Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 14, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'CONTRAFECT Corp | ' |
Entity Central Index Key | '0001478069 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 20,217,263 |
Balance_Sheets
Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $31,320,237 | $4,145,270 |
Prepaid expenses and other current assets | 417,143 | 198,410 |
Total current assets | 31,737,380 | 4,343,680 |
Property and equipment, net | 2,320,484 | 2,735,175 |
Restricted cash | ' | 25,000 |
Other assets | 143,621 | 2,579,980 |
Total assets | 34,201,485 | 9,683,835 |
Current liabilities: | ' | ' |
Accounts payable | 389,235 | 2,124,906 |
Accrued liabilities | 2,963,685 | 4,095,337 |
Deferred rent | 935,943 | 896,603 |
Total current liabilities | 4,288,863 | 7,116,846 |
Convertible notes payable | ' | 9,816,365 |
Warrant liabilities | 403,696 | 3,088,017 |
Embedded derivatives liabilities | ' | 2,680,780 |
Total liabilities | 4,692,559 | 22,702,008 |
Commitments and contingencies | ' | ' |
Stockholders' equity (deficit): | ' | ' |
Preferred stock, $0.0001 par value, 25,000,000 shares authorized and none outstanding at September 30, 2014; none authorized and outstanding at December 31, 2013 | ' | ' |
Common stock, $0.0001 par value, 100,000,000 shares authorized, 20,084,883 shares outstanding at September 30, 2014; 28,571,428 shares authorized, 1,011,997 shares outstanding at December 31, 2013 | 2,008 | 101 |
Additional paid-in capital | 117,228,694 | 4,930,310 |
Accumulated deficit | -87,721,776 | -57,840,911 |
Total stockholders' equity (deficit) | 29,508,926 | -52,910,500 |
Total liabilities, convertible preferred stock, and stockholders' equity (deficit) | 34,201,485 | 9,683,835 |
Series A Convertible Preferred Stock [Member] | ' | ' |
Current liabilities: | ' | ' |
Convertible preferred stock, value | ' | 1,964,283 |
Stockholders' equity (deficit): | ' | ' |
Total stockholders' equity (deficit) | ' | 1,964,283 |
Series B Convertible Preferred Stock [Member] | ' | ' |
Current liabilities: | ' | ' |
Convertible preferred stock, value | ' | 10,175,750 |
Stockholders' equity (deficit): | ' | ' |
Total stockholders' equity (deficit) | ' | 10,175,750 |
Series C Convertible Preferred Stock [Member] | ' | ' |
Current liabilities: | ' | ' |
Convertible preferred stock, value | ' | 27,752,294 |
Stockholders' equity (deficit): | ' | ' |
Total stockholders' equity (deficit) | ' | $27,752,294 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 28,571,428 |
Common stock, shares outstanding | 20,084,883 | 1,011,997 |
Series A Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 0 | 2,200,000 |
Preferred stock, shares issued | ' | 2,200,000 |
Preferred stock, shares outstanding | 0 | 2,200,000 |
Series B Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 0 | 5,600,000 |
Preferred stock, shares issued | ' | 4,651,163 |
Preferred stock, shares outstanding | 0 | 4,651,163 |
Series C Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 0 | 9,090,909 |
Preferred stock, shares issued | ' | 9,090,909 |
Preferred stock, shares outstanding | 0 | 9,090,909 |
Series C-1 Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 0 | 6,060,607 |
Preferred stock, shares issued | ' | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Statements_of_Operations
Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Operating expenses: | ' | ' | ' | ' |
Research and development | $2,363,957 | $2,108,397 | $6,545,496 | $6,601,105 |
General and administrative | 2,274,569 | 1,465,708 | 5,561,432 | 5,249,485 |
Total operating expenses | 4,638,526 | 3,574,105 | 12,106,928 | 11,850,590 |
Loss from operations | -4,638,526 | -3,574,105 | -12,106,928 | -11,850,590 |
Other income (expense) | ' | ' | ' | ' |
Interest expense, net | -11,067,209 | -784,075 | -12,414,240 | -838,776 |
Refundable state tax credits | ' | ' | 424,649 | ' |
Change in fair value of warrant and embedded derivative liabilities | -691,943 | ' | -1,315,894 | ' |
Total other income (expense) | -11,759,152 | -784,075 | -13,305,485 | -838,776 |
Net loss | -16,397,678 | -4,358,180 | -25,412,413 | -12,689,366 |
Preferred stock dividend in-kind | ' | ' | -4,468,452 | ' |
Net loss attributable to common stockholders | ($16,397,678) | ($4,358,180) | ($29,880,865) | ($12,689,366) |
Per share information: | ' | ' | ' | ' |
Net loss per share of common stock, basic and diluted | ($1.22) | ($4.31) | ($5.76) | ($12.54) |
Basic and diluted weighted average shares outstanding | 13,403,595 | 1,011,997 | 5,187,920 | 1,011,670 |
Statement_of_Convertible_Prefe
Statement of Convertible Preferred Stock and Stockholders' Equity (Deficit) (USD $) | Total | Preferred Stock [Member] | Initial Public Offering [Member] | IPO Over-Allotment [Member] | Convertible Notes [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member] | Series A Convertible Preferred Stock [Member] | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C-1 Convertible Preferred Stock [Member] | Series C-1 Convertible Preferred Stock [Member] |
Preferred Stock [Member] | Initial Public Offering [Member] | IPO Over-Allotment [Member] | Convertible Notes [Member] | Preferred Stock [Member] | Initial Public Offering [Member] | IPO Over-Allotment [Member] | Convertible Notes [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | Preferred Stock [Member] | |||||||||||||
Beginning Balance at Dec. 31, 2013 | ($52,910,500) | ' | ' | ' | ' | $101 | ' | ' | ' | ' | $4,930,310 | ' | ' | ' | ' | ($57,840,911) | ' | $1,964,283 | ' | $10,175,750 | ' | $27,752,294 | ' | ' | ' |
Beginning Balance, Shares at Dec. 31, 2013 | ' | ' | ' | ' | ' | 1,011,997 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | 4,651,163 | ' | 9,090,909 | ' | ' | ' |
Issuance of preferred stock for license | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' |
Issuance of preferred stock for license, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 151,515 | ' |
Issuance of securities in IPO | ' | ' | 36,000,000 | 5,281,998 | ' | ' | ' | 600 | 88 | ' | ' | ' | 35,999,400 | 5,281,910 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of securities in IPO, Shares | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | 880,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock | ' | 40,392,327 | ' | ' | 30,632,689 | ' | 686 | ' | ' | 520 | ' | 44,860,093 | ' | ' | 30,632,169 | ' | -4,468,452 | ' | -1,964,283 | ' | -10,175,750 | ' | -27,752,294 | ' | -500,000 |
Issuance of common stock, Shares | ' | ' | ' | ' | ' | ' | 6,861,968 | ' | ' | 5,197,476 | ' | ' | ' | ' | ' | ' | ' | ' | -2,200,000 | ' | -4,651,163 | ' | -9,090,909 | ' | -151,515 |
Financing cost of sale of securities in IPO | -6,644,713 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -6,644,713 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cancellation of placement agent warrants | 941,541 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 941,541 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net shares of common stock issued in relation to vesting of retention grants | 532,451 | ' | ' | ' | ' | 13 | ' | ' | ' | ' | 532,438 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net shares of common stock issued in relation to vesting of retention grants, Shares | ' | ' | ' | ' | ' | 133,109 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | 695,546 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 695,546 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss for the nine months ended September 30, 2014 | -25,412,413 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -25,412,413 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ending balance at Sep. 30, 2014 | $29,508,926 | ' | ' | ' | ' | $2,008 | ' | ' | ' | ' | $117,228,694 | ' | ' | ' | ' | ($87,721,776) | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ending balance, Shares at Sep. 30, 2014 | ' | ' | ' | ' | ' | 20,084,883 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities | ' | ' |
Net loss | ($25,412,413) | ($12,689,366) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation | 414,691 | 419,695 |
Stock-based compensation expense | 1,225,984 | 1,063,709 |
Issuance of preferred stock and other costs in exchange for licensed technology | 1,000,000 | ' |
Issuance of common stock in exchange for licensed technology | ' | 10,000 |
Issuance of common stock warrants in exchange for services | ' | 22,149 |
Recognition of beneficial conversion feature | 7,428,547 | ' |
Amortization of debt issuance costs | 1,240,391 | 196,271 |
Amortization of debt discount | 3,550,527 | 336,036 |
Change in fair value of warrant and embedded derivative liabilities | 1,315,894 | ' |
Increase in deferred rent | 39,340 | 171,528 |
Changes in operating assets and liabilities: | ' | ' |
Decrease (increase) in prepaid expenses and other current assets | -218,733 | 127,516 |
Increase in other assets | ' | -939,998 |
Increase (decrease) in accounts payable and accrued liabilities | -1,621,663 | 368,351 |
Net cash used in operating activities | -11,037,435 | -10,914,109 |
Cash flows from investing activities | ' | ' |
Decrease in restricted cash | 25,000 | 955,621 |
Sales of property and equipment | ' | 12,987 |
Net cash used in investing activities | 25,000 | 968,608 |
Cash flows from financing activities | ' | ' |
Proceeds from issuance of convertible notes | 3,036,350 | 11,863,650 |
Payment of financing costs of convertible notes | -24,850 | -1,330,935 |
Proceeds from initial public offering | 41,281,998 | ' |
Payment of financing costs of initial public offering | -6,106,096 | ' |
Repayment of lease and notes payable | ' | -1,281,338 |
Net cash provided by financing activities | 38,187,402 | 9,251,377 |
Net increase (decrease) in cash and cash equivalents | 27,174,967 | -694,124 |
Cash and cash equivalents at beginning of period | 4,145,270 | 7,886,264 |
Cash and cash equivalents at end of period | 31,320,237 | 7,192,140 |
Supplemental disclosures of cash flow information and non-cash investing and financing activities | ' | ' |
Cash paid for interest | ' | 54,701 |
Issuance of common and preferred stock for license received | 500,000 | 10,000 |
Cancellation of placement agent warrants | $941,541 | ' |
Organization_and_Description_o
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Organization and Description of Business | ' |
1. Organization and Description of Business | |
Organization and Business | |
ContraFect Corporation (the “Company”) is a biotechnology company focused on protein and antibody therapeutic products for life-threatening infectious diseases, particularly those treated in hospital-based settings. The Company intends to address multi-drug resistant infections using our therapeutic product candidates from its lysin and monoclonal antibody platforms to target conserved regions of either bacteria or viruses. The Company’s most advanced product candidates are CF-301, a lysin for the treatment of Staph aureus bacteremia, and CF-404, a combination of mAbs for the treatment of life-threatening seasonal and pandemic varieties of influenza. | |
The Company has incurred losses from operations since inception as a research and development organization and has relied on its ability to fund its operations through public and private debt and equity financings. Management expects operating losses and negative cash flows to continue at more significant levels in the future as it enters clinical trials. Transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidates and achieving a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional public or private equity financings, and may seek additional capital through arrangements with strategic partners or from other sources. In August 2014, the Company completed its initial public offering of units (the “IPO”), raising net proceeds of $35.0 million, net of underwriting discount, commissions and offering expenses. In conjunction with the closing of the Company’s IPO, the principal amount of the Convertible Notes (as defined in Note 6 “Senior Convertible Notes”), and all accrued and unpaid interest thereon, and all outstanding shares of the Company’s preferred stock, including the in-kind dividend payable, automatically converted into 11,971,956 shares of common stock. The significant increase in common stock outstanding in August 2014 is expected to impact the year-over-year comparability of the Company’s net loss per share calculations. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies | |
Basis of Presentation | |
The accompanying financial information as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2013 balance sheet was derived from the Company’s audited financial statements. The Company’s audited financial statements as of and for the year ended December 31, 2013, including all related disclosures and the complete listing of significant accounting policies as described in note 2 thereof, are included in the Company’s prospectus dated July 28, 2014, filed with the SEC on July 29, 2014 pursuant to Rule 424(b)(1) under the Securities Act, related to the Company’s IPO. | |
In the opinion of management, the unaudited financial information as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the operating results for the full fiscal year or any future periods. | |
Significant Risks and Uncertainties | |
The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, the Company’s products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products and the Company’s ability to raise capital. See “Risk Factors” contained elsewhere in this Quarterly Report on Form 10-Q for additional risks and uncertainties. | |
Reverse Stock Split | |
The Company’s board of directors approved a 1-for-7 reverse split of the Company’s outstanding common stock. This reverse split was effected on July 25, 2014. Accordingly, all shares and per share amounts were retroactively adjusted to reflect this reverse split. | |
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |
Prior to being a public company, the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The Company granted stock options at exercise prices not less than the fair market value of its common stock as determined by the board of directors, with input from management. The board of directors determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of redeemable convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company. | |
As a private company, the Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. The methodologies included an option pricing method and a probability-weighted expected return methodology that determined an estimated value under an IPO scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology included estimates and assumptions that required the Company’s judgment. These estimates included assumptions regarding future performance, including the successful completion of pre-clinical studies and clinical trials and the time to completing an IPO or sale. Significant changes to the key assumptions used in the valuations could have resulted in different fair values of common stock at each valuation date. | |
Cash and Cash Equivalents | |
The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposit, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value. | |
Marketable securities with original maturities greater than three months and less than one year are considered to be short-term investments. Short-term investments are reported at fair market value and unrealized gains and losses (if any) are included as a separate component of stockholders’ equity (deficit). Realized gains, realized losses, the amortization of premiums and discounts, interest earned, and dividends earned are included in interest income. The Company did not have any marketable securities as of September 30, 2014 or December 31, 2013. | |
Deferred Offering Costs | |
As of December 31, 2013, the Company had approximately $1.2 million of deferred offering costs representing legal, accounting and other costs directly attributable to the Company’s offering of its equity securities capitalized as other long term assets. These and additional costs were deferred until the completion of the Company’s IPO, at which time they were reclassified to additional paid-in capital as a reduction of the proceeds. See Note 4, “Other Assets.” | |
Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, notes payable, convertible notes, warrant liabilities and embedded derivatives liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The fair value of the Company’s convertible notes, warrant liabilities and embedded derivatives liabilities are based upon unobservable inputs, as described further below. | |
The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: | |
Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | |
Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | |
Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable. | |
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | |
The Company had no liabilities classified as Level 1 or Level 2. The carrying amounts reported in the accompanying financial statements for accounts payable and accrued expenses approximate their respective fair values due to their short-term maturities. The fair value of the warrant and embedded derivative liabilities are discussed in Note 3, “Fair Value Measurements.” | |
Share-based Compensation | |
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and non-employee directors, including employee stock options. Compensation expense based on the grant date fair value is generally amortized over the requisite service period of the award on a straight-line basis. | |
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions such as stock price, expected volatility and expected term. The Company’s estimates of these assumptions are primarily based on third-party valuations, historical data, peer company data and judgment regarding future trends and factors. Prior to being a public company, the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The board of directors determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of redeemable convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company. | |
The Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. The methodologies included an option pricing method and a probability-weighted expected return methodology that determined an estimated value under an offering scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology included estimates and assumptions that required the Company’s judgment. These estimates included assumptions regarding future performance, including the successful completion of pre-clinical studies and clinical trials and the time to completing an offering or sale. Significant changes to the key assumptions used in the valuations could have resulted in different fair values of common stock at each valuation date. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition Accounting Standards Update, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 provides guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for fiscal years and interim periods beginning after December 15, 2016. Early adoption is not permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. | |
In June 2014, the FASB issued Accounting Standards Update, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 910, Consolidation (ASU 2014-10). ASU 2014-10 eliminates the designation of “Development Stage Entity” in the codification and the incremental reporting requirements associated with this designation. This update allows an entity currently designated as “development stage” to remove the designation from its financial statements and the inception-to-date information from its statements of income, cash flows and shareholders’ equity. This guidance is effective for fiscal years beginning after December 15, 2014. Early adoption is allowed, and the Company adopted this pronouncement commencing with its financial statements as of June 30, 2014 and for the three and six months ended June 30, 2014, removing the “development stage entity” designation and associated information no longer required. | |
In August 2014, the FASB issued a new Accounting Standards Update, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year of the date the financial statements are issued, and, if such conditions exist, to provide related footnote disclosures. The guidance is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
3. Fair Value Measurements | |||||||||||||||||
The Company considered its convertible note related warrant liabilities and embedded derivatives liabilities as Level 3 financial instruments. The valuation of these liabilities therefore requires inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable. The Company determined the estimated fair value of the warrant liabilities and the embedded derivatives liabilities using a probability weighted estimated returns method (“PWERM”). The PWERM considered several “exit strategy” scenarios and various valuations of the Company, including whether or not an initial public offering would be completed and the timing of such events. The scenarios (or nodes of the model) used a Black-Scholes option-pricing model to determine the fair value of each node, which fair values are then probability weighted based on management’s estimates of the likelihood of each scenario. The probability weighted values were then discounted to present value at a rate that reflects the specific stage of the Company’s development. | |||||||||||||||||
The following assumption ranges were used in the Black-Scholes option-pricing model to determine the fair value of the convertible note related warrant and embedded derivatives liabilities immediately prior to the Company’s IPO and as of December 31, 2013: | |||||||||||||||||
Immediately | December 31, | ||||||||||||||||
Prior to | 2013 | ||||||||||||||||
IPO | |||||||||||||||||
Expected volatility | 61.2 | % | 56.8% – 61.2% | ||||||||||||||
Expected term (in years) | 4.09 | 2.99 – 4.08 | |||||||||||||||
Risk-free interest rate | 1.31 | % | 0.78% – 1.33% | ||||||||||||||
Expected dividend yield | — | % | — % | ||||||||||||||
The following estimated fair values per share of the Company’s underlying common stock and probability weightings were used to determine the fair value of the convertible note related warrant and embedded derivatives liabilities immediately prior to the Company’s IPO and as of December 31, 2013: | |||||||||||||||||
Immediately Prior to IPO | 31-Dec-13 | ||||||||||||||||
Scenarios | Estimated | Probability | Estimated | Probability | |||||||||||||
Fair Value | Weighting | Fair Value | Weighting | ||||||||||||||
per Common | per Common | ||||||||||||||||
Share | Share | ||||||||||||||||
Early initial public offering | $ | 4 | 100 | % | $ | 7.42 | 20 | % | |||||||||
Delayed initial public offering | $ | — | — | $ | 8.61 | 40 | % | ||||||||||
Dissolution or Sale | $ | — | — | $ | 0 | 40 | % | ||||||||||
The Company issued a warrant to the underwriter of its IPO and classified it as a liability (see Note 8, “Capital Structure”). The warrant will be re-measured at each subsequent reporting period and changes in fair value will be recognized in the statement of operations. The following assumptions were used in a Black-Scholes option-pricing model to determine the fair value of the warrant liability: | |||||||||||||||||
Issuance of | |||||||||||||||||
Underwriter’s Warrant | |||||||||||||||||
Expected volatility | 75.5 | % | |||||||||||||||
Expected term (in years) | 5 | ||||||||||||||||
Risk-free interest rate | 1.65 | % | |||||||||||||||
Expected dividend yield | – | % | |||||||||||||||
The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013: | |||||||||||||||||
Fair Value Measurement As of September 30, 2014 | |||||||||||||||||
Quoted Prices | Significant | Significant | |||||||||||||||
in Active | Other Observable | Unobservable | |||||||||||||||
Markets for | Inputs | Inputs | |||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents | $ | 31,339,914 | $ | — | $ | — | |||||||||||
Warrant liability | — | — | 403,696 | ||||||||||||||
Embedded derivatives liability | — | — | — | ||||||||||||||
Total | $ | 31,339,914 | $ | — | $ | 403,696 | |||||||||||
Fair Value Measurement As of December 31, 2013 | |||||||||||||||||
Quoted Prices | Significant | Significant | |||||||||||||||
in Active | Other Observable | Unobservable | |||||||||||||||
Markets for | Inputs | Inputs | |||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents | $ | 3,917,876 | $ | — | $ | — | |||||||||||
Warrant liability | — | — | 3,088,017 | ||||||||||||||
Embedded derivatives liability | — | — | 2,680,780 | ||||||||||||||
Total | $ | 3,917,876 | $ | — | $ | 5,768,797 | |||||||||||
The Company estimated the fair value of the convertible note related warrant and embedded derivatives liabilities at the time of issuance of the notes and subsequent remeasurement at each reporting date, using a probability weighted expected return method that considers the probability of achieving each scenario and the Black-Scholes option-pricing model using the following inputs: the expected volatility of the price of the underlying common stock, the remaining expected life of the liabilities, the risk-free interest rates, and the expected dividend rates. The estimates are based, in part, on subjective assumptions and could differ materially in the future. Changes to these assumptions as well as the Company’s estimated underlying stock price on the measurement date can have a significant impact on the fair value of the warrant liability and the embedded derivatives liability. | |||||||||||||||||
The following tables present a reconciliation of the Company’s financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Warrant liabilities | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Balance at beginning of period | $ | 5,649,248 | $ | 1,783,244 | $ | 3,088,017 | $ | — | |||||||||
Issuances of convertible notes | — | 282,347 | 865,635 | 2,065,591 | |||||||||||||
Cancellation of placement agent warrants (2) | (941,541 | ) | — | (941,541 | ) | — | |||||||||||
Increase in fair value (1) | 958,176 | — | 2,653,772 | — | |||||||||||||
Conversion of convertible notes to common stock | (5,665,883 | ) | — | (5,665,883 | ) | — | |||||||||||
Issuance of underwriter’s warrants | 403,696 | — | 403,696 | — | |||||||||||||
Balance at end of period | $ | 403,696 | $ | 2,065,591 | $ | 403,696 | $ | 2,065,591 | |||||||||
Embedded derivatives liabilities | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Balance at beginning of period | $ | 2,146,742 | $ | 899,167 | $ | 2,680,780 | $ | — | |||||||||
Issuances of convertible notes | — | 167,824 | 537,607 | 1,066,991 | |||||||||||||
Decrease in fair value (1) | (266,233 | ) | — | (1,337,878 | ) | — | |||||||||||
Conversion of convertible notes to common stock | (1,880,509 | ) | — | (1,880,509 | ) | — | |||||||||||
Balance at end of period | $ | — | $ | 1,066,991 | $ | — | $ | 1,066,991 | |||||||||
-1 | The change in the fair values of the warrant and embedded derivatives liabilities are recorded in other expenses in the statement of operations. | ||||||||||||||||
-2 | The Company reclassified the balance of the placement agent warrants to additional paid-in capital as a reduction of the offering costs upon their cancellation. |
Other_Assets
Other Assets | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Other Assets | ' | ||||||||
4. Other Assets | |||||||||
Other assets consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Deferred offering costs | $ | — | $ | 1,245,660 | |||||
Debt issuance costs | — | 1,190,699 | |||||||
Other | 143,621 | 143,621 | |||||||
$ | 143,621 | $ | 2,579,980 | ||||||
The Company accumulated the costs representing legal and accounting fees and other costs directly attributable to the Company’s IPO as deferred offering costs and classified these costs as other long term assets until the completion of the offering. The Company reclassified its deferred offering costs to additional paid-in capital as a reduction of the gross proceeds received in the offering. | |||||||||
The Company recorded the costs directly related to the issuance of its Convertible Notes (see Note 6, “Senior Convertible Notes” for further information) as debt issuance costs and classified these costs as other long term assets. The costs were amortized to interest expense over the period from the issuance to the maturity of the Convertible Notes using the effective interest method of amortization until the completion of the Company’s IPO. Upon the closing of the offering, the Company accelerated the amortization of the remaining balance to interest expense. |
Accrued_Expenses
Accrued Expenses | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
5. Accrued Expenses | |||||||||
Accrued expenses consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued compensation costs | $ | 1,878,040 | $ | 2,162,961 | |||||
Accrued financing costs | — | 1,245,660 | |||||||
Accrued settlement and licensing fees | 500,000 | — | |||||||
Accrued interest charges | — | 462,773 | |||||||
Accrued professional fees | 478,649 | 13,413 | |||||||
Other | 106,996 | 210,530 | |||||||
$ | 2,963,685 | $ | 4,095,337 | ||||||
Senior_Convertible_Notes
Senior Convertible Notes | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Senior Convertible Notes | ' | ||||||||
6. Senior Convertible Notes | |||||||||
The Company issued approximately $15.0 million aggregate principal amount of its 8.00% Convertible Notes due May 31, 2015 (the “Convertible Notes”) from June 2013 through June 2014. Dr. Sol Barer, a director of the Company, purchased $2.0 million principal amount of the Convertible Notes, Alpha Spring Limited, for which Mr. Zan, one of the Company’s directors, is the sole director, purchased $831,350 principal amount of the Convertible Notes, Mr. Low, one of the Company’s directors, purchased $90,000 principal amount of the Convertible Notes and Ms. Julia P. Gregory, the Company’s Chief Executive Officer, purchased $25,000 principal amount of the Convertible Notes. | |||||||||
On August 1, 2014, in conjunction with the closing of the Company’s IPO, the principal amount of the Convertible Notes, and all accrued and unpaid interest thereon, automatically converted into 5,109,988 shares of common stock. Upon the closing of the offering, the Company accelerated the amortization of the remaining debt discount balance to interest expense. | |||||||||
Accounting Analysis | |||||||||
The Company determined that both the warrants and the Convertible Notes were free standing instruments for accounting purposes. The terms of the warrants included an exercise price “cap” that is analogous to “down round protection” which precluded the Company from classifying the warrants in equity. As such, the warrants were classified as a liability and allocated their full fair value on day one and the residual value was ascribed to the Convertible Notes. In addition, the Convertible Notes also included embedded derivatives (i.e. penalty provisions) that required bifurcation. The Company aggregated these bifurcated features and reflected the values of these embedded derivatives in the account “embedded derivative liability”. These warrants and embedded derivatives were re-measured at each reporting period and immediately prior to the closing of the Company’s IPO, and changes in fair value were recognized in the statement of operations (see Note 3, “Fair Value Measurements”). Upon the closing of the offering, the Company reclassified the balances of the convertible note related warrant and embedded derivative liabilities to additional paid-in capital as the terms of the warrants, including any penalty warrants, became fixed and the interest penalties were paid in the Company’s common stock, and therefore both the warrants and penalties were no longer considered a liability. Based on the terms of the warrants, the Company determined the total number of shares of the Company’s common stock underlying the warrants held by purchasers of the Convertible Notes to be 3,321,416 at an exercise price of $3.00 per share. | |||||||||
At issuance, the Convertible Notes included a beneficial conversion feature for which a discount could not be calculated due to the indeterminable number of shares of common stock that could have been issued upon conversion contingent on the Company’s IPO. On the closing of the Company’s IPO, this contingency was resolved and the Company determined the amount of the discount to be recognized for each tranche of Convertible Notes issued by calculating the difference between the common stock value on the date of issuance and the effective conversion price, based on the number of shares of common stock actually issued on conversion. The Company determined the aggregate discount of $7,428,547 for the beneficial conversion feature and recognized this amount as additional interest expense upon the closing of its IPO. | |||||||||
As of September 30, 2014 and December 31, 2013, the Convertible Notes consisted of the following: | |||||||||
Liability component | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Principal | $ | — | $ | 11,963,650 | |||||
Less: debt discount, net (1) | — | (2,147,286 | ) | ||||||
Net carrying amount | $ | — | $ | 9,816,364 | |||||
-1 | Includes the estimated fair value of the warrants issued to purchasers of the Convertible Notes and the bifurcated embedded derivative features of the Convertible Notes at the time of issuance. The Company recorded interest expense on a quarterly basis and upon the closing of the Company’s IPO. The components of interest expense include (i) accrued interest at the stated 8% rate, (ii) the amortization of the debt discount and (iii) the amortization of the deferred issuance costs. | ||||||||
Placement Agent Warrants | |||||||||
The Maxim Group, LLC (“Maxim”) received a warrant to purchase 10% of the total number of shares of common stock into which the note purchased by the holder is convertible. The exercise price of the warrant was equal to 110% of the lower of a 25% discount to the initial public offering price, or $10.50 in the event there was no initial public offering within six months of the Company’s initial filing. The Company classified this warrant as a liability since it also did not meet the requirements to be included in equity. The warrant was re-measured at each reporting period and changes in fair value were recognized in the statement of operations. | |||||||||
On July 25, 2014, Maxim forfeited the warrant and the warrant was cancelled by the Company. The Company reclassified the balance of the warrant to additional paid-in capital as a reduction of the offering costs. |
Net_Loss_Per_Share_of_Common_S
Net Loss Per Share of Common Stock | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Loss Per Share of Common Stock | ' | ||||||||||||||||
7. Net Loss Per Share of Common Stock | |||||||||||||||||
Diluted loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. | |||||||||||||||||
The following table sets forth the computation of basic and diluted loss per share for common stockholders: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss applicable to common stockholders | $ | (16,397,678 | ) | $ | (4,358,180 | ) | $ | (29,880,865 | ) | $ | (12,689,366 | ) | |||||
Weighted average shares of common stock outstanding | 13,403,595 | 1,011,997 | 5,187,920 | 1,011,670 | |||||||||||||
Net loss per share of common stock—basic and diluted | $ | (1.22 | ) | $ | (4.31 | ) | $ | (5.76 | ) | $ | (12.54 | ) | |||||
The following potentially dilutive securities outstanding at September 30, 2014 and 2013 have been excluded from the computation of diluted weighted average shares outstanding, as they would have been antidilutive: | |||||||||||||||||
September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Preferred stock | — | 4,554,874 | |||||||||||||||
Stock options | 2,843,995 | 2,192,984 | |||||||||||||||
Class A Warrants | 6,880,333 | — | |||||||||||||||
Class B Warrants | 3,440,166 | — | |||||||||||||||
Warrants | 4,256,862 | 718,322 | |||||||||||||||
17,421,356 | 7,466,180 | ||||||||||||||||
The potential dilutive impact of the Company’s Convertible Notes and related warrants are not included as of September 30, 2013 as the number of shares was not determinable at that time and would also have been antidilutive. |
Capital_Structure
Capital Structure | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Equity [Abstract] | ' | ||||||||
Capital Structure | ' | ||||||||
8. Capital Structure | |||||||||
Common Stock | |||||||||
Initial Public Offering | |||||||||
On August 1, 2014, the Company closed an initial public offering of its units (the “IPO”). Each unit consisted of one share of common stock, one Class A Warrant to purchase one share of common stock at an exercise price of $4.80 per share and one Class B Warrant to purchase one-half share of common stock at an exercise price of $4.00 per full share (the “Units”). The closing of the IPO resulted in the sale of an aggregate of 6,880,333 Units at a public offering price of $6.00 per Unit, less underwriting discounts and commissions and the underwriter’s expenses, including 880,333 Units issued upon the exercise by the underwriters of their option to purchase additional Units at the public offering price to cover over-allotments of the Company. The Company received net proceeds from the IPO of $35.0 million, after deducting underwriting discounts, commissions, and expenses payable by the Company. The common stock and accompanying Class A and Class B warrants have been classified to stockholders’ equity (deficit) in the Company’s balance sheet. | |||||||||
In July 2014, the shareholders approved an amended certificate of incorporation that became effectively immediately upon the closing of the Company’s IPO. The approved certificate increased the number of authorized shares of common stock to 100,000,000 shares. | |||||||||
Underwriter’s Warrant | |||||||||
Maxim received a warrant to purchase 3% of the total number of shares of common stock sold in the IPO, including those shares sold upon the exercise of the over-allotment, for a total of 206,410 shares of common stock underlying the underwriter’s warrants. The warrants are exercisable at an exercise price of $7.50 per share beginning 180 days after the effective date of the Company’s registration statement and expiring on August 27, 2019. The Company classified this warrant as a liability since it did not meet the requirements to be included in equity. The fair value of the warrant will be re-measured at each reporting period and changes in fair value will be recognized in the statement of operations. | |||||||||
Reserved for Future Issuance | |||||||||
The Company has reserved for future issuance the following number of shares of common stock as of September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Conversion of Series A preferred stock | — | 628,570 | |||||||
Conversion of Series B preferred stock | — | 1,328,902 | |||||||
Conversion of Series C preferred stock | — | 2,597,402 | |||||||
Conversion of Series C-1 preferred stock | — | — | |||||||
Options to purchase common stock | 2,843,995 | 2,221,652 | |||||||
Class A Warrants to purchase common stock | 6,880,333 | ||||||||
Class B Warrants to purchase common stock | 3,440,166 | ||||||||
Warrants to purchase common stock | 4,256,682 | 718,322 | |||||||
17,421,356 | 7,494,848 | ||||||||
Convertible Preferred Stock | |||||||||
Dividends | |||||||||
On May 28, 2014, the board of directors declared a dividend to be paid in-kind to the holders of the Company’s preferred stock in accordance with the Company’s Fourth Amended and Restated Certificate of Incorporation, whereby each holder of shares of preferred stock will be entitled to a number of additional shares of the applicable series of preferred stock equal to the amount of the accrued and unpaid dividend on such holder’s shares (the “Dividend”). The Company determined that 605,645 shares of Series A preferred stock, 1,172,645 shares of Series B preferred stock, 1,379,388 shares of Series C preferred stock and 2,395 shares of Series C-1 preferred stock would be required to satisfy the Dividend. | |||||||||
The Company recorded the in-kind dividend payable and associated expense at fair value of the securities to be issued. The Company was able to assess the value of the preferred stock dividends in terms of its common stock to be issued upon conversion of the preferred stock on the closing of its IPO. | |||||||||
Conversion | |||||||||
On August 1, 2014, in conjunction with the closing of the Company’s IPO, all outstanding shares of the Company’s preferred stock, including the in-kind dividend payable, were automatically converted into 6,861,968 shares of its common stock. |
Stock_Option_and_Incentive_Pla
Stock Option and Incentive Plans | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Stock Option and Incentive Plans | ' | ||||||||||||||||
9. Stock Option and Incentive Plans | |||||||||||||||||
Amended and Restated 2008 Equity Incentive Plan | |||||||||||||||||
In July 2008, the Company adopted the 2008 Equity Incentive Plan (the “Plan”). The Plan allows for the granting of non-qualified stock options, restricted stock, stock appreciation rights and other performance awards to the Company’s employees, members of the board of directors and consultants of the Company. Originally, upon adoption of the Plan, the number of shares of common stock reserved pursuant to the Plan was 214,285. On December 12, 2011, the Plan was amended to increase the number of shares of common stock available under the Plan to 900,000. | |||||||||||||||||
On February 26, 2013, the board of directors approved an amended and restated plan (the “Amended Plan”) to increase the number of shares of common stock available under the Amended Plan to 1,571,428 and to reduce the period that exercisable awards remain exercisable upon termination of service from ten years to two years. The board of directors also approved an option exchange offer (the “Exchange Offer”) for eligible option holders with outstanding options with an exercise price in excess of $3.50 per share. The offering period for the Exchange Offer commenced on March 11, 2013 and expired on April 9, 2013. Participation in the Exchange Offer was voluntary. Options to purchase 647,521 shares of the Company’s common stock, held by a total of 26 participants, including 20 employees, were exchanged under the tender offer. The exchanged option grants were granted at an exercise price of $3.50 per share. The Company recorded expense associated with the modification with an immediate charge for the vested portion of option grants exchanged and additional charges as the remaining unvested portions become vested. | |||||||||||||||||
On February 24, 2014, the board of directors increased the number of shares of common stock available under the Company’s Amended Plan to 1,857,142. | |||||||||||||||||
On April 29, 2014, the board of directors increased the number of shares of common stock available under the Company’s Amended Plan to 2,357,142 and approved grants to purchase a total of 559,285 shares of the Company’s common stock. | |||||||||||||||||
As of the Company’s prospectus dated July 28, 2014, filed with the SEC on July 29, 2014 pursuant to Rule 424(b)(1) under the Securities Act, related to the Company’s IPO, the Company expects no further grants to be made under the Amended Plan. | |||||||||||||||||
2014 Omnibus Incentive Plan | |||||||||||||||||
In April 2014, the Company’s board of directors adopted the 2014 Omnibus Incentive Plan (the “2014 Plan”). The 2014 Plan was approved by the Company’s shareholders on July 3, 2014. The 2014 Plan allows for the granting of incentive and non-qualified stock options, restricted stock and stock unit awards, stock appreciation rights and other performance-based awards to the Company’s employees, members of the board of directors and consultants of the Company. On July 28, 2014, the effective date of the 2014 Plan, the number of shares of common stock reserved pursuant to the 2014 Plan was 571,429. The 2014 Plan provides for an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2015 and continuing until the expiration of the 2014 Plan, equal to the lesser of (i) 4% of the outstanding shares of common stock on such date or (ii) an amount determined by the Company’s board of directors. | |||||||||||||||||
The Company recognized compensation expense for share-based compensation based on the fair value of the underlying instrument. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. A summary of stock option activity for the nine months ended September 30, 2014, is summarized as follows: | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
Options | Average | ||||||||||||||||
Exercise Price | |||||||||||||||||
Options outstanding at December 31, 2013 | 2,221,652 | $ | 5.32 | ||||||||||||||
Granted | 703,556 | 4.27 | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited | (81,213 | ) | 5 | ||||||||||||||
Options outstanding at September 30, 2014 | 2,843,995 | 5.07 | |||||||||||||||
Of the option grants outstanding to purchase 2,843,995 shares of common stock, grants to purchase 682,154 shares of common stock were issued and are outstanding outside the Company’s incentive plans. | |||||||||||||||||
The following table summarizes information regarding all stock options outstanding and exercisable at September 30, 2014: | |||||||||||||||||
Exercise Price | Options Outstanding | Options Exercisable | |||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||
Remaining | Remaining | ||||||||||||||||
Shares | Contractual | Shares | Contractual | ||||||||||||||
Outstanding | Life in | Outstanding | Life in | ||||||||||||||
Years | Years | ||||||||||||||||
$ 3.50 | 1,435,831 | 7.44 | 1,302,661 | 7.35 | |||||||||||||
$ 4.27 | 696,413 | 9.36 | 213,736 | 9.2 | |||||||||||||
$ 6.02 | 35,714 | 9.22 | 35,714 | 9.22 | |||||||||||||
$ 9.03 | 641,067 | 6.16 | 598,925 | 6.17 | |||||||||||||
$11.55 | 34,970 | 5.65 | 30,684 | 6.11 | |||||||||||||
2,843,995 | 2,181,720 | ||||||||||||||||
The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model. The weighted average grant date fair value of options granted during the nine months ended September 30, 2014 and 2013 was $4.27 and $3.50, respectively. Total compensation expense recognized amounted to $1,249,124, $248,789, $1,630,300 and $1,063,709 for the three and nine months ended September 30, 2014 and 2013, respectively. As of September 30, 2014, the total remaining unrecognized compensation cost related to unvested stock options was $1,762,160 which will be recognized over a weighted average period of approximately 2.34 years. | |||||||||||||||||
The following assumptions were used to compute the fair value of stock option grants: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Risk free interest rate | 1.65 | % | — | % | 1.98 | % | 1.18 | % | |||||||||
Expected dividend yield | — | — | — | — | |||||||||||||
Expected term (in years) | 5.44 | — | 5.74 | 6.29 | |||||||||||||
Expected volatility | 75.5 | % | — | % | 76.8 | % | 73.2 | % | |||||||||
Expected volatility—The Company estimated the expected volatility based on an average of the volatility of similar companies with publicly-traded equity securities. The companies were selected based on their enterprise value, risk profiles, position within the industry, and with historical information sufficient to meet the expected term of the associated award. | |||||||||||||||||
Expected term—The Company based expected term on the midpoint of the vesting period and the contractual term of each respective option grant. | |||||||||||||||||
Risk-free interest rate—The Company estimated the risk-free interest rate in reference to yield on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. | |||||||||||||||||
Expected dividend yield—The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has not historically declared or paid dividends to common stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in its continued growth. |
Retention_Bonus_Plan
Retention Bonus Plan | 9 Months Ended |
Sep. 30, 2014 | |
Text Block [Abstract] | ' |
Retention Bonus Plan | ' |
10. Retention Bonus Plan | |
On February 24, 2014, the Company adopted the ContraFect Corporation Retention Bonus Plan (the “Retention Plan”). Under the Retention Plan, participants will vest in and become eligible to receive awards equal to a fixed dollar amount (the “Award Amount”), upon the earliest to occur of any of the following events: (i) the IPO; (ii) a Change of Control (as defined in the Retention Plan); (iii) May 31, 2015; and (iv) a participant’s termination of employment due to death or Disability (as defined in the Retention Plan) (each such event, a “Payment Event”). In the event of an IPO or Change of Control, participants who are then employed by the Company shall be eligible to receive a payment in an amount equal to 1.82 times each participant’s Award Amount. For an IPO Payment Event, the Company intends to pay each participant’s Award Amount in shares of common stock, with a lump sum cash payment in respect of any fractional shares. For a Change of Control Payment Event, the Company intends to pay each participant’s Award Amount in the same form of consideration that the holders of common shares receive in the transaction. The Company intends to pay Award Amounts that vest upon an eligible termination or May 31, 2015 in a lump sum cash payment. | |
As of June 30, 2014, Award Amounts totaling $532,700 had been granted under the Retention Plan. Upon the closing of the Company’s IPO, the Company recognized a total of $954,754 of expense associated with the vesting of the grants. On September 11, 2014, the Company issued 133,109 shares of its common stock, net of shares withheld for tax obligations, in payment of the retention grants. |
Significant_Agreements
Significant Agreements | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Significant Agreements | ' |
11. Significant Agreements | |
Trellis Biosciences, LLC | |
On January 29, 2014, the Company entered into a license agreement with Trellis Biosciences, LLC (“Trellis”) that gives it exclusive rights to all Trellis mAbs in the field of influenza discovered from the Trellis CellSpot platform. Particularly, the license provides the Company with three fully human mAbs that bind, neutralize and protect animals from all strains of H1, H3 and B influenza, and that will also cross bind, neutralize and protect animals from all other seasonal or pandemic influenza strains that may arise (including H5N1 and H7N9). | |
In consideration for the license, the Company paid Trellis $200,000 and issued 151,515 shares of Series C-1 preferred stock, contractually valued at $500,000. An additional $500,000 in shares of Series C-1 preferred stock or in shares of the Company’s common stock, valued at the ten-day weighted average price per share for the ten days prior to such issuance, will be issued on the six month anniversary of the agreement. The Company has recorded a liability for the full $500,000 value of the shares to be issued to Trellis. The Company will also be required to pay Trellis up to $1.3 million upon the achievement of specified development and regulatory milestones and make additional payments upon the achievement of future sales and a royalty of 4% of future net sales from products. The Company is allowed to grant sublicenses to third parties. | |
The license agreement terminates upon the earlier of (i) the Company’s decision to terminate the agreement at will or for safety reasons, (ii) material breach by either party that is not cured within ninety (90) days, or (iii) either party’s insolvency. | |
MorphoSys AG | |
In June 2014, the Company and MorphoSys AG agreed to terminate their license agreement effective as of August 15, 2014 and resolve all outstanding claims thereunder. On August 11, 2014, the Company made the €1,000,000 payment to MorphoSys AG pursuant to the agreed upon settlement. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
12. Subsequent events | |
On October 7, 2014, the Company authorized the issuance of 132,380 shares of common stock to Trellis in satisfaction of the $500,000 remaining due in stock as consideration for the license. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying financial information as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2013 balance sheet was derived from the Company’s audited financial statements. The Company’s audited financial statements as of and for the year ended December 31, 2013, including all related disclosures and the complete listing of significant accounting policies as described in note 2 thereof, are included in the Company’s prospectus dated July 28, 2014, filed with the SEC on July 29, 2014 pursuant to Rule 424(b)(1) under the Securities Act, related to the Company’s IPO. | |
In the opinion of management, the unaudited financial information as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the operating results for the full fiscal year or any future periods. | |
Significant Risks and Uncertainties | ' |
Significant Risks and Uncertainties | |
The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s products, the Company’s ability to obtain regulatory approval to market its products, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, the Company’s products, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products and the Company’s ability to raise capital. See “Risk Factors” contained elsewhere in this Quarterly Report on Form 10-Q for additional risks and uncertainties. | |
Reverse Stock Split | ' |
Reverse Stock Split | |
The Company’s board of directors approved a 1-for-7 reverse split of the Company’s outstanding common stock. This reverse split was effected on July 25, 2014. Accordingly, all shares and per share amounts were retroactively adjusted to reflect this reverse split. | |
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |
Prior to being a public company, the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The Company granted stock options at exercise prices not less than the fair market value of its common stock as determined by the board of directors, with input from management. The board of directors determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of redeemable convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company. | |
As a private company, the Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. The methodologies included an option pricing method and a probability-weighted expected return methodology that determined an estimated value under an IPO scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology included estimates and assumptions that required the Company’s judgment. These estimates included assumptions regarding future performance, including the successful completion of pre-clinical studies and clinical trials and the time to completing an IPO or sale. Significant changes to the key assumptions used in the valuations could have resulted in different fair values of common stock at each valuation date. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
The Company considers all highly liquid investments with maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposit, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value. | |
Marketable securities with original maturities greater than three months and less than one year are considered to be short-term investments. Short-term investments are reported at fair market value and unrealized gains and losses (if any) are included as a separate component of stockholders’ equity (deficit). Realized gains, realized losses, the amortization of premiums and discounts, interest earned, and dividends earned are included in interest income. The Company did not have any marketable securities as of September 30, 2014 or December 31, 2013. | |
Deferred Offering Costs | ' |
Deferred Offering Costs | |
As of December 31, 2013, the Company had approximately $1.2 million of deferred offering costs representing legal, accounting and other costs directly attributable to the Company’s offering of its equity securities capitalized as other long term assets. These and additional costs were deferred until the completion of the Company’s IPO, at which time they were reclassified to additional paid-in capital as a reduction of the proceeds. See Note 4, “Other Assets.” | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities, notes payable, convertible notes, warrant liabilities and embedded derivatives liabilities. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The fair value of the Company’s convertible notes, warrant liabilities and embedded derivatives liabilities are based upon unobservable inputs, as described further below. | |
The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), establishes a hierarchy of inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: | |
Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | |
Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly. | |
Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable. | |
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | |
The Company had no liabilities classified as Level 1 or Level 2. The carrying amounts reported in the accompanying financial statements for accounts payable and accrued expenses approximate their respective fair values due to their short-term maturities. The fair value of the warrant and embedded derivative liabilities are discussed in Note 3, “Fair Value Measurements.” | |
Share-based Compensation | ' |
Share-based Compensation | |
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and non-employee directors, including employee stock options. Compensation expense based on the grant date fair value is generally amortized over the requisite service period of the award on a straight-line basis. | |
The fair value of options is calculated using the Black-Scholes option pricing model to determine the fair value of stock options on the date of grant based on key assumptions such as stock price, expected volatility and expected term. The Company’s estimates of these assumptions are primarily based on third-party valuations, historical data, peer company data and judgment regarding future trends and factors. Prior to being a public company, the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The board of directors determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of redeemable convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company. | |
The Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. The methodologies included an option pricing method and a probability-weighted expected return methodology that determined an estimated value under an offering scenario and a sale scenario based upon an assessment of the probability of occurrence of each scenario. Each valuation methodology included estimates and assumptions that required the Company’s judgment. These estimates included assumptions regarding future performance, including the successful completion of pre-clinical studies and clinical trials and the time to completing an offering or sale. Significant changes to the key assumptions used in the valuations could have resulted in different fair values of common stock at each valuation date. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition Accounting Standards Update, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 provides guidance to clarify the principles for recognizing revenue. This guidance includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for fiscal years and interim periods beginning after December 15, 2016. Early adoption is not permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. | |
In June 2014, the FASB issued Accounting Standards Update, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 910, Consolidation (ASU 2014-10). ASU 2014-10 eliminates the designation of “Development Stage Entity” in the codification and the incremental reporting requirements associated with this designation. This update allows an entity currently designated as “development stage” to remove the designation from its financial statements and the inception-to-date information from its statements of income, cash flows and shareholders’ equity. This guidance is effective for fiscal years beginning after December 15, 2014. Early adoption is allowed, and the Company adopted this pronouncement commencing with its financial statements as of June 30, 2014 and for the three and six months ended June 30, 2014, removing the “development stage entity” designation and associated information no longer required. | |
In August 2014, the FASB issued a new Accounting Standards Update, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year of the date the financial statements are issued, and, if such conditions exist, to provide related footnote disclosures. The guidance is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Assumption Ranges Used to Determine Fair Value of Convertible Note Related Warrant, Embedded Derivatives Liabilities and Fair Value of Warrant Liability | ' | ||||||||||||||||
The following assumption ranges were used in the Black-Scholes option-pricing model to determine the fair value of the convertible note related warrant and embedded derivatives liabilities immediately prior to the Company’s IPO and as of December 31, 2013: | |||||||||||||||||
Immediately | December 31, | ||||||||||||||||
Prior to | 2013 | ||||||||||||||||
IPO | |||||||||||||||||
Expected volatility | 61.2 | % | 56.8% – 61.2% | ||||||||||||||
Expected term (in years) | 4.09 | 2.99 – 4.08 | |||||||||||||||
Risk-free interest rate | 1.31 | % | 0.78% – 1.33% | ||||||||||||||
Expected dividend yield | — | % | — % | ||||||||||||||
Estimated Fair Values per Share of Company's Underlying Common Stock and Probability Weightings Used to Determine Fair Value of Convertible Note Related Warrant and Embedded Derivative Liabilities | ' | ||||||||||||||||
The following estimated fair values per share of the Company’s underlying common stock and probability weightings were used to determine the fair value of the convertible note related warrant and embedded derivatives liabilities immediately prior to the Company’s IPO and as of December 31, 2013: | |||||||||||||||||
Immediately Prior to IPO | 31-Dec-13 | ||||||||||||||||
Scenarios | Estimated | Probability | Estimated | Probability | |||||||||||||
Fair Value | Weighting | Fair Value | Weighting | ||||||||||||||
per Common | per Common | ||||||||||||||||
Share | Share | ||||||||||||||||
Early initial public offering | $ | 4 | 100 | % | $ | 7.42 | 20 | % | |||||||||
Delayed initial public offering | $ | — | — | $ | 8.61 | 40 | % | ||||||||||
Dissolution or Sale | $ | — | — | $ | 0 | 40 | % | ||||||||||
Information about Company's Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013: | |||||||||||||||||
Fair Value Measurement As of September 30, 2014 | |||||||||||||||||
Quoted Prices | Significant | Significant | |||||||||||||||
in Active | Other Observable | Unobservable | |||||||||||||||
Markets for | Inputs | Inputs | |||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents | $ | 31,339,914 | $ | — | $ | — | |||||||||||
Warrant liability | — | — | 403,696 | ||||||||||||||
Embedded derivatives liability | — | — | — | ||||||||||||||
Total | $ | 31,339,914 | $ | — | $ | 403,696 | |||||||||||
Fair Value Measurement As of December 31, 2013 | |||||||||||||||||
Quoted Prices | Significant | Significant | |||||||||||||||
in Active | Other Observable | Unobservable | |||||||||||||||
Markets for | Inputs | Inputs | |||||||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||||||
(Level 1) | |||||||||||||||||
Cash equivalents | $ | 3,917,876 | $ | — | $ | — | |||||||||||
Warrant liability | — | — | 3,088,017 | ||||||||||||||
Embedded derivatives liability | — | — | 2,680,780 | ||||||||||||||
Total | $ | 3,917,876 | $ | — | $ | 5,768,797 | |||||||||||
Reconciliation of Company's Financial Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) | ' | ||||||||||||||||
The following tables present a reconciliation of the Company’s financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Warrant liabilities | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Balance at beginning of period | $ | 5,649,248 | $ | 1,783,244 | $ | 3,088,017 | $ | — | |||||||||
Issuances of convertible notes | — | 282,347 | 865,635 | 2,065,591 | |||||||||||||
Cancellation of placement agent warrants (2) | (941,541 | ) | — | (941,541 | ) | — | |||||||||||
Increase in fair value (1) | 958,176 | — | 2,653,772 | — | |||||||||||||
Conversion of convertible notes to common stock | (5,665,883 | ) | — | (5,665,883 | ) | — | |||||||||||
Issuance of underwriter’s warrants | 403,696 | — | 403,696 | — | |||||||||||||
Balance at end of period | $ | 403,696 | $ | 2,065,591 | $ | 403,696 | $ | 2,065,591 | |||||||||
Embedded derivatives liabilities | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Balance at beginning of period | $ | 2,146,742 | $ | 899,167 | $ | 2,680,780 | $ | — | |||||||||
Issuances of convertible notes | — | 167,824 | 537,607 | 1,066,991 | |||||||||||||
Decrease in fair value (1) | (266,233 | ) | — | (1,337,878 | ) | — | |||||||||||
Conversion of convertible notes to common stock | (1,880,509 | ) | — | (1,880,509 | ) | — | |||||||||||
Balance at end of period | $ | — | $ | 1,066,991 | $ | — | $ | 1,066,991 | |||||||||
-1 | The change in the fair values of the warrant and embedded derivatives liabilities are recorded in other expenses in the statement of operations. | ||||||||||||||||
-2 | The Company reclassified the balance of the placement agent warrants to additional paid-in capital as a reduction of the offering costs upon their cancellation. | ||||||||||||||||
Underwriter's Warrant [Member] | ' | ||||||||||||||||
Assumption Ranges Used to Determine Fair Value of Convertible Note Related Warrant, Embedded Derivatives Liabilities and Fair Value of Warrant Liability | ' | ||||||||||||||||
The following assumptions were used in a Black-Scholes option-pricing model to determine the fair value of the warrant liability: | |||||||||||||||||
Issuance of | |||||||||||||||||
Underwriter’s Warrant | |||||||||||||||||
Expected volatility | 75.5 | % | |||||||||||||||
Expected term (in years) | 5 | ||||||||||||||||
Risk-free interest rate | 1.65 | % | |||||||||||||||
Expected dividend yield | – | % |
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ||||||||
Schedule of Other Assets | ' | ||||||||
Other assets consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Deferred offering costs | $ | — | $ | 1,245,660 | |||||
Debt issuance costs | — | 1,190,699 | |||||||
Other | 143,621 | 143,621 | |||||||
$ | 143,621 | $ | 2,579,980 | ||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Summary of Accrued Expenses | ' | ||||||||
Accrued expenses consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued compensation costs | $ | 1,878,040 | $ | 2,162,961 | |||||
Accrued financing costs | — | 1,245,660 | |||||||
Accrued settlement and licensing fees | 500,000 | — | |||||||
Accrued interest charges | — | 462,773 | |||||||
Accrued professional fees | 478,649 | 13,413 | |||||||
Other | 106,996 | 210,530 | |||||||
$ | 2,963,685 | $ | 4,095,337 | ||||||
Senior_Convertible_Notes_Table
Senior Convertible Notes (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Summary of Convertible Notes | ' | ||||||||
As of September 30, 2014 and December 31, 2013, the Convertible Notes consisted of the following: | |||||||||
Liability component | September 30, | December 31, | |||||||
2014 | 2013 | ||||||||
Principal | $ | — | $ | 11,963,650 | |||||
Less: debt discount, net (1) | — | (2,147,286 | ) | ||||||
Net carrying amount | $ | — | $ | 9,816,364 | |||||
-1 | Includes the estimated fair value of the warrants issued to purchasers of the Convertible Notes and the bifurcated embedded derivative features of the Convertible Notes at the time of issuance. The Company recorded interest expense on a quarterly basis and upon the closing of the Company’s IPO. The components of interest expense include (i) accrued interest at the stated 8% rate, (ii) the amortization of the debt discount and (iii) the amortization of the deferred issuance costs. |
Net_Loss_Per_Share_of_Common_S1
Net Loss Per Share of Common Stock (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Computation of Basic and Diluted Loss Per Share for Common Stockholders | ' | ||||||||||||||||
The following table sets forth the computation of basic and diluted loss per share for common stockholders: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net loss applicable to common stockholders | $ | (16,397,678 | ) | $ | (4,358,180 | ) | $ | (29,880,865 | ) | $ | (12,689,366 | ) | |||||
Weighted average shares of common stock outstanding | 13,403,595 | 1,011,997 | 5,187,920 | 1,011,670 | |||||||||||||
Net loss per share of common stock—basic and diluted | $ | (1.22 | ) | $ | (4.31 | ) | $ | (5.76 | ) | $ | (12.54 | ) | |||||
Schedule of Antidilutive Securities Excluded from Computation of Diluted Weighted Average Shares Outstanding | ' | ||||||||||||||||
The following potentially dilutive securities outstanding at September 30, 2014 and 2013 have been excluded from the computation of diluted weighted average shares outstanding, as they would have been antidilutive: | |||||||||||||||||
September 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Preferred stock | — | 4,554,874 | |||||||||||||||
Stock options | 2,843,995 | 2,192,984 | |||||||||||||||
Class A Warrants | 6,880,333 | — | |||||||||||||||
Class B Warrants | 3,440,166 | — | |||||||||||||||
Warrants | 4,256,862 | 718,322 | |||||||||||||||
17,421,356 | 7,466,180 | ||||||||||||||||
Capital_Structure_Tables
Capital Structure (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Equity [Abstract] | ' | ||||||||
Summary of Common Stock Reserved for Future Issuance | ' | ||||||||
The Company has reserved for future issuance the following number of shares of common stock as of September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Conversion of Series A preferred stock | — | 628,570 | |||||||
Conversion of Series B preferred stock | — | 1,328,902 | |||||||
Conversion of Series C preferred stock | — | 2,597,402 | |||||||
Conversion of Series C-1 preferred stock | — | — | |||||||
Options to purchase common stock | 2,843,995 | 2,221,652 | |||||||
Class A Warrants to purchase common stock | 6,880,333 | ||||||||
Class B Warrants to purchase common stock | 3,440,166 | ||||||||
Warrants to purchase common stock | 4,256,682 | 718,322 | |||||||
17,421,356 | 7,494,848 | ||||||||
Stock_Option_and_Incentive_Pla1
Stock Option and Incentive Plans (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
A summary of stock option activity for the nine months ended September 30, 2014, is summarized as follows: | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
Options | Average | ||||||||||||||||
Exercise Price | |||||||||||||||||
Options outstanding at December 31, 2013 | 2,221,652 | $ | 5.32 | ||||||||||||||
Granted | 703,556 | 4.27 | |||||||||||||||
Exercised | — | — | |||||||||||||||
Forfeited | (81,213 | ) | 5 | ||||||||||||||
Options outstanding at September 30, 2014 | 2,843,995 | 5.07 | |||||||||||||||
Summary of Stock Options Outstanding and Exercisable | ' | ||||||||||||||||
The following table summarizes information regarding all stock options outstanding and exercisable at September 30, 2014: | |||||||||||||||||
Exercise Price | Options Outstanding | Options Exercisable | |||||||||||||||
Weighted Average | Weighted Average | ||||||||||||||||
Remaining | Remaining | ||||||||||||||||
Shares | Contractual | Shares | Contractual | ||||||||||||||
Outstanding | Life in | Outstanding | Life in | ||||||||||||||
Years | Years | ||||||||||||||||
$ 3.50 | 1,435,831 | 7.44 | 1,302,661 | 7.35 | |||||||||||||
$ 4.27 | 696,413 | 9.36 | 213,736 | 9.2 | |||||||||||||
$ 6.02 | 35,714 | 9.22 | 35,714 | 9.22 | |||||||||||||
$ 9.03 | 641,067 | 6.16 | 598,925 | 6.17 | |||||||||||||
$11.55 | 34,970 | 5.65 | 30,684 | 6.11 | |||||||||||||
2,843,995 | 2,181,720 | ||||||||||||||||
Assumptions to Compute Fair Value of Stock Option Grants | ' | ||||||||||||||||
The following assumptions were used to compute the fair value of stock option grants: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Risk free interest rate | 1.65 | % | — | % | 1.98 | % | 1.18 | % | |||||||||
Expected dividend yield | — | — | — | — | |||||||||||||
Expected term (in years) | 5.44 | — | 5.74 | 6.29 | |||||||||||||
Expected volatility | 75.5 | % | — | % | 76.8 | % | 73.2 | % |
Organization_and_Description_o1
Organization and Description of Business - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended |
Aug. 01, 2014 | Aug. 31, 2014 | Sep. 30, 2014 | |
Organization And Description Of Business [Line Items] | ' | ' | ' |
Net proceeds from initial public offering | $35,000,000 | $35,000,000 | $41,281,998 |
Initial Public Offering [Member] | ' | ' | ' |
Organization And Description Of Business [Line Items] | ' | ' | ' |
Securities converted into common stock | ' | 11,971,956 | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Summary Of Significant Accounting Policies [Line Items] | ' | ' |
Reverse split of the company's outstanding common stock | '1-for-7 | ' |
Reverse split, effective date | 25-Jul-14 | ' |
Marketable securities | $0 | $0 |
Deferred offering costs | ' | 1,245,660 |
Liabilities | 4,692,559 | 22,702,008 |
Level 1 [Member] | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' |
Liabilities | 0 | ' |
Level 2 [Member] | ' | ' |
Summary Of Significant Accounting Policies [Line Items] | ' | ' |
Liabilities | $0 | ' |
Fair_Value_Measurements_Assump
Fair Value Measurements - Assumption Ranges Used to Determine Fair Value of Convertible Note Related Warrant, Embedded Derivatives Liabilities and Fair Value of Warrant Liability (Detail) | 0 Months Ended | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |
Underwriter's Warrant [Member] | Minimum [Member] | Maximum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' | ' |
Expected volatility | 61.20% | 75.50% | 56.80% | 61.20% |
Expected term (in years) | '4 years 1 month 2 days | '5 years | '2 years 11 months 27 days | '4 years 29 days |
Risk-free interest rate | 1.31% | 1.65% | 0.78% | 1.33% |
Expected dividend yield | ' | ' | ' | ' |
Fair_Value_Measurements_Estima
Fair Value Measurements - Estimated Fair Values per Share of Company's Underlying Common Stock and Probability Weightings Used to Determine Fair Value of Convertible Note Related Warrant and Embedded Derivative Liabilities (Detail) (USD $) | Jul. 31, 2014 | Dec. 31, 2013 |
Early Initial Public Offering [Member] | ' | ' |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ' | ' |
Estimated Fair Value per Common Share | $4 | $7.42 |
Probability Weighting | 100.00% | 20.00% |
Delayed Initial Public Offering [Member] | ' | ' |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ' | ' |
Estimated Fair Value per Common Share | ' | $8.61 |
Probability Weighting | ' | 40.00% |
Dissolution or Sale [Member] | ' | ' |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ' | ' |
Estimated Fair Value per Common Share | ' | $0 |
Probability Weighting | ' | 40.00% |
Fair_Value_Measurements_Inform
Fair Value Measurements - Information about Company's Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Embedded derivatives liability | ' | $2,680,780 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ' | ' |
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Cash equivalents | 31,339,914 | 3,917,876 |
Total | 31,339,914 | 3,917,876 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' |
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ' | ' |
Warrant liability | 403,696 | 3,088,017 |
Embedded derivatives liability | ' | 2,680,780 |
Total | $403,696 | $5,768,797 |
Fair_Value_Measurements_Reconc
Fair Value Measurements - Reconciliation of Company's Financial Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Warrant Liabilities [Member] | ' | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Balance at beginning of period | $5,649,248 | $1,783,244 | $3,088,017 | ' |
Issuances of convertible notes | ' | 282,347 | 865,635 | 2,065,591 |
Cancellation of placement agent warrants | -941,541 | ' | -941,541 | ' |
Increase (decrease) in fair value | 958,176 | ' | 2,653,772 | ' |
Conversion of convertible notes to common stock | -5,665,883 | ' | -5,665,883 | ' |
Issuance of underwriter's warrants | 403,696 | ' | 403,696 | ' |
Balance at end of period | 403,696 | 2,065,591 | 403,696 | 2,065,591 |
Embedded Derivatives Liabilities [Member] | ' | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Balance at beginning of period | 2,146,742 | 899,167 | 2,680,780 | ' |
Issuances of convertible notes | ' | 167,824 | 537,607 | 1,066,991 |
Increase (decrease) in fair value | -266,233 | ' | -1,337,878 | ' |
Conversion of convertible notes to common stock | -1,880,509 | ' | -1,880,509 | ' |
Balance at end of period | ' | $1,066,991 | ' | $1,066,991 |
Other_Assets_Schedule_of_Other
Other Assets - Schedule of Other Assets (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | ' |
Deferred offering costs | ' | $1,245,660 |
Debt issuance costs | ' | 1,190,699 |
Other | 143,621 | 143,621 |
Other assets | $143,621 | $2,579,980 |
Accrued_Expenses_Summary_of_Ac
Accrued Expenses - Summary of Accrued Expenses (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ' | ' |
Accrued compensation costs | $1,878,040 | $2,162,961 |
Accrued financing costs | ' | 1,245,660 |
Accrued settlement and licensing fees | 500,000 | ' |
Accrued interest charges | ' | 462,773 |
Accrued professional fees | 478,649 | 13,413 |
Other | 106,996 | 210,530 |
Accrued expenses and other current liabilities | $2,963,685 | $4,095,337 |
Senior_Convertible_Notes_Addit
Senior Convertible Notes - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Aug. 01, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Convertible Notes [Member] | Initial Public Offering [Member] | 8.00% Convertible Notes due May 31, 2015 [Member] | Dr. Sol Barer [Member] | Mr. Zan [Member] | Mr. Low [Member] | Ms. Julia P. Gregory [Member] | Placement Agent Warrants [Member] | |||
8.00% Convertible Notes due May 31, 2015 [Member] | 8.00% Convertible Notes due May 31, 2015 [Member] | 8.00% Convertible Notes due May 31, 2015 [Member] | ||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Notes, principal amount | ' | $11,963,650 | ' | ' | $15,000,000 | ' | ' | ' | ' | ' |
Convertible Notes, interest rate | 8.00% | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' |
Convertible Notes, due date | ' | ' | ' | ' | 31-May-15 | ' | ' | ' | ' | ' |
Convertible Notes, amount | ' | ' | ' | ' | ' | 2,000,000 | 831,350 | 90,000 | 25,000 | ' |
Conversion of Convertible Notes together with accrued and unpaid interest into common stock, shares | ' | ' | ' | 5,109,988 | ' | ' | ' | ' | ' | ' |
IPO, closing date | 1-Aug-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock held by Convertible Notes holders | ' | ' | 3,321,416 | ' | ' | ' | ' | ' | ' | ' |
Common stock held by Convertible Notes holders, exercise price | $7.50 | ' | $3 | ' | ' | ' | ' | ' | ' | ' |
Recognition of beneficial conversion feature | $7,428,547 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of warrant on number of shares of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Exercise price of the warrant description | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The exercise price of the warrant was equal to 110% of the lower of a 25% discount to the initial public offering price, or $10.50 in the event there was no initial public offering within six months of the Company's initial filing. |
Senior_Convertible_Notes_Summa
Senior Convertible Notes - Summary of Convertible Notes (Detail) (USD $) | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ' |
Principal | $11,963,650 |
Less: debt discount, net | -2,147,286 |
Net carrying amount | $9,816,365 |
Senior_Convertible_Notes_Summa1
Senior Convertible Notes - Summary of Convertible Notes (Parenthetical) (Detail) | Sep. 30, 2014 |
Debt Disclosure [Abstract] | ' |
Accrued interest at stated percentage | 8.00% |
Net_Loss_Per_Share_of_Common_S2
Net Loss Per Share of Common Stock - Schedule of Computation of Basic and Diluted Loss Per Share for Common Stockholders (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net loss applicable to common stockholders | ($16,397,678) | ($4,358,180) | ($29,880,865) | ($12,689,366) |
Weighted average shares of common stock outstanding | 13,403,595 | 1,011,997 | 5,187,920 | 1,011,670 |
Net loss per share of common stock-basic and diluted | ($1.22) | ($4.31) | ($5.76) | ($12.54) |
Net_Loss_Per_Share_of_Common_S3
Net Loss Per Share of Common Stock - Schedule of Antidilutive Securities Excluded from Computation of Diluted Weighted Average Shares Outstanding (Detail) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Potentially antidilutive securities outstanding excluded from the computation of diluted weighted average shares | 17,421,356 | 7,466,180 |
Preferred Stock [Member] | ' | ' |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Potentially antidilutive securities outstanding excluded from the computation of diluted weighted average shares | ' | 4,554,874 |
Equity Options [Member] | ' | ' |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Potentially antidilutive securities outstanding excluded from the computation of diluted weighted average shares | 2,843,995 | 2,192,984 |
Class A Warrants [Member] | ' | ' |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Potentially antidilutive securities outstanding excluded from the computation of diluted weighted average shares | 6,880,333 | ' |
Class B Warrants [Member] | ' | ' |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Potentially antidilutive securities outstanding excluded from the computation of diluted weighted average shares | 3,440,166 | ' |
Warrants [Member] | ' | ' |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' | ' |
Potentially antidilutive securities outstanding excluded from the computation of diluted weighted average shares | 4,256,862 | 718,322 |
Capital_Structure_Additional_I
Capital Structure - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||
Aug. 01, 2014 | Aug. 31, 2014 | Sep. 30, 2014 | Jul. 31, 2014 | Dec. 31, 2013 | Aug. 01, 2014 | Aug. 01, 2014 | 28-May-14 | 28-May-14 | 28-May-14 | 28-May-14 | Aug. 01, 2014 | Aug. 01, 2014 | |
Initial Public Offering [Member] | Initial Public Offering [Member] | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series C-1 Convertible Preferred Stock [Member] | Common Class A [Member] | Common Class B [Member] | ||||||
Initial Public Offering [Member] | Initial Public Offering [Member] | ||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
IPO, closing date | ' | ' | 1-Aug-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial public offering, units description | ' | ' | 'Each unit consisted of one share of common stock, one Class A Warrant to purchase one share of common stock at an exercise price of $4.80 per share and one Class B Warrant to purchase one-half share of common stock at an exercise price of $4.00 per full share (the "Units"). | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price per share | ' | ' | $7.50 | ' | ' | ' | ' | ' | ' | ' | ' | $4.80 | $4 |
Common stock units sold by initial public offering | ' | ' | ' | ' | ' | 6,880,333 | ' | ' | ' | ' | ' | ' | ' |
Public offering price, per unit | ' | ' | ' | ' | ' | ' | $6 | ' | ' | ' | ' | ' | ' |
Common stock upon exercise of option by underwriters | ' | ' | 206,410 | ' | ' | 880,333 | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from initial public offering | $35,000,000 | $35,000,000 | $41,281,998 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | 100,000,000 | 100,000,000 | 28,571,428 | ' | ' | ' | ' | ' | ' | ' | ' |
Class of warrant purchase percentage | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants expiration date | ' | ' | 27-Aug-19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercisable period | ' | ' | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend declaration date | ' | ' | 28-May-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of Preferred Stock in payment of dividend | ' | ' | ' | ' | ' | ' | ' | 605,645 | 1,172,645 | 1,379,388 | 2,395 | ' | ' |
Number of shares issued on conversion of preferred stock including in-kind dividend payable into common stock | 6,861,968 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital_Structure_Summary_of_C
Capital Structure - Summary of Common Stock Reserved for Future Issuance (Detail) | Sep. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | 17,421,356 | 7,494,848 |
Series A Convertible Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | ' | 628,570 |
Series B Convertible Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | ' | 1,328,902 |
Series C Convertible Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | ' | 2,597,402 |
Series C-1 Convertible Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | ' | ' |
Equity Options [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | 2,843,995 | 2,221,652 |
Class A Warrants [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | 6,880,333 | ' |
Class B Warrants [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | 3,440,166 | ' |
Warrants [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Total Common Stock reserved for future issuance | 4,256,682 | 718,322 |
Stock_Option_and_Incentive_Pla2
Stock Option and Incentive Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Apr. 29, 2014 | Feb. 26, 2013 | Apr. 29, 2014 | Jul. 31, 2008 | Feb. 26, 2013 | Feb. 24, 2014 | Feb. 26, 2013 | Dec. 12, 2011 | Jul. 28, 2014 | Jul. 28, 2014 | |
2008 Equity Incentive Plan [Member] | 2008 Equity Incentive Plan [Member] | 2008 Equity Incentive Plan [Member] | 2008 Equity Incentive Plan [Member] | Amended Plan [Member] | Amended Plan [Member] | Amended Plan [Member] | Amended Plan [Member] | 2014 Omnibus Incentive Plan [Member] | 2014 Omnibus Incentive Plan [Member] | ||||||
Employees | Participant | Maximum [Member] | |||||||||||||
Participant | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock reserved pursuant to the plan | 17,421,356 | ' | 17,421,356 | ' | 7,494,848 | ' | ' | ' | 214,285 | ' | 1,857,142 | 1,571,428 | 900,000 | 571,429 | ' |
Termination of service, Period | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | '2 years | ' | ' | ' | ' | ' |
Exercise price per share, Granted | ' | ' | $4.27 | ' | ' | ' | ' | ' | ' | $3.50 | ' | ' | ' | ' | ' |
Number of participants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26 | ' | ' | ' |
Number of employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | ' |
Options to purchase Company's Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | 647,521 | ' | ' | ' | ' | ' |
Number of common stock available for grant | 682,154 | ' | 682,154 | ' | ' | ' | ' | 2,357,142 | ' | ' | ' | ' | ' | ' | ' |
Approved grants to purchase shares of Common Stock | ' | ' | ' | ' | ' | 559,285 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual increase of plan, percentage of common stock shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% |
Number of common stock shares outstanding | 2,843,995 | ' | 2,843,995 | ' | 2,221,652 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period of unvested stock options | ' | ' | '2 years 4 months 2 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value of options | ' | ' | $4.27 | $3.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation expense recognized | $1,249,124 | $248,789 | $1,630,300 | $1,063,709 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost related to unvested stock options | $1,762,160 | ' | $1,762,160 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_Option_and_Incentive_Pla3
Stock Option and Incentive Plans - Summary of Stock Option Activity (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Weighted Average Exercise Price, Options outstanding, Beginning balance | $5.32 |
Weighted Average Exercise Price, Granted | $4.27 |
Weighted Average Exercise Price, Exercised | ' |
Weighted Average Exercise Price, Forfeited | $5 |
Weighted Average Exercise Price, Options outstanding, Ending balance | $5.07 |
Number of Options, Options outstanding, Beginning balance | 2,221,652 |
Number of Options, Granted | 703,556 |
Number of Options, Exercised | ' |
Number of Options, Forfeited | -81,213 |
Number of Options, Options outstanding, Ending balance | 2,843,995 |
Stock_Option_and_Incentive_Pla4
Stock Option and Incentive Plans - Summary of Stock Options Outstanding and Exercisable (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Exercise Price $3.50 [Member] | Exercise Price $3.50 [Member] | Exercise Price $4.27 [Member] | Exercise Price $4.27 [Member] | Exercise Price $6.02 [Member] | Exercise Price $6.02 [Member] | Exercise Price $9.03 [Member] | Exercise Price $9.03 [Member] | Exercise Price $11.55 [Member] | Exercise Price $11.55 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options Outstanding Weighted Average Remaining, Shares Outstanding | 2,843,995 | ' | 1,435,831 | ' | 696,413 | ' | 35,714 | ' | 641,067 | ' | 34,970 |
Options Outstanding Weighted Average Remaining, Contractual Life in Years | ' | '7 years 5 months 9 days | ' | '9 years 4 months 10 days | ' | '9 years 2 months 19 days | ' | '6 years 1 month 28 days | ' | '5 years 7 months 24 days | ' |
Options Exercisable Weighted Average Remaining, Shares Outstanding | 2,181,720 | ' | 1,302,661 | ' | 213,736 | ' | 35,714 | ' | 598,925 | ' | 30,684 |
Options Exercisable Weighted Average Remaining, Contractual Life in Years | ' | '7 years 4 months 6 days | ' | '9 years 2 months 12 days | ' | '9 years 2 months 19 days | ' | '6 years 2 months 1 day | ' | '6 years 1 month 10 days | ' |
Exercise Price | $4.27 | $3.50 | ' | $4.27 | ' | $6.02 | ' | $9.03 | ' | $11.55 | ' |
Stock_Option_and_Incentive_Pla5
Stock Option and Incentive Plans - Assumptions to Compute Fair Value of Stock Option Grants (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' |
Risk free interest rate | 1.65% | ' | 1.98% | 1.18% |
Expected dividend yield | ' | ' | ' | ' |
Expected term (in years) | '5 years 5 months 9 days | ' | '5 years 8 months 27 days | '6 years 3 months 15 days |
Expected volatility | 75.50% | ' | 76.80% | 73.20% |
Retention_Bonus_Plan_Additiona
Retention Bonus Plan - Additional Information (Detail) (Retention Plan [Member], USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 11, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | |
Retention Plan [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Retention Bonus Plan, description | ' | ' | 'Under the Retention Plan, participants will vest in and become eligible to receive awards equal to a fixed dollar amount (the bAward Amountb), upon the earliest to occur of any of the following events: (i) the IPO; (ii) a Change of Control (as defined in the Retention Plan); (iii) May 31, 2015; and (iv) a participantbs termination of employment due to death or Disability (as defined in the Retention Plan) (each such event, a bPayment Eventb). In the event of an IPO or Change of Control, participants who are then employed by the Company shall be eligible to receive a payment in an amount equal to 1.82 times each participantbs Award Amount. | ' |
Award Amounts granted under retention plan | ' | ' | ' | $532,700 |
Expense associated with the vesting of the grants | ' | $954,754 | ' | ' |
Common stock issued in payment of the retention grants | 133,109 | ' | ' | ' |
Significant_Agreements_Additio
Significant Agreements - Additional Information (Detail) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Dec. 31, 2013 | Jan. 29, 2014 | Sep. 30, 2014 | Aug. 11, 2014 | Sep. 30, 2014 | 28-May-14 | Sep. 30, 2014 | Jan. 29, 2014 | Jan. 29, 2014 | |
USD ($) | USD ($) | Trellis Biosciences, LLC [Member] | Trellis Biosciences, LLC [Member] | MorphoSys AG [Member] | MorphoSys AG [Member] | Series C-1 Convertible Preferred Stock [Member] | Series C-1 Convertible Preferred Stock [Member] | Series C-1 Convertible Preferred Stock [Member] | Maximum [Member] | |
USD ($) | EUR (€) | Trellis Biosciences, LLC [Member] | Trellis Biosciences, LLC [Member] | Trellis Biosciences, LLC [Member] | ||||||
USD ($) | USD ($) | USD ($) | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement, date | ' | ' | ' | 29-Jan-14 | ' | ' | ' | ' | ' | ' |
License agreement, description | ' | ' | ' | 'The license provides the Company with three fully human mAbs | ' | ' | ' | ' | ' | ' |
Amended license agreement, date | ' | ' | ' | 14-Aug-14 | ' | ' | ' | ' | ' | ' |
Consideration paid under license agreement | ' | ' | $200,000 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock issued, shares | ' | ' | ' | ' | ' | ' | 2,395 | ' | 151,515 | ' |
Preferred stock issued, value | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' |
Obligation to pay upon the achievement of specified development and regulatory milestones | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 |
Royalty payment obligation | 2,963,685 | 4,095,337 | ' | ' | ' | ' | ' | 500,000 | ' | ' |
Payments of royalty percentage on future net sales | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' |
License agreement payment description | ' | ' | ' | 'An additional $500,000 in shares of Series C-1 preferred stock or in shares of the Companybs common stock, valued at the ten-day weighted average price per share for the ten days prior to such issuance, will be issued on the six month anniversary of the agreement. The Company has recorded a liability for the full $500,000 value of the shares to be issued to Trellis. The Company will also be required to pay Trellis up to $1.3 million upon the achievement of specified development and regulatory milestones and make additional payments upon the achievement of future sales and a royalty of 4% of future net sales from products. | ' | ' | ' | ' | ' | ' |
License agreement expiration date | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement termination date | ' | ' | ' | ' | ' | 15-Aug-14 | ' | ' | ' | ' |
Payment made to MorphoSys AG upon settlement | ' | ' | ' | ' | € 1,000,000 | ' | ' | ' | ' | ' |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Jul. 31, 2014 | Dec. 31, 2013 | Oct. 07, 2014 |
Subsequent Events [Member] | ||||
Trellis Biosciences, LLC [Member] | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 28,571,428 | 132,380 |
Common stock value in consideration of license | $2,008 | ' | $101 | $500,000 |