Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 02, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | XFOR | |
Entity Registrant Name | X4 PHARMACEUTICALS, INC. | |
Entity Central Index Key | 0001501697 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 12,430,434 | |
Entity File Number | 001-38295 | |
Entity Tax Identification Number | 273181608 | |
Entity Address, Address Line One | 955 Massachusetts Avenue | |
Entity Address, Address Line Two | 4th Floor | |
Entity Address, City or Town | Cambridge | |
Entity Address, State or Province | Massachusetts | |
Entity Address, Postal Zip Code | 02139 | |
City Area Code | (857) | |
Local Phone Number | 529-8300 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 90,180 | $ 8,134 |
Restricted cash | 3,163 | |
Research and development incentive receivable | 1,708 | |
Prepaid expenses and other current assets | 1,598 | 1,205 |
Total current assets | 96,649 | 9,339 |
Property and equipment, net | 258 | 241 |
Intangible assets | 4,900 | |
Goodwill | 27,109 | |
Right-of-use assets | 2,187 | |
Restricted cash | 2,298 | 364 |
Other assets | 106 | |
Total assets | 133,507 | 9,944 |
Current liabilities: | ||
Accounts payable | 3,099 | 2,969 |
Accrued expenses | 5,094 | 3,251 |
Current portion of lease liability | 860 | |
Current portion of long-term debt, net of discount | 4,151 | 1,687 |
Total current liabilities | 13,204 | 7,907 |
Preferred stock warrant liability | 4,947 | |
Long-term debt, including accretion, net of discount and current portion | 21,748 | 8,145 |
Deferred rent | 417 | |
Lease liability | 2,369 | |
Other liabilities | 18 | 205 |
Total liabilities | 37,339 | 21,621 |
Commitments and contingencies (Note 9) | ||
Convertible preferred stock (Series Seed, A and B), $0.001 par value; 10,000,000 and 59,413,523 shares authorized as of June 30, 2019 and December 31, 2018, respectively; 0 and 40,079,567 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 64,675 | |
Common stock | 13 | |
Stockholders’ equity (deficit): | ||
Common stock | 13 | |
Additional paid-in capital | 199,690 | 2,151 |
Accumulated other comprehensive income | (42) | |
Accumulated deficit | (103,493) | (79,237) |
Total stockholders’ equity (deficit) | 96,168 | (77,086) |
Total liabilities, convertible preferred stock, redeemable common stock and stockholders’ equity (deficit) | $ 133,507 | 9,944 |
Convertible Preferred Stock [Member] | ||
Current liabilities: | ||
Convertible preferred stock (Series Seed, A and B), $0.001 par value; 10,000,000 and 59,413,523 shares authorized as of June 30, 2019 and December 31, 2018, respectively; 0 and 40,079,567 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 64,675 | |
Redeemable Common Stock [Member] | ||
Current liabilities: | ||
Common stock | 734 | |
Stockholders’ equity (deficit): | ||
Common stock | 734 | |
Total stockholders’ equity (deficit) | $ 734 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Convertible preferred stock, shares authorized | 49,413,523 | |
Convertible preferred stock, shares issued | 40,079,567 | |
Convertible preferred stock, shares outstanding | 40,079,567 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 33,333,333 | 11,070,776 |
Common stock, shares issued | 12,429,057 | 351,652 |
Common stock, shares outstanding | 12,429,057 | 351,652 |
Convertible Preferred Stock [Member] | ||
Convertible preferred stock, par or stated value per share | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 10,000,000 | 59,413,523 |
Convertible preferred stock, shares issued | 0 | 40,079,567 |
Convertible preferred stock, shares outstanding | 0 | 40,079,567 |
Redeemable Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 0 | 107,364 |
Common stock, shares outstanding | 0 | 107,364 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating expenses: | ||||
Research and development | $ 8,854 | $ 4,755 | $ 14,509 | $ 9,499 |
General and administrative | 4,560 | 1,621 | 9,343 | 2,987 |
Total operating expenses | 13,414 | 6,376 | 23,852 | 12,486 |
Loss from operations | (13,414) | (6,376) | (23,852) | (12,486) |
Other income (expense): | ||||
Interest income | 394 | 67 | 463 | 136 |
Interest expense | (512) | (167) | (911) | (336) |
Change in fair value of preferred stock warrant liability | 283 | (288) | (309) | |
Change in fair value of derivative liability | 159 | 183 | (406) | |
Other income (expense) | 149 | 149 | ||
Total other income (expense), net | 31 | 342 | (404) | (915) |
Net loss | (13,383) | (6,034) | (24,256) | (13,401) |
Accruing dividends on Series A convertible preferred stock | (748) | (592) | (1,488) | |
Adjustment to accumulated deficit in connection with repurchase of Series Seed convertible preferred stock | (22) | (22) | ||
Net loss attributable to common stockholders | $ (13,383) | $ (6,804) | $ (24,848) | $ (14,911) |
Net loss per share attributable to common stockholders—basic and diluted | $ (1.02) | $ (14.83) | $ (3.32) | $ (32.53) |
Weighted average common shares outstanding—basic and diluted | 13,177,235 | 458,718 | 7,479,178 | 458,346 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (13,383) | $ (6,034) | $ (24,256) | $ (13,401) |
Other comprehensive loss | ||||
Currency translation adjustments | (65) | (42) | ||
Total comprehensive loss | $ (13,448) | $ (6,034) | $ (24,298) | $ (13,401) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Convertible Preferred Shares [Member] | Redeemable Common Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Beginning balance at Dec. 31, 2017 | $ (44,545) | $ 734 | $ 1,385 | $ (45,930) | |||
Convertible preferred shares, beginning balance, shares at Dec. 31, 2017 | 38,018,968 | ||||||
Convertible preferred shares, beginning balance at Dec. 31, 2017 | $ 60,903 | ||||||
Beginning balance, shares at Dec. 31, 2017 | 107,364 | 350,607 | |||||
Repurchase of Series Seed convertible preferred stock, net of issuance costs of $1 | (22) | $ (517) | (22) | ||||
Repurchase of Series Seed convertible preferred stock, shares | (598,975) | ||||||
Stock-based compensation expense | 128 | 128 | |||||
Net loss | (7,367) | (7,367) | |||||
Ending balance at Mar. 31, 2018 | (51,806) | $ 734 | 1,513 | (53,319) | |||
Convertible preferred shares, ending balance, shares at Mar. 31, 2018 | 37,419,993 | ||||||
Convertible preferred shares, ending balance at Mar. 31, 2018 | $ 60,386 | ||||||
Ending balance, shares at Mar. 31, 2018 | 107,364 | 350,607 | |||||
Beginning balance at Dec. 31, 2017 | (44,545) | $ 734 | 1,385 | (45,930) | |||
Convertible preferred shares, beginning balance, shares at Dec. 31, 2017 | 38,018,968 | ||||||
Convertible preferred shares, beginning balance at Dec. 31, 2017 | $ 60,903 | ||||||
Beginning balance, shares at Dec. 31, 2017 | 107,364 | 350,607 | |||||
Repurchase of Series Seed convertible preferred stock, net of issuance costs of $1 | (22) | ||||||
Net loss | (13,401) | ||||||
Ending balance at Jun. 30, 2018 | (57,688) | $ 734 | 1,665 | (59,353) | |||
Convertible preferred shares, ending balance, shares at Jun. 30, 2018 | 37,419,993 | ||||||
Convertible preferred shares, ending balance at Jun. 30, 2018 | $ 60,386 | ||||||
Ending balance, shares at Jun. 30, 2018 | 107,364 | 351,652 | |||||
Beginning balance at Mar. 31, 2018 | (51,806) | $ 734 | 1,513 | (53,319) | |||
Convertible preferred shares, beginning balance, shares at Mar. 31, 2018 | 37,419,993 | ||||||
Convertible preferred shares, beginning balance at Mar. 31, 2018 | $ 60,386 | ||||||
Beginning balance, shares at Mar. 31, 2018 | 107,364 | 350,607 | |||||
Repurchase of Series Seed convertible preferred stock, net of issuance costs of $1 | (22) | ||||||
Exercise of stock options | 7 | 7 | |||||
Exercise of stock options, shares | 1,045 | ||||||
Stock-based compensation expense | 145 | 145 | |||||
Net loss | (6,034) | (6,034) | |||||
Ending balance at Jun. 30, 2018 | (57,688) | $ 734 | 1,665 | (59,353) | |||
Convertible preferred shares, ending balance, shares at Jun. 30, 2018 | 37,419,993 | ||||||
Convertible preferred shares, ending balance at Jun. 30, 2018 | $ 60,386 | ||||||
Ending balance, shares at Jun. 30, 2018 | 107,364 | 351,652 | |||||
Beginning balance at Dec. 31, 2018 | $ (77,086) | $ 734 | 2,151 | (79,237) | |||
Convertible preferred shares, beginning balance, shares at Dec. 31, 2018 | 40,079,567 | 40,079,567 | |||||
Convertible preferred shares, beginning balance at Dec. 31, 2018 | $ 64,675 | $ 64,675 | |||||
Beginning balance, shares at Dec. 31, 2018 | 107,364 | 351,652 | |||||
Conversion of redeemable common stock into common stock | 734 | $ (734) | $ 1 | 733 | |||
Conversion of redeemable common stock into common stock, shares | (107,364) | 107,364 | |||||
Conversion of convertible preferred shares into common stock | 64,675 | $ (64,675) | $ 4 | 64,671 | |||
Conversion of convertible preferred shares into common stock, shares | (40,079,567) | 3,808,430 | |||||
Exchange of common stock in connection with Merger | 45,541 | $ 2 | 45,539 | ||||
Exchange of common stock in connection with Merger, shares | 2,440,582 | ||||||
Fair value of replacement equity awards | 817 | 817 | |||||
Reclassification of warrant liability to permanent equity | 5,235 | 5,235 | |||||
Exercise of stock options | 113 | 113 | |||||
Exercise of stock options, shares | 16,483 | ||||||
Stock-based compensation expense | 262 | 262 | |||||
Currency translation adjustments | 23 | $ 23 | |||||
Net loss | (10,873) | (10,873) | |||||
Ending balance at Mar. 31, 2019 | 29,441 | $ 7 | 119,521 | 23 | (90,110) | ||
Ending balance, shares at Mar. 31, 2019 | 6,724,511 | ||||||
Beginning balance at Dec. 31, 2018 | $ (77,086) | $ 734 | 2,151 | (79,237) | |||
Convertible preferred shares, beginning balance, shares at Dec. 31, 2018 | 40,079,567 | 40,079,567 | |||||
Convertible preferred shares, beginning balance at Dec. 31, 2018 | $ 64,675 | $ 64,675 | |||||
Beginning balance, shares at Dec. 31, 2018 | 107,364 | 351,652 | |||||
Conversion of redeemable common stock into common stock | $ 734 | ||||||
Exercise of stock options, shares | 17,183 | ||||||
Net loss | $ (24,256) | ||||||
Ending balance at Jun. 30, 2019 | 96,168 | $ 13 | 199,690 | (42) | (103,493) | ||
Ending balance, shares at Jun. 30, 2019 | 12,429,057 | ||||||
Beginning balance at Mar. 31, 2019 | 29,441 | $ 7 | 119,521 | 23 | (90,110) | ||
Beginning balance, shares at Mar. 31, 2019 | 6,724,511 | ||||||
Issuance of common stock and prefunded warrants for the purchase of common stock, net of issuance costs of $931 | 79,297 | $ 6 | 79,291 | ||||
Issuance of common stock and prefunded warrants for the purchase of common stock, net of issuance costs of $931, shares | 5,670,000 | ||||||
Exercise of stock options | 5 | 5 | |||||
Exercise of stock options, shares | 700 | ||||||
Exercise of warrants | 440 | 440 | |||||
Exercise of warrants, shares | 33,846 | ||||||
Stock-based compensation expense | 433 | 433 | |||||
Currency translation adjustments | (65) | (65) | |||||
Net loss | (13,383) | (13,383) | |||||
Ending balance at Jun. 30, 2019 | $ 96,168 | $ 13 | $ 199,690 | $ (42) | $ (103,493) | ||
Ending balance, shares at Jun. 30, 2019 | 12,429,057 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Mar. 31, 2018 | |
Convertible Preferred Shares [Member] | ||
Net of issuance costs | $ 1 | |
Common Stock [Member] | ||
Issuance costs | $ 931 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (24,256) | $ (13,401) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 695 | 273 |
Depreciation expense | 44 | 51 |
Non-cash lease expense | 244 | |
Non-cash interest expense | 369 | 59 |
Change in fair value of preferred stock warrant liability | 288 | 309 |
Change in fair value of derivative liability | (183) | 406 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 13 | 490 |
Accounts payable | (1,702) | (605) |
Accrued expenses | (1,157) | 453 |
Lease liabilities | (397) | |
Net cash used in operating activities | (26,042) | (11,965) |
Cash flows from investing activities: | ||
Cash, cash equivalents and restricted cash acquired in connection with the Merger | 26,406 | |
Acquisition of property, plant and equipment | (10) | |
Net cash provided by investing activities | 26,396 | |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and warrants | 565 | 7 |
Proceeds from borrowings under loan and security agreements, net of issuance costs | 9,849 | |
Repurchase of Series Seed convertible preferred stock | (1,160) | |
Repayments of borrowings under loan and security agreement | (2,914) | (1,000) |
Sale of common stock, pre-funded warrants and Class A warrants, net of issuance costs | 79,291 | |
Net cash provided by (used in) financing activities | 86,791 | (2,153) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 87,143 | (14,118) |
Cash, cash equivalents and restricted cash at beginning of period | 8,498 | 27,048 |
Cash, cash equivalents and restricted cash at end of period | 95,641 | $ 12,930 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance costs not yet paid | 354 | |
Conversion of convertible preferred stock into common stock | 64,675 | |
Conversion of redeemable common stock into common stock | 734 | |
Conversion of convertible preferred stock warrants into common stock warrants | 5,235 | |
Fair value of net assets acquired in the Merger | $ 46,358 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation X4 Pharmaceuticals, Inc. (formerly Arsanis, Inc.), together with its subsidiaries (the “Company”), is a clinical-stage biotechnology company focused on the research, development and commercialization of novel therapeutics for the treatment of rare diseases. The Company’s lead product candidate, mavorixafor (X4P-001), is a potential first-in-class, once-daily, oral inhibitor of CXCR4 and is currently in Phase 3 development for treatment of WHIM syndrome, a rare, inherited, primary immunodeficiency disease caused by genetic mutations in the CXCR4 receptor gene. The Company is headquartered in Cambridge, Massachusetts. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with governmental regulations and the ability to secure additional capital to fund operations. Drug candidates currently under development will require extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Merger with Arsanis On November 26, 2018, Arsanis, Inc., a publicly held Delaware corporation (“Arsanis”), Artemis AC Corp., a Delaware corporation and a wholly owned subsidiary of Arsanis (“Merger Sub”), and X4 Therapeutics, Inc. (“X4”) entered into an Agreement and Plan of Merger, as amended on December 20, 2018 and March 8, 2019 (the “Merger Agreement”), pursuant to which the Merger Sub merged with and into X4, with X4 surviving the merger as a wholly owned subsidiary of Arsanis. The transactions described in the foregoing sentence may be referred to in these condensed consolidated financial statements as “the Merger.” The transaction was accounted for as a reverse merger in accordance with GAAP. Under this method of accounting, X4 was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the facts that, immediately following the Merger: (i) the Company’s stockholders own a substantial majority of the voting rights in the combined organization, (ii) the Company designated a majority of the members of the initial board of directors of the combined organization and (iii) the Company’s senior management hold all key positions in the senior management of the combined organization. Accordingly, for accounting purposes, the business combination was treated as the equivalent of X4 issuing stock to acquire the net assets of Arsanis. As a result, as of the closing date of the Merger, the net assets of Arsanis were recorded at their acquisition-date fair values in the financial statements of the Company and the reported operating results prior to the business combination will be those of the Company. In addition, transaction costs incurred by the Company in connection with the business combination will be expensed as incurred. On March 13, 2019, Arsanis, X4 and Merger Sub completed the Merger pursuant to the terms of the Merger Agreement. Pursuant to the terms of the Merger Agreement, each outstanding share of X4’s common stock and preferred stock was exchanged for 0.5702 shares of Arsanis’s common stock (the “Exchange Ratio”). In addition, all outstanding options exercisable for common stock and warrants exercisable for convertible preferred stock of X4 became options and warrants exercisable for the same number of shares of common stock of Arsanis multiplied by the Exchange Ratio. In connection with the Merger, X4 changed its name to X4 Therapeutics, Inc. Following the closing of the Merger, X4 Therapeutics, Inc. became a wholly owned subsidiary of the Company, which changed its name to X4 Pharmaceuticals, Inc. As used herein, the words “the Company” refers to, for periods following the Merger, X4 Pharmaceuticals, Inc. (formerly Arsanis, Inc.), together with is direct and indirect subsidiaries, and for periods prior to the Merger, X4 Therapeutics, Inc. (formerly X4 Pharmaceuticals, Inc.), and its direct and indirect subsidiaries, as applicable. Immediately following the Merger, stockholders of X4 owned approximately 63.7% of the combined organization’s outstanding common stock. On March 14, 2019, the combined organization’s common stock began trading on The Nasdaq Capital Market under the ticker symbol “XFOR.” Reverse Stock Split--- On March 13, 2019, immediately following the closing of the Merger, the Company effected a 1-for-6 reverse stock split of its common stock (the “Reverse Stock Split”). Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split. Unless otherwise noted, all references to common stock share and per share amounts have also been adjusted to reflect the exchange ratio of 0.5702. Going Concern Assessment--- In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. As of August 6, 2019, the issuance date of these condensed consolidated financial statements, the Company expects that its cash and cash equivalents will be sufficient to fund its forecasted operating expenses, capital expenditure requirements and debt service payments for at least the next twelve months from the issuance of these financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations. If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or pre-commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Unaudited Interim Financial Statements--- The condensed balance sheet at December 31, 2018 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying condensed consolidated financial statements are unaudited. The accompanying unaudited interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2018. In the opinion of management, all adjustments, consisting only of normal recurring adjustments as necessary, for the fair statement of the Company’s condensed financial position, condensed results of its operations and cash flows have been made. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. Use of Estimates--- The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual of research and development expenses, the valuation of intangible assets acquired in business combinations, the valuations of common stock prior to the Merger, the valuation of stock options, preferred stock warrants (and the resulting preferred stock warrant liability), derivative instruments (and the resulting derivative liability), and the preferred stock repurchase liability, and valuation of lease liabilities. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Principles of Consolidation--- The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including X4 Pharmaceuticals (Austria) GmbH, which is incorporated in Vienna, Austria and was formerly named Arsanis Biosciences GmbH (“X4 GmbH”), and X4 Therapeutics, Inc. All significant intercompany accounts and transactions have been eliminated. Foreign Currency and Currency Translation--- Management has determined that the functional currency for the Company’s wholly owned foreign subsidiary, X4 GmbH, is the euro. Management’s assessment considered the currency environment in which the entity operates, including inflows of cash from research and development incentive programs and outflows of cash for operating expenditure. Accordingly, the assets and liabilities of X4 GmbH are translated from the euro into U.S. dollars at the exchange rate in effect on the balance sheet date and income and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated balance sheet as a component of accumulated other comprehensive income (loss). Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the euro are included in other income (expense), net in the consolidated statements of operations as incurred. Concentrations of Credit Risk and Significant Suppliers--- Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and research and development incentive receivables. The Company generally maintains cash balances in various operating accounts at financial institutions that management believes to be of high credit quality in amounts that may exceed federally insured limits. The Company has not experienced losses related to its cash and cash equivalents. The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs. The Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. These programs could be adversely affected by a significant interruption in these manufacturing services or in the supply of active pharmaceutical ingredients and formulated drugs. Cash and Cash Equivalents--- The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consisted of money market funds as of June 30, 2019 and December 31, 2018. Restricted Cash and Compensating Balance Arrangements--- As of June 30, 2019 As of December 31, 2018 Letter of credit security: Cambridge Lease (a) $ 264 $ 264 Letter of credit security: Waltham Lease (b) 250 — Letter of credit security: Vienna Austria Lease (c) 95 — Corporate credit card collateral (d) 150 100 Compensating balance arrangement (e) 1,539 Total restricted cash (non-current) $ 2,298 $ 364 (a) In connection with the Company’s lease agreement for its facility in Cambridge, Massachusetts, the Company maintains a letter of credit of $264, which is secured by restricted cash, for the benefit of the landlord. (b) The Company maintains a letter of credit, which is secured by a restricted cash amount of $250 as of June 30, 2019, for the benefit of the landlord in connection with a leased facility in Waltham, Massachusetts. (c) In connection with the Company’s lease agreement for its laboratory and office facility in Vienna, Austria, the Company maintains a letter of credit of $95, which is secured by restricted cash, for the benefit of the landlord. (d) As of June 30, 2019 and December 31, 2018, the Company was required to maintain a separate cash balance of $150 and $100, respectively, to collateralize corporate credit cards with a bank. (e) In accordance with the Company’s loan agreement with Österreichische Forschungsförderungsgesellschaft mbH (“FFG”), as amended (see Note 7), the Company must maintain a cash balance of at least 70% of the outstanding principal of the FFG loan in a local Austrian bank account. As of June 30, 2019, non-current restricted cash includes 70% of the non-current portion of the FFG loan. In addition, 70% of the current portion of the FFG loan, or $3,163, is classified as current restricted cash on the Company’s consolidated balance sheet as of June 30, 2019. In accordance with the Company’s Amended and Restated Loan Agreement with Hercules Capital, Inc. (“Hercules”) as further described in Note 7, the Company is required to maintain cash in an account accessible by the lender in an amount not less than 125% of the outstanding loan balance, or if the Company’s consolidated cash is lower than this amount, all of the Company’s cash other than $2,500. As of June 30, 2019, the Company maintained $25,000 in an account accessible by the lender in accordance with the terms of Amended and Restated Loan Agreement. The underlying cash subject to these compensating balance agreements is classified within cash and cash equivalents on the consolidated balance sheet. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the sum to the total of amounts shown in the Company’s condensed consolidated statement of cash flows as of June 30, 2019, December 31, 2018, June 30, 2018 and December 31, 2017: June 30, 2019 December 31, 2018 June 30, 2018 December 31, 2017 Cash and cash equivalents $ 90,180 $ 8,134 $ 12,566 $ 26,684 Restricted cash, current portion 3,163 — — — Restricted cash, non-current portion 2,298 364 364 364 Total cash, cash equivalents and restricted cash $ 95,641 $ 8,498 $ 12,930 $ 27,048 Property and Equipment--- Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Office furniture 3 years Computer equipment 3 years Software 3 years Laboratory equipment 3 to 10 years Leasehold improvements Shorter of lease term or 10 years Estimated useful lives are periodically assessed to determine if changes are appropriate. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheet and any resulting gains or losses are included in the consolidated statements of operations and comprehensive loss in the period of disposal. Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. Right-of-Use Assets and Leases--- Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date as its date of initial application, with prior periods unchanged and presented in accordance with the guidance in Topic 840, Leases (“ASC 840”). At the inception of an arrangement, the Company determines whether the arrangement contains a lease based on the unique facts and circumstances present. Leases with a non-cancellable term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Options to renew a lease are not included in the Company’s initial lease term assessment unless there is reasonable certainty that the Company will renew the lease. If a lease is cancellable without penalty, the Company excludes from the lease term periods following the cancellation notice period unless it is reasonably certain that the Company will not cancel the lease. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. Certain adjustments to the right-of-use operating asset may be required for items such as incentives received or accrued rent. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates it incurs to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease are split into lease components and non-lease components. A policy election is available pursuant to which an entity may elect to not separate lease and non-lease components. Rather, each lease component and the related non-lease components are accounted for together as a single component. For new and amended leases beginning in 2019 and after, the Company has elected to account for the lease and non-lease components as a combined lease component for its office and laboratory building leases. Impairment of Long-Lived Assets--- Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value. To date, the Company has not recorded any impairment losses on long-lived assets. Goodwill--- Business combinations are accounted for under the acquisition method. The total purchase price of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, probabilities of success, discount rates, and asset lives, among other items. Assets acquired and liabilities assumed are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill is tested for impairment at the reporting unit level annually in the fourth quarter, or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. The Company has determined that it operates in a single operating segment and has a single reporting unit. The Company assesses qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the reporting unit was less than its carrying amount. If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would perform a quantitative impairment test. The Company compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets, goodwill is not impaired, and no further testing is required. If the fair value of the reporting unit is less than the carrying value, the Company measures the amount of impairment loss, if any, as the excess of the carrying value over the fair value of the reporting unit. The Company has determined there were no indicators of goodwill impairment as of June 30, 2019. Intangible Assets--- The Company acquired certain in-process research and development assets (“IPR&D”), which are classified as indefinite-lived intangible assets. Acquired IPR&D represents the fair value assigned to research and development assets that the Company acquires and have not been completed at the acquisition date. The fair value of IPR&D acquired in a business combination is recorded on the Company’s consolidated balance sheets at the acquisition-date fair value and is determined by estimating the costs to develop the technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value. IPR&D is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned or transferred to a third party. If the Company determines that IPR&D becomes impaired or is abandoned, the carrying value is written down to its fair value with the related impairment charge recognized in the Company’s consolidated statement of operations in the period in which the impairment occurs. Upon successful completion of each project and launch of the product, the Company would make a separate determination of the estimated useful life of the IPR&D intangible asset and the related amortization will be recorded as an expense prospectively over its estimated useful life. The projected discounted cash flow models used to estimate the Company’s IPR&D reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a drug development asset, including the following: • Probability of successfully completing clinical trials and obtaining regulatory approval; • Market size, market growth projections, and market share; • Estimates regarding the timing of and the expected costs to advance the Company’s clinical programs to commercialization; • Estimates of future cash flows from potential product sales; and • A discount rate. Additionally, to the extent the Company acquires other indefinite-lived intangible assets through its business combinations, these assets are reviewed for impairment on an annual basis or more frequently if indicators of impairment are present. If the Company determines that the asset becomes impaired, the carrying value is written down to its fair value with the related impairment charge recognized in its consolidated statements of operations in the period in which the impairment occurs. Deferred Rent--- The Company’s lease agreements include payment escalations and lease incentives (including a leasehold improvement tenant allowance). For periods prior to January 1, 2019, these payments were accrued or deferred as appropriate such that rent expense was recognized on a straight-line basis over the respective lease terms. Effective January 1, 2019, upon the adoption of ASC 842, deferred rent was reclassified as a reduction to the applicable right-of-use asset as further described in Note 8. Fair Value Measurements--- Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Prior to the Merger, the Company’s preferred stock warrant liability, derivative liability and preferred stock repurchase liability were carried at fair value, determined according to Level 3 inputs in the fair value hierarchy described above (See Note 4). The Company’s cash equivalents, consisting of money market funds invested in U.S. Treasury securities, are carried at fair value, determined based on Level 2 inputs in the fair value hierarchy described above (see Note 4). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities. The carrying value of the Company’s outstanding loan and security agreement (the “Hercules Loan Agreement”) with Hercules approximates its fair value at June 30, 2019 because the debt bears interest at a variable market rate and the Company’s credit risk has not materially changed since the inception of the agreement. The carrying value of the Company’s loans under the funding agreements with FFG were recorded at fair value on the opening balance sheet of Arsanis as of the date of the Merger and approximates the fair value of the loans at June 30, 2019. (See Note 3). Segment Information--- The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The Company’s focus is on the research, development and commercialization of novel therapeutics for the treatment of rare diseases. Revenue Recognition--- Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. The modified retrospective method requires that the cumulative effect of initially applying ASC 606 be recognized as an adjustment to the opening balance of retained earnings or accumulated deficit of the annual period that includes the date of initial application. The Company had no arrangements that were in the scope of ASC 606 on January 1, 2018 and thus there was no impact to the condensed consolidated financial statements as a result of the adoption. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as collaboration arrangements and leases. Prior to completion of the Merger, Arsanis entered into a single out-licensing agreement with Janssen Pharmaceuticals, Inc. (see Note 13) that was within the scope of ASC 606. The revenue associated with this arrangement is not reflected in the consolidated financial statements of the Company as it occurred prior to the Merger. Research and Development Programs--- Proceeds under the research and development incentive program from the Austrian government are recognized as other income in an amount equal to the qualifying expenses incurred in each period multiplied by the applicable reimbursement percentage. Incentive income recognized upon incurring qualifying expenses in advance of receipt of proceeds from research and development incentives is recorded in the consolidated balance sheet as research and development incentive receivable. Research and Development Costs--- Costs associated with internal research and development and external research and development services, including drug development and preclinical studies, are expensed as incurred. Research and development expenses include costs for salaries, employee benefits, subcontractors, facility-related expenses, depreciation and amortization, stock-based compensation, third-party license fees, laboratory supplies, and external costs of outside vendors engaged to conduct discovery, preclinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials, and other costs. The Company recognizes external research and development costs based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its service providers. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such prepaid expenses are recognized as an expense when the goods have been delivered or the related services have been performed, or when it is no longer expected that the goods will be delivered or the services rendered. Upfront payments, milestone payments and annual maintenance fees under license agreements are expensed in the period in which they are incurred. Patent Costs--- All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. Debt Issuance Costs--- Debt issuance costs consist of payments made to secure commitments under certain debt financing arrangements. These amounts are recognized as interest expense over the period of the financing arrangement using the effective interest method. If the financing arrangement is canceled or forfeited, or if the utility of the arrangement to the Company is otherwise compromised, these costs are recognized as interest expense immediately. The Company’s consolidated financial statements present debt issuance costs related to a recognized debt liability as a direct reduction from the carrying amount of that debt liability. Stock-Based Compensation--- The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company issues stock-based awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company has not issued any stock-based awards with performance-based vesting conditions. Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Company classifies stock-based compensation expense in its consolidated statement of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. The Company recognizes compensation expense for only the portion of awards that are expected to vest. In developing a forfeiture rate estimate, the Company has considered its historical experience to estimate pre-vesting forfeitures for service-based awards. The impact of a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual forfeiture rate is materially different from the Company’s estimate, the Company may be required to record adjustments to stock-based compensation expense in future periods. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Prior to March 13, 2019, the Company had been a private company and lacked company-specific historical and implied volatility information for its common stock. Therefore, the Company estimates its expected common stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employee consultants is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield considers the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. Preferred Stock Warrant Liability--- Prior to the Merger with Arsanis, the Company classified warrants for the purchase of shares of its convertible preferred stock (see Note 10) as a liability on its consolidated balance sheets as these warrants are freestanding financial instruments that may have required the Company to transfer assets upon exercise. The warrant liability, which consisted of warrants for the purchase of Series A and Series B convertible preferred stock, was initially recorded at fair value upon the date of issuance of each warrant and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of the warrant liability are recognized as a component of other income (expense), net in the consolidated statement of operations. Concurrent with the closing of the Merger, all X4 preferred stock was converted to common stock and the X4 preferred stock warrants converted to warrants for the purchase of Arsanis common stock. The Company assessed the features of the warrants and determined that they qualify for classification as permanent equity. Accordingly, the Company remeasured the warrants to fair value upon the closing of the Merger and reclassified the resulting warrant liability to additional paid-in capital (see Note 10). Derivative Liabilities: Genzyme Continent Payment--- The Company’s license agreement with Genzyme Corporation (“Genzyme”) (see Note 13) contains a contingent payment obligation that required the Company to make a cash payment to Genzyme upon a change of control event of the Company. The contingent payment obligation met the definition of a derivative instrument as the contingent payment obligation was not clearly and closely related to its host instrument and was a cash-settled liability. Accordingly, the Company classified this derivative as a liability within other liabilities (non-current) on its condensed consolidated balance sheet. The derivative liability was initially recorded at fair value on the date of entering into the license agreement and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of this derivative liability were recognized as a component of other income (expense), net in the condensed consolidated statement of operations. The Merger with Arsanis (see Note 1) qualified as a change of control event, as defined in the license agreement, but resulted in no payment being due to Genzyme under the license agreement. As a result, on March 13, 2019, the closing date of the Merger with Arsanis, the derivative liability was remeasured to fair value, which was $0, and subsequent changes in fair value will no longer be recognized in the consolidated statements of operations because the contingent payment obligation to Genzyme expired at that time. Derivative Liabilities: Hercules Loan Redemption Feature--- The Company’s Hercules loan (see Note 7) contains a redemption feature that, upon an event of default, provides Hercules the option to accelerate and demand repayment of the debt, including a prepayment premium. The redemption feature meets the definition of a derivative instrument as the repayment of the debt contains a substantial premium, resulting in the redemption feature not being clearly and closely related to its host instrument. Accordingly, the Company classifies this derivative as a liability within other liabilities (non-current) on its condensed consolidated balance sheet. The derivative liability was initially recorded at fair value on the date of entering into the Hercules Loan Agreement and is subsequently remeasured to fair value at each reporting date. Changes in the fair value of this derivative liability are recognized as a component of other income (expense), net in the condensed consolidated statement of operations and comprehensive loss. Changes in the fair value of this derivative liability will continue to be recognized until all amounts outstanding under the Hercules Loan Agreement are repaid or until the Hercules Loan Agreement is terminated. Comprehensive Loss--- Comprehensive loss includes net loss as well as foreign currency translation adjustments. For the three and six months ended June 30, 2019, comprehensive loss includes |
Merger Accounting
Merger Accounting | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Merger Accounting | 3. Merger Accounting On March 13, 2019, the Company completed its merger with Arsanis. Based on the Exchange Ratio of 0.5702, immediately following the Merger, former Arsanis stockholders, Arsanis option holders and other persons holding securities or other rights directly or indirectly convertible, exercisable or exchangeable for Arsanis common stock owned approximately 31.3% of the outstanding capital stock of the combined organization on a fully diluted basis, and former X4 stockholders, holders of options or warrants to acquire X4 capital stock and other persons holding securities and other rights directly or indirectly convertible, exercisable or exchangeable for X4 capital stock owned approximately 68.7% of the outstanding capital stock of the combined organization on a fully diluted basis. At the closing of the Merger, all shares of X4 common stock and X4 preferred stock then outstanding were exchanged for Arsanis common stock. In addition, pursuant to the terms of the Merger Agreement, the Company, for accounting purposes, assumed all outstanding stock options to purchase shares of Arsanis common stock at the closing of the Merger. At the closing of the Merger, such stock options became options to purchase an aggregate of 271,230 shares of the Company’s common stock after giving effect to the Reverse Stock Split. The total purchase price paid in the Merger has been allocated to the tangible and intangible assets acquired and liabilities assumed of Arsanis based on their fair values as of the completion of the Merger, with the excess allocated to goodwill. The following summarizes the preliminary estimate of the purchase price paid in the Merger: Number of shares of the combined organization owned by Arsanis stockholders (1) 2,440,582 Multiplied by the fair value per share of Arsanis common stock (2) $ 18.66 Fair value of consideration issued it effect the Merger $ 45,541 Fair value of replacement awards held by former employees, board of directors and consultants of Arsanis that were vested as of the Merger. $ 817 Purchase price: $ 46,358 (1) The number of shares of 2,440,582 represents the historical 14,643,737 shares of Arsanis common stock outstanding immediately prior to the closing of the Merger, adjusted for the Reverse Stock Split. (2) Based on the last reported sale price of Arsanis common stock on the Nasdaq Global Market on March 13, 2019, the closing date of the Merger, and gives effect to the Reverse Stock Split. The following summarizes the allocation of the purchase price to the net tangible and intangible assets acquired: Cash, cash equivalents and restricted cash $ 26,406 Other current assets 2,147 Property and equipment, net 68 IPR&D indefinite-lived intangible assets 4,900 Other assets, non-current 486 Current liabilities (5,205 ) Loans payable (8,713 ) Other liabilities, non-current (840 ) Goodwill 27,109 Purchase price $ 46,358 The goodwill of $27,109 is not tax deductible and represents the excess of the consideration paid over the fair value of assets acquired and liabilities assumed. Goodwill is mainly attributable to the enhanced value of the combined company, as reflected in the increase in market value of the Arsanis common shares following the announcement of the Merger with X4. During the quarter ended June 30, 2019, goodwill was adjusted by $298 to reflect a change in the allocation of purchase price to the fair value of an acquired operating lease as of March 13, 2019. There have been no other changes in the value of goodwill from the acquisition date to June 30, 2019, and there were no indicators of impairment as of June 30, 2019. The Company incurred costs directly related to the Merger of approximately $1 million for the six months ended June 30, 2019. The in-process research and development intangible assets represent the acquisition-date fair value of three development programs acquired from Arsanis, which the Company refers to as the ASN200, ASN300 and ASN500 programs. The fair value of the IPR&D intangible assets was based on assumptions that market participants would use in pricing the assets, based on the most advantageous market for the assets assuming highest and best use. The fair value was determined by estimating the costs to develop the project into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value using a weighted average discount rate of 19.5%. These IPR&D intangible assets are not amortized, but rather are reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned or transferred to a third party. As further described in Note 16, in July 2019, the Company entered into outlicensing arrangements with two third parties and, as a result, transferred the rights to develop and commercialize the programs underlying the IPR&D intangible assets. Accordingly, the Company considered whether these subsequent transactions indicated that the fair value of the IPR&D intangible assets was lower than their carrying amounts and thus impaired. The Company concluded that the carrying amount continued to reflect the fair value of the IPR&D assets based on assumptions that market participants would use in pricing the assets and assuming the highest and best use of the assets. The preliminary allocation of the purchase price for the Merger was based on estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization of the valuation of the acquired intangible assets, property, plant and equipment, right-of-use assets, lease obligations, fair value of debt and any related deferred taxes. Measurements of these items inherently require significant estimates and assumptions. The following supplemental unaudited pro forma information presents the Company’s financial results as if the acquisition of Arsanis had occurred on January 1, 2018: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 (unaudited) Revenue $ — $ — $ — $ — Net loss $ (12,904 ) $ (18,616 ) $ (29,162 ) $ (38,851 ) The above unaudited pro forma information was determined based on the historical GAAP results of the Company and Arsanis. The unaudited pro forma consolidated results are not necessarily indicative of what the Company’s consolidated results of operations would have been if the acquisition was completed on January 1, 2018. The unaudited pro forma consolidated net loss includes pro forma adjustments primarily relating to the reclassification of transaction costs and severance payments directly related to the closing of the Merger of $2,663 from the six months ended June 30, 2019 to the six months ended June 30, 2018. There were no material pro forma adjustments for the three month periods ended June 30, 2019 or June 30, 2018. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | 4. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values: Fair Value Measurements as of June 30, 2019 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents—money market funds $ — $ 89,545 $ — $ 89,545 $ — $ 89,545 $ — $ 89,545 Liabilities: None Fair Value Measurements as of December 31, 2018 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents—money market fund $ — $ 8,134 $ — $ 8,134 $ — $ 8,134 $ — $ 8,134 Liabilities: Preferred stock warrant liability $ — $ — $ 4,947 $ 4,947 Derivative liability — — 201 $ 201 $ — $ — $ 5,148 $ 5,148 As of June 30, 2019 and December 31, 2018, there were no transfers between Level 1, Level 2 and Level 3. The Company’s cash equivalents consisted of a money market fund invested in U.S. Treasury securities. The money market fund was valued using inputs observable in active markets for similar securities, which represents a Level 2 measurement in the fair value hierarchy. Valuation of Preferred Stock Warrant Liabilities The preferred stock warrant liability in the table above consists of the fair values of (i) warrants to purchase shares of Series A convertible preferred stock that were issued in 2015 and shares of Series B convertible preferred stock that were issued in 2017 and 2018 in connection with the Company’s Series A and Series B convertible preferred stock financings, respectively (see Notes 10), (ii) warrants to purchase shares of Series A convertible preferred stock that were issued in 2016 in connection with the Company’s entering into a loan and security agreement with Silicon Valley Bank (see Note 7) and (iii) warrants to purchase shares of Series B convertible preferred stock that were issued or were issuable in 2018 in connection with the Company’s entering into the Hercules Loan Agreement (see Note 7). The liability associated with the warrants was recorded at fair value on the dates the warrants were issued and exercisable and was subsequently remeasured to fair value at each reporting date through December 31, 2018. Upon the closing of the Merger on March 13, 2019, all X4 preferred stock warrants were converted to warrants for Company’s common stock and, as a result, the warrants were adjusted to fair value and reclassified to permanent equity. The aggregate fair value of the warrant liability was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used various valuation methods, including the Monte Carlo method, the option-pricing method and the hybrid method (which is a combination of an option-pricing method and a probability-weighted expected return method), all of which incorporate assumptions and estimates, to value the preferred stock warrants. Estimates and assumptions impacting the fair value measurement include the fair value per share of the underlying shares of the Company’s Series A and Series B convertible preferred stock, risk free interest rate, expected dividend yield, expected volatility of the price of the underlying preferred stock, and either the remaining contractual term of the warrants (except for warrants that would be automatically exercised upon an initial public offering, in which case the remaining estimated term to automatic exercise was used). The most significant assumption in the Monte Carlo method, the option-pricing method and the hybrid method impacting the fair value of the preferred stock warrants is the fair value of the Company’s convertible preferred stock as of each remeasurement date. The Company determines the fair value per share of the underlying preferred stock by taking into consideration the most recent sales of its convertible preferred stock, results obtained from third-party valuations and additional factors that are deemed relevant. As of December 31, 2018, the fair value of the Series A convertible preferred stock was $1.70 per share the fair value of the Series B convertible preferred stock was $1.86 per share. There were no warrants for the purchase of convertible preferred shares as of June 30, 2019 as all such warrants were converted to warrants for the purchase of common stock upon the Merger. The Company had been a private company prior to the Merger and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the estimated remaining term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the estimated remaining term of the warrants. The Company estimated a 0% expected dividend yield as the Company has never paid or declared dividends and does not intend to do so in the foreseeable future. Valuation of Derivative Liability The fair value of the derivative liability recognized in connection with the Company’s July 2014 license agreement with Genzyme (see Note 13) was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of this derivative liability is reported within other liabilities on the consolidated balance sheets. The fair value of this derivative liability was estimated by the Company at each reporting date based, in part, on the results of third-party valuations, which were prepared using the option-pricing method or the hybrid method, each of which considered as inputs the type, timing and probability of occurrence of a change of control event, the potential amount of the payment under potential exit scenarios, the fair value per share of the underlying common stock and the risk-adjusted discount rate. As of December 31, 2018, the fair value of this derivative liability was $183. The Merger with Arsanis (see Note 1) qualified as a change of control event, as defined in the license agreement, but results in no payment being due to Genzyme under the license agreement. As a result, on March 13, 2019, the closing date of the Merger with Arsanis, this derivative liability was remeasured to fair value, which was $0, and subsequent changes in fair value will no longer be recognized in the consolidated statements of operations and comprehensive loss because the contingent payment obligation to Genzyme expired at that time. The fair value of the derivative liability recognized in connection with the Hercules Loan Agreement (see Note 7) was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of this derivative liability is reported within other liabilities on the consolidated balance sheets. The fair value of this derivative liability was estimated by the Company at each reporting date based, in part, on the results of third-party valuations, which were prepared based on a discounted cash flow model that considered the timing and probability of occurrence of a redemption upon an event of default, the potential amount of prepayment upon an event of default and the risk-adjusted discount rate. As of June 30, 2019 and December 31, 2018, the fair value of this derivative liability was immaterial. The following table provides a roll-forward of the aggregate fair values of the Company’s warrant liability and derivative liability, for which fair values are determined using Level 3 inputs: Preferred Stock Warrant Liability Derivative Liability Balance as of December 31, 2018 $ 4,947 $ 201 Change in fair value 288 (183 ) Conversion of convertible preferred stock warrant into common stock warrant in connection with Merger (5,235 ) Balance as of June 30, 2019 $ — $ 18 |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consisted of the following: June 30, 2019 December 31, 2018 Leasehold improvements $ 336 $ 299 Furniture and fixtures 105 53 Computer equipment 52 56 Software 9 9 Lab equipment 61 — 563 417 Less: Accumulated depreciation and amortization (305 ) (176 ) $ 258 $ 241 Depreciation and amortization expense related to property and equipment was $44 and $51 for the six months ended June 30, 2019 and 2018, respectively. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Text Block [Abstract] | |
Accrued Expenses | 6. Accrued expenses consisted of the following: June 30, 2019 December 31, 2018 Accrued employee compensation and benefits $ 1,374 924 Accrued external research and development expenses 2,561 754 Accrued professional fees 879 1,324 Other 280 249 $ 5,094 $ 3,251 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 7. Long-Term Debt Long-term debt consisted of the following: June 30, 2019 December 31, 2018 Principal amount of long-term debt $ 26,717 $ 10,000 Less: Current portion of long-term debt (4,519 ) (1,687 ) Long-term debt, net of current portion 22,198 8,313 Debt discount, net of accretion (672 ) (226 ) Cumulative accretion of final payment due at maturity 222 58 Long-term debt, including accretion, net of current portion $ 21,748 $ 8,145 SVB Loan Agreement In October 2016, the Company entered into a loan and security agreement with Silicon Valley Bank (“SVB”), which the Company refers to as the SVB Loan Agreement, pursuant to which SVB made certain term loans available to the Company. The SVB Loan Agreement provided for a term loan of up to $6,000, which was borrowed by the Company in June 2017. Borrowings under the SVB Loan Agreement bore interest at a variable rate equal to 5.5% plus the greater of (i) 3.5% or (ii) The Wall Street Journal Hercules Loan Agreements Hercules Loan Agreement and First Amendment In October 2018, the Company entered into the Hercules Loan Agreement. The Hercules Loan Agreement provided for aggregate borrowings of up to $13,000, consisting of (i) a term loan of up to $8,000, which was available upon entering into the agreement, (ii) subject to specified financing conditions, an additional term loan of up to $2,000, available for borrowing from January 1, 2019 to March 31, 2019, and (iii) subject to specified financing conditions and the receipt of the second tranche term loan in the amount of $2,000 described above, an additional term loan of up to $3,000, available for borrowing until March 31, 2019. In October 2018, the Company borrowed $8,000 under the Hercules Loan Agreement. In December 2018, the Company entered into the First Amendment to the Hercules Loan Agreement (the “First Amendment”), which amended the available borrowing dates of the second tranche from between January 1, 2019 and March 31, 2019 to between December 11, 2018 and December 14, 2018 and amended the term loan maturity date to November 1, 2021. In December 2018, the Company borrowed the additional $2,000 provided under the Hercules Loan Agreement, as amended by the First Amendment. In March 2019, the conditions necessary for borrowing the remaining $3,000 under the Hercules Loan Agreement, as amended by the First Amendment, were not met and the borrowing capacity expired at that time. In connection with entering into the Hercules Loan Agreement in October 2018, the Company issued to Hercules warrants for the purchase of 210,638 shares of Series B convertible preferred stock at an exercise price of $1.88 per share (which were subsequently converted to warrants for the purchase of 20,016 shares of common stock at an exercise price of $19.78 per share following the Merger). These warrants were immediately exercisable and expire in October 2028. In addition, in connection with entering into the First Amendment in December 2018, the Company agreed to issue to Hercules warrants for the purchase of a specified number of shares of convertible preferred stock at an aggregate exercise price of $99. On March 18, 2019, as a result of the closing of the Merger with Arsanis on March 13, 2019, the Company issued to Hercules warrants for the purchase of 5,000 shares of common stock of the combined organization at an exercise price of $19.80 per share, each of which reflected the share Exchange Ratio of 1-for-0.5702 applied in the Merger as well as the Reverse Stock Split effected by the combined organization on March 13, 2019. On October 19, 2018 and December 11, 2018, the dates the Company entered into the Hercules Loan Agreement and the First Amendment, respectively, the Company recorded the aggregate initial fair value of the warrants of $132 as a preferred stock warrant liability, with a corresponding amount recorded as a debt discount on the Company’s consolidated balance sheet. As of March 13, 2019, and December 31, 2018, the fair value of the warrants were $326 and $282, respectively. Upon the closing of the Merger, the warrants were converted to warrants for common stock and are no longer adjusted to fair value. Amended and Restated Loan Agreement In June 2019, the Company refinanced the Hercules Loan Agreement, as amended, and entered into an Amended and Restated Loan and Security Agreement (the “June 2019 Loan Agreement”) with Hercules. The June 2019 Loan Agreement provides for aggregate maximum borrowings of $35,000, of which $10,000 was previously outstanding. The Company agreed to borrow $20,000 as of the closing date on June 27, 2019, including $10,000 in new borrowings and $10,000 rolled over from the previous agreement. An additional $5,000 is available for borrowing through December 15, 2020 and, subject to approval by Hercules, an additional term loan of $10,000 is available through June 15, 2022. Borrowings under the June 2019 Loan Agreement bear interest at a variable rate equal to the greater of (i) 8.75% or (ii) 8.75% plus The Wall Street Journal Borrowings under the June 2019 Loan Agreement are repayable in monthly interest-only payments through January 1, 2022, and in equal monthly payments of principal and accrued interest from February 1, 2022 until the maturity date of the loan, which is July 1, 2023. At the Company’s option, the Company may prepay all, but not less than all, of the outstanding borrowings, subject to a prepayment premium of up to 2.0% of the principal amount outstanding as of the date of repayment. In addition, the June 2019 Loan Agreement provides for payments by the Company to Hercules of (i) $795,000 payable upon the earlier of November 1, 2021 or the repayment in full of all obligations under the June 2019 Loan Agreement, and (ii) 4.0% of the aggregate principal drawn under the June 2019 Loan Agreement payable upon the earlier of maturity or the repayment in full of all obligations under such agreement. Borrowings under the June 2019 Loan Agreement are collateralized by substantially all of the Company’s personal property and other assets except for the Company’s intellectual property (but including rights to payment and proceeds from the sale, licensing or disposition of the intellectual property). Under the 2019 Loan Agreement, the Company has agreed to affirmative and negative covenants to which it will remain subject until maturity or repayment of the loan in full. The covenants include (a) maintaining a minimum liquidity amount of the lesser of (i) 125% of the aggregate principal amount of outstanding borrowings under the June 2019 Loan Agreement and (ii) 100% of the Company and its consolidated subsidiaries’ cash and cash equivalents (other than up to $2.5 million which may be held by an excluded subsidiary, as defined) in an account in which Hercules has a first priority security interest, as well as (b) restrictions on the Company’s ability to incur additional indebtedness, pay dividends, encumber its intellectual property, or engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses. The June 2019 Loan Agreement also contains a covenant that requires the Company to repay its FFG Loan Agreement on or prior to December 31, 2019. The FFG Loan Agreement was not modified as a result of this covenant. The Company was in compliance with all covenants under the June 2019 Loan Agreement as of June 30, 2019 and the FFG principal amounts are classified on the consolidated balance sheet in accordance with their contractual maturity dates. The Company’s obligations under the June 2019 Loan Agreement are subject to acceleration upon occurrence of specified events of default, including payment default, insolvency and a material adverse change in the Company’s business, operations or financial or other conditions. The Company concluded that the redemption feature meets the definition of an embedded derivative instrument as the repayment of the debt contains a substantial premium, resulting in the redemption feature not being clearly and closely related to the host instrument. The Company recorded the issuance-date fair value of the derivative liability of $18 as a component of debt issuance costs. In connection with entering into the Hercules Loan Agreement and the First Amendment, the Company had deferred $180 associated with upfront (1) fees associated with entering into the agreement, (2) the fair value of the warrants issued and (3) the fair value of an embedded derivative associated with the accelerated redemption feature. The $180 is classified as a debt discount, which is reflected as a reduction of the carrying value of long-term debt on the Company’s consolidated balance sheet and is being amortized to interest expense over the term of the loan using the effective interest method. As a result of the June 2019 refinancing and entering into the June 2019 Loan Agreement, the Company considered whether the previous debt was either extinguished or modified based on the difference in the cash flows of the previous and new debt. The Company determined that Hercules Loan Agreement, as amended by the First Amendment, was modified. Accordingly, the unamortized debt discount of the previous debt and newly incurred fees paid to the lender related to the June 2019 Loan Agreement will be amortized to interest expense over the life of the new debt arrangement using the effective interest method. The Company recognized aggregate interest expense under the Hercules Loan Agreement, as amended by the First Amendment, and the June 2019 Loan Agreement of $382 and $0 during the three months ended June 30, 2019 and 2018, respectively, and $739 and $0 during six months ended June 30, 2019 and 2018, respectively. Interest expense includes $101 and $215 for the three and six months ended June 30, 2019, respectively, related to the accretion of the debt discount and the final payment. As of June 30, 2019 the unamortized debt discount was $104. The annual effective interest rate on the 2019 June Loan Agreement as of June 30, 2019 is 11.0%. There were no principal payments due or paid under the Hercules Loan Agreement, as amended by the First Amendment, during the six months ended June 30, 2019. Principal payments begin in January 2022. FFG Loan Agreement Between September 2011 and March 2017, Arsanis GmbH entered into a series of funding agreements with Österreichische Forschungsförderungsgesellschaft mbH (“FFG”) that provided for loans and grants to fund qualifying research and development expenditures of X4 GmbH on a project-by-project basis, as approved by FFG. Amounts due under the FFG loans bear interest at rates ranging from 0.75% to 2.0% per annum. Giving effect to the Settlement Agreement (as defined below), the loans matured at various dates between March 31, 2019 and March 2021. Interest on amounts due under the loans is payable semi-annually in arrears, with all principal and remaining accrued interest due upon maturity. On March 8, 2019, Arsanis, Merger Sub, X4 and Arsanis GmbH entered into a Settlement Agreement with FFG (the “Settlement Agreement”) in respect to allegations by FFG in February 2019 that Arsanis and Arsanis GmbH breached certain reporting, performance and other obligations in connection with grants and loans made by FFG to Arsanis GmbH between September 2011 and March 2017 to fund qualifying research and development expenditures. Pursuant to the terms of the Settlement Agreement, in exchange for FFG’s waiver of all claims against Arsanis and Arsanis GmbH (except for its claims for repayment of the loans and regular interest but including its waiver of claims for repayment of grants and interest exceeding regular interest), subject to compliance by Arsanis and Arsanis GmbH with the terms of the Settlement Agreement, Arsanis GmbH agreed to repay the outstanding loan principal (plus regular interest accrued thereon) on an accelerated payment schedule of three years instead of five years, with the final accelerated installment due and payable on June 30, 2021. The parties also agreed, among other things, that (i) the portion of such loans to be repaid in 2019 will be $2,914 on the first business day following March 31, 2019, and such amount was paid on April 1, 2019, and (ii) until all of the loans have been repaid and subject to other terms specified in the Settlement Agreement, commencing April 30, 2019, a minimum cash balance equal to 70% of the then-outstanding principal amount of the loans will be maintained at X4 Pharmaceuticals (Austria) GmbH in an account held with an Austrian bank. The Company was in compliance with all covenants under the FFG Loan Agreement as of June 30, 2019 and the principal amounts of the FFG loans are classified as either current of non-current on the consolidated balance sheet in accordance with the contractual maturity dates within the FFG Loan Agreement. As noted above, the June 2019 Loan Agreement with Hercules includes a covenant that requires the Company to repay the FFG loans in full on or prior to June 30, 2019. As of June 30, 2019, future principal payments and the final payment due under the Company’s loan agreements were as follows: Year Ending December 31, Hercules FFG Total 2019 $ — $ — $ — 2020 — 4,519 4,519 2021 — 2,198 2,198 2022 11,897 — 11,897 2023 8,103 — 8,103 Long-term debt $ 20,000 $ 6,717 $ 26,717 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases Effective January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date as its date of initial application, with prior periods unchanged and presented in accordance with the previous lease accounting guidance. Upon adoption, the Company recorded right-of-use assets of $2,026 and lease liabilities of $2,538, of which $1,925 was classified as non-current and $613 as current. The difference between the value of the right-of-use asset and the lease liabilities related to $512 of net deferred, accrued and prepaid rent that was reclassified against the right-of-use asset upon adoption of ASC 842 on January 1, 2019. The Company has lease agreements for its facilities in Cambridge, Massachusetts, which is the Company’s global headquarters, Vienna, Austria, which is the Company’s research and development center, and Waltham, Massachusetts, which is the former headquarters of Arsanis. The Company plans to sublease its Waltham, Massachusetts facility. There are no restrictions or financial covenants associated with any of the lease agreements. Cambridge Lease In August 2017, the Company entered into a non-cancellable operating lease agreement for office space of approximately thirteen thousand square feet in Cambridge, Massachusetts (“Cambridge Lease”) which expires on July 31, 2022. The Cambridge lease includes an annual rent escalation clause and the Company has the option to extend the lease for one period of five additional years. Base rent is approximately $816 annually and the monthly rent expense is being recognized on a straight-line basis over the term of the lease as the Company amortizes the associated operating lease right-of-use asset. In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, in accordance with the terms of lease. These costs are not included in the determination of the leases’ right-of-use operating assets or lease operating liabilities. Waltham Lease On March 13, 2019, as part of its Merger with Arsanis, the Company acquired a non-cancellable operating lease for approximately six thousand square feet of office space in Waltham, Massachusetts (“Waltham Lease”). The Waltham lease, as amended, commenced on January 1, 2019, and expires approximately 5 years from the commencement date. The base rent is approximately $262 annually. In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, which costs are not included in the determination of the leases’ right-of-use assets or lease liabilities. The Company has ceased using the leased space and is actively seeking to obtain a subtenant. As a result, the Company has adjusted the value of the right-of-use asset to its estimated fair value, which represents management’s best estimate of sublease income that could be obtained for the space, less costs to obtain a sublease. The right-of-use asset is being amortized to rent expense over the 5 year term of the lease. Vienna Austria Lease On March 13, 2019, as part of its Merger with Arsanis, the Company acquired an operating lease for approximately four hundred square meters of laboratory and office space in Vienna, Austria, (the “Vienna Austria Lease”) which commenced on March 1, 2019, as amended, for a term of two years. The lease is cancellable by the Company upon three months’ notice with no penalty. The annual base rent is approximately $155. The Company has classified this lease as a short-term lease as it is not reasonably certain that the Company with not terminate the lease within one year and, accordingly, has not recorded a right-of-use asset. Accordingly, rent expense is recorded on a straight-line basis as incurred over the term of the lease. As the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The components of lease expense for the three and six months ended June 30, 2019 were as follows: Lease Cost For the Three months ended June 30, 2019 For the Six months ended June 30, 2019 Fixed operating lease cost $ 198 $ 385 Short-term lease costs 38 46 Total lease expense $ 236 $ 431 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 266 $ 467 Leased assets obtained in exchange for new operating lease liabilities (1) $ 388 Weighted-average remaining lease term—operating leases 3.5 years Weighted-average discount rate—operating leases 9.0 % (1) Acquired in Merger with Arsanis Maturities of lease liabilities due under these lease agreements as of June 30, 2019 are as follows: Maturity of lease liabilities Operating Leases 2019 (remainder of 2019) $ 551 2020 1,085 2021 1,098 2022 754 2023 263 Thereafter — Total lease payments 3,751 Less: interest (522 ) Total operating lease liabilities as of June 30, 2019 $ 3,229 The Company adopted ASU 2016-02 on January 1, 2019 as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future annual minimum lease payments due under the Company’s operating leases as of December 31, 2018 were as follows: Year Ending December 31, Operating Leases 2019 $ 810 2020 823 2021 835 2022 492 Total $ 2,960 |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | 9. Commitment and Contingencies Sponsored Research Agreement Commitments In April 2017, the Company entered into a sponsored research agreement with a university pursuant to which the Company and the university are conducting a research program related to understanding the mechanisms of failed long-term adaptive immunity in WHIM patients. Under the terms of the agreement, the Company agreed to provide funding for the research program of up to $499 over a three-year period. The agreement will remain in effect for three years, unless earlier terminated. The Company may terminate the agreement at any time upon at least 60 days’ prior written notice. For the three and six months ended June 30, 2019, the Company incurred $41 and $83, respectively, of research and development expenses related to its payment obligations to the university under the agreement. As of June 30, 2019, the Company had non-cancelable purchase commitments under this agreement totaling $139, with $83 committed in 2019 and $56 committed in 2020. In May 2019, the Company amended its agreement with a clinical research organization (“CRO”) pursuant to which the Company and the CRO are conducting a global Phase 3 clinical trial of mavorixafor for the treatment of WHIM syndrome. The Company may terminate the agreement by providing 30 days’ notice and if such termination occurred, the Company would incur early termination fees of up to $1,000 based on a percentage of committed resources of the CRO as of the termination. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnification obligations. The Company is not currently aware of any indemnification claims and has not accrued any liabilities related to such obligations in its consolidated financial statements as of June 30, 2019 or December 31, 2018. License Agreements In February 2017, Arsanis entered into an option and license agreement with Adimab, LLC (“Adimab”) Legal Proceedings The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings. |
Preferred and Common Stock Warr
Preferred and Common Stock Warrants | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Preferred and Common Stock Warrants | 10. Preferred and Common Stock Warrants Prior to the Merger with Arsanis (see Note 1), the Company had issued warrants for the purchase of its preferred stock and had classified its preferred stock warrants as a liability on its consolidated balance sheet as the warrants were deemed to be freestanding financial instruments that may have required the Company to transfer assets upon exercise. The liability associated with each of these warrants was initially recorded at fair value upon the issuance date of each warrant and was subsequently remeasured to fair value as a component of other income (expense), net in the consolidated statement of operations. Upon the closing of the Merger, pursuant to the Merger Agreement, all of the outstanding X4 preferred stock was converted to Arsanis common stock and the X4 preferred stock warrants converted to warrants for the purchase of Arsanis common stock. The Company assessed the features of the warrants and determined that they qualify for classification as permanent equity upon the closing of the Merger. Accordingly, the Company remeasured the warrants to fair value upon the closing of the Merger, which was $5,235 at March 13, 2019, with $288 of expense recorded during the three months ended March 31, 2019. Upon the closing of the Merger, the warrant liability was reclassified to additional paid-in capital. In connection with its issuance of common stock in a public offering that closed on April 16, 2019, the Company issued 3,900,000 Class A warrants, which have an exercise price of $13.20 per warrant and are convertible into shares of the Company’s common stock. These warrants expire on April 15, 2024 and were immediately exercisable. In addition, the Company issued 2,130,000 pre- funded warrants for proceeds of $10.999 per share. Each of the pre-funded warrants is convertible into one common share, has a remaining exercise price of $0.001 per share and was immediately exercisable upon issuance. The following table provides a roll forward of outstanding warrants: Number of warrants Weighted Average Exercise Price Weighted Average Contractual Term (Years) Outstanding and exercisable warrants to purchase preferred shares as of December 31, 2018 5,146,400 $ 1.94 4.23 Converted to warrants for the purchase of common stock and adjusted for the Exchange Ratio and Reverse Stock Split (4,657,350 ) Issued 6,035,000 12.43 Exercised (33,846 ) 13.20 Cancelled — — Outstanding and exercisable as of June 30, 2019 6,490,204 $ 13.03 3.15 As of June 30, 2019, the Company’s outstanding warrants to purchase shares of common stock consisted of the following: Issuance Date Number of Shares of Common Stock Issuable Exercise Price Classification Expiration Date August 14, 2015 81,228 $ 21.78 Equity August 14, 2020 August 21, 2015 69,603 $ 21.78 Equity August 21, 2020 October 25, 2016 5,155 $ 19.78 Equity October 24, 2026 November 1, 2017 130,609 $ 19.78 Equity October 31, 2020 November 17, 2017 8,442 $ 19.78 Equity November 16, 2020 December 4, 2017 5,661 $ 19.78 Equity December 3, 2020 December 28, 2017 6,925 $ 19.78 Equity December 27, 2020 December 28, 2017 115,916 $ 19.78 Equity December 28, 2027 September 12, 2018 25,275 $ 19.78 Equity September 12, 2021 September 12, 2018 20,220 $ 19.78 Equity September 12, 2028 October 19, 2018 20,016 $ 19.78 Equity October 19, 2028 March 13, 2019 5,000 $ 19.80 Equity March 12, 2029 April 16, 2019 3,866,154 $ 13.20 Equity April 15, 2024 April 16, 2019 2,130,000 $ 11.00 Equity n/a 6,490,204 As of December 31, 2018, the Company’s outstanding warrants to purchase shares of preferred stock (which converted into warrants to purchase common stock upon close of the Merger) consisted of the following (not adjusted for the Reverse Stock Split or Exchange Ratio): December 31, 2018 Warrant Name Issuance Date Number of Shares of Preferred Stock Issuable Exercise Price Exercisable for Classification Expiration Date Series A warrants August 14, 2015 854,785 $ 2.07 Series A Liability August 14, 2020 Series A warrants August 21, 2015 732,453 $ 2.07 Series A Liability August 21, 2020 SVB warrants October 25, 2016 54,256 $ 1.88 Series A Liability October 24, 2026 Series B warrants November 1, 2017 1,374,435 $ 1.88 Series B Liability October 31, 2020 Series B warrants November 17, 2017 88,845 $ 1.88 Series B Liability November 16, 2020 Series B warrants December 4, 2017 59,576 $ 1.88 Series B Liability December 3, 2020 Series B warrants December 28, 2017 72,875 $ 1.88 Series B Liability December 27, 2020 Series B warrants December 28, 2017 1,219,815 $ 1.88 Series B Liability December 28, 2027 Series B warrants September 12, 2018 265,957 $ 1.88 Series B Liability September 12, 2021 Series B warrants September 12, 2018 212,765 $ 1.88 Series B Liability September 12, 2028 Series B warrants October 19, 2018 210,638 $ 1.88 Series B Liability October 19, 2028 5,146,400 |
Common Stock, Redeemable Common
Common Stock, Redeemable Common Stock, and Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2019 | |
Federal Home Loan Banks [Abstract] | |
Common Stock, Redeemable Common Stock, and Convertible Preferred Stock | 11. Common Stock, Redeemable Common Stock, and Convertible Preferred Stock (converted to Common Stock) Common Stock As of June 30, 2019 and December 31, 2018, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 33,333,333 shares and 11,070,776, shares, respectively, of $0.001 par value common stock. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any. No cash dividends have been declared or paid to date. On April 12, 2019, the Company entered into an underwriting agreement with Cowen and Company, LLC and Stifel, Nicolaus & Company, Incorporated, as representatives of the several underwriters named therein pursuant to which it sold 5,670,000 shares of common stock and, in lieu of common stock, pre-funded warrants to purchase 2,130,000 shares of common stock, and accompanying Class A warrants to purchase 3,900,000 shares of its common stock. The common stock was issued at a price to the public of $11.00 per share and accompanying Class A warrants and the pre-funded warrants were issued at a price of $10.999 per pre-funded warrant and accompanying Class A warrants. The Class A warrants have an exercise price of $13.20, will expire five years from the date of issuance, and are immediately exercisable with certain restrictions. The gross proceeds from the offering were $85.8 million before deducting underwriting discounts and offering expenses. The offering closed on April 16, 2019. The Company evaluated the Class A and pre-funded warrants for liability or equity classification in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging Redeemable Common Stock Pursuant to the requirements of the July 2014 license agreement with Genzyme (see Note 13), in August 2015, the Company issued to Genzyme for no additional consideration 107,371, as adjusted for the Reverse Stock Split and Exchange Ratio, shares of common stock, which had an aggregate fair value of $734 on the date of issuance. Genzyme had the right to require the Company to repurchase all, but not less than all, of these shares of common stock at any time during the term of the license agreement for a price of $0.01 per share. Because of this redemption feature, the shares of common stock issued to Genzyme were classified outside of stockholders’ deficit on the consolidated balance sheets. As a result of the Merger, these shares were exchanged for common stock. Convertible Preferred Stock (converted to Common Stock) The Company has issued Series Seed convertible preferred stock (the “Series Seed preferred stock”), Series A convertible preferred stock (the “Series A preferred stock”) and Series B convertible preferred stock (the “Series B preferred stock”). As of June 30, 2019 and December 31, 2018, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue a total of 10,000,000 shares and 59,413,523 shares, respectively, of preferred stock, with a par value of $0.001 per share. The holders of Preferred Stock have liquidation rights in the event of a deemed liquidation that, in certain situations, are not solely within the control of the Company. Therefore, the Preferred Stock is classified outside of stockholders’ deficit on the consolidated balance sheet. As of June 30, 2019, there was no preferred stock outstanding. As of December 31, 2018, the preferred stock consisted of the following: December 31, 2018 Preferred Stock Designated Preferred Stock Issued and Outstanding Carrying Value Liquidation Preference Common Stock Issuable Upon Conversion (1) Series Seed preferred stock 2,313,523 1,516,136 $ 1,310 $ 1,444 143,630 Series A preferred stock 22,000,000 19,946,862 32,480 47,624 1,895,610 Series B preferred stock 25,100,000 18,616,569 30,885 34,999 1,769,190 49,413,523 40,079,567 $ 64,675 $ 84,067 3,808,430 (1) Adjusted to reflect Reverse Stock Split and Exchange Ratio. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 12. Stock-Based Compensation Summary of Plans Upon completion of the Merger with Arsanis on March 13, 2019, X4’s 2015 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2015 Plan”), Arsanis’ 2017 Equity Incentive Plan (the “2017 Plan”) and Arsanis’ 2017 Employee Stock Purchase Plan (the “2017 ESPP”) were assumed by the Company. In June 2019, the Company adopted the 2019 Inducement Equity Incentive Plan (the “2019 Plan”). These plans are administered by the Board of Directors or, at the discretion of the Board of Directors, by a committee of the Board of Directors. The exercise prices, vesting and other restrictions are determined at the discretion of the Board of Directors, or its committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of the stock option may not be greater than ten years. Incentive stock options granted to employees and restricted stock awards granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over four years. Non-statutory options granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over three or four years. Shares that are expired, terminated, surrendered or canceled under the Plans without having been fully exercised will be available for future awards. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant of awards. 2015 Employee, Director and Consultant Equity Incentive Plan In 2015, the board of directors and shareholders of X4 adopted the 2015 Plan, which provided for the Company to grant incentive stock options or nonqualified stock options, restricted stock awards and other stock-based awards to employees, directors and consultants of the Company. Each stock option outstanding under the 2015 Plan at the effective time of the Merger was automatically converted into a stock option exercisable for a number of shares of the Company’s common stock calculated based on the Exchange Ratio and the exercise price per share of such outstanding stock option. As of June 30, 2019, the total number of shares of common stock that may be issued under the 2015 Plan is 969,340 shares, adjusted for the Exchange Ratio and Reverse Stock Split. Shares that are expired, forfeited, canceled or otherwise terminated without having been fully exercised will be available for future grant under the 2015 Plan. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for future grants. 2017 Equity Incentive Plan In 2017, the board of directors and shareholders of Arsanis adopted the 2017 Plan, which provided for the Company to grant incentive stock options, non-qualified options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Incentive stock options may be granted only to the Company’s employees, including officers and directors who are also employees. Awards other than incentive stock options may be granted to employees, officers, members of the board of directors, advisors and consultants of the Company. The number of shares of common stock reserved for issuance under this plan will automatically increase on January 1 of each year, through January 1, 2027, in an amount equal to the lowest of 170,915 shares of the Company’s common stock (as adjusted for the Reverse Stock Split), 4% of the number of shares of the Company’s common stock outstanding on January 1 of each year and an amount determined by the Company’s board of directors. 2017 Employee Stock Purchase Plan In 2017, the board of directors and shareholders of Arsanis adopted the 2017 ESPP. The 2017 ESPP provides participating employees with the opportunity to purchase shares of the Company’s common stock at defined purchase prices over six-month offering periods. For the six months ended June 30, 2019, no shares of common stock were issued under the 2017 ESPP. 2019 Inducement Equity Incentive Plan On June 17, 2019, the board of directors approved the adoption of the 2019 Plan, which provides for the Company to grant nonqualified stock options, restricted stock awards and other stock-based awards to new employees of the Company. Awards issued from the 2019 Plan are intended to be material inducements to each employee’s acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). As of June 30, 2019, the total number of shares of common stock that may be issued under the 2019 Plan is 150,000 shares. Shares that are expired, forfeited, canceled or otherwise terminated without having been fully exercised will be available for future grant under the 2019 Plan. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for future grants. Stock Option Valuation The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees, directors and non- employees: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Risk-free interest rate 2.0 % 2.6 % 2.1 % 2.6 % Expected term (in years) 6.05 5.67 6.00 5.74 Expected volatility 88.0 % 87.4 % 88.9 % 86.7 % Expected dividend yield 0 % 0 % 0 % 0 % Stock Options The following table summarizes the Company’s stock option activity for the six months ended June 30, 2019: Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2018 797,931 $ 8.29 8.42 $ 6,486 Assumed as part of Merger with Arsanis 271,230 62.60 Granted 377,906 16.21 Exercised (17,183 ) 6.68 Forfeited (156,352 ) 51.98 Outstanding as of June 30, 2019 1,273,532 $ 21.97 7.65 $ 7,168 Exercisable as of June 30, 2019 489,033 $ 21.62 7.02 Vested and expected to vest as of June 30, 2019 1,097,545 $ 17.69 8.34 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2019 was $130. The weighted average grant-date fair value per share of stock options granted during the six months ended June 30, 2019 was $11.92. Restricted Stock Units During the three months ended June 30, 2019, the Company granted 116,689 restricted stock units to employees. The restricted stock units vest 25% annually on the grant anniversary over four years and had a grant date fair value of $1,721, which will be recognized as stock-based compensation expense, net of estimated forfeitures, over the vesting period. Stock-Based Compensation Effective January 1, 2019, the Company adopted ASU 2018-07 and no longer remeasures the fair value of equity awards granted to non-employees at each reporting period end (see Note 2). As of June 30, 2019, total unrecognized compensation expense related to unvested stock options and restricted stock units was $6,529, which is expected to be recognized over a weighted average period of 3.4 years. Stock-based compensation expense was classified in the consolidated statements of operations as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Research and development expense $ 214 $ 51 $ 298 $ 89 General and administrative expense 219 94 397 184 Total stock-based compensation 433 145 695 273 |
License, Collaboration, and Fun
License, Collaboration, and Funding Agreements | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements Abstract | |
License, Collaboration, and Funding Agreements | 13. License, Collaboration, and Funding Agreements Genzyme Agreement In July 2014, the Company entered into a license agreement (the “Genzyme Agreement”) with Genzyme pursuant to which the Company was granted an exclusive license to certain patents and intellectual property owned or controlled by Genzyme related to the CXCR4 receptor to develop and commercialize products containing licensed compounds (including but not limited to X4P-001) for all therapeutic, prophylactic and diagnostic uses, with the exception of autologous and allogenic human stem cell therapy. Under the terms of the Genzyme Agreement, the Company is obligated to use commercially reasonable efforts to develop and commercialize licensed products for use in the field in the United States and at least one other major market country. The Company has the right to grant sublicenses of the licensed rights that cover X4P-001 to third parties. In exchange for these rights, in August 2014, the Company made an upfront payment of $50 to Genzyme. The Company accounted for the acquisition of technology as an asset acquisition because it did not meet the definition of a business. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations because the acquired technology represented in-process research and development and had no alternative future use. In August 2015, as a result of the closing of the Company’s Series A preferred stock financing, the Company made an additional cash payment of $300 to Genzyme and issued to Genzyme 107,371 shares of its common stock, as adjusted for the 1 for 6 Reverse Stock Split and Exchange Ratio (see Note 11), each as required by the Genzyme Agreement. The $300 payment and the $734 fair value of the 107,371 shares of common stock issued to Genzyme were recorded as research and development expense in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2015. Prior to the Merger with Arsanis, Genzyme had the right to require the Company to repurchase all, but not less than all, of these shares of common stock at any time during the term of the Genzyme Agreement for a price of $0.01 per share. Due to this redemption feature, the shares of common stock issued to Genzyme were classified outside of stockholders’ deficit on the consolidated balance sheets as of December 31, 2018. On March 13, 2019, the closing date of the Merger with Arsanis, these redeemable common shares were exchanged for common shares and, as a result, the fair value of the shares was reclassified to permanent equity. Under the Genzyme Agreement, the Company is obligated to pay Genzyme milestone payments in the aggregate amount of up to $25,000, contingent upon the achievement by the Company of certain late-stage regulatory and sales milestones with respect to licensed products. In addition, the Company may be required to make a one-time milestone payment to Genzyme upon the consummation by the Company of a change of control transaction, in an amount equal to 5.5% of the consideration paid to equity holders of the Company, other than Genzyme, in connection with such change of control transaction, after deducting outstanding debt obligations of the Company and the aggregate cash investments made by equity holders into the Company prior to the closing of the change of control transaction. The Merger with Arsanis qualifies as a change of control transaction, as defined in the license agreement, but resulted in no payment being due to Genzyme under the license agreement. The Company concluded that this contingent payment obligation meets the definition of a derivative instrument as the contingent payment obligation is not clearly and closely related to its host instrument and is a cash-settled liability (see Note 2). Accordingly, the Company classifies this derivative as a liability within other liabilities (non-current) on its consolidated balance sheet (see Note 2), and changes in the fair value of the derivative liability are recognized as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss (see Note 4). On March 13, 2019, the closing date of the Merger with Arsanis, this derivative liability was remeasured to fair value, which was $0, and subsequent changes in fair value will no longer be recognized in the consolidated statements of operations and comprehensive loss because the contingent payment obligation expired at that time. Under the Genzyme Agreement, the Company is obligated to pay Genzyme tiered royalties based on net sales of licensed products that the Company commercializes under the agreement. The obligation to pay royalties for each licensed product expires on a country-by-country basis on the latest of (i) the expiration of licensed patent rights that cover that licensed product in that country, (ii) the expiration of regulatory exclusivity in that country and (iii) ten years after the first commercial sale of such licensed product in that country. Royalty rates are subject to reduction under the agreement in specified circumstances, including in any country if the Company is required to obtain a license from any third party to the extent the Company’s patent rights might infringe the third party’s patent rights, if a licensed product is not covered by a valid claim in that country or if sales of generic products reach certain thresholds in that country. If the Company enters into a sublicense under the agreement, the Company will be obligated to pay Genzyme a percentage of certain upfront fees, maintenance fees, milestone payments and royalty payments paid to the Company by the sublicensee. Under the Genzyme Agreement, the Company will itself manufacture and supply, or enter into manufacturing or supply agreements with Genzyme or third parties to manufacture and supply, clinical and commercial supplies of licensed compounds and each licensed product. During the six months ended June 30, 2019, the Company did not enter into any third-party manufacturing or supply agreements in connection with the Genzyme Agreement. The Company is also responsible for all costs related to the filing, prosecution and maintenance of the licensed patent rights. The Genzyme Agreement will remain in effect until the expiration of the royalty term in all countries for all licensed products. The agreement may be terminated by either party with at least 90 days’ notice in the event of material breach by the other party that remains uncured for 90 days, by either party for insolvency or bankruptcy of the other party, immediately by Genzyme if the Company challenges the licensed patents, or immediately by the Company if a material safety issue arises. During the six months ended June 30, 2019, the Company did not incur any payment obligations to Genzyme under the Genzyme Agreement. Georgetown Agreement In December 2016, the Company entered into a license agreement (the “Georgetown Agreement”) with Georgetown University (“Georgetown”) pursuant to which the Company obtained an exclusive, worldwide license to make, have made, use, sell, offer for sale and import of products covered by patent rights co-owned by Georgetown. The rights licensed to the Company are for all therapeutic, prophylactic and diagnostic uses in all disease indications in humans and animals. Under the terms of the Georgetown Agreement, the Company paid a one-time only, upfront fee of $50 and the Company may be required to make milestone payments of up to an aggregate of $800 related to commercial sales of a product. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations because the acquired technology represented in-process research and development and had no alternative future use. Under the Georgetown Agreement, the Company is solely responsible for all development and commercialization activities and costs in its respective territories. The Company is also responsible for all costs related to the filing, prosecution and maintenance of the licensed patent rights. The term of the Georgetown Agreement will continue until the expiration of the last valid claim within the patent rights covering the product. Georgetown may terminate the agreement in the event (i) the Company fails to pay any amount and fails to cure such failure within 30 days after receipt of notice, (ii) the Company defaults in its obligation to obtain and maintain insurance and fails to remedy such breach within 45 days after receipt of notice, or (iii) the Company declares insolvency or bankruptcy. The Company may terminate the agreement at any time upon at least 60 days’ written notice. During the six months ended June 30, 2019, the Company did not incur any payment obligations to Georgetown under the Georgetown Agreement and no milestone payments were made or due under the Georgetown Agreement. Beth Israel Deaconess Medical Center Agreement In December 2016, the Company entered into a license agreement (the “BIDMC Agreement”) with Beth Israel Deaconess Medical Center (“BIDMC”), pursuant to which the Company obtained an exclusive, worldwide license to make, have made, use, sell, offer for sale and import products covered by patent rights co-owned by BIDMC. The rights licensed to the Company are for all fields of use. Under the terms of the BIDMC Agreement, the Company paid a one-time, upfront fee of $20 and the Company is responsible for all future patent prosecution costs. The Company recorded the upfront payment as research and development expense in the consolidated statement of operations because the acquired technology represented in-process research and development and had no alternative future use. The term of the BIDMC Agreement will continue until the expiration of the last valid claim within the patent rights covering the licensed products. BIDMC may terminate the agreement in the event (i) the Company fails to pay any amount and fails to cure such failure within 15 days after receipt of notice, (ii) the Company is in material breach of any material provision of the agreement and fails to remedy such breach within 60 days after receipt of notice, or (iii) the Company declares insolvency or bankruptcy. The Company may terminate the agreement at any time upon at least 90 days’ written notice. The Company did not incur any payment obligations under the BIDMC Agreement during the six months ended June 30, 2019. Research and Development Incentive Program The Company participates in a research and development incentive program provided by the Austrian government whereby the Company is entitled to reimbursement by the Austrian government for a percentage of qualifying research and development expenses incurred by the Company’s subsidiary in Austria. Under the program, the reimbursement rate for qualifying research and development expenses incurred by the Company through its subsidiary in Austria is 14% for the current year. The Company recognizes incentive income from Austrian research and development incentives when qualifying expenses have been incurred, there is reasonable assurance that the payment will be received, and the consideration can be reliably measured. Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive program described above. At each reporting date, management estimates the reimbursable incentive income available to the Company based on available information at the time. As of June 30, 2019, the amount due under the program is $1.7 million, which amounts were included in grant and incentive receivables in the consolidated balance sheet. During the three and six months ended June 30, 2019, the Company recorded $136 of income related to the program within the condensed consolidated statement of operations as “other income (expense)”. Janssen License and Option Agreement On December 12, 2018, Arsanis entered into a patent license and option agreement with Janssen Pharmaceuticals, Inc. (“Janssen”), (the “Janssen License and Option Agreement”). Pursuant to the Janssen License and Option Agreement, Arsanis granted to Janssen (i) a non-exclusive license to specified patents in Arsanis’s portfolio related to the ASN200 program, and (ii) an option for Janssen to acquire these patents in the future if specified conditions are met. Janssen agreed to pay Arsanis $3.5 million within 15 business days after the December 12, 2018 effective date of the Janssen License and Option Agreement, in addition to a future $0.5 million payment in the event Janssen exercises its option to acquire the relevant patents. Arsanis received the $3.5 million and recognized this amount as revenue. Such revenue is not reflected in the consolidated financial statements of the Company as it occurred prior to the Merger. Janssen’s option to the relevant patents will be recognized as revenue in full in the period in which the option exercise occurs. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes The Company did not record a federal or state income tax benefit for its losses for the three and six months ended June 30, 2019 and 2018 due to the conclusion that a full valuation allowance is required against the Company’s deferred tax assets. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 15. Net Loss per Share Basic and diluted net loss per share attributable to common stockholders was calculated as follow: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator: Net loss $ (13,383 ) $ (6,034 ) $ (24,256 ) $ (13,401 ) Accruing dividends on Series A convertible preferred stock — (748 ) (592 ) (1,488 ) Adjustment to accumulated deficit in connection with repurchase of Series Seed convertible preferred stock — (22 ) — (22 ) Net loss attributable to common stockholders $ (13,383 ) $ (6,804 ) $ (24,848 ) $ (14,911 ) Denominator: Weighted average common shares outstanding—basic and diluted 13,177,235 458,718 7,479,178 458,346 Net loss per share attributable to common stockholders— basic and diluted $ (1.02 ) $ (14.83 ) $ (3.32 ) $ (32.53 ) The Company has included 107,371 shares of redeemable common stock in its computation of basic and diluted weighted average common shares outstanding for the six months ended June 30, 2019 and the three and six months ended June 30, 2018 as this class of stock participates in losses similarly to other common stockholders. Basic and diluted weighted average common shares outstanding for the three and six months ended June 30, 2019 also includes the weighted average effect of 2,130,000 pre-funded warrants for the purchase of common shares, which were issued in April 2019 and for which the remaining unfunded exercise price is less than $0.01 per share. The Company’s potentially dilutive securities included outstanding stock options, convertible preferred stock, and warrants to purchase shares of convertible preferred stock for the three and six months ended June 30, 2018 and included outstanding stock options and warrants to purchase common stock for the three and six months ended June 30, 2019. These potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share, and thus they are considered “anti-dilutive.” Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end and adjusted for the Exchange Ratio and Reverse Stock Split, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Options to purchase common stock 1,273,532 532,081 1,273,532 532,081 Convertible preferred stock (as converted to common stock) — 3,556,147 — 3,556,147 Warrants to purchase common stock (excluding prefunded warrants, which are included in basic shares outstanding) 4,360,204 423,539 4,360,204 423,539 5,633,736 4,511,767 5,633,736 4,511,767 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On July 17, 2019, the Company announced that it has entered into an agreement with Abbisko Therapeutics (“Abbisko”) to develop and commercialize the Company’s product candidate, mavorixafor, in combination with checkpoint inhibitors or other agents in Greater China for oncology indications. The agreement provides Abbisko with the exclusive rights in China, Taiwan, Hong Kong and Macau to develop and commercialize mavorixafor in combination with checkpoint inhibitors or other agents in oncology indications. Pancreatic cancer, ovarian cancer and triple negative breast cancer will be explored initially. The Company retains the full rest-of-world rights to develop and commercialize mavorixafor outside of Greater China for all indications and the ability to utilize and data generated pursuant to the Abbisko collaboration for rest-of-world development. The Company is assessing the financial impact of this arrangement and will account for this arrangement beginning in the third quarter of 2019. In July 2019, the Company entered into an outlicensing arrangement with Evotec International GmbH (“Evotec”) whereby the Company transferred intellectual property and other rights related to its ASN500 program through an exclusive, worldwide license in return for an upfront fee, future payments based on achievement of clinical and regulatory milestones, and royalties based on net sales of the resulting licensed product. In addition, in July 2019, Bravos Bioscience LLC (“Bravos”), an entity that had entered into option agreements with Arsanis in 2018 to license certain intellectual property and other rights related to two preclinical stage programs that Arsanis referred to as the ASN200 and ASN300 programs, exercised amended versions of the option agreements. In accordance with the amended option agreements, Bravos obtained exclusive, sublicensable, rights to the ASN200 and ASN300 programs in return for an upfront fee and future payments to the Company, which are based on a percentage of future transaction fees, as defined, obtained by Bravos related to the programs. The Company is assessing the financial impact of these arrangements will account for these arrangements beginning in the third quarter of 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements--- The condensed balance sheet at December 31, 2018 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying condensed consolidated financial statements are unaudited. The accompanying unaudited interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2018. In the opinion of management, all adjustments, consisting only of normal recurring adjustments as necessary, for the fair statement of the Company’s condensed financial position, condensed results of its operations and cash flows have been made. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. |
Use of Estimates | Use of Estimates--- The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual of research and development expenses, the valuation of intangible assets acquired in business combinations, the valuations of common stock prior to the Merger, the valuation of stock options, preferred stock warrants (and the resulting preferred stock warrant liability), derivative instruments (and the resulting derivative liability), and the preferred stock repurchase liability, and valuation of lease liabilities. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation--- The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, including X4 Pharmaceuticals (Austria) GmbH, which is incorporated in Vienna, Austria and was formerly named Arsanis Biosciences GmbH (“X4 GmbH”), and X4 Therapeutics, Inc. All significant intercompany accounts and transactions have been eliminated. |
Foreign Currency and Currency Translation | Foreign Currency and Currency Translation--- Management has determined that the functional currency for the Company’s wholly owned foreign subsidiary, X4 GmbH, is the euro. Management’s assessment considered the currency environment in which the entity operates, including inflows of cash from research and development incentive programs and outflows of cash for operating expenditure. Accordingly, the assets and liabilities of X4 GmbH are translated from the euro into U.S. dollars at the exchange rate in effect on the balance sheet date and income and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated balance sheet as a component of accumulated other comprehensive income (loss). Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the euro are included in other income (expense), net in the consolidated statements of operations as incurred. |
Concentrations of Credit Risk and Significant Suppliers | Concentrations of Credit Risk and Significant Suppliers--- Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and research and development incentive receivables. The Company generally maintains cash balances in various operating accounts at financial institutions that management believes to be of high credit quality in amounts that may exceed federally insured limits. The Company has not experienced losses related to its cash and cash equivalents. |
Cash and Cash Equivalents | Cash and Cash Equivalents--- The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consisted of money market funds as of June 30, 2019 and December 31, 2018. |
Restricted Cash and Compensating Balance Arrangements | Restricted Cash and Compensating Balance Arrangements--- As of June 30, 2019 As of December 31, 2018 Letter of credit security: Cambridge Lease (a) $ 264 $ 264 Letter of credit security: Waltham Lease (b) 250 — Letter of credit security: Vienna Austria Lease (c) 95 — Corporate credit card collateral (d) 150 100 Compensating balance arrangement (e) 1,539 Total restricted cash (non-current) $ 2,298 $ 364 (a) In connection with the Company’s lease agreement for its facility in Cambridge, Massachusetts, the Company maintains a letter of credit of $264, which is secured by restricted cash, for the benefit of the landlord. (b) The Company maintains a letter of credit, which is secured by a restricted cash amount of $250 as of June 30, 2019, for the benefit of the landlord in connection with a leased facility in Waltham, Massachusetts. (c) In connection with the Company’s lease agreement for its laboratory and office facility in Vienna, Austria, the Company maintains a letter of credit of $95, which is secured by restricted cash, for the benefit of the landlord. (d) As of June 30, 2019 and December 31, 2018, the Company was required to maintain a separate cash balance of $150 and $100, respectively, to collateralize corporate credit cards with a bank. (e) In accordance with the Company’s loan agreement with Österreichische Forschungsförderungsgesellschaft mbH (“FFG”), as amended (see Note 7), the Company must maintain a cash balance of at least 70% of the outstanding principal of the FFG loan in a local Austrian bank account. As of June 30, 2019, non-current restricted cash includes 70% of the non-current portion of the FFG loan. In addition, 70% of the current portion of the FFG loan, or $3,163, is classified as current restricted cash on the Company’s consolidated balance sheet as of June 30, 2019. In accordance with the Company’s Amended and Restated Loan Agreement with Hercules Capital, Inc. (“Hercules”) as further described in Note 7, the Company is required to maintain cash in an account accessible by the lender in an amount not less than 125% of the outstanding loan balance, or if the Company’s consolidated cash is lower than this amount, all of the Company’s cash other than $2,500. As of June 30, 2019, the Company maintained $25,000 in an account accessible by the lender in accordance with the terms of Amended and Restated Loan Agreement. The underlying cash subject to these compensating balance agreements is classified within cash and cash equivalents on the consolidated balance sheet. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the sum to the total of amounts shown in the Company’s condensed consolidated statement of cash flows as of June 30, 2019, December 31, 2018, June 30, 2018 and December 31, 2017: June 30, 2019 December 31, 2018 June 30, 2018 December 31, 2017 Cash and cash equivalents $ 90,180 $ 8,134 $ 12,566 $ 26,684 Restricted cash, current portion 3,163 — — — Restricted cash, non-current portion 2,298 364 364 364 Total cash, cash equivalents and restricted cash $ 95,641 $ 8,498 $ 12,930 $ 27,048 |
Property and Equipment | Property and Equipment--- Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Office furniture 3 years Computer equipment 3 years Software 3 years Laboratory equipment 3 to 10 years Leasehold improvements Shorter of lease term or 10 years |
Right-of-Use Assets and Leases | Right-of-Use Assets and Leases--- Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date as its date of initial application, with prior periods unchanged and presented in accordance with the guidance in Topic 840, Leases (“ASC 840”). At the inception of an arrangement, the Company determines whether the arrangement contains a lease based on the unique facts and circumstances present. Leases with a non-cancellable term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Options to renew a lease are not included in the Company’s initial lease term assessment unless there is reasonable certainty that the Company will renew the lease. If a lease is cancellable without penalty, the Company excludes from the lease term periods following the cancellation notice period unless it is reasonably certain that the Company will not cancel the lease. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. Certain adjustments to the right-of-use operating asset may be required for items such as incentives received or accrued rent. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates it incurs to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets--- Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized in loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value. To date, the Company has not recorded any impairment losses on long-lived assets. |
Goodwill | Goodwill--- Business combinations are accounted for under the acquisition method. The total purchase price of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, probabilities of success, discount rates, and asset lives, among other items. Assets acquired and liabilities assumed are recorded at their estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill is tested for impairment at the reporting unit level annually in the fourth quarter, or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. The Company has determined that it operates in a single operating segment and has a single reporting unit. The Company assesses qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the reporting unit was less than its carrying amount. If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would perform a quantitative impairment test. |
Intangible Assets | Intangible Assets--- The Company acquired certain in-process research and development assets (“IPR&D”), which are classified as indefinite-lived intangible assets. Acquired IPR&D represents the fair value assigned to research and development assets that the Company acquires and have not been completed at the acquisition date. The fair value of IPR&D acquired in a business combination is recorded on the Company’s consolidated balance sheets at the acquisition-date fair value and is determined by estimating the costs to develop the technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value. IPR&D is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned or transferred to a third party. If the Company determines that IPR&D becomes impaired or is abandoned, the carrying value is written down to its fair value with the related impairment charge recognized in the Company’s consolidated statement of operations in the period in which the impairment occurs. Upon successful completion of each project and launch of the product, the Company would make a separate determination of the estimated useful life of the IPR&D intangible asset and the related amortization will be recorded as an expense prospectively over its estimated useful life. The projected discounted cash flow models used to estimate the Company’s IPR&D reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a drug development asset, including the following: • Probability of successfully completing clinical trials and obtaining regulatory approval; • Market size, market growth projections, and market share; • Estimates regarding the timing of and the expected costs to advance the Company’s clinical programs to commercialization; • Estimates of future cash flows from potential product sales; and • A discount rate. |
Deferred Rent | Deferred Rent--- The Company’s lease agreements include payment escalations and lease incentives (including a leasehold improvement tenant allowance). For periods prior to January 1, 2019, these payments were accrued or deferred as appropriate such that rent expense was recognized on a straight-line basis over the respective lease terms. Effective January 1, 2019, upon the adoption of ASC 842, deferred rent was reclassified as a reduction to the applicable right-of-use asset as further described in Note 8. |
Fair Value Measurements | Fair Value Measurements--- Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
Segment Information | Segment Information--- The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The Company’s focus is on the research, development and commercialization of novel therapeutics for the treatment of rare diseases. |
Revenue Recognition | Revenue Recognition--- Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective transition method. The modified retrospective method requires that the cumulative effect of initially applying ASC 606 be recognized as an adjustment to the opening balance of retained earnings or accumulated deficit of the annual period that includes the date of initial application. The Company had no arrangements that were in the scope of ASC 606 on January 1, 2018 and thus there was no impact to the condensed consolidated financial statements as a result of the adoption. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as collaboration arrangements and leases. Prior to completion of the Merger, Arsanis entered into a single out-licensing agreement with Janssen Pharmaceuticals, Inc. (see Note 13) that was within the scope of ASC 606. The revenue associated with this arrangement is not reflected in the consolidated financial statements of the Company as it occurred prior to the Merger. |
Research and Development Programs | Research and Development Programs--- Proceeds under the research and development incentive program from the Austrian government are recognized as other income in an amount equal to the qualifying expenses incurred in each period multiplied by the applicable reimbursement percentage. Incentive income recognized upon incurring qualifying expenses in advance of receipt of proceeds from research and development incentives is recorded in the consolidated balance sheet as research and development incentive receivable. |
Research and Development Costs | Research and Development Costs--- Costs associated with internal research and development and external research and development services, including drug development and preclinical studies, are expensed as incurred. Research and development expenses include costs for salaries, employee benefits, subcontractors, facility-related expenses, depreciation and amortization, stock-based compensation, third-party license fees, laboratory supplies, and external costs of outside vendors engaged to conduct discovery, preclinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials, and other costs. The Company recognizes external research and development costs based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its service providers. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such prepaid expenses are recognized as an expense when the goods have been delivered or the related services have been performed, or when it is no longer expected that the goods will be delivered or the services rendered. |
Patent Costs | Patent Costs--- All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. |
Debt Issuance Costs | Debt Issuance Costs--- Debt issuance costs consist of payments made to secure commitments under certain debt financing arrangements. These amounts are recognized as interest expense over the period of the financing arrangement using the effective interest method. If the financing arrangement is canceled or forfeited, or if the utility of the arrangement to the Company is otherwise compromised, these costs are recognized as interest expense immediately. The Company’s consolidated financial statements present debt issuance costs related to a recognized debt liability as a direct reduction from the carrying amount of that debt liability. |
Stock-Based Compensation | Stock-Based Compensation--- The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company issues stock-based awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company has not issued any stock-based awards with performance-based vesting conditions. Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Company classifies stock-based compensation expense in its consolidated statement of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. The Company recognizes compensation expense for only the portion of awards that are expected to vest. In developing a forfeiture rate estimate, the Company has considered its historical experience to estimate pre-vesting forfeitures for service-based awards. The impact of a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual forfeiture rate is materially different from the Company’s estimate, the Company may be required to record adjustments to stock-based compensation expense in future periods. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Prior to March 13, 2019, the Company had been a private company and lacked company-specific historical and implied volatility information for its common stock. Therefore, the Company estimates its expected common stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employee consultants is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield considers the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. |
Preferred Stock Warrant Liability | Preferred Stock Warrant Liability--- Prior to the Merger with Arsanis, the Company classified warrants for the purchase of shares of its convertible preferred stock (see Note 10) as a liability on its consolidated balance sheets as these warrants are freestanding financial instruments that may have required the Company to transfer assets upon exercise. The warrant liability, which consisted of warrants for the purchase of Series A and Series B convertible preferred stock, was initially recorded at fair value upon the date of issuance of each warrant and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of the warrant liability are recognized as a component of other income (expense), net in the consolidated statement of operations. Concurrent with the closing of the Merger, all X4 preferred stock was converted to common stock and the X4 preferred stock warrants converted to warrants for the purchase of Arsanis common stock. The Company assessed the features of the warrants and determined that they qualify for classification as permanent equity. Accordingly, the Company remeasured the warrants to fair value upon the closing of the Merger and reclassified the resulting warrant liability to additional paid-in capital (see Note 10). |
Derivative Liabilities | Derivative Liabilities: Genzyme Continent Payment--- The Company’s license agreement with Genzyme Corporation (“Genzyme”) (see Note 13) contains a contingent payment obligation that required the Company to make a cash payment to Genzyme upon a change of control event of the Company. The contingent payment obligation met the definition of a derivative instrument as the contingent payment obligation was not clearly and closely related to its host instrument and was a cash-settled liability. Accordingly, the Company classified this derivative as a liability within other liabilities (non-current) on its condensed consolidated balance sheet. The derivative liability was initially recorded at fair value on the date of entering into the license agreement and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of this derivative liability were recognized as a component of other income (expense), net in the condensed consolidated statement of operations. The Merger with Arsanis (see Note 1) qualified as a change of control event, as defined in the license agreement, but resulted in no payment being due to Genzyme under the license agreement. As a result, on March 13, 2019, the closing date of the Merger with Arsanis, the derivative liability was remeasured to fair value, which was $0, and subsequent changes in fair value will no longer be recognized in the consolidated statements of operations because the contingent payment obligation to Genzyme expired at that time. Derivative Liabilities: Hercules Loan Redemption Feature--- The Company’s Hercules loan (see Note 7) contains a redemption feature that, upon an event of default, provides Hercules the option to accelerate and demand repayment of the debt, including a prepayment premium. The redemption feature meets the definition of a derivative instrument as the repayment of the debt contains a substantial premium, resulting in the redemption feature not being clearly and closely related to its host instrument. Accordingly, the Company classifies this derivative as a liability within other liabilities (non-current) on its condensed consolidated balance sheet. The derivative liability was initially recorded at fair value on the date of entering into the Hercules Loan Agreement and is subsequently remeasured to fair value at each reporting date. Changes in the fair value of this derivative liability are recognized as a component of other income (expense), net in the condensed consolidated statement of operations and comprehensive loss. Changes in the fair value of this derivative liability will continue to be recognized until all amounts outstanding under the Hercules Loan Agreement are repaid or until the Hercules Loan Agreement is terminated. |
Comprehensive Loss | Comprehensive Loss--- Comprehensive loss includes net loss as well as foreign currency translation adjustments. For the three and six months ended June 30, 2019, comprehensive loss includes $65 and $42 of foreign currency translation adjustments, respectively. |
Income Taxes | Income Taxes--- The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. |
Net Income (Loss) per Share | Net Income (Loss) per Share--- For periods prior to the Merger with Arsanis on March 13, 2019, the Company follows the two-class method when computing net income (loss) per share as the Company had issued shares that met the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Basic shares outstanding includes the weighted average effect of the Company’s pre-funded warrants issued in April 2019, the exercise of which requires little or no consideration for the delivery of shares of common stock. Diluted net income (loss) attributable to common stockholders is computed by adjusting net income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In April 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) (Part I) Accounting for Certain Financial Instruments with Down Round Features (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU 2018-07, which superseded Subtopic 505-50, Equity— Equity-Based Payments to Non-Employees Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Credit Losses (Topic 326) In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, In November 2018, the FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 In April 2019, the FASB issued ASU 2019-04 , Codification Improvements to Topic 326 Financial Instruments- Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 Derivative and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Compensating Balance Arrangements | As of June 30, 2019 As of December 31, 2018 Letter of credit security: Cambridge Lease (a) $ 264 $ 264 Letter of credit security: Waltham Lease (b) 250 — Letter of credit security: Vienna Austria Lease (c) 95 — Corporate credit card collateral (d) 150 100 Compensating balance arrangement (e) 1,539 Total restricted cash (non-current) $ 2,298 $ 364 (a) In connection with the Company’s lease agreement for its facility in Cambridge, Massachusetts, the Company maintains a letter of credit of $264, which is secured by restricted cash, for the benefit of the landlord. (b) The Company maintains a letter of credit, which is secured by a restricted cash amount of $250 as of June 30, 2019, for the benefit of the landlord in connection with a leased facility in Waltham, Massachusetts. (c) In connection with the Company’s lease agreement for its laboratory and office facility in Vienna, Austria, the Company maintains a letter of credit of $95, which is secured by restricted cash, for the benefit of the landlord. (d) As of June 30, 2019 and December 31, 2018, the Company was required to maintain a separate cash balance of $150 and $100, respectively, to collateralize corporate credit cards with a bank. (e) In accordance with the Company’s loan agreement with Österreichische Forschungsförderungsgesellschaft mbH (“FFG”), as amended (see Note 7), the Company must maintain a cash balance of at least 70% of the outstanding principal of the FFG loan in a local Austrian bank account. As of June 30, 2019, non-current restricted cash includes 70% of the non-current portion of the FFG loan. In addition, 70% of the current portion of the FFG loan, or $3,163, is classified as current restricted cash on the Company’s consolidated balance sheet as of June 30, 2019. |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the sum to the total of amounts shown in the Company’s condensed consolidated statement of cash flows as of June 30, 2019, December 31, 2018, June 30, 2018 and December 31, 2017: June 30, 2019 December 31, 2018 June 30, 2018 December 31, 2017 Cash and cash equivalents $ 90,180 $ 8,134 $ 12,566 $ 26,684 Restricted cash, current portion 3,163 — — — Restricted cash, non-current portion 2,298 364 364 364 Total cash, cash equivalents and restricted cash $ 95,641 $ 8,498 $ 12,930 $ 27,048 |
Property and Equipment | Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset, as follows: Estimated Useful Life Office furniture 3 years Computer equipment 3 years Software 3 years Laboratory equipment 3 to 10 years Leasehold improvements Shorter of lease term or 10 years |
Merger Accounting (Tables)
Merger Accounting (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The following summarizes the preliminary estimate of the purchase price paid in the Merger: Number of shares of the combined organization owned by Arsanis stockholders (1) 2,440,582 Multiplied by the fair value per share of Arsanis common stock (2) $ 18.66 Fair value of consideration issued it effect the Merger $ 45,541 Fair value of replacement awards held by former employees, board of directors and consultants of Arsanis that were vested as of the Merger. $ 817 Purchase price: $ 46,358 (1) The number of shares of 2,440,582 represents the historical 14,643,737 shares of Arsanis common stock outstanding immediately prior to the closing of the Merger, adjusted for the Reverse Stock Split. (2) Based on the last reported sale price of Arsanis common stock on the Nasdaq Global Market on March 13, 2019, the closing date of the Merger, and gives effect to the Reverse Stock Split. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following summarizes the allocation of the purchase price to the net tangible and intangible assets acquired: Cash, cash equivalents and restricted cash $ 26,406 Other current assets 2,147 Property and equipment, net 68 IPR&D indefinite-lived intangible assets 4,900 Other assets, non-current 486 Current liabilities (5,205 ) Loans payable (8,713 ) Other liabilities, non-current (840 ) Goodwill 27,109 Purchase price $ 46,358 |
Business Acquisition, Pro Forma Information | The following supplemental unaudited pro forma information presents the Company’s financial results as if the acquisition of Arsanis had occurred on January 1, 2018: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 (unaudited) Revenue $ — $ — $ — $ — Net loss $ (12,904 ) $ (18,616 ) $ (29,162 ) $ (38,851 ) |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values: Fair Value Measurements as of June 30, 2019 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents—money market funds $ — $ 89,545 $ — $ 89,545 $ — $ 89,545 $ — $ 89,545 Liabilities: None Fair Value Measurements as of December 31, 2018 Using: Level 1 Level 2 Level 3 Total Assets: Cash equivalents—money market fund $ — $ 8,134 $ — $ 8,134 $ — $ 8,134 $ — $ 8,134 Liabilities: Preferred stock warrant liability $ — $ — $ 4,947 $ 4,947 Derivative liability — — 201 $ 201 $ — $ — $ 5,148 $ 5,148 |
Summary of Aggregate Fair Values of Warrant Liability and Derivative Liability | The following table provides a roll-forward of the aggregate fair values of the Company’s warrant liability and derivative liability, for which fair values are determined using Level 3 inputs: Preferred Stock Warrant Liability Derivative Liability Balance as of December 31, 2018 $ 4,947 $ 201 Change in fair value 288 (183 ) Conversion of convertible preferred stock warrant into common stock warrant in connection with Merger (5,235 ) Balance as of June 30, 2019 $ — $ 18 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following: June 30, 2019 December 31, 2018 Leasehold improvements $ 336 $ 299 Furniture and fixtures 105 53 Computer equipment 52 56 Software 9 9 Lab equipment 61 — 563 417 Less: Accumulated depreciation and amortization (305 ) (176 ) $ 258 $ 241 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Text Block [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: June 30, 2019 December 31, 2018 Accrued employee compensation and benefits $ 1,374 924 Accrued external research and development expenses 2,561 754 Accrued professional fees 879 1,324 Other 280 249 $ 5,094 $ 3,251 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Long Term Debt | Long-term debt consisted of the following: June 30, 2019 December 31, 2018 Principal amount of long-term debt $ 26,717 $ 10,000 Less: Current portion of long-term debt (4,519 ) (1,687 ) Long-term debt, net of current portion 22,198 8,313 Debt discount, net of accretion (672 ) (226 ) Cumulative accretion of final payment due at maturity 222 58 Long-term debt, including accretion, net of current portion $ 21,748 $ 8,145 |
Schedule of Future Principal Payments and the Final Payments Due | As of June 30, 2019, future principal payments and the final payment due under the Company’s loan agreements were as follows: Year Ending December 31, Hercules FFG Total 2019 $ — $ — $ — 2020 — 4,519 4,519 2021 — 2,198 2,198 2022 11,897 — 11,897 2023 8,103 — 8,103 Long-term debt $ 20,000 $ 6,717 $ 26,717 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense for the three and six months ended June 30, 2019 were as follows: Lease Cost For the Three months ended June 30, 2019 For the Six months ended June 30, 2019 Fixed operating lease cost $ 198 $ 385 Short-term lease costs 38 46 Total lease expense $ 236 $ 431 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 266 $ 467 Leased assets obtained in exchange for new operating lease liabilities (1) $ 388 Weighted-average remaining lease term—operating leases 3.5 years Weighted-average discount rate—operating leases 9.0 % (1) Acquired in Merger with Arsanis |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities due under these lease agreements as of June 30, 2019 are as follows: Maturity of lease liabilities Operating Leases 2019 (remainder of 2019) $ 551 2020 1,085 2021 1,098 2022 754 2023 263 Thereafter — Total lease payments 3,751 Less: interest (522 ) Total operating lease liabilities as of June 30, 2019 $ 3,229 |
Summary of Future Minimum Lease Payments Due under Operating Leases | Future annual minimum lease payments due under the Company’s operating leases as of December 31, 2018 were as follows: Year Ending December 31, Operating Leases 2019 $ 810 2020 823 2021 835 2022 492 Total $ 2,960 |
Preferred and Common Stock Wa_2
Preferred and Common Stock Warrants (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Warrants | The following table provides a roll forward of outstanding warrants: Number of warrants Weighted Average Exercise Price Weighted Average Contractual Term (Years) Outstanding and exercisable warrants to purchase preferred shares as of December 31, 2018 5,146,400 $ 1.94 4.23 Converted to warrants for the purchase of common stock and adjusted for the Exchange Ratio and Reverse Stock Split (4,657,350 ) Issued 6,035,000 12.43 Exercised (33,846 ) 13.20 Cancelled — — Outstanding and exercisable as of June 30, 2019 6,490,204 $ 13.03 3.15 |
Schedule of Warrant to Purchase Redeemable Convertible Preferred Stock | As of June 30, 2019, the Company’s outstanding warrants to purchase shares of common stock consisted of the following: Issuance Date Number of Shares of Common Stock Issuable Exercise Price Classification Expiration Date August 14, 2015 81,228 $ 21.78 Equity August 14, 2020 August 21, 2015 69,603 $ 21.78 Equity August 21, 2020 October 25, 2016 5,155 $ 19.78 Equity October 24, 2026 November 1, 2017 130,609 $ 19.78 Equity October 31, 2020 November 17, 2017 8,442 $ 19.78 Equity November 16, 2020 December 4, 2017 5,661 $ 19.78 Equity December 3, 2020 December 28, 2017 6,925 $ 19.78 Equity December 27, 2020 December 28, 2017 115,916 $ 19.78 Equity December 28, 2027 September 12, 2018 25,275 $ 19.78 Equity September 12, 2021 September 12, 2018 20,220 $ 19.78 Equity September 12, 2028 October 19, 2018 20,016 $ 19.78 Equity October 19, 2028 March 13, 2019 5,000 $ 19.80 Equity March 12, 2029 April 16, 2019 3,866,154 $ 13.20 Equity April 15, 2024 April 16, 2019 2,130,000 $ 11.00 Equity n/a 6,490,204 As of December 31, 2018, the Company’s outstanding warrants to purchase shares of preferred stock (which converted into warrants to purchase common stock upon close of the Merger) consisted of the following (not adjusted for the Reverse Stock Split or Exchange Ratio): December 31, 2018 Warrant Name Issuance Date Number of Shares of Preferred Stock Issuable Exercise Price Exercisable for Classification Expiration Date Series A warrants August 14, 2015 854,785 $ 2.07 Series A Liability August 14, 2020 Series A warrants August 21, 2015 732,453 $ 2.07 Series A Liability August 21, 2020 SVB warrants October 25, 2016 54,256 $ 1.88 Series A Liability October 24, 2026 Series B warrants November 1, 2017 1,374,435 $ 1.88 Series B Liability October 31, 2020 Series B warrants November 17, 2017 88,845 $ 1.88 Series B Liability November 16, 2020 Series B warrants December 4, 2017 59,576 $ 1.88 Series B Liability December 3, 2020 Series B warrants December 28, 2017 72,875 $ 1.88 Series B Liability December 27, 2020 Series B warrants December 28, 2017 1,219,815 $ 1.88 Series B Liability December 28, 2027 Series B warrants September 12, 2018 265,957 $ 1.88 Series B Liability September 12, 2021 Series B warrants September 12, 2018 212,765 $ 1.88 Series B Liability September 12, 2028 Series B warrants October 19, 2018 210,638 $ 1.88 Series B Liability October 19, 2028 5,146,400 |
Common Stock, Redeemable Comm_2
Common Stock, Redeemable Common Stock, and Convertible Preferred Stock (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Federal Home Loan Banks [Abstract] | |
Preferred Stock | As of June 30, 2019, there was no preferred stock outstanding. As of December 31, 2018, the preferred stock consisted of the following: December 31, 2018 Preferred Stock Designated Preferred Stock Issued and Outstanding Carrying Value Liquidation Preference Common Stock Issuable Upon Conversion (1) Series Seed preferred stock 2,313,523 1,516,136 $ 1,310 $ 1,444 143,630 Series A preferred stock 22,000,000 19,946,862 32,480 47,624 1,895,610 Series B preferred stock 25,100,000 18,616,569 30,885 34,999 1,769,190 49,413,523 40,079,567 $ 64,675 $ 84,067 3,808,430 (1) Adjusted to reflect Reverse Stock Split and Exchange Ratio. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Valuation | The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees, directors and non- employees: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Risk-free interest rate 2.0 % 2.6 % 2.1 % 2.6 % Expected term (in years) 6.05 5.67 6.00 5.74 Expected volatility 88.0 % 87.4 % 88.9 % 86.7 % Expected dividend yield 0 % 0 % 0 % 0 % |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity for the six months ended June 30, 2019: Number of Shares Weighted Average Exercise Price Weighted Average Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of December 31, 2018 797,931 $ 8.29 8.42 $ 6,486 Assumed as part of Merger with Arsanis 271,230 62.60 Granted 377,906 16.21 Exercised (17,183 ) 6.68 Forfeited (156,352 ) 51.98 Outstanding as of June 30, 2019 1,273,532 $ 21.97 7.65 $ 7,168 Exercisable as of June 30, 2019 489,033 $ 21.62 7.02 Vested and expected to vest as of June 30, 2019 1,097,545 $ 17.69 8.34 |
Summary of Stock-Based Compensation Expense Classification | Stock-based compensation expense was classified in the consolidated statements of operations as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Research and development expense $ 214 $ 51 $ 298 $ 89 General and administrative expense 219 94 397 184 Total stock-based compensation 433 145 695 273 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | Basic and diluted net loss per share attributable to common stockholders was calculated as follow: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator: Net loss $ (13,383 ) $ (6,034 ) $ (24,256 ) $ (13,401 ) Accruing dividends on Series A convertible preferred stock — (748 ) (592 ) (1,488 ) Adjustment to accumulated deficit in connection with repurchase of Series Seed convertible preferred stock — (22 ) — (22 ) Net loss attributable to common stockholders $ (13,383 ) $ (6,804 ) $ (24,848 ) $ (14,911 ) Denominator: Weighted average common shares outstanding—basic and diluted 13,177,235 458,718 7,479,178 458,346 Net loss per share attributable to common stockholders— basic and diluted $ (1.02 ) $ (14.83 ) $ (3.32 ) $ (32.53 ) |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss per Share Attributable to Common Stockholders | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end and adjusted for the Exchange Ratio and Reverse Stock Split, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Options to purchase common stock 1,273,532 532,081 1,273,532 532,081 Convertible preferred stock (as converted to common stock) — 3,556,147 — 3,556,147 Warrants to purchase common stock (excluding prefunded warrants, which are included in basic shares outstanding) 4,360,204 423,539 4,360,204 423,539 5,633,736 4,511,767 5,633,736 4,511,767 |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2019 | Mar. 13, 2019 | |
Schedule Of Accounting Policies [Line Items] | ||
Percentage of common stock owned | 63.70% | |
Reverse stock split, description | 1-for-6 | |
Arsanis [Member] | ||
Schedule Of Accounting Policies [Line Items] | ||
Business acquisition share exchange ratio | 0.5702 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Compensating Balance Arrangements (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Total restricted cash (non-current) | $ 2,298 | $ 364 | $ 364 | $ 364 |
Corporate Credit Card Collateral [Member] | ||||
Total restricted cash (non-current) | 150 | 100 | ||
Compensating Balance Arrangement [Member] | ||||
Total restricted cash (non-current) | 1,539 | |||
Letter of Credit [Member] | Cambridge Lease Agreement [Member] | ||||
Total restricted cash (non-current) | 264 | $ 264 | ||
Letter of Credit [Member] | Waltham Lease [Member] | ||||
Total restricted cash (non-current) | 250 | |||
Letter of Credit [Member] | Vienna Austria Lease [Member] | ||||
Total restricted cash (non-current) | $ 95 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Compensating Balance Arrangements (Detail) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 08, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Total restricted cash (non-current) | $ 2,298 | $ 364 | $ 364 | $ 364 | |
Restricted Cash, Current | $ 3,163 | ||||
FFG Loan Agreement [Member] | |||||
Percentage of minimum cash balance | 70.00% | ||||
Percentage of non-current portion of loan | 70.00% | ||||
Percentage of current portion of loan | 70.00% | ||||
Restricted Cash, Current | $ 3,163 | ||||
Corporate Credit Card Collateral [Member] | |||||
Total restricted cash (non-current) | 150 | 100 | |||
Letter of Credit [Member] | Cambridge Lease Agreement [Member] | |||||
Total restricted cash (non-current) | 264 | $ 264 | |||
Letter of Credit [Member] | Waltham Lease [Member] | |||||
Total restricted cash (non-current) | 250 | ||||
Letter of Credit [Member] | Vienna Austria Lease [Member] | |||||
Total restricted cash (non-current) | 95 | ||||
Letter of Credit [Member] | Vienna Austria Lease [Member] | Laboratory And Office Facility Leases [Member] | |||||
Total restricted cash (non-current) | $ 95 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Mar. 13, 2019 | Jan. 01, 2019 | |
Restricted Cash And Cash Equivalents Items [Line Items] | ||||
Minimum liquidity as a percentage of debt | 125.00% | 125.00% | ||
Maximum liquidity other than cash and cash equivalents | $ 2,500 | $ 2,500 | ||
Debt instrument covenant liquidity in cash | 25,000 | 25,000 | ||
Fair value of derivative liability | 0 | 0 | $ 5,235 | |
Comprehensive loss included of foreign currency translation gain adjustments | (65) | (42) | ||
Operating lease liabilities | 3,229 | 3,229 | ||
Right-of-use assets | 2,187 | 2,187 | ||
Accounting Standards Update 2016-02 [Member] | ||||
Restricted Cash And Cash Equivalents Items [Line Items] | ||||
Operating lease liabilities | 2,500 | 2,500 | $ 2,538 | |
Right-of-use assets | $ 2,000 | $ 2,000 | $ 2,026 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 90,180 | $ 8,134 | $ 12,566 | $ 26,684 |
Restricted Cash, Current | 3,163 | |||
Restricted cash, non-current portion | 2,298 | 364 | 364 | 364 |
Total cash, cash equivalents and restricted cash | $ 95,641 | $ 8,498 | $ 12,930 | $ 27,048 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Property and Equipment (Detail) | 6 Months Ended |
Jun. 30, 2019 | |
Furniture and Fixtures [Member] | |
Estimated useful life | 3 years |
Computer Equipment [Member] | |
Estimated useful life | 3 years |
Software Development [Member] | |
Estimated useful life | 3 years |
Laboratory Equipment [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Laboratory Equipment [Member] | Maximum [Member] | |
Estimated useful life | 10 years |
Leasehold Improvements [Member] | |
Estimated useful life | 10 years |
Estimated useful life | Shorter of lease term or 10 years |
Merger Accounting - Additional
Merger Accounting - Additional Information (Detail) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019USD ($)Programshares | Jun. 30, 2018USD ($) | Mar. 13, 2019 | |
Business Acquisition [Line Items] | |||
Business acquisition, equity interest | 63.70% | ||
Goodwill | $ 27,109 | ||
Goodwill, Purchase Accounting Adjustments | 298 | ||
Business combination, acquisition related costs | $ 1,000 | ||
Number of development programs acquired | Program | 3 | ||
Weighted average discount rate | 19.50% | ||
Pro Forma [Member] | |||
Business Acquisition [Line Items] | |||
Business combination, acquisition related costs | $ 2,663 | $ 2,663 | |
Arsanis Security Holders [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, equity interest | 31.30% | ||
XFour Security Holders [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, equity interest | 68.70% | ||
Arsanis [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, date of acquisition | Mar. 13, 2019 | ||
Business acquisition share exchange ratio | 0.5702 | ||
Business combination options to purchase of common stock | shares | 271,230 | ||
Goodwill | $ 27,109 |
Merger Accounting - Schedule of
Merger Accounting - Schedule of Business Acquisitions by Acquisition, Contingent Consideration (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2019 | ||
Acquisition Date [Line Items] | |||
Fair value of consideration issued it effect the Merger | $ 45,541 | ||
Arsanis [Member] | |||
Acquisition Date [Line Items] | |||
Number of shares of the combined organization owned by Arsanis stockholders | [1] | 2,440,582 | |
Multiplied by the fair value per share of Arsanis common stock | [2] | $ 18.66 | |
Fair value of consideration issued it effect the Merger | $ 45,541 | ||
Fair value of replacement awards held by former employees, board of directors and consultants of Arsanis that were vested as of the Merger. | 817 | ||
Purchase price: | $ 46,358 | ||
[1] | The number of shares of 2,440,582 represents the historical 14,643,737 shares of Arsanis common stock outstanding immediately prior to the closing of the Merger, adjusted for the Reverse Stock Split. | ||
[2] | Based on the last reported sale price of Arsanis common stock on the Nasdaq Global Market on March 13, 2019, the closing date of the Merger, and gives effect to the Reverse Stock Split. |
Merger Accounting - Schedule _2
Merger Accounting - Schedule of Business Acquisitions by Acquisition, Contingent Consideration (Parenthetical) (Detail) | 6 Months Ended |
Jun. 30, 2019shares | |
Acquisition Date [Line Items] | |
Stock issued during period, shares, reverse stock splits | 2,440,582 |
Arsanis [Member] | |
Acquisition Date [Line Items] | |
Stock issued during period, shares, reverse stock splits | 14,643,737 |
Merger Accounting - Schedule _3
Merger Accounting - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Acquisition Date [Line Items] | |
Goodwill | $ 27,109 |
Arsanis [Member] | |
Acquisition Date [Line Items] | |
Cash, cash equivalents and restricted cash | 26,406 |
Other current assets | 2,147 |
Property and equipment, net | 68 |
IPR&D indefinite-lived intangible assets | 4,900 |
Other assets, non-current | 486 |
Current liabilities | (5,205) |
Loans payable | (8,713) |
Other liabilities, non-current | (840) |
Goodwill | 27,109 |
Purchase price | $ 46,358 |
Merger Accounting - Business Ac
Merger Accounting - Business Acquisition, Pro Forma Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||||
Net loss | $ (12,904) | $ (18,616) | $ (29,162) | $ (38,851) |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Schedule of Assets and Liabilities Measured at Fair Value (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash equivalents | $ 89,545 | $ 8,134 |
Liabilities: | ||
Derivative liability | 5,148 | |
Preferred Stock Warrant Liability [Member] | ||
Liabilities: | ||
Derivative liability | 4,947 | |
Derivative Liability [Member] | ||
Liabilities: | ||
Derivative liability | 201 | |
Money Market Funds [Member] | ||
Assets: | ||
Cash equivalents | 89,545 | 8,134 |
Level 2 [Member] | ||
Assets: | ||
Cash equivalents | 89,545 | 8,134 |
Level 2 [Member] | Money Market Funds [Member] | ||
Assets: | ||
Cash equivalents | $ 89,545 | 8,134 |
Level 3 [Member] | ||
Liabilities: | ||
Derivative liability | 5,148 | |
Level 3 [Member] | Preferred Stock Warrant Liability [Member] | ||
Liabilities: | ||
Derivative liability | 4,947 | |
Level 3 [Member] | Derivative Liability [Member] | ||
Liabilities: | ||
Derivative liability | $ 201 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Transfers between fair value levels | $ 0 | $ 0 |
Genzyme Agreement [Member] | ||
Fair value of derivative liability | $ 0 | $ 183 |
Measurement Input, Expected Dividend Rate [Member] | ||
Expected dividend yield | 0.00% | |
Arsanis [Member] | Genzyme Agreement [Member] | ||
Fair value of derivative liability | $ 0 | |
Series A Convertible Preferred Stock [Member] | Arsanis And Merger Sub [Member] | ||
Preferred stock Fair value per share | $ 1.70 | |
Series B Convertible Preferred Stock [Member] | Arsanis And Merger Sub [Member] | ||
Preferred stock Fair value per share | $ 1.86 | |
Convertible Preferred Stock [Member] | ||
Number of warrants for purchase of convertible preferred shares | 0 |
Fair Value of Financial Asset_5
Fair Value of Financial Assets and Liabilities - Summary of Aggregate Fair Values of Warrant Liability and Derivative Liability (Detail) - Level 3 [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Preferred Stock Warrant Liability [Member] | |
Fair Value Assets Measured On Recurring And Nonrecurring Basis [Line Items] | |
Balance as of December 31, 2018 | $ 4,947 |
Change in fair value | 288 |
Conversion of convertible preferred stock warrant into common stock warrant in connection with Merger | (5,235) |
Derivative Liability [Member] | |
Fair Value Assets Measured On Recurring And Nonrecurring Basis [Line Items] | |
Balance as of December 31, 2018 | 201 |
Change in fair value | (183) |
Balance as of June 30, 2019 | $ 18 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 563 | $ 417 |
Less: Accumulated depreciation and amortization | (305) | (176) |
Property and Equipment, Net | 258 | 241 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 336 | 299 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 105 | 53 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 52 | 56 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | 9 | $ 9 |
Lab Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, Gross | $ 61 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expense | $ 44 | $ 51 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued employee compensation and benefits | $ 1,374 | $ 924 |
Accrued external research and development expenses | 2,561 | 754 |
Accrued professional fees | 879 | 1,324 |
Other | 280 | 249 |
Total accrued expenses | $ 5,094 | $ 3,251 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long Term Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Long Term Debt [Abstract] | ||
Principal amount of long-term debt | $ 26,717 | $ 10,000 |
Less: Current portion of long-term debt | (4,519) | (1,687) |
Long-term debt, net of current portion | 22,198 | 8,313 |
Debt discount, net of accretion | (672) | (226) |
Cumulative accretion of final payment due at maturity | 222 | 58 |
Long-term debt, including accretion, net of current portion | $ 21,748 | $ 8,145 |
Long Term Debt - SVB Loan Agree
Long Term Debt - SVB Loan Agreement - Additional Information (Detail) - SVB Loan Agreement [Member] - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Oct. 31, 2018 | Oct. 31, 2016 | Jun. 30, 2019 | Oct. 19, 2018 | Jun. 30, 2017 | |
Schedule Of Long Term Debt [Line Items] | |||||
Debt instrument variable percentage | 5.50% | ||||
Debt instrument description | Borrowings under the SVB Loan Agreement bore interest at a variable rate equal to 5.5% plus the greater of (i) 3.5% or (ii) The Wall Street Journal prime rate. | ||||
Repayment of outstanding loan principal | $ 4,333 | ||||
Repayments portion of total borrowing | 270 | ||||
Debt instrument prepayment premium | 87 | ||||
Debt instrument accrued interest | $ 23 | ||||
Debt instrument stated percentage | 10.75% | ||||
Minimum [Member] | |||||
Schedule Of Long Term Debt [Line Items] | |||||
Debt instrument variable percentage | 3.50% | ||||
Term Loan A [Member] | |||||
Schedule Of Long Term Debt [Line Items] | |||||
Maximum term loan borrowing capacity | $ 6,000 |
Long Term Debt - Hercules Loan
Long Term Debt - Hercules Loan Agreement - Additional Information (Detail) $ / shares in Units, $ in Thousands | Mar. 18, 2019$ / sharesshares | Mar. 13, 2019USD ($) | Dec. 31, 2018USD ($) | Oct. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 27, 2019USD ($) | Dec. 11, 2018USD ($) | Oct. 19, 2018USD ($) |
Schedule Of Long Term Debt [Line Items] | |||||||||||
Fair value of derivative liability | $ 5,235 | $ 0 | $ 0 | ||||||||
Minimum liquidity as a percentage of debt | 125.00% | 125.00% | |||||||||
Maximum liquidity other than cash and cash equivalents | $ 2,500 | $ 2,500 | |||||||||
Unamortized debt discount | $ 226 | 672 | $ 672 | ||||||||
Arsanis [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Business acquisition share exchange ratio | 0.5702 | ||||||||||
Hercules Loan Agreement [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 13,000 | ||||||||||
Proceeds from lines of credit | $ 8,000 | ||||||||||
Fair value of derivative liability | $ 326 | 282 | $ 132 | $ 132 | |||||||
Interest Expense, Debt | 382 | $ 0 | $ 739 | $ 0 | |||||||
Amount of interest expense including accretion of debt discount. | 101 | 215 | |||||||||
Unamortized debt discount | $ 104 | $ 104 | |||||||||
Effective interest rate of loan | 11.00% | 11.00% | |||||||||
Principal payments | $ 0 | ||||||||||
Hercules Loan Agreement [Member] | Arsanis [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Warrant exercise price | $ / shares | $ 19.80 | $ 99 | |||||||||
Number of warrants for purchase of convertible preferred shares | shares | 5,000 | ||||||||||
Business acquisition share exchange ratio | 0.5702 | ||||||||||
Hercules Loan Agreement [Member] | Series B Redeemable Convertible Preferred Stock [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Warrant issued to purchase stock | shares | 210,638 | ||||||||||
Warrant exercise price | $ / shares | $ 1.88 | ||||||||||
Class of warrant expiration period | 2028-10 | ||||||||||
Hercules Loan Agreement [Member] | Common Stock [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Warrant exercise price | $ / shares | $ 19.78 | ||||||||||
Number of warrants for purchase of convertible preferred shares | shares | 20,016 | ||||||||||
Hercules Loan Agreement [Member] | Additional Term Loan One [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,000 | ||||||||||
Proceeds from lines of credit | $ 2,000 | 2,000 | |||||||||
Line of credit facility, expiration date | Nov. 1, 2021 | ||||||||||
Hercules Loan Agreement [Member] | Additional Term Loan Two [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | 3,000 | ||||||||||
Line of credit facility, expiration date | Mar. 1, 2019 | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 8,000 | ||||||||||
June 2019 Loan Agreement [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 35,000 | $ 35,000 | |||||||||
Line of credit facility, expiration date | Jul. 1, 2023 | ||||||||||
Line of credit facility, outstanding | $ 10,000 | $ 10,000 | |||||||||
Line of credit facility, current borrowing capacity | $ 20,000 | ||||||||||
Line of credit interest rate, Description | Borrowings under the June 2019 Loan Agreement bear interest at a variable rate equal to the greater of (i) 8.75% or (ii) 8.75% plus The Wall Street Journal prime rate minus 6.0%. In an event of default, as defined in the June 2019 Loan Agreement, and until such event is no longer continuing, the interest rate applicable to borrowings under the June 2019 Loan Agreement would be increased by 4.0% | ||||||||||
Long-term Debt, Maturities repayment terms | Borrowings under the June 2019 Loan Agreement are repayable in monthly interest-only payments through January 1, 2022, and in equal monthly payments of principal and accrued interest from February 1, 2022 until the maturity date of the loan, which is July 1, 2023. At the Company’s option, the Company may prepay all, but not less than all, of the outstanding borrowings, subject to a prepayment premium of up to 2.0% of the principal amount outstanding as of the date of repayment. In addition, the June 2019 Loan Agreement provides for payments by the Company to Hercules of (i) $795,000 payable upon the earlier of November 1, 2021 or the repayment in full of all obligations under the June 2019 Loan Agreement, and (ii) 4.0% of the aggregate principal drawn under the June 2019 Loan Agreement payable upon the earlier of maturity or the repayment in full of all obligations under such agreement | ||||||||||
Debt instrument variable percentage | 8.75% | ||||||||||
Interest rate increase percentage | 4.00% | ||||||||||
Line of credit facility periodic payment | $ 795 | ||||||||||
Line of credit principal amount drawn percentage | 4.00% | ||||||||||
Minimum liquidity as a percentage of debt | 125.00% | 125.00% | |||||||||
Minimum liquidity as a percentage of debt | 100.00% | 100.00% | |||||||||
Maximum liquidity other than cash and cash equivalents | $ 2,500 | $ 2,500 | |||||||||
Fair value of derivative liability | $ 18 | 18 | |||||||||
Upfront payments | 180 | ||||||||||
Amortization of debt discount | $ 180 | ||||||||||
June 2019 Loan Agreement [Member] | First Tranche [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Term loan repayment period | Jan. 1, 2022 | ||||||||||
June 2019 Loan Agreement [Member] | Second Tranche [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Term loan repayment period | Feb. 1, 2022 | ||||||||||
June 2019 Loan Agreement [Member] | Prime Rate [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility interest rate | 6.00% | ||||||||||
June 2019 Loan Agreement [Member] | Minimum [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Debt instrument variable percentage | 8.75% | ||||||||||
June 2019 Loan Agreement [Member] | Maximum [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Debt instrument pre payment premium percentage | 2.00% | 2.00% | |||||||||
June 2019 Loan Agreement [Member] | Additional Term Loan One [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, additional borrowing capacity | $ 5,000 | $ 5,000 | |||||||||
June 2019 Loan Agreement [Member] | Additional Term Loan Two [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, additional borrowing capacity | $ 10,000 | $ 10,000 | |||||||||
June 2019 Loan Agreement [Member] | New Borrowings [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, current borrowing capacity | 10,000 | ||||||||||
June 2019 Loan Agreement [Member] | Previous Agreement [Member] | |||||||||||
Schedule Of Long Term Debt [Line Items] | |||||||||||
Line of credit facility, current borrowing capacity | $ 10,000 |
Long Term Debt - FFG Loan Agree
Long Term Debt - FFG Loan Agreement - Additional Information (Detail) - FFG Loan Agreement [Member] - USD ($) $ in Thousands | Mar. 08, 2019 | Jun. 30, 2019 |
Schedule Of Long Term Debt [Line Items] | ||
Debt instrument, maturity start date | Mar. 31, 2019 | |
Debt instrument, maturity end date | Mar. 31, 2021 | |
Repayment of outstanding loan principal | $ 2,914 | |
Number of years accelerated payment | 3 years | 5 years |
Percentage of minimum cash balance | 70.00% | |
Minimum [Member] | ||
Schedule Of Long Term Debt [Line Items] | ||
Debt instrument, interest rate | 0.75% | |
Maximum [Member] | ||
Schedule Of Long Term Debt [Line Items] | ||
Debt instrument, interest rate | 2.00% |
Long-Term Debt - Schedule of Fu
Long-Term Debt - Schedule of Future Principal Payments and the Final Payments Due (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Maturities [Line Items] | ||
2019 | $ 0 | |
2020 | 4,519 | |
2021 | 2,198 | |
2022 | 11,897 | |
2023 | 8,103 | |
Principal amount of long-term debt | 26,717 | $ 10,000 |
Hercules Loan Agreement [Member] | ||
Debt Maturities [Line Items] | ||
2019 | 0 | |
2022 | 11,897 | |
2023 | 8,103 | |
Principal amount of long-term debt | 20,000 | |
FFG Loan Agreement [Member] | ||
Debt Maturities [Line Items] | ||
2019 | 0 | |
2020 | 4,519 | |
2021 | 2,198 | |
Principal amount of long-term debt | $ 6,717 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | Mar. 13, 2019USD ($)ft²m² | Aug. 31, 2017USD ($)ft² | Jun. 30, 2019USD ($) | Jan. 01, 2019USD ($) |
Lessee Lease Description [Line Items] | ||||
Right-of-use assets | $ 2,187 | |||
Operating lease liabilities | 3,229 | |||
Lease liability, net of current portion | 2,369 | |||
Current portion of lease liability | $ 860 | |||
Cambridge Lease Agreement [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Lease expiration date | Jul. 31, 2022 | |||
Current office space under lease agreement | ft² | 13,000 | |||
Option to extend the lease agreement | The Company has the option to extend the lease for one period of five additional years. | |||
Lease, renewal term of contract | 5 years | |||
Base rent | $ 816 | |||
Waltham Lease [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Current office space under lease agreement | ft² | 6,000 | |||
Base rent | $ 262 | |||
Agreement commencement date | Jan. 1, 2019 | |||
Operating lease expiration | 5 years | |||
Vienna Lease [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Current office space under lease agreement | m² | 400 | |||
Base rent | $ 155 | |||
Agreement commencement date | Mar. 1, 2019 | |||
Lease, term of contract | 2 years | |||
Period for written notice for cancellable | 3 months 19 days | |||
Accounting Standards Update 2016-02 [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Right-of-use assets | $ 2,000 | $ 2,026 | ||
Operating lease liabilities | $ 2,500 | 2,538 | ||
Lease liability, net of current portion | 1,925 | |||
Current portion of lease liability | 613 | |||
Net deferred, accrued and prepaid rent | $ 512 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | ||
Leases [Abstract] | |||
Fixed operating lease cost | $ 198 | $ 385 | |
Short-term lease costs | 38 | 46 | |
Total lease expense | 236 | 431 | |
Operating cash flows from operating leases | $ 266 | 467 | |
Leased assets obtained in exchange for new operating lease liabilities | $ 388 | [1] | |
Weighted-average remaining lease term-operating leases | 3 years 6 months | 3 years 6 months | |
Weighted-average discount rate-operating leases | 9.00% | 9.00% | |
[1] | Acquired in Merger with Arsanis |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (remainder of 2019) | $ 551 |
2020 | 1,085 |
2021 | 1,098 |
2022 | 754 |
2023 | 263 |
Thereafter | 0 |
Total lease payments | 3,751 |
Less: interest | (522) |
Total operating lease liabilities as of June 30, 2019 | $ 3,229 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments Due under Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 810 |
2020 | 823 |
2021 | 835 |
2022 | 492 |
Total | $ 2,960 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
May 31, 2019 | Apr. 30, 2017 | Feb. 28, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Contingencies And Commitments [Line Items] | ||||||||
Research and development expense | $ 8,854,000 | $ 4,755,000 | $ 14,509,000 | $ 9,499,000 | ||||
Sponsored Research Agreement [Member] | ||||||||
Contingencies And Commitments [Line Items] | ||||||||
Purchase commitment, amount | $ 499,000 | |||||||
Purchase commitment, period | 3 years | |||||||
Research and development expense | 41,000 | 83,000 | ||||||
Non-cancelable purchase commitments amount | 139,000 | 139,000 | ||||||
Non-cancelable purchase commitments amount, 2019 | 83,000 | 83,000 | ||||||
Non-cancelable purchase commitments amount, 2020 | 56,000 | 56,000 | ||||||
Termination notice period | 30 days | |||||||
Maximum termination fees | $ 1,000,000 | |||||||
Indemnification Agreements [Member] | ||||||||
Contingencies And Commitments [Line Items] | ||||||||
Accrued liabilities | $ 0 | $ 0 | $ 0 | |||||
Adimab Option and License Agreement [Member] | ||||||||
Contingencies And Commitments [Line Items] | ||||||||
Potential milestone payments | $ 25,000,000 | |||||||
Option fee including up front payment | $ 250,000 |
Preferred and Common Stock Wa_3
Preferred and Common Stock Warrants - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Apr. 16, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Apr. 12, 2019 | Mar. 13, 2019 |
Fair value of warrant purchase | $ 0 | $ 5,235 | |||
Gain (loss) on change in fair value of warrant | $ 288 | ||||
Number of warrants, Issued | 6,035,000 | ||||
Class A Warrant [Member] | |||||
Number of warrants, Issued | 3,900,000 | ||||
Warrant exercise price | $ 13.20 | $ 13.20 | |||
Warrants expiration date | Apr. 15, 2024 | ||||
Pre Funded Warrant [Member] | |||||
Number of warrants, Issued | 2,130,000 | ||||
Warrant exercise price | $ 0.001 | $ 10.999 | |||
Conversion of warrant, description | Each of the pre-funded warrants is convertible into one common share, has a remaining exercise price of $0.001 per share and was immediately exercisable upon issuance. |
Preferred and Common Stock Wa_4
Preferred and Common Stock Warrants - Schedule of Outstanding Warrants (Detail) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ||
Number of warrants, Outstanding and exercisable warrants, Beginning Balance | 5,146,400 | |
Number of warrants, Converted to warrants for the purchase of common stock and adjusted for the Exchange Ratio and Reverse Stock Split | (4,657,350) | |
Number of warrants, Issued | 6,035,000 | |
Number of warrants, Exercised | (33,846) | |
Number of warrants, Outstanding and exercisable warrants, Ending Balance | 6,490,204 | 5,146,400 |
Weighted Average Exercise Price, Outstanding and exercisable warrants, Beginning Balance | $ 1.94 | |
Weighted Average Exercise Price, Issued | 12.43 | |
Weighted Average Exercise Price, Exercised | 13.20 | |
Weighted Average Exercise Price, Outstanding and exercisable warrants, Ending Balance | $ 13.03 | $ 1.94 |
Weighted Average Contractual Term, Outstanding and exercisable warrants | 3 years 1 month 24 days | 4 years 2 months 23 days |
Preferred and Common Stock Wa_5
Preferred and Common Stock Warrants - Summary of Outstanding Warrants to Purchase Shares of Common Stock (Detail) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Class of Warrant or Right [Line Items] | ||
Number of Shares of common Stock Issuable | 6,490,204 | 5,146,400 |
Issuance On August 14, 2015 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Aug. 14, 2015 | |
Number of Shares of common Stock Issuable | 81,228 | |
Exercise Price | $ 21.78 | |
Expiration Date | Aug. 14, 2020 | |
Issuance On August 14, 2015 [Member] | Series A Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Aug. 14, 2015 | |
Number of Shares of common Stock Issuable | 854,785 | |
Exercise Price | $ 2.07 | |
Expiration Date | Aug. 14, 2020 | |
Issuance On August 21, 2015 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Aug. 21, 2015 | |
Number of Shares of common Stock Issuable | 69,603 | |
Exercise Price | $ 21.78 | |
Expiration Date | Aug. 21, 2020 | |
Issuance On August 21, 2015 [Member] | Series A Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Aug. 21, 2015 | |
Number of Shares of common Stock Issuable | 732,453 | |
Exercise Price | $ 2.07 | |
Expiration Date | Aug. 21, 2020 | |
Issuance On October 25, 2016 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Oct. 25, 2016 | Oct. 25, 2016 |
Number of Shares of common Stock Issuable | 5,155 | 54,256 |
Exercise Price | $ 19.78 | $ 1.88 |
Expiration Date | Oct. 24, 2026 | Oct. 24, 2026 |
Issuance On November 1, 2017 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Nov. 1, 2017 | |
Number of Shares of common Stock Issuable | 130,609 | |
Exercise Price | $ 19.78 | |
Expiration Date | Oct. 31, 2020 | |
Issuance On November 1, 2017 [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Nov. 1, 2017 | |
Number of Shares of common Stock Issuable | 1,374,435 | |
Exercise Price | $ 1.88 | |
Expiration Date | Oct. 31, 2020 | |
Issuance On November 17, 2017 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Nov. 17, 2017 | |
Number of Shares of common Stock Issuable | 8,442 | |
Exercise Price | $ 19.78 | |
Expiration Date | Nov. 16, 2020 | |
Issuance On November 17, 2017 [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Nov. 17, 2017 | |
Number of Shares of common Stock Issuable | 88,845 | |
Exercise Price | $ 1.88 | |
Expiration Date | Nov. 16, 2020 | |
Issuance On December 4, 2017 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Dec. 4, 2017 | |
Number of Shares of common Stock Issuable | 5,661 | |
Exercise Price | $ 19.78 | |
Expiration Date | Dec. 3, 2020 | |
Issuance On December 4, 2017 [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Dec. 4, 2017 | |
Number of Shares of common Stock Issuable | 59,576 | |
Exercise Price | $ 1.88 | |
Expiration Date | Dec. 3, 2020 | |
Issuance On December 28, 2017 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Dec. 28, 2017 | |
Number of Shares of common Stock Issuable | 6,925 | |
Exercise Price | $ 19.78 | |
Expiration Date | Dec. 27, 2020 | |
Issuance On December 28, 2017 [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Dec. 28, 2017 | |
Number of Shares of common Stock Issuable | 72,875 | |
Exercise Price | $ 1.88 | |
Expiration Date | Dec. 27, 2020 | |
Issuance On December 28, 2017 One [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Dec. 28, 2017 | |
Number of Shares of common Stock Issuable | 115,916 | |
Exercise Price | $ 19.78 | |
Expiration Date | Dec. 28, 2027 | |
Issuance On December 28, 2017 One [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Dec. 28, 2017 | |
Number of Shares of common Stock Issuable | 1,219,815 | |
Exercise Price | $ 1.88 | |
Expiration Date | Dec. 28, 2027 | |
Issuance On September 12, 2018 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Sep. 12, 2018 | |
Number of Shares of common Stock Issuable | 25,275 | |
Exercise Price | $ 19.78 | |
Expiration Date | Sep. 12, 2021 | |
Issuance On September 12, 2018 [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Sep. 12, 2018 | |
Number of Shares of common Stock Issuable | 265,957 | |
Exercise Price | $ 1.88 | |
Expiration Date | Sep. 12, 2021 | |
Issuance On September 12, 2018 One [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Sep. 12, 2018 | |
Number of Shares of common Stock Issuable | 20,220 | |
Exercise Price | $ 19.78 | |
Expiration Date | Sep. 12, 2028 | |
Issuance On September 12, 2018 One [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Sep. 12, 2018 | |
Number of Shares of common Stock Issuable | 212,765 | |
Exercise Price | $ 1.88 | |
Expiration Date | Sep. 12, 2028 | |
Issuance On October 19, 2018 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Oct. 19, 2018 | |
Number of Shares of common Stock Issuable | 20,016 | |
Exercise Price | $ 19.78 | |
Expiration Date | Oct. 19, 2028 | |
Issuance On October 19, 2018 [Member] | Series B Preferred Stock Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Oct. 19, 2018 | |
Number of Shares of common Stock Issuable | 210,638 | |
Exercise Price | $ 1.88 | |
Expiration Date | Oct. 19, 2028 | |
Issuance On March 13, 2019 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Mar. 13, 2019 | |
Number of Shares of common Stock Issuable | 5,000 | |
Exercise Price | $ 19.80 | |
Expiration Date | Mar. 12, 2029 | |
Issuance On April 16, 2019 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Apr. 16, 2019 | |
Number of Shares of common Stock Issuable | 3,866,154 | |
Exercise Price | $ 13.20 | |
Expiration Date | Apr. 15, 2024 | |
Issuance On April 16, 2019 One [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issuance Date | Apr. 16, 2019 | |
Number of Shares of common Stock Issuable | 2,130,000 | |
Exercise Price | $ 11 |
Common Stock, Redeemable Comm_3
Common Stock, Redeemable Common Stock, and Convertible Preferred Stock - Additional Information (Detail) - USD ($) | Apr. 12, 2019 | Aug. 31, 2015 | Aug. 31, 2014 | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 16, 2019 |
Common stock, authorized shares | 33,333,333 | 11,070,776 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Common stock, voting right | Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. | |||||
Dividends on common stock declared or paid | $ 0 | $ 0 | ||||
Stock issued during period, shares, new issues | 5,670,000 | |||||
Sale of stock, price per share | $ 11 | |||||
Proceeds from issuance common stock before underwriters discounts and commissions and offering expenses | $ 85,800,000 | |||||
Convertible preferred stock, shares authorized | 49,413,523 | |||||
Preferred stock outstanding | $ 0 | |||||
Series Seed Preferred Stock [Member] | ||||||
Convertible preferred stock, shares authorized | 10,000,000 | 59,413,523 | ||||
Convertible preferred stock, par or stated value per share | $ 0.001 | $ 0.001 | ||||
Genzyme Agreement [Member] | ||||||
Stock issued during period, shares, new issues | 107,371 | |||||
Sale of stock, price per share | $ 0.01 | |||||
Stock issued during period | 107,371 | |||||
Common stock aggregate fair value | $ 734,000 | |||||
Common stock repurchase price per share | $ 0.01 | |||||
Pre Funded Warrant [Member] | ||||||
Class of warrant or right, warrants to purchase of common stock | 2,130,000 | |||||
Warrant exercise price | $ 10.999 | $ 0.001 | ||||
Class A Warrant [Member] | ||||||
Class of warrant or right, warrants to purchase of common stock | 3,900,000 | |||||
Warrant exercise price | $ 13.20 | $ 13.20 | ||||
Class of warrants or rights expiration period | 5 years |
Common Stock, Redeemable Comm_4
Common Stock, Redeemable Common Stock, and Convertible Preferred Stock - Convertible Preferred Stock (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
Temporary Equity [Line Items] | |
Preferred Stock Designated | 49,413,523 |
Preferred Stock Issued | 40,079,567 |
Preferred Stock Outstanding | 40,079,567 |
Carrying Value | $ | $ 64,675 |
Liquidation Preference | $ | $ 84,067 |
Common Stock Issuable Upon Conversion | 3,808,430 |
Series Seed Preferred Stock [Member] | |
Temporary Equity [Line Items] | |
Preferred Stock Designated | 2,313,523 |
Preferred Stock Issued | 1,516,136 |
Preferred Stock Outstanding | 1,516,136 |
Carrying Value | $ | $ 1,310 |
Liquidation Preference | $ | $ 1,444 |
Common Stock Issuable Upon Conversion | 143,630 |
Series A Preferred Stock | |
Temporary Equity [Line Items] | |
Preferred Stock Designated | 22,000,000 |
Preferred Stock Issued | 19,946,862 |
Preferred Stock Outstanding | 19,946,862 |
Carrying Value | $ | $ 32,480 |
Liquidation Preference | $ | $ 47,624 |
Common Stock Issuable Upon Conversion | 1,895,610 |
Series B Preferred Stock | |
Temporary Equity [Line Items] | |
Preferred Stock Designated | 25,100,000 |
Preferred Stock Issued | 18,616,569 |
Preferred Stock Outstanding | 18,616,569 |
Carrying Value | $ | $ 30,885 |
Liquidation Preference | $ | $ 34,999 |
Common Stock Issuable Upon Conversion | 1,769,190 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Jan. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share based compensation, description | These plans are administered by the Board of Directors or, at the discretion of the Board of Directors, by a committee of the Board of Directors. The exercise prices, vesting and other restrictions are determined at the discretion of the Board of Directors, or its committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of the stock option may not be greater than ten years. | ||
Vesting rights, descriptions | Incentive stock options granted to employees and restricted stock awards granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over four years. Non-statutory options granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over three or four years. | ||
Number of share options exercisable, aggregate intrinsic Value | $ 130 | $ 130 | |
Options granted, weighted average grant date fair value | $ 11.92 | ||
Restricted Stock Units (RSUs) [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share based compensation, restricted stock units granted | 116,689 | ||
Restricted stock units vested, percentage | 25.00% | ||
Shares based compensation, vested period | 4 years | ||
Share based compensation, grant date fair value | $ 1,721 | ||
Unrecognized compensation cost of stock based awards | $ 6,529 | $ 6,529 | |
Unrecognized compensation cost of stock based awards, recognition period | 3 years 4 months 24 days | ||
2017 Employee Stock Purchase Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Shares of common stock issued | 0 | ||
2015 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Ordinary share issued | 969,340 | 969,340 | |
2017 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Ordinary share issued | 170,915 | 170,915 | |
Common stock reserved for future issuance, description | The number of shares of common stock reserved for issuance under this plan will automatically increase on January 1 of each year, through January 1, 2027, in an amount equal to the lowest of 170,915 shares of the Company’s common stock (as adjusted for the Reverse Stock Split), 4% of the number of shares of the Company’s common stock outstanding on January 1 of each year and an amount determined by the Company’s board of directors. | ||
Percentage of number of common stock outstanding | 4.00% | ||
2019 Equity Incentive Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Ordinary share issued | 150,000 | 150,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used in Black-Scholes Option-Pricing Model to Determine Grant-date Fair Value of Stock Options Granted (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Sharebased Compensation Arrangement By Sharebased Payment Award Stock Options Shares Outstanding Weighted Average Exercise Price And Additional Disclosures [Abstract] | ||||
Risk-free interest rate | 2.00% | 2.60% | 2.10% | 2.60% |
Expected term (in years) | 6 years 18 days | 5 years 8 months 1 day | 6 years | 5 years 8 months 26 days |
Expected volatility | 88.00% | 87.40% | 88.90% | 86.70% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of shares outstanding, Beginning balance | 797,931 | |
Number of shares, Assumed as part of merger with Arsanis | 271,230 | |
Number of shares, Granted | 377,906 | |
Number of shares, Exercised | (17,183) | |
Number of shares, Forfeited | (156,352) | |
Number of shares Outstanding, Ending balance | 1,273,532 | 797,931 |
Number of shares Options, Exercisable | 489,033 | |
Number of shares Options, Vested and expected to vest | 1,097,545 | |
Weighted average exercise price, Beginning balance | $ 8.29 | |
Weighted average exercise price, Assumed as part of merger with Arsanis | 62.60 | |
Weighted average exercise price, Granted | 16.21 | |
Weighted average exercise price, Exercised | 6.68 | |
Weighted average exercise price, Forfeited | 51.98 | |
Weighted average exercise price, Ending balance | 21.97 | $ 8.29 |
Weighted average exercise price, Exercisable | 21.62 | |
Weighted average exercise price, Vested and expected to vest | $ 17.69 | |
Weighted average contractual term outstanding | 7 years 7 months 24 days | 8 years 5 months 1 day |
Weighted average contractual term outstanding, Exercisable | 7 years 7 days | |
Weighted average contractual term outstanding, Vested and expected to vest | 8 years 4 months 2 days | |
Aggregate intrinsic value, Beginning balance | $ 6,486 | |
Aggregate intrinsic value, Ending balance | $ 7,168 | $ 6,486 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-Based Compensation Expense Classification (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 433 | $ 145 | $ 695 | $ 273 |
Research and Development Expense [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | 214 | 51 | 298 | 89 |
General and Administrative Expense [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 219 | $ 94 | $ 397 | $ 184 |
License, Collaboration, and F_2
License, Collaboration, and Funding Agreements - Additional Information (Detail) - USD ($) | Apr. 12, 2019 | Dec. 31, 2016 | Aug. 31, 2014 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Collaboration License And Funding Arrangements [Line Items] | |||||||
Stock issued during period, shares, new issues | 5,670,000 | ||||||
Reverse stock split, description | 1-for-6 | ||||||
Shares issued price per share | $ 11 | ||||||
Other income | $ 149,000 | $ 149,000 | |||||
AUSTRIA [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
Grant income | 14.00% | ||||||
Genzyme Agreement [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
Upfront payments | $ 50,000 | ||||||
Cash payment | $ 300,000 | ||||||
Stock issued during period, shares, new issues | 107,371 | ||||||
Reverse stock split, description | adjusted for the 1 for 6 Reverse Stock Split and Exchange Ratio | ||||||
Research and Development Expense | $ 734,000 | ||||||
Shares issued price per share | $ 0.01 | ||||||
Future milestone payments | $ 25,000,000 | ||||||
Consideration paid to equity shareholders | 5.50% | ||||||
Derivative Liability | 0 | $ 0 | $ 183,000 | ||||
License agreement termination description | The agreement may be terminated by either party with at least 90 days’ notice in the event of material breach by the other party that remains uncured for 90 days, by either party for insolvency or bankruptcy of the other party, immediately by Genzyme if the Company challenges the licensed patents, or immediately by the Company if a material safety issue arises. | ||||||
Payment on obligation under license agreement | $ 0 | ||||||
Georgetown Agreement [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
License agreement termination description | The event (i) the Company fails to pay any amount and fails to cure such failure within 30 days after receipt of notice, (ii) the Company defaults in its obligation to obtain and maintain insurance and fails to remedy such breach within 45 days after receipt of notice, or (iii) the Company declares insolvency or bankruptcy. The Company may terminate the agreement at any time upon at least 60 days’ written notice. | ||||||
Payment on obligation under license agreement | $ 0 | ||||||
One time upfront payment | $ 50,000 | ||||||
Milestone payments | 800,000 | ||||||
Milestone payment obligation | 0 | $ 0 | |||||
BIDMC Agreement [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
License agreement termination description | The event (i) the Company fails to pay any amount and fails to cure such failure within 15 days after receipt of notice, (ii) the Company is in material breach of any material provision of the agreement and fails to remedy such breach within 60 days after receipt of notice, or (iii) the Company declares insolvency or bankruptcy. The Company may terminate the agreement at any time upon at least 90 days’ written notice. | ||||||
Payment on obligation under license agreement | $ 0 | ||||||
One time upfront payment | $ 20,000 | ||||||
Research and Development Incentive [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
Grant receivable | 1,700,000 | 1,700,000 | |||||
Other income | $ 136,000 | $ 136,000 | |||||
Janssen License and Option Agreement [Member] | Janssen Pharmaceuticals Incorporation [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
Payables from related parties | 3,500,000 | ||||||
Payment received from related parties | $ 3,500,000 | ||||||
License and options agreement description | Pursuant to the Janssen License and Option Agreement, Arsanis granted to Janssen (i) a non-exclusive license to specified patents in Arsanis’s portfolio related to the ASN200 program, and (ii) an option for Janssen to acquire these patents in the future if specified conditions are met. Janssen agreed to pay Arsanis $3.5 million within 15 business days after the December 12, 2018 effective date of the Janssen License and Option Agreement, in addition to a future $0.5 million payment in the event Janssen exercises its option to acquire the relevant patents. Arsanis received the $3.5 million and recognized this amount as revenue. | ||||||
Janssen License and Option Agreement [Member] | Janssen Pharmaceuticals Incorporation [Member] | Patents [Member] | |||||||
Collaboration License And Funding Arrangements [Line Items] | |||||||
Option to acquire the relevant patents | $ 500,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Federal income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
State income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Basic and Diluted Net loss per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||||
Net loss | $ (13,383) | $ (10,873) | $ (6,034) | $ (7,367) | $ (24,256) | $ (13,401) |
Accruing dividends on Series A convertible preferred stock | (748) | (592) | (1,488) | |||
Adjustment to accumulated deficit in connection with repurchase of Series Seed convertible preferred stock | (22) | $ (22) | (22) | |||
Net loss attributable to common stockholders | $ (13,383) | $ (6,804) | $ (24,848) | $ (14,911) | ||
Weighted average common shares outstanding—basic and diluted | 13,177,235 | 458,718 | 7,479,178 | 458,346 | ||
Net loss per share attributable to common stockholders—basic and diluted | $ (1.02) | $ (14.83) | $ (3.32) | $ (32.53) |
Net Loss per Share - Additional
Net Loss per Share - Additional Information (Detail) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Apr. 16, 2019 | Apr. 12, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Weighted Average Common Shares Basic and Diluted | 13,177,235 | 458,718 | 7,479,178 | 458,346 | ||
Pre Funded Warrant [Member] | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Weighted Average Common Shares Basic and Diluted | 2,130,000 | 2,130,000 | ||||
Exercise Price | $ 0.001 | $ 10.999 | ||||
Pre Funded Warrant [Member] | Maximum [Member] | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Exercise Price | $ 0.01 | $ 0.01 | ||||
Redeemable Common Stock [Member] | ||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||
Weighted Average Common Shares Basic and Diluted | 107,371 | 107,371 | 107,371 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss per Share Attributable to Common Stockholders (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 5,633,736 | 4,511,767 | 5,633,736 | 4,511,767 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 1,273,532 | 532,081 | 1,273,532 | 532,081 |
Warrant [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 4,360,204 | 423,539 | 4,360,204 | 423,539 |
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of diluted net loss per share | 3,556,147 | 3,556,147 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | 1 Months Ended |
Jul. 31, 2019Program | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Number of additional programs under preclinical stages | 2 |