Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SLNO | |
Entity Registrant Name | SOLENO THERAPEUTICS INC | |
Entity Central Index Key | 1,484,565 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,768,375 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 14,866 | $ 17,100 |
Restricted cash | 35 | 35 |
Prepaid expenses and other current assets | 423 | 343 |
Current assets held for sale | 484 | 516 |
Total current assets | 15,808 | 17,994 |
Long-term assets | ||
Property and equipment, net | 17 | 23 |
Other assets | 126 | 126 |
Intangible assets, net | 19,927 | 20,413 |
Long-term assets held for sale | 453 | 466 |
Total assets | 36,331 | 39,022 |
Current liabilities | ||
Accounts payable | 1,133 | 633 |
Accrued compensation and other current liabilities | 721 | 973 |
Current liabilities held for sale | 88 | 127 |
Total current liabilities | 1,942 | 1,733 |
Long-term liabilities | ||
Contingent liability for Essentialis purchase price | 5,510 | 5,082 |
Other liabilities | 13 | 13 |
Long-term liabilities held for sale | 625 | 225 |
Total liabilities | 13,312 | 12,487 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity | ||
Common stock | 20 | 19 |
Additional paid-in-capital | 140,733 | 140,495 |
Accumulated deficit | (117,734) | (113,979) |
Total stockholders' equity | 23,019 | 26,535 |
Total liabilities and stockholders' equity | 36,331 | 39,022 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Convertible preferred stock | 0 | 0 |
Series A Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | 291 | 352 |
Series C Warrant [Member] | ||
Long-term liabilities | ||
Warrant liability | 4 | 6 |
2017 PIPE Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | $ 4,927 | $ 5,076 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,768,375 | 19,238,972 |
Common stock, shares outstanding | 19,768,375 | 19,238,972 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock par value (in dollars per share) | $ 0.001 | |
Convertible preferred stock, shares designated | 13,780 | 13,780 |
Convertible preferred stock, shares issued | 3,571 | 4,571 |
Convertible preferred stock, shares outstanding | 3,571 | 4,571 |
Convertible preferred stock, aggregate liquidation preference | $ 0 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating expenses | ||
Research and development | $ 1,180 | $ 327 |
Sales and marketing | 27 | |
General and administrative | 1,867 | 1,019 |
Change in fair value of contingent consideration | 428 | 5 |
Total operating expenses | 3,475 | 1,373 |
Operating loss | (3,475) | (1,373) |
Other income (expense) | ||
Cease-use income (expense) | 3 | (2) |
Change in fair value of warrants liabilities | 212 | (69) |
Interest and other income (expense) | 19 | (601) |
Total other income (expense) | 234 | (672) |
Loss from continuing operations | (3,241) | (2,045) |
Loss from discontinued operations | (514) | (842) |
Net loss | $ (3,755) | $ (2,887) |
Loss per common share from continuing operations, basic and diluted | $ (0.17) | $ (0.40) |
Loss per common share from discontinued operations, basic and diluted | (0.02) | (0.17) |
Net loss per common share, basic and diluted | $ (0.19) | $ (0.57) |
Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 19,530,311 | 5,090,581 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (3,755) | $ (2,887) |
Loss from discontinued operations | (514) | (842) |
Loss from continuing operations | (3,241) | (2,045) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Depreciation and amortization | 492 | 119 |
Stock-based compensation expense | 341 | 140 |
Board fees paid with common stock | 82 | 45 |
Change in fair value of stock warrants | (212) | 69 |
Change in fair value of contingent consideration | 428 | 5 |
Non-cash expense of issuing shares to Aspire Capital | 602 | |
Change in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (80) | (15) |
Accounts payable | 409 | (204) |
Accrued compensation and other current liabilities | (252) | (49) |
Other long-term liabilities | (16) | |
Net cash used in continuing operating activities | (2,033) | (1,349) |
Net cash used in discontinued operating activities | (487) | (834) |
Net cash used in operating activities | (2,520) | (2,183) |
Cash flows from investing activities: | ||
Net cash used in discontinued investing activities | (4) | |
Net cash used in investing activities | (4) | |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 10,000 | |
Cash paid for the issuance cost of common stock and common stock warrants | (112) | |
Net cash provided by (used in) continuing financing activities | (112) | 10,000 |
Net cash provided by discontinued financing activities | 400 | |
Net cash provided by financing activities | 288 | 10,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (2,232) | 7,813 |
Net increase in cash and cash equivalents included in current assets held for sale | (2) | |
Cash, cash equivalents and restricted cash, beginning of period | 17,135 | 2,761 |
Cash, cash equivalents and restricted cash, end of period | 14,901 | 10,574 |
Supplemental disclosures of non-cash investing and financing information | ||
Issuance of common stock in Essentialis acquisition | 17,246 | |
Contingent cash consideration of Essentialis acquisition | 2,590 | |
Costs of issuing common stock and common stock warrants recorded in accounts payable | 91 | |
Continuing Operations [Member] | ||
Cash flows from financing activities: | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | (2,145) | 8,651 |
Discontinued Operations [Member] | ||
Cash flows from financing activities: | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ (87) | $ (838) |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1. Description of Business Soleno Therapeutics, Inc. (the “Company” or “Soleno”) was incorporated in the State of Delaware on August 25, 1999, and is located in Redwood City, California. The Company initially developed and commercialized neonatology devices and diagnostics. Additionally, the Company had a therapeutics platform based on its proprietary technology for precision metering of gas flow. Upon the acquisition of Essentialis Inc., or “Essentialis” through a merger, or the Merger, on March 7, 2017, pursuant to an Agreement and Plan of Merger, or the Merger Agreement, the Company initiated actions to divest, sell or dispose its device and diagnostics business activities and focus its research and transitioning to the development and commercialization of novel therapeutics for the treatment of rare diseases and on advancing the lead drug candidate acquired with Essentialis. Essentialis was a privately held, clinical stage biotechnology company focused on the development of breakthrough medicines for the treatment of rare diseases where there is increased mortality and risk of cardiovascular and endocrine complications. Prior to the Merger, Essentialis’s efforts were focused primarily on developing and testing product candidates that target the ATP-sensitive Subsequent to the merger with Essentialis, the Company explored opportunities to divest, sell or dispose of the NeoForce, CoSense, and Serenz businesses. The Company’s current research and development efforts are primarily focused on advancing its lead candidate, DCCR tablets for the treatment of PWS into late-stage clinical development, with a secondary emphasis on its joint venture with OAHL for the CoSense technology. CoSense is 510(k) cleared for sale in the U.S. and received CE Mark certification for sale in the E.U. The Company continues to separately evaluate alternatives for its Serenz portfolio. The operations directly related to the NeoForce, CoSense, and Serenz business are reported herein as discontinued operations and the related assets are reported as assets held for sale in accordance with ASC 205-20-45-10. The Company completed the sale of stock of its previously 100% wholly-owned subsidiaryNFI on July 18, 2017, pursuant to a Stock Purchase Agreement, or NFI Purchase Agreement, with NeoForce Holdings, Inc., or NFI Holdings, a 100% owned subsidiary of Flexicare Medical Limited, a privately held United Kingdom company, for $720,000 and adjustments for inventory and the current cash balances held at NFI. On October 6, 2017, the Company effected a one-for-five On December 4, 2017, Soleno, and its wholly-owned subsidiary, Capnia, Inc., a Delaware corporation, or Capnia, entered into a joint venture with OptAsia Healthcare Limited, a Hong Kong company limited by shares, or OAHL, with the purpose of developing and commercializing medical monitors, including the CoSense ® End-Tidal end-tidal |
Going Concern and Management's
Going Concern and Management's Plans | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Management's Plans | Note 2. Going Concern and Management’s Plans The Company had a net loss of $3.8 million for the three months ended March 31, 2018 and has an accumulated deficit of $117.7 million at March 31, 2018 from having incurred losses since its inception. The Company has approximately $14.0 million of working capital at March 31, 2018 and used approximately $2.5 million of cash in its operating activities during the three months ended March 31, 2018. The Company has financed its operations principally through issuances of equity securities. The Company has continued to focus on expense control, including reducing its workforce, eliminating outside consultants, reducing legal fees and implementing a plan to allow Board members to receive common stock, in lieu of cash payments. On December 11, 2017, the Company entered into the Unit Purchase Agreement with certain stockholders, pursuant to which the Company sold and issued 8,141,116 immediately separable units at a price per unit of $1.84, for aggregate gross proceeds of $15.0 million. Each unit consisted of one share of the Company’s common stock and a warrant to purchase 0.74 shares of the Company’s common stock at an exercise price of $2.00 a share, for an aggregate of 8,141,116 Shares and corresponding warrants to purchase an aggregate of 6,024,425 Warrant Shares, together referred to as the Resale Shares. The Company also granted certain registration rights to these stockholders, pursuant to which, among other things, the Company prepared and filed a registration statement with the SEC to register for resale the Resale Shares. The registration statement was declared effective in February 2018. The accompanying condensed consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. The Company expects to continue incurring losses for the foreseeable future and may be required to raise additional capital to complete its clinical trials, pursue product development initiatives and penetrate markets for the sale of its products. Management believes that the Company will continue to have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means, but the Company’s access to such capital resources is uncertain and is not assured. If the Company is unable to secure additional capital, it may be required to curtail its clinical trials and development of new products and take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays in the Company’s efforts to complete its clinical trials and commercialize its products, which is critical to the realization of its business plan and the future operations of the Company. These matters raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing this quarterly report. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should it be unable to continue as a going concern. Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern within one year from the date of filing these financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies There have been no material changes to the significant accounting policies during the three months ended March 31, 2018, as compared to the significant accounting policies described in Note 3 of the “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States, or GAAP, for complete financial statements. The condensed consolidated balance sheet at December 31, 2017, has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company’s financial position as of March 31, 2018, and results of its operations for the three months ended March 31, 2018 and 2017. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These classifications have no effect on the previously reported net loss of loss per share. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K. Recent Accounting Standards Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting In March 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118” 2018-05”) Tax Cuts and Jobs Act ASU 2018-09 Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) 2014-09”). ASU 2014-09 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts ASU 2014-09 2014-09 ASU 2014-09 ASU 2014-09 ASU 2014-09 ASU 2014-09 ASU 2014-09 ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ASU 2014-09 2015-14 In January 2017, the FASB issued Accounting Standards Update (ASU) 2017-04: “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” 2017-04”), In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception 2017-11). 2017-11 In February 2018, the FASB issued Accounting Standards Update No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” 2018-02”), 2018-02 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4. Fair Value of Financial Instruments The carrying value of the Company’s cash, restricted cash and accounts payable approximate fair value due to the short-term nature of these items. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: • Level I - Unadjusted quoted prices in active markets for identical assets or liabilities; • Level II - Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and • Level III - Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial instruments that were measured at fair value on recurring basis by level within the fair value hierarchy (in thousands). Fair Value Measurements at March 31, 2018 Total Level 1 Level 2 Level 3 Assets Money market fund $ 14,844 $ 14,844 $ — $ — Liabilities Series A warrant liability $ 291 $ 291 $ — $ — Series C warrant liability 4 — — 4 2017 PIPE warrant liability 4,927 — — 4,927 Essentialis purchase price contingency liability 5,510 — — 5,510 Total common stock warrant and contingent consideration liability $ 10,732 $ 291 $ — $ 10,441 Fair Value Measurements at December 31, 2017 Total Level 1 Level 2 Level 3 Assets Money market fund $ 16,790 $ 16,790 $ — $ — Liabilities Series A warrant liability $ 352 $ 352 $ — $ — Series C warrant liability 6 — — 6 2017 PIPE warrant liability 5,076 — — 5,076 Essentialis purchase price contingency liability 5,082 — — 5,082 Total common stock warrant and contingent consideration liability $ 10,516 $ 352 $ — $ 10,164 The Series A Warrant is a registered security that trades on the open market and the fair value of the Series A Warrant liability is based on the publicly quoted trading price of the warrants which is listed on and obtained from NASDAQ. Accordingly, the fair value of Series A Warrants is a Level 1 measurement. The fair value measurement of the Series C Warrants is based on significant inputs that are unobservable and thus represent Level 3 measurements. The Company’s estimated fair value of the Series C Warrant liability is calculated using the Black-Scholes valuation model, which is equivalent to fair value computed using the Binomial Lattice Option Model. Key assumptions include the volatility of the Company’s stock, the expected warrant term, expected dividend yield and risk-free interest rates. The Company’s estimated fair value of the 2017 PIPE Warrants was calculated using a Monte Carlo simulation of a geometric Brownian motion model. The Monte Carlo simulation pricing model requires the input of highly subjective assumptions including the expected stock price volatility, the expected term, the expected dividend yield and the risk-free interest rate. The fair value of the Essentialis purchase price contingent liability is estimated using scenario-based methods based upon the Company’s analysis of the likelihood of obtaining specified approvals from the Federal Drug Administration as well as reaching cumulative revenue milestones (see Note 10). The Level 3 estimates are based, in part, on subjective assumptions. During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at fair value using Level 3 inputs. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the periods presented. The following table sets forth a summary of the changes in the fair value of the Company’s Level 1 and Level 3 warrants, which are treated as liabilities, as follows (dollars in thousands). Series A Warrant Series C Warrant 2017 PIPE Warrants Number of Warrants Liability Number of Warrants Liability Number of Warrants Liability Purchase Balance at December 31, 2017 485,121 $ 352 118,083 $ 6 6,024,425 $ 5,076 $ 5,082 Change in value of Series A Warrants — (61 ) — — — — — Change in value of Series C Warrants — — — (2 ) — — — Change in value of 2017 PIPE Warrants — — — — — (149 ) — Change in value of contingent liability — — — — — — 428 Balance at March 31, 2018 485,121 $ 291 118,083 $ 4 6,024,425 $ 4,927 $ 5,510 |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Assets Held for Sale | Note 5. Discontinued Operations and Assets Held for Sale (i) Assets held for sale and discontinued operations Subsequent to the Merger with Essentialis described in Note 1, the Company explored opportunities to divest, sell or dispose of the CoSense, Neo Force, Inc. and Serenz businesses. Under ASC 205-20-45-10, The components of the Balance Sheet accounts presented as assets and liabilities held for sale follow (in thousands). March 31, 2018 December 31, 2017 Current assets Cash and cash equivalents $ 2 $ — Accounts receivable 64 50 Inventory 380 420 Prepaid expenses and other current assets 38 46 Total current assets held for sale $ 484 $ 516 Long-term assets Property and equipment, net $ 18 $ 20 Other intangible assets 435 446 Total long-term assets held for sale $ 453 $ 466 Current liabilities Accounts payable $ 38 $ 51 Accrued compensation and other current liabilities 50 76 Total current liabilities for sale $ 88 $ 127 Long-term liabilities Other long-term liabilities $ 625 $ 225 Total long-term liabilities held for sale $ 625 $ 225 The components of the Statement of Operations presented as Discontinued Operations follow (in thousands). Three Months Ended March 31, 2018 2017 Product revenue $ 51 $ 265 Cost of product revenue 51 209 Gross profit — 56 Expenses Research and development 401 667 Sales and marketing 11 87 General and administrative 102 139 Total expenses 514 893 Operating loss (514 ) (837 ) Other income (expense) — (5 ) Net loss from discontinued operations $ (514 ) $ (842 ) Stock-based compensation expense of $19,000 and $45,000 was classified in discontinued operations for the three months ended March 31, 2018 and 2017, respectively. (ii) NFI Sale On September 2, 2015, the Company established NFI, a wholly owned subsidiary of the Company and through NFI, acquired substantially all of the assets of an unrelated privately held company NeoForce. On July 18, 2017, the Company completed the sale of stock of its 100% wholly-owned subsidiary, NFI, primarily related to the Company’s portfolio of neonatology resuscitation business pursuant to the NFI Purchase Agreement, with NFI Holdings, a 100% owned subsidiary of Flexicare Medical Limited, a privately held United Kingdom company, for $720,000 and adjustments for inventory and the current cash balances held at NFI. The Company will also receive the total outstanding accounts receivable and inventory held by NFI at the date of sale, as it is collected or sold, respectively. The transactions contemplated by the NFI Purchase Agreement are a continuation of a process previously disclosed by the Company of evaluating strategic alternatives and focusing on the Company’s rare disease therapeutic business. The NFI Purchase Agreement includes customary terms and conditions, including an adjustment to the purchase price based on inventory and accounts receivables, and provisions that require the Company to indemnify NFI Holdings for certain losses that it incurs as a result of a breach by the Company of its representations and warranties in the NFI Purchase Agreement and certain other matters. Proceeds from the sale are payable to the Company as follows: (1) a $720,000 payment to the Company in cash on July 18, 2017, (2) the value of outstanding accounts receivable as it is collected by NFI following July 18, 2017, payable on a monthly basis, and (3) the value of inventory as it is sold following July 18, 2017, payable on a monthly basis. The NFI Purchase Agreement contains customary representations and warranties of each of the parties. (iii) CoSense Joint Venture Agreement In December 2017, the Company entered into a joint venture with OAHL with respect to its CoSense product by agreeing to sell shares of Capnia, its wholly-owned subsidiary, to OAHL. CoSense was Soleno’s first Sensalyze Technology Platform product to receive 510(k) clearances from the FDA and CE Mark certification. CoSense measures CO, which can be elevated due to endogenous causes such as excessive breakdown of red blood cells, or hemolysis, or exogenous causes such as CO poisoning and smoke inhalation. The first target market for CoSense is for the use of ETCO measurements to aid in detection of hemolysis in neonates, a disorder in which CO and bilirubin are produced in excess as byproducts of the breakdown of red blood cells. The Company’s entry into the joint venture results from a comprehensive review of strategic alternatives for its legacy products and product candidates following its transition to a primarily therapeutic drug product company. The terms of the Joint Venture Agreement provide that OAHL will invest up to a total of $2.2 million of Capnia’s common shares on an incremental quarterly basis commencing in December 2017. Going forward, OAHL will be responsible for funding a portion of the Capnia operations. As of March 31, 2018, the Company had issued no shares of Capnia to OAHL. The Company will report for its ownership position in Capnia pursuant to ASC 810. |
Warrant Liabilities
Warrant Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Text Block [Abstract] | |
Warrant Liabilities | Note 6. Warrant Liabilities Warrants terms The Company has issued multiple warrant series, of which the Series A Warrants, Series C Warrants and 2017 PIPE Warrants (the “Warrants”) are considered liabilities pursuant to the guidance established by ASC 815 Derivatives and Hedging. The Company’s Warrants contain standard anti-dilution provisions for stock dividends, stock splits, subdivisions, combinations and similar types of recapitalization events. The Series A and Series C Warrants also contain a cashless exercise feature that provides for their net share settlement at the option of the holder in the event that there is no effective registration statement covering the continuous offer and sale of the Series A Warrants and shares underlying the Series A Warrants, or the shares underlying the Series C Warrants, respectively. The Company is required to comply with certain requirements to cause or maintain the effectiveness of a registration statement for the offer and sale of the shares underlying the Warrants and for the offer and sale of the Series C Warrants. The Series A and Series C Warrants contracts further provide for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Warrant is convertible into in the event that the Company is unable to maintain the effectiveness of a registration statement as described herein. The Company evaluated the registration payment arrangement stipulated in the terms of these securities and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the proceeds related to the warrant financings to the registration payment arrangement. The Warrants also contain a fundamental transactions provision that permits their settlement in cash at fair value at the option of the holder upon the occurrence of a change in control. Such change in control events include tender offers or hostile takeovers, which are not within the sole control of the Company as the issuer of these warrants. Accordingly, the Warrants are considered to have a cash settlement feature that precludes their classification as equity instruments. Settlement at fair value upon the occurrence of a fundamental transaction would be computed using the Black Scholes Option Pricing Model, which is equivalent to fair value computed using the Binomial Lattice Option Model. Accounting Treatment The Company accounts for the Warrants in accordance with the guidance in ASC 815 The Company classified the Warrants, with a term greater than one year, as long-term liabilities at their fair value and will re-measure Series A Warrants The Company has issued 489,921 Series A Warrants to purchase shares of its Common Stock at an exercise price of $32.50 per share in connection with the unit offering offered in the Company’s initial public offering (“IPO”) in November 2014. The Series A Warrants are exercisable at any time prior to the expiration of the five-year term on November 12, 2019. Upon the completion of the IPO, the Series A Warrants started trading on the NASDAQ under the symbol SLNOW. As the Series A Warrants are publicly traded, the Company uses the closing price on the measurement date to determine the fair value of these the Series A Warrants. Since their issuance, a total of 4,800 Series A Warrants have been exercised. As of March 31, 2018, the fair value of the 485,121 outstanding Series A Warrants was approximately $291,000, and the decrease of $61,000 in fair value during the three months ended March 31, 2018 was recorded as other income in the condensed consolidated statements of operations. Series C Warrants On March 5, 2015, the Company entered into separate agreements with certain Series B Warrant holders, who agreed to exercise their Series B Warrants to purchase an aggregate of 117,902 shares of the Company’s Common Stock at an exercise price of $32.50 per share, resulting in the de-recognition In April 2015, the Company issued a tender offer to the remaining holders of Series B Warrants to induce the holders to cash exercise the outstanding Series B Warrants in exchange for new Series C Warrants with an exercise price of $31.25 per share that expire on March 5, 2020. The tender offer was extended to Series B Warrant holders under a registration statement filed with the SEC on Form S-4, The Series C Warrants are exercisable into 118,083 shares of the Company’s Common Stock. As of March 31, 2018, the fair value of the Series C Warrants was determined to be approximately $4,000. The decline in the fair value of the liability for the Series C Warrants of $2,000 in the three months ended March 31, 2018 was recorded as other income in the condensed consolidated statements of operations. The Company has calculated the fair value of the Series C Warrants using a Black-Scholes pricing model, which is equivalent to the fair value computed using the Binomial Lattice Option Model. The Black-Scholes pricing model requires the input of highly subjective assumptions including the expected stock price volatility. The Company used the following inputs. March 31, 2018 December 31, 2017 Volatility 90 % 90 % Expected term (years) 1.92 2.17 Expected dividend yield — % — % Risk-free rate 2.26 % 1.91 % Warrants Issued as Part of the Units in the 2017 PIPE Offering The 2017 PIPE Warrants were issued on December 15, 2017 in the 2017 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2017 PIPE Offering, and entitle the holder to purchase one share of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2017 PIPE Warrants and terminating at the earlier of December 15, 2020 or 30 days following positive Phase III results for Diazoxide Choline Controlled-Release (DCCR) tablet in Prader-Willi syndrome (PWS). The exercise price and number of shares of common stock issuable upon exercise of the 2017 PIPE Warrants may be adjusted in certain circumstances, including in the event of a stock split, stock dividend, extraordinary dividend, or recapitalization, reorganization, merger or consolidation. However, the exercise price of the 2017 PIPE Warrants will not be reduced below $1.72. In the event of a change of control of the Company, the holders of unexercised warrants may present their unexercised warrants to the Company, or its successor, to be purchased by the Company, or its successor, in an amount equal to the per share value determined by the Black Scholes methodology. As of March 31, 2018, the fair value of the PIPE Warrants was determined to be approximately $4.9 million. The decline in the fair value of the liability for the PIPE Warrants of $149,000 in the three months ended March 31, 2018 was recorded as other income in the condensed consolidated statements of operations. The Company has calculated the fair value of the 2017 PIPE Warrants using a Monte Carlo simulation of a geometric Brownian motion model. The Monte Carlo simulation pricing model requires the input of highly subjective assumptions including the expected stock price volatility. The following summarizes certain key assumptions used in estimating the fair values. March 31, December 31, Volatility 62 % 67 % Expected term (years) 0.8 0.8 Expected dividend yield — % — % Risk-free rate 2.09 % 1.76 % |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Facility Leases On July 1, 2015 the Company executed a new four year non-cancelable The Company also leases office space under a non-cancelable Rent expense was $85,000 and $135,000 during the three months ended March 31, 2018 and 2017, respectively. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 8. Stockholders’ Equity Convertible Preferred Stock The Company is authorized to issue 10,000,000 shares of Preferred Stock. The Company has issued a total of 13,780 Series B Convertible Preferred Stock under the 2016 Sabby Purchase Agreement, with a par value of $0.001 and a stated value of $1,000 per share. The Series B Convertible Preferred Stock is convertible to Common Stock of the Company at the rate of 200 shares of Common Stock for each converted share of Series B Convertible Preferred Stock. Under the terms of the Series B Convertible Preferred Stock, in no event shall shares of Common Stock be issued to Sabby upon conversion of the Series B Convertible Preferred Stock to the extent such issuance of shares of Common Stock would result in Sabby having ownership in excess of 4.99%. The Series B Convertible Preferred Stock do not have an expiration date and are not redeemable at the option of the holders. In connection with each close of the Series B Convertible Preferred Stock, the Company was obligated to repurchase the remaining outstanding Series A Convertible Preferred Stock at the original issuance price. In addition, the exercise price of the existing Series D Warrants originally issued in conjunction with the 2015 Sabby Purchase Agreement was reduced from $12.30 to $8.75 per share on the effective date of the 2016 Sabby Purchase Agreement. Sabby converted 1,000 shares of Series B Convertible Preferred Stock into 200,000 shares of Common Stock during 2016. During the three months ended March 31, 2018 and 2017 Sabby converted 1,000 and 120 shares of Series B Convertible Preferred stock into 200,000 and 120,200 shares of Common Stock, respectively. As of March 31, 2018, there were 3,571 shares of Series B Convertible Preferred Stock outstanding. Common Stock On December 22, 2016, the Company entered into the Merger Agreement with Essentialis. Consummation of the Merger was subject to various closing conditions, including the Company’s consummation of a financing of at least $8 million at, or substantially contemporaneous with, the closing of the Merger, which occurred on March 7, 2017 and the receipt of stockholder approval of the Merger at a special meeting of stockholders, which the Company received on March 6, 2017. On March 7, 2017, the Company completed the Merger with Essentialis and issued 3,783,388 shares of common stock to shareholders of Essentialis. Pursuant to the terms of the Merger Agreement, the Company held back shares of common stock as partial recourse to satisfy indemnification claims. Effective March 7, 2018, on the 1-year carve-out On January 27, 2017, the Company entered into the 2017 Aspire Purchase Agreement with Aspire Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $17.0 million in value of shares of our Common Stock over the 30-month In December 2017, the Company entered into a Securities Purchase Agreement, or the Unit Purchase Agreement, with purchasers of the Company’s securities pursuant to which the Company sold and issued 8,141,116 immediately separable units at a price per unit of $1.84 for aggregate gross proceeds of approximately $15,000,000 Each unit consisted of one share of the Company’s common stock and a warrant to purchase 0.74 of a share of the Company’s common stock at an exercise price of $2.00 per share, for an aggregate of 8,141,116 shares of common stock, and corresponding warrants, or the 2017 PIPE Warrants, to purchase 6,024,425 shares of common stock. Soleno refers to the Shares and the Warrant Shares collectively as the Resale Shares. The Company also granted certain registration rights to the investors pursuant to the Unit Purchase Agreement pursuant to which, among other things, the Company prepared and filed a registration statement with the SEC to register for resale the Resale Shares. The registration statement was declared effective in February 2018. Stock Incentive Plan The Company has adopted the 1999 Incentive Stock Plan, the 2010 Equity Incentive Plan, and the 2014 Equity Incentive Plan (“2014 Plan”), together the Plans. The 1999 Incentive Stock Plan expired in 2009, and the 2010 Equity Incentive Plan has been closed to new issuances. Under the 2014 Plan the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance units or performance shares to employees, directors, advisors, and consultants. Options granted under the 2014 Plan may be incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees, including officers and directors. The Board of Directors has the authority to determine to whom stock options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price of an option will not be less than 110% of fair value. The vesting period is normally monthly over a period of 4 years from the vesting date. The contractual term of an option is no longer than five years for ISOs for which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than ten years for all other options. The terms and conditions governing restricted stock units is at the sole discretion of the Board. There have been no grants of stock appreciation rights, performance units or performance shares as of March 31, 2018. As of March 31, 2018, a total of 1,266,804 shares are available for future grant under the 2014 Plan. The Company recognized stock-based compensation expense related to options and restricted stock units granted to employees, directors and consultants for the three months ended March 31, 2018 and 2017 of $360,000 and $185,000, respectively of which $19,000 and $45,000 was recorded in discontinued operations in the first quarter of 2018 and 2017, respectively. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. Stock compensation expense was allocated between departments in continuing operations as follows (in thousands). Three Months Ended March 31, 2018 2017 Research and development $ 106 $ 10 General and administrative 235 130 Total $ 341 $ 140 Stock Options The Company granted options to purchase 616,500 and 12,000 shares of the Company’s common stock during the three months ended March 31, 2018 and 2017, respectively. The fair value of each award granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions. Three Months Ended March 31, 2018 2017 Expected life (years) 6.0 6.0 Risk-free interest rate 2.7 % 2.2 % Volatility 70 % 61 % Dividend rate — % — % The Black-Scholes option-pricing model requires the use of highly subjective assumptions to estimate the fair value of stock-based awards. These assumptions include: • Expected volatility: • Expected term: • Risk-free rate: • Expected dividend yield: The following table summarizes stock option transactions for the three months ended March 31, 2018 as issued under the Plans: Number of Weighted-Average Weighted Average (in years) Balance at December 31, 2017 1,026,987 $ 9.99 — Options granted 616,500 1.60 Options exercised — Options canceled/forfeited (92,177 ) 14.54 Balance at March 31, 2018 1,551,310 6.38 8.89 Options vested at March 31, 2018 509,830 $ 13.15 7.83 Options vested and expected to vest at March 31, 2018 1,551,310 $ 6.38 8.89 The weighted-average grant date fair value of employee options granted was $1.03 and $1.90 per share for the three months ended March 31, 2018 and 2017, respectively. At March 31, 2018, total unrecognized employee stock-based compensation was $1.6 million, which is expected to be recognized over the weighted-average remaining vesting period of 3.2 years. As of March 31, 2018, the outstanding stock options had an intrinsic value of $131,000. The fair value of an equity award granted to a non-employee non-employees Restricted Stock Units There were 99,217 restricted stock units granted by the Company during the three months ended March 31, 2018 to employees and nonemployees. The shares were 100% vested on the grant date and were valued based on the Company’s common stock price on the grant date, with all of the related stock-based compensation expense recognized at that time. 2014 Employee Stock Purchase Plan Soleno’s board of directors and stockholders have adopted the 2014 Employee Stock Purchase Plan, or the ESPP. The ESPP has become effective, and the board of directors will implement commencement of offers thereunder in its discretion. A total of 27,967 shares of the Company’s Common Stock has been made available for sale under the ESPP. In addition, the ESPP provides for annual increases in the number of shares available for issuance under the plan on the first day of each year beginning in the year following the initial date that the board of directors authorizes commencement, equal to the least of: • 1.0% of the outstanding shares of the Company’s Common Stock on the first day of such year; 55,936 shares; or • such amount as determined by the board of directors. As of March 31, 2018, there were no purchases by employees under this plan. Series D Warrants The Company issued 256,064 Series D Warrants in October 2015, with an exercise price of $12.30 and a term of five years expiring on October 15, 2020. The Company’s Series D Warrants contain standard anti-dilution provisions for stock dividends, stock splits, subdivisions, combinations and similar types of recapitalization events. They also contain a cashless exercise feature that provides for their net share settlement at the option of the holder in the event that there is no effective registration statement covering the continuous offer and sale of the warrants and underlying shares. The Company is required to comply with certain requirement to cause or maintain the effectiveness of a registration statement for the offer and sale of these securities. The Series D Warrant agreement further provides for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Series D Warrant is convertible into in the event that the Company is unable to maintain the effectiveness of a registration statement as described herein. The Company evaluated the registration payment arrangement stipulated in the terms of this securities agreement and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the proceeds to the registration payment arrangement. The Series D Warrant agreement specifically provides that under no circumstances will the Company be required to settle any Series D Warrant exercise for cash, whether by net settlement or otherwise. Accounting Treatment The Company accounts for the Series D Warrants in accordance with the guidance in ASC 815 Derivatives and Hedging Other Common Stock Warrants As of March 31, 2018, the Company had 96,029 Common Stock warrants outstanding from the 2010/2012 convertible notes, with an exercise price of $24.35 and a term of 10 years expiring in November 2024. The Company also had outstanding 1,851 Common Stock warrants issued in 2009, with an exercise price of $108.00 and a term of 10 years, expiring in January 2019 and 16,500 Common Stock warrants issued to the underwriter in the Company’s IPO, with an exercise price of $35.70 and a term of 10 years, expiring in November 2024. |
Net loss per share
Net loss per share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net loss per share | Note 9. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted-average number of Common Stock actually outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of Common Stock outstanding and dilutive potential Common Stock that would be issued upon the exercise of Common Stock warrants and options. For the three months ended March 31, 2018 and 2017, the effect of issuing the potential common stock is anti-dilutive due to the net losses in those periods and the number of shares used to compute basic and diluted earnings per share are the same in each of those periods. The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in Common Stock equivalent shares). As of March 31 2018 2017 Convertible preferred stock 714,200 2,435,800 Warrants issued to 2010/2012 convertible note holders to purchase common stock 102,070 102,070 Options to purchase common stock 1,551,310 586,971 Warrants issued in 2009 to purchase common stock 1,851 1,851 Warrants issued to underwriter to purchase common stock 16,500 16,500 Series A warrants to purchase common stock 485,121 485,121 Series C warrants to purchase common stock 118,083 118,083 Series D warrants to purchase common stock 586,182 586,162 2017 PIPE warrants 6,024,425 — Total 9,599,742 4,332,558 |
Acquisition of Essentialis, Inc
Acquisition of Essentialis, Inc. | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Essentialis, Inc. | Note 10. Acquisition of Essentialis, Inc. On March 7, 2017, the Company acquired Essentialis through the merger of the Company’s wholly-owned subsidiary, Company E Merger Sub, Inc., a Delaware corporation (“Merger Sub”), whereby Merger Sub merged into Essentialis, with Essentialis surviving the merger as a wholly owned subsidiary of the Company. The transaction has been accounted for as an asset acquisition under the acquisition method of accounting. The amendments in ASU 2017-01 In consideration, the Company issued 3,783,388 shares of common stock to stockholders of Essentialis on March 7, 2017. Pursuant to the terms of the Merger Agreement, the Company held back shares of common stock as partial recourse to satisfy indemnification claims. Effective on the 1-year Since the acquisition was determined to be an asset acquisition, the total value of the purchase consideration will be allocated to the asset acquired. The fair value of the shares issued on the completion of the merger and of the contingent shares to be issued in the future was based on the stock price of the Company on the date of completion of the merger. In addition, the trading history of the Company was reviewed to assess the reliability of the implied consideration value. The Company trades on the NASDAQ, a major U.S. stock exchange, and has significant average daily trading volume with tight intraday bid-ask The agreement to pay cash upon the achievement of the commercial milestones results in the recognition of a contingent consideration. The fair value of the contingent cash consideration is based on the Company’s analysis of the likelihood of the drug indication moving from phase II through approval in the Federal Drug Administration approval process and then reaching the cumulative revenue milestones. In determining the likelihood of this occurring, the analysis relied on 2016 research published by BIO, Biomedtraker, & Amplion titles “Clinical Development Success Rates 2006-2015.” Based on management’s assessment, a 56% probability of achieving each milestone was determined to be reasonable. Additionally, the Company anticipates that it could reach the commercial milestones of $100 million and $200 million in applicable revenue in 2023 and 2025, respectively. The Company recorded the acquisition pursuant to the guidance in ASC 805, which provides that not all of the relevant information needed to complete acquisition-date measurements may be obtainable or known at the time of closing the acquisition and in time for issuance of interim or annual financial statements. Therefore, ASC 805 provides for a “measurement period” during which adjustments to the provisional valuation amounts initially recorded can be made in order to reflect information, existing at the acquisition date, but of which management subsequently obtains or becomes aware. ASC 805 provides that the measurement period can extend for up to, but not exceed, one year. The Company completed and finalized its assessments of the fair value of consideration paid and of the net assets acquired as of December 31, 2017. Management engaged independent professional assistance and advice in order to assess the fair value of the contingent stock and cash consideration as of March 7, 2017 and December 31, 2017. During the process of determining the fair value of the contingent consideration at December 31, 2017, the Company became aware that certain of the subjective assumptions made at the time of the initial valuation should be modified based upon management’s increased understanding of the commercial capabilities of the DCCR drug. Accordingly, the Company determined that it was appropriate to adjust the provisional valuation amounts recorded for the contingent stock and cash consideration made at the inception in March 2017. As a result, the value of the contingent cash consideration to be paid upon completing successive sales milestones increased and the value of the contingent stock consideration payable upon timing milestones was reduced; the resulting combined change to the total contingent consideration was not material. The initial valuation of the contingent consideration determined the fair value of the contingent stock consideration to be $4,220,000 and the fair value of the contingent cash consideration to be $1,090,000, for the combined value of $5,310,000. The revision of the initial valuation of the contingent consideration, made within the measurement period, determined the fair value of the contingent stock consideration to be $2,680,000 and the fair value of the contingent cash consideration to be $2,590,000, for the combined value of $5,270,000. Also subsequent to March 7, 2017 and prior to December 31, 2017, the Company completed its assessment of the tax effect on the net assets acquired by obtaining the independent study and report regarding the change in control in the previously outstanding stock of Essentialis. As a result of completing the study, the Company determined that, pursuant to Section 382 of the Internal Revenue Code, the utilization of Essentialis’s federal and state operating loss carryforwards were limited, which required the Company to record a net deferred tax liability in the amount of $1.7 million, deferred to future periods, as an element of the assets acquired. As a consequence of recording the net deferred tax liability, the Company’s valuation allowance was reduced by $1.7 million, which resulted in the provision for income tax benefit and an increase in the value of the intangible asset acquired. Accordingly, the initial purchase cost of the asset acquired was adjusted as of March 2017 and the net increase in amortization of the related intangible asset was recorded in the fourth quarter of 2017. The probability weighted milestone payments were discounted to determine the present value of future cash payments. The analysis utilized the weighted average cost of capital (WACC) discount rate which was estimated to be 20%. The aggregate purchase price consideration was as follows (in thousands). Fair value of stock consideration $ 17,246 Fair value of contingent consideration 2,590 Total purchase price consideration $ 19,836 The fair value of the asset acquired is as follows (in thousands). Patents $ 19,836 Net Assets Acquired $ 19,836 As an asset acquisition, the Company also capitalized approximately $573,000 of total costs incurred to complete the acquisition consisting of legal fees of $469,000, printing fees of $75,000 and accounting and other fees of $29,000. Additionally, the Company recorded as part of the purchase price consideration the value equivalent to the deferred tax liability that resulted from acquiring the assets in the amount of approximately $1,651,000. The total intangible asset of $22.0 million was recorded on the balance sheet and is being amortized ratably over the life of the patents through June 30, 2028. The fair value of the liability for the contingent consideration payable by the Company achieving the commercial sales milestones of $100 million and $200 million was initially established as approximately $2,590,000 at the time of the merger and approximately $5,510,000 at March 31, 2018, based on the Company’s assessment that it could reach the commercial sales milestones of in 2023 and 2025, respectively. |
Compensation Plan for Board Mem
Compensation Plan for Board Members | 3 Months Ended |
Mar. 31, 2018 | |
Compensation Related Costs [Abstract] | |
Compensation Plan for Board Members | Note 11. Compensation Plan for Board Members In 2017, the Compensation Committee of the Board of Directors recommended, and the Board approved a revised compensation plan pursuant to which all board fees are paid in Common Stock of the Company. Payment to the Board of Directors in shares of the Company’s Common Stock is made after the close of the quarter in which the compensation is earned. During the three months ended March 31, 2018 and 2017, the Company issued 47,757 and 9,997 shares, respectively, of Common Stock to its Board members for fees earned. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 12. Subsequent Event On May 14, 2018, the Company announced that it has initiated its multi-center Phase III clinical trial of Diazoxide Choline Controlled-Release (“DCCR”) for the treatment of Prader-Willi Syndrome (“PWS”). Accordingly, the Company is also obligated to issue an additional 913,389 shares of common stock to Essentialis stockholders upon the achievement of this development milestone. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States, or GAAP, for complete financial statements. The condensed consolidated balance sheet at December 31, 2017, has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company’s financial position as of March 31, 2018, and results of its operations for the three months ended March 31, 2018 and 2017. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These classifications have no effect on the previously reported net loss of loss per share. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K. |
Recent Accounting Standards | Recent Accounting Standards Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting In March 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118” 2018-05”) Tax Cuts and Jobs Act ASU 2018-09 Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) 2014-09”). ASU 2014-09 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts ASU 2014-09 2014-09 ASU 2014-09 ASU 2014-09 ASU 2014-09 ASU 2014-09 ASU 2014-09 ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ASU 2014-09 2015-14 In January 2017, the FASB issued Accounting Standards Update (ASU) 2017-04: “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” 2017-04”), In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception 2017-11). 2017-11 In February 2018, the FASB issued Accounting Standards Update No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” 2018-02”), 2018-02 |
Fair Value of Financial Instr19
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on recurring basis by level within the fair value hierarchy (in thousands). Fair Value Measurements at March 31, 2018 Total Level 1 Level 2 Level 3 Assets Money market fund $ 14,844 $ 14,844 $ — $ — Liabilities Series A warrant liability $ 291 $ 291 $ — $ — Series C warrant liability 4 — — 4 2017 PIPE warrant liability 4,927 — — 4,927 Essentialis purchase price contingency liability 5,510 — — 5,510 Total common stock warrant and contingent consideration liability $ 10,732 $ 291 $ — $ 10,441 Fair Value Measurements at December 31, 2017 Total Level 1 Level 2 Level 3 Assets Money market fund $ 16,790 $ 16,790 $ — $ — Liabilities Series A warrant liability $ 352 $ 352 $ — $ — Series C warrant liability 6 — — 6 2017 PIPE warrant liability 5,076 — — 5,076 Essentialis purchase price contingency liability 5,082 — — 5,082 Total common stock warrant and contingent consideration liability $ 10,516 $ 352 $ — $ 10,164 |
Summary of Changes in Fair Value of Level1 and Level 3 Financial Instruments | The following table sets forth a summary of the changes in the fair value of the Company’s Level 1 and Level 3 warrants, which are treated as liabilities, as follows (dollars in thousands). Series A Warrant Series C Warrant 2017 PIPE Warrants Number of Warrants Liability Number of Warrants Liability Number of Warrants Liability Purchase Balance at December 31, 2017 485,121 $ 352 118,083 $ 6 6,024,425 $ 5,076 $ 5,082 Change in value of Series A Warrants — (61 ) — — — — — Change in value of Series C Warrants — — — (2 ) — — — Change in value of 2017 PIPE Warrants — — — — — (149 ) — Change in value of contingent liability — — — — — — 428 Balance at March 31, 2018 485,121 $ 291 118,083 $ 4 6,024,425 $ 4,927 $ 5,510 |
Discontinued Operations and A20
Discontinued Operations and Assets Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Components of Discontinued Operations | The components of the Balance Sheet accounts presented as assets and liabilities held for sale follow (in thousands). March 31, December 31, Current assets Cash and cash equivalents $ 2 $ — Accounts receivable 64 50 Inventory 380 420 Prepaid expenses and other current assets 38 46 Total current assets held for sale $ 484 $ 516 Long-term assets Property and equipment, net $ 18 $ 20 Other intangible assets 435 446 Total long-term assets held for sale $ 453 $ 466 Current liabilities Accounts payable $ 38 $ 51 Accrued compensation and other current liabilities 50 76 Total current liabilities for sale $ 88 $ 127 Long-term liabilities Other long-term liabilities $ 625 $ 225 Total long-term liabilities held for sale $ 625 $ 225 The components of the Statement of Operations presented as Discontinued Operations follow (in thousands). Three Months Ended March 31, 2018 2017 Product revenue $ 51 $ 265 Cost of product revenue 51 209 Gross profit — 56 Expenses Research and development 401 667 Sales and marketing 11 87 General and administrative 102 139 Total expenses 514 893 Operating loss (514 ) (837 ) Other income (expense) — (5 ) Net loss from discontinued operations $ (514 ) $ (842 ) |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Series C Warrant [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | The Company used the following inputs. March 31, 2018 December 31, 2017 Volatility 90 % 90 % Expected term (years) 1.92 2.17 Expected dividend yield — % — % Risk-free rate 2.26 % 1.91 % |
2017 PIPE Warrant Liability [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | The following summarizes certain key assumptions used in estimating the fair values. March 31, December 31, Volatility 62 % 67 % Expected term (years) 0.8 0.8 Expected dividend yield — % — % Risk-free rate 2.09 % 1.76 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Stock Based Compensation Expense | Stock compensation expense was allocated between departments in continuing operations as follows (in thousands). Three Months Ended March 31, 2018 2017 Research and development $ 106 $ 10 General and administrative 235 130 Total $ 341 $ 140 |
Schedule of Fair Value of Award Granted Using Black-Scholes Option Pricing Model | The fair value of each award granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions. Three Months Ended March 31, 2018 2017 Expected life (years) 6.0 6.0 Risk-free interest rate 2.7 % 2.2 % Volatility 70 % 61 % Dividend rate — % — % |
Summary of Stock Option Transactions | The following table summarizes stock option transactions for the three months ended March 31, 2018 as issued under the Plans: Number of Weighted-Average Weighted Average (in years) Balance at December 31, 2017 1,026,987 $ 9.99 — Options granted 616,500 1.60 Options exercised — Options canceled/forfeited (92,177 ) 14.54 Balance at March 31, 2018 1,551,310 6.38 8.89 Options vested at March 31, 2018 509,830 $ 13.15 7.83 Options vested and expected to vest at March 31, 2018 1,551,310 $ 6.38 8.89 |
Net loss per share (Tables)
Net loss per share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding | The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in Common Stock equivalent shares). As of March 31 2018 2017 Convertible preferred stock 714,200 2,435,800 Warrants issued to 2010/2012 convertible note holders to purchase common stock 102,070 102,070 Options to purchase common stock 1,551,310 586,971 Warrants issued in 2009 to purchase common stock 1,851 1,851 Warrants issued to underwriter to purchase common stock 16,500 16,500 Series A warrants to purchase common stock 485,121 485,121 Series C warrants to purchase common stock 118,083 118,083 Series D warrants to purchase common stock 586,182 586,162 2017 PIPE warrants 6,024,425 — Total 9,599,742 4,332,558 |
Acquisition of Essentialis, I24
Acquisition of Essentialis, Inc. (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Consideration | The aggregate purchase price consideration was as follows (in thousands). Fair value of stock consideration $ 17,246 Fair value of contingent consideration 2,590 Total purchase price consideration $ 19,836 |
Fair Values of Assets Acquired | The fair value of the asset acquired is as follows (in thousands). Patents $ 19,836 Net Assets Acquired $ 19,836 |
Description of Business - Addit
Description of Business - Additional Information (Detail) | Oct. 06, 2017 | Jul. 18, 2017USD ($) |
NeoForce Holdings Inc. [Member] | ||
Class of Stock [Line Items] | ||
Proceeds from the sale of business | $ 720,000 | |
Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Reverse stock split | 0.2 |
Going Concern and Management'26
Going Concern and Management's Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Dec. 11, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Liquidity And Managements Plans [Line Items] | ||||
Net loss | $ (3,755) | $ (2,887) | ||
Accumulated deficit | (117,734) | $ (113,979) | ||
Positive (deficit) in working capital | 14,000 | |||
Net cash used in operating activities | $ (2,520) | $ (2,183) | ||
Equity Unit Purchase Agreements [Member] | ||||
Liquidity And Managements Plans [Line Items] | ||||
Number of newly issued | 8,141,116 | |||
Price per unit | $ 1.84 | |||
Gross Proceeds from issuance of units | $ 15,000 | |||
Common Stock [Member] | Equity Unit Purchase Agreements [Member] | ||||
Liquidity And Managements Plans [Line Items] | ||||
Warrant to call common stock | 0.74 | |||
Warrant exercise price | $ 2 | |||
Warrants, to purchase shares of common stock | 6,024,425 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | $ 291,000 | $ 352,000 |
Series C Warrant [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 4,000 | 6,000 |
2017 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 4,927,000 | 5,076,000 |
Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 291,000 | |
Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 10,732,000 | 10,516,000 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 291,000 | 352,000 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series C Warrant [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 4,000 | 6,000 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | 2017 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 4,927,000 | 5,076,000 |
Fair Value, Measurements, Recurring [Member] | Essentialis, Inc. [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 5,510,000 | 5,082,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 291,000 | 352,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 291,000 | 352,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 10,441,000 | 10,164,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | Series C Warrant [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 4,000 | 6,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | 2017 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 4,927,000 | 5,076,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Essentialis, Inc. [Member] | ||
Liabilities | ||
Warrant contingent consideration liability | 5,510,000 | 5,082,000 |
Money market fund [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets | ||
Cash and cash equivalents | 14,844,000 | 16,790,000 |
Money market fund [Member] | Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | $ 14,844,000 | $ 16,790,000 |
Fair Value of Financial Instr28
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Level 1 and Level 3 Financial Instruments (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Series A Warrant Liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the end of period, in shares | shares | 485,121 |
Series A Warrant Liability [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 352 |
Balance at the beginning of period, in shares | shares | 485,121 |
Change in value of Warrant | $ (61) |
Balance at the end of period, in shares | shares | 485,121 |
Balance at end of period | $ 291 |
Series C Warrant [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 6 |
Balance at the beginning of period, in shares | shares | 118,083 |
Change in value of Warrant | $ (2) |
Balance at the end of period, in shares | shares | 118,083 |
Balance at end of period | $ 4 |
2017 PIPE Warrant Liability [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 5,076 |
Balance at the beginning of period, in shares | shares | 6,024,425 |
Change in value of Warrant | $ (149) |
Balance at the end of period, in shares | shares | 6,024,425 |
Balance at end of period | $ 4,927 |
Purchase price contingent liability [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | 5,082 |
Change in value of Warrant | 428 |
Balance at end of period | $ 5,510 |
Discontinued Operations and A29
Discontinued Operations and Assets Held for Sale - Balance Sheet Components of Discontinued Operations (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Total current assets held for sale | $ 484 | $ 516 |
Long-term assets | ||
Total long-term assets held for sale | 453 | 466 |
Current liabilities | ||
Total current liabilities for sale | 88 | 127 |
Long-term liabilities | ||
Total long-term liabilities held for sale | 625 | 225 |
CoSense and NFI [Member] | Discontinued Operations, Held-for-sale [Member] | ||
Current assets | ||
Cash and cash equivalents | 2 | |
Accounts receivable | 64 | 50 |
Inventory | 380 | 420 |
Prepaid expenses and other current assets | 38 | 46 |
Total current assets held for sale | 484 | 516 |
Long-term assets | ||
Property and equipment, net | 18 | 20 |
Other intangible assets | 435 | 446 |
Total long-term assets held for sale | 453 | 466 |
Current liabilities | ||
Accounts payable | 38 | 51 |
Accrued compensation and other current liabilities | 50 | 76 |
Total current liabilities for sale | 88 | 127 |
Long-term liabilities | ||
Other long-term liabilities | 625 | 225 |
Total long-term liabilities held for sale | $ 625 | $ 225 |
Discontinued Operations and A30
Discontinued Operations and Assets Held for Sale - Components of Income of Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Expenses | ||
Net loss from discontinued operations | $ (514) | $ (842) |
CoSense and NFI [Member] | Discontinued Operations, Held-for-sale [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Product revenue | 51 | 265 |
Cost of product revenue | 51 | 209 |
Gross profit | 56 | |
Expenses | ||
Research and development | 401 | 667 |
Sales and marketing | 11 | 87 |
General and administrative | 102 | 139 |
Total expenses | 514 | 893 |
Operating loss | (514) | (837) |
Other income (expense) | (5) | |
Net loss from discontinued operations | $ (514) | $ (842) |
Discontinued Operations and A31
Discontinued Operations and Assets Held for Sale - Additional Information (Detail) - USD ($) | Jul. 18, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Stock-based compensation expense, discontinued operation | $ 360,000 | $ 185,000 | ||
OAHL [Member] | Capnia, Inc. [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of shares issued | 0 | |||
OAHL [Member] | Capnia, Inc. [Member] | Corporate Joint Venture [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Investment | $ 2,200,000 | |||
Discontinued Operations, Held-for-sale [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Stock-based compensation expense, discontinued operation | $ 19,000 | $ 45,000 | ||
NeoForce Holdings Inc. [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from the sale of business | $ 720,000 |
Warrant Liabilities - Additiona
Warrant Liabilities - Additional Information (Detail) - USD ($) | Mar. 05, 2015 | Jul. 31, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 15, 2017 | Apr. 30, 2015 |
Class of Warrant or Right [Line Items] | |||||||
Aggregate VWAP (percent) | 1.00% | ||||||
(Increase) decrease in the fair value of warrants liabilities | $ (212,000) | $ 69,000 | |||||
Proceeds from issuance of common stock under tender offer | $ 10,000,000 | ||||||
Series A Warrants to Purchase Shares of Common Stock [Member] | IPO [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of common stock purchased upon issuance of warrants | 489,921 | ||||||
Exercise price of warrants exercised | $ 32.50 | ||||||
Warrants term | 5 years | ||||||
Series B Warrant Liability [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Exercise price of warrants exercised | $ 32.50 | ||||||
Warrants exercised (in shares) | 117,902 | ||||||
De-recognition of warrant liability | $ 6,700,000 | ||||||
Proceeds from exercise of warrants | $ 3,800,000 | ||||||
Series C Warrant [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of common stock purchased upon issuance of warrants | 118,083 | ||||||
Exercise price of warrants exercised | $ 31.25 | $ 31.25 | |||||
Warrant liability | $ 4,000 | $ 6,000 | |||||
(Increase) decrease in the fair value of warrants liabilities | $ 2,000 | ||||||
Proceeds from issuance of common stock under tender offer | $ 5,882 | ||||||
Warrants cashless exercised (in shares) | 181 | ||||||
Series C Warrant [Member] | Common Stock [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Issuance of shares upon cashless exercise warrants (in shares) | 181 | ||||||
Series A Warrant Liability [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrants exercised (in shares) | 4,800 | ||||||
Warrants outstanding (in shares) | 485,121 | ||||||
Warrant liability | $ 291,000 | 352,000 | |||||
(Increase) decrease in the fair value of warrants liabilities | 61,000 | ||||||
Series A Warrant Liability [Member] | Convertible preferred stock warrant liability [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrant liability | $ 291,000 | ||||||
2017 PIPE Warrant Liability to Purchase Common Stock [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Exercise price of warrants exercised | $ 2 | ||||||
Warrant issuance description | The 2017 PIPE Warrants were issued on December 15, 2017 in the 2017 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2017 PIPE Offering, and entitle the holder to purchase one share of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2017 PIPE Warrants and terminating at the earlier of December 15, 2020 or 30 days following positive Phase III results for Diazoxide Choline Controlled-Release (DCCR) tablet in Prader-Willi syndrome (PWS). | ||||||
2017 PIPE Warrant Liability to Purchase Common Stock [Member] | Minimum [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Exercise price of warrants exercised | $ 1.72 | ||||||
2017 PIPE Warrant Liability [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrant liability | $ 4,927,000 | $ 5,076,000 | |||||
(Increase) decrease in the fair value of warrants liabilities | 149,000 | ||||||
Fair value of estimated warrants | $ 4,900,000 |
Warrant Liabilities - Fair Valu
Warrant Liabilities - Fair Value of Convertible Preferred Stock Warrant Liability (Detail) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Series C Warrant [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Volatility | 90.00% | 90.00% |
Expected Term | 1 year 11 months 1 day | 2 years 2 months 1 day |
Expected dividend yield | 0.00% | 0.00% |
Risk-free rate | 2.26% | 1.91% |
2017 PIPE Warrant Liability [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Volatility | 62.00% | 67.00% |
Expected Term | 9 months 18 days | 9 months 18 days |
Expected dividend yield | 0.00% | 0.00% |
Risk-free rate | 2.09% | 1.76% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 01, 2016ft² | Jul. 01, 2015USD ($)ft² | Feb. 28, 2015USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |||||
Non-cancelable operating lease agreement term | 4 years | ||||
Area of real estate property (in sqft) | ft² | 8,171 | ||||
Future minimum commitment under non-cancelable operating lease | $ | $ 23,300 | $ 22,000 | |||
Period of increases to monthly payments | 3 years | 2 years | |||
Additional area of office space for headquarters facility | ft² | 5,265 | ||||
Rent expense | $ | $ 85,000 | $ 135,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | Dec. 11, 2017USD ($)$ / sharesshares | Oct. 06, 2017 | Mar. 07, 2017USD ($)shares | Jan. 27, 2017USD ($) | Dec. 22, 2016USD ($) | Oct. 31, 2015$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016shares | Dec. 31, 2017$ / sharesshares | Jun. 29, 2016$ / shares | Jun. 28, 2016$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||
Proceeds from issuance of common stock | $ | $ 10,000,000 | |||||||||||
Number of options granted | 0 | |||||||||||
Stock-based compensation expense | $ | $ 360,000 | $ 185,000 | ||||||||||
Weighted average grant date fair value per option granted (in dollars per share) | $ / shares | $ 1.03 | $ 1.90 | ||||||||||
Future stock-based compensation for unvested employee options granted and outstanding | $ | $ 1,600,000 | |||||||||||
Stock options outstanding, intrinsic value | $ | $ 131,000 | |||||||||||
Liquidated damages amount percent of VWAP (percent) | 1.00% | |||||||||||
Discontinued Operations, Held-for-sale [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ | $ 19,000 | $ 45,000 | ||||||||||
Essentialis, Inc. [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Amount of financing needed | $ | $ 8,000,000 | |||||||||||
Common stock shares issued in acquisition (shares) | 3,783,388 | |||||||||||
Indemnification claims period | 1 year | |||||||||||
Contingent consideration potential additional shares issuable if milestones are reached (shares) | 913,389 | |||||||||||
Maximum total common stock issuable in acquisition (in shares) | 4,877,444 | |||||||||||
Earnout Payments [Member] | Essentialis, Inc. [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Maximum potential cash earnout payments | $ | $ 30,000,000 | |||||||||||
Indemnification Claims [Member] | Essentialis, Inc. [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common stock shares issued in acquisition (shares) | 180,667 | |||||||||||
Aspire Capital Fund, LLC [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Maximum commitment under stock purchase agreement | $ | $ 17,000,000 | |||||||||||
Purchase agreement term | 30 months | |||||||||||
Proceeds from issuance of common stock | $ | $ 2,000,000 | |||||||||||
Equity Unit Purchase Agreements [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of newly issued | 8,141,116 | |||||||||||
Price per unit | $ / shares | $ 1.84 | |||||||||||
Gross Proceeds from issuance of units | $ | $ 15,000,000 | |||||||||||
Common Stock [Member] | Equity Unit Purchase Agreements [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 2 | |||||||||||
Warrant to call common stock | 0.74 | |||||||||||
Warrants, to purchase shares of common stock | 6,024,425 | |||||||||||
Warrants Issued in 2009 to Purchase Common Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 108 | |||||||||||
Warrants outstanding (in shares) | 1,851 | |||||||||||
Warrants term | 10 years | |||||||||||
Series D Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 12.30 | |||||||||||
Warrants outstanding (in shares) | 256,064 | |||||||||||
Warrants term | 5 years | |||||||||||
Liquidated damages amount percent of VWAP (percent) | 1.00% | |||||||||||
Warrants to Purchase Stock [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 24.35 | |||||||||||
Warrants outstanding (in shares) | 96,029 | |||||||||||
Warrants term | 10 years | |||||||||||
Underwriter [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 35.70 | |||||||||||
Warrants outstanding (in shares) | 16,500 | |||||||||||
Warrants term | 10 years | |||||||||||
Employee Stock Purchase Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares available for grant | 27,967 | |||||||||||
Percentage of outstanding stock maximum | 1.00% | |||||||||||
Number of additional shares authorized | 55,936 | |||||||||||
Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Ownership interest of voting rights of all classes of stock (percent) | 10.00% | |||||||||||
Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting period | 4 years | |||||||||||
Number of options granted | 616,500 | 12,000 | ||||||||||
Number of shares available for grant | 1,266,804 | |||||||||||
Future stock-based compensation, requisite service period | 3 years 2 months 12 days | |||||||||||
Stock Options [Member] | Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Percentage of fair market value | 110.00% | |||||||||||
Stock Options [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Contractual term of option | 10 years | |||||||||||
ISOs [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Contractual term of option | 5 years | |||||||||||
Restricted Stock Units [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock units granted | 99,217 | |||||||||||
Vesting percentage | 100.00% | |||||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||||
Preferred stock shares issued | 13,780 | |||||||||||
Convertible preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | |||||||||||
Number of shares converted | 1,000 | 120 | 1,000 | |||||||||
Convertible preferred stock, shares outstanding | 3,571 | |||||||||||
Common Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Conversion ratio | 0.2 | |||||||||||
Number of shares issued upon conversion | 200,000 | 120,200 | 200,000 | |||||||||
Common Stock [Member] | Sabby Management, LLC [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Ownership interest (percent) | 4.99% | |||||||||||
Common Stock [Member] | 2016 Sabby Purchase Agreement [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Conversion ratio | 200 | |||||||||||
Series D Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 8.75 | $ 12.30 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Based Compensation Expense (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | $ 360,000 | $ 185,000 |
Continuing Operations [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | 341 | 140 |
Research and Development [Member] | Continuing Operations [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | 106 | 10 |
General and Administrative [Member] | Continuing Operations [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | $ 235 | $ 130 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Fair Value of Award Granted Using Black-Scholes Option Pricing Model (Detail) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Equity And Stock Based Compensation [Abstract] | ||
Expected life (years) | 6 years | 6 years |
Risk-free interest rate | 2.70% | 2.20% |
Volatility | 70.00% | 61.00% |
Dividend rate | 0.00% | 0.00% |
Stockholders' Equity - Summar38
Stockholders' Equity - Summary of Stock Option Transactions (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options granted | 0 | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning balance | 1,026,987 | |
Options granted | 616,500 | 12,000 |
Options exercised | 0 | |
Options canceled/forfeited | (92,177) | |
Ending balance | 1,551,310 | |
Weighted-Average Exercise Price per Share | ||
Beginning balance (in dollars per share) | $ 9.99 | |
Options granted (in dollars per share) | 1.60 | |
Options exercised (in dollars per share) | 0 | |
Options canceled/forfeited (in dollars per share) | 14.54 | |
Ending balance (in dollars per share) | $ 6.38 | |
Weighted Average Remaining Contractual Term | ||
Options outstanding at end of period | 8 years 10 months 21 days | |
Options vested at end of period | 7 years 9 months 29 days | |
Options vested and expected to vest at end of period | 8 years 10 months 21 days | |
Options vested at end of period (shares) | 509,830 | |
Options vested at end of period (in dollars per share) | $ 13.15 | |
Options vested and expected to vest at end of period (shares) | 1,551,310 | |
Options vested and expected to vest at end of period (in dollars per share) | $ 6.38 |
Net loss per share - Schedule o
Net loss per share - Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding (Detail) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 9,599,742 | 4,332,558 |
Underwriter [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 16,500 | 16,500 |
Series A Warrants to Purchase Shares of Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 485,121 | 485,121 |
Series C Warrant to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 118,083 | 118,083 |
Series D Warrant To Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 586,182 | 586,162 |
2017 PIPE Warrant Liability [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 6,024,425 | |
Warrants Issued to 2010/2012 Convertible Note Holders to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 102,070 | 102,070 |
Options to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 1,551,310 | 586,971 |
Warrants Issued in 2009 to Purchase Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 1,851 | 1,851 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 714,200 | 2,435,800 |
Acquisition of Essentialis, I40
Acquisition of Essentialis, Inc. - Additional Information (Detail) - USD ($) | Mar. 07, 2017 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||
Share price (in usd per share) | $ 3.85 | |
Fair value of stock consideration | $ 4,220,000 | |
Fair value of cash consideration | 1,090,000 | |
Total purchase price consideration | 5,310,000 | |
First commercial sales milestone | 100,000,000 | |
Second commercial sales milestone | 200,000,000 | |
Contingent liability payment on achievement of sales milestone | $ 2,590,000 | 5,510,000 |
Changes Measurement [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of stock consideration | 2,680,000 | |
Fair value of cash consideration | 2,590,000 | |
Total purchase price consideration | 5,270,000 | |
Essentialis, Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Shares issued in acquisition (in shares) | 3,783,388 | |
Fair value of stock consideration | $ 17,246 | |
Total purchase price consideration | 19,836 | |
Value of deferred tax liability assumed | $ 1,651,000 | 1,700,000 |
Increase (decrease) in valuation allowance | (1,700,000) | |
Fair value inputs, discount rate (percent) | 20.00% | |
Essentialis, Inc. [Member] | Patents [Member] | ||
Business Acquisition [Line Items] | ||
Capitalized costs | $ 573,000 | |
Legal fees | 469,000 | |
Printing fees | 75,000 | |
Accounting and other fees | 29,000 | |
Total intangible asset | $ 22,000,000 | |
Essentialis, Inc. [Member] | Indemnification Claims [Member] | ||
Business Acquisition [Line Items] | ||
Shares issued in acquisition (in shares) | 180,667 | |
Essentialis, Inc. [Member] | Development Milestone [Member] | ||
Business Acquisition [Line Items] | ||
Shares issued in acquisition (in shares) | 913,389 | |
Probability of development success rate (percent) | 56.00% | |
Revenue milestone in 2023 | 100,000,000 | |
Revenue milestone in 2025 | $ 200,000,000 | |
Essentialis, Inc. [Member] | Earnout Payments [Member] | ||
Business Acquisition [Line Items] | ||
Contingent consideration | $ 30,000,000 |
Acquisition of Essentialis, I41
Acquisition of Essentialis, Inc. - Purchase Price Consideration (Detail) - USD ($) | Mar. 07, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Fair value of stock consideration | $ 4,220,000 | ||
Fair value of contingent consideration | 5,510,000 | $ 5,082,000 | |
Total purchase price consideration | $ 5,310,000 | ||
Essentialis, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Fair value of stock consideration | $ 17,246 | ||
Fair value of contingent consideration | 2,590 | ||
Total purchase price consideration | 19,836 | ||
Net Assets Acquired | 19,836 | ||
Essentialis, Inc. [Member] | Patents [Member] | |||
Business Acquisition [Line Items] | |||
Patents | $ 19,836 |
Compensation Plan for Board M42
Compensation Plan for Board Members - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Board of Directors [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Issuance of common stock to board members in lieu of cash payments for quarterly board fees (shares) | 47,757 | 9,997 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Essentialis, Inc. [Member] - shares | May 14, 2018 | Mar. 07, 2017 |
Subsequent Event [Line Items] | ||
Contingent consideration potential additional shares issuable if milestones are reached (shares) | 913,389 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Contingent consideration potential additional shares issuable if milestones are reached (shares) | 913,389 |