into equity, would result in further significant dilution to the Company’s existing stockholders. Alternatively, the Company may seek to engage in one or more potential transactions, such as the sale of the Company, or sale or divestiture of some of its assets, such as a sale of its dermatology platform assets, but there can be no assurance that the Company will be able to enter into such a transaction or transactions on a timely basis or at all on terms that are favorable to the Company. Under these circumstances, the Company could instead determine to dissolve and liquidate its assets or seek protection under the bankruptcy laws. If the Company decides to dissolve and liquidate its assets or to seek protection under the bankruptcy laws, it is unclear to what extent the Company will be able to pay its obligations, and, accordingly, it is further unclear whether and to what extent any resources will be available for distributions to stockholders. |
Classification of Warrants Issued in Connection with Offerings of Common Stock | Classification of Warrants Issued in Connection with Offerings of Common Stock The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and remeasured each balance sheet date thereafter. Changes in the estimated fair value of liability-classified warrants are recognized as a non-cash gain or loss on the consolidated statements of operations and comprehensive loss. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Restricted Cash | Restricted Cash Restricted cash as of June 30, 2020 and December 31, 2019 includes funds maintained in a separate deposit account to secure a letter of credit for the benefit of the lessor of facility space leased by the Company. |
Impairment of Long-Lived Assets | Assets Held for Sale The Company generally considers assets to be held for sale when (i) the Company commits to a plan to sell the assets, (ii) the assets are available for immediate sale in their present condition, (iii) the Company has initiated an active program to locate a buyer and other actions required to complete the plan to sell the assets, (iv) consummation of the planned sale transaction is probable, (v) the assets are being actively marketed for sale at a price that is reasonable in relation to their current fair value, (vi) the transaction is expected to qualify for recognition as a completed sale, within one year, and (vii) significant changes to or withdrawal of the plan is unlikely. Following the classification of any depreciable assets within a disposal group as held for sale, the Company discontinues depreciating the asset and writes down the asset to the lower of carrying value or fair market value less cost to sell, if needed. As described in Note 14—Assets Held for Sale, Impairment Charges, on June 29, 2020, actions taken by the Company caused certain property and equipment assets to meet the relevant criteria for classification and reporting as held for sale. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for an amount by which the carrying amount of the asset exceeds the fair value of the asset. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Basic shares outstanding includes the weighted average effect of the Company’s outstanding pre-funded warrants, the exercise of which requires little or no consideration for the delivery of shares of common stock. 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. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are anti-dilutive for all periods presented. |
Segment and Geographic Information | Segment and Geographic Information The Company has determined that it operates in one segment. The Company uses its nitric oxide-based technology to develop product candidates. The Chief Executive Officer, who is the Company’s chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company has only had limited revenue since its inception, but substantially all revenue was derived from licensing agreements originating in the United States. All of the Company’s long-lived assets are maintained in the United States. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Pronouncements Adopted In August 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. This guidance is intended to improve the effectiveness of disclosure requirements on fair value measurements in Topic 820. The new standard modifies certain disclosure requirements and is effective for annual reporting periods beginning after December 15, 2019. This ASU was effective for the Company as of January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This guidance is intended to improve the accounting for variable interest entities and whether the entity should be consolidated. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU was effective for the Company as of January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 . This guidance is intended to reduce diversity in practice and clarify the interaction between Topic 808, Collaborative Arrangements , and Topic 606, Revenue from Contracts with Customers . This ASU provided guidance on whether certain transactions between collaborative arrangement participants should be accounted for with revenue under Topic 606. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. This ASU was effective for the Company as of January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements Being Evaluated In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance is intended to improve consistent application and simplify the accounting for income taxes. This ASU removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance. This standard is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adoption of this ASU and does not expect the adoption of this new standard to have a material impact on its consolidated financial statements. |
Leases | Pursuant to the Company’s accounting policy and applicable guidance in ASC 842, Leases, the Company assesses all arrangements that convey the right to control the use of property, plant and equipment, at inception, to determine if each such arrangement is, or contains, a lease based on the unique facts and circumstances present in that arrangement. For those leases identified, the Company determines the lease classification, recognition, and measurement at the lease commencement date. For arrangements that contain a lease the Company: (i) identifies lease and non-lease components; (ii) determines the consideration in the contract; (iii) determines whether the lease is an operating or financing lease; and (iv) recognizes lease Right of Use (“ROU”) assets and corresponding lease liabilities. Lease liabilities are recorded based on the present value of lease payments over the expected lease term. The corresponding ROU asset is measured from the initial lease liability, adjusted by (i) accrued or prepaid rents; (ii) remaining unamortized initial direct costs and lease incentives; and (iii) any impairments of the ROU asset. The Company separates lease components (fixed rent payments) from non-lease components (common-area maintenance costs) on its real estate assets. Fixed lease payments on operating leases are recognized over the expected term of the lease on a straight-line basis. Variable lease expenses that are not considered fixed are expensed as incurred. Fixed and variable lease expense on operating leases is recognized within operating expenses within the Company’s condensed consolidated statements of operations. The Company does not recognize an ROU asset or corresponding liability for lease arrangements with an original term of 12 months or less. The interest rate implicit in the Company’s lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment. |
Share-based Compensation | ASC 718 requires that a liability-based award should be classified as a liability on the Company’s condensed consolidated balance sheets and the amount of compensation cost recognized should be based on the fair value of the liability. When a liability-based award includes both a service and market condition, the market condition is taken into account when determining the appropriate method to estimate fair value and the compensation cost is amortized over the estimated service period. Therefore, the liability associated with the Performance Plan obligation is recorded within other long-term liabilities on the Company’s condensed consolidated balance sheets at the estimated fair value on the date of issuance and is re-valued each subsequent reporting period end. The Company recognizes share-based compensation expense within operating expenses in the condensed consolidated statements of operations, including adjustments to the fair value of the liability-based award, on a straight-line basis over the requisite service period. The fair value of obligations under the Performance Plan are estimated using a Monte Carlo simulation approach. The Company’s common stock price is simulated under the Geometric Brownian Motion framework under each simulation path. The other assumptions for the Monte Carlo simulation include the risk-free interest rate, estimated volatility and the expected term. Expected stock price volatility is based on the Company’s actual historical volatility over a historical period equal to the expected remaining life of the plan. The fair value of the underlying common stock is the published closing market price on the Nasdaq Global Market as of each reporting date, as adjusted for significant results, as necessary (if applicable). The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of valuation equal to the remaining expected life of the plan. The dividend yield percentage is zero because the Company does not currently pay dividends, nor does it intend to do so during the expected term of the plan. The expected life of bonus awards under the Performance Plan is assumed to be equivalent to the remaining contractual term based on the estimated service period including the service inception date of the plan participants and the contractual end of the Performance Plan. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Anti-dilutive Securities Excluded from Calculation of Weighted Average Common Shares Outstanding | The following securities, presented on a common stock equivalent basis, have been excluded from the calculation of weighted average common shares outstanding for the three and six months ended June 30, 2020 and 2019 because the effect is anti-dilutive due to the net loss reported in each of those periods. All share amounts presented in the table below represent the total number outstanding as of the end of each period. June 30, 2020 2019 Warrants to purchase common stock associated with January 2018 public offering (Note 10) 10,000,000 10,000,000 Warrants to purchase common stock associated with March 2020 public offering (Note 10) 3,467,625 — Warrants to purchase common stock associated with March 2020 registered direct offering (Note 10) 558,140 — Stock options outstanding under the 2008 and 2016 Plans (Note 11) 1,900,329 1,522,300 Stock appreciation rights outstanding under the 2016 Plan (Note 11) 600,000 — Inducement stock options outstanding (Note 11) 94,000 100,500 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Contract Liabilities | The following table presents the Company’s contract assets and contract liabilities balances for the periods indicated. Contract Asset Contract Liability Net Deferred Revenue December 31, 2019 $ 8,974 $ 20,478 $ 11,504 June 30, 2020 $ 8,895 $ 18,156 $ 9,261 Short-term Deferred Revenue Long-term Deferred Revenue Net Deferred Revenue December 31, 2019 $ 4,428 $ 7,076 $ 11,504 June 30, 2020 $ 4,401 $ 4,860 $ 9,261 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment | Property and equipment consisted of the following: June 30, December 31, Computer equipment $ 575 $ 575 Furniture and fixtures 305 305 Laboratory equipment 8,077 7,898 Office equipment 339 339 Leasehold improvements 7,053 7,068 Property and equipment, gross 16,349 16,185 Less: Accumulated depreciation and amortization (6,611 ) (5,679 ) Property and equipment, net of accumulated depreciation and amortization 9,738 $ 10,506 Less: Impairment charges on assets held and used or upon classification of assets held for sale (2,421 ) — Property and equipment, net of accumulated depreciation and impairment charge 7,317 10,506 Less: Property and equipment reclassified to assets held for sale, net (977 ) — Property and equipment, net of assets classified as held for sale $ 6,340 $ 10,506 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Future Issuance | The Company had reserved shares of common stock for future issuance as follows: June 30, 2020 December 31, 2019 Outstanding stock options (Note 11) 1,994,329 1,789,303 Warrants to purchase common stock issued in January 2018 Offering (Note 10) 10,000,000 10,000,000 Warrants to purchase common stock issued in March 2020 Public Offering (Note 10) 3,467,625 — Warrants to purchase common stock issued in March 2020 Registered Direct Offering (Note 10) 558,140 — Outstanding stock appreciation rights (Note 11) 600,000 1,000,000 For possible future issuance under 2016 Stock Plan (Note 11) 549,437 388,463 17,169,531 13,177,766 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expenses | Total share-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 303 $ 520 $ 511 $ 581 General and administrative 116 1,020 180 1,173 $ 419 $ 1,540 $ 691 $ 1,754 |
Summary of Stock Option Activity | Stock option activity for the six months ended June 30, 2020 is as follows: Shares Subject to Outstanding Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding as of December 31, 2019 1,789,303 $ 3.89 Options granted 417,000 0.46 Options forfeited (211,974 ) 3.79 Options exercised — — Options outstanding as of June 30, 2020 1,994,329 $ 3.18 7.89 $ 11 |
Organization and Significant _4
Organization and Significant Accounting Policies - Additional Information (Details) $ in Thousands | Mar. 26, 2020USD ($) | Mar. 03, 2020USD ($) | Jul. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Organization And Significant Accounting Policies [Line Items] | ||||||||
Accumulated deficit | $ (234,237) | $ (234,237) | $ (219,984) | |||||
Cash and cash equivalents | $ 35,458 | $ 22,438 | 35,458 | $ 22,438 | $ 13,711 | |||
Proceeds from sale of common stock | 17,085 | 0 | ||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | 12,577 | 0 | ||||||
Proceeds from exercise of common stock warrants | $ 5,463 | $ 0 | ||||||
Number of segment | segment | 1 | |||||||
Percentage of total revenue generated from Japan licensing partner | 83.00% | 100.00% | 84.00% | 100.00% | ||||
License and collaboration revenue | ||||||||
Organization And Significant Accounting Policies [Line Items] | ||||||||
Revenue | $ 1,100 | $ 1,101 | $ 2,124 | $ 2,201 | ||||
License and collaboration revenue | Amended Sato Agreement | ||||||||
Organization And Significant Accounting Policies [Line Items] | ||||||||
Revenue | $ 1,100 | $ 1,101 | 2,124 | $ 2,201 | ||||
March 2020 Public Offering | ||||||||
Organization And Significant Accounting Policies [Line Items] | ||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 5,158 | |||||||
Underwriting discounts and commissions and offering expenses | $ 791 | |||||||
March 2020 Registered Direct Offering | ||||||||
Organization And Significant Accounting Policies [Line Items] | ||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 7,225 | |||||||
Underwriting discounts and commissions and offering expenses | $ 774 | |||||||
Aspire Capital | ||||||||
Organization And Significant Accounting Policies [Line Items] | ||||||||
Proceeds from sale of common stock | $ 17,085 | |||||||
Aspire Capital | Subsequent Event | ||||||||
Organization And Significant Accounting Policies [Line Items] | ||||||||
Proceeds from sale of common stock | $ 13,071 |
Organization and Significant _5
Organization and Significant Accounting Policies - Summary of Anti-dilutive Securities Excluded from Calculation of Weighted Average Common Shares Outstanding (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock Options | 2008 Stock Plan and 2016 Stock Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 1,900,329 | 1,522,300 | 1,900,329 | 1,522,300 |
Stock Options | Inducement Options Outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 94,000 | 100,500 | 94,000 | 100,500 |
Stock Appreciation Rights (SARs) | 2016 Stock Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 600,000 | 0 | 600,000 | 0 |
January 2018 Public Offering | Warrants to Purchase Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 |
March 2020 Public Offering | Warrants to Purchase Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 3,467,625 | 0 | 3,467,625 | 0 |
March 2020 Registered Direct Offering | Warrants to Purchase Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities (in shares) | 558,140 | 0 | 558,140 | 0 |
KNOW Bio, LLC (Details)
KNOW Bio, LLC (Details) | Oct. 13, 2017USD ($)oncovirus | Dec. 29, 2015 | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 30, 2015 |
Collaborative Arrangements Transactions [Line Items] | |||||
Milestone and royalty payments | $ 0 | $ 0 | |||
KNOW Bio | |||||
Collaborative Arrangements Transactions [Line Items] | |||||
Percentage of outstanding member interests of KNOW Bio distributed to stockholders | 100.00% | ||||
Written notice to terminate, period | 90 days | ||||
Option term for development and commercialization of products | 3 years | ||||
Right to sublicense, term | 3 years | ||||
Upfront license agreement payment due upon execution | $ 250,000 | ||||
KNOW Bio | Maximum | |||||
Collaborative Arrangements Transactions [Line Items] | |||||
Number of other specified oncoviruses | oncovirus | 4 |
Research and Development Lice_2
Research and Development Licenses (Details) - USD ($) | Jun. 30, 2020 | Jun. 27, 2012 |
Licensing Agreements | ||
Research And Development Licenses [Line Items] | ||
Accrual for future payments | $ 0 | |
UNC License Agreement | ||
Research And Development Licenses [Line Items] | ||
Potential regulatory and commercial milestones payable under agreement | $ 425,000 |
Licensing Arrangements (Details
Licensing Arrangements (Details) - Amended Sato Agreement | Nov. 07, 2019JPY (¥) | Nov. 07, 2019USD ($) | Mar. 14, 2019JPY (¥) | Mar. 14, 2019USD ($) | Oct. 23, 2018JPY (¥) | Oct. 23, 2018USD ($) | Oct. 05, 2018USD ($) | Jan. 19, 2017JPY (¥) | Jan. 19, 2017USD ($) | Jan. 12, 2017JPY (¥) | Jan. 12, 2017USD ($) | Jun. 30, 2020 | Dec. 31, 2019JPY (¥) | Dec. 31, 2019USD ($) | Sep. 13, 2019JPY (¥) | Feb. 14, 2019JPY (¥) | Oct. 05, 2018JPY (¥) | Jan. 12, 2017USD ($) |
Collaborative Arrangements Transactions [Line Items] | ||||||||||||||||||
Upfront payment receivable | ¥ 1,250,000,000 | |||||||||||||||||
Upfront payment installments | ¥ 500,000,000 | ¥ 500,000,000 | 250,000,000 | |||||||||||||||
Payment received under license agreement | ¥ 500,000,000 | $ 4,554,000 | ¥ 500,000,000 | $ 4,460,000 | ¥ 250,000,000 | $ 2,224,000 | ¥ 1,250,000,000 | $ 10,813,000 | ¥ 1,250,000,000 | $ 10,813,000 | ||||||||
Aggregate development and regulatory milestone payments potentially receivable under license agreement | 2,750,000,000 | 1,750,000,000 | ||||||||||||||||
Aggregate Phase 1 trial milestone payment term under license agreement | 250,000,000 | ¥ 250,000,000 | $ 2,162,000 | $ 2,162,000 | ||||||||||||||
Aggregate becoming payable upon earlier of specified future dates or achievement of milestone events | 1,000,000,000 | |||||||||||||||||
Aggregate commercial milestone payments potentially receivable under license agreement | ¥ 900,000,000 | ¥ 3,900,000,000 | ||||||||||||||||
License agreement additional term | 2 years | |||||||||||||||||
Maximum preclinical studies amount | $ | $ 1,000,000 | |||||||||||||||||
Written notice to terminate, period | 120 days | 120 days | ||||||||||||||||
Written notice to terminate due to material breach, term | 60 days | 60 days | ||||||||||||||||
Upfront fee refundable in event of termination | $ | $ 0 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) | Nov. 07, 2019JPY (¥) | Nov. 07, 2019USD ($) | Mar. 14, 2019JPY (¥) | Mar. 14, 2019USD ($) | Oct. 23, 2018JPY (¥) | Oct. 23, 2018USD ($) | Jan. 19, 2017JPY (¥) | Jan. 19, 2017USD ($) | Jan. 12, 2017JPY (¥) | Jan. 12, 2017USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Feb. 29, 2020USD ($) | Dec. 31, 2019JPY (¥) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 13, 2019JPY (¥) | Aug. 30, 2019USD ($) | Feb. 14, 2019JPY (¥) | Oct. 05, 2018JPY (¥) | Jan. 12, 2017USD ($) |
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Performance obligations under long-term contracts unsatisfied | $ 9,261,000 | $ 9,261,000 | |||||||||||||||||||||
License and collaboration revenue | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Revenue | 1,100,000 | $ 1,101,000 | 2,124,000 | $ 2,201,000 | |||||||||||||||||||
Government research contracts and grants revenue | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Revenue | 221,000 | 0 | 410,000 | 0 | |||||||||||||||||||
National Institutes of Health | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Amount awarded from government grant | $ 997,000 | $ 223,000 | |||||||||||||||||||||
National Institutes of Health | Phase 1 Grant | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Revenue | 5,000 | 29,000 | |||||||||||||||||||||
National Institutes of Health | Phase 2 Grant | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Revenue | 0 | 0 | |||||||||||||||||||||
U.S. Department of Defense | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Amount awarded from government grant | $ 1,113,000 | ||||||||||||||||||||||
U.S. Department of Defense | Government research contracts and grants revenue | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Revenue | 216,000 | 381,000 | |||||||||||||||||||||
Amended Sato Agreement | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Maximum preclinical studies amount | $ 1,000,000 | ||||||||||||||||||||||
Payment received under license agreement | ¥ 500,000,000 | $ 4,554,000 | ¥ 500,000,000 | $ 4,460,000 | ¥ 250,000,000 | $ 2,224,000 | ¥ 1,250,000,000 | $ 10,813,000 | ¥ 1,250,000,000 | $ 10,813,000 | |||||||||||||
Milestone payment received following initiation of Phase 1 trial | 250,000,000 | ¥ 250,000,000 | $ 2,162,000 | $ 2,162,000 | |||||||||||||||||||
Upfront payment receivable | ¥ | ¥ 1,250,000,000 | ||||||||||||||||||||||
Upfront payment installments | ¥ | ¥ 500,000,000 | ¥ 500,000,000 | 250,000,000 | ||||||||||||||||||||
Aggregate becoming payable upon earlier of specified future dates or achievement of milestone events | ¥ | 1,000,000,000 | ||||||||||||||||||||||
Potential future sales-based milestone payments | ¥ | ¥ 900,000,000 | ¥ 3,900,000,000 | |||||||||||||||||||||
Amended Sato Agreement | License and collaboration revenue | |||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||
Revenue | $ 1,100,000 | $ 1,101,000 | $ 2,124,000 | $ 2,201,000 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract asset | $ 8,895 | $ 8,974 |
Contract liability, gross | 18,156 | 20,478 |
Net deferred revenue | 9,261 | 11,504 |
Deferred revenue, current portion | 4,401 | 4,428 |
Deferred revenue, net of current portion | $ 4,860 | $ 7,076 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations, Expected Timing of Satisfaction (Details) | Jun. 30, 2020 | Oct. 04, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue remaining performance obligation percentage | 24.00% | |
Estimated performance period | 12 months | |
Amended Sato Agreement | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2017-02-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Estimated performance period | 7 years 6 months | 5 years |
Research and Development Arra_2
Research and Development Arrangements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | May 04, 2019 | Apr. 29, 2019 | |
Ligand Pharmaceuticals Incorporated | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Immediate funding | $ 12,000,000 | ||||||||
Potential regulatory and commercial milestones payable under agreement | $ 20,000,000 | ||||||||
Minimum | Ligand Pharmaceuticals Incorporated | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Tiered royalties, percentage | 7.00% | ||||||||
Maximum | Ligand Pharmaceuticals Incorporated | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Tiered royalties, percentage | 10.00% | ||||||||
SB206 | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Restricted cash related to Funding Agreement | $ 0 | $ 0 | $ 0 | ||||||
SB206 | Ligand Pharmaceuticals Incorporated | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Research and development contra expense | $ (369,000) | $ (2,193,000) | $ (1,882,000) | $ (2,193,000) | |||||
Restricted Cash | SB206 | Ligand Pharmaceuticals Incorporated | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Immediate funding | $ 12,000,000 | ||||||||
Reedy Creek Investments LLC | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Immediate funding | $ 25,000,000 | ||||||||
Additional funding potentially receivable | $ 10,000,000 | ||||||||
Royalty and milestone agreement funding, amount not expected to be received | $ 10,000,000 | ||||||||
Initial percentage of fees and milestone to determine quarterly payments per agreement | 25.00% | ||||||||
Reedy Creek Investments LLC | Novan, Inc. | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Beneficial ownership percentage | 5.00% | 5.00% | |||||||
Reedy Creek Investments LLC | SB206 | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Percentage used to determine ongoing quarterly payments per agreement | 10.00% | ||||||||
Reedy Creek Investments LLC | SB204 And SB414 | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Percentage used to determine ongoing quarterly payments per agreement | 20.00% | ||||||||
Reedy Creek Investments LLC | Cash and Cash Equivalents | |||||||||
Collaborative Arrangements Transactions [Line Items] | |||||||||
Immediate funding | $ 25,000,000 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 16,349,000 | $ 16,185,000 |
Less: Accumulated depreciation and amortization | (6,611,000) | (5,679,000) |
Property and equipment, net of accumulated depreciation and amortization | 9,738,000 | 10,506,000 |
Less: Impairment charges on assets held and used or upon classification of assets held for sale | (2,421,000) | 0 |
Property and equipment, net of accumulated depreciation and impairment charge | 7,317,000 | 10,506,000 |
Less: Property and equipment reclassified to assets held for sale, net | (977,000) | 0 |
Property and equipment, net of assets classified as held for sale | 6,340,000 | 10,506,000 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 575,000 | 575,000 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 305,000 | 305,000 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,077,000 | 7,898,000 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 339,000 | 339,000 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,053,000 | $ 7,068,000 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 492 | $ 518 | $ 987 | $ 1,021 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)officer | Aug. 31, 2015ft² | |
Commitments And Contingencies [Line Items] | |||||||
Weighted average discount rate, operating lease liabilities | 9.85% | 9.85% | |||||
Weighed average remaining lease term, operating leases | 6 years | 6 years | |||||
Rentable square feet of facility space | ft² | 51,000 | ||||||
Optional term of extending lease agreement | 5 years | ||||||
Current contractual base rent payments per month | $ 95 | ||||||
Percentage of increase in annual rental payments | 3.00% | ||||||
Rent expense associated with primary facility lease (Topic 842) | $ 171 | $ 273 | $ 395 | $ 430 | |||
February 2020 Restructuring | |||||||
Commitments And Contingencies [Line Items] | |||||||
Accrued severance costs | $ 0 | 0 | |||||
Employee severance costs expensed | $ 59 | ||||||
Two Former Officers | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of former officers | officer | 2 | ||||||
Severance expenses | $ 0 | $ 878 | |||||
Accrued severance costs | $ 33 |
Paycheck Protection Program (De
Paycheck Protection Program (Details) - Paycheck Protection Program Loan $ in Thousands | Apr. 22, 2020USD ($) |
Debt Instrument [Line Items] | |
Unsecured loan made under Paycheck Protection Program | $ 956 |
Fixed interest rate of loan per annum | 1.00% |
Initial period of interest deferral | 6 months |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Additional Information (Details) - USD ($) | Jun. 15, 2020 | Mar. 26, 2020 | Mar. 03, 2020 | Jan. 09, 2018 | Jun. 30, 2020 | Aug. 31, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 14, 2020 | Sep. 16, 2019 | Aug. 30, 2019 | Aug. 29, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||||||||||||||||
Capital stock, shares authorized (in shares) | 210,000,000 | 210,000,000 | 210,000,000 | 210,000,000 | 210,000,000 | ||||||||||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Common stock issued during period (in shares) | 10,550,000 | 14,000,000 | |||||||||||||||||
Period of option to purchase additional shares | 30 days | ||||||||||||||||||
Common stock, maximum additional shares available for purchase (in shares) | 2,750,000 | ||||||||||||||||||
Maximum additional number of common warrants available for purchase (in shares) | 2,750,000 | ||||||||||||||||||
Percentage of common stock sold related to warrants issued | 3.00% | 3.00% | |||||||||||||||||
Warrants expiration period | 4 years | ||||||||||||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 12,577,000 | $ 0 | |||||||||||||||||
Proceeds from exercise of common stock warrants | 5,463,000 | 0 | |||||||||||||||||
Proceeds from issuance of common stock under common stock purchase agreement | $ 17,085,000 | $ 0 | |||||||||||||||||
Common stock, shares outstanding (in shares) | 119,422,047 | 119,422,047 | 119,422,047 | 119,422,047 | 119,422,047 | 26,734,800 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||
March 2020 Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 5,158,000 | ||||||||||||||||||
Underwriting discounts and commissions and offering expenses | $ 791,000 | ||||||||||||||||||
March 2020 Registered Direct Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 7,225,000 | ||||||||||||||||||
Underwriting discounts and commissions and offering expenses | $ 774,000 | ||||||||||||||||||
January 2018 Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock issued during period (in shares) | 10,000,000 | ||||||||||||||||||
Price per share (in USD per share) | $ 3.8 | ||||||||||||||||||
Warrant exercise price (in USD per share) | $ 4.66 | ||||||||||||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 35,194,000 | ||||||||||||||||||
Underwriting discounts and commissions and offering expenses | $ 2,806,000 | ||||||||||||||||||
Aspire Capital | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Proceeds from issuance of common stock under common stock purchase agreement | $ 17,085,000 | ||||||||||||||||||
Aspire Capital | June 2020 Common Stock Purchase Agreement | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock issued during period (in shares) | 30,025,000 | ||||||||||||||||||
Maximum value of shares of common stock authorized to be sold | $ 20,000,000 | ||||||||||||||||||
Common stock purchase agreement term | 30 months | ||||||||||||||||||
Maximum shares to be purchased with purchase notice per business day (in shares) | 300,000 | ||||||||||||||||||
Maximum aggregate purchase price payable on one purchase date | $ 500,000 | ||||||||||||||||||
Maximum shares to be purchased per trading day upon mutual agreement (in shares) | 2,000,000 | ||||||||||||||||||
Number of shares submitted via purchase notice to trigger a VWAP purchase notice (in shares) | 300,000 | ||||||||||||||||||
Maximum percentage of common stock traded on trading day to be purchased | 30.00% | ||||||||||||||||||
Purchase price per share pursuant to VWAP purchase notice as a percentage of VWAP for common stock | 97.00% | ||||||||||||||||||
Minimum closing sale price to effect purchase of shares (in usd per share) | $ 0.15 | ||||||||||||||||||
Maximum number of shares that may be sold under agreement (in shares) | 15,859,487 | ||||||||||||||||||
Percentage of common stock on date of purchase agreement that cannot be exceeded | 19.99% | ||||||||||||||||||
Minimum average price per share paid for all shares issued to allow for additional share issuance (in usd per share) | $ 0.414 | ||||||||||||||||||
Shares of common stock issued for commitment fee (in shares) | 1,449,275 | ||||||||||||||||||
Value of commitment fee shares issued | $ 848,000 | ||||||||||||||||||
Average sales price per share of common stock (in usd per share) | $ 0.49 | ||||||||||||||||||
Available for sale under common stock purchase agreement | $ 5,195,000 | $ 5,195,000 | $ 5,195,000 | $ 5,195,000 | $ 5,195,000 | ||||||||||||||
Proceeds from issuance of common stock under common stock purchase agreement | 14,805,000 | ||||||||||||||||||
Aspire Capital | 2019 Common Stock Purchase Agreement | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock issued during period (in shares) | 3,865,717 | 700,000 | 4,565,717 | 4,865,717 | |||||||||||||||
Maximum value of shares of common stock authorized to be sold | $ 25,000,000 | ||||||||||||||||||
Common stock purchase agreement term | 30 months | ||||||||||||||||||
Maximum shares to be purchased with purchase notice per business day (in shares) | 100,000 | ||||||||||||||||||
Maximum aggregate purchase price payable on one purchase date | $ 500,000 | ||||||||||||||||||
Number of shares submitted via purchase notice to trigger a VWAP purchase notice (in shares) | 100,000 | ||||||||||||||||||
Maximum percentage of common stock traded on trading day to be purchased | 30.00% | ||||||||||||||||||
Purchase price per share pursuant to VWAP purchase notice as a percentage of VWAP for common stock | 97.00% | ||||||||||||||||||
Minimum closing sale price to effect purchase of shares (in usd per share) | $ 0.25 | ||||||||||||||||||
Maximum number of shares that may be sold under agreement (in shares) | 5,211,339 | ||||||||||||||||||
Percentage of common stock on date of purchase agreement that cannot be exceeded | 19.99% | ||||||||||||||||||
Minimum average price per share paid for all shares issued to allow for additional share issuance (in usd per share) | $ 2.17 | ||||||||||||||||||
Shares of common stock issued for commitment fee (in shares) | 345,622 | ||||||||||||||||||
Value of commitment fee shares issued | $ 750,000 | ||||||||||||||||||
Average sales price per share of common stock (in usd per share) | $ 0.62 | ||||||||||||||||||
Available for sale under common stock purchase agreement | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||
Common stock registered (in shares) | 7,032,630 | ||||||||||||||||||
Period of prohibited issuance of additional securities in variable rate transactions | 1 year | ||||||||||||||||||
Conditional period for VWAP to exceed purchase price per share to issue additional securities | 5 days | ||||||||||||||||||
Proceeds from issuance of common stock under common stock purchase agreement | $ 1,838,000 | $ 3,026,000 | |||||||||||||||||
Maximum | January 2018 Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants issued (in shares) | 10,000,000 | ||||||||||||||||||
Pre Funded Warrant | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants issued (in shares) | 8,054,652 | 4,333,334 | |||||||||||||||||
Price per share (in USD per share) | $ 0.4299 | ||||||||||||||||||
Warrant exercise price (in USD per share) | 0.0001 | $ 0.0001 | |||||||||||||||||
Warrant exercise limitation, maximum beneficial ownership percentage, current | 4.99% | ||||||||||||||||||
Warrant exercise limitation, maximum beneficial ownership percentage, if elected by holder | 9.99% | ||||||||||||||||||
Pre Funded Warrant | March 2020 Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants exercised during period (in shares) | 4,333,334 | ||||||||||||||||||
Warrants owned (in shares) | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Pre Funded Warrant | March 2020 Registered Direct Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants exercised during period (in shares) | 8,054,652 | ||||||||||||||||||
Warrants owned (in shares) | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
Common Warrant | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants issued (in shares) | 2,750,000 | ||||||||||||||||||
Warrant exercise price (in USD per share) | $ 0.3 | ||||||||||||||||||
Warrants expiration period | 5 years | ||||||||||||||||||
Warrants exercised during period (in shares) | 18,210,667 | ||||||||||||||||||
Warrants owned (in shares) | 2,872,667 | 2,872,667 | 2,872,667 | 2,872,667 | 2,872,667 | ||||||||||||||
Common Warrant | March 2020 Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Proceeds from exercise of common stock warrants | $ 5,463,000 | ||||||||||||||||||
Common Warrant | Maximum | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants issued (in shares) | 18,333,334 | ||||||||||||||||||
Pre Funded and Common Stock Warrants | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Price per share (in USD per share) | $ 0.2999 | ||||||||||||||||||
Underwriter Warrant | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants issued (in shares) | 594,958 | ||||||||||||||||||
Warrant exercise price (in USD per share) | $ 0.375 | ||||||||||||||||||
Warrants expiration period | 5 years | ||||||||||||||||||
Warrants owned (in shares) | 594,958 | 594,958 | 594,958 | 594,958 | 594,958 | ||||||||||||||
Common and Underwriter Warrants | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Fundamental transaction common stock acquired threshold | 50.00% | ||||||||||||||||||
Black Scholes valuation input, historical volatility period | 100 days | ||||||||||||||||||
Maximum volatility rate used to derive Black-Scholes Value in event of fundamental transaction | 100.00% | ||||||||||||||||||
Warrant exercise limitation, maximum beneficial ownership percentage, current | 4.99% | ||||||||||||||||||
Warrant exercise limitation, maximum beneficial ownership percentage, if elected by holder | 9.99% | ||||||||||||||||||
Placement Agent Warrant | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrant exercise price (in USD per share) | $ 0.5375 | ||||||||||||||||||
Warrants expiration period | 5 years | ||||||||||||||||||
Warrants owned (in shares) | 558,140 | 558,140 | 558,140 | 558,140 | 558,140 | ||||||||||||||
Placement Agent Warrant | Maximum | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants issued (in shares) | 558,140 | ||||||||||||||||||
Common Stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock issued during period (in shares) | 1,498,602 | ||||||||||||||||||
Price per share (in USD per share) | $ 0.43 | ||||||||||||||||||
Common stock, shares outstanding (in shares) | 119,422,047 | 119,422,047 | 72,019,062 | 119,422,047 | 119,422,047 | 26,069,734 | 119,422,047 | 26,734,800 | 26,069,734 | 26,056,735 | |||||||||
Common Stock | Pre Funded Warrant | March 2020 Registered Direct Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock issued during period (in shares) | 10,550,000 | ||||||||||||||||||
Common Stock | Common Warrant | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Price per share (in USD per share) | $ 0.3 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Reserved Shares of Common Stock for Future Issuance (Details) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 17,169,531 | 13,177,766 |
2016 Stock Plan | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 549,437 | 388,463 |
Outstanding stock options | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 1,994,329 | 1,789,303 |
Stock Appreciation Rights (SARs) | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 600,000 | 1,000,000 |
January 2018 Public Offering | Warrants to Purchase Common Stock | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 10,000,000 | 10,000,000 |
March 2020 Public Offering | Warrants to Purchase Common Stock | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 3,467,625 | 0 |
March 2020 Registered Direct Offering | Warrants to Purchase Common Stock | ||
Class of Stock [Line Items] | ||
Common stock shares reserved for future issuance (in shares) | 558,140 | 0 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 13, 2020 | Feb. 01, 2020 | Jan. 06, 2020 | Sep. 06, 2019 | Jul. 31, 2019 | Jul. 30, 2019 | Aug. 08, 2018 | May 31, 2018 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Closing sale price of common stock (in usd per share) | $ 0.52 | |||||||||||||
Term of SAR award | 10 years | |||||||||||||
Number of options granted to employees (in shares) | 417,000 | |||||||||||||
Options forfeited (in shares) | (211,974) | |||||||||||||
Share-based compensation expense for equity-based awards | $ 419 | $ 1,540 | $ 691 | $ 1,754 | ||||||||||
Stock options outstanding (in shares) | 1,994,329 | 1,994,329 | 1,789,303 | |||||||||||
CEO | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Employment agreement, number of SARs granted (in shares) | 1,000,000 | |||||||||||||
Stock Appreciation Rights (SARs) | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Employment agreement, number of SARs granted (in shares) | 600,000 | |||||||||||||
Exercise price (in USD per share) | $ 0.82 | |||||||||||||
Employee share-based compensation expense | $ 29 | $ 409 | $ 91 | $ 416 | ||||||||||
Stock Appreciation Rights (SARs) | CEO | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exercise price (in USD per share) | $ 3.80 | |||||||||||||
Inducement Grants | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Exercise price (in USD per share) | $ 2.62 | $ 3.15 | ||||||||||||
Number of options granted to employees (in shares) | 25,000 | 100,500 | ||||||||||||
Inducement options vesting period | 3 years | |||||||||||||
Options forfeited (in shares) | (25,000) | |||||||||||||
Stock options outstanding (in shares) | 94,000 | 94,000 | ||||||||||||
2016 Stock Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Increase in number of shares of common stock reserved for issuance (in shares) | 1,000,000 | 1,000,000 | ||||||||||||
Maximum aggregate shares to be awarded to one person (in shares) | 1,000,000 | 250,000 | ||||||||||||
Number of options granted to employees (in shares) | 383,000 | |||||||||||||
Shares available for future issuance (in shares) | 549,437 | 549,437 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-based Compensation Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense for equity-based awards | $ 419 | $ 1,540 | $ 691 | $ 1,754 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense for equity-based awards | 303 | 520 | 511 | 581 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense for equity-based awards | $ 116 | $ 1,020 | $ 180 | $ 1,173 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Shares Subject to Outstanding Options | |
Options outstanding (in shares) | shares | 1,789,303 |
Options granted (in shares) | shares | 417,000 |
Options forfeited (in shares) | shares | (211,974) |
Options exercised (in shares) | shares | 0 |
Options outstanding (in shares) | shares | 1,994,329 |
Weighted-Average Exercise Price Per Share | |
Options outstanding (in USD per share) | $ / shares | $ 3.89 |
Options granted (in USD per share) | $ / shares | 0.46 |
Options forfeited (in USD per share) | $ / shares | 3.79 |
Options exercised (in USD per share) | $ / shares | 0 |
Options outstanding (in USD per share) | $ / shares | $ 3.18 |
Weighted- Average Remaining Contractual Term (in years) | |
Options outstanding | 7 years 10 months 20 days |
Aggregate Intrinsic Value | |
Options outstanding | $ | $ 11 |
Tangible Stockholder Return P_2
Tangible Stockholder Return Plan (Details) | Aug. 02, 2018USD ($)tranche$ / shares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 419,000 | $ 1,540,000 | $ 691,000 | $ 1,754,000 | |
Performance Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Estimated dividend yield | 0.00% | ||||
Share-based compensation expense | $ 84,000 | $ 885,000 | $ (29,000) | $ 924,000 | |
Performance Plan | Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Bonus award payment term | 24 months | ||||
Performance Plan | Employees And Consultants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Bonus award payment term | 12 months | ||||
Performance Plan | Deferred Bonus | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of tranches | tranche | 2 | ||||
Number of consecutive trading days | 30 days | ||||
Share price target, first tranche (in USD per share) | $ / shares | $ 11.17 | ||||
Bonus pool, first tranche | $ 25,000,000 | ||||
Share price target, second tranche (in USD per share) | $ / shares | $ 25.45 | ||||
Bonus pools, second tranche | $ 50,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Mar. 26, 2020 | Mar. 03, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Apr. 29, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||||||||
Common stock, number of shares held (in shares) | 119,422,047 | 26,734,800 | |||||||
Common stock issued during period (in shares) | 10,550,000 | 14,000,000 | |||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 12,577 | $ 0 | |||||||
Board Members | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock, number of shares held (in shares) | 1,104,776 | 1,002,776 | |||||||
Reedy Creek Investments LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Warrants owned (in shares) | 3,900,000 | ||||||||
Reedy Creek Investments LLC | Novan, Inc. | |||||||||
Related Party Transaction [Line Items] | |||||||||
Beneficial ownership percentage | 5.00% | 5.00% | |||||||
Sabby | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock issued during period (in shares) | 6,200,000 | ||||||||
Joseph Moglia | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock issued during period (in shares) | 1,000,000 | ||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 430 | ||||||||
Pre Funded Warrant | |||||||||
Related Party Transaction [Line Items] | |||||||||
Warrants issued (in shares) | 8,054,652 | 4,333,334 | |||||||
Pre Funded Warrant | Sabby | |||||||||
Related Party Transaction [Line Items] | |||||||||
Warrants issued (in shares) | 2,602,326 | ||||||||
Common Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock, number of shares held (in shares) | 119,422,047 | 26,069,734 | 72,019,062 | 26,734,800 | 26,069,734 | 26,056,735 | |||
Common stock issued during period (in shares) | 1,498,602 | ||||||||
Common Stock | Pre Funded Warrant | Sabby | |||||||||
Related Party Transaction [Line Items] | |||||||||
Proceeds from issuance of common stock and pre-funded warrants, net of underwriting fees and commissions | $ 3,800 |
Assets Held for Sale, Impairm_2
Assets Held for Sale, Impairment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 29, 2020 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Property carrying value | $ 6,340 | $ 10,506 | |
Right-of-use lease assets | 1,816 | $ 1,833 | |
Furniture and equipment | Disposal group, held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Carrying value of disposal group | $ 454 | ||
Fair value less costs to sell | 265 | ||
Impairment charge on held for sale assets | 189 | ||
Manufacturing and laboratory equipment | Disposal group, held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Carrying value of disposal group | 1,510 | ||
Fair value less costs to sell | 712 | ||
Impairment charge on held for sale assets | 798 | ||
Manufacturing and laboratory equipment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Property carrying value | 744 | ||
Right-of-use asset, leasehold improvements and other property | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Property carrying value | 8,227 | ||
Other assets held and used | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Property carrying value | 505 | ||
Impairment charge on held for use assets | 505 | ||
Primary Facility Lease | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Right-of-use lease assets | 1,816 | ||
Restricted cash securing letter of credit associated with Primary Facility Lease | 539 | ||
Impairment charge on held for use assets | $ 929 | ||
Primary Facility Lease | Right-of-use asset, leasehold improvements and other property | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Fair value of asset group | 7,298 | ||
Primary Facility Lease | Leasehold improvements | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Property carrying value | $ 5,872 |
Subsequent Events (Details)
Subsequent Events (Details) | Jul. 21, 2020USD ($)$ / sharesshares | Jul. 16, 2020USD ($)ft² | Jun. 15, 2020USD ($)$ / sharesshares | Mar. 26, 2020shares | Mar. 03, 2020shares | Aug. 14, 2020$ / sharesshares | Jul. 31, 2020USD ($) | Jul. 21, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Sep. 01, 2020ft² | Jun. 14, 2020$ / shares | Feb. 01, 2020$ / shares | Aug. 31, 2015ft² |
Subsequent Event [Line Items] | ||||||||||||||||
Rentable square feet of facility space | ft² | 51,000 | |||||||||||||||
Common stock issued during period (in shares) | shares | 10,550,000 | 14,000,000 | ||||||||||||||
Proceeds from sale of common stock | $ 17,085,000 | $ 0 | ||||||||||||||
Closing sale price of common stock (in usd per share) | $ / shares | $ 0.52 | |||||||||||||||
Aspire Capital | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Proceeds from sale of common stock | 17,085,000 | |||||||||||||||
Aspire Capital | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Proceeds from sale of common stock | $ 13,071,000 | |||||||||||||||
Aspire Capital | June 2020 Common Stock Purchase Agreement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued during period (in shares) | shares | 30,025,000 | |||||||||||||||
Average sales price per share of common stock (in usd per share) | $ / shares | $ 0.49 | |||||||||||||||
Proceeds from sale of common stock | $ 14,805,000 | |||||||||||||||
Available for sale under common stock purchase agreement | 5,195,000 | 5,195,000 | ||||||||||||||
Maximum value of shares of common stock authorized to be sold | $ 20,000,000 | |||||||||||||||
Common stock purchase agreement term | 30 months | |||||||||||||||
Shares of common stock issued for commitment fee (in shares) | shares | 1,449,275 | |||||||||||||||
Maximum shares to be purchased with purchase notice per business day (in shares) | shares | 300,000 | |||||||||||||||
Maximum aggregate purchase price payable on one purchase date | $ 500,000 | |||||||||||||||
Maximum shares to be purchased per trading day upon mutual agreement (in shares) | shares | 2,000,000 | |||||||||||||||
Number of shares submitted via purchase notice to trigger a VWAP purchase notice (in shares) | shares | 300,000 | |||||||||||||||
Maximum percentage of common stock traded on trading day to be purchased | 30.00% | |||||||||||||||
Purchase price per share pursuant to VWAP purchase notice as a percentage of VWAP for common stock | 97.00% | |||||||||||||||
Minimum closing sale price to effect purchase of shares (in usd per share) | $ / shares | $ 0.15 | |||||||||||||||
Maximum number of shares that may be sold under agreement (in shares) | shares | 15,859,487 | |||||||||||||||
Percentage of common stock on date of purchase agreement that cannot be exceeded | 19.99% | |||||||||||||||
Minimum average price per share paid for all shares issued to allow for additional share issuance (in usd per share) | $ / shares | $ 0.414 | |||||||||||||||
Aspire Capital | June 2020 Common Stock Purchase Agreement | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued during period (in shares) | shares | 7,739,280 | |||||||||||||||
Average sales price per share of common stock (in usd per share) | $ / shares | $ 0.67 | |||||||||||||||
Proceeds from sale of common stock | $ 5,195,000 | |||||||||||||||
Available for sale under common stock purchase agreement | $ 0 | 0 | ||||||||||||||
Aspire Capital | July 2020 Common Stock Purchase Agreement | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued during period (in shares) | shares | 5,555,555 | 9,055,555 | ||||||||||||||
Average sales price per share of common stock (in usd per share) | $ / shares | $ 0.87 | |||||||||||||||
Proceeds from sale of common stock | $ 5,000,000 | 7,876,000 | ||||||||||||||
Maximum value of shares of common stock authorized to be sold | $ 30,000,000 | $ 30,000,000 | ||||||||||||||
Common stock purchase agreement term | 30 months | |||||||||||||||
Closing sale price of common stock (in usd per share) | $ / shares | $ 0.9 | $ 0.9 | ||||||||||||||
Shares of common stock issued for commitment fee (in shares) | shares | 1,000,000 | |||||||||||||||
Maximum shares to be purchased with purchase notice per business day (in shares) | shares | 300,000 | 300,000 | ||||||||||||||
Maximum aggregate purchase price payable on one purchase date | $ 500,000 | $ 500,000 | ||||||||||||||
Maximum shares to be purchased per trading day upon mutual agreement (in shares) | shares | 2,000,000 | 2,000,000 | ||||||||||||||
Number of shares submitted via purchase notice to trigger a VWAP purchase notice (in shares) | shares | 300,000 | 300,000 | ||||||||||||||
Maximum percentage of common stock traded on trading day to be purchased | 30.00% | 30.00% | ||||||||||||||
Purchase price per share pursuant to VWAP purchase notice as a percentage of VWAP for common stock | 97.00% | 97.00% | ||||||||||||||
Minimum closing sale price to effect purchase of shares (in usd per share) | $ / shares | $ 0.15 | $ 0.15 | ||||||||||||||
Maximum number of shares that may be sold under agreement (in shares) | shares | 25,433,642 | 25,433,642 | ||||||||||||||
Percentage of common stock on date of purchase agreement that cannot be exceeded | 19.99% | 19.99% | ||||||||||||||
Minimum average price per share paid for all shares issued to allow for additional share issuance (in usd per share) | $ / shares | $ 0.5907 | $ 0.5907 | ||||||||||||||
Primary Facility Lease | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Rentable square feet of facility space | ft² | 51,350 | |||||||||||||||
Remaining minimum lease payments under Primary Facility Lease | $ 7,900,000 | $ 7,900,000 | ||||||||||||||
Primary Facility Lease | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Rentable square feet of facility space | ft² | 12,000 | 10,000 | ||||||||||||||
Lease termination expense | $ 600,000 | |||||||||||||||
Security deposit forfeited | 539,000 | |||||||||||||||
Cash paid for lease termination expense | $ 61,000 | |||||||||||||||
Forecast | Primary Facility Lease | Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Lease termination expense | $ 600,000 | |||||||||||||||
Operating Lease, Lease Termination Costs, Cash Expenditures | 1,300,000 | |||||||||||||||
Security deposit forfeited | 500,000 | |||||||||||||||
Broker commissions | 400,000 | |||||||||||||||
Facility decommissioning and environmental remediation costs | 300,000 | |||||||||||||||
Cash paid for lease termination from existing cash | 800,000 | |||||||||||||||
Funds to received from new tenant to offset expenditures | $ 300,000 |
Uncategorized Items - novn-2020
Label | Element | Value |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 8,286,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 0 |