Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'RGLS | ' |
Entity Registrant Name | 'REGULUS THERAPEUTICS INC. | ' |
Entity Central Index Key | '0001505512 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 41,777,326 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $33,490 | $40,552 |
Short-term investments | 90,413 | 57,548 |
Contracts and other receivables | 95 | ' |
Prepaid and other current assets | 1,288 | 829 |
Total current assets | 125,286 | 98,929 |
Property and equipment, net | 3,981 | 3,310 |
Intangibles, net | 1,145 | 1,154 |
Other assets | 178 | 125 |
Total assets | 130,590 | 103,518 |
Current liabilities: | ' | ' |
Accounts payable | 1,140 | 311 |
Accrued liabilities | 1,705 | 658 |
Accrued compensation | 1,228 | 1,348 |
Current portion of deferred revenue | 9,454 | 10,451 |
Total current liabilities | 13,527 | 12,768 |
Convertible notes payable, at fair value | 13,921 | 10,134 |
Deferred revenue, less current portion | 7,138 | 17,756 |
Other long-term liabilities | 1,558 | 767 |
Total liabilities | 36,144 | 41,425 |
Stockholders' equity: | ' | ' |
Common stock, $0.001 par value; 200,000,000 shares authorized, 41,774,442 and 35,831,808 shares issued and outstanding at September 30, 2013 (unaudited) and December 31, 2012, respectively | 42 | 36 |
Additional paid-in capital | 171,608 | 122,528 |
Accumulated other comprehensive loss | -44 | -52 |
Accumulated deficit | -77,160 | -60,419 |
Total stockholders' equity | 94,446 | 62,093 |
Total liabilities and stockholders' equity | $130,590 | $103,518 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 41,774,442 | 35,831,808 |
Common stock, shares outstanding | 41,774,442 | 35,831,808 |
Condensed_Statements_of_Operat
Condensed Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Total revenues | $6,118 | $2,809 | $14,115 | $9,462 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 7,106 | 5,248 | 21,710 | 14,735 |
General and administrative | 1,917 | 1,093 | 5,545 | 2,998 |
Total operating expenses | 9,023 | 6,341 | 27,255 | 17,733 |
Loss from operations | -2,905 | -3,532 | -13,140 | -8,271 |
Other income (expense): | ' | ' | ' | ' |
Interest and other income | 72 | 20 | 207 | 74 |
Interest expense | -7 | -110 | -25 | -294 |
Loss on extinguishment of debt | ' | -1,738 | ' | -1,738 |
Gain (loss) from changes in valuation of convertible note payable | 671 | -331 | -3,787 | -331 |
Loss before income taxes | -2,169 | -5,691 | -16,745 | -10,560 |
Income tax benefit | -5 | -6 | -4 | -28 |
Net loss | -2,164 | -5,685 | -16,741 | -10,532 |
Other comprehensive loss: | ' | ' | ' | ' |
Unrealized gain on short-term investments, net | 37 | 10 | 8 | 44 |
Comprehensive loss | -2,127 | -5,675 | -16,733 | -10,488 |
Net loss per share: | ' | ' | ' | ' |
Basic | ($0.05) | ($15.98) | ($0.45) | ($41.03) |
Diluted | ($0.07) | ($15.98) | ($0.45) | ($41.03) |
Weighted average shares used to compute net loss per share: | ' | ' | ' | ' |
Basic | 40,154,812 | 355,735 | 37,367,368 | 256,682 |
Diluted | 41,555,660 | 355,735 | 37,367,368 | 256,682 |
Strategic Alliances and Collaborations | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' |
Total revenues | $6,118 | $2,809 | $14,115 | $9,462 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating activities | ' | ' |
Net loss | ($16,741) | ($10,532) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation and amortization expense | 996 | 741 |
Loss on extinguishment of debt | ' | 1,738 |
Loss from valuation of convertible note payable | 3,787 | 331 |
Stock-based compensation | 2,524 | 732 |
Amortization of premium on investments, net | 1,018 | 311 |
Gain on investments | -6 | ' |
Change in operating assets and liabilities: | ' | ' |
Contracts and other receivables | -95 | -3,000 |
Prepaid and other assets | -512 | 56 |
Accounts payable | 829 | 148 |
Accrued liabilities | 851 | 73 |
Accrued compensation | -120 | 302 |
Deferred revenue | -11,615 | -527 |
Deferred rent and other liabilities | 68 | 55 |
Net cash used in operating activities | -19,016 | -9,572 |
Investing activities | ' | ' |
Purchases of short-term investments | -50,390 | -9,287 |
Maturities and sales of short-term investments | 16,520 | 24,550 |
Purchases of property and equipment | -608 | -724 |
Acquisition of intangibles | -46 | -185 |
Net cash (used in) provided by investing activities | -34,524 | 14,354 |
Financing activities | ' | ' |
Proceeds from issuance of common stock, net | 46,562 | 102 |
Proceeds from issuance of convertible notes payable | ' | 5,000 |
Principal payments on other long-term obligations | -84 | -326 |
Costs paid in connection with initial public offering | ' | -1,307 |
Net cash provided by financing activities | 46,478 | 3,469 |
Net (decrease) increase in cash and cash equivalents | -7,062 | 8,251 |
Cash and cash equivalents at beginning of period | 40,552 | 9,175 |
Cash and cash equivalents at end of period | 33,490 | 17,426 |
Supplemental disclosure of cash flow information | ' | ' |
Interest paid | ' | 32 |
Income taxes paid | 1 | 207 |
Supplemental disclosure of non-cash investing and financing activities | ' | ' |
Amounts accrued for property and equipment, net | 57 | ' |
Amounts accrued for patent expenditures, net | ' | $10 |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation and Summary of Significant Accounting Policies | ' |
1. Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | |
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. | |
Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2012 for Regulus Therapeutics Inc. (“we,” “us,” “our,” or the “Company”), from which the balance sheet information herein for the year ended December 31, 2012 was derived. | |
On September 7, 2012, our board of directors approved a one-for-two reverse stock split of our common stock. The accompanying condensed financial statements and notes to the condensed financial statements give retroactive effect to the reverse split for all periods presented. No further splits (or reverse splits) of our common stock have been contemplated as of September 30, 2013. | |
In October 2012, we completed an initial public offering and concurrent private placement of 18,980,982 shares of common stock at an offering price of $4.00 per share. In addition, principal and interest of $10.8 million from convertible notes outstanding were automatically converted upon the closing of the initial public offering into an aggregate of 2,703,269 shares of our common stock. We raised a total of $70.0 million in net proceeds from our initial public offering and concurrent private placement, after deducting underwriter discounts, commissions and other offering expenses. | |
In July 2013, we completed a public offering of 5,175,000 shares of common stock at an offering price of $9.50 per share. The shares were registered pursuant to a registration statement on Form S-1. We raised a total of $45.8 million in net proceeds, after deducting underwriting discounts, commissions and other offering expenses. | |
Use of Estimates | |
Our financial statements are prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. | |
Revenue Recognition | |
As of September 30, 2013, we have ongoing strategic alliance agreements and collaborations with GlaxoSmithKline plc (“GSK”), Sanofi, AstraZeneca AB (“AstraZeneca”) and Biogen Idec MA Inc. (“Biogen Idec”). Our revenues generally consist of upfront payments for licenses or options to obtain licenses in the future, research and development funding and milestone payments. We recognize revenues when all four of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery of the products and/or services has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. | |
For these multiple element arrangements, deliverables under our agreements are accounted for as separate units of accounting provided that (i) a delivered item has value to the customer on a stand-alone basis; and (ii) if the agreement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. The allocation of consideration amongst the units of accounting under our strategic alliance agreements and collaborations are derived using a “best estimate of selling price” if vendor specific objective evidence and third-party evidence of fair value is not available. | |
Milestones | |
We recognize revenue from milestone payments when earned, provided that (i) the milestone event is substantive in that it can only be achieved based in whole or in part on either our performance or on the occurrence of a specific outcome resulting from our performance and its achievability was not reasonably assured at the inception of the agreement; (ii) we do not have ongoing performance obligations related to the achievement of the milestone; and (iii) it would result in the receipt of additional payments. A milestone payment is considered substantive if all of the following conditions are met: (i) the milestone payment is non-refundable; (ii) achievement of the milestone was not reasonably assured at the inception of the arrangement; (iii) substantive effort is involved to achieve the milestone; and (iv) the amount of the milestone payments appears reasonable in relation to the effort expended, the other milestones in the arrangement and the related risk associated with the achievement of the milestone. Any amounts received under the agreements in advance of performance, if deemed substantive, are recorded as deferred revenue and recognized as revenue as we complete our performance obligations. | |
Generally, the milestone events contained in our strategic alliance agreements and collaborations coincide with the progression of our product candidates from target selection, to clinical candidate selection, to clinical trial, to regulatory approval and then to commercialization. The process of successfully discovering a new development candidate, having it approved and ultimately sold for a profit is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve. Therefore, as a product candidate progresses through the stages of its life-cycle, the value of the product candidate generally increases. | |
Deferred Revenue | |
Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in the accompanying condensed balance sheets. Amounts not expected to be recognized within the next 12 months are classified as non-current deferred revenue. | |
Stock-Based Compensation | |
We account for stock-based compensation expense related to stock options granted to employees and members of our board of directors by estimating the fair value of each stock option on the date of grant using the Black-Scholes model. We recognize stock-based compensation expense using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), we recognize compensation expense over the requisite service period for each separately vesting tranche of the award as though the award was in substance multiple awards, resulting in accelerated expense recognition over the vesting period. | |
We account for stock options granted to non-employees other than members of our board of directors, which primarily consist of members of our scientific advisory board, using the fair value approach. Stock options granted to non-employees are subject to periodic revaluation over their vesting terms. | |
Fair Value Option | |
Applicable accounting guidance permits entities to choose, at specified election dates, to measure specified items at fair value if the decision about the election is: 1) applied instrument by instrument, 2) irrevocable, and 3) applied to an entire instrument. | |
In July 2012, we amended and restated our $5.0 million convertible promissory note originally issued in February 2010 to GSK (“2010 GSK Note”), which was accounted for as a debt extinguishment of the original note. We elected to measure the 2010 GSK Note under the fair value option. Upon initial measurement, the difference between the carrying value of the original note and the fair value of the 2010 GSK Note was recorded as a loss on extinguishment of debt to non-operating earnings. Thereafter, any change to the fair value of the 2010 GSK Note is recorded as a gain (loss) from valuation of convertible note payable to non-operating earnings. | |
Recent Accounting Pronouncements | |
In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update will require companies to present information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income in one place and reference the amounts to the related footnote disclosures. Current accounting standards present this information in different places throughout the financial statements. ASU 2013-02 was effective for us for the nine months ended September 30, 2013. The adoption of ASU 2013-02 had no impact on our financial condition, results of operations, or cash flows. | |
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). This update provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. We intend to adopt this guidance in 2014, and do not believe the adoption of this standard will have a material impact on our financial condition, results of operations or related financial statement disclosures. |
Net_Loss_Per_Share
Net Loss Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Net Loss Per Share | ' | ||||||||||||||||
2. Net Loss Per Share | |||||||||||||||||
Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of convertible preferred stock, options outstanding under our stock option plan and convertible notes payable. Applicable accounting guidance provides that a contract that is reported as an asset or liability for accounting purposes may require an adjustment to the numerator of the diluted earnings per share calculation for any changes in income or loss that would result if the contract had been reported as an equity instrument for accounting purposes during the period. Securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period presented. Adding back the gain from the change in valuation of the convertible note payable for the three months ended September 30, 2013 to the numerator and adding the number of shares to be issued upon conversion of the convertible note payable into the denominator of the diluted earnings per share calculation resulted in an increase to the loss per share for the period. The convertible note payable was anti-dilutive for the nine months ended September 30, 2013. | |||||||||||||||||
The following table summarizes the adjustment to net loss for the diluted net loss per share calculation for the three months ended September 30, 2013 (in thousands): | |||||||||||||||||
Net loss | $ | (2,164 | ) | ||||||||||||||
Less: gain from change in valuation of note payable | 671 | ||||||||||||||||
Net loss used to compute diluted net loss per share | $ | (2,835 | ) | ||||||||||||||
Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common equivalent shares): | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Convertible preferred stock outstanding | — | 13,699,999 | — | 13,699,999 | |||||||||||||
Common stock options | 3,041,033 | 2,845,675 | 2,474,614 | 2,823,463 | |||||||||||||
Convertible note payable | — | — | 1,400,848 | — | |||||||||||||
Total | 3,041,033 | 16,545,674 | 3,875,462 | 16,523,462 | |||||||||||||
In October 2012, all convertible preferred stock converted into common stock in conjunction with our initial public offering. As of September 30, 2013 we had a convertible note payable outstanding with a principal balance of $5.4 million that was convertible into common shares at $4.00 per share, at the option of the note holder. |
Investments
Investments | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Investments | ' | ||||||||||||||||||||
3. Investments | |||||||||||||||||||||
We invest our excess cash in commercial paper and debt instruments of financial institutions, corporations, U.S. government-sponsored agencies, and the U.S. Treasury. For investments in debt securities with unrealized losses, we do not intend to sell these investments, nor is it more than likely that we will be required to do so, prior to the recovery of their amortized cost basis, which may be their maturity. As of September 30, 2013, our short-term investments had a weighted average maturity of less than two years. | |||||||||||||||||||||
The following tables summarize our short-term investments (dollars in thousands): | |||||||||||||||||||||
Maturity | Amortized | Unrealized | Estimated | ||||||||||||||||||
(in years) | cost | Gains | Losses | fair value | |||||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||
Corporate debt securities | 2 or less | $ | 68,649 | $ | 18 | $ | (50 | ) | $ | 68,617 | |||||||||||
Commercial paper | 1 or less | 999 | — | — | 999 | ||||||||||||||||
Certificates of deposit | 2 or less | 13,770 | — | — | 13,770 | ||||||||||||||||
Debt securities of U.S. government-sponsored agencies | 1 or less | 7,025 | 2 | — | 7,027 | ||||||||||||||||
Total | $ | 90,443 | $ | 20 | $ | (50 | ) | $ | 90,413 | ||||||||||||
Maturity | Amortized | Unrealized | Estimated | ||||||||||||||||||
(in years) | cost | Gains | Losses | fair value | |||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||
Corporate debt securities | 2 or less | $ | 44,898 | $ | 7 | $ | (49 | ) | $ | 44,856 | |||||||||||
Commercial paper | 2 or less | 6,492 | — | — | 6,492 | ||||||||||||||||
Certificates of deposit | 1 or less | 6,200 | — | — | 6,200 | ||||||||||||||||
Total | $ | 57,590 | $ | 7 | $ | (49 | ) | $ | 57,548 | ||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
4. Fair Value Measurements | |||||||||||||||||
We have certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements. | |||||||||||||||||
Applicable accounting guidance defines fair value 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 as of the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors that market participants would use in valuing the asset or liability. The guidance prioritizes the inputs used in measuring the fair value into the following hierarchy: | |||||||||||||||||
• | Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. | ||||||||||||||||
• | Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | ||||||||||||||||
• | Level 3 includes financial instruments for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including management’s own assumptions. | ||||||||||||||||
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||
Fair value as of September 30, 2013 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents | $ | 33,377 | $ | 33,377 | $ | — | $ | — | |||||||||
Corporate debt securities | 68,617 | — | 68,617 | — | |||||||||||||
Commercial paper | 999 | — | 999 | — | |||||||||||||
Certificates of deposit | 13,770 | — | 13,770 | — | |||||||||||||
Debt securities of U.S. government-sponsored agencies | 7,027 | — | 7,027 | — | |||||||||||||
$ | 123,790 | $ | 33,377 | $ | 90,413 | $ | — | ||||||||||
Liabilities: | |||||||||||||||||
Convertible notes payable | $ | 13,921 | $ | — | $ | — | $ | 13,921 | |||||||||
Fair value as of December 31, 2012 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents | $ | 39,363 | $ | 39,363 | $ | — | $ | — | |||||||||
Corporate debt securities | 44,856 | — | 44,856 | — | |||||||||||||
Commercial paper | 6,492 | — | 6,492 | — | |||||||||||||
Certificates of deposit | 6,200 | — | 6,200 | — | |||||||||||||
$ | 96,911 | $ | 39,363 | $ | 57,548 | $ | — | ||||||||||
Liabilities: | |||||||||||||||||
Convertible notes payable | $ | 10,134 | $ | — | $ | — | $ | 10,134 | |||||||||
Changes in the estimated fair value of convertible notes payable from December 31, 2012 through September 30, 2013 are as follows (in thousands): | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Using Significant | |||||||||||||||||
Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
Balance at December 31, 2012 | $ | 10,134 | |||||||||||||||
Change in estimated fair value of convertible notes payable | 3,787 | ||||||||||||||||
Balance at September 30, 2013 | $ | 13,921 | |||||||||||||||
We obtain pricing information from quoted market prices or quotes from brokers/dealers. We generally determine the fair value of our investment securities using standard observable inputs, including reported trades, broker/dealer quotes, bids and/or offers. | |||||||||||||||||
In July 2012, we amended and restated the 2010 GSK Note, which resulted in a debt extinguishment for accounting purposes. Concurrently with the debt extinguishment, we elected the fair value option for the 2010 GSK Note. The amended and restated 2010 GSK Note provided for a rollover of the 2010 GSK Note into a new promissory note effective as of the closing date of a qualifying initial public offering (“Post-IPO GSK Note”). We used a third party valuation firm to value the Post-IPO GSK Note at September 30, 2013 and recorded a gain from the change in valuation of the Post-IPO GSK Note of $0.7 million for the three months ended September 30, 2013 and a loss of $3.8 million for the nine months ended September 30, 2013 on the condensed statements of operations and comprehensive loss for the respective periods. The gain from the change in valuation of the Post-IPO GSK Note for the three months ended September 30, 2013 was principally driven by a reduction in our stock price to $9.43 as of September 30, 2013, compared to $9.81 as of June 30, 2013. | |||||||||||||||||
The third-party valuation firm used an income approach in the form of a convertible bond valuation model to value the Post-IPO GSK Note. The convertible bond model considered the debt and option characteristics of the Post-IPO GSK Note. The key inputs to the model as of September 30, 2013 were stock price, volatility (65%), risk-free rate (0.32%), and credit spread (8.5%). The volatility inputs were based on historical and implied volatility of peer companies. Peer companies were materially consistent with those used previously in our 409A analyses and in previous valuations of this instrument. The risk-free rate inputs were based on the yield of U.S. Treasury Strips as of each date. The credit spread inputs were based on a creditworthiness analysis of the Company and market rates for comparable straight debt instruments. |
Convertible_Notes_Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2013 | |
Convertible Notes Payable | ' |
5. Convertible Notes Payable | |
2012 Amendment of the 2010 GSK Note | |
In July 2012, we amended and restated our 2010 GSK Note. In October 2012, in conjunction with our initial public offering, we issued the Post-IPO GSK Note in the principal amount of $5.4 million, which was equivalent to the original principal amount of $5.0 million plus accrued but unpaid interest of approximately $0.4 million. The amended and restated 2010 GSK Note was then simultaneously cancelled and our obligations thereunder terminated. The Post-IPO GSK Note has a maturity date of October 9, 2015. At GSK’s option, the Post-IPO GSK Note may be converted into shares of our common stock at any time prior to the maturity at a conversion price per share equal to the initial public offering price of $4.00, subject to complying with certain threshold ownership percentage limitations set forth in the Post-IPO GSK Note. At September 30, 2013, the fair value of the Post-IPO GSK Note is $13.9 million and is classified as “Convertible note payable, at fair value” on the condensed balance sheet. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
6. Stockholders’ Equity | |||||||||||||||||
Shares Reserved for Future Issuance | |||||||||||||||||
The following shares of common stock are reserved for future issuance at September 30, 2013: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Common stock options outstanding | 4,160,215 | 4,661,549 | |||||||||||||||
Common stock options available for future grant | 2,161,410 | 946,403 | |||||||||||||||
Employee Stock Purchase Plan | 460,283 | 150,000 | |||||||||||||||
Convertible note payable | 1,400,848 | 1,366,787 | |||||||||||||||
Total common shares reserved for future issuance | 8,182,756 | 7,124,739 | |||||||||||||||
The following table summarizes our stock option activity under all stock option plans for the nine months ended September 30, 2013 (in thousands): | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
options | average | ||||||||||||||||
exercise | |||||||||||||||||
price | |||||||||||||||||
Options outstanding at December 31, 2012 | 4,720 | $ | 2.11 | ||||||||||||||
Granted | 361 | $ | 7.91 | ||||||||||||||
Exercised | (720 | ) | $ | 0.8 | |||||||||||||
Canceled/forfeited/expired | (201 | ) | $ | 3.44 | |||||||||||||
Options outstanding at September 30, 2013 | 4,160 | $ | 2.78 | ||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The following table summarizes the weighted average assumptions we used in our Black-Scholes calculations: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Employee Stock Options: | |||||||||||||||||
Risk-free interest rate | 1.7 | % | * | 1.4 | % | 1.1 | % | ||||||||||
Expected dividend yield | 0 | % | * | 0 | % | 0 | % | ||||||||||
Expected volatility | 72.7 | % | * | 67.8 | % | 71 | % | ||||||||||
Expected term (years) | 6.1 | * | 6.1 | 6.1 | |||||||||||||
* | No stock options were granted during the three months ended September 30, 2012. | ||||||||||||||||
The following table summarizes the allocation of our stock compensation expense (in thousands): | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 594 | $ | 278 | $ | 1,664 | $ | 461 | |||||||||
General and administrative | 384 | 136 | 860 | 271 | |||||||||||||
Total | $ | 978 | $ | 414 | $ | 2,524 | $ | 732 |
Strategic_Alliances_and_Collab
Strategic Alliances and Collaborations | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Strategic Alliances and Collaborations | ' | ||||||||||||||||
7. Strategic Alliances and Collaborations | |||||||||||||||||
The following table summarizes the amounts included in our revenues which resulted from our strategic alliances and collaborations (in thousands): | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Sanofi | $ | 5,422 | $ | 2,500 | $ | 10,828 | $ | 7,530 | |||||||||
GSK | 144 | 186 | 1,634 | 1,809 | |||||||||||||
AstraZeneca | 465 | 94 | 1,394 | 94 | |||||||||||||
Biogen Idec | 87 | 29 | 259 | 29 | |||||||||||||
Total | $ | 6,118 | $ | 2,809 | $ | 14,115 | $ | 9,462 | |||||||||
Sanofi | |||||||||||||||||
In July 2012, we amended and restated our collaboration and license agreement with Sanofi to expand the potential therapeutic applications of the microRNA alliance targets to be developed under such agreement. The modification made to the agreement was considered a material modification, which required the application of the new authoritative guidance adopted by us in January 2011 for multiple element arrangements. We determined that the elements within the strategic alliance agreement with Sanofi should be treated as a single unit of accounting because the delivered elements did not have stand-alone value to Sanofi. The following elements were delivered as part of the strategic alliance with Sanofi: (1) a license for up to four microRNA targets; and (2) a research license under our technology alliance. | |||||||||||||||||
In June 2013, the original research term expired, upon which we and Sanofi entered into an option agreement pursuant to which we granted Sanofi an exclusive right to negotiate the co-development and commercialization of certain of our unencumbered microRNA programs and we were granted the exclusive right to negotiate with Sanofi for co-development and commercialization of certain miR-21 anti-miRs in oncology and Alport’s Syndrome. These options expire in December 2013, subject to a 30-day extension in certain circumstances. In July 2013, we received an upfront payment of $2.5 million, of which $1.25 million is creditable against future amounts payable by Sanofi to us under any future co-development and commercialization agreement we enter pursuant to the option agreement. The non-creditable portion of this payment, $1.25 million, will be recognized as revenue over the option period from the effective date of the option agreement in June 2013 until the expiration of the option period in December 2013. Revenue associated with the creditable portion of this option payment will be deferred until the option period expires, or is re-evaluated in connection with a creditable transaction. In addition, we agreed to continue specified research on the miR-21 programs during the option period. As a result of the expiration of the original research term and subsequent option agreement, we re-evaluated our estimated period of performance and are now amortizing the remaining deferred revenue of $10.1 million associated with the initial upfront payment of $25.0 million ratably from June 2013 until the expiration of the option period in December 2013. | |||||||||||||||||
We have evaluated the remaining contingent event-based payments under our strategic alliance agreement with Sanofi and determined that the preclinical payments meet the definition of a substantive milestone because they are related to events: (i) that can be achieved based in whole or in part on our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there was substantive uncertainty at the date the agreement was entered into that the event would be achieved, and (iii) that would result in additional payments being due to us. Accordingly, revenue for these achievements will be recognized in its entirety in the period when the milestone is achieved and collectability is reasonably assured. Other contingent event-based payments under the strategic alliance agreement for which payment is contingent upon the results of Sanofi’s performance will not be accounted for using the milestone method. Such payments will be recognized as revenue over the remaining estimated period of performance, if any, and when collectability is reasonably assured. As of the expiration of the research term in June 2013, Sanofi no longer has rights to select additional microRNA targets. As such, we can earn a preclinical milestone of $15.0 million upon the filing of an Investigational New Drug application (“IND”) for the selected microRNA target. We can also receive milestone payments of up to $33.0 million for clinical milestones and up to $165.0 million for regulatory and commercial milestones. In addition, we are entitled to receive royalties based on a percentage of net sales which will range from 8 to 12%, depending upon the volume of sales. | |||||||||||||||||
GSK | |||||||||||||||||
In April 2008, we entered into a strategic alliance with GSK to discover, develop and commercialize novel microRNA-targeted therapeutics to treat inflammatory diseases (the “immuno-inflammatory alliance”). In February 2010, we and GSK expanded the strategic alliance to include hepatitis C virus infection (“HCV”) to discover, develop and commercialize microRNA therapeutics targeting miR-122 for the treatment of HCV (the “HCV alliance”). In June 2012, we amended our product development and commercialization agreement with GSK to extend the target selection period for the fourth collaboration target under the agreement. The modification made to the agreement was considered a material modification, which required the application of the new authoritative guidance adopted by us in January 2011 for multiple element arrangements. We determined that the elements within the strategic alliance should be treated as a single unit of accounting because the delivered elements, the opt-in licenses for microRNA product candidates, did not have stand-alone value to GSK. As a result of the extension of the target selection period, we extended the amortization period for the remaining deferred revenue to approximately eight years, which represented our new estimated performance period under the amended agreement. As of September 30, 2013, deferred revenue associated with the product development and commercialization agreement was $3.7 million. | |||||||||||||||||
In June 2013, the product development and commercialization agreement with GSK was amended to state that RG-101, and other formulations thereof, will be developed by us independently of our alliance with GSK for the treatment of chronic HCV infection. This amendment removed any further milestone or royalty obligations owed by GSK to us as it relates to RG-101. Concurrent with the amendment, we accelerated the remaining unamortized $1.1 million in deferred revenue associated with the upfront payment from the February 2010 amendment that expanded our agreement with GSK to include potential microRNA therapeutics for the treatment of HCV, which represents that our estimated performance period under the amended agreement is complete. | |||||||||||||||||
HCV Alliance | |||||||||||||||||
Notwithstanding the foregoing, GSK has retained its interest in the miR-122 program in HCV, and miR-122 remains a collaboration target under the alliance. If the HCV program is successful, we could receive contractual milestone payments up to $144.5 million, including up to $5.5 million for preclinical milestones, up to $29.0 million for clinical milestones, up to $50.0 million for regulatory milestones and up to $60.0 million for commercialization milestones. In addition, we will receive tiered royalties which can increase up to the low end of the 10 to 20% range on sales from any product that GSK successfully commercializes under this alliance. | |||||||||||||||||
We have evaluated the remaining contingent event-based payments under our strategic alliance agreement with GSK and determined that the preclinical and clinical payments meet the definition of a substantive milestone because they are related to events: (i) that can be achieved based in whole or in part on our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there was substantive uncertainty at the date the agreement was entered into that the event would be achieved, and (iii) that would result in additional payments being due to us. Accordingly, revenue for these achievements will be recognized in its entirety in the period when the milestone is achieved and collectability is reasonably assured. Other contingent event-based payments under the strategic alliance agreement for which payment is contingent upon the results of GSK’s performance will not be accounted for using the milestone method. Such payments will be recognized as revenue over the remaining estimated period of performance, if any, and when collectability is reasonably assured. We can earn a preclinical milestone of $5.5 million upon the selection of a development candidate. We can also earn the following clinical milestones: $4.0 million for initiation of a Phase 1 clinical trial; $5.0 million for the initiation of a Phase 2 clinical trial; and $20.0 million if GSK chooses to opt-in to the program following the completion of a proof-of-concept trial. | |||||||||||||||||
Immuno-Inflammatory Alliance | |||||||||||||||||
The immuno-inflammatory alliance with GSK includes contractual milestones. If all the product candidates are successfully developed and commercialized through pre-agreed sales targets we could receive milestone payments up to $432.5 million, including up to $15.5 million for preclinical milestones, up to $87.0 million for clinical milestones, up to $150.0 million for regulatory milestones and up to $180.0 million for commercialization milestones. We are also entitled to receive tiered royalties as a percentage of annual sales which can increase up to the low end of the 10 to 20% range. | |||||||||||||||||
We have evaluated the remaining contingent event-based payments under our strategic alliance agreement with GSK and determined that the preclinical and clinical payments meet the definition of a substantive milestone because they are related to events: (i) that can be achieved based in whole or in part on our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there was substantive uncertainty at the date the agreement was entered into that the event would be achieved, and (iii) that would result in additional payments being due to us. Accordingly, revenue for these achievements will be recognized in its entirety in the period when the milestone is achieved and collectability is reasonably assured. Other contingent event-based payments under the strategic alliance agreement for which payment is contingent upon the results of GSK’s performance will not be accounted for using the milestone method. Such payments will be recognized as revenue over the remaining estimated period of performance, if any, and when collectability is reasonably assured. We can earn the following preclinical milestones: $0.5 million upon the selection of a fourth microRNA target and $5.0 million upon the selection of a development candidate for each of the selected three targets. We can also earn the following clinical milestones for each of the selected three targets: $4.0 million for the initiation of a Phase 1 clinical trial; $5.0 million for the initiation of a Phase 2 clinical trial; and $20.0 million if GSK chooses to opt-in to the program following the completion of a proof-of-concept trial. | |||||||||||||||||
AstraZeneca | |||||||||||||||||
In August 2012, we entered into a collaboration and license agreement with AstraZeneca. Under the terms of the agreement, we have agreed to collaborate with AstraZeneca to identify, research and develop compounds targeting three microRNA alliance targets primarily in the fields of cardiovascular diseases, metabolic diseases and oncology. Pursuant to the agreement, we granted AstraZeneca an exclusive, worldwide license to thereafter develop, manufacture and commercialize lead compounds designated by AstraZeneca in the course of the collaboration activities against the alliance targets for all human therapeutic uses. Under the terms of the agreement we are required to use commercially reasonable efforts to perform all research, development and manufacturing activities described in the research plan, at our cost, until the acceptance of an IND or the end of the research term, which extends until the fourth anniversary of the date of the agreement, and may be extended only by mutual written agreement of us and AstraZeneca. Following the earlier to occur of the acceptance of an IND in a major market or the end of the research term, AstraZeneca will assume all costs, responsibilities and obligations for further development, manufacture and commercialization of alliance product candidates. | |||||||||||||||||
Under the terms of the agreement, we received an upfront payment of $3.0 million in October 2012. We determined the elements within the strategic alliance agreement should be treated as a single unit of accounting because the delivered element, the license, does not have stand-alone value. As a result, we are recognizing revenue related to the upfront payment on a straight-line basis over our estimated period of performance, which is four years based on the expected term of the research and development plan. If all three targets are successfully developed and commercialized through pre-agreed sales targets, we could receive milestone payments up to $498.0 million, including up to $5.0 million for preclinical milestones, up to $123.0 million for clinical milestones, and up to $370.0 million for commercialization milestones. In addition, we are entitled to receive royalties based on a percentage of net sales which will range from the mid-single digits to the low end of 10 to 20%, depending upon the product and the volume of sales, which royalties may be reduced in certain, limited circumstances. | |||||||||||||||||
We have evaluated the contingent event-based payments under our strategic alliance agreement with AstraZeneca and determined that the preclinical payments meet the definition of substantive milestones because they are related to events: (i) that can be achieved based in whole or in part on our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there was substantive uncertainty at the date the agreement was entered into that the event would be achieved, and (iii) that would result in additional payments being due to us. Accordingly, revenue for these achievements will be recognized in its entirety in the period when the milestone is achieved and collectability is reasonably assured. Other contingent event-based payments under the strategic alliance agreement for which payment is contingent upon the results of AstraZeneca’s performance will not be accounted for using the milestone method. Such payments will be recognized as revenue over the remaining estimated period of performance, if any, and when collectability is reasonably assured. | |||||||||||||||||
Concurrently with the collaboration and license agreement, we entered into a Common Stock Purchase Agreement (“CSPA”) with AstraZeneca, pursuant to which we agreed to sell to AstraZeneca an aggregate of $25.0 million of our common stock in a private placement concurrently with our initial public offering, at a price per share equal to the initial public offering price. In October 2012, in accordance with the CSPA, we sold AstraZeneca 6,250,000 shares of our common stock at a price per share of $4.00. Further, the CSPA stipulated that AstraZeneca could not sell, transfer, make any short sale of, or grant any option for the sale of any common stock for a 365-day period following the effective date of our initial public offering. Accounting guidance for multiple element arrangements contains a presumption that separate contracts negotiated and/or entered into at or near the same time with the same entity were negotiated as a package and should be evaluated as a single agreement. We valued the discount applied to the shares of common stock due to the one-year restriction. Based upon restricted stock studies of similar duration and a Black-Scholes valuation to measure the lack of marketability discount, $4.3 million was attributed to the collaboration and license agreement. We continue to recognize the $4.3 million into revenue ratably over the estimated period of performance of the collaboration. | |||||||||||||||||
Biogen Idec | |||||||||||||||||
In August 2012, we entered into a collaboration and license agreement with Biogen Idec pursuant to which we and Biogen Idec have agreed to collaborate on microRNA biomarkers for multiple sclerosis (“MS”). Under the terms of the agreement, we granted Biogen Idec an exclusive, royalty free, worldwide license to our interest in the collaboration intellectual property for the purpose of commercializing non-microRNA products for the treatment, diagnosis and prevention of MS and non-MS diseases and disorders. We also granted Biogen Idec an exclusive, royalty-free, worldwide license, with the right to sublicense, to our interest in the collaboration intellectual property (and a non-exclusive license to our background intellectual property) for the purpose of commercializing products for the diagnosis of MS. We also granted Biogen Idec a right of first negotiation on certain commercial transactions relating to microRNA products which utilize intellectual property developed during the collaboration. Pursuant to the terms of the agreement, in August 2012 we received an upfront payment of $0.8 million. We are also eligible to receive research milestone payments up to an aggregate of $1.3 million. We considered the elements within the collaboration and license agreement as a single unit of accounting because the delivered element, the license, does not have stand-alone value. As a result, we are recognizing revenue relating to the upfront payment of $0.8 million on a straight-line basis over our estimated period of performance, which is approximately two years based on the expected term of the research and development plan. | |||||||||||||||||
In June 2013, we amended the collaboration and license agreement with Biogen Idec to provide for revised terms with respect to phase 1 of the research plan under the Biogen Idec agreement and revised payment provisions relating to the phase 1 milestones. The Biogen Idec amendment does not modify the maximum dollar amount we were originally eligible to receive in connection with phase 1 milestones under the Biogen Idec agreement, or our estimated period of performance. | |||||||||||||||||
We have evaluated the contingent event-based payments under our collaboration and license agreement with Biogen Idec and determined that the research payments meet the definition of substantive milestones because they are related to events: (i) that can be achieved based in whole or in part on our performance or on the occurrence of a specific outcome resulting from our performance, (ii) for which there was substantive uncertainty at the date the agreement was entered into that the event would be achieved, and (iii) that would result in additional payments being due to us. Accordingly, revenue for these achievements will be recognized in its entirety in the period when the milestone is achieved and collectability is reasonably assured. We can earn the following research milestones: $0.25 million for identification of a microRNA biomarker; $0.5 million for validation of the microRNA biomarker in a second independent sample set; and $0.5 million upon the refinement of the microRNA biomarker signature from a longitudinal study of patient samples on MS therapy. | |||||||||||||||||
Concurrently with the collaboration and license agreement, we entered into a note purchase agreement with Biogen Idec, pursuant to which we issued Biogen Idec a convertible promissory note in the principal amount of $5.0 million. The $5.0 million note plus accrued interest converted into 1,256,232 shares of our common stock upon the closing of our initial public offering in October 2012 at a conversion price of $4.00 per share. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions | ' |
8. Related Party Transactions | |
We have entered into several agreements with related parties in the ordinary course of business to license intellectual property and to procure administrative and research and development support services. These agreements include a Services Agreement with our founding companies Isis Pharmaceuticals, Inc. (“Isis”) and Alnylam Pharmaceuticals, Inc. (“Alnylam”). Total costs incurred from services provided from Alnylam under the Services Agreement were $0.1 million and $0.5 million for the three and nine months ended September 30, 2013, respectively. Activities under the Services Agreement for the nine months ended September 30, 2012 were immaterial. | |
In August, 2013, we entered into an amendment to the Amended and Restated License and Collaboration Agreement with Isis and Alnylam dated January 1, 2009, as amended in June 2010 and October 2011 (as amended, the “Amendment”). Under the terms of the Amendment, the parties agreed to our use of certain Alnylam-controlled intellectual property concerning the use and manufacture of GalNAc conjugates (“GalNAc Process Technology”) on a non-exclusive basis. We will generally not be permitted to sublicense or otherwise transfer the GalNAc Process Technology and other Alnylam licensed intellectual property rights relating to GalNAc conjugate technology without the prior written consent of Alnylam, subject to certain limited exceptions for sublicenses to third party collaboration partners. There were no financial terms related to this Amendment. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events | ' |
9. Subsequent Events | |
In October 2013, we received a payment of $0.1 million from Biogen Idec for work performed pursuant to the terms of our collaboration and license agreement based on our research to discover microRNAs as biomarkers for MS. |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. | |
Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2012 for Regulus Therapeutics Inc. (“we,” “us,” “our,” or the “Company”), from which the balance sheet information herein for the year ended December 31, 2012 was derived. | |
On September 7, 2012, our board of directors approved a one-for-two reverse stock split of our common stock. The accompanying condensed financial statements and notes to the condensed financial statements give retroactive effect to the reverse split for all periods presented. No further splits (or reverse splits) of our common stock have been contemplated as of September 30, 2013. | |
In October 2012, we completed an initial public offering and concurrent private placement of 18,980,982 shares of common stock at an offering price of $4.00 per share. In addition, principal and interest of $10.8 million from convertible notes outstanding were automatically converted upon the closing of the initial public offering into an aggregate of 2,703,269 shares of our common stock. We raised a total of $70.0 million in net proceeds from our initial public offering and concurrent private placement, after deducting underwriter discounts, commissions and other offering expenses. | |
In July 2013, we completed a public offering of 5,175,000 shares of common stock at an offering price of $9.50 per share. The shares were registered pursuant to a registration statement on Form S-1. We raised a total of $45.8 million in net proceeds, after deducting underwriting discounts, commissions and other offering expenses. | |
Use of Estimates | ' |
Use of Estimates | |
Our financial statements are prepared in accordance with GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. | |
Revenue Recognition | ' |
Revenue Recognition | |
As of September 30, 2013, we have ongoing strategic alliance agreements and collaborations with GlaxoSmithKline plc (“GSK”), Sanofi, AstraZeneca AB (“AstraZeneca”) and Biogen Idec MA Inc. (“Biogen Idec”). Our revenues generally consist of upfront payments for licenses or options to obtain licenses in the future, research and development funding and milestone payments. We recognize revenues when all four of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery of the products and/or services has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. | |
For these multiple element arrangements, deliverables under our agreements are accounted for as separate units of accounting provided that (i) a delivered item has value to the customer on a stand-alone basis; and (ii) if the agreement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. The allocation of consideration amongst the units of accounting under our strategic alliance agreements and collaborations are derived using a “best estimate of selling price” if vendor specific objective evidence and third-party evidence of fair value is not available. | |
Milestones | |
We recognize revenue from milestone payments when earned, provided that (i) the milestone event is substantive in that it can only be achieved based in whole or in part on either our performance or on the occurrence of a specific outcome resulting from our performance and its achievability was not reasonably assured at the inception of the agreement; (ii) we do not have ongoing performance obligations related to the achievement of the milestone; and (iii) it would result in the receipt of additional payments. A milestone payment is considered substantive if all of the following conditions are met: (i) the milestone payment is non-refundable; (ii) achievement of the milestone was not reasonably assured at the inception of the arrangement; (iii) substantive effort is involved to achieve the milestone; and (iv) the amount of the milestone payments appears reasonable in relation to the effort expended, the other milestones in the arrangement and the related risk associated with the achievement of the milestone. Any amounts received under the agreements in advance of performance, if deemed substantive, are recorded as deferred revenue and recognized as revenue as we complete our performance obligations. | |
Generally, the milestone events contained in our strategic alliance agreements and collaborations coincide with the progression of our product candidates from target selection, to clinical candidate selection, to clinical trial, to regulatory approval and then to commercialization. The process of successfully discovering a new development candidate, having it approved and ultimately sold for a profit is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve. Therefore, as a product candidate progresses through the stages of its life-cycle, the value of the product candidate generally increases. | |
Deferred Revenue | ' |
Deferred Revenue | |
Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in the accompanying condensed balance sheets. Amounts not expected to be recognized within the next 12 months are classified as non-current deferred revenue. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
We account for stock-based compensation expense related to stock options granted to employees and members of our board of directors by estimating the fair value of each stock option on the date of grant using the Black-Scholes model. We recognize stock-based compensation expense using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), we recognize compensation expense over the requisite service period for each separately vesting tranche of the award as though the award was in substance multiple awards, resulting in accelerated expense recognition over the vesting period. | |
We account for stock options granted to non-employees other than members of our board of directors, which primarily consist of members of our scientific advisory board, using the fair value approach. Stock options granted to non-employees are subject to periodic revaluation over their vesting terms. | |
Fair Value Option | ' |
Fair Value Option | |
Applicable accounting guidance permits entities to choose, at specified election dates, to measure specified items at fair value if the decision about the election is: 1) applied instrument by instrument, 2) irrevocable, and 3) applied to an entire instrument. | |
In July 2012, we amended and restated our $5.0 million convertible promissory note originally issued in February 2010 to GSK (“2010 GSK Note”), which was accounted for as a debt extinguishment of the original note. We elected to measure the 2010 GSK Note under the fair value option. Upon initial measurement, the difference between the carrying value of the original note and the fair value of the 2010 GSK Note was recorded as a loss on extinguishment of debt to non-operating earnings. Thereafter, any change to the fair value of the 2010 GSK Note is recorded as a gain (loss) from valuation of convertible note payable to non-operating earnings. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update will require companies to present information about amounts reclassified out of accumulated other comprehensive income and their corresponding effect on net income in one place and reference the amounts to the related footnote disclosures. Current accounting standards present this information in different places throughout the financial statements. ASU 2013-02 was effective for us for the nine months ended September 30, 2013. The adoption of ASU 2013-02 had no impact on our financial condition, results of operations, or cash flows. | |
In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). This update provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. We intend to adopt this guidance in 2014, and do not believe the adoption of this standard will have a material impact on our financial condition, results of operations or related financial statement disclosures. |
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Adjustment for Net Loss for Diluted Net Loss per Share Calculation | ' | ||||||||||||||||
The following table summarizes the adjustment to net loss for the diluted net loss per share calculation for the three months ended September 30, 2013 (in thousands): | |||||||||||||||||
Net loss | $ | (2,164 | ) | ||||||||||||||
Less: gain from change in valuation of note payable | 671 | ||||||||||||||||
Net loss used to compute diluted net loss per share | $ | (2,835 | ) | ||||||||||||||
Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss per Share | ' | ||||||||||||||||
Potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive are as follows (in common equivalent shares): | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Convertible preferred stock outstanding | — | 13,699,999 | — | 13,699,999 | |||||||||||||
Common stock options | 3,041,033 | 2,845,675 | 2,474,614 | 2,823,463 | |||||||||||||
Convertible note payable | — | — | 1,400,848 | — | |||||||||||||
Total | 3,041,033 | 16,545,674 | 3,875,462 | 16,523,462 |
Investments_Tables
Investments (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Summary of Short-Term Investments | ' | ||||||||||||||||||||
The following tables summarize our short-term investments (dollars in thousands): | |||||||||||||||||||||
Maturity | Amortized | Unrealized | Estimated | ||||||||||||||||||
(in years) | cost | Gains | Losses | fair value | |||||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||
Corporate debt securities | 2 or less | $ | 68,649 | $ | 18 | $ | (50 | ) | $ | 68,617 | |||||||||||
Commercial paper | 1 or less | 999 | — | — | 999 | ||||||||||||||||
Certificates of deposit | 2 or less | 13,770 | — | — | 13,770 | ||||||||||||||||
Debt securities of U.S. government-sponsored agencies | 1 or less | 7,025 | 2 | — | 7,027 | ||||||||||||||||
Total | $ | 90,443 | $ | 20 | $ | (50 | ) | $ | 90,413 | ||||||||||||
Maturity | Amortized | Unrealized | Estimated | ||||||||||||||||||
(in years) | cost | Gains | Losses | fair value | |||||||||||||||||
As of December 31, 2012 | |||||||||||||||||||||
Corporate debt securities | 2 or less | $ | 44,898 | $ | 7 | $ | (49 | ) | $ | 44,856 | |||||||||||
Commercial paper | 2 or less | 6,492 | — | — | 6,492 | ||||||||||||||||
Certificates of deposit | 1 or less | 6,200 | — | — | 6,200 | ||||||||||||||||
Total | $ | 57,590 | $ | 7 | $ | (49 | ) | $ | 57,548 | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012 (in thousands): | |||||||||||||||||
Fair value as of September 30, 2013 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents | $ | 33,377 | $ | 33,377 | $ | — | $ | — | |||||||||
Corporate debt securities | 68,617 | — | 68,617 | — | |||||||||||||
Commercial paper | 999 | — | 999 | — | |||||||||||||
Certificates of deposit | 13,770 | — | 13,770 | — | |||||||||||||
Debt securities of U.S. government-sponsored agencies | 7,027 | — | 7,027 | — | |||||||||||||
$ | 123,790 | $ | 33,377 | $ | 90,413 | $ | — | ||||||||||
Liabilities: | |||||||||||||||||
Convertible notes payable | $ | 13,921 | $ | — | $ | — | $ | 13,921 | |||||||||
Fair value as of December 31, 2012 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents | $ | 39,363 | $ | 39,363 | $ | — | $ | — | |||||||||
Corporate debt securities | 44,856 | — | 44,856 | — | |||||||||||||
Commercial paper | 6,492 | — | 6,492 | — | |||||||||||||
Certificates of deposit | 6,200 | — | 6,200 | — | |||||||||||||
$ | 96,911 | $ | 39,363 | $ | 57,548 | $ | — | ||||||||||
Liabilities: | |||||||||||||||||
Convertible notes payable | $ | 10,134 | $ | — | $ | — | $ | 10,134 | |||||||||
Changes in Estimated Fair Value of Convertible Notes Payable | ' | ||||||||||||||||
Changes in the estimated fair value of convertible notes payable from December 31, 2012 through September 30, 2013 are as follows (in thousands): | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Using Significant | |||||||||||||||||
Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
Balance at December 31, 2012 | $ | 10,134 | |||||||||||||||
Change in estimated fair value of convertible notes payable | 3,787 | ||||||||||||||||
Balance at September 30, 2013 | $ | 13,921 | |||||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Common Stock Reserved for Future Issuance | ' | ||||||||||||||||
The following shares of common stock are reserved for future issuance at September 30, 2013: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Common stock options outstanding | 4,160,215 | 4,661,549 | |||||||||||||||
Common stock options available for future grant | 2,161,410 | 946,403 | |||||||||||||||
Employee Stock Purchase Plan | 460,283 | 150,000 | |||||||||||||||
Convertible note payable | 1,400,848 | 1,366,787 | |||||||||||||||
Total common shares reserved for future issuance | 8,182,756 | 7,124,739 | |||||||||||||||
Stock Option Activity | ' | ||||||||||||||||
The following table summarizes our stock option activity under all stock option plans for the nine months ended September 30, 2013 (in thousands): | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
options | average | ||||||||||||||||
exercise | |||||||||||||||||
price | |||||||||||||||||
Options outstanding at December 31, 2012 | 4,720 | $ | 2.11 | ||||||||||||||
Granted | 361 | $ | 7.91 | ||||||||||||||
Exercised | (720 | ) | $ | 0.8 | |||||||||||||
Canceled/forfeited/expired | (201 | ) | $ | 3.44 | |||||||||||||
Options outstanding at September 30, 2013 | 4,160 | $ | 2.78 | ||||||||||||||
Assumptions Used to Estimate Fair Value of Stock Options Using Black-Scholes Option Pricing Model | ' | ||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The following table summarizes the weighted average assumptions we used in our Black-Scholes calculations: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Employee Stock Options: | |||||||||||||||||
Risk-free interest rate | 1.7 | % | * | 1.4 | % | 1.1 | % | ||||||||||
Expected dividend yield | 0 | % | * | 0 | % | 0 | % | ||||||||||
Expected volatility | 72.7 | % | * | 67.8 | % | 71 | % | ||||||||||
Expected term (years) | 6.1 | * | 6.1 | 6.1 | |||||||||||||
* | No stock options were granted during the three months ended September 30, 2012. | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
The following table summarizes the allocation of our stock compensation expense (in thousands): | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 594 | $ | 278 | $ | 1,664 | $ | 461 | |||||||||
General and administrative | 384 | 136 | 860 | 271 | |||||||||||||
Total | $ | 978 | $ | 414 | $ | 2,524 | $ | 732 |
Strategic_Alliances_and_Collab1
Strategic Alliances and Collaborations (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Revenue from Strategic Alliance | ' | ||||||||||||||||
The following table summarizes the amounts included in our revenues which resulted from our strategic alliances and collaborations (in thousands): | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Sanofi | $ | 5,422 | $ | 2,500 | $ | 10,828 | $ | 7,530 | |||||||||
GSK | 144 | 186 | 1,634 | 1,809 | |||||||||||||
AstraZeneca | 465 | 94 | 1,394 | 94 | |||||||||||||
Biogen Idec | 87 | 29 | 259 | 29 | |||||||||||||
Total | $ | 6,118 | $ | 2,809 | $ | 14,115 | $ | 9,462 |
Business_Basis_of_Presentation
Business, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | ||||
Jul. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 30, 2012 | Jul. 31, 2012 | Oct. 30, 2012 | Oct. 30, 2012 | |
Convertible Notes | Initial Public Offering | ||||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Common stock shares, issued | 5,175,000 | ' | ' | ' | ' | ' | 18,980,982 |
Common stock shares, par value | $9.50 | ' | ' | ' | ' | ' | $4 |
Outstanding principal amount | ' | ' | ' | $10,800,000 | $5,000,000 | ' | ' |
Conversion of convertible notes into common stock shares | ' | 1,256,232 | ' | ' | ' | 2,703,269 | ' |
Proceeds from issuance of common stock | $45,800,000 | $46,562,000 | $102,000 | ' | ' | ' | $70,000,000 |
Summary_of_Adjustment_for_Net_
Summary of Adjustment for Net Loss for Diluted Net Loss per Share Calculation (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Net loss | ($2,164) | ($5,685) | ($16,741) | ($10,532) |
Less: gain from change in valuation of note payable | 671 | -331 | -3,787 | -331 |
Net loss used to compute diluted net loss per share | ($2,835) | ' | ' | ' |
Potentially_Dilutive_Securitie
Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss per Share (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive securities not included in calculation of diluted net loss per share | 3,041,033 | 16,545,674 | 3,875,462 | 16,523,462 |
Convertible Preferred Stock | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive securities not included in calculation of diluted net loss per share | ' | 13,699,999 | ' | 13,699,999 |
Common stock options | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive securities not included in calculation of diluted net loss per share | 3,041,033 | 2,845,675 | 2,474,614 | 2,823,463 |
Convertible Notes Payable | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive securities not included in calculation of diluted net loss per share | ' | ' | 1,400,848 | ' |
Net_Loss_Per_Share_Additional_
Net Loss Per Share - Additional Information (Detail) (USD $) | Sep. 30, 2013 |
In Millions, except Per Share data, unless otherwise specified | |
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ' |
Convertible notes payable | $5.40 |
Conversion price per share of convertible notes payable | $4 |
Summary_of_ShortTerm_Investmen
Summary of Short-Term Investments (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Investment [Line Items] | ' | ' |
Amortized cost | $90,443 | $57,590 |
Unrealized Gains | 20 | 7 |
Unrealized Losses | -50 | -49 |
Estimated fair value | 90,413 | 57,548 |
Corporate Debt Securities | ' | ' |
Investment [Line Items] | ' | ' |
Maturity | '2 or less | '2 or less |
Amortized cost | 68,649 | 44,898 |
Unrealized Gains | 18 | 7 |
Unrealized Losses | -50 | -49 |
Estimated fair value | 68,617 | 44,856 |
Commercial Paper | ' | ' |
Investment [Line Items] | ' | ' |
Maturity | '1 or less | '2 or less |
Amortized cost | 999 | 6,492 |
Estimated fair value | 999 | 6,492 |
Certificates of Deposit | ' | ' |
Investment [Line Items] | ' | ' |
Maturity | '2 or less | '1 or less |
Amortized cost | 13,770 | 6,200 |
Estimated fair value | 13,770 | 6,200 |
US Government-Sponsored Agencies Debt Securities | ' | ' |
Investment [Line Items] | ' | ' |
Maturity | '1 or less | ' |
Amortized cost | 7,025 | ' |
Unrealized Gains | 2 | ' |
Estimated fair value | $7,027 | ' |
Fair_Value_Hierarchy_for_Asset
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | $123,790 | $96,911 |
Convertible Notes Payable | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities measured at fair value on a recurring basis | 13,921 | 10,134 |
Cash Equivalents | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 33,377 | 39,363 |
Corporate Debt Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 68,617 | 44,856 |
Commercial Paper | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 999 | 6,492 |
Certificates of Deposit | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 13,770 | 6,200 |
US Government-Sponsored Agencies Debt Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 7,027 | ' |
Fair Value, Inputs, Level 1 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 33,377 | 39,363 |
Fair Value, Inputs, Level 1 | Cash Equivalents | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 33,377 | 39,363 |
Fair Value, Inputs, Level 2 | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 90,413 | 57,548 |
Fair Value, Inputs, Level 2 | Corporate Debt Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 68,617 | 44,856 |
Fair Value, Inputs, Level 2 | Commercial Paper | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 999 | 6,492 |
Fair Value, Inputs, Level 2 | Certificates of Deposit | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 13,770 | 6,200 |
Fair Value, Inputs, Level 2 | US Government-Sponsored Agencies Debt Securities | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Assets measured at fair value on a recurring basis | 7,027 | ' |
Fair Value, Inputs, Level 3 | Convertible Notes Payable | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Liabilities measured at fair value on a recurring basis | $13,921 | $10,134 |
Changes_in_Estimated_Fair_Valu
Changes in Estimated Fair Value of Convertible Notes Payable (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Change in estimated fair value of convertible notes payable | $671 | ($331) | ($3,787) | ($331) |
Fair Value, Inputs, Level 3 | ' | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Beginning Balance | ' | ' | 10,134 | ' |
Change in estimated fair value of convertible notes payable | ' | ' | 3,787 | ' |
Ending Balance | $13,921 | ' | $13,921 | ' |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' | ' | ' |
Gain (Loss) from valuation of convertible notes payable | $671 | ($331) | ($3,787) | ($331) | ' |
Stock price | $9.43 | ' | $9.43 | ' | $9.81 |
Fair value assumption, volatility rate | ' | ' | 65.00% | ' | ' |
Fair value assumption, risk free rate | ' | ' | 0.32% | ' | ' |
Fair value assumption, credit spread | ' | ' | 8.50% | ' | ' |
Convertible_Notes_Payable_Addi
Convertible Notes Payable - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 30, 2012 | Jul. 31, 2012 | Oct. 31, 2012 | Oct. 31, 2012 |
Oct-12 | Oct-12 | |||||
Convertible Debt | ||||||
GSK | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Convertible notes issued | ' | ' | ' | ' | ' | $5,400,000 |
Outstanding principal amount | ' | ' | 10,800,000 | 5,000,000 | 5,000,000 | ' |
Accrued interest on convertible notes | ' | ' | ' | ' | 400,000 | ' |
Conversion rate | ' | ' | ' | ' | 9-Oct-15 | ' |
Conversion price per shares | $4 | ' | ' | ' | $4 | ' |
Convertible note payable, at fair value | $13,921,000 | $10,134,000 | ' | ' | ' | ' |
Common_Stock_Reserved_for_Futu
Common Stock Reserved for Future Issuance (Detail) | Sep. 30, 2013 | Dec. 31, 2012 |
Equity [Line Items] | ' | ' |
Common stock options outstanding | 4,160,000 | 4,720,000 |
Total common shares reserved for future issuance | 8,182,756 | 7,124,739 |
Common Stock | ' | ' |
Equity [Line Items] | ' | ' |
Common stock options outstanding | 4,160,215 | 4,661,549 |
Common stock shares available for future grant | 2,161,410 | 946,403 |
Employee Stock Purchase Plan | ' | ' |
Equity [Line Items] | ' | ' |
Common stock shares available for future grant | 460,283 | 150,000 |
Convertible Notes Payable | ' | ' |
Equity [Line Items] | ' | ' |
Total common shares reserved for future issuance | 1,400,848 | 1,366,787 |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 |
Number of options | ' |
Options outstanding at December 31, 2012 | 4,720 |
Granted | 361 |
Exercised | -720 |
Canceled/forfeited/expired | -201 |
Options outstanding at September 30, 2013 | 4,160 |
Weighted average exercise price | ' |
Options outstanding at December 31, 2012 | $2.11 |
Granted | $7.91 |
Exercised | $0.80 |
Canceled/forfeited/expired | $3.44 |
Options outstanding at September 30, 2013 | $2.78 |
Assumptions_Used_to_Estimate_F
Assumptions Used to Estimate Fair Value of Stock Options Using Black-Scholes Option Pricing Model (Detail) (Common stock options) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
Common stock options | ' | ' | ' |
Employee Stock Options: | ' | ' | ' |
Risk-free interest rate | 1.70% | 1.40% | 1.10% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 72.70% | 67.80% | 71.00% |
Expected term (years) | '6 years 1 month 6 days | '6 years 1 month 6 days | '6 years 1 month 6 days |
StockBased_Compensation_Detail
Stock-Based Compensation (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expenses | $978 | $414 | $2,524 | $732 |
Research and development | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expenses | 594 | 278 | 1,664 | 461 |
General and administrative | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expenses | $384 | $136 | $860 | $271 |
Revenue_from_Strategic_Allianc
Revenue from Strategic Alliance (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Total revenues | $6,118 | $2,809 | $14,115 | $9,462 |
Strategic Alliances and Collaborations | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Total revenues | 6,118 | 2,809 | 14,115 | 9,462 |
Strategic Alliances and Collaborations | Sanofi | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Total revenues | 5,422 | 2,500 | 10,828 | 7,530 |
Strategic Alliances and Collaborations | GSK | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Total revenues | 144 | 186 | 1,634 | 1,809 |
Strategic Alliances and Collaborations | Astra Zeneca | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Total revenues | 465 | 94 | 1,394 | 94 |
Strategic Alliances and Collaborations | Biogen Idec | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Total revenues | $87 | $29 | $259 | $29 |
Strategic_Alliances_and_Collab2
Strategic Alliances and Collaborations - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||
Jul. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | GSK | Sanofi | Sanofi | Sanofi | Sanofi | Sanofi | Sanofi | Sanofi | Sanofi | Astra Zeneca | Astra Zeneca | Astra Zeneca | Astra Zeneca | Astra Zeneca | Astra Zeneca | Astra Zeneca | Biogen Idec | Biogen Idec | Biogen Idec | Biogen Idec | Biogen Idec | ||||
Immuno-Inflammatory Alliance | HCV Alliance | Preclinical | Preclinical | Clinical | Clinical | Regulatory | Regulatory | Commercialization | Fourth Micro RNA Targets | Development Candidate | Phase One Clinical Trial | Phase One Clinical Trial | Phase Two Clinical Trial | Phase Two Clinical Trial | Proof-of-Concept Trial | Proof-of-Concept Trial | Commercialization Milestones | Development Commercialization And License Agreement | Minimum | Minimum | Maximum | Maximum | HCV Alliance | Preclinical | Clinical | Development Commercialization And License Agreement | Research and Development | Minimum | Maximum | Agreement | Preclinical | Clinical | Commercialization | Minimum | Maximum | Research Tax Credit Carryforward | Identification Of Micro Rna Biomarker | Validation Of Micro Rna Biomarker | Longitudinal Study Of Patient Samples On Ms Therapy | ||||||||
Immuno-Inflammatory Alliance | HCV Alliance | Immuno-Inflammatory Alliance | HCV Alliance | Immuno-Inflammatory Alliance | HCV Alliance | Immuno-Inflammatory Alliance | Immuno-Inflammatory Alliance | Immuno-Inflammatory Alliance | Immuno-Inflammatory Alliance | HCV Alliance | Immuno-Inflammatory Alliance | HCV Alliance | Immuno-Inflammatory Alliance | HCV Alliance | HCV Alliance | Immuno-Inflammatory Alliance | HCV Alliance | Immuno-Inflammatory Alliance | HCV Alliance | HCV Alliance | HCV Alliance | HCV Alliance | HCV Alliance | ||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option expiry date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2013-12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option extension period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial upfront option payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,500,000 | $25,000,000 | ' | ' | ' | $3,000,000 | ' | ' | ' | ' | ' | $800,000 | ' | ' | ' | ' |
Upfront payment creditable against future accounts receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront payment non-creditable portion recognized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,100,000 | ' | ' | ' | 4,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue through milestone payments | ' | ' | ' | ' | 432,500,000 | 144,500,000 | 15,500,000 | 5,500,000 | 87,000,000 | 29,000,000 | 150,000,000 | 50,000,000 | 180,000,000 | 500,000 | 5,000,000 | 4,000,000 | 4,000,000 | 5,000,000 | 5,000,000 | 20,000,000 | 20,000,000 | 60,000,000 | ' | ' | ' | ' | ' | ' | 165,000,000 | 15,000,000 | 33,000,000 | ' | ' | ' | ' | ' | 498,000,000 | 5,000,000 | 123,000,000 | 370,000,000 | ' | ' | ' | 1,300,000 | 250,000 | 500,000 | 500,000 |
Royalties based on percentage of net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | 20.00% | 20.00% | ' | ' | ' | ' | ' | ' | 8.00% | 12.00% | ' | ' | ' | ' | ' | 10.00% | 20.00% | ' | ' | ' | ' | ' |
Deferred revenue recognition period | ' | ' | ' | '8 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acceleration of remaining amortization of upfront payment | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of collaborative areas granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration and license agreement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'August 2012 | ' | ' | ' | ' | ' | 'August 2012 | ' | ' | ' | ' |
Expected term of research and development plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issue | ' | 42,000 | 36,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued | ' | 41,774,442 | 35,831,808 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Price per share | $9.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of days during which AstraZeneca could not sell, transfer, make any short sale of, or grant any option for the sale of any common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '365 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricting common stock valuation measurement period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' |
Issued promissory note | ' | $5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion to common stock | ' | 1,256,232 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion rate | ' | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (Alnylam, USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Alnylam | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Service agreement | $0.10 | $0.50 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Biogen Idec, USD $) | 9 Months Ended | 1 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Oct. 31, 2013 |
Subsequent Event | ||
Subsequent Event [Line Items] | ' | ' |
Payment received pursuant to the terms of collaboration and license agreement | $0.80 | $0.10 |