Verastem (VSTM) 10-Q 9 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document and Entity Information
Entity Registrant Name	Verastem, Inc.
Entity Central Index Key	1,526,119
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
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		36,992,418
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 15,147	$ 24,870
Short-term investments	84,388	85,388
Prepaid expenses and other current assets	1,002	585
Total current assets	100,537	110,843
Property and equipment, net	1,865	2,048
Restricted cash	162	203
Total assets	102,564	113,094
Current liabilities:
Accounts payable	2,595	3,942
Accrued expenses	3,529	6,098
Liability classified stock-based compensation awards		69
Total current liabilities	6,124	10,109
Other liabilities	472	516
Stockholders' equity
Convertible Preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.0001 par value; 100,000 shares authorized, 36,992 and 36,941 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	4	4
Additional paid-in capital	303,006	301,305
Accumulated other comprehensive income	135	43
Accumulated deficit	(207,177)	(198,883)
Total stockholders' equity	95,968	102,469
Total liabilities and stockholders' equity	$ 102,564	$ 113,094

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	36,992	36,941
Common stock, shares outstanding	36,992	36,941

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating expenses:
Research and development	$ 4,179	$ 10,528
General and administrative	4,255	4,714
Total operating expenses	8,434	15,242
Loss from operations	(8,434)	(15,242)
Interest income	140	62
Net loss	$ (8,294)	$ (15,180)
Net loss per share - basic and diluted	$ (0.22)	$ (0.46)
Weighted-average number of common shares used in net loss per share—basic and diluted	36,975	33,323
Net loss	$ (8,294)	$ (15,180)
Unrealized gains (losses) on available-for-sale securities	92	28
Comprehensive loss	$ (8,202)	$ (15,152)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net loss	$ (8,294)	$ (15,180)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	183	188
Stock-based compensation expense	1,706	3,134
Amortization of premiums and discounts on available-for-sale marketable securities	(12)	58
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(376)	(250)
Accounts payable	(1,347)	891
Accrued expenses and other liabilities	(2,613)	(355)
Liability classified stock-based compensation awards	(69)	(213)
Net cash used in operating activities	(10,822)	(11,727)
Investing activities
Purchases of property and equipment		(196)
Purchases of investments	(36,346)	(78,326)
Maturities of investments	37,450	31,123
Net cash provided by (used in) investing activities	1,104	(47,399)
Financing activities
Proceeds from the exercise of stock options		7
Net proceeds from the issuance of common stock and restricted common stock	0	55,566
Cash used to settle restricted stock liability	(5)	(223)
Net cash (used in) provided by financing activities	(5)	55,350
Decrease in cash and cash equivalents	(9,723)	(3,776)
Cash and cash equivalents at beginning of period	24,870	33,901
Cash and cash equivalents at end of period	$ 15,147	30,125
Supplemental disclosure of non-cash financing and investing activities
Proceeds from the issuance of common stock included in prepaid expenses and other current assets		1,972
Public offering costs in accounts payable and accrued expenses and other liabilities		55
Purchases of property and equipment in accounts payable		$ 8

Summary of significant accounti

Summary of significant accounting policies	3 Months Ended
	Mar. 31, 2016
Significant accounting policies.
Significant accounting policies	Verastem, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 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 generally accepted accounting principles 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 months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2016. 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, 2015 as filed with the SEC on March 3, 2016. Recent accounting pronouncements Employee share-based payments In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting . The standard will revise accounting for share-based compensation arrangements, including the income tax impact and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees to put most leases on their balance sheets as a liability for the obligation to make lease payments and as a right-of-use asset, but recognize expenses on the income statements in a manner similar to today’s accounting. The guidance also eliminates the current real estate-specific provisions for all entities. For calendar-year public entities, the guidance becomes effective in 2019 and interim periods within that year. Early adoption is permitted for all entities. The Company has not chosen early adoption for this ASU and is currently evaluating its effect on the Company’s consolidated financial statements. Going concern In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40). ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern every reporting period, and provide certain disclosures if management has substantial doubt about the entity’s ability to operate as a going concern, or an express statement if not, by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has evaluated the impact of the adoption of ASU 2014-15 on its three months ended March 31, 2016 consolidated financial statements and determined that there is not substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance of the three months ended March 31, 2016 consolidated financial statements. 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, 2015 as filed with the SEC on March 3, 2016.

Fair value of financial instrum

Fair value of financial instruments	3 Months Ended
	Mar. 31, 2016
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 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 March 31, 2016 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): Quoted prices Significant other Significant in active observable unobservable markets inputs inputs Description Total (Level 1) (Level 2) (Level 3) Financial assets Cash equivalents $ $ $ — $ — Short-term investments — — Total financial assets $ $ $ $ — The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value at December 31, 2015 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): Quoted prices Significant other Significant in active observable unobservable markets inputs inputs Description Total (Level 1) (Level 2) (Level 3) Financial assets Cash equivalents $ $ $ $ — Short-term investments — — Total financial assets $ $ $ $ — Financial liabilities Liability classified stock-based compensation awards $ $ $ — $ — Total financial liabilities $ $ $ — $ — The Company’s cash equivalents and investments are comprised of United States Treasury money market accounts, United States Treasury securities, government-sponsored enterprise securities, and corporate bonds and commercial paper. 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 March 31, 2016 and December 31, 2015. 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 months ended March 31, 2016 and 2015, the Company made approximate deposits to the taxing authorities of $5,000 and $223,000 , respectively, to settle the tax liability for awards that settled during such periods.

Investments

Investments	3 Months Ended
	Mar. 31, 2016
Investments
Investments	3. Investments The Company’s investments are classified as available-for-sale pursuant to the accounting standards for investments in 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 months ended March 31, 2016 and 2015. The Company recorded approximate unrealized gains of $92,000 and $28,000 during the three months ended March 31, 2016 and 2015, 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 months ended March 31, 2016 or 2015. 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 March 31, 2016, 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 March 31, 2016 and December 31, 2015 consist of the following (in thousands): Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ $ — $ — $ Total cash and cash equivalents $ $ — $ — $ Investments: Government-sponsored enterprise securities (due within 1 year) $ $ $ — $ Treasury securities (due within 1 year) — — Corporate bonds and commercial paper (due within 1 year) — Total investments $ $ $ — $ Total cash, cash equivalents, and investments $ $ $ — $ Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ $ — $ — $ Government-sponsored enterprise securities (original maturities within 90 days) — — Corporate bonds and commercial paper (original maturities within 90 days) — — Total cash and cash equivalents $ $ — $ — $ Investments: Government-sponsored enterprise securities (due within 1 year) $ $ $ — $ Treasury securities (due within 1 year) — — Corporate bonds and commercial paper (due within 1 year) Total investments $ $ $ $ Total cash, cash equivalents, and investments $ $ $ $

Accrued expenses

Accrued expenses	3 Months Ended
	Mar. 31, 2016
Accrued expenses
Accrued expenses	4. Accrued expenses Accrued expenses consist of the following (in thousands): March 31, December 31, 2016 2015 Contract research organization costs $ $ Compensation and related benefits Professional fees Deferred rent Other $ $

Net loss per share

Net loss per share	3 Months Ended
	Mar. 31, 2016
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 and the warrant issued in 2014 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. The following potentially dilutive securities were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three months ended March 31, 2016 2015 Outstanding stock options Outstanding warrants Unvested restricted stock units —

Stock-based compensation

Stock-based compensation	3 Months Ended
	Mar. 31, 2016
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, 2016 and 2015, the shares available under the 2012 Plan increased by 1,285,714 and 1,081,045 shares of common stock, respectively. In December 2014, the Company established an inducement award program (in accordance with NASDAQ Listing Rule 5635(c)(4)) under which it may grant non-statutory stock options to purchase up to an aggregate of 750,000 shares of common stock to new employees as inducement for prospective employees to enter into employment with the Company. The program is governed by the terms of the 2012 Plan but the shares are not issued pursuant to the 2012 Plan. The Company has granted 210,000 options to purchase shares under this program as of March 31, 2016 and 2015. There have been 75,000 shares returned to this program due to cancellations as of March 31, 2016. No shares had been cancelled and returned to the program as of March 31, 2015. Restricted common stock No restricted common stock was granted during the three months ended March 31, 2016 and 2015. The total fair value of shares vested during the three months ended March 31, 2015 was approximately $59,000 . All issued awards were fully vested as of December 31, 2015. Restricted stock units A summary of the Company’s restricted stock units (RSUs) activity and related information is as follows: Weighted- average grant date fair value Shares per share Unvested at December 31, 2015 $ Vested $ Forfeited — $ — Unvested at March 31, 2016 — $ — No RSUs were granted during the three months ended March 31, 2016 and 2015. The approximate total fair value of RSUs vested during the three months ended March 31, 2016 and 2015 was $65,000 and $873,000 , respectively . As of March 31, 2016, there was no unrecognized stock-based compensation expense related to unvested RSUs granted under the 2012 Plan. During the first quarter of 2013, the Company amended the terms of certain RSUs related to a total of 697,060 shares of common stock to allow for tax withholdings greater than the minimum required statutory withholding amount, of which there are no remaining outstanding as of March 31, 2016. As a result of this change in the terms of the awards, the outstanding RSUs were considered to be liability instruments. As a result of this modification, the Company recorded 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 recorded stock ‑based compensation expense equal to the greater of the original grant date fair value of the awards or the settlement date fair value. As of March 31, 2016, all RSUs were fully vested. During the three months ended March 31, 2016 and 2015, the Company made approximate deposits with the taxing authorities of $5,000 and $223,000 , respectively, in respect of the tax liability for awards that settled during such periods. Stock options A summary of the Company’s stock option activity and related information follows: Weighted-average Weighted-average remaining Aggregate exercise price per contractual term intrinsic value Shares share (years) (in thousands) Outstanding at December 31, 2015 $ $ Granted $ Exercised $ Forfeited $ Outstanding at March 31, 2016 $ $ Vested at March 31, 2016 $ $ Vested and expected to vest at March 31, 2016(1) $ $ (1) This represents the number of vested options as of December 31, 2015, plus the number of unvested options expected to vest as of December 31, 2015, based on the unvested options at December 31, 2015, adjusted for the estimated forfeiture rate. 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: Three Months Ended March 31, 2015 Risk-free interest rate % % Volatility % % Dividend yield — — Expected term (years)

Equity Offerings

Equity Offerings	3 Months Ended
	Mar. 31, 2016
Equity Offerings.
Equity Offerings	7. Equity offerings In January 2015, the Company closed a public offering in which it sold 8,337,500 shares of its common stock to the public at a price of $6.50 per share, including 1,087,500 shares issued pursuant to the exercise of the underwriters’ option to purchase additional shares. The offering was completed under the shelf registration statement that was filed on Form S-3 and declared effective by the SEC on January 8, 2014. The net proceeds from this offering were approximately $50.9 million, after deducting underwriting discounts and commissions. In December 2013, the Company established an at-the-market equity offering program pursuant to which it is able to offer and sell up to $35.0 million of its common stock at then current market prices from time to time through Cantor Fitzgerald & Co., as sales agent. In November 2014, the Company commenced sales under this program. Through December 31, 2015, the Company sold 2,536,155 shares under this program for net proceeds of approximately $22.5 million (after deducting commissions and other offering expenses), of which 470,309 shares were sold in the three months ending March 31, 2015 for net proceeds of $4.4 million (after deducting commissions and other offering expenses). Of the cumulative net proceeds through December 31, 2015, $9. 6 million was received in 2014, $4.6 million was received in the three months ended March 31, 2015 and $8.3 million was received subsequent to March 31, 2015. No additional sales of our common stock were made under this program and no proceeds were received during the three months ended March 31, 2016.

Reduction in force

Reduction in force	3 Months Ended
	Mar. 31, 2016
Reduction in force
Reduction in force	8. Reduction in force In October 2015, the Company announced a reduction of workforce by approximately 50% to 20 full time employees. All affected employees will receive severance pay and outplacement assistance. As a result of the reduction in force and associated costs, the Company estimates one-time severance and related costs of $1.1 million. Of these one-time severance and related costs, approximately $349,000 was paid through December 31, 2015, approximately $521,000 was paid in the three months ended March 31, 2016, and approximately $192,000 will be paid in the 2016 fiscal year subsequent to March 31, 2016. The remaining liability is recorded within accrued expenses on the condensed consolidated balance sheets.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2016
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. On April 18, 2016, the Company announced that Gregory I. Berk, M.D. had been appointed as its Chief Medical Officer, effective as of April 15, 2016, and entered into an employment agreement with Dr. Berk, effective as of April 15, 2016, governing the terms of Dr. Berk’s employment for an indefinite term. On April 18, 2016, the Company announced that John “Jack” Green had resigned as Chief Financial Officer of the Company, effective as of April 15, 2016. Mr. Green will become a consultant to the Company pursuant to the terms of a consulting agreement he entered into with the Company on April 15, 2016. On April 18, 2016, the Company appointed Joe Chiapponi, Vice President of Finance, as its Treasurer, principal financial officer and principal accounting officer, effective as of April 18, 2016.

Summary of significant accoun15

Summary of significant accounting policies (Policies)	3 Months Ended
	Mar. 31, 2015
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 generally accepted accounting principles 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 months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2016. 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, 2015 as filed with the SEC on March 3, 2016. Recent accounting pronouncements Employee share-based payments In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting . The standard will revise accounting for share-based compensation arrangements, including the income tax impact and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees to put most leases on their balance sheets as a liability for the obligation to make lease payments and as a right-of-use asset, but recognize expenses on the income statements in a manner similar to today’s accounting. The guidance also eliminates the current real estate-specific provisions for all entities. For calendar-year public entities, the guidance becomes effective in 2019 and interim periods within that year. Early adoption is permitted for all entities. The Company has not chosen early adoption for this ASU and is currently evaluating its effect on the Company’s consolidated financial statements. Going concern In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (Subtopic 205-40). ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern every reporting period, and provide certain disclosures if management has substantial doubt about the entity’s ability to operate as a going concern, or an express statement if not, by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has evaluated the impact of the adoption of ASU 2014-15 on its three months ended March 31, 2016 consolidated financial statements and determined that there is not substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance of the three months ended March 31, 2016 consolidated financial statements. 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, 2015 as filed with the SEC on March 3, 2016.

Fair value of financial instr16

Fair value of financial instruments (Tables)	3 Months Ended
	Mar. 31, 2016
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 March 31, 2016 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): Quoted prices Significant other Significant in active observable unobservable markets inputs inputs Description Total (Level 1) (Level 2) (Level 3) Financial assets Cash equivalents $ $ $ — $ — Short-term investments — — Total financial assets $ $ $ $ — The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value at December 31, 2015 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): Quoted prices Significant other Significant in active observable unobservable markets inputs inputs Description Total (Level 1) (Level 2) (Level 3) Financial assets Cash equivalents $ $ $ $ — Short-term investments — — Total financial assets $ $ $ $ — Financial liabilities Liability classified stock-based compensation awards $ $ $ — $ — Total financial liabilities $ $ $ — $ —

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2016
Investments
Schedule of cash, cash equivalents and investments	Cash, cash equivalents and investments at March 31, 2016 and December 31, 2015 consist of the following (in thousands): Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ $ — $ — $ Total cash and cash equivalents $ $ — $ — $ Investments: Government-sponsored enterprise securities (due within 1 year) $ $ $ — $ Treasury securities (due within 1 year) — — Corporate bonds and commercial paper (due within 1 year) — Total investments $ $ $ — $ Total cash, cash equivalents, and investments $ $ $ — $ Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ $ — $ — $ Government-sponsored enterprise securities (original maturities within 90 days) — — Corporate bonds and commercial paper (original maturities within 90 days) — — Total cash and cash equivalents $ $ — $ — $ Investments: Government-sponsored enterprise securities (due within 1 year) $ $ $ — $ Treasury securities (due within 1 year) — — Corporate bonds and commercial paper (due within 1 year) Total investments $ $ $ $ Total cash, cash equivalents, and investments $ $ $ $

Accrued expenses (Tables)

Accrued expenses (Tables)	3 Months Ended
	Mar. 31, 2016
Accrued expenses
Schedule of accrued expenses	Accrued expenses consist of the following (in thousands): March 31, December 31, 2016 2015 Contract research organization costs $ $ Compensation and related benefits Professional fees Deferred rent Other $ $

Net loss per share (Tables)

Net loss per share (Tables)	3 Months Ended
	Mar. 31, 2016
Net loss per share
Schedule of potentially anti-dilutive securities excluded from calculation of diluted net loss per share	Three months ended March 31, 2016 2015 Outstanding stock options Outstanding warrants Unvested restricted stock units —

Stock-based compensation (Table

Stock-based compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Stock-based compensation
Summary of restricted stock units (RSUs) activity and related information	Weighted- average grant date fair value Shares per share Unvested at December 31, 2015 $ Vested $ Forfeited — $ — Unvested at March 31, 2016 — $ —
Summary of stock option activity and related information	Weighted-average Weighted-average remaining Aggregate exercise price per contractual term intrinsic value Shares share (years) (in thousands) Outstanding at December 31, 2015 $ $ Granted $ Exercised $ Forfeited $ Outstanding at March 31, 2016 $ $ Vested at March 31, 2016 $ $ Vested and expected to vest at March 31, 2016(1) $ $
Schedule of assumptions used to estimate fair value of each stock option on grant date	Three Months Ended March 31, 2015 Risk-free interest rate % % Volatility % % Dividend yield — — Expected term (years)

Fair value of financial instr21

Fair value of financial instruments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Financial assets
Cash equivalents	$ 15,147,000		$ 24,870,000
Short-term investments	84,388,000		85,388,000
Financial liabilities
Cash used to settle restricted stock liability	(5,000)	$ (223,000)
Total
Financial assets
Cash equivalents	13,176,000		23,036,000
Short-term investments	84,388,000		85,388,000
Total financial assets	97,564,000		108,424,000
Financial liabilities
Liability classified stock-based compensation awards			69,000
Total financial liabilities			69,000
RSUs
Financial liabilities
Cash used to settle restricted stock liability	(5,000)	$ (223,000)
Quoted prices in active markets (Level 1)
Financial assets
Cash equivalents	13,176,000		11,464,000
Total financial assets	13,176,000		11,464,000
Financial liabilities
Liability classified stock-based compensation awards			69,000
Total financial liabilities			69,000
Significant other observable inputs (Level 2)
Financial assets
Cash equivalents			11,572,000
Short-term investments	84,388,000		85,388,000
Total financial assets	$ 84,388,000		$ 96,960,000

Investments (Details)

Investments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Investments
Charges for other-than-temporary declines in fair value of short-term or long-term investments	$ 0	$ 0
Unrealized gains (losses) on investments	92,000	28,000
Realized gains or losses on investments	0	0
Investments that had been in an unrealized loss position for a significant period	0
Amortized cost
Cash and cash equivalents, Amortized cost	15,147,000	$ 30,125,000	$ 24,870,000	$ 33,901,000
Investments, Amortized Cost	84,253,000		85,345,000
Total cash, cash equivalents, and investments, Amortized Cost	99,400,000		110,215,000
Investments, Gross unrealized gains
Due within 1 year	135,000		62,000
Total cash, cash equivalents, and investments, Gross Unrealized Gains	135,000		62,000
Investments, Gross unrealized losses
Available For Sale Security Accumulated Gross Unrealized Loss Before Tax			(19,000)
Fair value
Cash and cash equivalents, Fair value	15,147,000		24,870,000
Available-for-sale Securities	84,388,000		85,388,000
Total cash, cash equivalents, and investments, Fair Value	99,535,000		110,258,000
Government-sponsored enterprise securities
Amortized cost
Due within 1 year	11,944,000		11,932,000
Investments, Gross unrealized gains
Due within 1 year	4,000		5,000
Fair value
Available-for-sale Securities, Debt Maturities, Next Rolling Twelve Months, Fair Value	11,948,000		11,937,000
Treasury securities
Amortized cost
Due within 1 year	1,002,000		1,005,000
Fair value
Available-for-sale Securities, Debt Maturities, Next Rolling Twelve Months, Fair Value	1,002,000		1,005,000
Corporate bonds and commercial paper
Amortized cost
Due within 1 year	71,307,000		72,408,000
Investments, Gross unrealized gains
Due within 1 year	131,000		57,000
Investments, Gross unrealized losses
Due within 1 year			(19,000)
Fair value
Available-for-sale Securities, Debt Maturities, Next Rolling Twelve Months, Fair Value	71,438,000		72,446,000
Cash and money market accounts
Amortized cost
Cash and cash equivalents, Amortized cost	15,147,000		13,298,000
Fair value
Cash and cash equivalents, Fair value	$ 15,147,000		13,298,000
Government-sponsored enterprise securities
Amortized cost
Cash and cash equivalents, Amortized cost			2,000,000
Fair value
Cash and cash equivalents, Fair value			2,000,000
Corporate bonds and commercial paper | Corporate bonds and commercial paper
Amortized cost
Cash and cash equivalents, Amortized cost			9,572,000
Fair value
Cash and cash equivalents, Fair value			$ 9,572,000

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accrued expenses
Contract research organization costs	$ 2,083	$ 3,782
Compensation and related benefits	771	1,802
Professional fees	412	260
Deferred rent	164	160
Other	99	94
Accrued expenses	$ 3,529	$ 6,098

Net loss per share (Details)

Net loss per share (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	5,616,229	5,704,951
Outstanding stock options
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	5,473,372	5,370,567
RSUs
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)		191,527
Outstanding warrants
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	142,857	142,857

Stock-based compensation (Detai

Stock-based compensation (Details) - shares	Jan. 01, 2016	Jan. 01, 2015	Feb. 29, 2012	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2014
2012 Plan
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	1,285,714	1,081,045
Inducement Award Program
Stock-based compensation
Initial number of shares reserved						750,000
Granted (in shares)				210,000	210,000
Shares returned to this program due to cancellations				75,000	0

Stock-based compensation Restri

Stock-based compensation Restricted Common Stock (Details) - Restricted common stock - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Additional disclosures
Granted (in shares)	0	0
Fair value of shares vested		$ 59,000

Stock-based compensation Rest27

Stock-based compensation Restricted Stock Units (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2013
Additional disclosures
Cash used to settle restricted stock liability awards	$ 5,000	$ 223,000
RSUs
Shares
Unvested at the beginning of the period (in shares)	53,751
Vested (in shares)	(53,751)
Granted (in shares)	0	0
Modified restricted stock units authorized			697,060
Modified restricted stock units outstanding	0
Weighted-average grant date fair value
Unvested at the beginning of the period (in dollars per share)	$ 11
Vested (in dollars per share)	$ 11
Additional disclosures
Cash used to settle restricted stock liability awards	$ 5,000	$ 223,000
2012 Plan | RSUs
Additional disclosures
Fair value of shares vested	65,000	$ 873,000
Unrecognized stock-based compensation expense	$ 0

Stock-based compensation Stock

Stock-based compensation Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Shares
Outstanding at the beginning of the period (in shares)	5,390,130
Granted (in shares)	461,280
Exercised (in shares)	(1,605)
Forfeited (in shares)	(376,433)
Outstanding at the end of the period (in shares)	5,473,372		5,390,130
Vested at the end of the period (in shares)	2,800,146
Vested and expected to vest at end of period (in shares)	5,292,001
Weighted-average exercise price per share
Outstanding at the beginning of the period (in dollars per share)	$ 8.71
Granted (in dollars per share)	1.85
Exercised (in dollars per share)	0.28
Forfeited (in dollars per share)	9.34
Outstanding at the end of the period (in dollars per share)	8.09		$ 8.71
Vested at the end of the period (in dollars per share)	9.93
Vested and expected to vest at end of the period (in dollars per share)	$ 8.17
Weighted-average remaining contractual term
Outstanding at the end of the period			8 years 1 month 6 days
Exercisable at the end of the period	8 years 1 month 6 days
Vested at the end of the period	7 years 2 months 12 days
Vested and expected to vest at the end of the period	8 years
Aggregate intrinsic value
Outstanding at the beginning of the period (in dollars)	$ 175
Outstanding at the end of the period (in dollars)	144		$ 175
Vested at the end of the period (in dollars)	141
Vested and expected to vest at end of the period (in dollars)	$ 143
Assumptions used to estimate fair value of each stock-based award on the grant date
Risk-free interest rate (as a percent)	1.90%	1.60%
Volatility (as a percent)	73.00%	72.00%
Expected term	5 years 9 months 18 days	6 years 1 month 6 days

Equity Offerings (Details)

Equity Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		5 Months Ended	12 Months Ended
	Jan. 31, 2015	Dec. 31, 2013	Mar. 31, 2016	Mar. 31, 2015	Aug. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Number of shares of common stock issued				470,309		2,536,155
Issuance of common stock		$ 35,000	$ 0	$ 55,566
Net proceeds from issuance of common stock in public offering				4,400		$ 22,500
Cash proceeds from the issuance of stock			$ 0	$ 4,600	$ 8,300		$ 9,600
Underwriting agreement
Number of shares of common stock issued	8,337,500
Share price for underwriting agreement	$ 6.50
Shares offering through underwriting agreement	1,087,500
Net proceeds from issuance of common stock in public offering	$ 50,900

Reduction in force (Details)

Reduction in force (Details)	1 Months Ended	3 Months Ended	6 Months Ended	12 Months Ended
	Oct. 31, 2015USD ($)employee	Mar. 31, 2016USD ($)	Sep. 30, 2016USD ($)	Dec. 31, 2015USD ($)
Restructuring Costs
Reduction of workforce	50.00%
Number of full time employees | employee	20
Severance paid		$ 521,000		$ 349,000
Severance and related costs	$ 1,100,000
Scenario, Forecast
Restructuring Costs
Severance paid			$ 192,000