| 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 September 30, 2017 and its results of operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016 . Operating results for the nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . 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, 2016 included in the final prospectus dated October 12, 2017 filed with the Securities and Exchange Commission (SEC). Recapitalization On September 29, 2017, the Company filed a certificate of amendment to amend its certificate of incorporation to (i) increase the number of authorized shares of the Company's common stock from 13,067,149 shares to 50,000,000 , and (ii) effectuate a 2.8879 -for-1 reclassification, or stock split, of the Company's common stock, to be effected prior to the effectiveness of the Company's registration statement on Form S-1 in connection with its IPO. The stock split was effected on October 10, 2017. All share and per share amounts in these unaudited interim consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to 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 September 30, 2017 and December 31, 2016 , the Company's financial instruments included cash and cash equivalents, grants receivable, accounts payable and accrued expenses. The carrying amounts reported in the Company's financial statements for these instruments approximates their respective fair values because of the short-term nature of these instruments. At September 30, 2017 and December 31, 2016 , there were no financial assets or liabilities measured at fair value on a recurring basis. The Company's financial instruments also included convertible debt at December 31, 2016 (Note 8). Inventory Prior to receiving FDA approval for XHANCE in September 2017, inventory purchases were expensed as incurred and recorded as a component of research and development expense. Subsequent to receiving FDA approval, inventories are stated at the lower of cost or market, net of reserves for excess and obsolete inventory. At September 30, 2017 , inventory consisted of raw materials. Deposits and other assets Deposits and other assets consist primarily of payments made in advance to outsourced contract manufacturers and equipment suppliers, as well as a receivable due from the FDA at December 31, 2016 related to a Prescription Drug User Fee Act (PDUFA) New Drug Application fee that the FDA refunded to the Company in March 2017. Throughout 2017 and 2016 , the Company made upfront payments to outsourced plastic mold development manufacturers and equipment suppliers for molds and equipment that are expected to be used for the commercial production of XHANCE. The Company expects to receive this equipment in 2017 . For equipment received prior to FDA approval, the Company recorded the cost associated with the equipment purchase as a component of research and development expense if there was no alternative future use of the equipment without FDA approval. Conversely, deposits on equipment received after the September 18, 2017 FDA approval of XHANCE will be capitalized as fixed assets when the equipment is received and are therefore classified as long-term deposits at September 30, 2017 . Deferred offering costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated, at which time these costs are netted against the proceeds from the equity financing. Upon completing its IPO in October 2017, the Company reclassified all outstanding deferred offering costs and netted them against the proceeds from the IPO. Net income (loss) per common share For the nine month period ended September 30, 2016 , the Company used the two-class method to compute net income (loss) per common share because the Company has issued securities (redeemable convertible preferred stock) that entitle the holder to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned and the accretion of redeemable convertible preferred stock to its redemption value during the period. The remaining earnings (undistributed earnings) are allocated to common stock and each series of redeemable convertible preferred stock to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the redeemable convertible preferred stock have no obligation to fund losses. Diluted net income (loss) per common share is computed under the two-class method by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options, warrants, and convertible debt. In addition, the Company analyzes the potential dilutive effect of the outstanding redeemable convertible preferred stock and convertible debt under the "if-converted" method when calculating diluted earnings per share, in which it is assumed that the outstanding redeemable convertible preferred stock or convertible debt converts into common stock at the beginning of the period or when issued if later. The Company reports the more dilutive of the approaches (two class or "if-converted") as their diluted net income per share during the period. For the three months ended September 30, 2017 and 2016 and for the nine months ended September 30, 2017 in which the Company reported a net loss, there is no dilutive effect under either the two-class or "if-converted" method. For the nine months ended September 30, 2016 , the Company presented diluted net income per common share using the two-class method, which was more dilutive than the "if-converted" method. The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated: Three Months Ended Nine Months Ended September 30, 2017 2016 2017 2016 Basic net (loss) income per common share calculation: Net (loss) income attributable to common stockholders $ (17,192 ) $ (9,385 ) $ (41,699 ) $ 18,365 Less: undistributed earnings to participating securities — — — (15,253 ) Net (loss) income attributable to common stockholders — basic (17,192 ) (9,385 ) (41,699 ) 3,112 Weighted average common shares outstanding — basic 4,067,717 4,050,065 4,067,717 4,049,800 Net (loss) income per share of common stock — basic $ (4.23 ) $ (2.32 ) $ (10.25 ) $ 0.77 Diluted net (loss) income per common share calculation: Net (loss) income attributable to common stockholders $ (17,192 ) $ (9,385 ) $ (41,699 ) $ 18,365 Less: undistributed earnings to participating securities — — — (15,253 ) Net (loss) income attributable to common stockholders — diluted (17,192 ) (9,385 ) (41,699 ) 3,112 Weighted average common shares outstanding — basic 4,067,717 4,050,065 4,067,717 4,049,800 Stock options — — — 925,212 Weighted average common shares outstanding — diluted 4,067,717 4,050,065 4,067,717 4,975,012 Net (loss) income per share of common stock — diluted $ (4.23 ) $ (2.32 ) $ (10.25 ) $ 0.63 Diluted net income (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 Nine Months Ended September 30, 2017 2016 2017 2016 Stock options 4,583,133 3,088,292 4,583,148 1,368,542 Common stock warrants 1,890,489 1,890,489 1,890,489 1,890,489 Convertible debt — 639,129 — 639,129 Convertible preferred stock 25,068,556 19,855,772 25,068,556 19,855,772 Total 31,542,178 25,473,682 31,542,193 23,753,932 Recent accounting pronouncements 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 2014-09, Revenue from Contracts with Customers (Topic 606) , which will replace 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 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within that reporting period. An entity can 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 has assessed the impact that ASU 2014-09 will have on its financial statements and related disclosures. To 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 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 is substantially complete with its initial assessment of the AVP-825 License Agreement, and currently does not expect the adoption of the ASU to have a material impact on its financial statements but is expected to result in expanded footnote disclosures. The Company will continue to monitor additional changes, modifications, clarifications or interpretations being undertaken by the FASB, which may impact our current conclusion. The Company will continue to assess any other customer arrangements that the Company enters into prior to the adoption date, confirming its method of adoption, determining the impact the new accounting standard will have on its financial statements and related disclosures and updating, as needed, its business processes, systems and controls required to comply with ASU 2014-09 upon its effective date of January 1, 2018. The Company will make updates to its quarterly and year-end disclosures, with a focus on implementation status updates related to the impact ASU 2014-09 will have on its financial statements and related footnotes. The Company plans to adopt the new standard effective January 1, 2018 using the modified retrospective approach. |
