Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | OTIC | ||
Entity Registrant Name | Otonomy, Inc. | ||
Entity Central Index Key | 0001493566 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 30,814,211 | ||
Entity Public Float | $ 77.9 | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common stock, par value $0.001 per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-36591 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-2590070 | ||
Entity Address, Address Line One | 4796 Executive Drive | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92121 | ||
City Area Code | 619 | ||
Local Phone Number | 323-2200 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE As noted herein, the information called for by Part III is incorporated by reference to specified portions of the registrant’s definitive proxy statement to be filed in conjunction with the registrant’s 2020 Annual Meeting of Stockholders, which is expected to be filed not later than 120 days after the registrant’s fiscal year ended December 31, 2019. |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 25,194 | $ 33,633 |
Short-term investments | 35,476 | 63,651 |
Accounts receivable, net | 48 | 108 |
Prepaid and other current assets | 2,432 | 2,677 |
Total current assets | 63,150 | 100,069 |
Restricted cash | 701 | 696 |
Property and equipment, net | 3,702 | 3,996 |
Right-of-use assets | 15,465 | |
Other long-term assets | 231 | |
Total assets | 83,018 | 104,992 |
Current liabilities: | ||
Accounts payable | 1,161 | 1,029 |
Accrued expenses | 5,442 | 3,788 |
Accrued compensation | 2,593 | 2,635 |
Leases, current | 3,302 | |
Deferred rent, current | 38 | |
Total current liabilities | 12,498 | 7,490 |
Long-term debt, net | 14,967 | 14,764 |
Leases, net of current | 15,320 | |
Deferred rent, net of current | 3,001 | |
Total liabilities | 42,785 | 25,255 |
Commitments and Contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized at December 31, 2019 and 2018; no shares issued or outstanding at December 31, 2019 and 2018 | ||
Common stock, $0.001 par value; 200,000,000 shares authorized at December 31, 2019 and 2018; 30,814,211 and 30,685,412 shares issued and outstanding at December 31, 2019 and 2018, respectively | 31 | 31 |
Additional paid-in capital | 500,084 | 494,947 |
Accumulated other comprehensive income (loss) | 11 | (23) |
Accumulated deficit | (459,893) | (415,218) |
Total stockholders’ equity | 40,233 | 79,737 |
Total liabilities and stockholders’ equity | $ 83,018 | $ 104,992 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares Issued | 30,814,211 | 30,685,412 |
Common stock, Shares outstanding | 30,814,211 | 30,685,412 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Product sales, net | $ 600 | $ 745 | $ 1,236 |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Costs and operating expenses: | |||
Cost of product sales | $ 912 | $ 946 | $ 3,098 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 32,805 | $ 31,844 | $ 42,701 |
Selling, general and administrative | 11,690 | 20,008 | 46,838 |
Total costs and operating expenses | 45,407 | 52,798 | 92,637 |
Loss from operations | (44,807) | (52,053) | (91,401) |
Other income (expense): | |||
Interest income | 1,723 | 1,689 | 1,271 |
Interest expense | (1,591) | (4) | 0 |
Total other income, net | 132 | 1,685 | 1,271 |
Net loss | $ (44,675) | $ (50,368) | $ (90,130) |
Net loss per share, basic and diluted | $ (1.45) | $ (1.65) | $ (2.97) |
Weighted-average shares used to compute net loss per share, basic and diluted | 30,726,786 | 30,610,244 | 30,304,158 |
Statements of Comprehensive Los
Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (44,675) | $ (50,368) | $ (90,130) |
Other comprehensive loss: | |||
Unrealized gain (loss) on available-for-sale securities | 34 | 77 | (59) |
Comprehensive loss | $ (44,641) | $ (50,291) | $ (90,189) |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2016 | $ 192,737 | $ 30 | $ 467,468 | $ (41) | $ (274,720) |
Beginning balance, shares at Dec. 31, 2016 | 30,255,339 | ||||
Issuance of common stock upon exercise of stock options | 448 | $ 1 | 447 | ||
Issuance of common stock upon exercise of stock options, shares | 191,106 | ||||
Issuance of common stock under employee stock purchase plan | 622 | 622 | |||
Issuance of common stock under employee stock purchase plan, shares | 80,072 | ||||
Issuance of common stock upon exercise of warrants, shares | 32,209 | ||||
Stock-based compensation expense | 13,661 | 13,661 | |||
Net loss | (90,130) | (90,130) | |||
Unrealized gain (loss) on available-for-sale securities | (59) | (59) | |||
Ending balance at Dec. 31, 2017 | 117,279 | $ 31 | 482,198 | (100) | (364,850) |
Ending balance, shares at Dec. 31, 2017 | 30,558,726 | ||||
Issuance of common stock upon exercise of stock options | 32 | 32 | |||
Issuance of common stock upon exercise of stock options, shares | 18,800 | ||||
Issuance of common stock under employee stock purchase plan | 303 | 303 | |||
Issuance of common stock under employee stock purchase plan, shares | 107,886 | ||||
Stock-based compensation expense | 12,414 | 12,414 | |||
Net loss | (50,368) | (50,368) | |||
Unrealized gain (loss) on available-for-sale securities | 77 | 77 | |||
Ending balance at Dec. 31, 2018 | 79,737 | $ 31 | 494,947 | (23) | (415,218) |
Ending balance, shares at Dec. 31, 2018 | 30,685,412 | ||||
Issuance of common stock upon exercise of stock options | $ 5 | 5 | |||
Issuance of common stock upon exercise of stock options, shares | 3,000 | 2,912 | |||
Issuance of common stock under employee stock purchase plan | $ 242 | 242 | |||
Issuance of common stock under employee stock purchase plan, shares | 125,887 | ||||
Stock-based compensation expense | 4,890 | 4,890 | |||
Net loss | (44,675) | (44,675) | |||
Unrealized gain (loss) on available-for-sale securities | 34 | 34 | |||
Ending balance at Dec. 31, 2019 | $ 40,233 | $ 31 | $ 500,084 | $ 11 | $ (459,893) |
Ending balance, shares at Dec. 31, 2019 | 30,814,211 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (44,675,000) | $ (50,368,000) | $ (90,130,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 1,149,000 | 1,186,000 | 1,289,000 |
Stock-based compensation | 4,890,000 | 12,414,000 | 13,661,000 |
Reserve for excess and obsolete inventory | 0 | 0 | 1,546,000 |
(Accretion of discounts) amortization of premiums on short-term investments | (787,000) | (506,000) | 358,000 |
Amortization of debt discount | 189,000 | 0 | 0 |
Impairment of property, plant and equipment | 0 | 0 | 400,000 |
Deferred rent | 0 | 103,000 | 2,272,000 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 60,000 | (1,000) | (16,000) |
Prepaid and other assets | 476,000 | (492,000) | 2,761,000 |
Accounts payable | 127,000 | 68,000 | (398,000) |
Accrued expenses | 1,656,000 | (166,000) | (5,518,000) |
Accrued compensation | (42,000) | (672,000) | (1,532,000) |
Right-of-use assets and lease liabilities, net | 32,000 | 0 | 0 |
Net cash used in operating activities | (36,925,000) | (38,434,000) | (75,307,000) |
Cash flows from investing activities: | |||
Purchases of short-term investments | (85,004,000) | (104,270,000) | (129,308,000) |
Maturities of short-term investments | 114,000,000 | 142,750,000 | 199,565,000 |
Purchases of property and equipment | (700,000) | (496,000) | (1,259,000) |
Net cash provided by investing activities | 28,296,000 | 37,984,000 | 68,998,000 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt, net of cash issuance costs | 0 | 14,830,000 | 0 |
Proceeds from issuance of common stock | 242,000 | 303,000 | 448,000 |
Proceeds from exercise of stock options | 5,000 | 32,000 | 622,000 |
Payments of debt issuance costs | (52,000) | 0 | 0 |
Net cash provided by financing activities | 195,000 | 15,165,000 | 1,070,000 |
Net change in cash, cash equivalents and restricted cash | (8,434,000) | 14,715,000 | (5,239,000) |
Cash, cash equivalents and restricted cash at beginning of period | 34,329,000 | 19,614,000 | 24,853,000 |
Cash, cash equivalents and restricted cash at end of period | 25,895,000 | 34,329,000 | 19,614,000 |
Cash and cash equivalents at end of period | 25,194,000 | 33,633,000 | 18,456,000 |
Restricted cash at end of period | 701,000 | 696,000 | 1,158,000 |
Supplemental cash flow information: | |||
Cash paid for interest | 1,394,000 | 4,000 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Purchase of property and equipment in accounts payable and accrued expenses | 76,000 | 7,000 | 132,000 |
Debt issuance costs in accounts payable and accrued expenses | 0 | 66,000 | 0 |
Debt issuance costs | $ 0 | $ 771,000 | $ 0 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Otonomy, Inc. (Otonomy or the Company) was incorporated in the state of Delaware on May 6, 2008. Otonomy is a biopharmaceutical company dedicated to the development of innovative therapeutics for neurotology. The Company pioneered the application of drug delivery technology to the ear in order to develop products that achieve sustained drug exposure from a single local administration. This approach is covered by a broad patent estate and is being utilized to develop a pipeline of products addressing important unmet medical needs including Ménière’s disease, hearing loss and tinnitus. OTIVIDEX is a sustained-exposure formulation of the steroid dexamethasone that has completed two Phase 3 trials for the treatment of Ménière’s disease, with a third Phase 3 trial currently enrolling patients. OTO-313 is a sustained-exposure formulation of the potent and selective N-Methyl-D-Aspartate (NMDA) receptor antagonist gacyclidine that is currently enrolling tinnitus patients in a Phase 1/2 clinical trial. OTO-413 is a sustained-exposure formulation of brain-derived neurotrophic factor (BDNF) for the repair of cochlear synaptopathy, an underlying cause of hearing loss, that is currently enrolling hearing loss patients in a Phase 1/2 clinical trial. Otonomy also has preclinical stage programs addressing prevention of cisplatin-induced hearing loss (OTO-510) and hair cell regeneration for severe hearing loss (OTO-6XX). In October 2019, the Company entered into a collaboration with Applied Genetic Technologies Corporation (AGTC), to co-develop and co-commercialize a gene therapy to restore hearing in patients with congenital hearing loss. In addition, the Company developed, received United States Food and Drug Administration (FDA) approval and commercially launched OTIPRIO for use during tympanostomy tube placement (TTP) surgery in pediatric patients. OTIPRIO was also approved by the FDA for the treatment of acute otitis externa (AOE). Basis of Presentation The financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses and negative cash flows from operating activities since inception. As of December 31, 2019, the Company had cash, cash equivalents and short-term investments of $60.7 million and an accumulated deficit of $459.9 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it: (i) develops and seeks regulatory approvals for OTIVIDEX and its other product candidates; and (ii) works to develop additional product candidates through research and development programs. When additional financing is required, the Company anticipates that it will seek additional funding through future debt and/or equity financings or other sources, such as potential collaboration agreements. If the Company is not able to secure adequate additional funding, if or when necessary, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, and future prospects. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of product sales and expense during the reporting period. Although these estimates are based on the Company’s knowledge of current events and anticipated actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held. Additionally, the Company established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. Cash and cash equivalents include cash in readily available checking, savings and money market accounts. The Company’s restricted cash consists of cash maintained in separate deposit accounts to secure a letter of credit issued by a bank to the landlord under a lease agreement for the Company’s corporate headquarters. Short-term Investments The Company carries short-term investments classified as available-for-sale debt securities at fair value as determined by prices for identical or similar securities at the balance sheet date. Short-term investments consist of Level 1 financial instruments in the fair value hierarchy (see Note 9 – Fair Value Realized gains or losses of available-for-sale securities are determined using the specific identification method and net realized gains and losses are included in interest income. The Company periodically reviews available-for-sale securities for other-than-temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company records unrealized gains and losses on available-for-sale debt securities as a component of other comprehensive loss within the statements of comprehensive loss and as a separate component of stockholders’ equity on the balance sheets. The Company does not hold equity securities in its investment portfolio. Fair Value of Financial Instruments The Company’s financial instruments include cash, cash equivalents, short-term investments, prepaid expenses and other assets, accounts payable, accrued expenses, accrued compensation and long-term debt. The carrying value of the Company’s cash and cash equivalents, short-term investments, prepaid expenses and other current assets, other long-term assets, accounts payable, accrued expenses, and accrued compensation approximate fair value due to the short-term nature of these items. Based on Level 3 inputs and the borrowing rates currently available for loans with similar terms, the Company believes the fair value of long-term debt approximates its carrying value. Accounts Receivable, net Accounts receivable are recorded net of customer allowances for chargebacks, distributor fees and any allowance for doubtful accounts. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. To date, the Company has determined that an allowance for doubtful accounts is not required. Inventory Inventory, which is recorded at the lower of cost or net realizable value. Cost is determined on a first-in, first-out method. Inventories consist of OTIPRIO finished goods and work in-process, as well as raw materials used in the manufacture of OTIPRIO. If inventory costs exceed expected market value due to obsolescence, expiry or quantities in excess of expected demand, write downs are recorded for the difference between cost and market value, less cost to sell. During the year ended December 31, 2017, the Company recorded an inventory write down of $1.5 million to cost of product sales. During 2018 and 2019, no such write downs were recorded. Property and Equipment Property and equipment generally consist of manufacturing equipment, office furniture and equipment, computers, and scientific equipment and are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally two to ten years). Leasehold improvements are recorded at cost and are depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Repairs and maintenance costs are charged to expense as incurred. Impairment of Long-Lived Assets The Company assesses the value of its long-lived assets for impairment on an annual basis and whenever events or changes in circumstances and the undiscounted cash flows generated by those assets indicate that the carrying amount of such assets may not be recoverable. While the Company’s current and historical operating losses and negative cash flows are indicators of impairment, the Company believes that future cash flows to be received support the carrying value of its long-lived assets. No impairment of long-lived assets was recorded during the years ended December 31, 2019 and 2018. During the year ended December 31, 2017, the Company recorded an impairment of its long-lived assets of approximately $0.4 million in cost of product sales related to OTIPRIO manufacturing equipment. Right-of-Use Assets and Lease Liabilities Effective January 1, 2019, as required by Accounting Standards Update (ASU) No. 2016-02, Leases Leases ASC 842 establishes a right-of-use (ROU) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. ASU 2016-02 provides a number of optional practical expedients and accounting policy elections. The Company elected the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or initial direct costs for any existing leases. The adoption of ASC 842 had a material effect on the Company’s balance sheets; however, it did not have a material effect on its statements of operations, comprehensive loss and cash flows. Upon adoption of ASC 842 as of January 1, 2019, the Company recognized (i) ROU assets of $16.7 million, net of $3.0 million of deferred rent, and (ii) lease liabilities of $19.7 million. The Company has operating leases for its facility and certain equipment and finance leases for certain computer equipment. Effective January 1, 2019, the Company determines if an arrangement is or contains a lease at the commencement date. Operating leases are included in ROU assets, Leases, current, and Leases, net of current on the balance sheets. Finance leases are included in Property and equipment, Leases, current, and Leases, net of current on the balance sheets. The Company elected not to recognize short-term leases (one year or less) on the balance sheets. ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at the commencement date. When the implicit rate of the lease is not provided or cannot be determined, the Company uses a collateralized incremental borrowing rate based on the information available at the commencement date, including lease term, in determining the present value of future payments. The Company considers payments for common area maintenance, real estate taxes and management fees to be variable non-lease components, which are expensed as incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Clinical Trial Expense Accruals As part of the process of preparing the Company’s financial statements, the Company is required to estimate expenses resulting from the Company’s obligations under contracts with vendors, contract research organizations (CROs) and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through financial models taking into account discussion with applicable personnel and outside service providers as to the progress or state of its trials. During the course of a clinical trial, the Company adjusts its clinical expense if actual results differ from its estimates. Revenue Recognition Effective January 1, 2018, the Company adopted ASC Revenue from Contracts with Customers Revenue Recognition To recognize revenue the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract with a customer under ASC 606 and when it is probable the Company will collect the consideration exchanged for the goods or services transferred to the customer. OTIPRIO is sold to a limited number of specialty wholesale distributors. The Company recognizes revenue when its customers obtain control of OTIPRIO, typically upon delivery by the Company to these distributors. The Company has determined the delivery of OTIPRIO to its customers constitutes a single performance obligation and no other performance obligations are present. Hospitals, ambulatory surgery centers and physician offices order OTIPRIO from the Company’s distributors and are the end users of OTIPRIO. The Company permits product returns from the distributors only if the product is damaged or is shipped or ordered in error. Product returns based on expiry are not permitted. To date, product returns have been immaterial. Sales commissions and other incremental costs of obtaining customer contracts are expensed as incurred as the amortization periods would be less than one year or the amount is immaterial. Transaction Price and Reserves for Variable Consideration Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, government chargebacks, discounts and rebates and other fee for service amounts that are detailed within customer contracts relating to the sale of OTIPRIO. These reserves, as detailed below, are based on the amounts earned or accrued on the Company’s sales. Variable consideration is estimated using the most likely method, which is the single most likely outcome under the Company’s contracts and takes into consideration contractual fees, historical chargeback activity and historical Medicaid rebates. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which the Company is entitled based on the terms of the respective underlying contracts. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Reserves are established for these discounts and allowances upon delivery of OTIPRIO by the distributor and are classified as: (i) an allowance against accounts receivable if the amount is payable to the distributor or (ii) an accrued liability if the amount is payable to a party other than the distributor. Allowances against accounts receivable relate to chargebacks and distributor fees and accruals relate primarily to government rebates. Trade Discounts and Allowances . The Company’s customers are specialty wholesale distributors with whom the Company has contracted to pay a fee based on a percentage of wholesale acquisition cost for sales order management, data, and distribution services . The Company determined such services received to date are not distinct from the sale of products to customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations. This fee for service is recorded as an allowance against accounts receivable at the time of sale based on the contracted percentage. Chargebacks . The Company estimates allowances against accounts receivable for chargebacks related to agreements with group purchasing organizations and federal contracts. Under these agreements, the Company credits distributors a chargeback amount which represents the difference between the wholesale acquisition cost and the discounted price at which eligible purchasers purchased from the distributors. At the time of sale, estimated chargebacks are recorded based on historical chargeback activity, the projected payer mix, patient population industry data and the identification of entities purchasing OTIPRIO that are eligible for discounted pricing. Government . The Company estimates a rebate liability in connection with a Medicaid Drug Rebate Agreement with the Centers for Medicare & Medicaid Services, which provides a rebate to participating states based on covered purchases of OTIPRIO. At the time of sale, estimated Medicaid rebates are recorded based on historical government rebate activity, the projected payer mix and Medicaid patient population industry data. Concentration of Major Customers The Company sells OTIPRIO to specialty wholesale distributor customers. The following table summarizes the Company’s sales to its largest customers for each of the periods presented: 2019 2018 2017 First largest 38 % 44 % 34 % Second largest 33 % 33 % 34 % Third largest 24 % 21 % 30 % Collaborative Arrangements The Company has entered into co-promotion agreements and research agreements that fall under the scope of ASC Topic 808, Collaborative Arrangements Co-promotion agreements can include payments and reimbursements for a proportion of product support expenses to the Company and profit sharing payments by the Company. Payments to or by the Company are recognized in selling, general and administrative expenses in the statements of operations. Research agreements can include reimbursements to or by the Company, which are recognized in research and development expenses in the statements of operations. Research and Development Research and development expenses include the costs associated with the Company’s research and development activities, including salaries, benefits, stock-based compensation expense and occupancy costs. Also included in research and development expenses are third-party costs incurred in conjunction with contract manufacturing for the Company’s research and development programs and clinical trials, including the cost of clinical trial drug supply, costs incurred by CROs and regulatory expenses. Research and development costs are expensed as incurred. Selling, General and Administrative Selling, general and administrative expenses include the costs associated with the Company’s executive, administrative, finance and human resource functions including salaries, benefits, stock-based compensation expense and occupancy costs. Other selling, general and administrative expenses include costs associated with prosecuting and maintaining the Company’s patent portfolio, corporate legal expenses, costs required for public company activities and infrastructure necessary for the general conduct of the Company’s business. The Company’s selling, general and administrative expenses also include OTIPRIO product support expenses, and profit-sharing fees payable to the Company’s partners, which are reduced by payments received from the Company’s partners under its co-promotion agreements. Stock-Based Compensation The Company accounts for stock-based compensation expense related to stock options and employee stock purchase plan (ESPP) rights by estimating the fair value on the date of grant using the Black-Scholes-Merton option pricing model. Forfeitures are recognized as incurred. For awards subject to time-based vesting conditions, stock-based compensation expense is recognized using the straight-line method. For performance-based awards to employees, (i) the fair value of the award is determined on the grant date, (ii) the Company assesses the probability of the individual performance milestones under the award being achieved and (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met. Income Taxes The accounting guidance for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position. The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. As of December 31, 2019, 2018 and 2017, potentially dilutive securities excluded from the calculation of diluted net loss per share consist of outstanding options to purchase 7,495,129, 5,019,964 and 4,599,252 shares of the Company’s common stock, respectively. Recent Accounting Pronouncements Not Yet Adopted I n June 2016, ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) was issued, as amended. ASU 2016-13 introduces the current expected credit loss model, which will require an entity to measure credit losses for certain financial instruments and financial assets. ASU 2016-13 will also apply to receivables arising from revenue transactions such as accounts receivable. ASU 2016-13 is effective for the Company beginning January 1, 2023. The Company does not expect the adoption of ASU 2016-13 to have a material effect on its financial position, results of operations or cash flows. Recently Adopted Effective January 1, 2019, as required, the Company adopted ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Effective January 1, 2019, as required, the Company adopted ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07). The amendments in ASU 2018-07 expand the scope of the standard to include share-based payment transactions for acquiring goods and services from nonemployees. The adoption of ASU 2018-07 did not have a material impact on its financial statements or disclosures. |
Available-for-Sale Securities
Available-for-Sale Securities | 12 Months Ended |
Dec. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Available-for-Sale Securities | 3. Available-for-Sale Securities The Company invests in available-for-sale debt securities consisting of money market funds, certificates of deposit, U.S. Treasury securities and U.S. government sponsored enterprise securities. Available-for-sale debt securities are classified as part of either cash and cash equivalents or short-term investments in the balance sheets. Available-for-sale debt securities with maturities of three months or less from the date of purchase have been classified as cash equivalents, and were $22.1 million and $17.2 million as of December 31, 2019 and 2018, respectively. Available-for-sale debt securities with maturities of more than three months from the date of purchase have been classified as short-term investments, and were as follows (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Market Value December 31, 2019: U.S. Treasury securities $ 35,465 $ 16 $ (5 ) $ 35,476 Total available-for-sale securities $ 35,465 $ 16 $ (5 ) $ 35,476 December 31, 2018: U.S. Treasury securities $ 63,674 $ 1 $ (24 ) $ 63,651 Total available-for-sale securities $ 63,674 $ 1 $ (24 ) $ 63,651 As of December 31, 2019, the Company had five securities in a gross unrealized loss position, all of which have been in such position for less than twelve months At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, and the Company’s intent and ability to hold the investment until recovery of its amortized cost basis. The Company intends, and has the ability, to hold any investments in unrealized loss positions until their amortized cost basis has been recovered. The Company obtains the fair value of its available-for-sale debt securities from a professional pricing service. The fair values of available-for-sale debt securities are validated by comparing the fair values reported by the professional pricing service to quoted market prices or to fair values obtained from the custodian bank. |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Details | 4. Balance Sheet Details Prepaid and Other Current Assets Prepaid and other current assets are comprised of the following (in thousands): December 31, 2019 2018 Prepaid clinical trial costs $ 209 $ 258 Other 2,223 2,419 Total $ 2,432 $ 2,677 Property and Equipment, Net Property and equipment, net consists of the following (in thousands): December 31, 2019 2018 Laboratory equipment $ 4,179 $ 3,772 Manufacturing equipment 1,111 1,017 Computer equipment and software 943 770 Leasehold improvements 768 736 Office furniture 1,548 1,548 8,549 7,843 Less: accumulated depreciation and amortization (4,847 ) (3,847 ) Total $ 3,702 $ 3,996 Depreciation expense was $1.1 million, $1.2 million and $1.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. Accrued Expenses Accrued expenses consist of the following (in thousands): December 31, 2019 2018 Accrued clinical trial costs $ 3,443 $ 1,294 Accrued other 1,999 2,494 Total $ 5,442 $ 3,788 |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges | 5. Restructuring Charges During the year ended December 31, 2017, the Company recorded a one-time restructuring charge of $3.8 million to selling, general and administrative expense. Restructuring costs primarily included severance, health insurance and $1.0 million in stock-based compensation expense. As of December 31, 2019 and 2018, the Company had no accrued and unpaid severance costs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Operating Leases In December 2016, the Company moved into its current headquarters location in San Diego, California. The lease commenced in December 2016 and has an initial term of 130 months, with an option by the Company to extend the lease term for an additional five years. The Company has the right to terminate the lease at the end of the 94th month of the lease term if it is acquired by a third party and pays an early termination fee. The Company is responsible for payment of taxes and operating expenses for the building, in addition to monthly base rent in the initial amount of approximately $232,000, with 3% annual increases, which monthly base rent was abated for the first ten months of the lease term. The total estimated base rent payments over the life of the lease are estimated to be approximately $32.7 million. Upon execution of the lease in May 2015, the Company provided a security deposit in the form of a letter of credit in the amount of approximately $695,000. Cash collateralizing the letter of credit is classified as noncurrent restricted cash on the balance sheets. The Company has determined that the lease is an operating lease for accounting purposes. Intellectual Property Licenses The Company has acquired exclusive rights to develop patented rights, information rights and related know-how for OTIPRIO, OTIVIDEX, OTO-311, OTO-313 and OTO-413 and potential future product candidates under licensing agreements with third parties. The licensing rights obligate the Company to make payments to the licensors for license fees, milestones and royalties. The Company is also responsible for patent prosecution costs, in the event such costs are incurred. The Company may be obligated to make additional milestone payments under the Company’s intellectual property license agreements as follows (in thousands): Development $ 1,500 Regulatory 10,275 Commercialization 1,000 Total $ 12,775 Under one of these agreements, the Company has achieved seven development milestones and one regulatory milestone, totaling $2.9 million, related to its clinical trials for OTIPRIO, OTIVIDEX, OTO-311 and OTO-413. In addition, the Company is obligated to pay royalties of less than five percent on net sales of OTIPRIO and on sales of any other commercial products developed using these licensed technologies. Such royalty expense for OTIPRIO is recorded to cost of product sales. The Company may also be obligated to pay to the licensors a percentage of fees received if and when the Company sublicenses the technology. As of December 31, 2019, the Company has not entered into any sublicense agreements for the licensed technologies. The following table summarizes costs recognized, in research and development, under the Company’s license agreements and other non-cancellable royalty and milestone obligations (in thousands): Years Ended December 31, 2019 2018 2017 License and other fees $ — $ — $ — Milestone fees 100 — — Total license and related fees $ 100 $ — $ — Other Royalty Arrangements The Company entered into an agreement related to OTIPRIO under which the Company is obligated to pay royalties of less than one percent on net product sales of OTIPRIO. The royalties are recorded as selling, general and administrative expense. The royalties are payable until the later of: (i) the expiration of the last to expire patent owned by the Company in such country covering OTIPRIO; or (ii) 10 years after the first commercial sale of OTIPRIO after receipt of regulatory approval for OTIPRIO in such country. In October 2014, the Company entered into an exclusive license agreement with Ipsen that enables the Company to use clinical and nonclinical gacyclidine data generated by Ipsen to support worldwide development and regulatory filings for OTO-313. Under this license agreement, the Company is obligated to pay Ipsen low single-digit royalties on annual net sales of OTO-313 by the Company or its affiliates or sublicensees, up to a maximum cumulative royalty totaling $10.0 million. Litigation From time to time, the Company may be involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business. Management believes there are no claims or actions pending against the Company as of December 31, 2019 which will have, individually or in the aggregate, a material adverse effect on its business, liquidity, financial position, or results of operations. Litigation, however, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Long Term Debt [Abstract] | |
Long-term Debt | 7. Long-term Debt On December 31, 2018 (the Closing Date), the Company entered into a Loan and Security Agreement (the Loan Agreement), among the Company, Oxford Finance LLC, as collateral agent, and the lenders party thereto from time to time. The Loan Agreement provides for a $15.0 million secured term loan credit facility (the Term Loan). The proceeds of the Term Loan may be used for working capital and general corporate purposes. The Company has the right to prepay the Term Loan in whole or in part at any time, subject to a prepayment fee of 3.00% if prepaid on or prior to the first anniversary of the Closing Date, 2.00% if prepaid after the first anniversary of the Closing Date and on or prior to the second anniversary of the Closing Date, and 1.00% thereafter. Amounts prepaid or repaid under the Term Loan may not be reborrowed. The Term Loan was fully funded on the Closing Date and matures on December 1, 2023 (the Maturity Date). The Company paid a facility fee of 0.75% and customary closing fees on the Closing Date. The Term Loan bears interest at a floating rate equal to the greater of 5.25% and the prime rate as reported in the Wall Street Journal from time to time, plus 3.75% (9.0% as of December 31, 2019, the minimum interest rate). Interest on the Term Loan is payable monthly in arrears. The Company is permitted to make interest-only payments on the Term Loan for the twenty-four (24) months following the Closing Date followed by consecutive equal monthly payments of principal and interest in arrears through the Maturity Date. The interest-only period can be extended by an additional twelve (12) months subject to the achievement of a certain clinical trial milestone. The outstanding principal amount of the Term Loan, together with accrued and unpaid interest, is due on December 1, 2023. Upon repayment or acceleration of the Term Loan, a final payment fee equal to 4.00% of the aggregate original principal amount of the Term Loan is payable (the Final Payment). The Final Payment of $0.6 million, as well as the initial facility fee and all other direct fees and costs associated with the Loan Agreement, was recognized as a debt discount. The debt discount will be amortized to interest expense over the term of the Loan Agreement using the effective interest method. The Company’s obligations under the Loan Agreement are secured by substantially all its assets, excluding intellectual property and subject to certain other exceptions and limitations. The Loan Agreement contains customary affirmative covenants, including covenants regarding compliance with applicable laws and regulations, reporting requirements, payment of taxes and other obligations, and maintenance of insurance. Further, subject to certain exceptions, the Loan Agreement contains customary negative covenants limiting the ability of the Company to, among other things, sell assets, allow a change of control to occur (if the Term Loan is not repaid), make acquisitions, incur debt, grant liens, make investments, pay dividends or repurchase stock. The Company has maintained compliance with all such covenants to date. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued and unpaid interest under the Loan Agreement immediately due and payable, increase the applicable rate of interest by 5.00%, and exercise the other rights and remedies provided for under the Loan Agreement and related loan documents. The events of default under the Loan Agreement include payment defaults, breaches of covenants or representations and warranties, material adverse changes, certain bankruptcy events, cross defaults with certain other indebtedness, and judgment defaults. Interest expense, including amortization of the debt discount, related to the Loan Agreement totaled $1.6 million for the year ended December 31, 2019. Accrued interest, included in accounts payable, was $0.1 million as of December 31, 2019. The outstanding Term Loan balance was $15.0 million as of December 31, 2019, inclusive of accretion of the final payment and net unamortized debt discount. The estimated aggregate amounts and timing of payments on the Company’s long-term debt obligations as of December 31, 2019 for the next five fiscal years were as follows: 2020 $ — 2021 4,714 2022 5,143 2023 5,743 2024 — Subtotal 15,600 Unamortized discount (633 ) Total long-term debt, net $ 14,967 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases Operating Leases Effective January 1, 2019, the Company adopted ASC 842 The Company has existing operating leases for certain office equipment and its facility with initial terms ranging from 48 months to 130 months. The facility lease has an option for the Company to extend the lease term for an additional five years; however, it is not reasonably certain the Company will exercise the option to renew when the lease term ends in 2027, and thus, the incremental term was excluded from the calculation of the lease liability. The Company has the right to terminate the lease at the end of the 94th month of the lease term if it is acquired by a third party and pays an early termination fee. On March 31, 2019, the Company entered into a lease for certain equipment with an initial term of 24 months, which includes a purchase option at the end of the lease term based upon the then fair market value of the equipment. The lease payment includes customary principal and interest as well as costs related to the installation and setup of the equipment. The Company evaluated the lease in accordance with ASC 842 and recorded this lease as an operating lease in the balance sheets. The ROU assets associated with all the Company’s operating leases are recognized in the balance sheets. Rent expense was $3.1 million, $3.1 million and $3.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. Finance Leases On March 31, 2019, the Company entered into a lease for certain computer equipment with an initial term of 24 months, which includes an option to purchase the equipment at the end of the lease term that is expected to be exercised. The lease payment includes customary principal and interest as well as costs related to the installation and setup of the equipment. The associated ROU asset is recognized within property and equipment, net in the balance sheets and is being amortized over three years in accordance with the Company’s standard depreciation and amortization policies. December 31, 2019 Lease expenses: Operating lease expenses $ 3,137 Variable lease expenses 942 Total lease expenses $ 4,079 December 31, 2019 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 32 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 81 Finance leases $ 134 Weighted-average remaining lease term: Operating leases 7.7 years Finance leases 1.3 years Weighted-average remaining discount rate: Operating leases 10.0 % Finance leases 9.2 % Lease Maturities: Operating Leases Finance Leases Total 2020 $ 3,231 $ 74 $ 3,305 2021 3,247 18 3,265 2022 3,333 — 3,333 2023 3,433 — 3,433 2024 3,536 — 3,536 Thereafter 10,284 — 10,284 Total minimum lease payments 27,064 92 27,156 Imputed interest (8,529 ) (5 ) (8,534 ) Total 18,535 87 18,622 Less: leases, current (3,229 ) (73 ) (3,302 ) Leases, net of current $ 15,306 $ 14 $ 15,320 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 9. Fair Value The accounting guidance defines fair value, establishes a consistency framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring basis or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a three-tier fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These tiers are based on the source of the inputs and are as follows: Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. As of December 31, 2019 and 2018, the Company held no assets or liabilities measured at fair value on a nonrecurring basis and no liabilities measured at fair value on a recurring basis. The following fair value hierarchy table presents the Company’s assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using Total Level 1 Level 2 Level 3 December 31, 2019: Assets Money market funds $ 22,121 $ 22,121 $ — $ — U.S. Treasury securities 35,476 35,476 — — Total $ 57,597 $ 57,597 $ — $ — December 31, 2018: Assets Money market funds $ 17,159 $ 17,159 $ — $ — U.S. Treasury securities 63,651 63,651 — — Total $ 80,810 $ 80,810 $ — $ — |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance are as follows: December 31, 2019 2018 Common stock options issued and outstanding 7,495,129 5,019,964 Common stock options available for future grant 3,548,214 4,492,021 Common stock reserved for issuance under ESPP 1,977,215 1,642,821 Total common stock reserved for future issuance 13,020,558 11,154,806 |
Stock-Based Compensation and Eq
Stock-Based Compensation and Equity Plans | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation and Equity Plans | 11. Stock-Based Compensation and Equity Plans 2014 Equity Incentive Plan The Company granted awards under its 2010 Equity Incentive Plan (the 2010 Plan) until June 2014. In July 2014, the Company’s board of directors adopted and the Company’s stockholders approved its 2014 Equity Incentive Plan (the 2014 Plan), which became effective in August 2014. In connection with the adoption of the 2014 Plan, the Company terminated the 2010 Plan for future use and provided that no further equity awards were to be granted under the 2010 Plan. All outstanding awards under the 2010 Plan continue to be governed by their existing terms. The 2014 Plan permits the grant of incentive stock options to the Company’s employees and the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to the Company’s employees, directors and consultants. Options granted under the 2014 Plan are generally scheduled to vest over four years, subject to continued service, and subject to certain acceleration of vesting provisions, expire no later than 10 years from the date of grant. Options granted under the 2014 Plan must have a per share exercise price equal to at least 100% of the fair market value of a share of the common stock as of the date of grant. Under the evergreen provision of the 2014 Plan, the number of shares available for issuance under the 2014 Plan includes an annual increase on the first day of each fiscal year equal to the lesser of (i) 2,500,000 shares; (ii) 5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company’s board of directors may determine. Effective January 1, 2020, the number of shares available for future issuance was increased by 1,540,710 shares so that the total available for future issuance as of January 1, 2020 was 5,088,924 shares. As of December 31, 2019, 3,548,214 options were available for grant under the 2014 Plan. The following table summarizes stock option activity for the year ended December 31, 2019 (in thousands except per share amounts and years): Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding as of December 31, 2018 5,020 $ 5.62 Granted 2,656 $ 2.08 Exercised (3 ) $ 1.76 Forfeited (178 ) $ 3.19 Outstanding as of December 31, 2019 7,495 $ 4.43 7.1 $ 6,279 Options vested and expected to vest as of December 31, 2019 7,495 $ 4.43 7.1 $ 6,279 Options exercisable as of December 31, 2019 3,912 $ 5.62 5.7 $ 1,782 The following table summarizes certain information regarding stock options (in thousands, except per share data): Years Ended December 31, 2019 2018 2017 Weighted-average grant date fair value per share of options granted during the period $ 1.64 $ 4.36 $ 9.14 Cash received from options exercised during the period 5 32 448 Intrinsic value of options exercised during the period 2 76 623 Performance-based Awards In February 2018, the Company granted its chief executive officer a stock option for the purchase of 250,000 shares of the Company’s common stock which is subject to time-based vesting and certain performance-based conditions. Specifically, subject to continued service the option was scheduled to vest upon achievement of a clinical development milestone. On the grant date, the Company determined the fair value of the award and determined achievement of the milestone was probable of occurrence and recognized stock-based compensation expense, based upon the grant date fair value, over the implicit service period. The milestone was achieved, and the option grant vested and was fully expensed as of December 31, 2018. Option Exchange On December 20, 2017, the Company commenced an option exchange program (Option Exchange) which allowed eligible employees to exchange certain outstanding stock options (Eligible Options), whether vested or unvested, with an exercise price greater than $12.00 per share, for new stock options. Non-employee members of the Company’s board of directors were not eligible to participate in the Option Exchange. The Option Exchange expired on January 19, 2018. The closing price of the Company’s common stock on that date was $5.675 per share. Pursuant to the terms and conditions of the Option Exchange, the Company accepted for exchange Eligible Options to purchase a total of 1,992,000 shares of the Company’s common stock, representing approximately 81.51% of the total shares of common stock underlying the Eligible Options. All surrendered options were canceled effective as of the expiration of the Option Exchange and in exchange on January 19, 2018, the Company granted new options to purchase an aggregate of 1,570,328 shares of the Company’s common stock with an exercise price of $5.675 per share pursuant to the terms of the Option Exchange and the 2014 Plan. These new options vest over one to three years, and expire eight years from the date of grant. The Company determined this option exchange was an option modification. The exchange of these stock options was treated as a modification for accounting purposes. The difference in the fair value of the canceled options immediately prior to the cancelation and the fair value of the modified options resulted in incremental value, of approximately $0.6 million, which was calculated using the Black-Scholes-Merton option pricing model. T remaining unrecognized expense for the exchanged option, as of the exchange date, 2014 Employee Stock Purchase Plan In July 2014, the Company’s board of directors adopted and the stockholders approved the Company’s 2014 Employee Stock Purchase Plan (the ESPP), which became effective upon adoption by the Company’s board of directors. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The offering periods generally start on the first trading day on or after June 1 and December 1 of each year and end on the first trading day on or before June 1 and December 1 approximately twenty-four months later, and include six-month purchase periods. The number of shares available for issuance under the ESPP includes an annual increase on the first day of each fiscal year, equal to the lesser of (i) 800,000 shares; (ii) 1.5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company’s board of directors may determine. Effective January 1, 2020, the number of shares available for future issuance was increased by 462,213 shares so that the total available for future issuance as of January 1, 2020 was 2,439,428 shares. As of December 31, 2019, the Company had issued 457,831 Stock-Based Compensation Expense The following are the weighted-average underlying assumptions used to determine the fair value of stock options and ESPP rights using the Black-Scholes-Merton option pricing model: Years Ended December 31, 2019 2018 2017 Stock Options: Risk-free interest rate 2.5 % 2.6 % 2.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 98.1 % 100.6 % 69.8 % Expected term (in years) 6.1 5.4 6.1 Employee Stock Purchase Plan: Risk-free interest rate 2.0 % 2.6 % 1.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 69.5 % 116.0 % 106.6 % Expected term (in years) 1.3 1.3 1.2 Risk-Free Interest Rate. The Company bases the risk-free interest rate assumption on observed interest rates appropriate for the expected term of the option grants. Expected Dividend Yield. The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends. Expected Volatility. The expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The peer group was developed based on companies in the biopharmaceutical industry. Expected Term. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period. Total non-cash stock-based compensation expense recognized in the statements of operations is as follows (in thousands): Years Ended December 31, 2019 2018 2017 Cost of product sales $ 12 $ 12 $ 20 Research and development 2,085 4,447 3,763 Selling, general and administrative 2,793 7,955 9,878 Total stock-based compensation $ 4,890 $ 12,414 $ 13,661 As of December 31, 2019, unrecognized compensation cost related to stock options was $7.5 million which is expected to be recognized over a remaining weighted-average vesting period of 2.2 years. As of December 31, 2019, unrecognized compensation cost related to ESPP rights was $0.1 million which is expected to be recognized over a remaining weighted-average vesting period of 0.8 years. |
Collaboration Agreements
Collaboration Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Collaborative Arrangement Disclosure [Abstract] | |
Collaboration Agreements | 12. Collaboration Agreements Co-Promotion Agreements The Company entered into a co-promotion agreement with Mission Pharmacal Company (Mission) in August 2018 and with Glenmark Therapeutics Inc., USA (Glenmark) in April 2019 (each, a Co-Promotion Agreement) to support the promotion of OTIPRIO for the treatment of AOE in physician offices. In July 2019, Glenmark informed the Company of its early discontinuation of OTIPRIO promotional support activities due to the delay in FDA approval of its Ryaltris allergy product, and the impact of such delay on its business operations. In September 2019, the Company reached a settlement with Glenmark regarding the financial and contractual terms impacted by this decision that included committed payments by Glenmark totaling $1.0 million. In August 2019, Mission informed the Company of its non-renewal of the co-promotion agreement. The Co-Promotion Agreements are within the scope of ASC 808, as the parties were active participants and exposed to the risks and rewards of the collaborative activity. Mission and Glenmark (each, a Partner) made non-refundable, non-creditable payments to the Company as partial consideration of the OTIPRIO product support activities provided by the Company and as reimbursement for certain expenses incurred by the Company to obtain and maintain FDA approval for use of OTIPRIO in AOE. In addition, each Partner reimbursed the Company for a proportion of product support expenses. All such payments are recognized proportionately with the performance of the underlying services and accounted for as reductions to selling, general and administrative expense. Each Partner agreed to bear the costs incurred for its promotion of OTIPRIO. In exchange for its promotional services, each Partner was entitled to receive a share of gross profits totaling more than 50% from the sale of OTIPRIO to each Partner’s accounts. The Company’s payments to each Partner for its portion of the gross profit has been recognized as selling, general and administrative expense in the Company’s statements of operations. The Company was the principal in the product sale of OTIPRIO and recognized all revenue and related cost of product sales. The Company retained and continues to retain all commercial rights for other customer segments for AOE and for use of OTIPRIO in other indications. The Company does not consider performing product support services for its Partners to be a part of its ongoing major or central operations and, thus, the associated payments are not considered revenue, nor do they fall under ASC 606. The Company considers these activities to be collaborative activities under the scope of ASC 808, and recognizes the shared profits and losses in the periods in which they occurred. For the years ended December 31, 2019 and 2018, the Company recognized reductions in selling, general and administrative expenses related to the Co-Promotion Agreements of $2.6 million and $0.6 million, respectively. AGTC collaboration In October 2019, the Company announced a strategic collaboration with AGTC to co-develop and co-commercialize an adeno-associated virus (AAV)-based gene therapy to restore hearing in patients with sensorineural hearing loss caused by a mutation in the gap junction beta 2 gene (GJB2). Under the collaboration agreement, the Company and AGTC will equally share the program costs and any revenue or other proceeds related to the program. As of December 31, 2019, the Company had no amounts payable to or receivable from AGTC. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event that a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has completed a preliminary IRC Section 382/383 analysis, regarding the limitation of net operating loss and research and development credit carryforwards as of December 31, 2019 and does not believe there to have been an ownership change during the year then ended. The Company will continue to consider changes in ownership that may cause losses of tax attributes in the future. Significant components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 78,768 $ 67,574 Research and development credits 8,920 7,963 Depreciation and amortization 12,608 15,376 Accrued expenses 381 623 Lease liabilities 4,349 — Deferred rent — 742 Stock compensation 4,395 6,349 Other, net 181 514 Total deferred tax assets 109,602 99,141 Less: valuation allowance (105,990 ) (99,141 ) Total deferred tax assets, net of valuation allowance 3,612 — Deferred tax liability: Right-of-use assets (3,612 ) — Total deferred tax liability (3,612 ) — Total $ — $ — Due to the Company’s history of losses and uncertainty regarding future earnings, a full valuation allowance has been recorded against the Company’s net deferred tax assets, as it is more likely than not that such net assets will not be realized. A valuation allowance of approximately $106.0 million and $99.1 million has been established as of December 31, 2019 and 2018, respectively. At December 31, 2019, the Company had federal and state net operating loss carryforwards of approximately $337.4 million net of IRC Section 382 limitations and $131.7 million, respectively. Of the federal net operating loss carryforwards, approximately $96.8 million were generated after January 1, 2018, and therefore do not expire. Federal net operating losses that occur after January 1, 2018 are subject to a taxable income limitation of 80% in accordance with the Tax Cuts and Jobs Act of 2017 (the TCJA). The remaining federal and state net operating loss carryforwards will begin to expire in 2030, unless previously utilized. As of December 31, 2019, the Company also had federal and California research and development credit carryforwards of approximately $10.9 million net of IRC Section 383 limitations and $5.0 million, respectively. The federal research and development credit carryforwards will begin expiring in 2030, unless previously utilized. The California research credit will carry forward indefinitely. The following is a reconciliation of the expected recovery of income taxes between those that are based on enacted tax rates and laws, to those currently reported for the years ended December 31 (in thousands): 2019 2018 2017 Federal statutory rate $ (9,382 ) $ (10,578 ) $ (30,645 ) State tax (net of federal benefit) 299 (4,383 ) (462 ) Permanent items, other 189 (2,092 ) 1,376 Stock compensation 2,470 2,570 1,720 Other adjustments 523 — — Rate change — — 45,421 Research and development credits (1,595 ) (2,308 ) (1,830 ) Uncertain tax positions 638 907 732 Change in valuation allowance 6,858 15,884 (16,312 ) Provision for income taxes $ 0 $ 0 $ 0 The TCJA was enacted on December 22, 2017. The TCJA amended the IRC to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the TCJA reduced the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction became effective on January 1, 2018. The Company remeasured certain deferred tax assets based on the rates at which they are expected to reverse in the future, which is generally 21%. As a result, the Company reduced its deferred tax asset balance as of December 31, 2017 by $44.5 million. Due to the Company’s full valuation allowance position as of December 31, 2017, the Company also reduced its valuation allowance by the same amount. Due to the timing of the enactment and the complexity involved in applying the provisions of the TCJA, the Company made reasonable estimates of the effects, and recorded provisional amounts in its financial statements as of December 31, 2017. As the Company collected and prepared necessary data, and interpreted the additional guidance issued by the U.S. Department of the Treasury, the Internal Revenue Service (IRS), and other standard-setting bodies, it made adjustments, over the course of 2018, to the provisional amounts including refinements to deferred taxes. The accounting for the tax effects of the TCJA was completed as of December 31, 2018. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in thousands): December 31, 2019 2018 2017 Balance at the beginning of the year $ 10,052 $ 9,098 $ 8,391 Adjustments related to prior year tax positions (80 ) 242 — Increases related to current year tax positions 767 712 798 Decreases for tax positions from prior years — — (91 ) $ 10,739 $ 10,052 $ 9,098 The Company’s policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense. The Company has no accruals for interest or penalties in the balance sheets as of December 31, 2019 and 2018 and has not recognized interest or penalties in the statements of operations for the years ended December 31, 2019, 2018 and 2017. Due to the valuation allowance recorded against the Company’s net deferred tax assets, future changes in unrecognized tax benefits will not impact the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly in the next 12 months. The Company is subject to taxation in the United States for federal and state purposes. Due to the net operating loss carryforwards, the U.S. federal and state returns are open to examination by the IRS and state tax authorities for all years since inception. The Company is not currently under examination by the federal or any state tax authority. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses and negative cash flows from operating activities since inception. As of December 31, 2019, the Company had cash, cash equivalents and short-term investments of $60.7 million and an accumulated deficit of $459.9 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it: (i) develops and seeks regulatory approvals for OTIVIDEX and its other product candidates; and (ii) works to develop additional product candidates through research and development programs. When additional financing is required, the Company anticipates that it will seek additional funding through future debt and/or equity financings or other sources, such as potential collaboration agreements. If the Company is not able to secure adequate additional funding, if or when necessary, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, and future prospects. |
Use of Estimates | Use of Estimates The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of product sales and expense during the reporting period. Although these estimates are based on the Company’s knowledge of current events and anticipated actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held. Additionally, the Company established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. Cash and cash equivalents include cash in readily available checking, savings and money market accounts. The Company’s restricted cash consists of cash maintained in separate deposit accounts to secure a letter of credit issued by a bank to the landlord under a lease agreement for the Company’s corporate headquarters. |
Short-Term Investments | Short-term Investments The Company carries short-term investments classified as available-for-sale debt securities at fair value as determined by prices for identical or similar securities at the balance sheet date. Short-term investments consist of Level 1 financial instruments in the fair value hierarchy (see Note 9 – Fair Value Realized gains or losses of available-for-sale securities are determined using the specific identification method and net realized gains and losses are included in interest income. The Company periodically reviews available-for-sale securities for other-than-temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company records unrealized gains and losses on available-for-sale debt securities as a component of other comprehensive loss within the statements of comprehensive loss and as a separate component of stockholders’ equity on the balance sheets. The Company does not hold equity securities in its investment portfolio. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments include cash, cash equivalents, short-term investments, prepaid expenses and other assets, accounts payable, accrued expenses, accrued compensation and long-term debt. The carrying value of the Company’s cash and cash equivalents, short-term investments, prepaid expenses and other current assets, other long-term assets, accounts payable, accrued expenses, and accrued compensation approximate fair value due to the short-term nature of these items. Based on Level 3 inputs and the borrowing rates currently available for loans with similar terms, the Company believes the fair value of long-term debt approximates its carrying value. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are recorded net of customer allowances for chargebacks, distributor fees and any allowance for doubtful accounts. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. To date, the Company has determined that an allowance for doubtful accounts is not required. |
Inventory | Inventory Inventory, which is recorded at the lower of cost or net realizable value. Cost is determined on a first-in, first-out method. Inventories consist of OTIPRIO finished goods and work in-process, as well as raw materials used in the manufacture of OTIPRIO. If inventory costs exceed expected market value due to obsolescence, expiry or quantities in excess of expected demand, write downs are recorded for the difference between cost and market value, less cost to sell. During the year ended December 31, 2017, the Company recorded an inventory write down of $1.5 million to cost of product sales. During 2018 and 2019, no such write downs were recorded. |
Property and Equipment | Property and Equipment Property and equipment generally consist of manufacturing equipment, office furniture and equipment, computers, and scientific equipment and are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally two to ten years). Leasehold improvements are recorded at cost and are depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Repairs and maintenance costs are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses the value of its long-lived assets for impairment on an annual basis and whenever events or changes in circumstances and the undiscounted cash flows generated by those assets indicate that the carrying amount of such assets may not be recoverable. While the Company’s current and historical operating losses and negative cash flows are indicators of impairment, the Company believes that future cash flows to be received support the carrying value of its long-lived assets. No impairment of long-lived assets was recorded during the years ended December 31, 2019 and 2018. During the year ended December 31, 2017, the Company recorded an impairment of its long-lived assets of approximately $0.4 million in cost of product sales related to OTIPRIO manufacturing equipment. |
Right-of-Use Assets and Lease Liabilities | Right-of-Use Assets and Lease Liabilities Effective January 1, 2019, as required by Accounting Standards Update (ASU) No. 2016-02, Leases Leases ASC 842 establishes a right-of-use (ROU) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. ASU 2016-02 provides a number of optional practical expedients and accounting policy elections. The Company elected the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or initial direct costs for any existing leases. The adoption of ASC 842 had a material effect on the Company’s balance sheets; however, it did not have a material effect on its statements of operations, comprehensive loss and cash flows. Upon adoption of ASC 842 as of January 1, 2019, the Company recognized (i) ROU assets of $16.7 million, net of $3.0 million of deferred rent, and (ii) lease liabilities of $19.7 million. The Company has operating leases for its facility and certain equipment and finance leases for certain computer equipment. Effective January 1, 2019, the Company determines if an arrangement is or contains a lease at the commencement date. Operating leases are included in ROU assets, Leases, current, and Leases, net of current on the balance sheets. Finance leases are included in Property and equipment, Leases, current, and Leases, net of current on the balance sheets. The Company elected not to recognize short-term leases (one year or less) on the balance sheets. ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at the commencement date. When the implicit rate of the lease is not provided or cannot be determined, the Company uses a collateralized incremental borrowing rate based on the information available at the commencement date, including lease term, in determining the present value of future payments. The Company considers payments for common area maintenance, real estate taxes and management fees to be variable non-lease components, which are expensed as incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals As part of the process of preparing the Company’s financial statements, the Company is required to estimate expenses resulting from the Company’s obligations under contracts with vendors, contract research organizations (CROs) and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through financial models taking into account discussion with applicable personnel and outside service providers as to the progress or state of its trials. During the course of a clinical trial, the Company adjusts its clinical expense if actual results differ from its estimates. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted ASC Revenue from Contracts with Customers Revenue Recognition To recognize revenue the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract with a customer under ASC 606 and when it is probable the Company will collect the consideration exchanged for the goods or services transferred to the customer. OTIPRIO is sold to a limited number of specialty wholesale distributors. The Company recognizes revenue when its customers obtain control of OTIPRIO, typically upon delivery by the Company to these distributors. The Company has determined the delivery of OTIPRIO to its customers constitutes a single performance obligation and no other performance obligations are present. Hospitals, ambulatory surgery centers and physician offices order OTIPRIO from the Company’s distributors and are the end users of OTIPRIO. The Company permits product returns from the distributors only if the product is damaged or is shipped or ordered in error. Product returns based on expiry are not permitted. To date, product returns have been immaterial. Sales commissions and other incremental costs of obtaining customer contracts are expensed as incurred as the amortization periods would be less than one year or the amount is immaterial. Transaction Price and Reserves for Variable Consideration Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, government chargebacks, discounts and rebates and other fee for service amounts that are detailed within customer contracts relating to the sale of OTIPRIO. These reserves, as detailed below, are based on the amounts earned or accrued on the Company’s sales. Variable consideration is estimated using the most likely method, which is the single most likely outcome under the Company’s contracts and takes into consideration contractual fees, historical chargeback activity and historical Medicaid rebates. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which the Company is entitled based on the terms of the respective underlying contracts. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Reserves are established for these discounts and allowances upon delivery of OTIPRIO by the distributor and are classified as: (i) an allowance against accounts receivable if the amount is payable to the distributor or (ii) an accrued liability if the amount is payable to a party other than the distributor. Allowances against accounts receivable relate to chargebacks and distributor fees and accruals relate primarily to government rebates. Trade Discounts and Allowances . The Company’s customers are specialty wholesale distributors with whom the Company has contracted to pay a fee based on a percentage of wholesale acquisition cost for sales order management, data, and distribution services . The Company determined such services received to date are not distinct from the sale of products to customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations. This fee for service is recorded as an allowance against accounts receivable at the time of sale based on the contracted percentage. Chargebacks . The Company estimates allowances against accounts receivable for chargebacks related to agreements with group purchasing organizations and federal contracts. Under these agreements, the Company credits distributors a chargeback amount which represents the difference between the wholesale acquisition cost and the discounted price at which eligible purchasers purchased from the distributors. At the time of sale, estimated chargebacks are recorded based on historical chargeback activity, the projected payer mix, patient population industry data and the identification of entities purchasing OTIPRIO that are eligible for discounted pricing. Government . The Company estimates a rebate liability in connection with a Medicaid Drug Rebate Agreement with the Centers for Medicare & Medicaid Services, which provides a rebate to participating states based on covered purchases of OTIPRIO. At the time of sale, estimated Medicaid rebates are recorded based on historical government rebate activity, the projected payer mix and Medicaid patient population industry data. |
Concentration of Major Customers | Concentration of Major Customers The Company sells OTIPRIO to specialty wholesale distributor customers. The following table summarizes the Company’s sales to its largest customers for each of the periods presented: 2019 2018 2017 First largest 38 % 44 % 34 % Second largest 33 % 33 % 34 % Third largest 24 % 21 % 30 % |
Collaborative Arrangements | Collaborative Arrangements The Company has entered into co-promotion agreements and research agreements that fall under the scope of ASC Topic 808, Collaborative Arrangements Co-promotion agreements can include payments and reimbursements for a proportion of product support expenses to the Company and profit sharing payments by the Company. Payments to or by the Company are recognized in selling, general and administrative expenses in the statements of operations. Research agreements can include reimbursements to or by the Company, which are recognized in research and development expenses in the statements of operations. |
Research and Development | Research and Development Research and development expenses include the costs associated with the Company’s research and development activities, including salaries, benefits, stock-based compensation expense and occupancy costs. Also included in research and development expenses are third-party costs incurred in conjunction with contract manufacturing for the Company’s research and development programs and clinical trials, including the cost of clinical trial drug supply, costs incurred by CROs and regulatory expenses. Research and development costs are expensed as incurred. |
Selling, General and Administrative | Selling, General and Administrative Selling, general and administrative expenses include the costs associated with the Company’s executive, administrative, finance and human resource functions including salaries, benefits, stock-based compensation expense and occupancy costs. Other selling, general and administrative expenses include costs associated with prosecuting and maintaining the Company’s patent portfolio, corporate legal expenses, costs required for public company activities and infrastructure necessary for the general conduct of the Company’s business. The Company’s selling, general and administrative expenses also include OTIPRIO product support expenses, and profit-sharing fees payable to the Company’s partners, which are reduced by payments received from the Company’s partners under its co-promotion agreements. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation expense related to stock options and employee stock purchase plan (ESPP) rights by estimating the fair value on the date of grant using the Black-Scholes-Merton option pricing model. Forfeitures are recognized as incurred. For awards subject to time-based vesting conditions, stock-based compensation expense is recognized using the straight-line method. For performance-based awards to employees, (i) the fair value of the award is determined on the grant date, (ii) the Company assesses the probability of the individual performance milestones under the award being achieved and (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met. |
Income Taxes | Income Taxes The accounting guidance for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position. The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. As of December 31, 2019, 2018 and 2017, potentially dilutive securities excluded from the calculation of diluted net loss per share consist of outstanding options to purchase 7,495,129, 5,019,964 and 4,599,252 shares of the Company’s common stock, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Not Yet Adopted I n June 2016, ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) was issued, as amended. ASU 2016-13 introduces the current expected credit loss model, which will require an entity to measure credit losses for certain financial instruments and financial assets. ASU 2016-13 will also apply to receivables arising from revenue transactions such as accounts receivable. ASU 2016-13 is effective for the Company beginning January 1, 2023. The Company does not expect the adoption of ASU 2016-13 to have a material effect on its financial position, results of operations or cash flows. Recently Adopted Effective January 1, 2019, as required, the Company adopted ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Effective January 1, 2019, as required, the Company adopted ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07). The amendments in ASU 2018-07 expand the scope of the standard to include share-based payment transactions for acquiring goods and services from nonemployees. The adoption of ASU 2018-07 did not have a material impact on its financial statements or disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Sales to Largest Customers | The following table summarizes the Company’s sales to its largest customers for each of the periods presented: 2019 2018 2017 First largest 38 % 44 % 34 % Second largest 33 % 33 % 34 % Third largest 24 % 21 % 30 % |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Available-for-Sale Debt Securities | Available-for-sale debt securities with maturities of more than three months from the date of purchase have been classified as short-term investments, and were as follows (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Market Value December 31, 2019: U.S. Treasury securities $ 35,465 $ 16 $ (5 ) $ 35,476 Total available-for-sale securities $ 35,465 $ 16 $ (5 ) $ 35,476 December 31, 2018: U.S. Treasury securities $ 63,674 $ 1 $ (24 ) $ 63,651 Total available-for-sale securities $ 63,674 $ 1 $ (24 ) $ 63,651 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Prepaid and Other Current Assets | Prepaid and other current assets are comprised of the following (in thousands): December 31, 2019 2018 Prepaid clinical trial costs $ 209 $ 258 Other 2,223 2,419 Total $ 2,432 $ 2,677 |
Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): December 31, 2019 2018 Laboratory equipment $ 4,179 $ 3,772 Manufacturing equipment 1,111 1,017 Computer equipment and software 943 770 Leasehold improvements 768 736 Office furniture 1,548 1,548 8,549 7,843 Less: accumulated depreciation and amortization (4,847 ) (3,847 ) Total $ 3,702 $ 3,996 |
Accrued Expenses | Accrued expenses consist of the following (in thousands): December 31, 2019 2018 Accrued clinical trial costs $ 3,443 $ 1,294 Accrued other 1,999 2,494 Total $ 5,442 $ 3,788 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Additional Milestone Payments under Intellectual Property License Agreements | The Company may be obligated to make additional milestone payments under the Company’s intellectual property license agreements as follows (in thousands): Development $ 1,500 Regulatory 10,275 Commercialization 1,000 Total $ 12,775 |
Summary of Costs Recognized Under License Agreements and Other Non-Cancellable Royalty and Milestone Obligations | The following table summarizes costs recognized, in research and development, under the Company’s license agreements and other non-cancellable royalty and milestone obligations (in thousands): Years Ended December 31, 2019 2018 2017 License and other fees $ — $ — $ — Milestone fees 100 — — Total license and related fees $ 100 $ — $ — |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long Term Debt [Abstract] | |
Summary of Estimated Aggregate Amounts and Timing of Payments on Long-term Debt Obligations | The estimated aggregate amounts and timing of payments on the Company’s long-term debt obligations as of December 31, 2019 for the next five fiscal years were as follows: 2020 $ — 2021 4,714 2022 5,143 2023 5,743 2024 — Subtotal 15,600 Unamortized discount (633 ) Total long-term debt, net $ 14,967 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Lease Expenses | December 31, 2019 Lease expenses: Operating lease expenses $ 3,137 Variable lease expenses 942 Total lease expenses $ 4,079 |
Summary of Other Information | December 31, 2019 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 32 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 81 Finance leases $ 134 Weighted-average remaining lease term: Operating leases 7.7 years Finance leases 1.3 years Weighted-average remaining discount rate: Operating leases 10.0 % Finance leases 9.2 % |
Future Minimum Annual Obligations under Finance and Operating Lease Commitments | Lease Maturities: Operating Leases Finance Leases Total 2020 $ 3,231 $ 74 $ 3,305 2021 3,247 18 3,265 2022 3,333 — 3,333 2023 3,433 — 3,433 2024 3,536 — 3,536 Thereafter 10,284 — 10,284 Total minimum lease payments 27,064 92 27,156 Imputed interest (8,529 ) (5 ) (8,534 ) Total 18,535 87 18,622 Less: leases, current (3,229 ) (73 ) (3,302 ) Leases, net of current $ 15,306 $ 14 $ 15,320 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets Measured on a Recurring Basis | The following fair value hierarchy table presents the Company’s assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using Total Level 1 Level 2 Level 3 December 31, 2019: Assets Money market funds $ 22,121 $ 22,121 $ — $ — U.S. Treasury securities 35,476 35,476 — — Total $ 57,597 $ 57,597 $ — $ — December 31, 2018: Assets Money market funds $ 17,159 $ 17,159 $ — $ — U.S. Treasury securities 63,651 63,651 — — Total $ 80,810 $ 80,810 $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance are as follows: December 31, 2019 2018 Common stock options issued and outstanding 7,495,129 5,019,964 Common stock options available for future grant 3,548,214 4,492,021 Common stock reserved for issuance under ESPP 1,977,215 1,642,821 Total common stock reserved for future issuance 13,020,558 11,154,806 |
Stock-Based Compensation and _2
Stock-Based Compensation and Equity Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2019 (in thousands except per share amounts and years): Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding as of December 31, 2018 5,020 $ 5.62 Granted 2,656 $ 2.08 Exercised (3 ) $ 1.76 Forfeited (178 ) $ 3.19 Outstanding as of December 31, 2019 7,495 $ 4.43 7.1 $ 6,279 Options vested and expected to vest as of December 31, 2019 7,495 $ 4.43 7.1 $ 6,279 Options exercisable as of December 31, 2019 3,912 $ 5.62 5.7 $ 1,782 |
Summary of Certain Information Regarding Stock Options | The following table summarizes certain information regarding stock options (in thousands, except per share data): Years Ended December 31, 2019 2018 2017 Weighted-average grant date fair value per share of options granted during the period $ 1.64 $ 4.36 $ 9.14 Cash received from options exercised during the period 5 32 448 Intrinsic value of options exercised during the period 2 76 623 |
Weighted-Average Underlying Assumptions Used to Determine Fair Value of Stock Options and ESPP Rights | The following are the weighted-average underlying assumptions used to determine the fair value of stock options and ESPP rights using the Black-Scholes-Merton option pricing model: Years Ended December 31, 2019 2018 2017 Stock Options: Risk-free interest rate 2.5 % 2.6 % 2.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 98.1 % 100.6 % 69.8 % Expected term (in years) 6.1 5.4 6.1 Employee Stock Purchase Plan: Risk-free interest rate 2.0 % 2.6 % 1.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 69.5 % 116.0 % 106.6 % Expected term (in years) 1.3 1.3 1.2 |
Summary of Non-cash Stock Based Compensation Expense | Total non-cash stock-based compensation expense recognized in the statements of operations is as follows (in thousands): Years Ended December 31, 2019 2018 2017 Cost of product sales $ 12 $ 12 $ 20 Research and development 2,085 4,447 3,763 Selling, general and administrative 2,793 7,955 9,878 Total stock-based compensation $ 4,890 $ 12,414 $ 13,661 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Deferred Tax Assets | Significant components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 78,768 $ 67,574 Research and development credits 8,920 7,963 Depreciation and amortization 12,608 15,376 Accrued expenses 381 623 Lease liabilities 4,349 — Deferred rent — 742 Stock compensation 4,395 6,349 Other, net 181 514 Total deferred tax assets 109,602 99,141 Less: valuation allowance (105,990 ) (99,141 ) Total deferred tax assets, net of valuation allowance 3,612 — Deferred tax liability: Right-of-use assets (3,612 ) — Total deferred tax liability (3,612 ) — Total $ — $ — |
Reconciliation of Expected Recovery of Income Taxes | The following is a reconciliation of the expected recovery of income taxes between those that are based on enacted tax rates and laws, to those currently reported for the years ended December 31 (in thousands): 2019 2018 2017 Federal statutory rate $ (9,382 ) $ (10,578 ) $ (30,645 ) State tax (net of federal benefit) 299 (4,383 ) (462 ) Permanent items, other 189 (2,092 ) 1,376 Stock compensation 2,470 2,570 1,720 Other adjustments 523 — — Rate change — — 45,421 Research and development credits (1,595 ) (2,308 ) (1,830 ) Uncertain tax positions 638 907 732 Change in valuation allowance 6,858 15,884 (16,312 ) Provision for income taxes $ 0 $ 0 $ 0 |
Unrecognized Tax Benefit | The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in thousands): December 31, 2019 2018 2017 Balance at the beginning of the year $ 10,052 $ 9,098 $ 8,391 Adjustments related to prior year tax positions (80 ) 242 — Increases related to current year tax positions 767 712 798 Decreases for tax positions from prior years — — (91 ) $ 10,739 $ 10,052 $ 9,098 |
Description of Business and B_3
Description of Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Cash, cash equivalents and short-term investments | $ 60,700 | |
Accumulated deficit | $ (459,893) | $ (415,218) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |||
Dec. 31, 2019USD ($)Segmentshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Jan. 01, 2019USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segment | Segment | 1 | |||
Inventory write-down | $ 0 | $ 0 | $ 1,500,000 | |
Impairment loss of long lived assets | 0 | 0 | $ 400,000 | |
Operating lease asset | 15,465,000 | |||
Operating lease liability | $ 18,535,000 | |||
Deferred rent | $ 3,001,000 | |||
Options to Purchase Common Stock [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Potentially dilutive securities excluded from the calculation of diluted net loss per share | shares | 7,495,129 | 5,019,964 | 4,599,252 | |
ASU 2016-02 [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Operating lease asset | $ 16,700,000 | |||
Operating lease liability | 19,700,000 | |||
Deferred rent | $ 3,000,000 | |||
Minimum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment useful lives | 2 years | |||
Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment useful lives | 10 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Sales to Largest Customers (Detail) - Customer Concentration Risk [Member] - Sales Revenue, Net [Member] | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Customer One [Member] | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk percentage | 38.00% | 44.00% | 34.00% |
Customer Two [Member] | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk percentage | 33.00% | 33.00% | 34.00% |
Customer Three [Member] | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Concentration risk percentage | 24.00% | 21.00% | 30.00% |
Available-for-Sale Securities -
Available-for-Sale Securities - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2019USD ($)Security | Dec. 31, 2018USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of available-for-sale securities in unrealized loss positions for less than twelve months | Security | 5 | |
Other-than-temporary declines in the value of any available-for-sale securities | $ 0 | |
Maximum maturity of available-for-sale debt securities | 1 year | |
Available-for-sale Securities [Member] | Money Market Funds and Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash equivalents | $ 22,100,000 | $ 17,200,000 |
Available-for-Sale Securities_2
Available-for-Sale Securities - Schedule of Available-for-Sale Debt Securities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 35,465 | $ 63,674 |
Unrealized Gains | 16 | 1 |
Unrealized Losses | (5) | (24) |
Market Value | 35,476 | 63,651 |
U.S. Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 35,465 | 63,674 |
Unrealized Gains | 16 | 1 |
Unrealized Losses | (5) | (24) |
Market Value | $ 35,476 | $ 63,651 |
Balance Sheet Details - Prepaid
Balance Sheet Details - Prepaid and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Prepaid clinical trial costs | $ 209 | $ 258 |
Other | 2,223 | 2,419 |
Total | $ 2,432 | $ 2,677 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 8,549 | $ 7,843 |
Less: accumulated depreciation and amortization | (4,847) | (3,847) |
Total | 3,702 | 3,996 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,179 | 3,772 |
Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,111 | 1,017 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 943 | 770 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 768 | 736 |
Office Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,548 | $ 1,548 |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 1,149 | $ 1,186 | $ 1,289 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued clinical trial costs | $ 3,443 | $ 1,294 |
Accrued other | 1,999 | 2,494 |
Total | $ 5,442 | $ 3,788 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost And Reserve [Line Items] | |||
Accrued and unpaid severance costs | $ 0 | $ 0 | |
Stock-Based Compensation Expense [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring costs | $ 1 | ||
Selling, General and Administrative Expense [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring charge | $ 3.8 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2019USD ($)Milestone | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | May 31, 2015USD ($) | |
Other Commitments [Line Items] | |||||
Operating lease term | 130 months | ||||
Additional operating lease term | 5 years | 5 years | |||
Period after which company has the right to terminate lease if it is acquired by a third party and pays early termination fee | 94 months | 94 months | |||
Monthly base rent for first year | $ 232,000 | ||||
Lease rate increase, percentage | 3.00% | ||||
Abatement period of monthly base rent | 10 months | ||||
Estimated base rent payments over the life of lease | $ 32,700,000 | ||||
Milestone fees | $ 100,000 | $ 0 | $ 0 | ||
Intellectual Property [Member] | |||||
Other Commitments [Line Items] | |||||
Milestone fees | $ 2,900,000 | ||||
Maximum percentage of royalties on sales | 5.00% | ||||
Intellectual Property [Member] | Regulatory [Member] | |||||
Other Commitments [Line Items] | |||||
Number of milestones achieved | Milestone | 1 | ||||
Intellectual Property [Member] | Development [Member] | |||||
Other Commitments [Line Items] | |||||
Number of milestones achieved | Milestone | 7 | ||||
Royalty Agreements [Member] | |||||
Other Commitments [Line Items] | |||||
Maximum percentage of royalties on sales | 1.00% | ||||
Royalty period | 10 years | ||||
Data License Agreement [Member] | |||||
Other Commitments [Line Items] | |||||
Description of royalties payable | The Company is obligated to pay Ipsen low single-digit royalties on annual net sales of OTO-313 by the Company or its affiliates or sublicensees | ||||
Maximum cumulative royalties paid under license agreement | $ 10,000,000 | ||||
Building [Member] | |||||
Other Commitments [Line Items] | |||||
Construction commencement period | 2016-12 | ||||
Restricted Cash [Member] | |||||
Other Commitments [Line Items] | |||||
Security deposit in the form of letter of credit | $ 695,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Additional Milestone Payments under Intellectual Property License Agreements (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Other Commitments [Line Items] | |
Cash Payments | $ 12,775 |
Development [Member] | |
Other Commitments [Line Items] | |
Cash Payments | 1,500 |
Regulatory [Member] | |
Other Commitments [Line Items] | |
Cash Payments | 10,275 |
Commercialization [Member] | |
Other Commitments [Line Items] | |
Cash Payments | $ 1,000 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Costs Recognized Under License Agreements and Other Non-Cancellable Royalty and Milestone Obligations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |||
License and other fees | $ 0 | $ 0 | $ 0 |
Milestone fees | 100 | 0 | 0 |
Total license and related fees | $ 100 | $ 0 | $ 0 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Debt discount, amount | $ 633 | |
Term Loan outstanding | 14,967 | $ 14,764 |
Accounts Payable [Member] | ||
Debt Instrument [Line Items] | ||
Accrued interest | 100 | |
Secured Term Loan Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 15,000 | |
Facility fee percentage | 0.75% | |
Debt instrument, maturity date | Dec. 1, 2023 | |
Interest rate description | The Term Loan bears interest at a floating rate equal to the greater of 5.25% and the prime rate as reported in the Wall Street Journal from time to time, plus 3.75% (9.0% as of December 31, 2019, the minimum interest rate). | |
Debt instrument, interest rate at period end | 9.00% | |
Debt instrument, minimum interest rate | 9.00% | |
Interest frequency payments | monthly | |
Interest only payment term | twenty-four (24) months | |
Interest only payment extension term | twelve (12) months | |
Repayment fee percentage | 4.00% | |
Debt discount, amount | $ 600 | |
Debt instrument, covenant description | The Loan Agreement contains customary affirmative covenants, including covenants regarding compliance with applicable laws and regulations, reporting requirements, payment of taxes and other obligations, and maintenance of insurance. Further, subject to certain exceptions, the Loan Agreement contains customary negative covenants limiting the ability of the Company to, among other things, sell assets, allow a change of control to occur (if the Term Loan is not repaid), make acquisitions, incur debt, grant liens, make investments, pay dividends or repurchase stock. The Company has maintained compliance with all such covenants to date. | |
Interest expense, including amortization of the debt discount | $ 1,600 | |
Term Loan outstanding | $ 15,000 | |
Secured Term Loan Credit Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, reference rate | 5.25% | |
Debt instrument, basis spread on variable rate | 3.75% | |
Secured Term Loan Credit Facility [Member] | On or Prior to First Anniversary of Closing Date [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of debt prepayment fee | 3.00% | |
Secured Term Loan Credit Facility [Member] | After First Anniversary of Closing Date and On or Prior to Second Anniversary of Closing Date [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of debt prepayment fee | 2.00% | |
Secured Term Loan Credit Facility [Member] | Thereafter Second Anniversary of Closing Date [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of debt prepayment fee | 1.00% | |
Secured Term Loan Credit Facility [Member] | Occurrence and During Continuance of Event of Default [Member] | ||
Debt Instrument [Line Items] | ||
Increase in applicable rate of interest | 5.00% |
Long-term Debt - Summary of Est
Long-term Debt - Summary of Estimated Aggregate Amounts and Timing of Payments on Long-term Debt Obligations (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Long Term Debt [Abstract] | |
2020 | $ 0 |
2021 | 4,714 |
2022 | 5,143 |
2023 | 5,743 |
2024 | 0 |
Subtotal | 15,600 |
Unamortized discount | (633) |
Total long-term debt, net | $ 14,967 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee Lease Description [Line Items] | ||||
Operating lease, description | The Company has existing operating leases for certain office equipment and its facility with initial terms ranging from 48 months to 130 months. | |||
Operating lease term | 130 months | |||
Operating lease, option to extend | true | |||
Operating lease, option to extend description | The facility lease has an option for the Company to extend the lease term for an additional five years; however, it is not reasonably certain the Company will exercise the option to renew when the lease term ends in 2027, and thus, the incremental term was excluded from the calculation of the lease liability. | |||
Additional operating lease term | 5 years | 5 years | ||
Operating lease term ending year | 2027 | |||
Operating lease, option to terminate | true | |||
Operating lease, option to terminate description | The Company has the right to terminate the lease at the end of the 94th month of the lease term if it is acquired by a third party and pays an early termination fee. | |||
Period after which company has the right to terminate lease if it is acquired by a third party and pays early termination fee | 94 months | 94 months | ||
Rent expense | $ 3.1 | $ 3.1 | $ 3.2 | |
Computer Equipment [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease, description | On March 31, 2019, the Company entered into a lease for certain equipment with an initial term of 24 months, which includes a purchase option at the end of the lease term based upon the then fair market value of the equipment. | |||
Operating lease term | 24 months | |||
Finance lease, description | On March 31, 2019, the Company entered into a lease for certain computer equipment with an initial term of 24 months, which includes an option to purchase the equipment at the end of the lease term that is expected to be exercised. | |||
Finance lease initial term | 24 months | |||
Finance lease right-of-use asset amortization term | 3 years | |||
Minimum [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease term | 48 months | |||
Maximum [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease term | 130 months |
Leases - Summary of Lease Expen
Leases - Summary of Lease Expenses (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease expenses: | |
Operating lease expenses | $ 3,137 |
Variable lease expenses | 942 |
Total lease expenses | $ 4,079 |
Leases - Summary of Other Infor
Leases - Summary of Other Information (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 32 |
Right-of-use assets obtained in exchange for new lease liabilities: | |
Operating leases | 81 |
Finance leases | $ 134 |
Weighted-average remaining lease term: | |
Operating leases | 7 years 8 months 12 days |
Finance leases | 1 year 3 months 18 days |
Weighted-average remaining discount rate: | |
Operating leases | 10.00% |
Finance leases | 9.20% |
Leases - Future Minimum Annual
Leases - Future Minimum Annual Obligations under Finance and Operating Lease Commitments (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating Leases, 2020 | $ 3,231 |
Operating Leases, 2021 | 3,247 |
Operating Leases, 2022 | 3,333 |
Operating Leases, 2023 | 3,433 |
Operating Leases, 2024 | 3,536 |
Operating Leases, Thereafter | 10,284 |
Operating Leases, Total minimum lease payments | 27,064 |
Operating Leases, Imputed interest | (8,529) |
Operating lease liability | 18,535 |
Operating Leases, Total | 18,535 |
Operating Leases, Less: leases, current | (3,229) |
Operating Leases, Leases, net of current | 15,306 |
Finance Leases, 2020 | 74 |
Finance Leases, 2021 | 18 |
Finance Leases, Total minimum lease payments | 92 |
Finance Leases, Imputed interest | (5) |
Finance Leases, Total | 87 |
Finance Leases, Less: leases, current | (73) |
Finance Leases, Leases, net of current | 14 |
2020 | 3,305 |
2021 | 3,265 |
2022 | 3,333 |
2023 | 3,433 |
2024 | 3,536 |
Thereafter | 10,284 |
Total minimum lease payments | 27,156 |
Imputed interest | (8,534) |
Total | 18,622 |
Less: leases, current | (3,302) |
Leases, net of current | $ 15,320 |
Fair Value - Additional informa
Fair Value - Additional information (Detail) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Measurements Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 0 | $ 0 |
Liabilities measured at fair value | 0 | 0 |
Fair Value Measurements, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 57,597,000 | 80,810,000 |
Liabilities measured at fair value | $ 0 | $ 0 |
Fair Value - Fair Value Assets
Fair Value - Fair Value Assets Measured on a Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Short-term investments | $ 35,476 | $ 63,651 |
U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 35,476 | 63,651 |
Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 57,597 | 80,810 |
Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 22,121 | 17,159 |
Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 35,476 | 63,651 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 57,597 | 80,810 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 22,121 | 17,159 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 35,476 | 63,651 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 0 | 0 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 0 | 0 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | $ 0 | $ 0 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares of Common Stock Reserved for Future Issuance (Detail) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 13,020,558 | 11,154,806 |
Options to Purchase Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 7,495,129 | 5,019,964 |
Available Future Grant Year [Member] | Options to Purchase Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 3,548,214 | 4,492,021 |
2014 Employee Stock Purchase Plan [Member] | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 1,977,215 | 1,642,821 |
Stock-Based Compensation and _3
Stock-Based Compensation and Equity Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2020 | Dec. 20, 2017 | Feb. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares reserved for issuance | 13,020,558 | 11,154,806 | |||
Stock option granted | 2,656,000 | ||||
Exchange of outstanding stock options, exercise price | $ 4.43 | $ 5.62 | |||
Common stock exercise price | $ 2.08 | ||||
Number of common stock issued pursuant to ESPP purchases | 457,831 | ||||
Unrecognized compensation costs related to stock options | $ 7.5 | ||||
Remaining weighted-average vesting period | 2 years 2 months 12 days | ||||
Unrecognized compensation cost related to stock options | $ 0.1 | ||||
Remaining weighted-average vesting period | 9 months 18 days | ||||
Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual term of options | 8 years | ||||
Incremental fair value options | $ 0.6 | ||||
Performance-based Awards [Member] | Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 250,000 | ||||
Options to Purchase Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares reserved for issuance | 7,495,129 | 5,019,964 | |||
Options to Purchase Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option exchange program, expiration date | Jan. 19, 2018 | ||||
Exchange of outstanding stock options under option exchange program, closing price per share | $ 5.675 | ||||
Options to Purchase Common Stock [Member] | Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares purchased | 1,992,000 | ||||
Percentage of number of common stock purchased | 81.51% | ||||
Minimum [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting period | 1 year | ||||
Minimum [Member] | Options to Purchase Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exchange of outstanding stock options, exercise price | $ 12 | ||||
Maximum [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting period | 3 years | ||||
Equity Incentive Plan 2014 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting period | 4 years | ||||
Contractual term of options | 10 years | ||||
Annual increase in common shares reserved for issuance, percentage of total shares of common stock | 5.00% | ||||
Changes in share issuance, description | Under the evergreen provision of the 2014 Plan, the number of shares available for issuance under the 2014 Plan includes an annual increase on the first day of each fiscal year equal to the lesser of (i) 2,500,000 shares; (ii) 5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company’s board of directors may determine. | ||||
Options available for grant | 3,548,214 | ||||
Equity Incentive Plan 2014 [Member] | Options to Purchase Common Stock [Member] | Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 1,570,328 | ||||
Common stock exercise price | $ 5.675 | ||||
Equity Incentive Plan 2014 [Member] | Subsequent Event [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual increase in common shares reserved for issuance | 1,540,710 | ||||
Common shares reserved for issuance | 5,088,924 | ||||
Equity Incentive Plan 2014 [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercise price, percentage of fair market value | 100.00% | ||||
Equity Incentive Plan 2014 [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual increase in common shares reserved for issuance | 2,500,000 | ||||
2014 Employee Stock Purchase Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual increase in common shares reserved for issuance, percentage of total shares of common stock | 1.50% | ||||
Changes in share issuance, description | issuance under the ESPP includes an annual increase on the first day of each fiscal year, equal to the lesser of (i) 800,000 shares; (ii) 1.5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company’s board of directors may determine. | ||||
Common shares reserved for issuance | 1,977,215 | 1,642,821 | |||
Eligible compensation contribution | 15.00% | ||||
Offering periods under plan | 24 months | ||||
Offering period description | The offering periods generally start on the first trading day on or after June 1 and December 1 of each year and end on the first trading day on or before June 1 and December 1 approximately twenty-four months later, and include six-month purchase periods. | ||||
2014 Employee Stock Purchase Plan [Member] | Subsequent Event [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares reserved for issuance | 2,439,428 | ||||
2014 Employee Stock Purchase Plan [Member] | Minimum [Member] | Subsequent Event [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual increase in common shares reserved for issuance | 462,213 | ||||
2014 Employee Stock Purchase Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual increase in common shares reserved for issuance | 800,000 |
Stock-Based Compensation and _4
Stock-Based Compensation and Equity Plans - Stock Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Options | |
Outstanding as of beginning of period | shares | 5,020 |
Granted | shares | 2,656 |
Exercised | shares | (3) |
Forfeited | shares | (178) |
Outstanding as of end of period | shares | 7,495 |
Options vested and expected to vest | shares | 7,495 |
Options exercisable | shares | 3,912 |
Weighted- Average Exercise Price | |
Outstanding as of beginning of period | $ / shares | $ 5.62 |
Granted | $ / shares | 2.08 |
Exercised | $ / shares | 1.76 |
Forfeited | $ / shares | 3.19 |
Outstanding as of end of period | $ / shares | 4.43 |
Options vested and expected to vest | $ / shares | 4.43 |
Options exercisable | $ / shares | $ 5.62 |
Weighted-Average Remaining Contractual Term (In Years) | |
Outstanding | 7 years 1 month 6 days |
Options vested and expected to vest | 7 years 1 month 6 days |
Options exercisable | 5 years 8 months 12 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 6,279 |
Options vested and expected to vest | $ | 6,279 |
Options exercisable | $ | $ 1,782 |
Stock-Based Compensation and _5
Stock-Based Compensation and Equity Plans - Summary of Certain Information Regarding Stock Options (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Weighted-average grant date fair value per share of options granted during the period | $ 1.64 | $ 4.36 | $ 9.14 |
Cash received from options exercised during the period | $ 5 | $ 32 | $ 448 |
Intrinsic value of options exercised during the period | $ 2 | $ 76 | $ 623 |
Stock-Based Compensation and _6
Stock-Based Compensation and Equity Plans - Weighted-Average Underlying Assumptions Used to Determine Fair Value of Stock Options and ESPP Rights (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.50% | 2.60% | 2.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 98.10% | 100.60% | 69.80% |
Expected term (in years) | 6 years 1 month 6 days | 5 years 4 months 24 days | 6 years 1 month 6 days |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.00% | 2.60% | 1.40% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 69.50% | 116.00% | 106.60% |
Expected term (in years) | 1 year 3 months 18 days | 1 year 3 months 18 days | 1 year 2 months 12 days |
Stock-Based Compensation and _7
Stock-Based Compensation and Equity Plans - Summary of Non-cash Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 4,890 | $ 12,414 | $ 13,661 |
Cost of Product Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 12 | 12 | 20 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | 2,085 | 4,447 | 3,763 |
Selling, General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation | $ 2,793 | $ 7,955 | $ 9,878 |
Collaboration Agreements - Addi
Collaboration Agreements - Additional information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Amounts receivable from or payable to the AGTC | $ 0 | ||
Glenmark Co-Promotion Agreement [Member] | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Payment of committed amount in settlement | $ 1,000 | ||
Mission Co-Promotion Agreement [Member] | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Decrease in selling general and administrative expenses | $ 2,600 | $ 600 | |
Mission Co-Promotion Agreement [Member] | Minimum [Member] | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Share of gross profits, percentage | 50.00% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 78,768 | $ 67,574 |
Research and development credits | 8,920 | 7,963 |
Depreciation and amortization | 12,608 | 15,376 |
Accrued expenses | 381 | 623 |
Lease liabilities | 4,349 | 0 |
Deferred rent | 0 | 742 |
Stock compensation | 4,395 | 6,349 |
Other, net | 181 | 514 |
Total deferred tax assets | 109,602 | 99,141 |
Less: valuation allowance | (105,990) | (99,141) |
Total deferred tax assets, net of valuation allowance | 3,612 | 0 |
Deferred tax liability: | ||
Right-of-use assets | (3,612) | 0 |
Total deferred tax liability | (3,612) | 0 |
Total | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Income Taxes [Line Items] | ||||
Valuation allowance | $ 105,990,000 | $ 99,141,000 | ||
Net operating loss carryforwards | $ 96,800,000 | |||
Percentage of taxable income limitation | 80.00% | |||
Corporate tax rate | 21.00% | 21.00% | 35.00% | |
Reduction of deferred tax asset | $ 44,500,000 | |||
Unrecognized tax benefit, income tax penalties and interest accrued | $ 0 | 0 | ||
Unrecognized tax benefits, income tax penalties and interest expense | 0 | $ 0 | $ 0 | |
State and Local Jurisdiction [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards | $ 131,700,000 | |||
Net operating loss carryforwards, expiration | will begin to expire in 2030 | |||
Internal Revenue Service (IRS) [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards | $ 337,400,000 | |||
Net operating loss carryforwards, expiration | will begin to expire in 2030 | |||
Tax credit carryforwards | $ 10,900,000 | |||
Tax credit carryforwards, expiration | will begin expiring in 2030 | |||
California Franchise Tax Board [Member] | ||||
Income Taxes [Line Items] | ||||
Tax credit carryforwards | $ 5,000,000 | |||
Tax credit carryforwards, expiration | indefinitely |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Expected Recovery of Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | $ (9,382) | $ (10,578) | $ (30,645) |
State tax (net of federal benefit) | 299 | (4,383) | (462) |
Permanent items, other | 189 | (2,092) | 1,376 |
Stock compensation | 2,470 | 2,570 | 1,720 |
Other adjustments | 523 | 0 | 0 |
Rate change | 0 | 0 | 45,421 |
Research and development credits | (1,595) | (2,308) | (1,830) |
Uncertain tax positions | 638 | 907 | 732 |
Change in valuation allowance | 6,858 | 15,884 | (16,312) |
Provision for income taxes | $ 0 | $ 0 | $ 0 |
Income Taxes - Activity Related
Income Taxes - Activity Related to Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Balance at the beginning of the year | $ 10,052 | $ 9,098 | $ 8,391 |
Adjustments related to prior year tax positions | (80) | 242 | 0 |
Increases related to current year tax positions | 767 | 712 | 798 |
Decreases for tax positions from prior years | 0 | 0 | (91) |
Unrecognized Tax Benefits | $ 10,739 | $ 10,052 | $ 9,098 |