Verastem (VSTM) 10-Q 7 Aug 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 31, 2014
Document and Entity Information	'	'
Entity Registrant Name	'Verastem, Inc.	'
Entity Central Index Key	'0001526119	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	25,842,328
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current assets:	'	'
Cash and cash equivalents	$22,391	$18,889
Short-term investments	76,204	82,423
Restricted cash	86	86
Prepaid expenses and other current assets	877	557
Total current assets	99,558	101,955
Property and equipment, net	1,489	631
Long-term investments	5,757	22,344
Restricted cash	203	'
Other assets	335	331
Total assets	107,342	125,261
Current liabilities:	'	'
Accounts payable	3,159	2,760
Accrued expenses	4,165	4,327
Liability classified stock-based compensation awards	547	717
Total current liabilities	7,871	7,804
Other liabilities	292	11
Stockholders' equity:	'	'
Convertible preferred stock, $0.0001 par value; 5,000 shares authorized; none issued and outstanding	'	'
Common stock, $0.0001 par value; 100,000 shares authorized; 25,722 and 25,328 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively	3	3
Additional paid-in capital	212,883	205,068
Accumulated other comprehensive income	29	28
Accumulated deficit	-113,736	-87,653
Total stockholders' equity	99,179	117,446
Total liabilities and stockholders' equity	$107,342	$125,261

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, except Per Share data, unless otherwise specified
CONDENSED CONSOLIDATED BALANCE SHEETS	'	'
Convertible preferred stock, par value (in dollars per share)	$0.00	$0.00
Convertible preferred stock, shares authorized	5,000	5,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	25,722	25,328
Common stock, shares outstanding	25,722	25,328

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Operating expenses:	'	'	'	'
Research and development	$8,305	$6,045	$16,716	$11,341
General and administrative	4,782	4,239	9,505	8,024
Total operating expenses	13,087	10,284	26,221	19,365
Loss from operations	-13,087	-10,284	-26,221	-19,365
Interest income	65	34	137	78
Net loss	-13,022	-10,250	-26,084	-19,287
Net loss per share-basic and diluted (in dollars per share)	($0.51)	($0.49)	($1.02)	($0.94)
Weighted-average number of common shares used in net loss per share-basic and diluted (in shares)	25,669	20,729	25,574	20,607
Comprehensive loss	($13,015)	($10,271)	($26,083)	($19,312)

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Operating activities	'	'
Net loss	($26,084)	($19,287)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	141	112
Amortization of premiums and discounts on available for sale marketable securities	152	'
Stock-based compensation expense	6,910	5,182
Common Stock issued to purchase technology rights	1,197	'
Changes in operating assets and liabilities:	'	'
Prepaid expenses, other current assets and other assets	-324	-630
Accounts payable	-187	186
Accrued expenses and other liabilities	373	1,781
Liability classified stock-based compensation award	-170	'
Net cash used in operating activities	-17,992	-12,656
Investing activities	'	'
Purchases of property and equipment	-412	-31
Purchases of investments	-26,640	-44,209
Maturities of investments	49,295	61,479
Increase in restricted cash	-203	'
Net cash provided by investing activities	22,040	17,239
Financing activities	'	'
Proceeds from the exercise of stock options	11	30
Cash used to settle restricted stock liability awards	-557	-829
Net cash used in financing activities	-546	-799
Increase in cash and cash equivalents	3,502	3,784
Cash and cash equivalents at beginning of period	18,889	10,096
Cash and cash equivalents at end of period	$22,391	$13,880

Summary_of_significant_account

Summary of significant accounting policies	6 Months Ended
	Jun. 30, 2014
Summary of significant accounting policies	'
Summary of significant accounting policies	'
	1. Summary of significant accounting policies
	Basis of presentation
	The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2014. For further information, refer to the financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission ("SEC") on March 6, 2014.
	Recent Accounting Pronouncements
	On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-10, which simplifies financial reporting for development stage entities by eliminating requirements specific to development stage entities. As a result, entities in a development stage will no longer need to present inception-to-date information about income statement line items, cash flows, and equity transactions. Instead, the new guidance clarifies how these entities should tailor existing disclosures to explain the risks and uncertainties related to their activities. This update is effective for annual periods beginning after December 15, 2014, and early application is permitted for any annual or interim period for which the entity's financial statements have not yet been issued. The Company adopted this guidance prior to issuing the financial statements in this Q2 2014 Form 10-Q. The adoption of ASU 2014-10 impacted disclosure only and did not have any impact on financial position or results of operations.
	There have been no changes to the Company's significant accounting policies included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on March 6, 2014.

Fair_value_of_financial_instru

Fair value of financial instruments	6 Months Ended
	Jun. 30, 2014
Fair value of financial instruments	'
Fair value of financial instruments	'
	2. Fair value of financial instruments
	The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy is now established that prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:
	Level 1 inputs	Quoted prices in active markets for identical assets or liabilities
	Level 2 inputs	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
	Level 3 inputs	Unobservable inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability
	The following table presents information about the Company's financial assets and liabilities that have been measured at fair value at June 30, 2014 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands).
	Description	Total		Quoted prices		Significant		Significant
				in active		other		unobservable
				markets		observable		inputs
				(Level 1)		inputs		(Level 3)
						(Level 2)
	Financial assets
	Cash equivalents	$	20,732	$	14,732	$	6,000	$	—
	Short-term investments		76,204		—		76,204		—
	Long-term investments		5,757		—		5,757		—
	Total financial assets	$	102,693	$	14,732	$	87,961	$	—
	Financial liabilities
	Liability classified stock-based compensation awards	$	547	$	547	$	—	$	—
	Total financial liabilities	$	547	$	547	$	—	$	—
	The following table presents information about the Company's financial assets and liabilities that have been measured at fair value at December 31, 2013 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands).
	Description	Total		Quoted prices		Significant		Significant
				in active		other		unobservable
				markets		observable		inputs
				(Level 1)		inputs		(Level 3)
						(Level 2)
	Financial assets
	Cash equivalents	$	17,000	$	17,000	$	—	$	—
	Short-term investments		82,423		—		82,423		—
	Long-term investments		22,344		—		22,344		—
	Total financial assets	$	121,767	$	17,000	$	104,767	$	—
	Financial liabilities
	Liability classified stock-based compensation awards	$	717	$	717	$	—	$	—
	Total financial liabilities	$	717	$	717	$	—	$	—
	The Company's cash equivalents and investments are comprised of money market accounts, government-sponsored enterprise securities, corporate bonds and commercial paper of publicly traded companies. These investments have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validates the prices provided by third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2014.
	The Company's liability classified stock-based compensation awards are comprised of restricted stock units (RSUs) that allow for greater than minimum statutory tax withholdings. These awards are valued based on the fair value of the Company's common stock underlying the awards, which is traded on an active market. During the first quarter of 2013, the Company amended the terms of certain RSUs to allow for cash tax withholdings greater than the minimum required statutory withholding amount. As a result of this change in the terms of the awards, the outstanding RSUs are considered to be liability instruments. As a result of this modification, the Company records a liability for the fair value of the awards as of each reporting date with the change in fair value recorded through the statement of operations. The Company will record stock-based compensation expense equal to the greater of the original grant date fair value of the awards or the settlement date fair value. During the three and the six months ended June 30, 2014, the Company paid approximately $58,000 and approximately $557,000, respectively, to settle the tax liability for awards that settled during the periods.

Investments

Investments	6 Months Ended
	Jun. 30, 2014
Investments	'
Investments	'
	3. Investments
	The Company's investments are classified as available-for-sale pursuant to Accounting Standards Codification (ASC) 320, Investments—Debt and Equity Securities. The Company classifies investments available to fund current operations as current assets on its balance sheets. Investments are classified as long-term assets on the balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii) the contractual maturity date of the investments is greater than one year.
	Investments are carried at fair value with unrealized gains and losses included as a component of accumulated other comprehensive (loss) income, until such gains and losses are realized. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is transferred from other comprehensive loss to the statement of operations. There were no charges taken for other-than-temporary declines in fair value of short-term or long-term investments during the three and six months ended June 30, 2014 and 2013. The Company recorded approximate unrealized gains and losses of $7,000, $1,000, $(21,000) and $(25,000) during the three and six months ended June 30, 2014 and 2013, respectively. Realized gains and losses are included in interest income in the statement of operations. There were no realized gains or losses recognized during the three and six months ended June 30, 2014 or 2013. The Company utilizes the specific identification method as a basis to determine the cost of securities sold.
	The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment's carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers the intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment's amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company's investment policy, the severity and the duration of the impairment and changes in value subsequent to year end. As of June 30, 2014, there were no investments with a fair value that was significantly lower than the amortized cost basis or any investments that had been in an unrealized loss position for a significant period.
	Cash, cash equivalents and investments at June 30, 2014 and December 31, 2013 consist of the following (in thousands):
		Amortized		Gross		Gross			Fair
		cost		unrealized		unrealized			value
				gains		losses
	June 30, 2014
	Cash and cash equivalents:
	Cash and money market accounts	$	16,391	$	—	$	—		$	16,391
	Corporate commercial paper		6,000		—		—			6,000
	Total cash and cash equivalents	$	22,391	$	—	$	—		$	22,391
	Investments:
	Government-sponsored enterprise securities (due within 1 year)	$	20,219	$	8	$	—		$	20,227
	Corporate bonds (due within 1 year)		55,955		25		(3	)		55,977
	Corporate bonds (due within 1 - 2 years)		5,758		—		(1	)		5,757
	Total investments	$	81,932	$	33	$	(4	)	$	81,961
	Total cash, cash equivalents, and investments	$	104,323	$	33	$	(4	)	$	104,352
		Amortized		Gross		Gross			Fair
		cost		unrealized		unrealized			value
				gains		losses
	December 31, 2013
	Cash and cash equivalents:
	Cash and money market accounts	$	18,889	$	—	$	—		$	18,889
	Total cash and cash equivalents	$	18,889	$	—	$	—		$	18,889
	Investments:
	Government-sponsored enterprise securities (due within 1 year)	$	30,652	$	12	$	—		$	30,664
	Government-sponsored enterprise securities (due within 1 - 2 years)		4,001		2		—			4,003
	Corporate bonds (due within 1 year)		51,735		30		(6	)		51,759
	Corporate bonds (due within 1 - 2 years)		18,351		2		(12	)		18,341
	Total investments	$	104,739	$	46	$	(18	)	$	104,767
	Total cash, cash equivalents, and investments	$	123,628	$	46	$	(18	)	$	123,656

Accrued_expenses

Accrued expenses	6 Months Ended
	Jun. 30, 2014
Accrued expenses	'
Accrued expenses	'
	4. Accrued expenses
	Accrued expenses consist of the following (in thousands):
		June 30,		December 31,
		2014		2013
	Contract research organization costs	$	2,609	$	1,918
	Compensation and related benefits		969		1,687
	Professional fees		275		237
	License milestones		110		360
	Deferred rent		72		38
	Other		130		87
		$	4,165	$	4,327

Net_loss_per_share

Net loss per share	6 Months Ended
	Jun. 30, 2014
Net loss per share	'
Net loss per share	'
	5. Net loss per share
	Basic and diluted net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. The Company's potentially dilutive shares, which include outstanding stock options, restricted stock units and unvested restricted stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. All potentially dilutive securities were excluded from the calculation of diluted net loss per share as the securities were anti-dilutive for all periods presented. The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
		Three months				Six months ended
		ended
		June 30,		June 30,		June 30,		June 30,
		2014		2013		2014		2013
	Outstanding stock options		4,151		2,263		4,151		2,263
	Unvested restricted stock		120		538		120		538
	Unvested restricted stock units		394		623		394		623

Stockbased_compensation

Stock-based compensation	6 Months Ended
	Jun. 30, 2014
Stock-based compensation	'
Stock-based compensation	'
	6. Stock-based compensation
	In December 2011, the Company adopted the 2012 Incentive Plan (the 2012 Plan). The 2012 Plan became effective upon the closing of the Company's IPO in February 2012. The 2012 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based and cash awards. Upon effectiveness, the number of shares of common stock that are reserved under the 2012 Plan is the sum of 3,428,571 shares plus the number of shares available under the Company's prior 2010 Plan. The number of shares reserved under the 2012 Plan is increased by the number of shares of common stock (up to a maximum of 571,242 shares) subject to outstanding awards under the 2010 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased. The 2012 Plan includes an "evergreen provision" that allows for an annual increase in the number of shares of common stock available for issuance under the 2012 Plan. The annual increase will be added on the first day of each year beginning in 2013 and each subsequent anniversary until the expiration of the 2012 Plan, equal to the lowest of 1,285,714 shares of common stock, 4.0% of the number of shares of common stock outstanding and an amount determined by the board of directors. On January 1, 2013 and 2014, the shares available under the 2012 Plan increased by 844,448 and 1,026,309 shares of common stock, respectively.
	Restricted common stock
	A summary of the Company's restricted common stock activity and related information is as follows:
		Shares			Weighted-
					average
					purchase price
					per share
	Unvested at December 31, 2013		329,282		$	0.034
	Vested		(208,860	)		0.022
	Unvested at June 30, 2014		120,422		$	0.056
	No restricted common stock was granted during the three and six months ended June 30, 2014 and 2013. The total fair value of shares vested during the three and six months ended June 30, 2014 and 2013 was an approximate $556,000, $1.6 million, an approximate $706,000 and $1.5 million, respectively. As of June 30, 2014, there was an approximate $296,000 of total unrecognized stock-based compensation expense related to unvested restricted common stock. The Company expects to recognize this expense over a remaining weighted average period of 0.3 years.
	A summary of the Company's restricted stock units (RSUs) activity and related information is as follows:
		Shares			Weighted-
					average
					grant date
					fair value
	Outstanding at December 31, 2013		529,850		$	10.78
	Settled		(131,798	)		10.35
	Forfeited		(4,284	)		11
	Outstanding at June 30, 2014		393,768		$	10.92
	No RSUs were granted during the three and six months ended June 30, 2014 and 2013. The total fair value of RSUs vested during the three and six months ended June 30, 2014 and 2013 was an approximate $125,000, $1.4 million, an approximate $122,000 and $2.3 million, respectively. As of June 30, 2014, there was $3.1 million of total unrecognized stock-based compensation expense related to unvested RSUs granted under the 2012 Plan. The Company expects to recognize this expense over a weighted average period of 1.6 years.
	During the first quarter of 2013, the Company amended the terms of certain RSUs related to a total of 657,058 shares of common stock to allow for tax withholdings greater than the minimum required statutory withholding amount, of which 308,424 remain outstanding as of June 30, 2014. As a result of this change in the terms of the awards, the outstanding RSUs are considered to be liability instruments. As a result of this modification, the Company records a liability for the fair value of the awards as of each reporting date with the change in fair value recorded through the statement of operations. The Company will record stock-based compensation expense equal to the greater of the original grant date fair value of the awards or the settlement date fair value. During the three and six months ended June 30, 2014, the Company deposited with taxing authorities approximately $58,000 and approximately $557,000, respectively, in respect of the tax liability for awards that settled during the periods.
	Stock options
	A summary of the Company's stock option activity and related information follows:
		Shares			Weighted-			Weighted-		Aggregate
					average			average		intrinsic
					price			remaining		value
					per share			contractual
								term (years)
	Outstanding at December 31, 2013		2,388,062		$	8.66
	Granted		1,802,167			12.72
	Exercised		(5,715	)		1.93
	Forfeited		(33,546	)		10.27
	Outstanding at June 30, 2014		4,151,058		$	10.42			8.9	$	2,669,825
	Exercisable at June 30, 2014		1,225,970		$	8.09			8.2	$	1,882,694
	Vested and expected to vest at June 30, 2014		3,837,817		$	10.36			8.9	$	2,648,704
	The fair value of each stock option is estimated on the grant date using the Black-Scholes option-pricing model using the following weighted average assumptions:
		Six months
		ended
		June 30,
		2014			2013
	Risk-free interest rate		2	%		1.1	%
	Dividend yield		—			—
	Volatility		81	%		75	%
	Expected term (years)		6.2			6.1

License_agreements

License agreements	6 Months Ended
	Jun. 30, 2014
License agreements	'
License agreements	'
	7. License agreements
	Under the license agreement with Poniard Pharmaceuticals, Inc. ("Poniard") that the Company entered into in November 2011 relating to VS-4718 and certain other compounds, the Company paid an upfront license fee and agreed to pay Poniard milestone payments upon the achievement of specified development and regulatory milestones. In February 2014, the Company purchased the assets which were the subject of the license agreement with Poniard from Encarta, Inc. ("Encarta"), who had previously purchased these assets in 2013. In consideration for these assets, the Company issued to Encarta 97,500 shares of common stock, a warrant to purchase 142,857 shares of common stock with an exercise price equal to $17.16 per share and paid $25,000. All existing obligations under the license agreement, including an achieved development milestone and an obligation to issue a warrant, were settled as part of this transaction. The Company incurred $1.2 million of research and development expense in the first quarter of 2014 as a result of this transaction. As the warrant that was issued was consistent with the existing obligation to issue a warrant, there were no charges recorded as a result of issuing the warrant. In connection with the asset purchase agreement, the Company also assumed the rights and obligations under the license agreement by and between the Scripps Research Institute ("Scripps") and Poniard, or the Scripps License Agreement. Pursuant to the Scripps License Agreement, the Company is obligated to pay Scripps potential product development milestone payments of up to an aggregate of $3.0 million upon the achievement of specified development and regulatory milestones. In addition, the Company is obligated to pay Scripps low single-digit royalties as a percentage of net sales of licensed products, subject to adjustments in certain circumstances. The Company's obligation to pay royalties on net sales is on a country by country basis. The milestones and royalties payable to Scripps will be recorded as expense when the obligations are incurred.

Commitments_and_Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2014
Commitments and Contingencies	'
Commitments and Contingencies	'
	8. Commitments and Contingencies
	On April 15, 2014, the Company entered into a lease agreement for approximately 15,197 square feet of office and laboratory space in Needham, Massachusetts. The Company intends to use the leased premises as its corporate headquarters commencing in the third quarter of 2014. The lease term commenced on April 15, 2014. The Company must commence rent payments under the lease agreement on the earlier of: (i) December 1, 2014, or (ii) the first day in the calendar month after which the initial improvements to build out the leased space are substantially complete (the "Rent Commencement Date"). The lease term expires on the last day of the 60th full month following the Rent Commencement Date. The Company has agreed to pay an initial annual base rent of approximately $493,000, which base rent increases after every twelve-month period during the lease term to approximately $554,000 for the last twelve-month period. The Company is recording rent expense on a straight-line basis, beginning in April 2014. The Company also received a tenant improvement allowance of approximately $684,000 in connection with the lease. The Company has accounted for the allowance as a lease incentive, which is being recorded as a reduction to rent expense over the lease term. Deferred rent and lease incentive obligation are included in accrued expenses and other liabilities in the consolidated balance sheet. The Company has also agreed to pay its proportionate share of increases in operating expenses and property taxes for the building in which the leased space is located. The Company has provided a security deposit in the form of a letter of credit in the amount of approximately $203,000, which may be reduced to approximately $162,000 on April 15, 2016. The amount is included in restricted cash on the consolidated balance sheet.

Subsequent_Events

Subsequent Events	6 Months Ended
	Jun. 30, 2014
Subsequent Events	'
Subsequent Events	'
	9. Subsequent Events
	The company reviews all activity subsequent to quarter end but prior to issuance of the condensed consolidated financial statements for events that could require disclosure or that could impact the carrying value of assets or liabilities as of the balance sheet date. During the period the Company did not have any material subsequent events.

Summary_of_significant_account1

Summary of significant accounting policies (Policies)	6 Months Ended
	Jun. 30, 2014
Summary of significant accounting policies	'
Basis of presentation	'
	Basis of presentation
	The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2014. For further information, refer to the financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission ("SEC") on March 6, 2014.
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements
	On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-10, which simplifies financial reporting for development stage entities by eliminating requirements specific to development stage entities. As a result, entities in a development stage will no longer need to present inception-to-date information about income statement line items, cash flows, and equity transactions. Instead, the new guidance clarifies how these entities should tailor existing disclosures to explain the risks and uncertainties related to their activities. This update is effective for annual periods beginning after December 15, 2014, and early application is permitted for any annual or interim period for which the entity's financial statements have not yet been issued. The Company adopted this guidance prior to issuing the financial statements in this Q2 2014 Form 10-Q. The adoption of ASU 2014-10 impacted disclosure only and did not have any impact on financial position or results of operations.
	There have been no changes to the Company's significant accounting policies included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on March 6, 2014.
Subsequent Events	'
	Subsequent Events
	The company reviews all activity subsequent to quarter end but prior to issuance of the condensed consolidated financial statements for events that could require disclosure or that could impact the carrying value of assets or liabilities as of the balance sheet date. During the period the Company did not have any material subsequent events.

Fair_value_of_financial_instru1

Fair value of financial instruments (Tables)	6 Months Ended
	Jun. 30, 2014
Fair value of financial instruments	'
Schedule of information about financial assets and liabilities measured at fair value	'
	The following table presents information about the Company's financial assets and liabilities that have been measured at fair value at June 30, 2014 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands).
	Description	Total		Quoted prices		Significant		Significant
				in active		other		unobservable
				markets		observable		inputs
				(Level 1)		inputs		(Level 3)
						(Level 2)
	Financial assets
	Cash equivalents	$	20,732	$	14,732	$	6,000	$	—
	Short-term investments		76,204		—		76,204		—
	Long-term investments		5,757		—		5,757		—
	Total financial assets	$	102,693	$	14,732	$	87,961	$	—
	Financial liabilities
	Liability classified stock-based compensation awards	$	547	$	547	$	—	$	—
	Total financial liabilities	$	547	$	547	$	—	$	—
	The following table presents information about the Company's financial assets and liabilities that have been measured at fair value at December 31, 2013 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands).
	Description	Total		Quoted prices		Significant		Significant
				in active		other		unobservable
				markets		observable		inputs
				(Level 1)		inputs		(Level 3)
						(Level 2)
	Financial assets
	Cash equivalents	$	17,000	$	17,000	$	—	$	—
	Short-term investments		82,423		—		82,423		—
	Long-term investments		22,344		—		22,344		—
	Total financial assets	$	121,767	$	17,000	$	104,767	$	—
	Financial liabilities
	Liability classified stock-based compensation awards	$	717	$	717	$	—	$	—
	Total financial liabilities	$	717	$	717	$	—	$	—

Investments_Tables

Investments (Tables)	6 Months Ended
	Jun. 30, 2014
Investments	'
Schedule of cash, cash equivalents and investments	'
	Cash, cash equivalents and investments at June 30, 2014 and December 31, 2013 consist of the following (in thousands):
		Amortized		Gross		Gross			Fair
		cost		unrealized		unrealized			value
				gains		losses
	June 30, 2014
	Cash and cash equivalents:
	Cash and money market accounts	$	16,391	$	—	$	—		$	16,391
	Corporate commercial paper		6,000		—		—			6,000
	Total cash and cash equivalents	$	22,391	$	—	$	—		$	22,391
	Investments:
	Government-sponsored enterprise securities (due within 1 year)	$	20,219	$	8	$	—		$	20,227
	Corporate bonds (due within 1 year)		55,955		25		(3	)		55,977
	Corporate bonds (due within 1 - 2 years)		5,758		—		(1	)		5,757
	Total investments	$	81,932	$	33	$	(4	)	$	81,961
	Total cash, cash equivalents, and investments	$	104,323	$	33	$	(4	)	$	104,352
		Amortized		Gross		Gross			Fair
		cost		unrealized		unrealized			value
				gains		losses
	December 31, 2013
	Cash and cash equivalents:
	Cash and money market accounts	$	18,889	$	—	$	—		$	18,889
	Total cash and cash equivalents	$	18,889	$	—	$	—		$	18,889
	Investments:
	Government-sponsored enterprise securities (due within 1 year)	$	30,652	$	12	$	—		$	30,664
	Government-sponsored enterprise securities (due within 1 - 2 years)		4,001		2		—			4,003
	Corporate bonds (due within 1 year)		51,735		30		(6	)		51,759
	Corporate bonds (due within 1 - 2 years)		18,351		2		(12	)		18,341
	Total investments	$	104,739	$	46	$	(18	)	$	104,767
	Total cash, cash equivalents, and investments	$	123,628	$	46	$	(18	)	$	123,656

Accrued_expenses_Tables

Accrued expenses (Tables)	6 Months Ended
	Jun. 30, 2014
Accrued expenses	'
Schedule of accrued expenses	'
	Accrued expenses consist of the following (in thousands):
		June 30,		December 31,
		2014		2013
	Contract research organization costs	$	2,609	$	1,918
	Compensation and related benefits		969		1,687
	Professional fees		275		237
	License milestones		110		360
	Deferred rent		72		38
	Other		130		87
		$	4,165	$	4,327

Net_loss_per_share_Tables

Net loss per share (Tables)	6 Months Ended
	Jun. 30, 2014
Net loss per share	'
Schedule of potentially anti-dilutive securities excluded from calculation of diluted net loss per share	'
		Three months				Six months ended
		ended
		June 30,		June 30,		June 30,		June 30,
		2014		2013		2014		2013
	Outstanding stock options		4,151		2,263		4,151		2,263
	Unvested restricted stock		120		538		120		538
	Unvested restricted stock units		394		623		394		623

Stockbased_compensation_Tables

Stock-based compensation (Tables)	6 Months Ended
	Jun. 30, 2014
Stock-based compensation	'
Summary of restricted common stock activity and related information	'
		Shares			Weighted-
					average
					purchase price
					per share
	Unvested at December 31, 2013		329,282		$	0.034
	Vested		(208,860	)		0.022
	Unvested at June 30, 2014		120,422		$	0.056
Summary of restricted stock units (RSUs) activity and related information	'
		Shares			Weighted-
					average
					grant date
					fair value
	Outstanding at December 31, 2013		529,850		$	10.78
	Settled		(131,798	)		10.35
	Forfeited		(4,284	)		11
	Outstanding at June 30, 2014		393,768		$	10.92
Summary of stock option activity and related information	'
		Shares			Weighted-			Weighted-		Aggregate
					average			average		intrinsic
					price			remaining		value
					per share			contractual
								term (years)
	Outstanding at December 31, 2013		2,388,062		$	8.66
	Granted		1,802,167			12.72
	Exercised		(5,715	)		1.93
	Forfeited		(33,546	)		10.27
	Outstanding at June 30, 2014		4,151,058		$	10.42			8.9	$	2,669,825
	Exercisable at June 30, 2014		1,225,970		$	8.09			8.2	$	1,882,694
	Vested and expected to vest at June 30, 2014		3,837,817		$	10.36			8.9	$	2,648,704
Schedule of assumptions used to estimate fair value of each stock option on grant date	'
		Six months
		ended
		June 30,
		2014			2013
	Risk-free interest rate		2	%		1.1	%
	Dividend yield		—			—
	Volatility		81	%		75	%
	Expected term (years)		6.2			6.1

Fair_value_of_financial_instru2

Fair value of financial instruments (Details) (USD $)	6 Months Ended			3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Dec. 31, 2013
				RSUs	RSUs	Total	Total	Quoted prices in active markets (Level 1)	Quoted prices in active markets (Level 1)	Significant other observable inputs (Level 2)	Significant other observable inputs (Level 2)
Financial assets	'	'	'	'	'	'	'	'	'	'	'
Cash equivalents	$22,391,000	'	$18,889,000	'	'	$20,732,000	$17,000,000	$14,732,000	$17,000,000	$6,000,000	'
Short-term investments	76,204,000	'	82,423,000	'	'	76,204,000	82,423,000	'	'	76,204,000	82,423,000
Long-term investments	'	'	'	'	'	5,757,000	22,344,000	'	'	5,757,000	22,344,000
Total financial assets	'	'	'	'	'	102,693,000	121,767,000	14,732,000	17,000,000	87,961,000	104,767,000
Financial liabilities	'	'	'	'	'	'	'	'	'	'	'
Liability classified stock-based compensation awards	'	'	'	'	'	547,000	717,000	547,000	717,000	'	'
Total financial liabilities	'	'	'	'	'	547,000	717,000	547,000	717,000	'	'
Cash paid to settle restricted stock liability awards	$557,000	$829,000	'	$58,000	$557,000	'	'	'	'	'	'

Investments_Details

Investments (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Investments	'	'	'	'	'	'
Charges for other-than-temporary declines in fair value of short-term or long-term investments	$0	$0	$0	$0	'	'
Unrealized gains (losses) on investments	7,000	-21,000	1,000	-25,000	'	'
Realized gains or losses on investments	0	0	0	0	'	'
Investments that had been in an unrealized loss position for a significant period	0	'	0	'	'	'
Investments	'	'	'	'	'	'
Cash and cash equivalents, Amortized cost	22,391,000	13,880,000	22,391,000	13,880,000	18,889,000	10,096,000
Cash and cash equivalents, Fair value	22,391,000	'	22,391,000	'	18,889,000	'
Investments, Amortized cost	'	'	'	'	'	'
Amortized Cost	81,932,000	'	81,932,000	'	104,739,000	'
Investments, Gross unrealized gains	'	'	'	'	'	'
Total cash, cash equivalents, and investments, Gross Unrealized Gains	33,000	'	33,000	'	46,000	'
Investments, Gross unrealized losses	'	'	'	'	'	'
Investments, Gross Unrealized Losses	-4,000	'	-4,000	'	-18,000	'
Fair value	'	'	'	'	'	'
Investments, Fair Value	81,961,000	'	81,961,000	'	104,767,000	'
Total cash, cash equivalents, and investments, Amortized Cost	104,323,000	'	104,323,000	'	123,628,000	'
Total cash, cash equivalents, and investments, Fair Value	104,352,000	'	104,352,000	'	123,656,000	'
Government-sponsored enterprise securities	'	'	'	'	'	'
Investments, Amortized cost	'	'	'	'	'	'
Due within 1 year	20,219,000	'	20,219,000	'	30,652,000	'
Due within 1 - 2 years	'	'	'	'	4,001,000	'
Investments, Gross unrealized gains	'	'	'	'	'	'
Due within 1 year	8,000	'	8,000	'	12,000	'
Due within 1 - 2 years	'	'	'	'	2,000	'
Fair value	'	'	'	'	'	'
Due within 1 year	20,227,000	'	20,227,000	'	30,664,000	'
Due within 1 - 2 years	'	'	'	'	4,003,000	'
Corporate bonds	'	'	'	'	'	'
Investments, Amortized cost	'	'	'	'	'	'
Due within 1 year	55,955,000	'	55,955,000	'	51,735,000	'
Due within 1 - 2 years	5,758,000	'	5,758,000	'	18,351,000	'
Investments, Gross unrealized gains	'	'	'	'	'	'
Due within 1 year	25,000	'	25,000	'	30,000	'
Due within 1 - 2 years	'	'	'	'	2,000	'
Investments, Gross unrealized losses	'	'	'	'	'	'
Due within 1 year	-3,000	'	-3,000	'	-6,000	'
Due within 1 - 2 years	-1,000	'	-1,000	'	-12,000	'
Fair value	'	'	'	'	'	'
Due within 1 year	55,977,000	'	55,977,000	'	51,759,000	'
Due within 1 - 2 years	5,757,000	'	5,757,000	'	18,341,000	'
Cash and money market accounts	'	'	'	'	'	'
Investments	'	'	'	'	'	'
Cash and cash equivalents, Amortized cost	16,391,000	'	16,391,000	'	18,889,000	'
Cash and cash equivalents, Fair value	16,391,000	'	16,391,000	'	18,889,000	'
Corporate commercial paper	'	'	'	'	'	'
Investments	'	'	'	'	'	'
Cash and cash equivalents, Amortized cost	6,000,000	'	6,000,000	'	'	'
Cash and cash equivalents, Fair value	$6,000,000	'	$6,000,000	'	'	'

Accrued_expenses_Details

Accrued expenses (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Accrued expenses	'	'
Contract research organization costs	$2,609	$1,918
Compensation and related benefits	969	1,687
Professional fees	275	237
License milestones	110	360
Deferred rent	72	38
Other	130	87
Accrued expenses	$4,165	$4,327

Net_loss_per_share_Details

Net loss per share (Details)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Outstanding stock options	'	'	'	'
Net loss per share	'	'	'	'
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	4,151	2,263	4,151	2,263
Unvested restricted stock	'	'	'	'
Net loss per share	'	'	'	'
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	120	538	120	538
Unvested restricted stock units	'	'	'	'
Net loss per share	'	'	'	'
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	394	623	394	623

Stockbased_compensation_Detail

Stock-based compensation (Details) (USD $)

6 Months Ended

0 Months Ended

1 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jan. 02, 2014

Jan. 02, 2013

Feb. 29, 2012

Jun. 30, 2014

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Mar. 31, 2013

Jun. 30, 2014

2012 Plan

2012 Plan

2012 Plan

2012 Plan

Restricted common stock

Restricted common stock

Restricted common stock

Restricted common stock

RSUs

RSUs

RSUs

RSUs

RSUs

Stock options

Stock-based compensation

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Initial number of shares reserved

'

'

'

'

3,428,571

'

'

'

'

'

'

'

'

'

'

'

Maximum incremental number of shares reserved

'

'

'

'

571,242

'

'

'

'

'

'

'

'

'

'

'

Annual increase in number of shares reserved

'

'

'

'

'

1,285,714

'

'

'

'

'

'

'

'

'

'

Percentage of outstanding shares of common stock used to compute annual increase in number of shares reserved

'

'

'

'

'

4.00%

'

'

'

'

'

'

'

'

'

'

Increase in number of shares reserved

'

'

1,026,309

844,448

'

'

'

'

'

'

'

'

'

'

'

'

Shares

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Unvested at the beginning of the period (in shares)

'

'

'

'

'

'

'

'

329,282

'

'

'

529,850

'

'

'

Vested (in shares)

'

'

'

'

'

'

'

'

-208,860

'

'

'

'

'

'

'

Settled (in shares)

'

'

'

'

'

'

'

'

'

'

'

'

-131,798

'

'

'

Forfeited (in shares)

'

'

'

'

'

'

'

'

'

'

'

'

-4,284

'

'

-33,546

Unvested at the end of the period (in shares)

'

'

'

'

'

'

120,422

'

120,422

'

393,768

'

393,768

'

'

'

Awards granted (in shares)

'

'

'

'

'

'

0

0

0

0

0

0

0

0

'

'

Modified restricted stock units outstanding

'

'

'

'

'

'

'

'

'

'

308,424

'

308,424

'

'

'

Modified restricted stock units authorized

'

'

'

'

'

'

'

'

'

'

'

'

'

'

657,058

'

Weighted-average grant date fair value

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Unvested at the beginning of the period (in dollars per share)

'

'

'

'

'

'

'

'

$0.03

'

'

'

$10.78

'

'

'

Vested (in dollars per share)

'

'

'

'

'

'

'

'

$0.02

'

'

'

'

'

'

'

Settled (in dollars per share)

'

'

'

'

'

'

'

'

'

'

'

'

$10.35

'

'

'

Forfeited (in dollars per share)

'

'

'

'

'

'

'

'

'

'

'

'

$11

'

'

$10.27

Unvested at the end of the period (in dollars per share)

'

'

'

'

'

'

$0.06

'

$0.06

'

$10.92

'

$10.92

'

'

'

Additional disclosures

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Total unrecognized stock-based compensation expense (in dollars)

'

'

'

'

'

'

$296,000

'

$296,000

'

$3,100,000

'

$3,100,000

'

'

'

Weighted average period over which total unrecognized stock based compensation expense is expected to be recognized

'

'

'

'

'

'

'

'

'3 months 18 days

'

'

'

'1 year 7 months 6 days

'

'

'

Fair value of shares vested

'

'

'

'

'

'

556,000

706,000

1,600,000

1,500,000

125,000

122,000

1,400,000

2,300,000

'

'

Cash used to settle restricted stock liability awards

$557,000

$829,000

'

'

'

'

'

'

'

'

$58,000

'

$557,000

'

'

'

Stockbased_compensation_Detail1

Stock-based compensation (Details 2) (Stock options, USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Stock options	'	'
Shares	'	'
Outstanding at the beginning of the period (in shares)	2,388,062	'
Granted (in shares)	1,802,167	'
Exercised (in shares)	-5,715	'
Forfeited (in shares)	-33,546	'
Outstanding at the end of the period (in shares)	4,151,058	'
Exercisable at the end of the period (in shares)	1,225,970	'
Vested and expected to vest at end of period (in shares)	3,837,817	'
Weighted-average exercise price per share	'	'
Outstanding at the beginning of the period (in dollars per share)	$8.66	'
Granted (in dollars per share)	$12.72	'
Exercised (in dollars per share)	$1.93	'
Forfeited (in dollars per share)	$10.27	'
Outstanding at the end of the period (in dollars per share)	$10.42	'
Exercisable at the end of the period (in dollars per share)	$8.09	'
Vested and expected to vest at end of the period (in dollars per share)	$10.36	'
Weighted-average remaining contractual term	'	'
Outstanding at the beginning of the period	'8 years 10 months 24 days	'
Outstanding at the end of the period	'8 years 10 months 24 days	'
Exercisable at the end of the period	'8 years 2 months 12 days	'
Vested and expected to vest at the end of the period	'8 years 10 months 24 days	'
Aggregate intrinsic value	'	'
Outstanding at the end of the period (in dollars)	$2,669,825	'
Exercisable at the end of the period (in dollars)	1,882,694	'
Vested and expected to vest at end of the period (in dollars)	$2,648,704	'
Assumptions used to estimate fair value of each stock-based award on the grant date	'	'
Risk-free interest rate (as a percent)	2.00%	1.10%
Volatility (as a percent)	81.00%	75.00%
Expected term	'6 years 2 months 12 days	'6 years 1 month 6 days

License_agreements_Details

License agreements (Details) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended	1 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014	Feb. 28, 2014	Feb. 28, 2014	Feb. 28, 2014
					Exclusive license agreement	Exclusive license agreement	Exclusive license agreement	Asset purchase agreement
						Encarta, Inc.	Scripps	Encarta, Inc.
License agreements	'	'	'	'	'	'	'	'
Common stock issued (in shares)	'	'	'	'	'	97,500	'	'
Number of shares of common stock in the warrant issued under the license agreement	'	'	'	'	'	142,857	'	'
Exercise price of shares of common stock in the warrant issued under the license agreement (in dollars per share)	'	'	'	'	'	$17.16	'	'
Cash payment made under the agreement	'	'	'	'	'	'	'	$25,000
Research and development expense	8,305,000	6,045,000	16,716,000	11,341,000	1,200,000	'	'	'
Warrant issuance charges	'	'	0	'	'	'	'	'
Milestone payments upon the achievement of specified development and regulatory milestones	'	'	'	'	'	'	$3,000,000	'

Commitments_and_Contingencies_

Commitments and Contingencies (Details) (Intercontinental Fund III 117 Kendrick Street, LLC, USD $)	0 Months Ended
	Apr. 15, 2014	Jun. 30, 2014	Apr. 15, 2014	Apr. 15, 2016
	sqft		Letter of credit	Letter of credit
				Subsequent events
Lease	'	'	'	'
Area of space	15,197	'	'	'
Lease term	'60 months	'	'	'
Initial annual base rent	$493,000	'	'	'
Period after which base rent increases	'12 months	'	'	'
Base rent for last twelve-month period	554,000	'	'	'
Tenant improvement allowance	'	684,000	'	'
Security deposit	'	'	$203,000	$162,000