Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 12, 2019 | |
Cover page. | ||
Entity Registrant Name | Cerecor Inc. | |
Entity Central Index Key | 0001534120 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Transition Period | true | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 44,106,794 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 5,250,651 | $ 10,646,301 |
Accounts receivable, net | 4,955,771 | 3,157,555 |
Other receivables | 208,204 | 5,469,011 |
Inventory, net | 402,267 | 1,110,780 |
Prepaid expenses and other current assets | 1,670,019 | 1,529,516 |
Restricted cash, current portion | 102,214 | 18,730 |
Total current assets | 12,589,126 | 21,931,893 |
Property and equipment, net | 1,496,431 | 586,512 |
Intangible assets, net | 26,595,239 | 31,239,468 |
Goodwill | 16,411,123 | 16,411,123 |
Restricted cash, net of current portion | 101,945 | 81,725 |
Total assets | 57,193,864 | 70,250,721 |
Current liabilities: | ||
Accounts payable | 826,472 | 1,446,141 |
Accrued expenses and other current liabilities | 13,133,895 | 19,731,373 |
Income taxes payable | 1,014,454 | 2,032,258 |
Long-term debt, current portion | 1,050,000 | 1,050,000 |
Contingent consideration, current portion | 1,237,401 | 1,956,807 |
Total current liabilities | 17,262,222 | 26,216,579 |
Long-term debt, net of current portion | 14,254,856 | 14,327,882 |
Contingent consideration, net of current portion | 6,236,084 | 7,093,757 |
Deferred tax liability, net | 98,061 | 69,238 |
License obligations | 0 | 1,250,000 |
Other long-term liabilities | 1,121,367 | 385,517 |
Total liabilities | 38,972,590 | 49,342,973 |
Stockholders’ equity: | ||
Common stock—$0.001 par value; 200,000,000 shares authorized at September 30, 2019 and December 31, 2018; 44,106,794 and 40,804,189 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 44,107 | 40,804 |
Preferred stock—$0.001 par value; 5,000,000 shares authorized at September 30, 2019 and December 31, 2018; 2,857,143 shares issued and outstanding at September 30, 2019 and December 31, 2018 | 2,857 | 2,857 |
Additional paid-in capital | 134,085,981 | 119,082,157 |
Accumulated deficit | (115,911,671) | (98,218,070) |
Total stockholders’ equity | 18,221,274 | 20,907,748 |
Total liabilities and stockholders’ equity | $ 57,193,864 | $ 70,250,721 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 44,106,794 | 40,804,189 |
Common stock, shares outstanding (in shares) | 44,106,794 | 40,804,189 |
Preferred stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 2,857,143 | 2,857,143 |
Preferred stock, shares outstanding (in shares) | 2,857,143 | 2,857,143 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenue | $ 5,613,276 | $ 4,074,786 | $ 15,474,123 | $ 13,342,699 |
Operating expenses: | ||||
Cost of product sales | 1,435,061 | 3,111,290 | 3,241,131 | 5,397,872 |
Research and development | 1,743,435 | 1,047,877 | 8,857,220 | 3,780,352 |
Acquired in-process research and development | 0 | 18,723,952 | 0 | 18,723,952 |
General and administrative | 2,679,396 | 1,884,293 | 7,778,386 | 7,833,612 |
Sales and marketing | 2,630,545 | 2,310,760 | 8,676,298 | 5,889,137 |
Amortization expense | 1,037,414 | 1,065,398 | 3,195,108 | 3,315,843 |
Impairment of intangible assets | 0 | 159,687 | 1,449,121 | 1,861,562 |
Change in fair value of contingent consideration | (197,219) | 84,844 | (1,009,168) | 360,850 |
Total operating expenses | 9,328,632 | 28,388,101 | 32,188,096 | 47,163,180 |
Loss from operations | (3,715,356) | (24,313,315) | (16,713,973) | (33,820,481) |
Other (expense) income: | ||||
Change in fair value of warrant liability and unit purchase option liability | 35,491 | (2,994) | 6,823 | (22,329) |
Other (expense) income, net | (15,000) | 0 | (24,400) | 18,655 |
Interest expense, net | (205,938) | (234,854) | (613,624) | (577,664) |
Total other expense, net | (185,447) | (237,848) | (631,201) | (581,338) |
Net loss before taxes | (3,900,803) | (24,551,163) | (17,345,174) | (34,401,819) |
Income tax expense | 115,651 | 52,412 | 348,427 | 92,076 |
Net loss | (4,016,454) | (24,603,575) | (17,693,601) | (34,493,895) |
Product revenue, net | ||||
Revenues: | ||||
Total revenue | 5,513,276 | 4,074,786 | 15,374,123 | 13,045,824 |
License and other revenue | ||||
Revenues: | ||||
Total revenue | 100,000 | 0 | 100,000 | 0 |
Sales force revenue | ||||
Revenues: | ||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 296,875 |
Common stock | ||||
Other (expense) income: | ||||
Net income (loss) per share of stock, basic and diluted (in dollars per share) | $ (0.07) | $ (0.71) | $ (0.31) | $ (1.05) |
Preferred Stock | ||||
Other (expense) income: | ||||
Net income (loss) per share of stock, basic and diluted (in dollars per share) | $ (0.35) | $ 0 | $ (1.56) | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net loss | $ (17,693,601) | $ (34,493,895) |
Adjustments to reconcile net loss provided by (used in) operating activities: | ||
Depreciation and amortization | 3,266,313 | 3,333,416 |
Impairment of intangible assets | 1,449,121 | 1,861,562 |
Stock-based compensation | 1,942,196 | 1,796,387 |
Acquired in-process research and development, including transaction costs | 0 | 18,723,952 |
Deferred taxes | 28,823 | (47,994) |
Amortization of inventory fair value associated with acquisition of TRx and Avadel's pediatric products | 107,272 | 262,419 |
Non-cash interest expense | 0 | 327,224 |
Change in fair value of warrant liability and unit purchase option liability | (6,823) | 22,328 |
Change in fair value of contingent consideration | (1,009,168) | 360,850 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (1,798,216) | (73,513) |
Other receivables | 5,260,807 | (3,072,729) |
Inventory, net | 601,241 | (226,735) |
Prepaid expenses and other assets | (140,503) | 27,571 |
Escrowed cash receivable | 0 | 3,752,390 |
Accounts payable | (619,669) | 172,243 |
Income taxes payable | (1,017,804) | (64,100) |
Accrued expenses and other liabilities | (6,573,918) | 6,186,178 |
License obligations | (1,250,000) | 0 |
Net cash used in operating activities | (17,453,929) | (1,152,446) |
Investing activities | ||
Acquisition of Avadel's pediatric products | 0 | (1) |
Cash acquired from the acquisition of Ichorion Therapeutics, Inc. | 0 | 1,429,876 |
Purchase of property and equipment | (262,011) | (65,057) |
Net cash (used in) provided by investing activities | (262,011) | 1,364,818 |
Financing activities | ||
Proceeds from exercise of stock options and warrants | 257,993 | 508,746 |
Proceeds from sales of common stock under employee stock purchase plan | 127,537 | 8,400 |
Restricted stock units withheld for taxes | (33,959) | 0 |
Proceeds from sale of shares pursuant to private placement, net | 3,737,400 | 3,857,106 |
Proceeds from underwritten public offering, net | 8,975,960 | 0 |
Payment of contingent consideration | (567,911) | (137,008) |
Payment of long-term debt | (73,026) | 0 |
Net cash provided by financing activities | 12,423,994 | 4,237,244 |
(Decrease) increase in cash, cash equivalents and restricted cash | (5,291,946) | 4,449,616 |
Cash, cash equivalents, and restricted cash at beginning of period | 10,746,756 | 2,605,499 |
Cash, cash equivalents, and restricted cash at end of period | 5,454,810 | 7,055,115 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 787,500 | 262,500 |
Cash paid for taxes | 1,326,025 | 0 |
Supplemental disclosures of non-cash activities | ||
Leased asset obtained in exchange for new operating lease liability | 743,025 | |
Debt assumed in Avadel Pediatric Products acquisition | 0 | (15,075,000) |
Cash and cash equivalents | 5,250,651 | 6,838,353 |
Restricted cash, current | 102,214 | 37,027 |
Restricted cash, non-current | $ 101,945 | $ 179,735 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited) - USD ($) | Total | Common stock | Preferred Stock | Additional paid in capital | Contingently issuable stock | Accumulated deficit |
Balance at the beginning (in shares) at Dec. 31, 2017 | 31,266,989 | 0 | ||||
Balance at the beginning at Dec. 31, 2017 | $ 27,859,608 | $ 31,268 | $ 0 | $ 83,338,136 | $ 2,655,464 | $ (58,165,260) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,000,000 | |||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,857,106 | $ 1,000 | 3,856,106 | |||
Issuance of shares in acquisition of Ichorion assets (in shares) | 5,798,735 | |||||
Issuance of shares in acquisition of Ichorion assets | 19,971,554 | $ 5,774 | 19,965,780 | |||
Issuance of stock (in shares) | 2,349,968 | |||||
Issuance of stock | 0 | $ 2,350 | 2,653,114 | (2,655,464) | ||
Exercise of stock options and warrants (in shares) | 243,942 | |||||
Exercise of stock options and warrants | 508,745 | $ 244 | 508,501 | |||
Shares purchased through employee stock purchase plan (in shares) | 20,000 | |||||
Shares purchased through employee stock purchase plan | 8,400 | $ 20 | 8,380 | |||
Stock-based compensation | 1,796,387 | 1,796,387 | ||||
Net loss | (34,493,895) | (34,493,895) | ||||
Balance at the end (in shares) at Sep. 30, 2018 | 40,679,634 | 0 | ||||
Balance at the end at Sep. 30, 2018 | 19,507,905 | $ 40,656 | $ 0 | 112,126,404 | 0 | (92,659,155) |
Balance at the beginning (in shares) at Jun. 30, 2018 | 33,790,686 | 0 | ||||
Balance at the beginning at Jun. 30, 2018 | 19,219,416 | $ 33,792 | $ 0 | 87,241,204 | 0 | (68,055,580) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,000,000 | |||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,857,106 | $ 1,000 | 3,856,106 | |||
Issuance of shares in acquisition of Ichorion assets (in shares) | 5,798,735 | |||||
Issuance of shares in acquisition of Ichorion assets | 19,971,554 | $ 5,774 | 19,965,780 | |||
Exercise of stock options and warrants (in shares) | 90,213 | |||||
Exercise of stock options and warrants | 118,272 | $ 90 | 118,182 | |||
Stock-based compensation | 945,132 | 945,132 | ||||
Net loss | (24,603,575) | (24,603,575) | ||||
Balance at the end (in shares) at Sep. 30, 2018 | 40,679,634 | 0 | ||||
Balance at the end at Sep. 30, 2018 | 19,507,905 | $ 40,656 | $ 0 | 112,126,404 | 0 | (92,659,155) |
Balance at the beginning (in shares) at Dec. 31, 2018 | 40,804,189 | 2,857,143 | ||||
Balance at the beginning at Dec. 31, 2018 | 20,907,748 | $ 40,804 | $ 2,857 | 119,082,157 | 0 | (98,218,070) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,200,000 | |||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,737,400 | $ 1,200 | 3,736,200 | |||
Issuance of stock (in shares) | 1,818,182 | |||||
Issuance of stock | 8,975,960 | $ 1,818 | 8,974,142 | |||
Exercise of stock options and warrants (in shares) | 74,952 | |||||
Exercise of stock options and warrants | $ 257,993 | $ 75 | 257,918 | |||
Restricted Stock Units vested during period (in shares) | 172,500 | |||||
Restricted Stock Units vested during period | $ 0 | 173 | (173) | |||
Restricted Stock Units withheld for taxes (in shares) | (6,969) | |||||
Restricted Stock Units withheld for taxes | $ (33,959) | $ (7) | (33,952) | |||
Shares purchased through employee stock purchase plan (in shares) | 43,940 | |||||
Shares purchased through employee stock purchase plan | 127,537 | $ 44 | 127,493 | |||
Stock-based compensation | 1,942,196 | 1,942,196 | ||||
Net loss | (17,693,601) | (17,693,601) | ||||
Balance at the end (in shares) at Sep. 30, 2019 | 44,106,794 | 2,857,143 | ||||
Balance at the end at Sep. 30, 2019 | 18,221,274 | $ 44,107 | $ 2,857 | 134,085,981 | 0 | (115,911,671) |
Balance at the beginning (in shares) at Jun. 30, 2019 | 42,898,251 | 2,857,143 | ||||
Balance at the beginning at Jun. 30, 2019 | 17,696,259 | $ 42,898 | $ 2,857 | 129,545,721 | 0 | (111,895,217) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,200,000 | |||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,737,400 | $ 1,200 | 3,736,200 | |||
Exercise of stock options and warrants (in shares) | 539 | |||||
Exercise of stock options and warrants | $ 1,176 | $ 1 | 1,175 | |||
Restricted Stock Units vested during period (in shares) | 11,250 | |||||
Restricted Stock Units vested during period | $ 0 | 11 | (11) | |||
Restricted Stock Units withheld for taxes (in shares) | (3,246) | |||||
Restricted Stock Units withheld for taxes | $ (15,901) | $ (3) | (15,898) | |||
Stock-based compensation | 818,794 | 818,794 | ||||
Net loss | (4,016,454) | (4,016,454) | ||||
Balance at the end (in shares) at Sep. 30, 2019 | 44,106,794 | 2,857,143 | ||||
Balance at the end at Sep. 30, 2019 | $ 18,221,274 | $ 44,107 | $ 2,857 | $ 134,085,981 | $ 0 | $ (115,911,671) |
Business
Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | 1. Business Cerecor Inc. (the “Company” or “Cerecor”) is a biopharmaceutical company focused on becoming a leader in the development and commercialization of treatments for orphan diseases and neurological disorders. The Company's orphan disease pipeline is led by CERC-801, CERC-802 and CERC-803. All three compounds are therapies for inborn errors of metabolism, specifically disorders known as Congenital Disorders of Glycosylation ("CDGs") by means of substrate replacement therapy. The U.S. Food and Drug Administration ("FDA") has granted Rare Pediatric Disease Designation ("RPDD") and Orphan Drug Designation ("ODD") to all three CERC-800 compounds, thus qualifying the Company to receive a Priority Review Voucher ("PRV") upon approval of a new drug application ("NDA"). The PRV may be sold or transferred an unlimited number of times. The Company plans to leverage the 505(b)(2) NDA pathway for all three compounds to accelerate their development and approval. Additionally, CERC-801 and CERC-802 were granted Fast Track Designation ("FTD") from the FDA which helps facilitate and expedite development of each compound. The Company is also in the process of developing one other preclinical orphan disease compound, CERC-913, for the treatment of mitochondrial DNA Depletion Syndrome. The Company's neurology pipeline is led by CERC-301, a Glutamate NR2B selective, NMDA Receptor antagonist, which Cerecor is currently developing as a novel treatment for orthostatic hypotension ("OH"). The Company is also developing CERC-406, a CNS-targeted COMT inhibitor for Parkinson's Disease. The Company also currently has one marketed product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions and indications. Cerecor was incorporated in 2011, commenced operations in 2011 and completed an initial public offering in October 2015. On November 17, 2017, the Company acquired TRx Pharmaceuticals, LLC (“TRx”) and its wholly-owned subsidiaries (see "TRx Acquisition" in Note 5 below for a description of this transaction). On February 16, 2018, Cerecor acquired all rights to Avadel Pharmaceuticals PLC’s (“Avadel”) marketed pediatric products (the “Acquired Products”) in exchange for Cerecor assuming certain financial obligations of Avadel (see "Avadel Pediatric Products Acquisition" in Note 5 below for a description of this transaction). On September 25, 2018, the Company acquired Ichorion Therapeutics, Inc., a privately-held biopharmaceutical company focused on developing treatments and increasing awareness of inherited metabolic disorders known as CDGs (see "Ichorion Asset Acquisition" in Note 5 below for a description of this transaction). On October 10, 2019, the Company entered into, and subsequently closed on, an asset purchase agreement (the "Aytu Purchase Agreement") with Aytu BioScience, Inc. (“Aytu”) to sell the Company’s rights, title and interest in, assets relating to its Pediatric Portfolio, namely Aciphex ® Sprinkle™, Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™, Poly-Vi-Flor ® and Tri-Vi-Flor™ (the "Divested Assets" or "Pediatric Portfolio"), as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts (the “Aytu transaction”). Aytu provided consideration of cash and preferred stock totaling $17 million ( $4.5 million in cash and $12.5 million in Aytu preferred stock) and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield CSF, LLC ("Deerfield") of approximately $15 million and certain other liabilities in excess of approximately $11 million . In addition, Aytu assumed future contractual obligations under existing license agreements associated with the Divested Assets. The Aytu transaction closed on November 1, 2019. Upon closing of the transaction, Cerecor terminated all sales force personnel, which included both those that Aytu offered employment, as well as any remaining sales force personnel. Cerecor expects to incur severance charges and legal costs in the fourth quarter as a result of the transaction (see Note 14 for description of this transaction). Liquidity In order to meet its cash flow needs, the Company applies a disciplined decision-making methodology as it evaluates the optimal allocation of the Company's resources between investing in the Company's development portfolio and acquisitions or in-licensing of new assets. For the nine months ended September 30, 2019, Cerecor generated a net loss of $17.7 million and negative cash flow from operations of $17.5 million . As of September 30, 2019, Cerecor had an accumulated deficit of $115.9 million and a balance of $5.3 million in cash and cash equivalents. During the first quarter of 2019, the Company closed an underwritten public offering of common stock for 1,818,182 shares of common stock of the Company, at a price to the public of $5.50 per share ("public price"). Armistice Capital Master Fund Ltd. ("Armistice"), our largest stockholder, participated in the offering by purchasing 363,637 shares of common stock of the Company from the underwriter at the public price. Cerecor director Steven J. Boyd is Armistice's Chief Investment Officer. The net proceeds of the offering were approximately $9.0 million (see "Common Stock Offering" in Note 9 below for description of the transaction). During the third quarter of 2019, the Company entered into a securities purchase agreement with Armistice, pursuant to which the Company sold 1,200,000 shares of the Company’s common stock for a purchase price of $3.132 per share. Net proceeds of the private placement were approximately $3.7 million . During the fourth quarter of 2019, the Company entered into, and subsequently closed on, the Aytu Purchase Agreement to sell the Company's rights, title and interest in, assets relating to its Pediatric Portfolio and related commercial infrastructure for a combination of cash and preferred stock totaling $17 million ( $4.5 million in cash and $12.5 million in Aytu preferred stock) and assumption of certain of the Company's liabilities including the Company’s payment obligations payable to Deerfield and certain other liabilities in excess of $15 million . The Company plans to use its current cash on hand inclusive of the $4.5 million cash collected in the fourth quarter of 2019 from the sale of the Pediatric Portfolio and related commercial infrastructure and the anticipated cash flows from the Company's sales of Millipred to offset costs related to its neurology programs, orphan disease programs, business development, and costs associated with its organizational infrastructure. Cerecor expects to continue to incur significant expenses and operating losses for the immediate future as it continues to invest in the Company's pipeline assets. Our ability to achieve and maintain profitability in the future is dependent on, among other things, the development, regulatory approval, and commercialization of our pipeline assets, the potential sale of any PRVs we receive and revenue from Millipred product sales, all being adequate to support our cost structure and pipeline asset development. The Company believes it will require additional financing to continue to execute its clinical development strategy and fund future operations. The Company plans to meet its capital requirements through operating cash flows from product sales of Millipred and some combination of PRV sales, equity or debt financings, collaborations, out-licensing arrangements, strategic alliances, federal and private grants, marketing, distribution or licensing arrangements or the sale of current or future assets. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible or suspend or curtail planned programs. If the Company raises additional funds through collaborations, strategic alliances or licensing arrangements with third parties, the Company may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates. Our plan to aggressively develop our pipeline will require substantial cash in excess of what the Company expects our cash from the current commercial operations to generate. However, the Company expects that our existing cash and cash equivalents, together with anticipated revenue, will enable us to fund our operating expenses, capital expenditure requirements, and other non-operating cash payments through at least November 2020. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). In the opinion of management, the accompanying unaudited condensed consolidated 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 condensed consolidated balance sheet at December 31, 2018 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”). Certain prior period amounts have been reclassified to conform to the current year presentation, as described below. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the December 31, 2018 audited consolidated financial statements. Reclassification During the fourth quarter of 2018, the Company concluded that going forward it would include change in fair value of contingent consideration within its own stand-alone line in operating expenses in the Company's statements of operations. The Company has reclassified $0.1 million and $0.4 million from other expenses to operating expenses in the three and nine months ended September, 30, 2018, respectively, on the statement of operations to conform with current period presentation. Significant Accounting Policies During the nine months ended September 30, 2019, there were no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on March 18, 2019 and amended on April 23, 2019, except for the recently adopted accounting standards described below. The following significant accounting policy was updated in 2019 to reflect changes upon our adoption of ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified one operating lease, which is for its corporate headquarters. Right-of-use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on our condensed consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the condensed consolidated balance sheet and are amortized over the lease term. To determine the present value of lease payments on lease commencement, we use the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within general and administrative expenses. Recently Adopted Accounting Pronouncements Adoption of ASC 842 In February 2016, FASB issued ASU 2016-02, which revises existing practice related to accounting for leases under ASC No. 840, Leases (“ASC 840”) for both lessees and lessors. The new guidance in ASU 2016-02 requires lessees to recognize a ROU asset and a lease liability for nearly all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the ROU asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating leases or finance leases. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). The Company adopted the standard using the modified retrospective transition method on its effective date of January 1, 2019 and therefore did not adjust prior comparative periods as permitted by the codification improvements issued by FASB in July 2018. Additionally, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classification. As a result of the standard, the Company recorded a lease liability of $1.2 million and a ROU asset of $0.7 million , which is equal to the initial measurement of the lease liability reduced by the unamortized balance of lease incentive received and deferred rent. There was no material impact to our condensed consolidated income statement (see Note 12 below for more information). Other Adopted Accounting Pronouncements SEC Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532 Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of GAAP or other regulatory requirements. Among other changes, the amendments provide that disclosure requirements related to the analysis of stockholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The Company began providing this disclosure in the first quarter of 2019 within a separate statement. New Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” (ASU 2016-13) This guidance applies to all entities and impacts how entities account for credit losses for most financial assets and other instruments. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods therein. The Company is currently evaluating the potential impact of the adoption of this standard, however, does not expect that the adoption of this new standard will have a material impact on the Company's results of operations or disclosures. Fair Value Measurements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This new standard modifies certain disclosure requirements on fair value measurements. This new standard will be effective for the Company on January 1, 2020. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company generates substantially all of its revenue from sales of prescription pharmaceutical products to its customers. The following table presents net revenues disaggregated by type (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Prescribed dietary supplements $ 2,318 $ 2,097 $ 5,909 $ 5,767 Prescription drugs 3,195 1,978 9,465 7,279 License and other revenue 100 — 100 — Sales force revenue — — — 297 Total revenue $ 5,613 $ 4,075 $ 15,474 $ 13,343 As is typical in the pharmaceutical industry, the Company sells its prescription pharmaceutical products (which include prescribed dietary supplements and prescription drugs) in the United States primarily through wholesale distributors and a specialty contracted pharmacy. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. In addition, the Company earns revenue from sales of its prescription pharmaceutical products directly to retail pharmacies. For the three months ended September 30, 2019, the Company’s three largest customers accounted for approximately 32% , 31% , and 27% of the Company's total net product revenues from sale of prescription pharmaceutical products. For the nine months ended September 30, 2019, the Company's three largest customers accounted for approximately 35% , 31% , and 26% of the Company's total net product revenues from sale of prescription pharmaceutical products. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes earnings per share ("EPS") using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. The Company has two classes of stock outstanding, common stock and preferred stock. The preferred stock was issued in the fourth quarter of 2018 upon Armistice exercising preferred stock warrants to acquire an aggregate of 2,857,143 shares of the Series B Convertible Preferred Stock ("convertible preferred stock"). The convertible preferred stock has the same rights and preferences as common stock, other than being non-voting and convertible to shares of common stock on a 1-to- 5 ratio. Under the two-class method, the convertible preferred stock is considered a separate class of stock for EPS purposes and therefore basic and diluted EPS is provided below for both common stock and preferred stock. EPS for common stock and EPS for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class of stock by the weighted average number of shares outstanding for each class of stock for the period. In applying the two-class method, undistributed earnings are allocated to common stock and preferred stock based on the weighted average shares outstanding during the period, which assumes the convertible preferred stock has been converted to common stock. Diluted net (loss) income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units, which are included under the "treasury stock method" when dilutive, (ii) common stock to be issued upon the assumed conversion of the Company's unit purchase option (the "UPO") shares, which are included under the "if-converted method" when dilutive; (iii) prior to issuance, the contingently issuable shares in the TRx acquisition, if contingencies would have been satisfied if the end of the contingency period were as of the balance sheet date under the "if-converted method" when dilutive; and (iv) common stock to be issued upon the exercise of outstanding warrants, which are included under the "treasury stock method" when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In periods of net loss, losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company's losses. The following table sets forth the computation of basic and diluted net loss per share of common stock and preferred stock for the three and nine months ended September 30, 2019 and 2018 , which includes both classes of participating securities: Three Months Ended September 30, 2019 2018 Common stock Preferred stock Common stock Preferred stock Numerator: Allocation of undistributed net loss $ (3,019,101 ) $ (997,353 ) $ (24,603,575 ) $ — Denominator: Weighted average shares 43,244,481 2,857,143 34,648,641 — Basic and diluted net loss per share $ (0.07 ) $ (0.35 ) $ (0.71 ) $ — Nine Months Ended September 30, 2019 2018 Common stock Preferred stock Common stock Preferred stock Numerator: Allocation of undistributed net loss $ (13,238,766 ) $ (4,454,835 ) $ (34,493,895 ) $ — Denominator: Weighted average shares 42,453,928 2,857,143 32,749,291 — Basic and diluted net loss per share $ (0.31 ) $ (1.56 ) $ (1.05 ) $ — The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three and nine months ended September 30, 2019 and 2018 , as they could have been anti-dilutive: Three and Nine Months Ended September 30, 2019 2018 Stock options 5,297,124 4,119,187 Warrants on common stock 4,024,708 18,905,064 Restricted Stock Units 267,500 445,000 Underwriters' unit purchase option 40,000 40,000 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations and Asset Acquisitions [Abstract] [Abstract] | |
Acquisitions | 5. Acquisitions Asset Acquisitions Ichorion Asset Acquisition On September 24, 2018, the Company entered into, and subsequently consummated the transactions contemplated by, an agreement and plan of merger (the "Merger Agreement") by and among the Company and Ichorion Therapeutics, Inc., a Delaware corporation (the “Ichorion Asset Acquisition”), with Ichorion surviving as a wholly owned subsidiary of the Company. The consideration for the Ichorion Asset Acquisition consisted of approximately 5.8 million shares of the Company’s common stock, par value $0.001 per share, as adjusted for Estimated Working Capital, as defined in the Merger Agreement. The shares of common stock issued as part of the acquisition may not be resold until January 2020. Consideration for the Ichorion Asset Acquisition includes certain development milestones worth up to an additional $15.0 million, payable either in shares of the Company's common stock or in cash, at the election of the Company. The fair value of the common stock shares transferred at closing was approximately $20.0 million based on the Company's stock price close on September 24, 2018 and offset by an estimated discount for lack of marketability calculated using guideline public company volatility for comparable companies. The assets acquired consisted primarily of $18.7 million of acquired in-process research and development ("IPR&D"), $1.6 million of cash and $0.2 million assembled workforce. The Company recorded this transaction as an asset purchase as opposed to a business combination as management concluded that substantially all of the value received was related to one group of similar identifiable assets which was the IPR&D for the three preclinical therapies for inherited metabolic disorders known as CDGs (CERC-801, CERC-802 and CERC-803). The Company considered these assets similar due to similarities in the risks for development, compound type, stage of development, regulatory pathway, patient population and economics of commercialization. The fair value of the IPR&D was immediately recognized as Acquired In-Process Research and Development expense as the IPR&D asset has no other alternate use due to the stage of development. The $0.2 million of transaction costs incurred were recorded to acquired IPR&D expense. The assembled workforce asset recorded to intangible assets will be amortized over an estimated useful life of two years . The contingent consideration of up to an additional $15.0 million relates to three future development milestones. The first milestone is the first product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $6.0 million . The second milestone is the second product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $5.0 million . The third milestone is a protide molecule being approved by the FDA on or prior to December 31, 2023. If this milestone is met, the Company is required to make a milestone payment of $4.0 million . All milestones are payable in either shares of the Company's common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of September 30, 2019, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. Avadel Pediatric Products Acquisition On February 16, 2018, the Company entered into an asset purchase agreement with Avadel US Holdings, Inc., Avadel Pharmaceuticals (USA), Inc., Avadel Pediatrics, Inc., Avadel Therapeutics, LLC and Avadel Pharmaceuticals PLC (collectively, the “Sellers”) to purchase and acquire all rights to the Sellers’ pediatric products. Total consideration transferred to the Sellers consisted of: (1) a cash payment of one dollar , (2) the Company's assumption of existing seller debt due in January 2021 with a fair value of $15.1 million , and (3) contingent consideration relating to royalty obligations through February 2026 with a fair value at acquisition date of approximately $7.9 million . As a result of the Avadel pediatric products acquisition, the Company recorded goodwill of $3.8 million , which is deductible over 15 years for income tax purposes. The transaction was accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. The goodwill recognized was attributable primarily to strategic opportunities related to an expanded commercial footprint and diversified pediatric product portfolio that is expected to provide revenue and cost synergies. During the second quarter of 2018, the Company identified and recorded measurement period adjustments to the preliminary purchase price allocation. These adjustments are reflected in the tables below. The measurement period adjustments were the result of additional analysis performed and information identified during the second quarter of 2018 based on facts and circumstances that existed as of the purchase date. There were no additional measurement adjustments recorded in 2018. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition and as adjusted for measurement period adjustments identified during the second quarter of 2018: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Inventory $ 2,549,000 $ (1,831,000 ) $ 718,000 Prepaid assets — 570,000 570,000 Intangible assets 16,453,000 1,838,000 18,291,000 Accrued expenses — (362,000 ) (362,000 ) Fair value of debt assumed (15,272,303 ) 197,303 (15,075,000 ) Fair value of contingent consideration (7,875,165 ) (44,835 ) (7,920,000 ) Total net liabilities assumed (4,145,468 ) 367,468 (3,778,000 ) Consideration exchanged 241,000 (240,999 ) 1 Goodwill $ 4,386,468 $ (608,467 ) $ 3,778,001 The purchase price allocation related to the acquisition of Avadel's pediatric products was finalized in 2018. The fair values of intangible assets, including marketing rights, licenses and developed technology, were determined using variations of the income approach. Varying discount rates were also applied to the projected net cash flows. The Company believes the assumptions are representative of those a market participant would use in estimating fair value. The fair value of intangible assets both as of the date of acquisition and as adjusted by measurement period adjustments identified during the second quarter of 2018 includes the following: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Acquired Product Marketing Rights - Karbinal $ 6,221,000 $ (21,000 ) $ 6,200,000 Acquired Product Marketing Rights - AcipHex 2,520,000 283,000 2,803,000 Acquired Product Marketing Rights - Cefaclor 6,291,000 1,320,000 7,611,000 Acquired Developed Technology - Flexichamber 1,131,000 546,000 1,677,000 Acquired IPR&D - LiquiTime formulations 290,000 (290,000 ) — Total $ 16,453,000 $ 1,838,000 $ 18,291,000 Subsequent to the finalization of the purchase price allocation related to the acquisition of Avadel's pediatric products, during the second quarter of 2019, the Company made a strategic decision to eliminate sales force efforts related to selling Flexichamber (other than the limited inventory currently on hand). As a result of this decision, paired with significant deviations from forecasted sales, management identified an impairment indicator for Flexichamber during the second quarter of 2019. Accordingly, during the second quarter of 2019, the Company performed a test for recoverability and concluded that the sum of its estimated future undiscounted cash flows was less than its carrying value of $1.4 million . Management then measured the impairment loss by calculating the excess of Flexichamber's carrying amount over its fair value. Management determined that due to the absence of future material cash flows that the fair value of Flexichamber as of June 30, 2019, which is considered a Level 3 nonrecurring fair value measurement, was $0 . Accordingly, a full impairment was recognized in the impairment of intangible asset line for Flexichamber in the amount of $1.4 million for the nine months ended September 30, 2019. In addition, because the Company expects the sale of remaining inventory on hand will not generate material cash flows, the Company wrote down the existing inventory on hand as of June 30, 2019 to $0 , which resulted in $0.2 million charge to cost of product sales during the nine months ended September 30, 2019. TRx Acquisition On November 17, 2017, the Company entered into, and consummated the transactions contemplated by, an equity interest purchase agreement (the “TRx Purchase Agreement”) by and among the Company, TRx, Fremantle Corporation and LRS International LLC, the selling members of TRx (collectively, the “TRx Sellers”), which provided for the purchase of all of the equity and ownership interests of TRx by the Company (the "TRx Acquisition"). The consideration for the TRx Acquisition consisted of $18.9 million in cash, as adjusted for estimated working capital, estimated cash on hand, estimated indebtedness and estimated transaction expenses, as well as 7,534,884 shares of the Company’s common stock having an aggregate value on the closing date of $8.5 million and certain potential contingent payments. Upon closing, the Company issued 5,184,920 shares of its common stock to the TRx Sellers. Pursuant to the TRx Purchase Agreement, the issuance of the remaining 2,349,968 shares was subject to the Company's stockholder approval. In May 2018, stockholder approval was obtained and the remaining shares were issued to the TRx Sellers. The contingent shares were initially recorded to contingently issuable shares, which is recorded within stockholder's equity and were reclassed to common stock and additional paid in capital upon issuance, on the consolidating balance sheet date. As a result of the TRx Acquisition, the Company has currently recorded goodwill of $12.6 million , of which $8.7 million was deductible for income taxes. During the third quarter of 2018, the Company identified and recorded measurement period adjustments to our preliminary purchase price allocation that was disclosed in prior periods. These adjustments are reflected in the tables below. The measurement period adjustments were the result of an arbitration ruling discussed in further detail in Note 13, the facts and circumstances of which existed as of the acquisition date. The following table summarizes the preliminary acquisition-date fair value of the consideration transferred at the date of acquisition both as disclosed in periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Cash $ 18,900,000 $ — $ 18,900,000 Common stock (including contingently issuable shares) 8,514,419 — 8,514,419 Contingent payments 2,576,633 (1,210,000 ) 1,366,633 Total consideration transferred $ 29,991,052 (1,210,000 ) 28,781,052 The TRx Acquisition was accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible and identifiable intangible assets acquired, and liabilities assumed, were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. The goodwill recognized is attributable primarily to strategic opportunities related to leveraging TRx’s research and development, intellectual property, and processes. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition both as disclosed in periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Fair value of assets acquired: Cash and cash equivalents $ 11,068 $ — $ 11,068 Accounts receivable, net 2,872,545 — 2,872,545 Inventory 495,777 — 495,777 Prepaid expenses and other current assets 134,281 — 134,281 Other receivables — 2,764,515 2,764,515 Identifiable Intangible Assets: — Acquired product marketing rights - Metafolin 10,465,000 1,522,000 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total assets acquired 21,581,671 4,292,515 25,874,186 Fair value of liabilities assumed: Accounts payable 192,706 — 192,706 Accrued expenses and other current liabilities 4,850,422 3,764,515 8,614,937 Deferred tax liability 839,773 78,840 918,613 Total liabilities assumed 5,882,901 3,843,355 9,726,256 Total identifiable net assets 15,698,770 449,160 16,147,930 Fair value of consideration transferred 29,991,052 (1,210,000 ) 28,781,052 Goodwill $ 14,292,282 $ (1,659,160 ) $ 12,633,122 The purchase price allocation related to the acquisition of TRx was finalized in 2018. The fair values of intangible assets, including marketing rights, licenses and developed technology, were determined using variations of the income approach, specifically the multi-period excess earnings method. Varying discount rates were also applied to the projected net cash flows. The Company believes the assumptions are representative of those a market participant would use in estimating fair value. The final fair value of intangible assets both as disclosed in prior periods and as adjusted by measurement period adjustments identified during the third quarter of 2018 includes the following: At November 17, Measurement Period Adjustments At November 17, 2017 (as adjusted) Acquired product marketing rights - Metafolin $ 10,465,000 $ 1,522,000 $ 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total $ 18,068,000 $ 1,528,000 $ 19,596,000 The Company received written notice to terminate the Pharmaceutical Associates, Inc. ("PAI") sales and marketing agreement in the second quarter of 2018. As a result, the Company reassessed the fair value of the PAI sales and marketing agreement on that date (a level III non-recurring fair value measurement) and concluded due to the absence of future cash flows beyond the date of termination that the fair value was $0 . An impairment charge was recognized in the second quarter of 2018 in the amount of $1.9 million , representing the remaining net book value of the PAI sales and marketing agreement intangible asset. Pro Forma Impact of Business Combinations The following supplemental unaudited pro forma information presents Cerecor’s financial results as if the acquisition of Avadel pediatric products, which was completed on February 16, 2018, had occurred on January 1, 2018: Nine Months Ended September 30, 2018 Total revenues, net $ 15,047,699 Net loss $ (35,539,494 ) Basic and diluted net loss per share of common stock $ (1.09 ) Basic and diluted net loss per share of preferred stock $ — The above unaudited pro forma information was determined based on the historical GAAP results of Cerecor and Avadel's pediatric products. The unaudited pro forma consolidated results are provided for informational purposes only and are not necessarily indicative of what Cerecor’s condensed consolidated results of operations would have been had the acquisition of Avadel's pediatric products been completed on the date indicated or what the consolidated results of operations will be in the future. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements ASC No. 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. 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: September 30, 2019 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* $ 3,221,364 $ — $ — Liabilities Contingent consideration $ — $ — $ 7,473,485 Warrant liability** $ — $ — $ 850 Unit purchase option liability** $ — $ — $ 2,493 December 31, 2018 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* $ 7,324,932 $ — $ — Liabilities Contingent consideration $ — $ — $ 9,050,564 Warrant liability** $ — $ — $ 2,950 Unit purchase option liability** $ — $ — $ 7,216 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying condensed consolidated balance sheets. **Warrant liability and UPO liability are reflected in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheets. As of September 30, 2019 and December 31, 2018, the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and other current liabilities, short term and long-term debt, warrant liability, the underwriters' UPO liability, and contingent consideration. The carrying amounts reported in the accompanying condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, 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 long-term debt of $15.0 million as of September 30, 2019 was based on current interest rates for similar types of borrowings and is in Level 2 of the fair value hierarchy. Level 3 Valuation The tables presented below are a summary of changes in the fair value of the Company’s Level 3 valuations for the warrant liability, UPO liability and contingent consideration for the nine months ended September 30, 2019 and 2018 : Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2018 $ 2,950 $ 7,216 $ 9,050,564 $ 9,060,730 Payment of contingent consideration — — (567,911 ) (567,911 ) Change in fair value due to Lachlan Settlement — — (1,277,150 ) (1,277,150 ) Other changes in fair value (2,100 ) (4,723 ) 267,982 261,159 Balance at September 30, 2019 $ 850 $ 2,493 $ 7,473,485 $ 7,476,828 Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2017 $ 8,185 $ 26,991 $ 2,576,633 $ 2,611,809 Issuance of contingent consideration — — 7,920,000 7,920,000 Payment of contingent consideration — — (137,008 ) (137,008 ) Purchase price allocation measurement period adjustment of contingent consideration — — (1,210,000 ) (1,210,000 ) Change in fair value 6,145 16,183 360,850 383,178 Balance at September 30, 2018 $ 14,330 $ 43,174 $ 9,510,475 $ 9,567,979 In 2014, the Company issued warrants to purchase 625,208 shares of convertible preferred stock. Upon the closing of our initial public offering ("IPO") in October 2015 these warrants became warrants to purchase 22,328 shares of common stock, in accordance with their terms. The warrants expire in October 2020. The warrants represent a freestanding financial instrument that is indexed to an obligation, which the Company refers to as the warrant liability. The warrant liability is marked-to-market each reporting period with the change in fair value recorded to other income, net in the accompanying 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 September 30, 2019 , include (i) volatility of 50% , (ii) risk free interest rate of 1.74% , (iii) strike price of $8.40 , (iv) fair value of common stock of $3.29 , and (v) expected life of 1.0 years. The underwriters’ UPO was issued to the underwriters of the Company's IPO in 2015 and provides the underwriters the option to purchase up to a total of 40,000 units. The units underlying the UPO will be, immediately upon exercise, separated into shares of common stock, underwriters’ Class A warrants and underwriters’ Class B warrants (such warrants together referred to as the Underwriters’ Warrants). The Underwriters’ Warrants were warrants to purchase shares of common stock. The Class B warrants expired in April 2017 and the Class A warrants expired in October 2018, while the UPO expires in October 2020. The Company classifies the UPO as a liability, as it is a freestanding marked-to-market derivative instrument that is precluded from being classified in stockholders’ equity. The UPO liability is marked-to-market each reporting period with the change in fair value recorded to other income, net in the accompanying statements of operations until the UPO is exercised, expires or other facts and circumstances lead the UPO to be reclassified to stockholders’ equity. The fair value of the UPO liability is estimated using a Black-Scholes option-pricing model. The significant assumptions used in preparing the simulation model for valuing the UPO as of September 30, 2019 , include (i) volatility of 50% , (ii) risk free interest rate of 1.74% , (iii) unit strike price of $7.47 , (iv) fair value of underlying equity of $3.29 , and (v) expected life of 1.0 years. The Company's business acquisitions of Avadel's pediatric products and TRx (see Note 5) involve the potential for future payment of consideration that is contingent upon the achievement of operation and commercial milestones and royalty payments on future product sales. The fair value of contingent consideration was determined at the acquisition date utilizing unobservable inputs such as the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event), and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liabilities are remeasured at the current fair value with changes recorded in the condensed consolidated statement of operations. As part of the acquisition of Avadel's pediatric products, the Company became obligated to pay a 15% annual royalty on net sales of the acquired Avadel pediatric products through February 2026, up to an aggregate amount of $12.5 million . The fair value of the future royalty was the expected future value of the contingent payments discounted to a present value. The estimated fair value of the royalty payments as of September 30, 2019 was $7.5 million . The significant assumptions used in estimating the fair value of the royalty payment as of September 30, 2019 include (i) the expected net sales of the acquired Avadel pediatric products for that are subject to the 15% royalty based on the Company's net sales forecast and, (ii) the risk-adjusted discount rate of 7.86% , which is comprised of the risk-free interest rate of 1.60% and a counterparty risk of 6.26% utilized to discount the expected royalty payments. The liability is reduced by periodic payments. As detailed in Note 14, in connection with the Company entering into the Aytu transaction in October 2019, the contingent consideration related to Avadel's pediatric products was transferred to Aytu upon closing of the transaction on November 1, 2019. However, the liability as of September 30, 2019 does not factor in the transfer of the liability because the transaction occurred subsequent to quarter end. The consideration for the TRx acquisition included certain potential contingent payments. First, pursuant to the TRx Purchase Agreement, the Company would have been required to pay $3.0 million to the Sellers if the gross profit related to TRx products equaled or exceeded $12.6 million in 2018. The Company did not achieve this contingent event in 2018 and therefore no value was assigned to the contingent payout as of December 31, 2018. Additionally, the Company may have been required to pay the following: (1) $2.0 million upon the transfer of the Ulesfia NDA to the Company ("NDA Transfer Milestone"), and (2) $2.0 million upon FDA approval of a new dosage of Ulesfia ("FDA Approval Milestone"). However, as part of the settlement the Company entered into during the second quarter of 2019 with Lachlan Pharmaceuticals, an Irish company controlled by the previous owners of TRx, among additional terms discussed in Note 13, the Company gave up its right to sell Ulesfia, except for a limited amount of inventory on hand until that inventory is sold or expired. As a result, the Settlement released the Company from the potential contingent payments related to the NDA Transfer Milestone and FDA Approval Milestone and therefore no value was assigned to the two milestones as of September 30, 2019 resulting in the Company recognizing a gain on the change of fair value of contingent consideration of $1.3 million for the nine months ended September 30, 2019. No other changes in valuation techniques or inputs occurred during the nine months ended September 30, 2019 and 2018. No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the nine months ended September 30, 2019 and 2018. |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | 7. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of September 30, 2019 and December 31, 2018 consisted of the following: As of September 30, 2019 December 31, 2018 Sales returns and allowances $ 5,143,150 $ 3,972,510 Medicaid rebates 2,603,632 2,237,269 Minimum sales commitments, royalties payable, and purchase obligations 957,243 9,662,901 Compensation and benefits 1,993,211 1,953,065 Research and development expenses 1,409,738 278,132 Sales and marketing 125,494 1,112,378 General and administrative 775,163 235,721 Other 126,264 279,397 Total accrued expenses and other current liabilities $ 13,133,895 $ 19,731,373 As detailed in Note 14, in connection with the Company entering into the Aytu transaction in October 2019, Aytu assumed certain of the Company's liabilities including certain accrued expenses and other current liabilities primarily related to sales returns and Medicaid rebates, upon closing of the transaction on November 1, 2019. However, accrued expenses and other current liabilities as of September 30, 2019 do not factor in Aytu's assumption of such liabilities because the transaction occurred subsequent to quarter end. |
Deerfield Obligation
Deerfield Obligation | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Deerfield Obligation | Deerfield Obligation In relation to the Company's acquisition of Avadel's pediatric products on February 16, 2018, the Company assumed an obligation that Avadel had to Deerfield CSF, (the "Deerfield Obligation"). Beginning in July 2018 through October 2020, the Company is required to pay a quarterly payment of $262,500 to Deerfield. In January 2021, a balloon payment of $15,250,000 is due. As payments were made, the difference between the gross value and fair value of these payments was recorded as interest expense in the Company's condensed consolidated statements of operations using the effective interest method. Interest expense for the three and nine months ended September 30, 2019 was $0.2 million and $0.7 million , respectively, and is included in interest expense, net on the accompanying consolidated statement of operations. The amounts due within the next year are included in current portion of long-term debt on the Company's condensed consolidated balance sheets. The amounts due in greater than one year are included in long-term debt, net of current portion, on the Company's condensed consolidated balance sheets. The Deerfield Obligation was $15.3 million as of September 30, 2019 , of which $1.1 million is recorded as a current liability. As detailed in Note 14, in connection with the Company entering into the Aytu transaction in October 2019, Aytu assumed the Deerfield Obligation upon closing of the transaction on November 1, 2019. However, the balance as of September 30, 2019 does not factor in Aytu's assumption of the liability because the transaction occurred subsequent to quarter-end. On November 1, 2019, in conjunction with the closing of the Aytu transaction, the Company entered into a guarantee (the “Guarantee”) in favor of Deerfield CSF. The Guarantee guarantees the payment by Aytu of the assumed liabilities to Deerfield, which includes the debt obligation and the contingent consideration related to future potential royalties on Avadel's pediatric products. Additionally, on November 1, 2019, the Company entered into a contribution agreement (the “Contribution Agreement”) with Armistice and Avadel, which governs contribution rights and obligations of the Company, Armistice and Avadel with respect to amounts that are paid by Armistice and Avadel to Deerfield CSF under certain guarantees made by Armistice and Avadel to Deerfield CSF. The liabilities to Deerfield, which include the debt obligation (consisting of the balloon payment and the remaining interest payments) and the undiscounted contingent consideration related to future potential royalties on Avadel's pediatric products, were $25.7 million as of the closing date on November 1, 2019. |
Capital Structure
Capital Structure | 9 Months Ended |
Sep. 30, 2019 | |
CAPITAL STRUCTURE | |
Capital Structure | Capital Structure According to the Company's amended and restated certificate of incorporation, the Company is authorized to issue two classes of stock, common stock and preferred stock. At September 30, 2019, the total number of shares of capital stock the Company was authorized to issue was 205,000,000 of which 200,000,000 was common stock and 5,000,000 was preferred stock. All shares of common and preferred stock have a par value of $0.001 per share. On December 26, 2018, the Company filed a Certificate of Designation of Preferences of Series B Non-Voting Convertible Preferred Stock ("Series B Convertible Preferred Stock" or "convertible preferred stock") of Cerecor Inc. (the “Certificate of Designation of the Series B Preferred Stock”) classifying and designating the rights, preferences and privileges of the Series B Convertible Preferred Stock. The Certificate of Designation of the Series B Convertible Preferred Stock authorized 2,857,143 shares of convertible preferred stock. The Series B Convertible Preferred Stock converts to shares of common stock on a 1-for- 5 ratio and has the same rights, preferences, and privileges as common stock other than it holds no voting rights. Convertible Preferred Stock December 2018 Armistice Private Placement On December 27, 2018, the Company entered into a series of transactions as part of a private placement with Armistice in order to generate cash to continue to develop our pipeline assets and for general corporate purposes. The transactions are considered one transaction for accounting purposes. As part of the transaction, the Company exchanged common stock warrants issued on April 27, 2017 to Armistice for the purchase up to 14,285,714 shares of the Company’s common stock at an exercise price of $0.40 per share (the "original warrants") for like-kind warrants to purchase up to 2,857,143 shares of the Company's newly designated Series B Convertible Preferred Stock with an exercise price of $2.00 per share (the "exchanged warrants"). Armistice immediately exercised the exchanged warrants and acquired an aggregate of 2,857,143 shares of the convertible preferred stock. Net proceeds of the transaction were approximately $5.7 million for the year ended December 31, 2018. In order to provide Armistice an incentive to exercise the exchanged warrants, the Company also entered into a securities purchase agreement with Armistice pursuant to which the Company issued warrants for 4,000,000 shares of common stock of the Company with a term of 5.5 years and an exercise price of $12.50 per share (the "incentive warrants"). For accounting purposes, the Company calculated the fair value of the incentive warrants of $1.7 million , which was considered a deemed distribution to Armistice for the year ended December 31, 2018. Voting Holders of the Company's convertible preferred stock are not entitled to vote. Dividends The holders of convertible preferred stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. Liquidation In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s convertible preferred stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities. Rights and Preferences Each share of convertible preferred stock converts to shares of common stock on a 1-for- 5 ratio. There are no other preemptive or subscription rights and there are no redemption or sinking fund provisions applicable to the Company’s common stock. Common Stock September 2019 Armistice Private Placement On September 4, 2019, the Company entered into a securities purchase agreement with Armistice, pursuant to which the Company sold 1,200,000 shares of the Company’s common stock for a purchase price of $3.132 per share, which represents the average closing price of the Common Stock on Nasdaq for the five trading days immediately preceding September 4, 2019. Net proceeds of the private placement were approximately $3.7 million . Common Stock Offering On March 8, 2019, the Company closed on an underwritten public offering of common stock for 1,818,182 shares of common stock of the Company, at a price to the public of $5.50 per share. Armistice participated in the offering by purchasing 363,637 shares of common stock of the Company from the underwriter at the public price. The gross proceeds to the Company, before deducting underwriting discounts and commissions and offering expenses, were approximately $10.0 million . The net proceeds were approximately $9.0 million . December 2018 Armistice Private Placement As discussed in detail above, on December 27, 2018 the Company exchanged previously outstanding warrants for like-kind warrants for 2,857,143 shares of the Company's convertible preferred stock with an exercise price of $2.00 per share. Armistice immediately exercised these warrants for 2,857,143 shares of convertible preferred stock for net proceeds to the Company of $5.7 million . The convertible preferred stock converts to common stock on a 1-for- 5 ratio (or to 14,285,714 shares of common stock in total). Additionally, on December 27, 2018, in order to provide Armistice an incentive to exercise the exchanged warrants, the Company entered into a securities purchase agreement with Armistice pursuant to which the Company issued warrants for 4,000,000 shares of common stock of the Company with a term of 5.5 years and an exercise price of $12.50 per share. August 2018 Armistice Private Placement On August 17, 2018, the Company entered into a securities purchase agreement with Armistice, pursuant to which the Company sold 1,000,000 shares of the Company’s common stock for a purchase price of $3.91 per share, which was the closing price of shares of the Common Stock on August 16, 2018. Net proceeds of this securities purchase agreement were approximately $3.9 million . Ichorion Asset Acquisition On September 25, 2018, under the terms of the Ichorion Asset Acquisition noted above in Note 5, the Company issued approximately 5,800,000 shares of common stock of the Company upon closing. Contingently Issuable Shares Under the terms of TRx acquisition noted above in Note 5 , the Company was required to issue common stock having an aggregate value as calculated in the TRx Purchase Agreement on the Closing Date of $8.1 million (the “Equity Consideration”). Upon closing, the Company issued 5,184,920 shares of its common stock. Pursuant to the TRx Purchase Agreement, the issuance of the remaining 2,349,968 shares as a part of the Equity Consideration was subject to stockholder approval at the Company's 2018 Annual Stockholder's Meeting. This approval was obtained in May 2018 and the remaining shares were issued to the TRx Sellers. Voting 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 common stock entitled to vote in any election of directors can elect all of the directors standing for election. Dividends The holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. Liquidation In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities. Rights and Preferences Holders of the Company’s common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the Company’s common stock. Common Stock Warrants At September 30, 2019 , the following common stock warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 22,328* $ 8.40 October 2020 2,380* $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 4,024,708 *Accounted for as a liability instrument (see Note 6 ) |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | 10. Stock-Based Compensation 2016 Equity Incentive Plan On April 5, 2016, the Company’s board of directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) as the successor to the 2015 Omnibus Plan (the “2015 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on May 18, 2016 (the “2016 Plan Effective Date”). Upon the 2016 Plan Effective Date, the 2016 Plan reserved and authorized up to 600,000 additional shares of common stock for issuance, as well as 464,476 unallocated shares remaining available for grant of new awards under the 2015 Plan. An Amended and Restated 2016 Equity Incentive Plan (the "2016 Amended Plan") was approved by the Company's stockholders in May 2018, which increased the share reserve by an additional 1.4 million shares. A Second Amended and Restated 2016 Equity Incentive Plan (the "2016 Second Amended Plan") was approved by the Company's stockholders in August 2019 which increased the share reserve by an additional 850,000 shares. During the term of the 2016 Second Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. As of September 30, 2019 , there were 1,963,869 shares available for future issuance under the 2016 Amended Plan. Option grants expire after ten years. Employee options typically vest over three or four years. Options granted to directors typically vest over one or three years. Directors may elect to receive stock options in lieu of board compensation, which vest immediately. For stock options granted to employees and non-employee directors, the estimated grant date fair market value of the Company’s stock-based awards is amortized ratably over the individuals’ service periods, which is the period in which the awards vest. Stock-based compensation expense includes expense related to stock options, restricted stock units and ESPP shares. The amount of stock-based compensation expense recognized for the three and nine months ended September 30, 2019 and 2018 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 176,261 $ 32,202 $ 354,347 $ 64,077 General and administrative 473,905 843,122 1,139,241 1,599,703 Sales and marketing 168,627 69,809 448,608 132,607 Total stock-based compensation $ 818,793 $ 945,133 $ 1,942,196 $ 1,796,387 In April 2019, the former CEO resigned, however he remains on the Company's board of directors. Subsequent to his resignation, during the second quarter of 2019, the former CEO agreed to forfeit the unvested portion of his equity awards granted to him during his service as CEO. As a result, he forfeited a total of 1,489,583 equity awards, which included 689,583 unvested service-based vesting options, 500,000 unvested market-based options and 300,000 unvested restricted stock units. The Company accounts for forfeitures as they occur. Because the requisite service period of 2.8 years was not rendered for the market-based options, the forfeiture of the market-based options resulted in the reversal in the second quarter of 2019 of the full expense recognized to date of $0.5 million , which was recorded as a reduction to general and administrative expense. Stock-based compensation during the three and nine months ended September 30, 2018 includes $0.3 million of expense related to modifications of awards related to a separated executive. Stock options with service-based vesting conditions The Company has granted awards that contain service-based vesting conditions. The compensation cost for these options is recognized on a straight-line basis over the vesting periods. A summary of option activity for the nine months ended September 30, 2019 is as follows: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value of options Weighted average remaining contractual term (in years) Balance at December 31, 2018 3,746,597 $ 4.16 7.8 Granted 2,618,264 $ 5.71 $ 8,076,475 Exercised (75,178 ) $ 3.44 Forfeited (902,767 ) $ 5.16 $ 2,640,665 Expired (389,792 ) $ 5.03 $ 992,343 Balance at September 30, 2019 4,997,124 $ 4.74 8.2 Exercisable at September 30, 2019 2,155,081 $ 4.36 6.9 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of September 30, 2019 , the aggregate intrinsic value of options outstanding and currently exercisable was $1.3 million and $0.9 million , respectively. The total grant date fair value of shares which vested during the nine months ended September 30, 2019 was $1.3 million . The per‑share weighted‑average grant date fair value of the options granted during the nine months ended September 30, 2019 was estimated at $3.08 . There were 622,583 options that vested during the nine months ended September 30, 2019 with a weighted average exercise price of $3.54 per share. The Company recognized stock-based compensation expense of $0.6 million and $1.6 million related to stock options with service-based vesting conditions for the three and nine months ended September 30, 2019, respectively. At September 30, 2019, there was $7.0 million of total unrecognized compensation cost related to unvested service-based vesting condition awards. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 3.0 years. Stock options with market-based vesting conditions The Company has granted awards that contain market-based vesting conditions. The following table summarizes the Company's market-based option activity for the nine months ended September 30, 2019 : Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2018 500,000 $ 4.24 9.2 Granted 300,000 $ 4.98 Exercised — Forfeited (500,000 ) $ 4.24 Balance at September 30, 2019 300,000 $ 4.98 9.65 $ — Exercisable at September 30, 2019 — (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. During the second quarter of 2019, the Company granted the Executive Chairman of the Board an option to purchase 300,000 shares of Company common stock with market-based vesting conditions at an exercise price of $4.98 per share. One-third of the shares vest upon the Company's common stock closing at or above $8.00 per share for three consecutive days, one-third of the shares vest upon the Company's stock closing at or above $10.50 per share for three consecutive days, and one-third of the shares vest upon the Company's stock closing at or above $13.00 per share for three consecutive days. Each vesting tranche represents a unique requisite service period and therefore the compensation cost for each vesting tranche is recognized on a straight-line basis over its respective vesting period. The Company recognized stock-based compensation expense of $0.1 million and $(0.2) million related to stock options with market-based based vesting conditions for the three and nine months ended September 30, 2019, respectively. The expense recognized for the nine months ended September 30, 2019 includes the reversal of expense for the former CEO's forfeited options and the expense related to the market-based options granted during the second quarter of 2019. At September 30, 2019 , there was $0.9 million of total unrecognized compensation cost related to unvested market-based vesting conditions awards. This compensation cost is expected to be recognized over a weighted-average period of 2.2 years. Stock-based compensation assumptions The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model and the assumptions used to compute stock-based compensation expense for market-based stock options grants under a Monte Carlo simulation for the nine months ended September 30, 2019 : Service-based options Expected dividend yield —% Expected volatility 55% Expected life (in years) 5.0 - 6.25 Risk-free interest rate 1.47 - 2.59% Market-based options Expected dividend yield —% Expected volatility 60% Expected life (in years) 10 Risk-free interest rate 2.32% Restricted Stock Units The Company has granted restricted stock units ("RSU") to certain employees. The Company measures the fair value of the restricted awards using the stock price on the date of the grant. The restricted shares typically vest annually over a four -year period beginning on the first anniversary of the award. The following table summarizes the Company's RSU activity for nine months ended September 30, 2019: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2018 445,000 $ 4.27 Granted 295,000 $ 4.98 Vested (172,500 ) $ 4.52 Forfeited (300,000 ) $ 4.24 Unvested RSUs at September 30, 2019 267,500 During the second quarter of 2019, the Company granted its newly appointed Executive Chairman of the Board 250,000 RSUs, of which 50,000 shares vested immediately on the grant date and the remainder are to vest in three equal annual increments based on continued service. The Company recognized stock-based compensation expense of $0.1 million and $0.4 million related to RSUs for the three and nine months ended September 30, 2019, respectively. At September 30, 2019 , there was $1.3 million of total unrecognized compensation cost related to the RSU grants. This compensation cost is expected to be recognized over a weighted-average period of 2.6 years. Employee Stock Purchase Plan On April 5, 2016, the Company’s board of directors approved the 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s stockholders and became effective on May 18, 2016 (the “ESPP Effective Date”). Under the ESPP, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The ESPP is administered by the compensation committee of the Company’s board of directors. Under the ESPP, eligible employees may purchase stock at 85% of the lower of the fair market value of a share of the Company’s common stock (i) on the first day of an offering period or (ii) on the purchase date. Eligible employees may contribute up to 15% of their earnings during the offering period. The Company’s board of directors may establish a maximum number of shares of the Company’s common stock that may be purchased by any participant, or all participants in the aggregate, during each offering or offering period. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 of the fair market value of the Company’s common stock for each calendar year in which such right is outstanding. Upon the ESPP Effective Date, the Company reserved and authorized up to 500,000 shares of common stock for issuance under the ESPP. On January 1 of each calendar year, the aggregate number of shares that may be issued under the ESPP shall automatically increase by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 500,000 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock as determined by the Company’s board of directors or compensation committee. The number of shares increased by 408,042 on January 1, 2019. As of September 30, 2019 , 1,148,085 shares remained available for issuance. In accordance with the guidance in ASC 718-50, Employee Stock Purchase Plans , the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company used the Black-Scholes valuation model and recognized stock-based compensation expense of $42,278 and $129,963 for the three and nine months ended September 30, 2019 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes was $115,651 and $348,427 for the three and nine months ended September 30, 2019, respectively, and is comprised of current year state income taxes and amortization of tax-deductible goodwill. Additionally, discrete to the three and nine months ended September 30, 2019, the Company recorded interest and penalties on the outstanding taxes payable to the IRS and various state authorities. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Corporate Headquarters' Lease The Company identified one operating lease, which is for its corporate headquarters located in Rockville, Maryland. The annual base rent for the office space is $161,671 , subject to annual 2.5% increases over the term of the lease. The lease provides for a rent abatement for a period of 12 months following the Company's date of occupancy. The lease has an initial term of 10 years from the date the Company makes its first annual fixed rent payment, which is expected to occur in January 2020. The Company has the option to extend the lease two times, each for a period of five years , and may terminate the lease as of the sixth anniversary of the first annual fixed rent payment, upon the payment of a termination fee. As of the lease commencement date, it is not reasonably certain that the Company will exercise the renewal periods or early terminate the lease and therefore the end date of the lease for accounting purposes is January 31, 2030. The remaining term of the lease at September 30, 2019 was 10.3 years. Supplemental balance sheet information related to the lease is as follows: As of September 30, 2019 December 31, 2018 Property and equipment, net $ 719,113 $ — Other current liabilities $ 114,387 $ — Other long-term liabilities $ 1,121,367 $ — The operating lease ROU asset is included in property and equipment and the lease liability is included in accrued expenses and other current liabilities and other long-term liabilities in our condensed consolidated balance sheets. In order to determine the present value of lease payments, the Company utilized a discount rate of 7.7% . This rate was determined based on available information of the rate of interest the Company would pay to borrow on a collateralized basis at an amount equal to the lease payments in a similar economic environment over a similar term on the transition date. The components of lease expense for the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Operating lease cost* $ 32,326 $ 47,371 $ 126,467 $ 144,172 *Includes short-term leases, which are immaterial. Because the corporate headquarter lease provides for a 12 -month lease abatement, the cash paid for amounts included in the measurement of lease liabilities was $0 as of September 30, 2019. The following table shows a maturity analysis of the operating lease liability as of September 30, 2019: Undiscounted Cash Flows October 1, 2019 through December 31, 2019 $ — 2020 155,815 2021 169,510 2022 173,748 2023 178,092 Thereafter 1,183,290 Total lease payments $ 1,860,455 Less implied interest $ (624,701 ) Total $ 1,235,754 |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is or may become party in various contractual disputes, litigation, and potential claims arising in the ordinary course of business. The Company currently does not believe that the resolution of such matters will have a material adverse effect on our financial position or results of operations except as otherwise disclosed in this document. TRx 2018 Target Gross Profit Dispute As part of the TRx acquisition, pursuant to the TRx Purchase Agreement, the Company was required to pay $3.0 million to the Sellers (or "former TRx owners") if the gross profit, as defined in the TRx Purchase Agreement, related to TRx products equaled or exceeded $12.6 million in 2018. The Company believes it did not achieve this contingent event in 2018 and therefore no amount is due to the former TRx owners. However, during the second quarter of 2019 the former TRx owners disputed the Company's calculation of gross profit, arguing the Company met the $12.6 million target in 2018. Pursuant to the TRx Purchase Agreement, the dispute was submitted to an independent accounting firm for resolution during the third quarter of 2019. The dispute was resolved on October 8, 2019, with the independent accounting firm ruling in favor of the Company, therefore resulting in no financial statement impact. Lachlan Pharmaceuticals Settlement As discussed in Note 5, in November 2017, the Company acquired TRx and its wholly-owned subsidiaries, including Zylera. The previous owners of TRx beneficially own more than 10% of our outstanding common stock. Zylera, which is now our wholly owned subsidiary, entered into an agreement with Lachlan Pharmaceuticals, an Irish company controlled by the previous owners of TRx (“Lachlan”), effective December 18, 2015 (the "Lachlan Agreement"). Pursuant to the Lachlan Agreement, Lachlan named Zylera as its exclusive distributor of Ulesfia in the United States and agreed to supply Ulesfia to Zylera exclusively for marketing and sale in the United States. On May 22, 2019, the Company, Lachlan, the owners of Lachlan and Concordia Pharmaceuticals Inc., Sarl (“Concordia”), which is the unrelated third party from which Lachlan obtained rights to distribute Ulesfia, entered into a Settlement Agreement and related side letter and terminated the Lachlan Agreement, as discussed in more detail below (the Settlement Agreement and related side letter collectively the “Settlement”). The Lachlan Agreement required Zylera to purchase a minimum of 20,000 units per year, or approximately $1.2 million worth of product, from Lachlan, unless and until there was a “Market Change” involving a new successful competitive product. Zylera was required to pay Lachlan $58.84 per unit and handling fees equal to $4.03 per unit of fully packaged Ulesfia in 2019, escalating 10% annually. The Lachlan Agreement also required that Zylera make certain cumulative net sales milestone payments and royalty payments to Lachlan with a $3.0 million annual minimum payment unless and until there was a Market Change. Lachlan was obligated to pay identical amounts to the unrelated third party from which it obtained rights to Ulesfia, with the payments ultimately flowing through Shionogi, Inc. to Summers Laboratories, Inc. ("Summers Labs"). Because of the dispute described below, the Company had not made any payments to Lachlan under the Lachlan Agreement subsequent to the acquisition date. On December 10, 2016, Zylera informed Lachlan that a Market Change had occurred due to the introduction of Arbor Pharmaceuticals' lice product, Sklice®. On June 5, 2017, Lachlan and Zylera entered into joint legal representation along with other unrelated third parties in negotiation and arbitration of a dispute with Summers Labs regarding the existence of a Market Change and the concomitant obligations of the parties. The arbitration panel issued an interim ruling on October 23, 2018 that no Market Change had occurred up to and including the date of the hearing. The arbitration panel issued a second interim ruling on December 26, 2018, rejecting Summers Labs' request to accelerate future minimum royalties, but ruling in favor of Summers Labs that it is owed reimbursement for all reasonable costs and expenses, including legal fees, by Shionogi, as well as interest, as stipulated in the contract. The arbitration panel issued a final award on March 1, 2019 that dictated the final amount of reimbursable costs and interest. The rulings and final award had no direct bearing on the Company because the Company was not a named defendant to the original claim by Summers Labs and a federal court denied Zylera's ability to be a counterclaimant in the matter. Furthermore, the Company was not subject to the guarantee or interest provisions identified in the second ruling as these elements of the contractual relationship were not passed down to or through Lachlan. However, the Company interpreted the rulings’ impact on the Lachlan Agreement to mean that the minimum purchase obligation and minimum royalty provisions of the contract were active and due for any prior periods as well as future periods. Prior to the Settlement, the Company had recognized an $8.7 million liability for these minimum obligations and $0.4 million for the royalty payable in accrued liabilities as of March 31, 2019. Additionally, prior to settlement, under the terms of the TRx Purchase Agreement, the former TRx owners were required to indemnify the Company for 100% of all “Pre-Acquisition Ulesfia Losses,” as defined in the TRx Purchase Agreement, related to this arbitration, including legal costs, in excess of $1.0 million . Furthermore, the former TRx owners were required to indemnify the Company for 50% of “Post-Acquisition Ulesfia Losses,” as defined in the TRx Purchase Agreement, which would include losses resulting from having to fund these minimum obligations post-acquisition. The Company had recorded an indemnity receivable of $5.2 million in other receivables as of March 31, 2019, which the Company believed was fully collectible. Pursuant to the Settlement, during the second quarter of 2019, the Company made a $2.3 million cash payment to Concordia for a full release of all current and future liabilities related to the Lachlan Agreement as of June 30, 2019. As a result, the Company reversed the $8.7 million liability for the minimum obligations and $0.4 million royalty payable in accrued liabilities during the second quarter of 2019. The Settlement also released the former TRx owners of their requirement to indemnify the Company for the losses discussed above. Thus, the Company reversed the $5.2 million indemnity receivable in other receivables during the second quarter of 2019. The Settlement resulted in a net reversal of $1.6 million in previously recognized expense to cost of product sales for the nine months ended September 30, 2019. Additionally, with the termination of the Lachlan Agreement, the Company gave up its right to sell Ulesfia, except for a limited amount of inventory on hand until that inventory is all sold or expired. Finally, as discussed in detail in Note 6, the Settlement released the Company from having to make any acquisition milestone payout for the NDA transfer of Ulesfia and the FDA approval of an alternate dosing. Therefore, no value is assigned to the two milestones as of September 30, 2019, which resulted in the recognition of a gain on the change in fair value of contingent consideration of $1.3 million for the nine months ended September 30, 2019. Karbinal Royalty Make-Whole Provision As discussed in Note 5, on February 16, 2018, in connection with the acquisition of Avadel's pediatric products, the Company entered into a supply and distribution agreement with TRIS Pharma (the "Karbinal Agreement"). As part of this agreement, the Company had an annual minimum sales commitment, which is based on a commercial year that spans from August 1 through July 31, of 70,000 units through 2033. The Company was required to pay TRIS a royalty make whole payment (“Make-Whole Payments”) of $30 for each unit under the 70,000 units annual minimum sales commitment through 2033. As a part of the sale of the Pediatric Portfolio to Aytu, which closed on November 1, 2019, the Company assigned all payment obligations, including the Make-Whole Payments, under the Karbinal Agreement (collectively, the “TRIS Obligations”) to Aytu. However, the Company remains liable for TRIS Obligations to the extent Aytu fails to make the required payments. The future Make-Whole Payments to be made by Aytu are unknown as the amount owed to TRIS is dependent on the number of units sold. Possible future milestone proceeds for out-licensed compounds On August 8, 2019, the Company entered into an assignment of license agreement (the “Assignment Agreement”) with ES Therapeutics, LLC (“ES Therapeutics”), a wholly-owned subsidiary of Armistice, a significant stockholder of the Company. Pursuant to the Assignment Agreement, the Company assigned and transferred its rights, title, interest, and obligations with respect to CERC-611 to ES Therapeutics. The Company initially licensed the compound from Eli Lilly Company ("Lilly") in September 2016. Under the Assignment Agreement, Armistice paid the Company an upfront payment of $0.1 million . The Company recognized the payment as license and other revenue for the three and nine months ended September 30, 2019. The Assignment Agreement also provides for: (a) a $7.5 million milestone payment to the Company upon cumulative net sales of licensed products reaching $750.0 million ; and (b) a $12.5 million milestone payment to the Company upon cumulative net sales of licensed products reaching $1.3 billion . The Assignment Agreement also releases the Company of obligations related to CERC-611, including the $1.3 million contingent payment to Lilly upon the first subject dosage of CERC-611 in a multiple ascending dose study, which was recorded as a license obligation on the balance sheet as of June 30, 2019. The decrease of this license obligation to $0 as of September 30, 2019 resulted in an offset of research and development expense of $1.3 million for the three and nine months ended September 30, 2019. The Assignment Agreement also releases the Company from additional potential future payments due to Lilly upon achievement of certain development and commercialization milestones, including the first commercial sale, and milestone payments and royalty on net sales upon commercialization of the compound. In August 2017, the Company sold its worldwide rights to CERC-501 to Janssen Pharmaceuticals, Inc. (“Janssen”) in exchange for initial gross proceeds of $25.0 million . There is a potential future $20.0 million regulatory milestone payment to the Company upon acceptance of an NDA for any indication. The terms of the agreement provide that Janssen will assume ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. Possible future milestone payments As detailed in Note 5, on September 24, 2018, the Company acquired Ichorion Therapeutics, Inc., thus acquiring three compounds for inherited metabolic disorders known as CDGs (CERC-801, CERC-802 and CERC-803) and one other preclinical orphan disease compound, CERC-913, for the treatment of mitochondrial DNA Depletion Syndrome. Consideration for the transaction included approximately 5.8 million shares of the Company’s common stock (adjusted for estimated working capital) and certain contingent development milestones worth up to an additional $15.0 million. The contingent consideration of up to an additional $15.0 million relates to three future development milestones for the acquired compounds. The first milestone is the first product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $6.0 million . The second milestone is the second product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $5.0 million . The third milestone is a protide molecule being approved by the FDA on or prior to December 31, 2023. If this milestone is met, the Company is required to make a milestone payment of $4.0 million . All milestones are payable in either shares of the Company's common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of September 30, 2019, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 10, 2019, the Company entered into the Aytu Purchase Agreement to sell the Company’s rights, title and interest in, assets relating to its Pediatric Portfolio, namely Aciphex ® Sprinkle™ , Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™ , Poly-Vi-Flor ® and Tri-Vi-Flor™ as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts. Aytu provided consideration of cash and preferred stock totaling $17 million ( $4.5 million in cash and $12.5 million in Aytu preferred stock) and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield CSF, LLC of approximately $15 million and certain other liabilities in excess of approximately $11 million primarily related to contingent consideration, Medicaid rebates and sales returns. In addition, Aytu assumed future contractual obligations under existing license agreements associated with the Divested Assets. The transaction closed on November 1, 2019. Armistice, a significant stockholder of the Company, is also a significant stockholder of Aytu. Upon closing of the transaction, Cerecor terminated all sales force personnel, which included both those that Aytu offered employment, as well as any remaining sales force personnel. Cerecor expects to incur severance charges and legal costs in the fourth quarter as a result of the transaction. Additionally, Cerecor retained all rights to Millipred ® . As part of a transition services agreement the Company entered into with Aytu, Aytu will manage the commercial operations of Millipred ® until the Company establishes an independent commercial infrastructure for the product. On November 1, 2019, in conjunction with the closing of the Aytu transaction, the Company entered into a Guarantee in favor of Deerfield CSF. The Guarantee guarantees the payment by Aytu of the assumed liabilities to Deerfield, which includes the debt obligation and the contingent consideration related to future potential royalties on Avadel's pediatric products. Additionally, on November 1, 2019, the Company entered into a Contribution Agreement with Armistice and Avadel, which governs contribution rights and obligations of the Company, Armistice and Avadel with respect to amounts that are paid by Armistice and Avadel to Deerfield CSF under certain guarantees made by Armistice and Avadel to Deerfield CSF. The liabilities to Deerfield, which include the debt obligation (consisting of the balloon payment and the remaining interest payments) and the undiscounted contingent consideration related to future potential royalties on Avadel's pediatric products, were $25.7 million as of the closing date on November 1, 2019. The Company is in-process of determining the financial effect of the Aytu transaction, however, the Company preliminarily estimates it will recognize a gain related to the sale upon closing the transaction during the fourth quarter of 2019. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). In the opinion of management, the accompanying unaudited condensed consolidated 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 condensed consolidated balance sheet at December 31, 2018 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”). Certain prior period amounts have been reclassified to conform to the current year presentation, as described below. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited condensed consolidated financial statements are read in conjunction with the December 31, 2018 audited consolidated financial statements. |
Reclassification | Reclassification During the fourth quarter of 2018, the Company concluded that going forward it would include change in fair value of contingent consideration within its own stand-alone line in operating expenses in the Company's statements of operations. The Company has reclassified $0.1 million and $0.4 million from other expenses to operating expenses in the three and nine months ended September, 30, 2018, respectively, on the statement of operations to conform with current period presentation. |
Recent Accounting Pronouncements | Significant Accounting Policies During the nine months ended September 30, 2019, there were no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on March 18, 2019 and amended on April 23, 2019, except for the recently adopted accounting standards described below. The following significant accounting policy was updated in 2019 to reflect changes upon our adoption of ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified one operating lease, which is for its corporate headquarters. Right-of-use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on our condensed consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the condensed consolidated balance sheet and are amortized over the lease term. To determine the present value of lease payments on lease commencement, we use the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within general and administrative expenses. Recently Adopted Accounting Pronouncements Adoption of ASC 842 In February 2016, FASB issued ASU 2016-02, which revises existing practice related to accounting for leases under ASC No. 840, Leases (“ASC 840”) for both lessees and lessors. The new guidance in ASU 2016-02 requires lessees to recognize a ROU asset and a lease liability for nearly all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the ROU asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating leases or finance leases. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). The Company adopted the standard using the modified retrospective transition method on its effective date of January 1, 2019 and therefore did not adjust prior comparative periods as permitted by the codification improvements issued by FASB in July 2018. Additionally, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classification. As a result of the standard, the Company recorded a lease liability of $1.2 million and a ROU asset of $0.7 million , which is equal to the initial measurement of the lease liability reduced by the unamortized balance of lease incentive received and deferred rent. There was no material impact to our condensed consolidated income statement (see Note 12 below for more information). Other Adopted Accounting Pronouncements SEC Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532 Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of GAAP or other regulatory requirements. Among other changes, the amendments provide that disclosure requirements related to the analysis of stockholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The Company began providing this disclosure in the first quarter of 2019 within a separate statement. New Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” (ASU 2016-13) This guidance applies to all entities and impacts how entities account for credit losses for most financial assets and other instruments. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods therein. The Company is currently evaluating the potential impact of the adoption of this standard, however, does not expect that the adoption of this new standard will have a material impact on the Company's results of operations or disclosures. Fair Value Measurements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This new standard modifies certain disclosure requirements on fair value measurements. This new standard will be effective for the Company on January 1, 2020. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents net revenues disaggregated by type (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Prescribed dietary supplements $ 2,318 $ 2,097 $ 5,909 $ 5,767 Prescription drugs 3,195 1,978 9,465 7,279 License and other revenue 100 — 100 — Sales force revenue — — — 297 Total revenue $ 5,613 $ 4,075 $ 15,474 $ 13,343 |
Net Loss Per Share - (Tables)
Net Loss Per Share - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of the computation of basic and diluted net loss per share of Common Stock | The following table sets forth the computation of basic and diluted net loss per share of common stock and preferred stock for the three and nine months ended September 30, 2019 and 2018 , which includes both classes of participating securities: Three Months Ended September 30, 2019 2018 Common stock Preferred stock Common stock Preferred stock Numerator: Allocation of undistributed net loss $ (3,019,101 ) $ (997,353 ) $ (24,603,575 ) $ — Denominator: Weighted average shares 43,244,481 2,857,143 34,648,641 — Basic and diluted net loss per share $ (0.07 ) $ (0.35 ) $ (0.71 ) $ — Nine Months Ended September 30, 2019 2018 Common stock Preferred stock Common stock Preferred stock Numerator: Allocation of undistributed net loss $ (13,238,766 ) $ (4,454,835 ) $ (34,493,895 ) $ — Denominator: Weighted average shares 42,453,928 2,857,143 32,749,291 — Basic and diluted net loss per share $ (0.31 ) $ (1.56 ) $ (1.05 ) $ — |
Schedule of anti-dilutive securities excluded from computation of diluted weighted shares outstanding | The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three and nine months ended September 30, 2019 and 2018 , as they could have been anti-dilutive: Three and Nine Months Ended September 30, 2019 2018 Stock options 5,297,124 4,119,187 Warrants on common stock 4,024,708 18,905,064 Restricted Stock Units 267,500 445,000 Underwriters' unit purchase option 40,000 40,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations and Asset Acquisitions [Abstract] [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition and as adjusted for measurement period adjustments identified during the second quarter of 2018: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Inventory $ 2,549,000 $ (1,831,000 ) $ 718,000 Prepaid assets — 570,000 570,000 Intangible assets 16,453,000 1,838,000 18,291,000 Accrued expenses — (362,000 ) (362,000 ) Fair value of debt assumed (15,272,303 ) 197,303 (15,075,000 ) Fair value of contingent consideration (7,875,165 ) (44,835 ) (7,920,000 ) Total net liabilities assumed (4,145,468 ) 367,468 (3,778,000 ) Consideration exchanged 241,000 (240,999 ) 1 Goodwill $ 4,386,468 $ (608,467 ) $ 3,778,001 The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition both as disclosed in periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Fair value of assets acquired: Cash and cash equivalents $ 11,068 $ — $ 11,068 Accounts receivable, net 2,872,545 — 2,872,545 Inventory 495,777 — 495,777 Prepaid expenses and other current assets 134,281 — 134,281 Other receivables — 2,764,515 2,764,515 Identifiable Intangible Assets: — Acquired product marketing rights - Metafolin 10,465,000 1,522,000 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total assets acquired 21,581,671 4,292,515 25,874,186 Fair value of liabilities assumed: Accounts payable 192,706 — 192,706 Accrued expenses and other current liabilities 4,850,422 3,764,515 8,614,937 Deferred tax liability 839,773 78,840 918,613 Total liabilities assumed 5,882,901 3,843,355 9,726,256 Total identifiable net assets 15,698,770 449,160 16,147,930 Fair value of consideration transferred 29,991,052 (1,210,000 ) 28,781,052 Goodwill $ 14,292,282 $ (1,659,160 ) $ 12,633,122 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The fair value of intangible assets both as of the date of acquisition and as adjusted by measurement period adjustments identified during the second quarter of 2018 includes the following: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Acquired Product Marketing Rights - Karbinal $ 6,221,000 $ (21,000 ) $ 6,200,000 Acquired Product Marketing Rights - AcipHex 2,520,000 283,000 2,803,000 Acquired Product Marketing Rights - Cefaclor 6,291,000 1,320,000 7,611,000 Acquired Developed Technology - Flexichamber 1,131,000 546,000 1,677,000 Acquired IPR&D - LiquiTime formulations 290,000 (290,000 ) — Total $ 16,453,000 $ 1,838,000 $ 18,291,000 The final fair value of intangible assets both as disclosed in prior periods and as adjusted by measurement period adjustments identified during the third quarter of 2018 includes the following: At November 17, Measurement Period Adjustments At November 17, 2017 (as adjusted) Acquired product marketing rights - Metafolin $ 10,465,000 $ 1,522,000 $ 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total $ 18,068,000 $ 1,528,000 $ 19,596,000 |
Schedule of Fair Value of Consideration Transferred | The following table summarizes the preliminary acquisition-date fair value of the consideration transferred at the date of acquisition both as disclosed in periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Cash $ 18,900,000 $ — $ 18,900,000 Common stock (including contingently issuable shares) 8,514,419 — 8,514,419 Contingent payments 2,576,633 (1,210,000 ) 1,366,633 Total consideration transferred $ 29,991,052 (1,210,000 ) 28,781,052 |
Business Acquisition, Pro Forma Information | The following supplemental unaudited pro forma information presents Cerecor’s financial results as if the acquisition of Avadel pediatric products, which was completed on February 16, 2018, had occurred on January 1, 2018: Nine Months Ended September 30, 2018 Total revenues, net $ 15,047,699 Net loss $ (35,539,494 ) Basic and diluted net loss per share of common stock $ (1.09 ) Basic and diluted net loss per share of preferred stock $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | 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: September 30, 2019 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* $ 3,221,364 $ — $ — Liabilities Contingent consideration $ — $ — $ 7,473,485 Warrant liability** $ — $ — $ 850 Unit purchase option liability** $ — $ — $ 2,493 December 31, 2018 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* $ 7,324,932 $ — $ — Liabilities Contingent consideration $ — $ — $ 9,050,564 Warrant liability** $ — $ — $ 2,950 Unit purchase option liability** $ — $ — $ 7,216 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying condensed consolidated balance sheets. **Warrant liability and UPO liability are reflected in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheets. |
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation | The tables presented below are a summary of changes in the fair value of the Company’s Level 3 valuations for the warrant liability, UPO liability and contingent consideration for the nine months ended September 30, 2019 and 2018 : Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2018 $ 2,950 $ 7,216 $ 9,050,564 $ 9,060,730 Payment of contingent consideration — — (567,911 ) (567,911 ) Change in fair value due to Lachlan Settlement — — (1,277,150 ) (1,277,150 ) Other changes in fair value (2,100 ) (4,723 ) 267,982 261,159 Balance at September 30, 2019 $ 850 $ 2,493 $ 7,473,485 $ 7,476,828 Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2017 $ 8,185 $ 26,991 $ 2,576,633 $ 2,611,809 Issuance of contingent consideration — — 7,920,000 7,920,000 Payment of contingent consideration — — (137,008 ) (137,008 ) Purchase price allocation measurement period adjustment of contingent consideration — — (1,210,000 ) (1,210,000 ) Change in fair value 6,145 16,183 360,850 383,178 Balance at September 30, 2018 $ 14,330 $ 43,174 $ 9,510,475 $ 9,567,979 |
Accrued Expenses And Other Cu_2
Accrued Expenses And Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities as of September 30, 2019 and December 31, 2018 consisted of the following: As of September 30, 2019 December 31, 2018 Sales returns and allowances $ 5,143,150 $ 3,972,510 Medicaid rebates 2,603,632 2,237,269 Minimum sales commitments, royalties payable, and purchase obligations 957,243 9,662,901 Compensation and benefits 1,993,211 1,953,065 Research and development expenses 1,409,738 278,132 Sales and marketing 125,494 1,112,378 General and administrative 775,163 235,721 Other 126,264 279,397 Total accrued expenses and other current liabilities $ 13,133,895 $ 19,731,373 |
Capital Structure (Tables)
Capital Structure (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
CAPITAL STRUCTURE | |
Schedule of outstanding common stock warrants | At September 30, 2019 , the following common stock warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 22,328* $ 8.40 October 2020 2,380* $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 4,024,708 *Accounted for as a liability instrument (see Note 6 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of stock-based compensation expense | The amount of stock-based compensation expense recognized for the three and nine months ended September 30, 2019 and 2018 was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 176,261 $ 32,202 $ 354,347 $ 64,077 General and administrative 473,905 843,122 1,139,241 1,599,703 Sales and marketing 168,627 69,809 448,608 132,607 Total stock-based compensation $ 818,793 $ 945,133 $ 1,942,196 $ 1,796,387 |
Summary of option activity | A summary of option activity for the nine months ended September 30, 2019 is as follows: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value of options Weighted average remaining contractual term (in years) Balance at December 31, 2018 3,746,597 $ 4.16 7.8 Granted 2,618,264 $ 5.71 $ 8,076,475 Exercised (75,178 ) $ 3.44 Forfeited (902,767 ) $ 5.16 $ 2,640,665 Expired (389,792 ) $ 5.03 $ 992,343 Balance at September 30, 2019 4,997,124 $ 4.74 8.2 Exercisable at September 30, 2019 2,155,081 $ 4.36 6.9 The Company has granted awards that contain market-based vesting conditions. The following table summarizes the Company's market-based option activity for the nine months ended September 30, 2019 : Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2018 500,000 $ 4.24 9.2 Granted 300,000 $ 4.98 Exercised — Forfeited (500,000 ) $ 4.24 Balance at September 30, 2019 300,000 $ 4.98 9.65 $ — Exercisable at September 30, 2019 — (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. |
Schedule of fair value assumptions for options | The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model and the assumptions used to compute stock-based compensation expense for market-based stock options grants under a Monte Carlo simulation for the nine months ended September 30, 2019 : Service-based options Expected dividend yield —% Expected volatility 55% Expected life (in years) 5.0 - 6.25 Risk-free interest rate 1.47 - 2.59% Market-based options Expected dividend yield —% Expected volatility 60% Expected life (in years) 10 Risk-free interest rate 2.32% |
Nonvested Restricted Stock Shares Activity | The following table summarizes the Company's RSU activity for nine months ended September 30, 2019: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2018 445,000 $ 4.27 Granted 295,000 $ 4.98 Vested (172,500 ) $ 4.52 Forfeited (300,000 ) $ 4.24 Unvested RSUs at September 30, 2019 267,500 |
Leases - (Tables)
Leases - (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Assets And Liabilities Lessee | Supplemental balance sheet information related to the lease is as follows: As of September 30, 2019 December 31, 2018 Property and equipment, net $ 719,113 $ — Other current liabilities $ 114,387 $ — Other long-term liabilities $ 1,121,367 $ — |
Lease, Cost | The components of lease expense for the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Operating lease cost* $ 32,326 $ 47,371 $ 126,467 $ 144,172 *Includes short-term leases, which are immaterial. |
Lessee, Operating Lease, Liability, Maturity | The following table shows a maturity analysis of the operating lease liability as of September 30, 2019: Undiscounted Cash Flows October 1, 2019 through December 31, 2019 $ — 2020 155,815 2021 169,510 2022 173,748 2023 178,092 Thereafter 1,183,290 Total lease payments $ 1,860,455 Less implied interest $ (624,701 ) Total $ 1,235,754 |
Business (Details)
Business (Details) | Nov. 01, 2019USD ($) | Mar. 08, 2019$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)product$ / shares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Subsequent Event [Line Items] | ||||||||
Net loss | $ (4,016,454) | $ (24,603,575) | $ (17,693,601) | $ (34,493,895) | ||||
Net cash used in operating activities | (17,453,929) | (1,152,446) | ||||||
Accumulated deficit | (115,911,671) | (115,911,671) | $ (98,218,070) | |||||
Cash and cash equivalents | $ 5,250,651 | $ 6,838,353 | $ 5,250,651 | $ 6,838,353 | $ 10,646,301 | |||
Sale of stock (in shares) | shares | 363,637 | |||||||
Purchase price (in dollars per share) | $ / shares | $ 5.50 | |||||||
Neurological Clinical And Preclinical Stage Compounds | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of products in development | product | 3 | |||||||
Preclinical Pediatric Orphan Rare Disease Compound | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of products in development | product | 1 | |||||||
Millipred | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of marketed products | product | 1 | |||||||
Underwritten Public Offering | Common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Sale of stock (in shares) | shares | 1,818,182 | |||||||
Purchase price (in dollars per share) | $ / shares | $ 5.50 | |||||||
Net proceeds | $ 9,000,000 | |||||||
Armistice Purchase Agreement | ||||||||
Subsequent Event [Line Items] | ||||||||
Sale of stock (in shares) | shares | 1,200,000 | |||||||
Purchase price (in dollars per share) | $ / shares | $ 3.132 | $ 3.132 | ||||||
Net proceeds | $ 3,700,000 | |||||||
Armistice | Underwritten Public Offering | Common stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Sale of stock (in shares) | shares | 363,637 | |||||||
Pediatric Portfolio | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Consideration | $ 17,000,000 | |||||||
Proceeds from sale of assets | 4,500,000 | |||||||
Assumption of debt on sale of assets | 15,000,000 | |||||||
Pediatric Portfolio | Subsequent Event | AYTU BioScience, Inc | ||||||||
Subsequent Event [Line Items] | ||||||||
Convertible preferred stock received | 12,500,000 | |||||||
Liabilities assumed by buyer | $ 11,000,000 |
Significant Accounting Polici_2
Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | |
SIGNIFICANT ACCOUNTING POLICIES | ||||
Reclassification adjustment | $ 100,000 | $ 400,000 | ||
Number of contracts | contract | 1 | |||
Operating lease liability | $ 1,235,754 | |||
Property and equipment, net | $ 719,113 | |||
Accounting Standards Update 2016-02 | ||||
SIGNIFICANT ACCOUNTING POLICIES | ||||
Operating lease liability | $ 1,200,000 | |||
Property and equipment, net | $ 700,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 5,613,276 | $ 4,074,786 | $ 15,474,123 | $ 13,342,699 | |
Prescribed dietary supplements | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 2,318,000 | 2,097,000 | 5,909,000 | 5,767,000 | |
Prescription drugs | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 3,195,000 | 1,978,000 | 9,465,000 | 7,279,000 | |
License and other revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 25,000,000 | 100,000 | 0 | 100,000 | 0 |
Sales force revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 296,875 | |
Customer Concentration Risk | Sales Revenue | Major Customer Number One | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 32.00% | 35.00% | |||
Customer Concentration Risk | Sales Revenue | Major Customer Number Two | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 31.00% | 31.00% | |||
Customer Concentration Risk | Sales Revenue | Major Customer Number Three | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 27.00% | 26.00% |
Net Loss Per Share - (Details)
Net Loss Per Share - (Details) | Dec. 27, 2018shares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares |
Basic (loss) income per share: | ||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | |||
Common stock | ||||||
Basic (loss) income per share: | ||||||
Undistributed (loss) earnings allocable to common shares | $ | $ (3,019,101) | $ (24,603,575) | $ (13,238,766) | $ (34,493,895) | ||
Weighted average number of shares outstanding, basic and diluted (in shares) | 43,244,481 | 34,648,641 | 42,453,928 | 32,749,291 | ||
Net income (loss) per share of common stock, basic and diluted (in dollars per share) | $ / shares | $ (0.07) | $ (0.71) | $ (0.31) | $ (1.05) | ||
Preferred Stock | ||||||
Basic (loss) income per share: | ||||||
Undistributed (loss) earnings allocable to common shares | $ | $ (997,353) | $ 0 | $ (4,454,835) | $ 0 | ||
Weighted average number of shares outstanding, basic and diluted (in shares) | 2,857,143 | 0 | 2,857,143 | 0 | ||
Net income (loss) per share of common stock, basic and diluted (in dollars per share) | $ / shares | $ (0.35) | $ 0 | $ (1.56) | $ 0 | ||
Preferred Stock | Series B Preferred Stock | ||||||
Basic (loss) income per share: | ||||||
Preferred stock conversion ratio | 5 | 5 | 5 | |||
Private Placement | Preferred Stock | Series B Preferred Stock | ||||||
Basic (loss) income per share: | ||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 |
Net Loss Per Share - Anti-dilu
Net Loss Per Share - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock options | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 5,297,124 | 4,119,187 | 5,297,124 | 4,119,187 |
Warrants on common stock | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 4,024,708 | 18,905,064 | 4,024,708 | 18,905,064 |
Restricted Stock Units | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 267,500 | 445,000 | 267,500 | 445,000 |
Underwriters' unit purchase option | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 40,000 | 40,000 | 40,000 | 40,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | Sep. 30, 2019USD ($)$ / shares | Sep. 25, 2018shares | Sep. 24, 2018USD ($)therapymilestone$ / sharesshares | Feb. 16, 2018USD ($) | Nov. 17, 2017USD ($)shares | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | Dec. 31, 2021USD ($) | Jun. 30, 2019USD ($) | Jun. 29, 2019USD ($) | Dec. 31, 2018USD ($)$ / shares | Jun. 30, 2018USD ($) |
Business Acquisition [Line Items] | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Fair value of shares issued | $ 19,971,554 | $ 19,971,554 | ||||||||||||
Fair value of debt assumed | $ 0 | $ 0 | (15,075,000) | $ 0 | (15,075,000) | |||||||||
Goodwill | 16,411,123 | 16,411,123 | 16,411,123 | $ 16,411,123 | ||||||||||
Impairment of intangible assets | 0 | 159,687 | 1,449,121 | $ 1,861,562 | ||||||||||
Inventory, net | 402,267 | 402,267 | 402,267 | 1,110,780 | ||||||||||
Impairment of intangible assets | $ 1,900,000 | |||||||||||||
Avadel | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash | $ 1 | |||||||||||||
Fair value of debt assumed | (15,075,000) | |||||||||||||
Contingent consideration | 7,900,000 | |||||||||||||
Goodwill | $ 3,778,001 | |||||||||||||
Goodwill tax deductible period | 15 years | |||||||||||||
Fair value assigned to intangible asset at purchase | $ 18,291,000 | |||||||||||||
TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash | $ 18,900,000 | |||||||||||||
Contingent consideration | 0 | $ 0 | 0 | $ 0 | ||||||||||
Goodwill | 12,633,122 | |||||||||||||
Fair value assigned to intangible asset at purchase | $ 19,596,000 | |||||||||||||
Unregistered shares of common stock issued or issuable as part of acquisition (in shares) | shares | 7,534,884 | |||||||||||||
Shares issued for purchase of business (in shares) | $ 8,514,419 | |||||||||||||
Shares issued upon closing (in shares) | shares | 5,184,920 | |||||||||||||
Contingent shares issuable as part of acquisition (in shares) | shares | 2,349,968 | |||||||||||||
Goodwill, expected tax deductible amount | $ 8,700,000 | |||||||||||||
PAI Sales & Marketing Agreement | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value assigned to intangible asset at purchase | 2,553,000 | |||||||||||||
Flexichamber | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Inventory, net | $ 0 | |||||||||||||
Change in inventory reserve | 200,000 | |||||||||||||
Flexichamber | Developed Technology Rights | Avadel | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value assigned to intangible asset at purchase | $ 1,677,000 | $ 0 | $ 1,400,000 | |||||||||||
Impairment of intangible assets | $ 1,400,000 | |||||||||||||
Nonrecurring | Level 3 | PAI Sales & Marketing Agreement | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value of sales and marketing agreement | $ 0 | |||||||||||||
Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Consideration issued (in shares) | shares | 5,800,000 | 5,800,000 | ||||||||||||
Contingent consideration | $ 15,000,000 | |||||||||||||
Fair value of shares issued | 20,000,000 | |||||||||||||
Intangible assets | 18,700,000 | |||||||||||||
Cash acquired | $ 1,600,000 | |||||||||||||
Number of preclinical therapies | therapy | 3 | |||||||||||||
Transaction costs | $ 200,000 | |||||||||||||
Number of contingent consideration milestones | milestone | 3 | |||||||||||||
Milestone payment | $ 0 | |||||||||||||
Ichorion | Assembled Workforce | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Intangible assets | $ 200,000 | |||||||||||||
Useful life | 2 years | |||||||||||||
Milestone Two | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | 2,000,000 | |||||||||||||
Milestone Three | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | $ 2,000,000 | |||||||||||||
Forecast | Milestone One | Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Milestone payment | $ 6,000,000 | |||||||||||||
Forecast | Milestone Two | Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Milestone payment | 5,000,000 | |||||||||||||
Forecast | Milestone Three | Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Milestone payment | $ 4,000,000 |
Acquisitions - Schedule of Allo
Acquisitions - Schedule of Allocation of Purchase Price (Details) - USD ($) | Feb. 16, 2018 | Nov. 17, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2019 | Dec. 31, 2018 |
Fair value of liabilities assumed: | ||||||
Fair value of debt assumed | $ (15,075,000) | $ 0 | ||||
Goodwill | $ 16,411,123 | $ 16,411,123 | ||||
Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Inventory | $ 718,000 | |||||
Prepaid expenses and other current assets | 570,000 | |||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 18,291,000 | |||||
Fair value of liabilities assumed: | ||||||
Accrued expenses and other current liabilities | (362,000) | |||||
Fair value of debt assumed | (15,075,000) | |||||
Fair value of contingent consideration | (7,920,000) | |||||
Total identifiable net assets | (3,778,000) | |||||
Fair value of consideration transferred | 1 | |||||
Goodwill | 3,778,001 | |||||
Measurement Period Adjustments | ||||||
Inventory | $ (1,831,000) | |||||
Prepaid assets | 570,000 | |||||
Intangible assets | 1,838,000 | |||||
Accrued expenses | 362,000 | |||||
Fair value of debt assumed | 197,303 | |||||
Fair value of contingent consideration | (44,835) | |||||
Total net liabilities assumed | 367,468 | |||||
Consideration exchanged | (240,999) | |||||
Goodwill | $ (608,467) | |||||
TRx | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 11,068 | |||||
Accounts receivable, net | 2,872,545 | |||||
Inventory | 495,777 | |||||
Prepaid expenses and other current assets | 134,281 | |||||
Other receivables | 2,764,515 | |||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 19,596,000 | |||||
Total assets acquired | 25,874,186 | |||||
Fair value of liabilities assumed: | ||||||
Accounts payable | 192,706 | |||||
Accrued expenses and other current liabilities | (8,614,937) | |||||
Deferred tax liability | 918,613 | |||||
Total liabilities assumed | 9,726,256 | |||||
Total identifiable net assets | 16,147,930 | |||||
Fair value of consideration transferred | 28,781,052 | |||||
Goodwill | 12,633,122 | |||||
Measurement Period Adjustments | ||||||
Accounts receivable, net | 0 | |||||
Inventory | 0 | |||||
Prepaid assets | 0 | |||||
Other receivables | 2,764,515 | |||||
Intangible assets | 1,528,000 | |||||
Total assets acquired | 4,292,515 | |||||
Accounts payable | 0 | |||||
Accrued expenses | 3,764,515 | |||||
Deferred tax liability | 78,840 | |||||
Fair value of contingent consideration | 1,210,000 | |||||
Total liabilities assumed | 3,843,355 | |||||
Total net liabilities assumed | 449,160 | |||||
Consideration exchanged | (1,210,000) | |||||
Goodwill | (1,659,160) | |||||
PAI Sales & Marketing Agreement | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 2,553,000 | |||||
Measurement Period Adjustments | ||||||
Intangible assets | 219,000 | |||||
Metafolin | Acquired product marketing rights | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 11,987,000 | |||||
Measurement Period Adjustments | ||||||
Intangible assets | 1,522,000 | |||||
Millipred | Acquired product marketing rights | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 5,056,000 | |||||
Measurement Period Adjustments | ||||||
Intangible assets | 342,000 | |||||
Ulesfia | Acquired product marketing rights | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 0 | |||||
Measurement Period Adjustments | ||||||
Intangible assets | $ (555,000) | |||||
Previously Reported | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Inventory | 2,549,000 | |||||
Prepaid expenses and other current assets | 0 | |||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 16,453,000 | |||||
Fair value of liabilities assumed: | ||||||
Accrued expenses and other current liabilities | 0 | |||||
Fair value of debt assumed | (15,272,303) | |||||
Fair value of contingent consideration | (7,875,165) | |||||
Total identifiable net assets | (4,145,468) | |||||
Fair value of consideration transferred | 241,000 | |||||
Goodwill | $ 4,386,468 | |||||
Previously Reported | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | 11,068 | |||||
Accounts receivable, net | 2,872,545 | |||||
Inventory | 495,777 | |||||
Prepaid expenses and other current assets | 134,281 | |||||
Other receivables | 0 | |||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 18,068,000 | |||||
Total assets acquired | 21,581,671 | |||||
Fair value of liabilities assumed: | ||||||
Accounts payable | 192,706 | |||||
Accrued expenses and other current liabilities | (4,850,422) | |||||
Deferred tax liability | 839,773 | |||||
Total liabilities assumed | 5,882,901 | |||||
Total identifiable net assets | 15,698,770 | |||||
Fair value of consideration transferred | 29,991,052 | |||||
Goodwill | 14,292,282 | |||||
Previously Reported | PAI Sales & Marketing Agreement | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 2,334,000 | |||||
Previously Reported | Metafolin | Acquired product marketing rights | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 10,465,000 | |||||
Previously Reported | Millipred | Acquired product marketing rights | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | 4,714,000 | |||||
Previously Reported | Ulesfia | Acquired product marketing rights | TRx | ||||||
Identifiable Intangible Assets: | ||||||
Identifiable Intangible Assets: | $ 555,000 |
Acquisitions - Schedule of Inta
Acquisitions - Schedule of Intangible Assets Acquired (Details) - USD ($) | 3 Months Ended | 10 Months Ended | ||||
Jun. 30, 2018 | Sep. 30, 2018 | Jun. 30, 2019 | Jun. 29, 2019 | Feb. 16, 2018 | Nov. 17, 2017 | |
Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | $ 18,291,000 | |||||
Intangible assets | $ 1,838,000 | |||||
TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | $ 19,596,000 | |||||
Intangible assets | $ 1,528,000 | |||||
PAI Sales & Marketing Agreement | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 2,553,000 | |||||
Intangible assets | 219,000 | |||||
Karbinal | Acquired product marketing rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 6,200,000 | |||||
Intangible assets | (21,000) | |||||
AcipHex | Acquired product marketing rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 2,803,000 | |||||
Intangible assets | 283,000 | |||||
Cefaclor | Acquired product marketing rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 7,611,000 | |||||
Intangible assets | 1,320,000 | |||||
Flexichamber | Developed Technology Rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | $ 0 | $ 1,400,000 | 1,677,000 | |||
Intangible assets | 546,000 | |||||
LiquiTime Process | In Process Research and Development | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 0 | |||||
Intangible assets | $ (290,000) | |||||
Metafolin | Acquired product marketing rights | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 11,987,000 | |||||
Intangible assets | 1,522,000 | |||||
Millipred | Acquired product marketing rights | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 5,056,000 | |||||
Intangible assets | 342,000 | |||||
Ulesfia | Acquired product marketing rights | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 0 | |||||
Intangible assets | $ (555,000) | |||||
Previously Reported | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 16,453,000 | |||||
Previously Reported | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 18,068,000 | |||||
Previously Reported | PAI Sales & Marketing Agreement | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 2,334,000 | |||||
Previously Reported | Karbinal | Acquired product marketing rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 6,221,000 | |||||
Previously Reported | AcipHex | Acquired product marketing rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 2,520,000 | |||||
Previously Reported | Cefaclor | Acquired product marketing rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 6,291,000 | |||||
Previously Reported | Flexichamber | Developed Technology Rights | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 1,131,000 | |||||
Previously Reported | LiquiTime Process | In Process Research and Development | Avadel | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | $ 290,000 | |||||
Previously Reported | Metafolin | Acquired product marketing rights | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 10,465,000 | |||||
Previously Reported | Millipred | Acquired product marketing rights | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | 4,714,000 | |||||
Previously Reported | Ulesfia | Acquired product marketing rights | TRx | ||||||
Business Acquisition [Line Items] | ||||||
Identifiable Intangible Assets: | $ 555,000 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Transferred (Details) - TRx - USD ($) | Nov. 17, 2017 | Sep. 30, 2018 |
Business Acquisition [Line Items] | ||
Cash | $ 18,900,000 | |
Common stock (including contingently issuable shares) | 8,514,419 | |
Contingent payments | 1,366,633 | |
Total consideration transferred | 28,781,052 | |
Fair value of contingent consideration | $ (1,210,000) | |
Consideration exchanged | $ (1,210,000) | |
Previously Reported | ||
Business Acquisition [Line Items] | ||
Cash | 18,900,000 | |
Common stock (including contingently issuable shares) | 8,514,419 | |
Contingent payments | 2,576,633 | |
Total consideration transferred | $ 29,991,052 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - Avadel | 9 Months Ended |
Sep. 30, 2018USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Total revenues, net | $ | $ 15,047,699 |
Net loss | $ | $ (35,539,494) |
Common stock | |
Business Acquisition [Line Items] | |
Diluted net loss per share (in dollars per share) | $ / shares | $ (1.09) |
Preferred Stock | |
Business Acquisition [Line Items] | |
Diluted net loss per share (in dollars per share) | $ / shares | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | $ 3,221,364 | $ 7,324,932 |
Level 3 | Contingent consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 7,473,485 | 9,050,564 |
Level 3 | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 850 | 2,950 |
Level 3 | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | $ 2,493 | $ 7,216 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Nov. 17, 2017USD ($) | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesclass_of_stockmilestone | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 27, 2018shares | Feb. 16, 2018USD ($) | Dec. 31, 2015shares | Dec. 31, 2014shares |
Level 3 Valuation | ||||||||||
Warrants outstanding term | 5 years 6 months | |||||||||
Number of shares available under warrant (in shares) | shares | 4,000,000 | |||||||||
Number of changes in valuation techniques | class_of_stock | 0 | |||||||||
Change in fair value | $ 197,219 | $ (84,844) | $ 1,009,168 | $ (360,850) | ||||||
Amount of transfers of assets from level 2 to level 1 | 0 | 0 | 0 | 0 | ||||||
Amount of transfers of assets from level 1 to level 2 | 0 | $ 0 | 0 | 0 | ||||||
Common Stock Warrant | ||||||||||
Level 3 Valuation | ||||||||||
Number of shares available under warrant (in shares) | shares | 40,000 | |||||||||
Level 2 | ||||||||||
Level 3 Valuation | ||||||||||
Long-term debt fair value | $ 15,000,000 | 15,000,000 | ||||||||
Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Change in fair value | $ 1,277,150 | (383,178) | ||||||||
Warrant liability | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants outstanding term | 1 year 18 days | 1 year 18 days | ||||||||
Equity Unit Purchase Option | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants outstanding term | 1 year 18 days | 1 year 18 days | ||||||||
Change in fair value | (16,183) | |||||||||
Contingent consideration | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Change in fair value | $ 1,277,150 | $ (360,850) | ||||||||
Volatility | Warrant liability | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | 0.50 | 0.50 | ||||||||
Volatility | Equity Unit Purchase Option | Level 3 | Minimum | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | 0.50 | 0.50 | ||||||||
Risk Free Interest Rate | Warrant liability | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | 0.0174 | 0.0174 | ||||||||
Risk Free Interest Rate | Equity Unit Purchase Option | Level 3 | Minimum | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | 0.0174 | 0.0174 | ||||||||
Strike Price (in dollars per share) | Warrant liability | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | $ / shares | (8.40) | (8.40) | ||||||||
Strike Price (in dollars per share) | Equity Unit Purchase Option | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | $ / shares | (7.47) | (7.47) | ||||||||
Share Price (in dollars per share) | Warrant liability | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | $ / shares | (3.29) | (3.29) | ||||||||
Share Price (in dollars per share) | Equity Unit Purchase Option | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Warrants measurement input | $ / shares | (3.29) | (3.29) | ||||||||
Preferred Stock | Series B Preferred Stock | ||||||||||
Level 3 Valuation | ||||||||||
Number of shares available under warrant (in shares) | shares | 625,208 | |||||||||
Common stock | ||||||||||
Level 3 Valuation | ||||||||||
Number of shares available under warrant (in shares) | shares | 22,328 | |||||||||
Avadel | ||||||||||
Level 3 Valuation | ||||||||||
Product royalty, net | 15.00% | |||||||||
Royalty obligation | $ 12,500,000 | $ 12,500,000 | ||||||||
Royalty obligation fair value disclosure | $ 7,500,000 | $ 7,500,000 | ||||||||
Contingent payments | $ 7,900,000 | |||||||||
Avadel | Discount Rate | ||||||||||
Level 3 Valuation | ||||||||||
Royalty obligation measurement input | 0.0786 | 0.0786 | ||||||||
Avadel | Risk Free Interest Rate | ||||||||||
Level 3 Valuation | ||||||||||
Royalty obligation measurement input | 0.0160 | 0.0160 | ||||||||
Avadel | Counterparty Credit Risk | ||||||||||
Level 3 Valuation | ||||||||||
Royalty obligation measurement input | 0.0626 | 0.0626 | ||||||||
TRx | ||||||||||
Level 3 Valuation | ||||||||||
Potential milestone payment | $ 3,000,000 | |||||||||
Contingent payments | $ 0 | $ 0 | $ 0 | |||||||
Number of contingent consideration milestones | milestone | 2 | |||||||||
Ulesfia Supply Agreement | Level 3 | ||||||||||
Level 3 Valuation | ||||||||||
Change in fair value | $ 1,300,000 | |||||||||
Milestone One | TRx | ||||||||||
Level 3 Valuation | ||||||||||
Business combination gross profit | $ 12,600,000 | |||||||||
Milestone Two | TRx | ||||||||||
Level 3 Valuation | ||||||||||
Contingent payments | 2,000,000 | |||||||||
Milestone Three | TRx | ||||||||||
Level 3 Valuation | ||||||||||
Contingent payments | $ 2,000,000 |
Fair Value Measurements - Rollf
Fair Value Measurements - Rollforward (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Change in fair value | $ (197,219) | $ 84,844 | $ (1,009,168) | $ 360,850 |
Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 9,060,730 | 2,611,809 | ||
Issuance of contingent consideration | 7,920,000 | |||
Payment of contingent consideration | (567,911) | (137,008) | ||
Purchase price allocation measurement period adjustment of contingent consideration | (1,210,000) | |||
Change in fair value | (1,277,150) | 383,178 | ||
Other changes in fair value | (261,159) | |||
Ending balance | 7,476,828 | 9,567,979 | 7,476,828 | 9,567,979 |
Warrant liability | Recurring basis | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 2,950 | 8,185 | ||
Change in fair value | 6,145 | |||
Other changes in fair value | 2,100 | |||
Ending balance | 850 | 14,330 | 850 | 14,330 |
Unit purchase option liability | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 7,216 | 26,991 | ||
Change in fair value | 16,183 | |||
Other changes in fair value | 4,723 | |||
Ending balance | 2,493 | 43,174 | 2,493 | 43,174 |
Contingent consideration | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 9,050,564 | 2,576,633 | ||
Issuance of contingent consideration | 7,920,000 | |||
Payment of contingent consideration | (567,911) | (137,008) | ||
Purchase price allocation measurement period adjustment of contingent consideration | (1,210,000) | |||
Change in fair value | (1,277,150) | 360,850 | ||
Other changes in fair value | (267,982) | |||
Ending balance | $ 7,473,485 | $ 9,510,475 | $ 7,473,485 | $ 9,510,475 |
Accrued Expenses And Other Cu_3
Accrued Expenses And Other Current Liabilities (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Sales returns and allowances | $ 5,143,150 | $ 3,972,510 |
Medicaid rebates | 2,603,632 | 2,237,269 |
Minimum sales commitments, royalties payable, and purchase obligations | 957,243 | 9,662,901 |
Compensation and benefits | 1,993,211 | 1,953,065 |
Research and development expenses | 1,409,738 | 278,132 |
Sales and marketing | 125,494 | 1,112,378 |
General and administrative | 775,163 | 235,721 |
Other | 126,264 | 279,397 |
Total accrued expenses and other current liabilities | $ 13,133,895 | $ 19,731,373 |
Deerfield Obligation - Narrati
Deerfield Obligation - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 28 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 31, 2020 | Jan. 31, 2021 | Nov. 01, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||||||
Interest expense, net | $ (205,938) | $ (234,854) | $ (613,624) | $ (577,664) | ||||
Long-term debt, current portion | 1,050,000 | 1,050,000 | $ 1,050,000 | |||||
Deerfield Obligation | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest expense, net | 200,000 | 700,000 | ||||||
Deerfield Obligation | 15,300,000 | 15,300,000 | ||||||
Long-term debt, current portion | $ 1,100,000 | $ 1,100,000 | ||||||
Forecast | Deerfield Obligation | ||||||||
Debt Instrument [Line Items] | ||||||||
Periodic payment | $ 262,500 | |||||||
Balloon payment to be paid | $ 15,250,000 | |||||||
Subsequent Event | Deerfield CSF | Payment Guarantee | ||||||||
Debt Instrument [Line Items] | ||||||||
Guarantor obligation | $ 25,700,000 |
Capital Structure - Common Stoc
Capital Structure - Common Stock (Details) | Sep. 04, 2019day | Mar. 08, 2019USD ($)$ / sharesshares | Dec. 27, 2018$ / sharesshares | Sep. 25, 2018shares | Sep. 24, 2018$ / sharesshares | Aug. 17, 2018USD ($)$ / sharesshares | Nov. 17, 2017USD ($)shares | Sep. 30, 2019USD ($)class_of_stock$ / sharesshares | Dec. 31, 2018$ / sharesshares | Sep. 30, 2018shares | Sep. 30, 2019USD ($)class_of_stockVote$ / sharesshares | Sep. 30, 2018USD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 26, 2018shares | Apr. 27, 2017$ / shares | Dec. 31, 2014shares |
Common Stock | ||||||||||||||||
Number of classes of stock authorized to issue | class_of_stock | 2 | 2 | ||||||||||||||
Number of shares of capital stock authorized to issue (in shares) | 205,000,000 | 205,000,000 | ||||||||||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Number of shares available under warrant (in shares) | 4,000,000 | |||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 | |||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Warrants outstanding term | 5 years 6 months | |||||||||||||||
Number of redemption or sinking fund provisions | class_of_stock | 0 | |||||||||||||||
Sale of stock (in shares) | 363,637 | |||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 5.50 | |||||||||||||||
Proceeds from issuance of common stock | $ | $ 8,975,960 | $ 0 | ||||||||||||||
Common stock | ||||||||||||||||
Common Stock | ||||||||||||||||
Number of shares available under warrant (in shares) | 22,328 | |||||||||||||||
Issuance of stock (in shares) | 1,818,182 | 2,349,968 | ||||||||||||||
Consideration issued (in shares) | 5,798,735 | 5,798,735 | ||||||||||||||
Series B Preferred Stock | Preferred Stock | ||||||||||||||||
Common Stock | ||||||||||||||||
Preferred stock conversion ratio | 5 | 5 | 5 | |||||||||||||
Number of shares available under warrant (in shares) | 625,208 | |||||||||||||||
Common Stock | ||||||||||||||||
Common Stock | ||||||||||||||||
Number of redemption or sinking fund provisions | class_of_stock | 0 | |||||||||||||||
Number of votes per share | Vote | 1 | |||||||||||||||
Number of preemptive, conversion or subscription rights | class_of_stock | 0 | |||||||||||||||
Private Placement | ||||||||||||||||
Common Stock | ||||||||||||||||
Number of shares available under warrant (in shares) | 14,285,714 | 14,285,714 | ||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.40 | $ 0.40 | ||||||||||||||
Proceeds from warrant exercises | $ | $ 5,700,000 | |||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 3.91 | |||||||||||||||
Proceeds from issuance or sale of equity | $ | $ 3,900,000 | |||||||||||||||
Private Placement | Common stock | ||||||||||||||||
Common Stock | ||||||||||||||||
Issuance of stock (in shares) | 1,000,000 | |||||||||||||||
Private Placement | Series A Preferred Stock | Preferred Stock | ||||||||||||||||
Common Stock | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | |||||||||||||||
Private Placement | Series B Preferred Stock | Preferred Stock | ||||||||||||||||
Common Stock | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 | 2,857,143 | |||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 2 | $ 2 | ||||||||||||||
Bought Deal | ||||||||||||||||
Common Stock | ||||||||||||||||
Sale of stock (in shares) | 1,818,182 | |||||||||||||||
Net proceeds | $ | $ 9,000,000 | |||||||||||||||
Proceeds from issuance of common stock | $ | $ 10,000,000 | |||||||||||||||
Armistice Purchase Agreement | ||||||||||||||||
Common Stock | ||||||||||||||||
Sale of stock (in shares) | 1,200,000 | |||||||||||||||
Net proceeds | $ | $ 3,700,000 | |||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 3.132 | $ 3.132 | ||||||||||||||
Trading days | day | 5 | |||||||||||||||
TRx | ||||||||||||||||
Common Stock | ||||||||||||||||
Unregistered shares of common stock issued or issuable as part of acquisition | $ | $ 8,100,000 | |||||||||||||||
Shares issued upon closing (in shares) | 5,184,920 | |||||||||||||||
Contingent shares issuable as part of acquisition (in shares) | 2,349,968 | |||||||||||||||
Ichorion | ||||||||||||||||
Common Stock | ||||||||||||||||
Consideration issued (in shares) | 5,800,000 | 5,800,000 | ||||||||||||||
Incentive Warrants | ||||||||||||||||
Common Stock | ||||||||||||||||
Number of shares available under warrant (in shares) | 4,000,000 | |||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 | |||||||||||||||
Warrants outstanding term | 5 years 6 months | |||||||||||||||
Fair value of incentive warrants | $ | $ 1,700,000 |
Capital Structure - Warrants (D
Capital Structure - Warrants (Details) - $ / shares | Sep. 30, 2019 | Dec. 27, 2018 |
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 4,000,000 | |
Exercise price per share (in dollars per share) | $ 12.50 | |
Common Stock Warrants Expiration October 2020 | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 22,328 | |
Exercise price per share (in dollars per share) | $ 8.40 | |
Common stock warrants, expiration date of May 2022 | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 2,380 | |
Exercise price per share (in dollars per share) | $ 8.68 | |
Common Stock Warrants Expiration June 2024 | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 4,000,000 | |
Exercise price per share (in dollars per share) | $ 12.50 | |
Warrants on common stock | Common Stock | ||
Common Stock Warrants | ||
Number of shares available under warrant (in shares) | 4,024,708 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | Jan. 01, 2019$ / sharesshares | May 18, 2016shares | Apr. 05, 2016USD ($)shares | Aug. 31, 2019shares | Apr. 30, 2019shares | May 31, 2018shares | Sep. 30, 2019USD ($)day$ / sharesshares | Jun. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2018$ / sharesshares |
Annual share reserve increase (as a percent) | 4.00% | |||||||||||
Total stock-based compensation | $ | $ 818,793 | $ 945,133 | $ 1,942,196 | $ 1,796,387 | ||||||||
Research and development | ||||||||||||
Total stock-based compensation | $ | 176,261 | 32,202 | 354,347 | 64,077 | ||||||||
General and administrative | ||||||||||||
Total stock-based compensation | $ | 473,905 | 843,122 | 1,139,241 | 1,599,703 | ||||||||
Sales and marketing | ||||||||||||
Total stock-based compensation | $ | 168,627 | 69,809 | 448,608 | 132,607 | ||||||||
Service Based Options | ||||||||||||
Total stock-based compensation | $ | $ 600,000 | $ 1,600,000 | ||||||||||
Option Activity, Number of shares | ||||||||||||
Balance, beginning of period (in shares) | 3,746,597 | 3,746,597 | ||||||||||
Granted (in shares) | 2,618,264 | |||||||||||
Options exercises in period (in shares) | (75,178) | |||||||||||
Forfeitures (in shares) | (902,767) | |||||||||||
Expired (in shares) | (389,792) | |||||||||||
Balance, end of period (in shares) | 4,997,124 | 4,997,124 | 3,746,597 | |||||||||
Exercisable (in shares) | 2,155,081 | 2,155,081 | ||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||
Beginning of period (in dollars per share) | $ / shares | $ 4.16 | $ 4.16 | ||||||||||
Granted (in dollars per share) | $ / shares | 5.71 | |||||||||||
Exercised (in dollars per share) | $ / shares | 3.44 | |||||||||||
Forfeitures (in dollars per share) | $ / shares | 5.16 | |||||||||||
Expired (in dollars per share) | $ / shares | 5.03 | |||||||||||
End of period (in dollars per share) | $ / shares | $ 4.74 | 4.74 | $ 4.16 | |||||||||
Exercisable (in dollars per share) | $ / shares | $ 4.36 | $ 4.36 | ||||||||||
Option Activity, Fair value of options granted | ||||||||||||
Grant date fair value of options granted | $ | $ 8,076,475 | $ 8,076,475 | ||||||||||
Grant date fair value of options forfeited | $ | 2,640,665 | 2,640,665 | ||||||||||
Weighted average grant date fair value of options expired | $ | 992,343 | $ 992,343 | ||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||
Balance | 8 years 2 months 25 days | 7 years 9 months 18 days | ||||||||||
Exercisable | 6 years 10 months 24 days | |||||||||||
Aggregate intrinsic value | $ | 1,300,000 | $ 1,300,000 | ||||||||||
Exercisable aggregate intrinsic value | $ | $ 900,000 | 900,000 | ||||||||||
Fair value of options vested in period | $ | $ 1,300,000 | |||||||||||
Per share weighted average fair value of options granted (in dollars per share) | $ / shares | $ 3.08 | |||||||||||
Options vested (in shares) | 622,583 | |||||||||||
Weighted average exercise price (in dollars per share) | $ / shares | $ 3.54 | $ 3.54 | ||||||||||
Compensation not yet recognized | $ | $ 7,000,000 | $ 7,000,000 | ||||||||||
Period for recognition | 3 years | |||||||||||
Fair value assumptions | ||||||||||||
Expected annual dividend yield | 0.00% | |||||||||||
Expected volatility | 55.00% | |||||||||||
Stock Options With Market Based Vesting Conditions | ||||||||||||
Total stock-based compensation | $ | $ 100,000 | $ (200,000) | ||||||||||
Option Activity, Number of shares | ||||||||||||
Balance, beginning of period (in shares) | 500,000 | 500,000 | ||||||||||
Granted (in shares) | 300,000 | |||||||||||
Options exercises in period (in shares) | 0 | |||||||||||
Forfeitures (in shares) | (500,000) | |||||||||||
Balance, end of period (in shares) | 300,000 | 300,000 | 500,000 | |||||||||
Exercisable (in shares) | 0 | 0 | ||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||
Beginning of period (in dollars per share) | $ / shares | $ 4.24 | $ 4.24 | ||||||||||
Granted (in dollars per share) | $ / shares | 4.98 | |||||||||||
Forfeitures (in dollars per share) | $ / shares | 4.24 | |||||||||||
End of period (in dollars per share) | $ / shares | $ 4.98 | $ 4.98 | $ 4.24 | |||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||
Balance | 9 years 7 months 25 days | 9 years 2 months 27 days | ||||||||||
Aggregate intrinsic value | $ | $ 0 | $ 0 | ||||||||||
Compensation not yet recognized | $ | 900,000 | $ 900,000 | ||||||||||
Period for recognition | 2 years 2 months 12 days | |||||||||||
Fair value assumptions | ||||||||||||
Expected annual dividend yield | 0.00% | |||||||||||
Expected volatility | 60.00% | |||||||||||
Expected term of options (in years) | 10 years | |||||||||||
Risk-free interest rate | 2.32% | |||||||||||
Restricted Stock Awards | ||||||||||||
Award vesting period | 4 years | |||||||||||
Total stock-based compensation | $ | 100,000 | $ 400,000 | ||||||||||
Compensation not yet recognized | $ | $ 1,300,000 | $ 1,300,000 | ||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||
Period for recognition | 2 years 7 months 6 days | |||||||||||
Non-vested RSUs Outstanding | ||||||||||||
RSAs granted (in shares) | 295,000 | |||||||||||
RSAs vested (in shares) | 172,500 | |||||||||||
RSAs forfeited (in shares) | (300,000) | |||||||||||
Ending balance of Non-vested RSAs (in shares) | 267,500 | 267,500 | 445,000 | |||||||||
Weighted average grant date fair value | ||||||||||||
Nonvested RSAs weighted average grant date fair value (in dollars per share) | $ / shares | $ 4.27 | |||||||||||
Nonvested RSAs grants in period weighted average grant date fair value (in dollars per share) | $ / shares | $ 4.98 | |||||||||||
RSAs vested in period weighted average grant date fair value (in dollars per share) | $ / shares | 4.52 | |||||||||||
Nonvested RSAs forfeitures weighted average grant date fair value (in dollars per share) | $ / shares | $ 4.24 | |||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||
Total stock-based compensation | $ | $ 42,278 | $ 129,963 | ||||||||||
Minimum | Service Based Options | ||||||||||||
Fair value assumptions | ||||||||||||
Expected term of options (in years) | 5 years | |||||||||||
Risk-free interest rate | 1.47% | |||||||||||
Maximum | Service Based Options | ||||||||||||
Fair value assumptions | ||||||||||||
Expected term of options (in years) | 6 years 3 months | |||||||||||
Risk-free interest rate | 2.59% | |||||||||||
2016 Plan | ||||||||||||
Increase in number of shares reserved for issuance (in shares) | 600,000 | 1,400,000 | ||||||||||
Common stock remaining for future issuance (in shares) | 1,963,869 | 1,963,869 | ||||||||||
2016 Plan | Equity Option | ||||||||||||
Award expiration period | 10 years | |||||||||||
2016 Second Amended Plan | ||||||||||||
Increase in number of shares reserved for issuance (in shares) | 850,000 | |||||||||||
2015 Plan | ||||||||||||
Common stock remaining for future issuance (in shares) | 464,476 | |||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||
Common stock remaining for future issuance (in shares) | 1,148,085 | 1,148,085 | ||||||||||
Weighted average grant date fair value | ||||||||||||
Percentage of fair market value on the lower of first day or last day of the offering period at which employees may purchase stock under the ESPP | 85.00% | |||||||||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15.00% | |||||||||||
Maximum annual amount of fair market value of the Company's common stock that a participant may accrue the rights to purchase | $ | $ 25,000 | |||||||||||
Shares of common stock for future issuance (in shares) | 500,000 | |||||||||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1.00% | |||||||||||
Increase in shares available (in shares) | 408,042 | |||||||||||
Employee | 2016 Plan | Minimum | Equity Option | ||||||||||||
Award vesting period | 3 years | |||||||||||
Employee | 2016 Plan | Maximum | Equity Option | ||||||||||||
Award vesting period | 4 years | |||||||||||
Director | 2016 Plan | Equity Option | ||||||||||||
Award vesting period | 3 years | |||||||||||
Terminated Executive | ||||||||||||
Total stock-based compensation | $ | $ 300,000 | $ 300,000 | ||||||||||
Terminated Executive | Option And Non Option Awards | ||||||||||||
Forfeitures (in shares) | 1,489,583 | |||||||||||
Terminated Executive | Service Based Options | ||||||||||||
Option Activity, Number of shares | ||||||||||||
Forfeitures (in shares) | (689,583) | |||||||||||
Terminated Executive | Stock Options With Market Based Vesting Conditions | ||||||||||||
Option Activity, Number of shares | ||||||||||||
Forfeitures (in shares) | (500,000) | |||||||||||
Terminated Executive | Restricted Stock Awards | ||||||||||||
Total stock-based compensation | $ | $ (500,000) | |||||||||||
Requisite service period | 2 years 9 months 18 days | |||||||||||
Non-vested RSUs Outstanding | ||||||||||||
RSAs forfeited (in shares) | (300,000) | |||||||||||
Board of Directors Chairman | Stock Options With Market Based Vesting Conditions | ||||||||||||
Option Activity, Number of shares | ||||||||||||
Granted (in shares) | 300,000 | |||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||
Granted (in dollars per share) | $ / shares | $ 4.98 | |||||||||||
Board of Directors Chairman | Restricted Stock Awards | ||||||||||||
Non-vested RSUs Outstanding | ||||||||||||
RSAs granted (in shares) | 250,000 | |||||||||||
RSAs vested (in shares) | 50,000 | |||||||||||
Tranche One | Board of Directors Chairman | Stock Options With Market Based Vesting Conditions | ||||||||||||
Award vesting percentage | 33.33% | |||||||||||
Weighted average grant date fair value | ||||||||||||
Number of days above threshold to trigger vesting | day | 3 | |||||||||||
Tranche One | Board of Directors Chairman | Restricted Stock Awards | ||||||||||||
Award vesting percentage | 33.33% | |||||||||||
Tranche One | Board of Directors Chairman | Minimum | ||||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 8 | $ 8 | ||||||||||
Tranche Two | Board of Directors Chairman | Stock Options With Market Based Vesting Conditions | ||||||||||||
Award vesting percentage | 33.33% | |||||||||||
Weighted average grant date fair value | ||||||||||||
Number of days above threshold to trigger vesting | day | 3 | |||||||||||
Tranche Two | Board of Directors Chairman | Restricted Stock Awards | ||||||||||||
Award vesting percentage | 33.33% | |||||||||||
Tranche Two | Board of Directors Chairman | Minimum | ||||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 10.50 | $ 10.50 | ||||||||||
Tranche Three | Board of Directors Chairman | Stock Options With Market Based Vesting Conditions | ||||||||||||
Award vesting percentage | 33.33% | |||||||||||
Weighted average grant date fair value | ||||||||||||
Number of days above threshold to trigger vesting | day | 3 | |||||||||||
Tranche Three | Board of Directors Chairman | Restricted Stock Awards | ||||||||||||
Award vesting percentage | 33.33% | |||||||||||
Tranche Three | Board of Directors Chairman | Minimum | ||||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 13 | $ 13 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 115,651 | $ 52,412 | $ 348,427 | $ 92,076 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($)contractrenewal_option | |
Leases [Abstract] | ||
Number of contracts | contract | 1 | |
Annual base rent | $ 161,671 | |
Annual rent increase | 2.50% | |
Rent abatement period | 12 months | |
Lease term of contract | 10 years | |
Number of renewal options | renewal_option | 2 | |
Renewal term | 5 years | |
Remaining lease team | 10 years 3 months 18 days | |
Discount rate | 7.70% | |
Operating lease payments | $ 0 |
Leases - Assets and Liabilitie
Leases - Assets and Liabilities (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Property and equipment, net | $ 719,113 |
Other current liabilities | 114,387 |
Other long-term liabilities | $ 1,121,367 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Operating lease cost | $ 32,326 | $ 126,467 | ||
Operating lease cost | $ 47,371 | $ 144,172 |
Leases - Lease Maturity (Detai
Leases - Lease Maturity (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
October 1, 2019 through December 31, 2019 | $ 0 |
2020 | 155,815 |
2021 | 169,510 |
2022 | 173,748 |
2023 | 178,092 |
Thereafter | 1,183,290 |
Total lease payments | 1,860,455 |
Less implied interest | (624,701) |
Operating lease liability | $ 1,235,754 |
Commitments And Contingencies (
Commitments And Contingencies (Details) shares in Millions | Sep. 30, 2019USD ($) | Aug. 08, 2019USD ($) | Sep. 25, 2018shares | Sep. 24, 2018USD ($)therapymilestoneshares | Feb. 16, 2018unit$ / unit | Nov. 17, 2017USD ($) | Dec. 18, 2015USD ($)unit | Nov. 30, 2017USD ($)$ / unit | Aug. 31, 2017USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2019USD ($) | Oct. 31, 2017 |
Operating Leased Assets [Line Items] | ||||||||||||||||||
Noncontrolling interest ownership percentage by Noncontrolling Owners | 10.00% | |||||||||||||||||
Gain on change in fair value | $ 197,219 | $ (84,844) | $ 1,009,168 | $ (360,850) | ||||||||||||||
License obligations | $ 0 | 0 | 0 | $ 1,250,000 | ||||||||||||||
Potential future regulatory milestone | $ 20,000,000 | |||||||||||||||||
Karbinal Agreement | TRIS Pharma | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Minimum quantity required | unit | 70,000 | |||||||||||||||||
Make whole payment per unit (in dollars per share) | $ / unit | 30 | |||||||||||||||||
Ulesfia Supply Agreement | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Indemnity receivable | (5,200,000) | (5,200,000) | (5,200,000) | $ 5,200,000 | ||||||||||||||
Zylera | Ulesfia Supply Agreement | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Price (in dollars per unit) | $ / unit | 58.84 | |||||||||||||||||
Management and handling fee (in dollars per unit) | $ / unit | 4.03 | |||||||||||||||||
Management and handling fee annual price increase | 10.00% | |||||||||||||||||
Zylera | Ulesfia Supply Agreement | Lachlan Pharmaceuticals | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Minimum quantity required | unit | 20,000 | |||||||||||||||||
Long-term purchase commitment | $ 1,200,000 | |||||||||||||||||
Minimum royalty | $ 3,000,000 | |||||||||||||||||
Lachlan Pharmaceuticals | Ulesfia Supply Agreement | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
License obligation | $ (8,700,000) | 8,700,000 | ||||||||||||||||
Royalties payable | $ 400,000 | |||||||||||||||||
Decrease in royalties payable | (400,000) | |||||||||||||||||
Indemnification of pre-acquisition losses (as a percent) | 100.00% | |||||||||||||||||
Threshold indemnification of legal costs and possible minimum payments | $ 1,000,000 | |||||||||||||||||
Indemnification of post-acquisition losses, (as a percent) | 50.00% | |||||||||||||||||
Payments for settlements | 2,300,000 | |||||||||||||||||
CERC-611 | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Potential milestone payment | $ 7,500,000 | |||||||||||||||||
Potential milestone revenue threshold | 750,000,000 | |||||||||||||||||
Potential milestone payment two | 12,500,000 | |||||||||||||||||
Potential milestone revenue threshold two | 1,300,000,000 | |||||||||||||||||
License obligations | 0 | 0 | 1,300,000 | 0 | ||||||||||||||
TRx | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Potential milestone payment | $ 3,000,000 | |||||||||||||||||
Milestone One | TRx | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Business combination gross profit | $ 12,600,000 | |||||||||||||||||
Level 3 | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Gain on change in fair value | 1,277,150 | $ (383,178) | ||||||||||||||||
Level 3 | Ulesfia Supply Agreement | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Gain on change in fair value | 1,300,000 | |||||||||||||||||
Cost of Sales | Lachlan Pharmaceuticals | Ulesfia Supply Agreement | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Gain related to settlement | $ 1,600,000 | |||||||||||||||||
Armistice | CERC-611 | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Installment payment | $ 100,000 | |||||||||||||||||
Payment period | 30 days | |||||||||||||||||
Total revenue | $ 100,000 | $ 100,000 | ||||||||||||||||
Ichorion | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Number of preclinical therapies | therapy | 3 | |||||||||||||||||
Issuance of shares in acquisition of Ichorion assets (in shares) | shares | 5.8 | 5.8 | ||||||||||||||||
Contingent consideration | $ 15,000,000 | |||||||||||||||||
Number of contingent consideration milestones | milestone | 3 | |||||||||||||||||
Milestone payment | $ 0 | |||||||||||||||||
Ichorion | CERC-801, CERC-802, And CERC-803 | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Number of preclinical therapies | therapy | 3 | |||||||||||||||||
Ichorion | CERC-913 | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Number of preclinical therapies | therapy | 1 | |||||||||||||||||
Forecast | Ichorion | Milestone One | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Milestone payment | $ 6,000,000 | |||||||||||||||||
Forecast | Ichorion | Milestone Two | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Milestone payment | 5,000,000 | |||||||||||||||||
Forecast | Ichorion | Milestone Three | ||||||||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||||||||
Milestone payment | $ 4,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Nov. 01, 2019USD ($) |
Pediatric Portfolio | |
Subsequent Event [Line Items] | |
Consideration | $ 17 |
Proceeds from sale of assets | 4.5 |
Assumption of debt on sale of assets | 15 |
Pediatric Portfolio | AYTU BioScience, Inc | |
Subsequent Event [Line Items] | |
Convertible preferred stock received | 12.5 |
Liabilities assumed by buyer | 11 |
Payment Guarantee | Deerfield CSF | |
Subsequent Event [Line Items] | |
Guarantor obligation | $ 25.7 |