Avalo Therapeutics (AVTX) 10-Q 13 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 13, 2015
Document and Entity Information
Entity Registrant Name	Cerecor Inc.
Entity Central Index Key	1,534,120
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,630,143
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 3,307,992	$ 11,742,349
Prepaid expenses and other current assets	105,059	360,307
Restricted cash, current portion		58,333
Total current assets	3,413,051	12,160,989
Restricted cash, net of current portion	117,165	117,165
Deferred financing costs	1,879,791
Property and equipment, net	41,364	38,740
Total assets	5,451,371	12,316,894
Current liabilities:
Current portion of long term debt, net of discount	3,128,785	1,905,879
Accounts payable	1,951,556	931,139
Accrued expenses and other current liabilities	1,519,819	975,114
Warrant liability	54,001	69,684
Investor rights obligation		1,112,000
Total current liabilities	6,654,161	4,993,816
Long term debt, net of current portion and debt discount	3,195,467	5,308,211
Other long term liability	107,193
Total liabilities	9,956,821	10,302,027
Convertible preferred stock:
Total convertible preferred stock	28,345,531	28,345,531
Stockholders (deficit) equity:
Common Stock, $0.001 par value; 230,000,000 shares authorized at December 31, 2014 and 8,214,285 shares authorized at September 30, 2015; 649,721 shares issued and outstanding at December 31, 2014 and September 30, 2015	650	650
Additional paid in capital	17,063,289	16,742,063
Accumulated deficit	(49,914,920)	(43,073,377)
Total stockholders' deficit	(32,850,981)	(26,330,664)
Total liabilities, convertible preferred stock and stockholders' deficit	5,451,371	12,316,894
Series A convertible preferred stock
Convertible preferred stock:
Total convertible preferred stock	10,462,885	10,462,885
Series A-1 convertible preferred stock
Convertible preferred stock:
Total convertible preferred stock	3,389,331	3,389,331
Series B convertible preferred stock
Convertible preferred stock:
Total convertible preferred stock	$ 14,493,315	$ 14,493,315

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Common stock, Par value	$ 0.001	$ 0.001
Common stock, Shares authorized	8,214,285	230,000,000
Common stock, Shares issued	649,721	649,721
Common stock, Shares outstanding	649,721	649,721
Series A convertible preferred stock
Convertible preferred stock, Par value	$ 0.001	$ 0.001
Convertible preferred stock, Shares authorized	31,116,391	31,116,391
Convertible preferred stock, Shares issued	31,116,391	31,116,391
Convertible preferred stock, Shares outstanding	31,116,391	31,116,391
Convertible preferred stock, aggregate liquidation preference	$ 23,337,293
Series A-1 convertible preferred stock
Convertible preferred stock, Par value	$ 0.001	$ 0.001
Convertible preferred stock, Shares authorized	9,074,511	9,074,511
Convertible preferred stock, Shares issued	9,074,511	9,074,511
Convertible preferred stock, Shares outstanding	9,074,511	9,074,511
Convertible preferred stock, aggregate liquidation preference	$ 6,805,883
Series B convertible preferred stock
Convertible preferred stock, Par value	$ 0.001	$ 0.001
Convertible preferred stock, Shares authorized	115,000,000	115,000,000
Convertible preferred stock, Shares issued	58,948,735	58,948,735
Convertible preferred stock, Shares outstanding	58,948,735	58,948,735
Convertible preferred stock, aggregate liquidation preference	$ 17,678,726

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating expenses:
Research and development	$ 1,237,375	$ 4,371,010	$ 4,835,981	$ 9,981,774
General and administrative	721,658	1,627,499	2,498,475	3,301,072
Loss from operations	1,959,033	5,998,509	7,334,456	13,282,846
Nonoperating Income (Expense) [Abstract]
Change in fair value of warrant liability and Investor Rights Obligation	1,465,422	348,289	1,127,683	734,279
Interest expense, net	(197,470)	(189,679)	(634,772)	(983,717)
Total other income (expense)	1,267,952	158,610	492,911	(249,438)
Net loss	$ 691,081	$ 5,839,899	$ 6,841,545	$ 13,532,284
Net loss per share of common stock, basic and diluted	$ (1.06)	$ (9.03)	$ (10.53)	$ (21.09)
Weighted average shares of Common Stock outstanding, basic and diluted	649,721	646,863	649,721	641,737
Pro forma net loss per share of Common Stock, basic and diluted	$ (0.15)		$ (1.48)
Pro forma weighted average shares of Common Stock outstanding, basic and diluted	$ 4,630,143		$ 4,630,143

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities
Net loss	$ (6,841,545)	$ (13,532,284)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	17,360	21,062
Stock-based compensation expense	321,228	917,996
Non-cash interest expense	204,759	944,966
Change in fair value of warrant liability and Investor Rights Obligation	(1,127,683)	(734,279)
Changes in assets and liabilities:
Prepaid expenses and other assets	255,248	62,193
Restricted cash	58,333	(350)
Accounts payable	318,218	(321,501)
Accrued expenses and other liabilities	178,982	1,091,447
Net cash used in operating activities	(6,615,100)	(11,550,750)
Investing activities
Purchase of property and equipment	(19,984)	(19,502)
Net cash used in investing activities	(19,984)	(19,502)
Financing activities
Proceeds from issuance of convertible promissory notes and demand notes		2,249,666
Proceeds from issuance of term loan, net of costs		7,390,000
Proceeds from issuance of Series B Convertible Preferred Stock and Common Stock Warrants, net of offering costs		14,584,307
Principal payments on term debt	(1,023,798)
Deferred financing costs	(775,475)	(343,816)
Net cash provided by (used in) financing activities	(1,799,273)	23,880,157
Increase (decrease) in cash and cash equivalents	(8,434,357)	12,309,905
Cash and cash equivalents at beginning of period	11,742,349	3,421,480
Cash and cash equivalents at end of period	3,307,992	15,731,385
Supplemental disclosures of cash flow information
Cash paid for interest	434,971	$ 72,413
Supplemental disclosures of noncash financing activities
Accrued deferred financing costs	$ 1,104,316

Business

Business	9 Months Ended
	Sep. 30, 2015
BUSINESS
BUSINESS	1. BUSINESS Description of Business and Organization Cerecor Inc. (the “Company” or “Cerecor”) was incorporated on January 31, 2011 in Delaware as Ceregen Corporation and subsequently changed the name to Cerecor Inc. in March 2011. The Company is a clinical ‑stage biopharmaceutical company with the goal of becoming a leader in the development of innovative drugs that make a difference in the lives of patients with neurological and psychiatric disorders. The Company’s operations since inception have been limited to organizing and staffing the Company, acquiring rights to and developing certain product candidates and its product platform, business planning and raising capital. Liquidity The Company has incurred recurring operating losses since inception. For the nine months ended September 30, 2015, the Company incurred a net loss of $6,841,545 and generated negative cash flows from operations of $6,615, 1 00 . As of September 30, 2015, the Company had an accumulated deficit of $49,914,920 . The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to the clinical development of its product candidates, its product platform, its preclinical programs, business development and the development of its administrative organization. In October 2015 the Company completed its initial public offering of units (“IPO”), selling 4,000,000 units at an offering price of $6.50 per share, resulting in gross proceeds of $26,000,000 and net proceeds from the offering of approximately $23.6 million, after deducting underwriting discounts and commissions (See note 10). The Company will require substantial additional financing to fund its operations and to continue to execute its strategy. To fully execute its business plan, the Company will need to complete certain research and development activities, have positive clinical trial results and obtain marketing approval for its product candidates, which may span many years, and may ultimately be unsuccessful. Any delays in completing these activities or negative clinical trial results could adversely impact the Company. The Company plans to meet its capital requirements primarily through a combination of equity and debt financings, collaborations, strategic alliances and marketing distribution or licensing arrangements and in the longer term, revenue from product sales to the extent its product candidates receive marketing approval and are commercialized. There can be no assurance, however, that the Company will be successful in obtaining financing at the level needed to sustain operations and develop its product candidates or on terms acceptable to the Company, or that the Company will obtain approvals necessary to market its products or achieve profitability or sustainable, positive cash flow. The Company currently anticipates that current cash and cash equivalents and the net proceeds from its IPO (see Note 10) will be sufficient to meet its anticipated cash requirements for at least the next 12 months.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES	2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company’s unaudited financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”). In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations and cash flows. The balance sheet at December 31, 2014 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited financial statements are read in conjunction with the December 31, 2014 audited financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, other comprehensive income and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to clinical trial accruals, Investor Rights Obligation (see Note 8), and warrant liability. The Company bases its estimates on historical experience and other market ‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. In addition, the Company utilized estimates and assumptions in determining the fair value of its Common Stock prior to its IPO (see Note 10). The Company granted stock options at exercise prices not less than the fair value of its Common Stock as determined by the board of directors, with input from management. Management has used the assistance of a third ‑party valuation firm in estimating the fair value of the Common Stock. The board of directors has historically determined the estimated fair value of the Common Stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the historic prices at which the Company sold shares of its Preferred Stock. Deferred Offering Costs The Company capitalizes certain legal, accounting and other third ‑party fees that are directly associated with in ‑process equity financings as deferred offering costs (non ‑current) until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid ‑in capital generated as a result of the offering. Should the equity financing for which those costs relate no longer be considered probable of being consummated, all deferred offering costs will be charged to operating expenses in the statement of operations at such time. The Company has incurred and deferred offering costs of $1,879,791 during the nine months ended September 30, 2015. We will incur additional offering costs during the fourth quarter as part of our initial public offering. The deferred offering costs were offset against the IPO proceeds upon completion of the offering in October 2015. Net Loss Per Share of Common Stock, Basic and Diluted Basic net loss per share of Common Stock is computed by dividing net loss by the weighted ‑average number of shares of Common Stock outstanding during the period, excluding the dilutive effects of Preferred Stock, Investor Rights Obligation, warrants on Preferred Stock and Common Stock, stock options and unvested restricted stock. Diluted net loss per share of Common Stock is computed by dividing the net loss by the sum of the weighted ‑average number of shares of Common Stock outstanding during the period plus the potential dilutive effects of warrants on Common Stock, stock options and unvested restricted stock outstanding during the period calculated in accordance with the treasury stock method, although these shares and options are excluded if their effect is anti ‑dilutive. In addition, the Company analyzes the potential dilutive effect of the outstanding Preferred Stock, Investor Rights Obligation, and warrants on Preferred Stock under the “if ‑converted” method when calculating diluted earnings per share, in which it is assumed that the outstanding security converts into Common Stock at the beginning of the period. Because the impact of these items is anti ‑dilutive during periods of net loss, there was no difference between basic and diluted net loss per share of Common Stock for the nine months ended September 30, 2014 and 2015. The following outstanding securities at September 30, 2014 and 2015 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti ‑dilutive: September 30, September 30, 2014 2015 Series A Convertible Preferred Stock Series A-1 Convertible Preferred Stock Series B Convertible Preferred Stock — Stock options Warrants on Common Stock Warrants on Preferred Stock Investor Rights Obligation — Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. A full valuation allowance has been established against all of the deferred tax assets as it is more likely than not that these assets will not be realized given the Company’s history of operating losses. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of September 30, 2015, the Company does not believe any material uncertain tax positions are present. Pro Forma Net Loss Per Share of Common Stock, Basic and Diluted On October 20, 2015, the Company consummated its IPO (see Note 10). The pro forma net loss per share is computed using the pro forma weighted-average shares of Common Stock outstanding, basic and diluted, and gives effect to the automatic conversion of all outstanding shares of the Company’s Series A Convertible Preferred Stock, Series A-1 Convertible Preferred Stock and Series B Convertible Preferred Stock into an aggregate of 3,980,422 shares of the Company’s Common Stock as of January 1, 2015 or the date of original issuance, if later. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014 ‑09, Revenue From Contracts With Customers (“ASU 2014 ‑09”). Pursuant to this update an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606) , which delays the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual reporting periods beginning after December 15, 2016. The Company does not believe ASU 2014-09 will have an effect on its current financial statements. In August 2014, the FASB issued ASU No. 2014 ‑15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The amendments in this update will explicitly require a company’s management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016. Early application is permitted. The Company is currently evaluating the potential impact of the adoption of this standard, but believes its adoption will have no impact on its financial position, results of operations or cash flows. In April 2015, the FASB issued ASU No. 2015 ‑03, Simplifying the Presentation of Debt Issuance Costs. The guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard also aligns the GAAP presentation with International Financial Reporting Standards and will remedy the long ‑standing conflict with the guidance in FASB Concepts Statement No. 6, Elements of Financial Statements, which indicates that debt issuance costs do not meet the definition of an asset, because they provide no future economic benefit. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance was adopted on a retrospective basis for the nine months ended September 30, 2015. The adoption of this guidance did not have a material impact on the Company’s balance sheets.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2015
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	3. FAIR VALUE MEASUREMENTS ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three ‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: · Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. · Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model ‑derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. · Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. At December 31, 2014 and September 30, 2015, the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts payable, accrued expenses and other curren t liabilities, long term debt, warrant l iability and the Investor Rights Obligation. The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, restricted cash, accounts payable, and accrued expenses and other current liabilities approximate their respective fair values because of the short ‑term nature of these accounts. The estimated fair value of the Company’s debt of $6.5 million as of September 30, 2015 was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis: December 31, 2014 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ $ — $ — Liabilities Investor Rights Obligation $ — $ — $ Warrant Liability $ — $ — $ September 30, 2015 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ $ — $ — Liabilities Investor Rights Obligation $ — $ — $ — Warrant Liability $ — $ — $ * Investments in money market funds are reflected in cash and cash equivalents on the accompanying Balance Sheets. Level 3 Valuation The Warrant Liability (which relates to warrants to purchase shares of Series B Convertible Preferred Stock) is marked ‑to ‑market each reporting period with the change in fair value recorded to other income (expense) in the Statements of Operations until the warrants are exercised, expire or other facts and circumstances lead the Warrant Liability to be reclassified to stockholders’ equity. The fair value of the Warrant Liability is estimated using a Black ‑Scholes Option Pricing Model. The significant assumptions used in preparing the option pricing model for valuing the Warrant Liability as of December 31, 2014 include (i) volatility of 60.0% , (ii) risk free interest rate of 2.1% , (iii) strike price ($0.2999) , (iv) fair value of Series B Convertible Preferred Stock ($0.18) , and (v) expected life of 8.23 years. The significant assumptions used in preparing the option pricing model for valuing the Warrant Liability as of September 30, 2015 include (i) volatility of 70.0% , (ii) risk free interest rate of 1.56% , (iii) strike price ($8.40) , (iv) fair value of Series B Convertible Preferred Stock ($4.95) , and (v) expected life of 5.4 years. Significant decreases in the Company’s stock price volatility will significantly decrease the overall valuation of the Company’s warrant liability, while significant increases in the Company’s stock price volatility will significantly increase the overall valuation. The Investor Rights Obligation expired in October of 2015 upon the closing of our IPO . While outstanding, the Investor Rights Obligation was remeasured at each reporting period and changes in fair value we re recorded as a component of other income (expense) in the Company’s Statement of Operations. The fair value of the Investor Rights Obligation was determined using a valuation model, which considers the probability of achieving certain milestones, the entity’s cost of capital, the estimated period the rights will be outstanding, consideration received for the instrument with the rights, the number of shares to be issued to satisfy the rights, the price of such shares and any changes in the fair value of the underlying instrument. The significant assumptions used in preparing the option pricing model for valuing the Company’s Investor Rights Obligation as of December 31, 2014 include (i) volati lity of 60% , (ii) risk free interest rate ranging from 0.05% to 0.63% , (iii) strike price ($8.40) , (iv) fair value of Preferred Stock ranging from $0.00 to $5.04 , and (v) expected life ranging from 0.5 to 1.75 years. The significant assumptions used in preparing the option pricing model for valuing the Company’s Investor Rights Obligation as of September 30, 2015 include (i) volatility of 90% , (ii) risk free interest rate of 0.00% , (iii) strike price ($8.40) , (iv) fair value of Preferred Stock ranging from $4.57 to $5.32 , and (v) expected life of 0.04 years. The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the Warrant Liability and the Investor Rights Obligation for the nine months ended September 30, 2015: Warrant Investor Rights Liability Obligation Total Balance at December 31, 2014 $ $ $ Change in fair value Balance at September 30, 2015 $ $ — $ No other changes in valuation techniques or inputs occurred during the nine months ended September 30, 2014 and 2015 . No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the nine months ended September 30, 2014 and 2015.

Deferred Financing Costs

Deferred Financing Costs	9 Months Ended
	Sep. 30, 2015
DEFERRED FINANCING COSTS
DEFERRED FINANCING COSTS	4. DEFERRED FINANCING COSTS Deferred financing costs incurred in preparation for our IPO consisted of the following: September 30, 2015 Legal fees $ Accounting fees Printing costs Other costs Total deferred financing costs $

Accrued Expenses And Other Curr

Accrued Expenses And Other Current Liabilities	9 Months Ended
	Sep. 30, 2015
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: December 31, September 30, 2014 2015 Compensation and benefits $ $ Research and development expenses General and administrative Accrued interest Total accrued expenses and other current liabilities $ $

Asset Acquisition And License A

Asset Acquisition And License Agreements	9 Months Ended
	Sep. 30, 2015
ASSET ACQUISITION AND LICENSE AGREEMENTS
ASSET ACQUISITION AND LICENSE AGREEMENTS	6. ASSET ACQUISITION AND LICENSE AGREEMENTS In February 2015, the Company acquired rights to CERC ‑501, which was previously referred to as OpRA Kappa, through an exclusive, worldwide license from Eli Lilly and Company. CERC ‑501 is a high ‑binding, selective Kappa opioid receptor (“KOR”) antagonist. Pursuant to the license agreement, the Company paid $750,000 to Lilly within 30 days of the execution of the license agreement, which was recorded as research and development expense in the accompanying unaudited Statement of Operations for the nine months ended September 30, 2015. Upon the Company undertaking a 9 ‑month toxicology study in non ‑human primates and delivering a final study report, the Company will be required to pay Lilly an additional $250,000 . The Company anticipates undertak ing this study and, as a result, accrued the remaining $250,000 as an accrued liability. Additional payments may be due upon achievement of development and regulatory milestones, including the first commercial sale. Upon commercialization, the Company is obligated to pay Lilly milestones and royalties on net sales. For the first KOR product the Company develops, the Company is required to make milestone payments in an amount not to exceed, in the aggregate, $19,000,000 upon the achievement of various development and regulatory milestones, including first commercial sale. Additionally, the Company will be required to make sales milestone payments in an amount not to exceed $30,000,000 . Upon commercialization of a KOR product, we will pay Eli Lilly a tiered royalty percentage on net sales of a KOR product from mid ‑single digits to low ‑double digits. The royalty obligation will be on a product by product and country by country basis until the later of (i) the expiration of the last to expire valid patent claim of a patent licensed to us under the license agreement covering the KOR product in such country, or (ii) eleven years from the first commercial sale of the KOR product in such country. The Company accounted for this transaction as an asset acquisition because it only acquired the assigned rights and technology and did not acquire any processes or activities.

Debt

Debt	9 Months Ended
	Sep. 30, 2015
DEBT
DEBT	7. DEBT Debt consisted of the following: December 31, September 30, 2014 2015 Term loan $ $ Less: debt discount Term Loan, net of debt discount Less: current portion, net of debt discount Long term debt, net of current portion and debt discount $ $ Term Loan In August 2014, the Company received a $7,500,000 secured term loan from a finance company. The loan is secured by a lien on all of the Company’s assets, excluding intellectual property, which was subject to a negative pledge. The loan contains certain additional nonfinancial covenants. In connection with the loan agreement, the Company’s cash and investment accounts are subject to account control agreements with the finance company that give the finance company the right to assume control of the accounts in the event of a loan default. Loan defaults are defined in the loan agreement and include, among others, the finance company’s determination that there is a material adverse change in the Company’s operations. Interest on the loan is at a rate of the greater of 7.95% , or 7.95% plus the prime rate as reported in The Wall Street Journal minus 3.25% . The current interest rate is 7.95% . The loan was interest ‑only for nine months, and is repayable in equal monthly payments of principal and interest of $304,278 over 27 months which began in June 2015. Interest expense, which includes amortization of discount and the accrual of a termination fee, was approximately $640,000 for the nine months ended September 30, 2015 in the accompanying unaudited Statement of Operations. In connection with the term loan, the Company issued a warrant to purchase 625,208 shares of Series B Convertible Preferred Stock at an exercise price of $0.2999 per share that is exercisable for a period ending five years following the Company’s IPO which is October 2020 . Upon the closing of the Company’s IPO, this warrant became a warrant to purchase 22,328 shares of Common Stock at an exercise price of $8.40 , in accordance with its terms. The Company’s warrant to purchase shares of Series B Convertible Preferred Stock represented a freestanding financial instrument that was indexed to an obligation of the Company to repurchase its Series B Convertible Preferred Stock by transferring assets and, therefore, met the criteria to be classified as a liability under FASB ASC 480, Distinguishing Liabilities from Equity . The Company records the warrant liability at its fair value using the Black ‑Scholes option pricing model and revalues the warrant at each reporting date (see Note 3).

Convertible Preferred Stock And

Convertible Preferred Stock And Stockholders' Deficit	9 Months Ended
	Sep. 30, 2015
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS? DEFICIT
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS? DEFICIT	8. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT At September 30, 2015, the Company was authorized to issue two classes of stock, Common Stock and Preferred Stock. The total number of shares of capital stock the Company was authorized to issue was 163,405,187 of which 8,214,285 was Common Stock and 155,190,902 was Preferred Stock. All shares of Common and Preferred Stock have a par value of $0.001 per share , 31,116,391 of the authorized shares of Preferred Stock are designated as Series A Convertible Preferred Stock, 9,074,511 of the authorized shares of Preferred Stock are designated as Series A ‑1 Convertible Preferred Stock and the remaining 115,000,000 shares have been designated as Series B Convertible Preferred Stock. In October 2015, e ach share of Series A Convertible Preferred Stock was converted into 0.04464 shares of Common Stock, each share of Series A ‑1 Convertible Preferred Stock was converted into 0.05357 shares of Common Stock and each share of Series B Convertible Preferred Stock was converted into 0.03571 share s of Common Stock . The Preferred Stock was subject to redemption under certain “deemed liquidation” events, as defined, and as such, the Preferred Stock was considered contingently redeemable for accounting purposes. Accordingly, the Preferred Stock has been recorded within temporary equity in the financial statements. The Company has not adjusted the Preferred Stock to its redemption amount at each reporting period, as the redemption of such Preferred Stock is not deemed probable of occurrence during the periods presented. The redemption of the Preferred Stock is not considered probable as the redemption is contingent on the occurrence of such “deemed liquidation” events, which include (i) the acquisition of the Company by another entity by means of any transaction or a series of related transactions, unless the existing stockholders of the Company continue to hold at least 50% of the voting power of the surviving or acquiring entity after such transaction; and (ii) a sale of all or substantially all of the assets of the Company. The Company has concluded that none of these events were probable during the periods presented. Since the issuance of Series B Convertible Preferred Stock, all series of Preferred Stock were entitled to a non ‑cumulative annual dividend of 8.0% . Dividends are paid when, as, and if declared by the board of directors. In the event of any liquidation, dissolution or winding up of the Company prior to the conversion, the holders of the Preferred Stock will be entitled to a liquidation preference in pari passu before any liquidation preference payments are made to the Common shareholders. The liquidation preference payment is equal to the greater of (i) original issuance plus any declared but unpaid dividends, or (ii) the amount that a Preferred holder would have been entitled to receive if they had converted to common immediately prior to liquidation. In October 2015 the Company completed its IPO. In connection with the closing of the IPO, all outstanding shares of the Company’s Series A Convertible Preferred Stock, Series A-1 Convertible Preferred Stock and Series B Convertible Preferred Stock were converted into 3,980,422 shares of Common Stock. Series B Convertible Preferred Stock Transaction On July 11, 2014, the Company completed an initial closing of an equity offering for shares of its Series B Convertible Preferred Stock and on August 19, 2014 completed a second closing. Pursuant to the terms of the agreement, the Company issued an aggregate of 50,017,786 shares of Series B Convertible Preferred Stock at an original issuance price of $0.2999 per share for gross proceeds of $15,000,000 . In addition, and pursuant to the terms of, several convertible promissory notes issued from April through September 2014, the Company issued 5,597,618 shares of Series B Convertible Preferred Stock upon the conversion of the outstanding principal and interest due under the convertible promissory notes in the aggregate amount of $1,259,016 . The conversion price for the convertible promissory notes was equal to $0.22492 , or 75% of the original issuance price of the Series B Convertible Preferred Stock. The demand notes issued in July 2014, with an aggregate principal balance of $996,666 , were converted into 3,333,331 shares of Series B Convertible Preferred Stock at a conversion price of $0.2999 per share. See Note 7 for additional information regarding the terms and provisions of the convertible promissory notes and demand notes. The second closing of the Series B Convertible Preferred Stock equity offering was with the term loan lender. Pursuant to the same terms and conditions of the initial offering, the Company issued 3,334,445 shares of Series B Convertible Preferred Stock to the term loan lender at an original issuance price of $0.2999 per share, for gross proceeds of $1,000,000 , which is included in the $15,000,000 described above. The right of the investors (the “Investor Rights Obligation”) to purchase Series B Convertible Preferred Stock represented a freestanding financial instrument and was indexed to an obligation of the Company to repurchase its Series B Convertible Preferred Stock by transferring assets. As such, the Company accounted for the Investor Rights Obligation as a liability in accordance with FASB ASC 480. The Company adjusted the carrying value of the liability to its estimated fair value at each reporting date (see Note 3). Common Stock Warrants At September 30, 2015, the following Common Stock warrants were outstanding (all of which are accounted for as equity instruments): Number of shares Exercise price Expiration underlying warrants per share Date $ 28.00 February 2017 14.00 February 2017 28.00 March 2017 14.00 March 2017 28.00 April 2017 28.00 July 2017 28.00 August 2018 28.00 December 2018 8.40 April 2019 * 8.40 May 2019 * 8.40 June 2019 * 8.40 July 2019 * 8.68 May 2022 * each of these warrants expired upon the closing of our IPO (Note 10), in accordance with their terms. On June 12, 2015, the Company and Maxim Partners LLC (“Maxim”) , an underwriter of the Company’s IPO, entered into an agreement to terminate a warrant to purchase 24,306 shares of Common Stock at an exercise price of $21.00 per share. The cancellation of the warrant was effective immediately without any consideration due to Maxim. Series B Convertible Preferred Stock Warrants In August 2014, a warrant to purchase 625,208 shares of Series B Convertible Preferred Stock, at an exercise price equal to $0.2999 per share, was issued to the term loan lender in conjunction with the loan of $7.5 million (see Note 7). The fair value was calculated at $115,056 using a Black ‑Scholes pricing model using a fair market value of $0.25 per share for its Series B Convertible Preferred Stock.

Common Stock and Stock Based Co

Common Stock and Stock Based Compensation	9 Months Ended
	Sep. 30, 2015
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION	9. COMMON STOCK AND STOCK ‑BASED COMPENSATION Common Stock On September 1, 2015, the Company filed an amendment to its amended and restated certificate of incorporation effecting a 1 for 28 reverse stock split of the Company's Common S t ock . All share and per share amounts of common stock in the accompanying financial statements have been restated for all periods to give retroactive effect to the reverse stock split. The shares of common stock retained a par value of $0.001 per share. Accordingly, the stockholders’ deficit reflects the reverse stock split by reclassifying from Common Stock to Additional Paid-In Capital in an amount equal to the par value of the decreased shares resulting from the reverse stock split. A description of the Company’s Common Stock as set forth in the Company’s certificate of incorporation in effect following the IPO follows. Voting Our Common Stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and does not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our Common Stock entitled to vote in any election of directors can elect all of the directors standing for election. Dividends Subject to preferences that may be applicable to any then outstanding convertible preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. Liquidation In the event of our liquidation, dissolution or winding up, holders of our Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of Convertible Preferred Stock. Rights and Preferences Holders of our Common Stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our Preferred Stock that we may designate and issue in the future. 2011 Stock Incentive Plan On April 28, 2011, the board of directors adopted the 2011 Stock Incentive Plan (the “Plan”) reserving and authorizing up to 178,571 shares of Common Stock for stock ‑based compensation awards to attract, retain and reward eligible employees, consultants, and non ‑employee directors. The options have a contractual term of ten years. Generally, the options vest annually over three or four years, as determined by the board of directors, upon each option grant, although certain option grants in 2014 were fully vested on the grant date. On January 10, 2012, the board of directors and stockholders of the Company approved an amendment to the Plan authorizing an increase in the aggregate number of shares reserved for issuance under the Plan from 178,571 to 285,714 shares of Common Stock. On May 6, 2013, the board of directors approved an amendment to the Plan authorizing an increase in the aggregate number of shares reserved for issuance under the Plan from 285,714 to 704,428 shares of Common Stock. As of September 30, 2015, there were 254,236 shares remaining under the Plan available for future issuance. On May 8, 2012, the board of directors approved three grants of non ‑qualified stock options outside of the Plan aggregating 167,857 to the President and Chief Executive Officer and two non ‑employee directors of the Company at $8. 68 per share, one ‑third vesting on three consecutive annual anniversaries. The estimated grant date fair market value of the Company’s stock ‑based awards is amortized ratably over the employees ’ service periods , which is the period in which the awards vest . Stock ‑ based compensation expense recognized was as follows: Nine Months Ended September 30, 2014 September 30, 2015 Research and development $ $ General and administrative Total stock-based compensation $ $ A summary of option activity is as follows: Options Outstanding Weighted Average Fair Value Of Remaining Number of Weighted-Average Options Contractual Term Shares Exercise Price Granted (in years) Balance, December 31, 2014 $ Granted $ $ Forfeitures $ Balance, September 30, 2015 $ Vested or expected to vest at September 30, 2015 $ Exercisable at September 30, 2015 $ As of September 30, 2015, there was $0.2 million of total unrecognized compensation expense, related to unvested options granted under the Plan, unvested options granted outside of the Plan, and restricted stock to be recognized as follows: Year ending December 31, 2015 $ 2016 2017 2018 2019 Total $ *Three months remaining in 2015 2015 Omnibus Plan On June 26, 2015, our board of directors adopted the 2015 Omnibus Plan, which was approved by our stockholders on August 31, 2015. Our 2015 Omnibus Plan became effective upon the business day immediately preceding the date of our final prospectus, which was dated October 14, 2015. As of the date of our 2015 Omnibus Plan, our 2011 Stock Incentive Plan merged with and into our 2015 Omnibus Plan and no additional grants will be made under our 2011 Stock Incentive Plan. Outstanding grants under our 2011 Stock Incentive Plan will continue in effect according to their terms as in effect before our 2015 Omnibus Plan merger, and the shares with respect to outstanding grants under our 2011 Stock Incentive Plan will be issued or transferred under our 2015 Omnibus Plan.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	10. SUBSEQUENT EVENTS Initial Public Offering On October 20, 2015, the Company consummated the IPO of its units. Each unit consists of one share of Common Stock, one Class A warrant to purchase one share of Common Stock and one Class B warrant to purchase one -half share of Common Stock (the “Units”), pursuant to an underwriting agreement with Maxim (the “Underwriting Agreement”). Pursuant to the terms and conditions of the Underwriting Agreement, the Company agreed to sell to the Representative an aggregate of 4,000,000 Units at a price of $6.50 per Unit, less underwriting discounts and commissions and the underwriter’s expenses. In addition, the Representative was granted an option to purchase up to an additional 600,000 Units on the same terms and conditions in the Underwriting Agreement to cover over-allotments, if any, and a unit purchase option to purchase up to a total of 40,000 units (or 1% of the Company’s Units sold in the offering). Upon the closing of, and based on the final terms thereof, the Company’s IPO, all outstanding shares of the Company’s preferred stock, were automatically converted into 3,980,422 shares of its Common Stock. The Company received approximately $23.6 million in proceeds (net of the underwriters discount) from the IPO. On November 10, 2015 Maxim determined that the Units should detach and the shares of Common Stock and the warrants underlying the Units would begin to trade separately on November 13, 2015. Amended Certificate of Incorporation Upon the closing of our IPO and the filing of our amended and restated certificate of incorporation, our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of undesignated preferred stock, par value $0.001 per share.

Significant Accounting Polici16

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The Company’s unaudited financial statements have been prepared in accordance with U. S. generally accepted accounting principles (“GAAP”). In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations and cash flows. The balance sheet at December 31, 2014 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited financial statements are read in conjunction with the December 31, 2014 audited financial statements.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, other comprehensive income and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to clinical trial accruals, Investor Rights Obligation (see Note 8), and warrant liability. The Company bases its estimates on historical experience and other market ‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. In addition, the Company utilized estimates and assumptions in determining the fair value of its Common Stock prior to its IPO (see Note 10). The Company granted stock options at exercise prices not less than the fair value of its Common Stock as determined by the board of directors, with input from management. Management has used the assistance of a third ‑party valuation firm in estimating the fair value of the Common Stock. The board of directors has historically determined the estimated fair value of the Common Stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the historic prices at which the Company sold shares of its Preferred Stock.
Deferred Offering Costs	Deferred Offering Costs The Company capitalizes certain legal, accounting and other third ‑party fees that are directly associated with in ‑process equity financings as deferred offering costs (non ‑current) until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid ‑in capital generated as a result of the offering. Should the equity financing for which those costs relate no longer be considered probable of being consummated, all deferred offering costs will be charged to operating expenses in the statement of operations at such time. The Company has incurred and deferred offering costs of $1,879,791 during the nine months ended September 30, 2015. We will incur additional offering costs during the fourth quarter as part of our initial public offering. The deferred offering costs were offset against the IPO proceeds upon completion of the offering in October 2015.
Net Loss Per Share of Common Stock, Basic and Diluted	Net Loss Per Share of Common Stock, Basic and Diluted Basic net loss per share of Common Stock is computed by dividing net loss by the weighted ‑average number of shares of Common Stock outstanding during the period, excluding the dilutive effects of Preferred Stock, Investor Rights Obligation, warrants on Preferred Stock and Common Stock, stock options and unvested restricted stock. Diluted net loss per share of Common Stock is computed by dividing the net loss by the sum of the weighted ‑average number of shares of Common Stock outstanding during the period plus the potential dilutive effects of warrants on Common Stock, stock options and unvested restricted stock outstanding during the period calculated in accordance with the treasury stock method, although these shares and options are excluded if their effect is anti ‑dilutive. In addition, the Company analyzes the potential dilutive effect of the outstanding Preferred Stock, Investor Rights Obligation, and warrants on Preferred Stock under the “if ‑converted” method when calculating diluted earnings per share, in which it is assumed that the outstanding security converts into Common Stock at the beginning of the period. Because the impact of these items is anti ‑dilutive during periods of net loss, there was no difference between basic and diluted net loss per share of Common Stock for the nine months ended September 30, 2014 and 2015. The following outstanding securities at September 30, 2014 and 2015 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti ‑dilutive: September 30, September 30, 2014 2015 Series A Convertible Preferred Stock Series A-1 Convertible Preferred Stock Series B Convertible Preferred Stock — Stock options Warrants on Common Stock Warrants on Preferred Stock Investor Rights Obligation —
Income Taxes	Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. A full valuation allowance has been established against all of the deferred tax assets as it is more likely than not that these assets will not be realized given the Company’s history of operating losses. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of September 30, 2015, the Company does not believe any material uncertain tax positions are present.
Pro Forma Net Loss Per Share of Common Stock, Basic and Diluted	Pro Forma Net Loss Per Share of Common Stock, Basic and Diluted On October 20, 2015, the Company consummated its IPO (see Note 10). The pro forma net loss per share is computed using the pro forma weighted-average shares of Common Stock outstanding, basic and diluted, and gives effect to the automatic conversion of all outstanding shares of the Company’s Series A Convertible Preferred Stock, Series A-1 Convertible Preferred Stock and Series B Convertible Preferred Stock into an aggregate of 3,980,422 shares of the Company’s Common Stock as of January 1, 2015 or the date of original issuance, if later.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014 ‑09, Revenue From Contracts With Customers (“ASU 2014 ‑09”). Pursuant to this update an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606) , which delays the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual reporting periods beginning after December 15, 2016. The Company does not believe ASU 2014-09 will have an effect on its current financial statements. In August 2014, the FASB issued ASU No. 2014 ‑15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The amendments in this update will explicitly require a company’s management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard will be effective in the first annual period ending after December 15, 2016. Early application is permitted. The Company is currently evaluating the potential impact of the adoption of this standard, but believes its adoption will have no impact on its financial position, results of operations or cash flows. In April 2015, the FASB issued ASU No. 2015 ‑03, Simplifying the Presentation of Debt Issuance Costs. The guidance requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard also aligns the GAAP presentation with International Financial Reporting Standards and will remedy the long ‑standing conflict with the guidance in FASB Concepts Statement No. 6, Elements of Financial Statements, which indicates that debt issuance costs do not meet the definition of an asset, because they provide no future economic benefit. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance was adopted on a retrospective basis for the nine months ended September 30, 2015. The adoption of this guidance did not have a material impact on the Company’s balance sheets.

Significant Accounting Polici17

Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
SIGNIFICANT ACCOUNTING POLICIES
Schedule of outstanding securities that have been excluded from the computation of diluted weighted shares outstanding	September 30, September 30, 2014 2015 Series A Convertible Preferred Stock Series A-1 Convertible Preferred Stock Series B Convertible Preferred Stock — Stock options Warrants on Common Stock Warrants on Preferred Stock Investor Rights Obligation —

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2015
FAIR VALUE MEASUREMENTS
Schedule of assets and liabilities that are measured at fair value on a recurring basis	December 31, 2014 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ $ — $ — Liabilities Investor Rights Obligation $ — $ — $ Warrant Liability $ — $ — $ September 30, 2015 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ $ — $ — Liabilities Investor Rights Obligation $ — $ — $ — Warrant Liability $ — $ — $ * Investments in money market funds are reflected in cash and cash equivalents on the accompanying Balance Sheets.
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation	Warrant Investor Rights Liability Obligation Total Balance at December 31, 2014 $ $ $ Change in fair value Balance at September 30, 2015 $ $ — $

Deferred Financing Costs (Table

Deferred Financing Costs (Tables)	9 Months Ended
	Sep. 30, 2015
DEFERRED FINANCING COSTS
Schedule of deferred financing costs in preparation for an IPO	September 30, 2015 Legal fees $ Accounting fees Printing costs Other costs Total deferred financing costs $

Accrued Expenses And Other Cu20

Accrued Expenses And Other Current Liabilities (Tables)	9 Months Ended
	Sep. 30, 2015
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Schedule of accrued expenses and other current liabilities	December 31, September 30, 2014 2015 Compensation and benefits $ $ Research and development expenses General and administrative Accrued interest Total accrued expenses and other current liabilities $ $

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2015
DEBT
Schedule of debt	December 31, September 30, 2014 2015 Term loan $ $ Less: debt discount Term Loan, net of debt discount Less: current portion, net of debt discount Long term debt, net of current portion and debt discount $ $

Convertible Preferred Stock A22

Convertible Preferred Stock And Stockholders' Deficit (Tables)	9 Months Ended
	Sep. 30, 2015
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS? DEFICIT
Schedule of outstanding common stock warrants	Number of shares Exercise price Expiration underlying warrants per share Date $ 28.00 February 2017 14.00 February 2017 28.00 March 2017 14.00 March 2017 28.00 April 2017 28.00 July 2017 28.00 August 2018 28.00 December 2018 8.40 April 2019 * 8.40 May 2019 * 8.40 June 2019 * 8.40 July 2019 * 8.68 May 2022 * each of these warrants expired upon the closing of our IPO (Note 10), in accordance with their terms.

Common Stock and Stock Based 23

Common Stock and Stock Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
STOCK BASED COMPENSATION
Schedule of stock-based compensation expense recognized	Nine Months Ended September 30, 2014 September 30, 2015 Research and development $ $ General and administrative Total stock-based compensation $ $
Schedule of a summary of option activity	Options Outstanding Weighted Average Fair Value Of Remaining Number of Weighted-Average Options Contractual Term Shares Exercise Price Granted (in years) Balance, December 31, 2014 $ Granted $ $ Forfeitures $ Balance, September 30, 2015 $ Vested or expected to vest at September 30, 2015 $ Exercisable at September 30, 2015 $
Schedule of unrecognized compensation expense to be recognized in the future	Year ending December 31, 2015 $ 2016 2017 2018 2019 Total $ *Three months remaining in 2015

Business (Details)

Business (Details) - USD ($)	Oct. 20, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Net loss		$ (691,081)	$ (5,839,899)	$ (6,841,545)	$ (13,532,284)
Cash flows from operations				(6,615,100)	$ (11,550,750)
Accumulated deficit		$ (49,914,920)		$ (49,914,920)		$ (43,073,377)
Subsequent events | IPO | Capital Unit
Shares issued	4,000,000
Issue price per share	$ 6.50
Gross proceeds	$ 26,000,000
Net proceeds	$ 23,600,000

Significant Accounting Polici25

Significant Accounting Policies (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
Deferred Offering Costs
Deferred financing costs	$ 1,879,791	$ 1,879,791
Series A convertible preferred stock
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		31,116,391	31,116,391
Series A-1 convertible preferred stock
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		9,074,511	9,074,511
Series B convertible preferred stock
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		58,948,735
Stock options
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		510,884	552,726
Warrants on Common Stock
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		657,474	657,474
Warrants on Preferred Stock
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		625,208	625,208
Investor Rights Obligation
Net Loss Per Share of Common Stock, Basic and Diluted
Anti-dilutive amount		53,351,117
Pro Forma Member | Common stock
Unaudited Pro Forma Presentation
Shares of common stock resulting from conversion of preferred stock (in shares)	3,980,422	3,980,422

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value of debt	$ 6,500,000
Recurring basis | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in money market funds	3,307,992	$ 11,251,724
Recurring basis | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investor Rights Obligation		1,112,000
Warrant Liability	$ 54,001	$ 69,684

Fair Value Measurements - Assum

Fair Value Measurements - Assumptions, RF (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation
Beginning balance	$ 1,181,684
Ending balance	54,001	$ 1,181,684
Amount of transfers of assets from level 1 to level 2	0	0
Amount of transfers of assets from level 2 to level 1	0	$ 0
Other Nonoperating Income (Expense)
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation
Change in fair value	$ (1,127,683)
Warrant Liability
Level 3 Valuation
Volatility	70.00%	60.00%
Risk free interest rate	1.56%	2.10%
Strike price	$ 8.4000	$ 0.2999
Fair value of stock price	$ 4.95	$ 0.18
Expected life	5 years 4 months 24 days	8 years 2 months 23 days
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation
Beginning balance	$ 69,684
Ending balance	54,001	$ 69,684
Warrant Liability | Other Nonoperating Income (Expense)
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation
Change in fair value	$ (15,683)
Investor Rights Obligation
Level 3 Valuation
Volatility	90.00%	60.00%
Strike price	$ 8.4000	$ 8.4000
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation
Beginning balance	$ 1,112,000
Ending balance		$ 1,112,000
Investor Rights Obligation | Other Nonoperating Income (Expense)
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation
Change in fair value	$ (1,112,000)
Investor Rights Obligation | Minimum
Level 3 Valuation
Risk free interest rate		0.05%
Fair value of stock price	$ 4.57	$ 0
Expected life		6 months
Investor Rights Obligation | Maximum
Level 3 Valuation
Risk free interest rate	0.00%	0.63%
Fair value of stock price	$ 5.32	$ 5.04
Expected life	15 days	1 year 9 months

Deferred Financing Costs (Detai

Deferred Financing Costs (Details)	Sep. 30, 2015USD ($)
Total deferred financing costs	$ 1,879,791
IPO
Legal fees	842,357
Accounting fees	669,142
Printing costs	256,478
Other costs	111,814
Total deferred financing costs	$ 1,879,791

Accrued Expenses And Other Cu29

Accrued Expenses And Other Current Liabilities (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Compensation and benefits	$ 407,047	$ 129,450
Research and development expenses	453,156	598,883
General and administrative	616,712	159,045
Accrued interest	42,905	87,736
Total accrued expenses and other current liabilities	$ 1,519,820	$ 975,114

Asset Acquisition And License30

Asset Acquisition And License Agreements (Details) - Lilly - USD ($)	1 Months Ended	9 Months Ended
	Feb. 28, 2015	Sep. 30, 2015
Development Milestone Commitment | Maximum
Asset Acquisition And License Agreement Line Items
Milestone commitment		$ 19,000,000
Sales Milestone Commitment | Maximum
Asset Acquisition And License Agreement Line Items
Milestone commitment		$ 30,000,000
Royalty Commitment
Asset Acquisition And License Agreement Line Items
Term of royalty obligation		11 years
CERC501
Asset Acquisition And License Agreement Line Items
Term of the study		9 months
Accrued license fee		$ 250,000
CERC-501 | Research and development expense
Asset Acquisition And License Agreement Line Items
Initial payment for license fees	$ 750,000
Term of the initial payment for the license	30 days

Debt (Details)

Debt (Details) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Jun. 30, 2015	Aug. 31, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Oct. 20, 2015	Dec. 31, 2014
Debt
Term loan			$ 6,476,202		$ 6,476,202			$ 7,500,000
Less: debt discount			(151,950)		(151,950)			(285,910)
Term Loan, net of debt discount			6,324,252		6,324,252			7,214,090
Less: current portion, net of debt discount			(3,128,785)		(3,128,785)			(1,905,879)
Long term debt, net of current portion and debt discount			3,195,467		3,195,467			$ 5,308,211
Interest expense			$ 197,470	$ 189,679	634,772	$ 983,717
Series B converitible preferred stock warrants
Debt
Number of shares available under warrant		625,208
Exercise price per share (in dollars per share)		$ 0.2999
Common stock warrants | IPO | Subsequent events
Debt
Number of shares available under warrant							22,328
Exercise price per share (in dollars per share)							$ 8.40
Term loan
Debt
Face amount		$ 7,500,000
Stated interest rate, minimum		7.95%
Current interest rate		7.95%
Term of interest-only period		9 months
Monthly payments of principal and interest		$ 304,278
Monthly payments of principal and interest, term	27 months
Interest expense					$ 640,000
Term loan | Series B converitible preferred stock warrants
Debt
Number of shares available under warrant		625,208
Exercise price per share (in dollars per share)		$ 0.2999
Exercisable term following an IPO		5 years
Term loan | Prime rate
Debt
Variable interest rate, deducted from basis		3.25%

Convertible Preferred Stock A32

Convertible Preferred Stock And Stockholders' Deficit (Details)	Oct. 20, 2015$ / sharesshares	Aug. 19, 2014USD ($)$ / sharesshares	Jul. 31, 2014USD ($)$ / sharesshares	Sep. 30, 2014USD ($)$ / sharesshares	Sep. 30, 2015class$ / sharesshares	Oct. 31, 2015shares	Sep. 01, 2015$ / shares	Dec. 31, 2014$ / sharesshares
Class of Stock [Line Items]
Number of classes of stock authorized to issue | class					2
Number of capital stock authorized to issue					163,405,187
Number of common stock authorized to issue					8,214,285			230,000,000
Common stock, par value | $ / shares					$ 0.001		$ 0.001	$ 0.001
Subsequent events
Class of Stock [Line Items]
Number of common stock authorized to issue	200,000,000
Common stock, par value | $ / shares	$ 0.001
Convertible promissory notes
Class of Stock [Line Items]
Convertible promissory notes converted | $				$ 1,259,016
Demand notes
Class of Stock [Line Items]
Aggregate principle balance of the debt | $			$ 996,666
Common stock | Subsequent events | IPO
Class of Stock [Line Items]
Shares of common stock resulting from conversion of preferred stock (in shares)	3,980,422
Series A, A 1 and B Convertible Preferred Stock
Class of Stock [Line Items]
Number of preferred stock authorized to issue					155,190,902
Preferred stock, par value | $ / shares					$ 0.001
Minimum percentage of voting power					50.00%
Non-cumulative dividend					8.00%
Series A convertible preferred stock
Class of Stock [Line Items]
Number of preferred stock authorized to issue					31,116,391			31,116,391
Preferred stock, par value | $ / shares					$ 0.001			$ 0.001
Number of shares of common stock received for each converted share						0.04464
Series A-1 convertible preferred stock
Class of Stock [Line Items]
Number of preferred stock authorized to issue					9,074,511			9,074,511
Preferred stock, par value | $ / shares					$ 0.001			$ 0.001
Number of shares of common stock received for each converted share						0.05357
Series B convertible preferred stock
Class of Stock [Line Items]
Number of preferred stock authorized to issue					115,000,000			115,000,000
Preferred stock, par value | $ / shares					$ 0.001			$ 0.001
Number of shares of common stock received for each converted share						0.03571
Shares issued		50,017,786
Original issuance price | $ / shares		$ 0.2999
Gross proceeds | $		$ 15,000,000
Series B convertible preferred stock | Term loan
Class of Stock [Line Items]
Shares issued			3,334,445
Original issuance price | $ / shares			$ 0.2999
Gross proceeds | $			$ 1,000,000
Series B convertible preferred stock | Convertible promissory notes
Class of Stock [Line Items]
Shares issued upon conversion of convertible promissory notes				5,597,618
Conversion price | $ / shares				$ 0.22492
Percentage of originial issuance price				75.00%
Series B convertible preferred stock | Demand notes
Class of Stock [Line Items]
Shares issued upon conversion of convertible promissory notes			3,333,331
Conversion price | $ / shares			$ 0.2999

Convertible Preferred Stock A33

Convertible Preferred Stock And Stockholders' Deficit - Warrants (Details) - USD ($)	Sep. 30, 2015	Jun. 12, 2015	Aug. 31, 2014
Series B convertible preferred stock
Warrants
Fair value of stock price			$ 0.25
Common stock warrants | Common stock
Warrants
Number of shares underlying warrants	657,474
Common stock warrants | Agreement to terminate a warrant with Maxim
Warrants
Number of shares underlying warrants		24,306
Exercise price per share (in dollars per share)		$ 21
Common stock warrants, expiration date of February 2017
Warrants
Exercise price per share (in dollars per share)	$ 28
Common stock warrants, expiration date of February 2017 | Common stock
Warrants
Number of shares underlying warrants	109,976
Common stock warrants, expiration date of February 2017
Warrants
Exercise price per share (in dollars per share)	$ 14
Common stock warrants, expiration date of February 2017 | Common stock
Warrants
Number of shares underlying warrants	29,260
Common stock warrants, expiration date of March 2017
Warrants
Exercise price per share (in dollars per share)	$ 28
Common stock warrants, expiration date of March 2017 | Common stock
Warrants
Number of shares underlying warrants	90,529
Common stock warrants, expiration date of March 2017
Warrants
Exercise price per share (in dollars per share)	$ 14
Common stock warrants, expiration date of March 2017 | Common stock
Warrants
Number of shares underlying warrants	29,557
Common stock warrants, expiration date of April 2017
Warrants
Exercise price per share (in dollars per share)	$ 28
Common stock warrants, expiration date of April 2017 | Common stock
Warrants
Number of shares underlying warrants	130,233
Common stock warrants, expiration date of July 2017
Warrants
Exercise price per share (in dollars per share)	$ 28
Common stock warrants, expiration date of July 2017 | Common stock
Warrants
Number of shares underlying warrants	14,284
Common stock warrants, expiration date of August 2018
Warrants
Exercise price per share (in dollars per share)	$ 28
Common stock warrants, expiration date of August 2018 | Common stock
Warrants
Number of shares underlying warrants	80,966
Common stock warrants, expiration date of December 2018
Warrants
Exercise price per share (in dollars per share)	$ 28
Common stock warrants, expiration date of December 2018 | Common stock
Warrants
Number of shares underlying warrants	3,571
Common stock warrants, expiration date of April 2019
Warrants
Exercise price per share (in dollars per share)	$ 8.40
Common stock warrants, expiration date of April 2019 | Common stock
Warrants
Number of shares underlying warrants	59,542
Common stock warrants, expiration date of May 2019
Warrants
Exercise price per share (in dollars per share)	$ 8.40
Common stock warrants, expiration date of May 2019 | Common stock
Warrants
Number of shares underlying warrants	23,816
Common stock warrants, expiration date of September 2019
Warrants
Exercise price per share (in dollars per share)	$ 8.40
Common stock warrants, expiration date of September 2019 | Common stock
Warrants
Number of shares underlying warrants	65,497
Common stock warrants, expiration date of July 2019
Warrants
Exercise price per share (in dollars per share)	$ 8.40
Common stock warrants, expiration date of July 2019 | Common stock
Warrants
Number of shares underlying warrants	17,863
Common stock warrants, expiration date of May 2022
Warrants
Exercise price per share (in dollars per share)	$ 8.68
Common stock warrants, expiration date of May 2022 | Common stock
Warrants
Number of shares underlying warrants	2,380
Series B converitible preferred stock warrants
Warrants
Number of shares underlying warrants			625,208
Exercise price per share (in dollars per share)			$ 0.2999
Fair value of warrant			$ 115,056
Series B converitible preferred stock warrants | Term loan
Warrants
Face amount			$ 7,500,000

Common Stock and Stock Based 34

Common Stock and Stock Based Compensation (Details)	Sep. 01, 2015$ / shares	May. 08, 2012item$ / sharesshares	Sep. 30, 2015USD ($)item$ / sharesshares	Sep. 30, 2014USD ($)	Dec. 31, 2014$ / sharesshares	May. 07, 2013shares	Jan. 11, 2012shares	Aug. 28, 2011shares
Common stock, Par value | $ / shares	$ 0.001		$ 0.001		$ 0.001
Number of votes per share | item			1
Total stock-based compensation			$ 321,228	$ 917,996
Number of shares
Balance, December 31, 2014 | shares			552,726
Granted | shares			72,856
Forfeitures | shares			(114,698)
Balance, September 30, 2015 | shares			510,884		552,726
Vested or expected to vest | shares			510,884
Exercisable | shares			439,607
Weighted-average exercise price
Balance, December 31, 2014 | $ / shares			$ 9.17
Granted | $ / shares			6.22
Forfeitures | $ / shares			8.59
Balance, September 30, 2015 | $ / shares			8.88		$ 9.17
Vested or expected to vest | $ / shares			8.88
Exercisable | $ / shares			$ 9.26
Fair value of options granted
Granted			$ 211,262
Weighted-average remaining contractual term (in years)
Balance			7 years 4 months 21 days		8 years 2 months 1 day
Vested or expected to vest			7 years 4 months 21 days
Exercisable			7 years 6 months 15 days
2,015			$ 19,095
2,016			57,419
2,017			45,932
2,018			42,495
2,019			14,113
Total unrecognized compensation expense			179,054
Research and development expense
Total stock-based compensation			57,353	181,256
General and administrative
Total stock-based compensation			$ 263,875	$ 736,740
2011 stock incentive plan
Number of shares authorized for issuance | shares						704,428	285,714	178,571
Options term (in years)			10 years
Number of common stock remaining for future issuance (in shares) | shares		167,857	254,236
2011 stock incentive plan | Minimum
Vesting period			3 years
2011 stock incentive plan | Maximum
Vesting period			4 years
Outside of Plan
Number of grants outside of the Plan | shares		3
Number of non-employee directors granted stock options | item		2
Percentage of vesting		33.00%
Number of consecutive annual anniversaries for vesting | item		3
Number of shares
Granted | shares		167,857
Weighted-average exercise price
Granted | $ / shares		$ 8.68
Common stock
Reverse stock split ratio	0.03571

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	Oct. 20, 2015	Sep. 30, 2015	Sep. 01, 2015	Dec. 31, 2014
Subsequent events
Common Stock, Shares Authorized		8,214,285		230,000,000
Common stock, par value		$ 0.001	$ 0.001	$ 0.001
Subsequent events
Subsequent events
Common Stock, Shares Authorized	200,000,000
Common stock, par value	$ 0.001
Preferred Stock, Shares Authorized	5,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.001
Subsequent events | Class A Warrant [Member] | Capital Unit
Subsequent events
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1
Subsequent events | Class B Warrant [Member] | Capital Unit
Subsequent events
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1
Subsequent events | Common stock | Capital Unit
Subsequent events
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1
Subsequent events | Common stock | Class A Warrant [Member]
Subsequent events
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	1
Subsequent events | Common stock | Class B Warrant [Member]
Subsequent events
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	0.5
Subsequent events | IPO | Capital Unit
Subsequent events
Issue price per share	$ 6.50
Net proceeds	$ 23.6
Subsequent events | IPO | Common stock
Subsequent events
Shares of common stock resulting from conversion of preferred stock (in shares)	3,980,422
Subsequent events | Over-Allotment Option [Member] | Capital Unit
Subsequent events
Number of units offered	600,000
Subsequent events | Aggregate Shares Offered to Underwriter Aside from Over Allotment and Unit Purchase Option [Member] | Capital Unit
Subsequent events
Number of units offered	4,000,000
Issue price per share	$ 6.50
Subsequent events | Unit Purchase Option to Underwriter [Member] | Capital Unit
Subsequent events
Unit Purchase Option to Underwriter Percentage of Shares Sold	1.00%
Subsequent events | Unit Purchase Option to Underwriter [Member] | Capital Unit | Maximum
Subsequent events
Number of units offered	40,000