Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | OptiNose, Inc. | |
Entity Central Index Key | 1,494,650 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 38,006,524 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 209,771 | $ 234,854 |
Accounts receivable, net | 2,049 | 0 |
Grants and other receivables | 271 | 46 |
Inventory | 3,580 | 2,013 |
Prepaid expenses and other current assets | 1,398 | 1,254 |
Total current assets | 217,069 | 238,167 |
Property and equipment, net | 3,102 | 2,564 |
Other assets | 391 | 405 |
Total assets | 220,562 | 241,136 |
Current liabilities: | ||
Accounts payable | 7,996 | 5,893 |
Accrued expenses | 14,492 | 8,698 |
Deferred other income | 0 | 186 |
Total current liabilities | 22,488 | 14,777 |
Long-term debt, net | 71,963 | 71,863 |
Total liabilities | 94,451 | 86,640 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 200,000,000 shares authorized at March 31, 2018 and December 31, 2017; 37,909,058 and 37,802,556 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 38 | 38 |
Additional paid-in capital | 368,018 | 365,838 |
Accumulated deficit | (241,841) | (211,269) |
Accumulated other comprehensive loss | (104) | (111) |
Total stockholders' equity | 126,111 | 154,496 |
Total liabilities and stockholders' equity | $ 220,562 | $ 241,136 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 200,000,000 | 200,000,000 |
Shares issued (in shares) | 37,909,058 | 37,802,556 |
Shares outstanding (in shares) | 37,909,058 | 37,802,556 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net product revenues | $ 865 | $ 0 |
Cost of product sales | 200 | 0 |
Gross margin | 665 | 0 |
Operating expenses: | ||
Research and development | 1,701 | 4,230 |
Selling, general and administrative | 28,011 | 3,073 |
Total operating expenses | 29,712 | 7,303 |
Loss from operations | (29,047) | (7,303) |
Other (income) expense: | ||
Grant and other income | (189) | (49) |
Interest income | (476) | (35) |
Interest expense | 2,193 | 862 |
Foreign currency gains | (3) | (6) |
Net loss | (30,572) | (8,075) |
Deemed dividend | 0 | 3,067 |
Accretion to redemption value | 0 | 528 |
Net loss attributable to common stockholders | $ (30,572) | $ (11,670) |
Net loss per share of common stock | ||
basic (in USD per share) | $ (0.81) | $ (2.87) |
diluted (in USD per share) | $ (0.81) | $ (2.87) |
Weighted average common shares outstanding | ||
basic (in shares) | 37,849,199 | 4,067,717 |
diluted (in shares) | 37,849,199 | 4,067,717 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (30,572) | $ (8,075) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | 7 | (1) |
Comprehensive loss | $ (30,565) | $ (8,076) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities: | ||
Net loss | $ (30,572) | $ (8,075) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 156 | 32 |
Stock-based compensation | 2,023 | 722 |
Amortization of debt discount and issuance costs | 73 | 194 |
Loss on sale of equipment | 1 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,049) | 0 |
Grants and other receivables | (225) | 141 |
Prepaid expenses and other assets | (118) | 1,592 |
Inventory | (1,543) | 0 |
Accounts payable | 3,723 | (2,417) |
Accrued expenses and other liabilities | 5,533 | 281 |
Cash used in operating activities | (22,998) | (7,530) |
Investing activities: | ||
Purchases of property and equipment | (382) | (90) |
Cash used in investing activities | (382) | (90) |
Financing activities: | ||
Proceeds from the sale of Series D preferred stock | 0 | 35,000 |
Cash paid for financing costs | (1,823) | (185) |
Proceeds from the exercise of stock options | 130 | 0 |
Cash (used in) provided by financing activities | (1,693) | 34,815 |
Effects of exchange rate changes on cash and cash equivalents | (1) | 0 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (25,074) | 27,195 |
Cash, cash equivalents and restricted cash at beginning of period | 234,875 | 36,847 |
Cash, cash equivalents and restricted cash at end of period | 209,801 | 64,042 |
Supplemental disclosure of noncash financing activities: | ||
Deemed dividend | 0 | 3,067 |
Accretion to redemption value | 0 | 528 |
Fixed asset purchases within accounts payable and accrued expenses | 303 | 0 |
Financing costs within accounts payable and accrued expenses | 671 | 0 |
Conversion of convertible notes payable and accrued interest into Series C-2 preferred stock | $ 0 | $ 19,527 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania, Ewing, New Jersey, Oslo, Norway and Swindon, England. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first two products approved by the United States Food and Drug Administration (FDA) utilize its proprietary Exhalation Delivery Systems (EDS), which are capable of deep intranasal deposition of medication. OptiNose developed its first product, Onzetra ® Xsail ® (sumatriptan nasal powder) through the completion of Phase III clinical trials and subsequently out-licensed the product to Avanir Pharmaceuticals, Inc. (Avanir). Onzetra Xsail received FDA approval and was launched in the United States (US) in 2016. The Company's second FDA-approved product, XHANCE TM (fluticasone propionate) nasal spray, 93 mcg, is a therapeutic that utilizes the Company's EDS to deliver a topically-acting corticosteroid for the treatment of nasal polyps in patients 18 years of age or older. XHANCE is also currently in development for the treatment of chronic sinusitis. In March 2018, the Company deployed approximately 80 field sales representatives (known as Territory Managers) through a contract sales organization to promote XHANCE, primarily to ENT and allergy physicians. Additionally, in March 2018, the Company introduced the XHANCE Xperience program to offer physicians and their commercially insured patients an opportunity to gain an initial experience with XHANCE. As part of this program, eligible patients receive up to two XHANCE prescriptions at no cost to them ($0 co-pay) and physicians have the opportunity to gain early experience with the product and receive feedback on patient experience. Beginning in April 2018, XHANCE also became available in retail pharmacies throughout the US. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Liquidity Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and most recently, preparing for the launch of XHANCE. XHANCE was introduced by the Company through the XHANCE Xperience program in March 2018 and became available in retail pharmacies in April 2018. As of March 31, 2018 , the Company had cash and cash equivalents of $209,771 . The Company may need to secure additional capital in the future through equity or debt financings, partnerships, collaborations, or other sources in order to service the Company's existing obligations under outstanding notes, including repayment, and to carry out all of the Company's planned development and commercial activities. If additional capital is not secured when required, the Company may need to delay or curtail its operations until such funding is received. The Company is subject to a number of risks similar to other life sciences companies, including, but not limited to, successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company's products. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited interim consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). In the opinion of management, the accompanying unaudited interim financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) considered necessary to present fairly the Company's financial position as of March 31, 2018 and its results of operations for the three months ended March 31, 2018 and 2017 and cash flows for the three months ended March 31, 2018 and 2017 . Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . The unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2017 contained in the Company’s annual report on Form 10-K for the year ended December 31, 2017 , filed with the SEC on March 13, 2018. Stock split On October 10, 2017, the Company effected a 2.8879 -for-1 stock split of the Company's common stock (Common Stock) in connection with its initial public offering (IPO). All common share and per share amounts in these consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the stock split. Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary. Fair value of financial instruments At March 31, 2018 and December 31, 2017 , the Company's financial instruments included cash and cash equivalents, accounts receivable, grants receivable, inventory, accounts payable and accrued expenses. The carrying amounts reported in the Company's financial statements for these instruments approximate their respective fair values because of the short-term nature of these instruments. The Company also believes the carrying value of long-term debt approximates fair value at March 31, 2018 as the interest rates are reflective of the rate the Company could obtain on debt with similar terms and conditions. At March 31, 2018 and December 31, 2017 , there were no financial assets or liabilities measured at fair value on a recurring basis. Inventory Inventories are stated at the lower of cost or net realizable value. Costs of inventories, which include amounts related to materials and manufacturing overhead, are determined on a first-in, first-out basis. An assessment of the recoverability of capitalized inventory is performed during each reporting period and any excess and obsolete inventories are written down to their estimated net realizable value in the period in which the impairment is first identified. Revenue recognition The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , which was adopted on January 1, 2018. This standard applies to all contracts with customers, with the exception of contracts that are within the scope of other standards, such as leases, insurance and financial instruments. Under ASC Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods or services. The Company performs the following five steps to recognize revenue under ASC Topic 606: (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 entity satisfies a performance obligation. The Company only recognizes revenue when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer. Net Product Revenues The Company sells XHANCE to specialty pharmacies and wholesalers in the US (collectively, Customers). These Customers subsequently resell the Company’s products to healthcare providers, patients and other retail pharmacies. In addition to agreements with Customers, the Company enters into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts for the purchase of the Company’s products. The Company recognizes revenue from product sales at the point the Customer obtains control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration which is described below. Payment terms with Customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. The Company expenses incremental costs of obtaining a contract with a Customer (for example, sales commissions) when incurred as the period of benefit is less than one year. Shipping and handling costs for product shipments to Customers are recorded as selling, general and administrative expenses. Transaction Price, including Estimates of Variable Consideration Revenue from products is recognized at the estimated net sales price (transaction price), which includes estimates of variable consideration. The Company includes estimated amounts in the transaction price to the extent it is determined probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. Components of Variable Consideration Components of variable consideration include provider chargebacks and discounts, trade discounts and allowances, product returns, government rebates, third-party payor rebates, sales order management fees and other incentives, such as voluntary patient assistance and other allowances that are offered within contracts between the Company and its Customers, payors and other indirect customers relating to the Company’s sale of products. Those components, as described below, are based on the amounts earned, or to be claimed, on the related sales and are presented as reductions of accounts receivable (if the amount is payable to the Customer) or as a current liability (if the amount is payable to a party other than the Customer). The Company considers all relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. • Variable Consideration - Accounts Receivable Reductions ◦ Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Reserves for chargebacks consist of credits the Company expects to issue for units that remain in the distribution channel inventories at each reporting period-end that the Company expects will be sold to qualified healthcare providers, as well as chargebacks that Customers have claimed, but for which the Company has not yet issued a credit. ◦ Trade Discounts and Allowances. The Company generally provides Customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. In addition, the Company reimburses (through discounts and allowances) its Customers for sales order management, data and distribution services. • Variable Consideration - Current Liabilities ◦ Product Returns. Consistent with industry practice, the Company has a product returns policy that provides Customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The right of return lapses upon shipment of the goods to a patient. The Company estimates the amount of its products that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to specialty pharmacies and wholesalers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. ◦ Government Rebates . The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. For Medicaid, accruals are based on estimates of future Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services. The Medicare Part D prescription drug benefit mandates manufacturers to fund approximately 50% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. To estimate the cost to the Company of this Medicare coverage gap responsibility, the Company estimates the number of patients in the prescription drug coverage gap for whom it will owe an additional liability under the Medicare Part D program. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. ◦ Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. ◦ Other Incentives. Other incentives that the Company offers include voluntary patient assistance programs, such as co-pay assistance programs, which are intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors and coupon programs for cash payers. The calculation of the accruals for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Net income (loss) per common share Basic net income (loss) per common share is determined by dividing net income (loss) applicable to Common Stock holders by the weighted average common shares outstanding during the period. For the three months ended March 31, 2018 and 2017 , the outstanding Common Stock options and Common Stock warrants have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted net loss per share are the same. Diluted net loss per common share for the periods presented do not reflect the following potential common shares, as the effect would be antidilutive: Three Months Ended March 31, 2018 2017 Stock options 6,309,453 4,400,858 Common stock warrants 1,890,489 1,890,489 Convertible preferred stock — 8,628,439 Total 8,199,942 14,919,786 Income taxes In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three months ended March 31, 2018 and 2017, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of March 31, 2018 and December 31, 2017, the Company has concluded that a full valuation allowance is necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. Due to the timing of and the substantial changes made by the TCJA, the Staff of the SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which provides registrants a measurement period to report the impact of the new US tax law. During the measurement period, provisional amounts for the effects of the law are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is not available, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one year following enactment of the TCJA. Accordingly, the Company's preliminary estimate of the impact of the TCJA and the re-measurement of its deferred tax assets and liabilities is subject to finalization of its analysis of certain matters, such as developing interpretations of the TCJA provisions, changes to certain estimates and the filing of its tax returns. US Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require adjustments to the Company's initial estimates. The final determination of the TCJA provisions and re-measurement of the Company's deferred tax assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. Recent accounting pronouncements In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting . ASU 2017-09 provides guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new standard is effective for fiscal years beginning after December 15, 2017. The adoption of ASU 2017-09 did not have a material impact on the Company’s results of operations, financial position, cash flows and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230). ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new standard is effective for fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 in the first quarter of 2018, and the guidance has been retrospectively applied to all periods presented. As of March 31, 2018 and December 31, 2017, the restricted cash balance included in prepaid expenses and other assets was $30 and $20, respectively. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The FASB issued the update to require the recognition of lease assets and liabilities on the balance sheet of lessees. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its results of operations, financial position and cash flows and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , or ASU-2014-09, which replaced numerous requirements in US GAAP, including industry-specific requirements. This guidance provides a five-step model to be applied to all contracts with customers, with an underlying principle that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also defines accounting for certain costs related to origination and fulfillment of contracts with customers, including whether such costs should be capitalized. This statement requires extensive quantitative and qualitative disclosures covering the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including disclosures on significant judgments made when applying the guidance and assets recognized from costs incurred to obtain or fulfill a contract. The guidance was effective for annual reporting periods beginning after December 15, 2017, and interim periods within that reporting period. An entity could elect to apply the guidance under one of the following two methods: (i) retrospectively to each prior reporting period presented — referred to as the full retrospective method or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings — referred to as the modified retrospective method. The Company assessed the impact that ASU No. 2014-09 had on its financial statements and related disclosures. Through the January 1, 2018 adoption date, the Company has derived its revenues from a single licensing agreement with Avanir (the AVP-825 License Agreement). The consideration the Company has received to date includes an upfront payment, research and development funding and development milestone payments. Additionally, the Company is eligible to receive sales milestone payments and royalties in the future once net product sales exceed a certain threshold. The Company analyzed the performance obligations under the AVP-825 License Agreement, and the consideration received to date and that the Company may receive in the future, as part of its analysis of the impact of ASU 2014-09 on this arrangement. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective transition method. No transition adjustments were recognized as a result of the adoption. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consisted of the following: March 31, December 31, 2017 Raw materials $ 1,627 $ 1,385 Work-in-process 1,114 628 Finished goods 839 — Total inventory $ 3,580 $ 2,013 Inventories are stated at the lower of cost or net realizable value, as determined on a first-in, first-out, basis. The approximate shelf life of finished goods is two years from the date manufacturing is completed. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net, consisted of: March 31, December 31, Computer equipment and software $ 502 $ 307 Furniture and fixtures 270 89 Machinery and equipment 2,649 2,495 Leasehold improvements 43 28 Construction in process 143 — 3,607 2,919 Less: accumulated depreciation (505 ) (355 ) $ 3,102 $ 2,564 Depreciation expense was $156 and $32 for the three months ended March 31, 2018 and 2017 , respectively. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of: March 31, December 31, Selling, general and administrative expenses 10,169 3,463 Research and development expenses 308 80 Bonus expense 1,444 4,163 Payroll and benefit expenses 783 448 Employee contributions withheld 678 185 Product revenue allowances 439 — Interest expense 373 45 Other 298 314 $ 14,492 $ 8,698 |
AVP-825 License Agreement
AVP-825 License Agreement | 3 Months Ended |
Mar. 31, 2018 | |
Research and Development [Abstract] | |
AVP-825 License Agreement | AVP-825 License Agreement In July 2013, the Company's wholly owned subsidiary, OptiNose AS, entered into the AVP-825 License Agreement with Avanir for the exclusive right to sell AVP-825 (now marketed as Onzetra ® Xsail ® ), a product combining a low-dose powder form of sumatriptan with the Company's EDS, for the acute treatment of migraines in adults and any follow-on products under development that consist of a formulation that contains triptans as the sole active ingredient. Through March 31, 2018 , under the terms of the AVP-825 License Agreement, the Company received aggregate cash payments of $70,000 in connection with the initial signing and the achievement of certain development milestones. Under the terms of the License Agreement, the Company is eligible to receive up to $50,000 upon the achievement of sales milestones as well as tiered low double-digit royalty payments on net sales in the US, Canada and Mexico after such cumulative sales exceed a certain threshold. The Company analyzed the performance obligations under the AVP-825 License Agreement, the consideration received to date and the consideration the Company may receive in the future as part of its analysis of the impact of ASU 2014-09 on this arrangement. The consideration the Company has received to date, which includes an upfront payment, research and development funding and development milestone payments has all been recognized in prior years, and all of the Company’s performance obligations pursuant to the arrangement have been completed. Future revenues that the Company is entitled to receive, which include sales milestone payments and royalties should net product sales exceed a certain threshold, will be recognized when earned. See Note 3 for additional information on ASU 2014-09. The Company did not recognize any licensing revenue under the arrangement during the three months ended March 31, 2018 and 2017 . |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term Debt On December 29, 2017, the Company entered into a Senior Secured Note Purchase Agreement (the Senior Secured Notes) with Athyrium Opportunities III Acquisition LP. The Senior Secured Notes provided the Company with up to $100,000 in capital, of which $75,000 was issued immediately. The remaining $25,000 (the Delayed Draw Notes) may be issued between April 1, 2019 and August 14, 2019, subject to the Company achieving trailing four quarter net revenues (as calculated pursuant to the terms of the Senior Secured Note Purchase Agreement) of $15,000 and a pro forma ratio of total debt to trailing four quarter net revenues not exceeding 6.50 to 1.00 , and certain other conditions. The Senior Secured Notes bear interest at 9.0% plus the three-month London Inter-bank Offered Rate (LIBOR) rate, subject to a 1.0% floor and are scheduled to mature on June 29, 2023. The interest rate was 11.19% at March 31, 2018 . The Senior Secured Notes bore front-end fees of 1.0% of the aggregate principal amount, which were paid at issuance. The Company is also required to pay an exit fee of 2.0% of any principal payments (whether mandatory, voluntary, or at maturity) made throughout the term of the Senior Secured Note Purchase Agreement. The Company recorded interest expense of $2,193 during the three months ended March 31, 2018 , in conjunction with the Senior Secured Notes. Interest expense included total coupon interest, exit fees, front end fees and the amortization of debt issuance costs. The front-end fees of $1,000 were recorded as debt discount at issuance and are being amortized to interest expense over the 5.5 year term of the loan. Additionally, back end fees of $2,000 are being amortized to interest expense and are recorded as an increase in the carrying amount throughout the term of the Senior Secured Notes. The Company also incurred $2,140 in debt issuance costs during the year ended December 31, 2017 , which are also being amortized to interest expense over the term of the Senior Secured Notes. The long-term debt balance is comprised of the following: March 31, December 31, Face amount $ 75,000 $ 75,000 Front end fees (976 ) (999 ) Debt issuance costs (2,130 ) (2,139 ) Back end fees 69 1 Long-term debt, net $ 71,963 $ 71,863 |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans For US employees, the Company maintains a defined contribution 401(k) retirement plan. As of March 31, 2018 , approximately $211 is recorded in accrued liabilities related to the Company match applicable to 2018 employee contributions. The Company's contributions are made in cash. For Norway and UK employees, the Company maintains defined contribution pension plans which meet statutory requirements of those jurisdictions. The Company incurred costs of $62 and $6 related to the pension plans for the three months ended March 31, 2018 and 2017, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Common Stock In October 2017, the Company increased the number of authorized common shares from 10,624,486 to 200,000,000 and completed an IPO of its Common Stock, selling 8,625,000 shares at $16.00 per share. As a result of the IPO, the Company received $125,471 in net proceeds, after deducting discounts and commissions of $9,660 and offering expenses of approximately $2,869 payable by the Company. Each share of Common Stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Subject to preferences that may apply to any outstanding preferred stock, holders of Common Stock are entitled to receive ratably any dividends that the Company’s board of directors may declare out of funds legally available for that purpose on a non-cumulative basis. No dividends had been declared through March 31, 2018 . Common Stock warrants As of March 31, 2018 , the Company had warrants outstanding to purchase 1,890,489 shares of Common Stock with an exercise price of $8.16 . The warrants expire on November 1, 2020. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company has issued serviced-based and performance-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones in connection with the Company's development programs. Additionally, the Company has issued options in excess of the fair market value of common shares on the issuance date that were only exercisable upon a change in control or upon or after an initial public offering. As of March 31, 2018 , all of the performance conditions related to performance-based stock options issued by the Company have been achieved. The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 Cost of product sales $ 1 $ — Research and development 239 378 General and administrative 1,783 344 $ 2,023 $ 722 In addition, stock-based compensation expense of $24 and $3 is included within inventory and prepaid expenses and other assets, respectively, as of March 31, 2018 , which represents the total stock-based compensation expense incurred related to employees involved in the manufacturing process of finished goods and samples during the period. The following table summarizes the activity related to option grants to employees and nonemployees for the three months ended March 31, 2018 : Shares Weighted average exercise price per share Weighted average remaining contractual life Outstanding at December 31, 2017 6,251,576 $ 9.34 6.67 Granted 191,879 17.96 Exercised (115,966 ) 2.52 Expired — — Forfeited (18,036 ) 5.14 Outstanding at March 31, 2018 6,309,453 $ 9.74 6.98 Exercisable at March 31, 2018 3,110,098 $ 5.60 4.79 Vested and expected to vest at March 31, 2018 6,309,453 $ 9.74 6.98 During the three months ended March 31, 2018 , options to purchase 191,879 shares of Common Stock were granted to employees and generally vest over four years. The options had an estimated weighted average grant date fair value of $12.18 . During the three months ended March 31, 2017, options to purchase 116,000 shares of Common Stock were granted to employees that generally vest over four years. The options had an estimated weighted average grant date fair value of $9.81 . The grant date fair value of each option grant was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions: Three Months Ended March 31, 2018 2017 Risk free interest rate 2.59 % 2.07 % Expected term (in years) 6.05 6.08 Expected volatility 76.21 % 73.93 % Annual dividend yield 0.00 % 0.00 % Fair value of common stock $ 17.96 $ 14.85 At March 31, 2018 , the unrecognized compensation cost related to unvested stock options expected to vest was $23,421 . This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 3.39 years. 2017 Employee Stock Purchase Plan The Company's 2017 Employee Stock Purchase Plan (the 2017 Plan) became effective on October 12, 2017. The 2017 Plan authorized the issuance of up to 144,395 shares of Common Stock pursuant to purchase rights granted to its employees or to employees of any of its participating affiliates. The number of shares of Common Stock that may be issued pursuant to rights granted under the 2017 Plan automatically increases on January 1st of each year, commencing on January 1, 2018 and continuing until the expiration of the 2017 Plan, in an amount equal to one percent of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year. As of January 1, 2018, the number of shares authorized for issuance under the 2017 Plan increased from 144,395 to 522,420 . Effective October 12, 2017, employees who elected to participate in the 2017 Plan commenced payroll withholdings that accumulate through June 30, 2018 (the first offering period). Beginning on January 1, 2018, employees who elected to participate in the 2017 Plan commenced payroll withholdings that also accumulate through June 30, 2018 (the second offering period). At the end of each of the current offering periods, shares of Common Stock may be purchased at 85% of the lower of the fair market value of Common Stock on the first or last day of the respective offering period. In accordance with the guidance in ASC 718-50 – Compensation – Stock Compensation , the ability to purchase shares of Common Stock at the lower of the price on the first day of the offering period or the last day of the offering period (i.e. the purchase date) represents an option and, therefore, the 2017 Plan is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value as estimated by applying the Black Scholes option-pricing model and is recognized over the requisite service period of the option. The Company recognized stock-based compensation expense of $156 during the three months ended March 31, 2018 related to the 2017 Plan. |
Basis of Presentation and Sum18
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of estimates | Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary. |
Fair value of financial instruments | Fair value of financial instruments At March 31, 2018 and December 31, 2017 , the Company's financial instruments included cash and cash equivalents, accounts receivable, grants receivable, inventory, accounts payable and accrued expenses. The carrying amounts reported in the Company's financial statements for these instruments approximate their respective fair values because of the short-term nature of these instruments. The Company also believes the carrying value of long-term debt approximates fair value at March 31, 2018 as the interest rates are reflective of the rate the Company could obtain on debt with similar terms and conditions. |
Inventory | Inventory Inventories are stated at the lower of cost or net realizable value. Costs of inventories, which include amounts related to materials and manufacturing overhead, are determined on a first-in, first-out basis. An assessment of the recoverability of capitalized inventory is performed during each reporting period and any excess and obsolete inventories are written down to their estimated net realizable value in the period in which the impairment is first identified. |
Revenue recognition | Revenue recognition The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , which was adopted on January 1, 2018. This standard applies to all contracts with customers, with the exception of contracts that are within the scope of other standards, such as leases, insurance and financial instruments. Under ASC Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods or services. The Company performs the following five steps to recognize revenue under ASC Topic 606: (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 entity satisfies a performance obligation. The Company only recognizes revenue when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer. Net Product Revenues The Company sells XHANCE to specialty pharmacies and wholesalers in the US (collectively, Customers). These Customers subsequently resell the Company’s products to healthcare providers, patients and other retail pharmacies. In addition to agreements with Customers, the Company enters into arrangements with healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts for the purchase of the Company’s products. The Company recognizes revenue from product sales at the point the Customer obtains control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration which is described below. Payment terms with Customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. The Company expenses incremental costs of obtaining a contract with a Customer (for example, sales commissions) when incurred as the period of benefit is less than one year. Shipping and handling costs for product shipments to Customers are recorded as selling, general and administrative expenses. Transaction Price, including Estimates of Variable Consideration Revenue from products is recognized at the estimated net sales price (transaction price), which includes estimates of variable consideration. The Company includes estimated amounts in the transaction price to the extent it is determined probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. Components of Variable Consideration Components of variable consideration include provider chargebacks and discounts, trade discounts and allowances, product returns, government rebates, third-party payor rebates, sales order management fees and other incentives, such as voluntary patient assistance and other allowances that are offered within contracts between the Company and its Customers, payors and other indirect customers relating to the Company’s sale of products. Those components, as described below, are based on the amounts earned, or to be claimed, on the related sales and are presented as reductions of accounts receivable (if the amount is payable to the Customer) or as a current liability (if the amount is payable to a party other than the Customer). The Company considers all relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. • Variable Consideration - Accounts Receivable Reductions ◦ Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to Customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Reserves for chargebacks consist of credits the Company expects to issue for units that remain in the distribution channel inventories at each reporting period-end that the Company expects will be sold to qualified healthcare providers, as well as chargebacks that Customers have claimed, but for which the Company has not yet issued a credit. ◦ Trade Discounts and Allowances. The Company generally provides Customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. In addition, the Company reimburses (through discounts and allowances) its Customers for sales order management, data and distribution services. • Variable Consideration - Current Liabilities ◦ Product Returns. Consistent with industry practice, the Company has a product returns policy that provides Customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The right of return lapses upon shipment of the goods to a patient. The Company estimates the amount of its products that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to specialty pharmacies and wholesalers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. ◦ Government Rebates . The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. For Medicaid, accruals are based on estimates of future Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services. The Medicare Part D prescription drug benefit mandates manufacturers to fund approximately 50% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. To estimate the cost to the Company of this Medicare coverage gap responsibility, the Company estimates the number of patients in the prescription drug coverage gap for whom it will owe an additional liability under the Medicare Part D program. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. ◦ Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. ◦ Other Incentives. Other incentives that the Company offers include voluntary patient assistance programs, such as co-pay assistance programs, which are intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors and coupon programs for cash payers. The calculation of the accruals for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. |
Net income (loss) per common share | Net income (loss) per common share Basic net income (loss) per common share is determined by dividing net income (loss) applicable to Common Stock holders by the weighted average common shares outstanding during the period. For the three months ended March 31, 2018 and 2017 , the outstanding Common Stock options and Common Stock warrants have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted net loss per share are the same. |
Income Taxes | Income taxes In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three months ended March 31, 2018 and 2017, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of March 31, 2018 and December 31, 2017, the Company has concluded that a full valuation allowance is necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. Due to the timing of and the substantial changes made by the TCJA, the Staff of the SEC issued Staff Accounting Bulletin No. 118 (SAB 118) which provides registrants a measurement period to report the impact of the new US tax law. During the measurement period, provisional amounts for the effects of the law are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is not available, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one year following enactment of the TCJA. Accordingly, the Company's preliminary estimate of the impact of the TCJA and the re-measurement of its deferred tax assets and liabilities is subject to finalization of its analysis of certain matters, such as developing interpretations of the TCJA provisions, changes to certain estimates and the filing of its tax returns. US Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require adjustments to the Company's initial estimates. The final determination of the TCJA provisions and re-measurement of the Company's deferred tax assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation - Scope of Modification Accounting . ASU 2017-09 provides guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new standard is effective for fiscal years beginning after December 15, 2017. The adoption of ASU 2017-09 did not have a material impact on the Company’s results of operations, financial position, cash flows and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230). ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new standard is effective for fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 in the first quarter of 2018, and the guidance has been retrospectively applied to all periods presented. As of March 31, 2018 and December 31, 2017, the restricted cash balance included in prepaid expenses and other assets was $30 and $20, respectively. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The FASB issued the update to require the recognition of lease assets and liabilities on the balance sheet of lessees. The standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. The ASU requires a modified retrospective transition method with the option to elect a package of practical expedients. Early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its results of operations, financial position and cash flows and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , or ASU-2014-09, which replaced numerous requirements in US GAAP, including industry-specific requirements. This guidance provides a five-step model to be applied to all contracts with customers, with an underlying principle that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also defines accounting for certain costs related to origination and fulfillment of contracts with customers, including whether such costs should be capitalized. This statement requires extensive quantitative and qualitative disclosures covering the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including disclosures on significant judgments made when applying the guidance and assets recognized from costs incurred to obtain or fulfill a contract. The guidance was effective for annual reporting periods beginning after December 15, 2017, and interim periods within that reporting period. An entity could elect to apply the guidance under one of the following two methods: (i) retrospectively to each prior reporting period presented — referred to as the full retrospective method or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings — referred to as the modified retrospective method. The Company assessed the impact that ASU No. 2014-09 had on its financial statements and related disclosures. Through the January 1, 2018 adoption date, the Company has derived its revenues from a single licensing agreement with Avanir (the AVP-825 License Agreement). The consideration the Company has received to date includes an upfront payment, research and development funding and development milestone payments. Additionally, the Company is eligible to receive sales milestone payments and royalties in the future once net product sales exceed a certain threshold. The Company analyzed the performance obligations under the AVP-825 License Agreement, and the consideration received to date and that the Company may receive in the future, as part of its analysis of the impact of ASU 2014-09 on this arrangement. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective transition method. No transition adjustments were recognized as a result of the adoption. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. |
Basis of Presentation and Sum19
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Antidilutive shares excluded from earnings per share | Diluted net loss per common share for the periods presented do not reflect the following potential common shares, as the effect would be antidilutive: Three Months Ended March 31, 2018 2017 Stock options 6,309,453 4,400,858 Common stock warrants 1,890,489 1,890,489 Convertible preferred stock — 8,628,439 Total 8,199,942 14,919,786 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: March 31, December 31, 2017 Raw materials $ 1,627 $ 1,385 Work-in-process 1,114 628 Finished goods 839 — Total inventory $ 3,580 $ 2,013 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment, net, consisted of: March 31, December 31, Computer equipment and software $ 502 $ 307 Furniture and fixtures 270 89 Machinery and equipment 2,649 2,495 Leasehold improvements 43 28 Construction in process 143 — 3,607 2,919 Less: accumulated depreciation (505 ) (355 ) $ 3,102 $ 2,564 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of: March 31, December 31, Selling, general and administrative expenses 10,169 3,463 Research and development expenses 308 80 Bonus expense 1,444 4,163 Payroll and benefit expenses 783 448 Employee contributions withheld 678 185 Product revenue allowances 439 — Interest expense 373 45 Other 298 314 $ 14,492 $ 8,698 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The long-term debt balance is comprised of the following: March 31, December 31, Face amount $ 75,000 $ 75,000 Front end fees (976 ) (999 ) Debt issuance costs (2,130 ) (2,139 ) Back end fees 69 1 Long-term debt, net $ 71,963 $ 71,863 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of allocated stock-based compensation expense | The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations for the three months ended March 31, 2018 and 2017 : Three Months Ended March 31, 2018 2017 Cost of product sales $ 1 $ — Research and development 239 378 General and administrative 1,783 344 $ 2,023 $ 722 |
Schedule of stock option activity | The following table summarizes the activity related to option grants to employees and nonemployees for the three months ended March 31, 2018 : Shares Weighted average exercise price per share Weighted average remaining contractual life Outstanding at December 31, 2017 6,251,576 $ 9.34 6.67 Granted 191,879 17.96 Exercised (115,966 ) 2.52 Expired — — Forfeited (18,036 ) 5.14 Outstanding at March 31, 2018 6,309,453 $ 9.74 6.98 Exercisable at March 31, 2018 3,110,098 $ 5.60 4.79 Vested and expected to vest at March 31, 2018 6,309,453 $ 9.74 6.98 |
Schedule of fair value options using Black-Scholes pricing model | The grant date fair value of each option grant was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions: Three Months Ended March 31, 2018 2017 Risk free interest rate 2.59 % 2.07 % Expected term (in years) 6.05 6.08 Expected volatility 76.21 % 73.93 % Annual dividend yield 0.00 % 0.00 % Fair value of common stock $ 17.96 $ 14.85 |
Liquidity (Details)
Liquidity (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash and cash equivalents | $ 209,771 | $ 234,854 |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Stock split conversion ratio | 2.8879 |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies - Antidilutive shares excluded from earnings per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securites excluded from computation of earnings per share | 8,199,942 | 14,919,786 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securites excluded from computation of earnings per share | 6,309,453 | 4,400,858 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securites excluded from computation of earnings per share | 1,890,489 | 1,890,489 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securites excluded from computation of earnings per share | 0 | 8,628,439 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,627 | $ 1,385 |
Work-in-process | 1,114 | 628 |
Finished goods | 839 | 0 |
Total inventory | $ 3,580 | $ 2,013 |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Shelf life of our finished goods | 2 years |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,607 | $ 2,919 | |
Less: accumulated depreciation | (505) | (355) | |
Property and equipment, net | 3,102 | 2,564 | |
Depreciation | 156 | $ 32 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 502 | 307 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 270 | 89 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,649 | 2,495 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 43 | 28 | |
Construction in process | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 143 | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Selling, general and administrative expenses | $ 10,169 | $ 3,463 |
Research and development expenses | 308 | 80 |
Bonus expense | 1,444 | 4,163 |
Payroll and benefit expenses | 783 | 448 |
Employee contributions withheld | 678 | 185 |
Product revenue allowances | 439 | 0 |
Interest expense | 373 | 45 |
Other | 298 | 314 |
Accrued Liabilities, Current | $ 14,492 | $ 8,698 |
AVP-825 License Agreement (Deta
AVP-825 License Agreement (Details) - License Agreement Terms - USD ($) | 3 Months Ended | 57 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Aggregate cash payments received from license agreement | $ 70,000,000 | ||
Potential proceeds upon achievement of milestones | $ 50,000,000 | ||
Licensing revenues | $ 0 | $ 0 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 3 Months Ended | 4 Months Ended | ||
Mar. 31, 2018USD ($) | Aug. 14, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 29, 2017USD ($)quarter | |
Debt Instrument [Line Items] | ||||
Debt amortization period | 5 years 6 months | |||
Interest expense, back end fees | $ 2,000,000 | |||
Debt issuance costs | $ 2,140,000 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt discount | 1,000,000 | |||
Senior Notes | Note Purchase Agreement | ||||
Debt Instrument [Line Items] | ||||
Unused borrowing capacity | $ 100,000,000 | |||
Face amount | $ 75,000,000 | 75,000,000 | ||
Stated interest rate | 11.19% | 9.00% | ||
Upfront fee | 1.00% | |||
Exit fee | 2.00% | |||
Interest expense, debt | $ 2,193,000 | |||
Unamortized debt issuance costs | $ 2,130,000 | $ 2,139,000 | ||
Senior Notes | Note Purchase Agreement | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Interest rate floor | 1.00% | |||
Senior Notes | Note Purchase Agreement - Delayed Draw Notes | ||||
Debt Instrument [Line Items] | ||||
Unused borrowing capacity | $ 25,000,000 | |||
Number of trailing quarters | quarter | 4 | |||
Scenario, Forecast | Senior Notes | Note Purchase Agreement - Delayed Draw Notes | ||||
Debt Instrument [Line Items] | ||||
Total debt to trailing four quarter net revenues | 6.50 | |||
Revenue, net | $ 15,000,000 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt, net | $ 71,963,000 | $ 71,863,000 |
Note Purchase Agreement | Senior Notes | ||
Debt Instrument [Line Items] | ||
Face amount | 75,000,000 | 75,000,000 |
Front end fees | (976,000) | (999,000) |
Debt issuance costs | (2,130,000) | (2,139,000) |
Back end fees | 69,000 | 1,000 |
Long-term debt, net | $ 71,963,000 | $ 71,863,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Defined contribution plan, cost | $ 211 | |
Foreign Plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Defined contribution plan, cost | $ 62 | $ 6 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2017USD ($)$ / sharesshares | Mar. 31, 2018$ / sharesshares | Dec. 31, 2017vote$ / sharesshares | Sep. 30, 2017shares | |
Class of Stock [Line Items] | ||||
Shares authorized (in shares) | 200,000,000 | 200,000,000 | ||
Vote per share | vote | 1 | |||
Dividends declared | $ / shares | $ 0 | |||
Common stock warrants outstanding (in shares) | 1,890,489 | |||
Common stock warrant exercise price (in dollars per share) | $ / shares | $ 8.16 | |||
IPO | ||||
Class of Stock [Line Items] | ||||
Price per share (usd per share) | $ / shares | $ 16 | |||
Proceeds from IPO | $ | $ 125,471 | |||
Fees and commissions | $ | 9,660 | |||
Stock issuance costs | $ | $ 2,869 | |||
IPO | Common Stock | ||||
Class of Stock [Line Items] | ||||
Shares authorized (in shares) | 200,000,000 | 10,624,486 | ||
Number of shares issued (in shares) | 8,625,000 |
Stock-based Compensation - (Nar
Stock-based Compensation - (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 12, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 2,023 | $ 722 | |||
Service Based Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | 4 years | |||
Granted (in shares) | 191,879 | 116,000 | |||
Fair value of common stock (in dollars per share) | $ 12.18 | $ 9.81 | |||
Unrecognized compensation cost | $ 23,421 | ||||
Unrecognized compensation, estimated weighted-average amortization period | 3 years 4 months 20 days | ||||
2010 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Plan options contractual life | 10 years | ||||
Award vesting period | 4 years | ||||
2017 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized under plan (shares) | 144,395 | 522,420 | 144,395 | ||
Additional shares authorized each year rate | 1.00% | ||||
Stock-based compensation expense | $ 156 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 2,023 | $ 722 |
Cost of product sales | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 1 | 0 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 239 | 378 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 1,783 | $ 344 |
Inventories | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 24 | |
Prepaid Expenses and Other Current Assets | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 3 |
Stock-based Compensation - Serv
Stock-based Compensation - Service-based stock options (Details) - Service Based Stock Options - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Service-based stock options activity | |||
Shares outstanding, beginning (in shares) | 6,251,576 | ||
Granted (in shares) | 191,879 | 116,000 | |
Exercised (in shares) | (115,966) | ||
Expired (in shares) | 0 | ||
Forfeited (in shares) | (18,036) | ||
Shares outstanding, ending (in shares) | 6,309,453 | 6,251,576 | |
Exercisable at September 30, 2017 (in shares) | 3,110,098 | ||
Vested and expected to vest at September 30, 2017 (in shares) | 6,309,453 | ||
Service-based stock options weighted average exercise price | |||
Beginning balance, Weighted average exercise price (in dollars per share) | $ 9.34 | ||
Granted, Weighted average exercise price (in dollars per share) | 17.96 | ||
Exercised, Weighted average exercise price (in dollars per share) | 2.52 | ||
Expired, Weighted average exercise price (in dollars per share) | 0 | ||
Forfeited, Weighted average exercise price (in dollars per share) | 5.14 | ||
Ending balance, Weighted average exercise price (in dollars per share) | 9.74 | $ 9.34 | |
Options exercisable, Weighted average exercise price per share (in dollars per share) | 5.60 | ||
Vested and expected to vest, Weighted average exercise price per share (in dollars per share) | $ 9.74 | ||
Service-based stock options, additional disclosures | |||
Options outstanding, Weighted average remaining contractual life | 6 years 11 months 23 days | 6 years 8 months 2 days | |
Options exercisable, Weighted average remaining contractual life | 4 years 9 months 15 days | ||
Vested and expected to vest, Weighted average remaining contractual life | 6 years 11 months 23 days |
Stock-based Compensation - Blac
Stock-based Compensation - Black-Scholes pricing model options (Details) - Stock options - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 2.59% | 2.07% |
Expected term (in years) | 6 years 20 days | 6 years 28 days |
Expected volatility | 76.21% | 73.93% |
Annual dividend yield | 0.00% | 0.00% |
Fair value of common stock (in dollars per share) | $ 17.96 | $ 14.85 |