Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37590 | |
Entity Registrant Name | CERECOR INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-0705648 | |
Entity Address, Address Line One | 540 Gaither Road, Suite 400 | |
Entity Address, City or Town | Rockville | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20850 | |
City Area Code | 410 | |
Local Phone Number | 522-8707 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | CERC | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 74,900,047 | |
Entity Central Index Key | 0001534120 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 45,390,553 | $ 3,609,438 |
Accounts receivable, net | 2,031,682 | 1,001,645 |
Other receivables | 1,953,036 | 4,240,572 |
Inventory, net | 12,196 | 21,334 |
Prepaid expenses and other current assets | 823,900 | 706,968 |
Restricted cash, current portion | 33,449 | 17,535 |
Investment in Aytu | 0 | 7,628,947 |
Current assets of discontinued operations | 0 | 497,577 |
Total current assets | 50,244,816 | 17,724,016 |
Property and equipment, net | 1,740,610 | 1,447,663 |
Intangible assets, net | 2,292,175 | 2,426,258 |
Goodwill | 14,409,088 | 14,409,088 |
Restricted cash, net of current portion | 180,336 | 101,945 |
Deferred tax asset, net | 337,797 | 0 |
Total assets | 69,204,822 | 36,108,970 |
Current liabilities: | ||
Accounts payable | 2,557,702 | 2,077,524 |
Accrued expenses and other current liabilities | 6,487,658 | 5,640,252 |
Income taxes payable | 0 | 551,671 |
Current liabilities of discontinued operations | 5,549,751 | 3,891,012 |
Total current liabilities | 14,595,111 | 12,160,459 |
Royalty obligation | 2,000,000 | 0 |
Deferred tax liability, net | 0 | 85,981 |
Other long-term liabilities | 2,031,560 | 1,111,965 |
Long-term liabilities of discontinued operations | 0 | 1,755,000 |
Total liabilities | 18,626,671 | 15,113,405 |
Stockholders’ equity: | ||
Common stock—$0.001 par value; 200,000,000 shares authorized at June 30, 2020 and December 31, 2019; 74,900,047 and 44,384,222 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 74,899 | 44,384 |
Preferred stock—$0.001 par value; 5,000,000 shares authorized at June 30, 2020 and December 31, 2019; 1,257,143 and 2,857,143 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 1,257 | 2,857 |
Additional paid-in capital | 199,191,022 | 135,238,941 |
Accumulated deficit | (148,689,027) | (114,290,617) |
Total stockholders’ equity | 50,578,151 | 20,995,565 |
Total liabilities and stockholders’ equity | $ 69,204,822 | $ 36,108,970 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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) | 74,900,047 | 44,384,222 |
Common stock, shares outstanding (in shares) | 74,900,047 | 44,384,222 |
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) | 1,257,143 | 2,857,143 |
Preferred stock, shares outstanding (in shares) | 1,257,143 | 2,857,143 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||||
Product revenue, net | $ 1,337,764 | $ 1,391,942 | $ 4,091,628 | $ 3,968,310 |
Operating expenses: | ||||
Cost of product sales | 77,580 | (1,496,677) | 144,139 | (744,128) |
Research and development | 5,916,869 | 3,712,596 | 10,684,619 | 7,113,785 |
Acquired in-process research and development | 0 | 0 | 25,549,344 | 0 |
General and administrative | 6,101,475 | 2,340,634 | 8,777,088 | 5,016,243 |
Sales and marketing | 653,265 | 325,861 | 1,329,790 | 722,137 |
Amortization expense | 403,500 | 334,747 | 834,083 | 669,495 |
Change in fair value of contingent consideration | 0 | (1,277,150) | 0 | (1,256,210) |
Total operating expenses | 13,152,689 | 3,940,011 | 47,319,063 | 11,521,322 |
Loss from continuing operations | (11,814,925) | (2,548,069) | (43,227,435) | (7,553,012) |
Other income (expense): | ||||
Change in fair value of Investment in Aytu | (1,872,031) | 0 | 5,207,789 | 0 |
Change in fair value of warrant liability and unit purchase option liability | 2,647 | 18,910 | 13,928 | (28,668) |
Other income (expense), net | 395,800 | 0 | 395,800 | (9,400) |
Interest income, net | 8,711 | 38,412 | 18,501 | 68,632 |
Total other (expense) income, net from continuing operations | (1,464,873) | 57,322 | 5,636,018 | 30,564 |
Loss from continuing operations before taxes | (13,279,798) | (2,490,747) | (37,591,417) | (7,522,448) |
Income tax (benefit) expense | (453,957) | 53,446 | (2,610,812) | 184,119 |
Loss from continuing operations | (12,825,841) | (2,544,193) | (34,980,605) | (7,706,567) |
(Loss) income from discontinued operations, net of tax | (455,463) | (3,678,906) | 582,195 | (5,970,580) |
Net loss | $ (13,281,304) | $ (6,223,099) | $ (34,398,410) | $ (13,677,147) |
Earnings Per Share [Abstract] | ||||
Revenue, Product and Service | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost, Product and Service | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Common stock | ||||
Earnings Per Share [Abstract] | ||||
Continuing operations (in dollars per share) | $ (0.18) | $ (0.05) | $ (0.53) | $ (0.14) |
Discontinued operations (in dollars per share) | (0.01) | (0.06) | 0.01 | (0.10) |
Net loss per share, basic and diluted (in dollars per share) | (0.19) | (0.11) | (0.52) | (0.24) |
Preferred Stock | ||||
Earnings Per Share [Abstract] | ||||
Continuing operations (in dollars per share) | (0.93) | (0.23) | (2.66) | (0.68) |
Discontinued operations (in dollars per share) | (0.03) | (0.32) | 0.04 | (0.53) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.96) | $ (0.55) | $ (2.62) | $ (1.21) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net loss | $ (34,398,410) | $ (13,677,147) |
Adjustments to reconcile net loss used in operating activities: | ||
Depreciation and amortization | 878,949 | 2,203,423 |
Impairment of intangible assets | 0 | 1,449,121 |
Stock-based compensation | 3,901,897 | 1,123,402 |
Acquired in-process research and development | 25,549,344 | 0 |
Deferred taxes | (423,778) | 18,870 |
Amortization of inventory fair value associated with acquisition of TRx and Avadel's pediatric products | 0 | 40,240 |
Change in fair value of Investment in Aytu | (5,207,789) | 0 |
Change in fair value of warrant liability and unit purchase option liability | (13,928) | 28,668 |
Change in value of Guarantee | (1,755,000) | 0 |
Change in fair value of contingent consideration | 0 | (811,948) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (532,460) | 297,267 |
Other receivables | (1,851,867) | 5,326,000 |
Inventory, net | 9,138 | 452,931 |
Prepaid expenses and other assets | (23,782) | 664,454 |
Accounts payable | 82,674 | (666) |
Income taxes payable | 288,329 | (639,784) |
Accrued expenses and other liabilities | (815,014) | (6,313,686) |
Lease liability, net | 17,510 | 0 |
Net cash used in operating activities | (14,294,187) | (9,838,855) |
Investing activities | ||
Proceeds from sale of Investment in Aytu, net | 12,836,736 | 0 |
Net cash paid in merger with Aevi | (1,250,650) | 0 |
Purchase of property and equipment | 0 | (256,926) |
Net cash provided by (used in) investing activities | 11,586,086 | (256,926) |
Financing activities | ||
Proceeds from underwritten public offering, net | 35,427,963 | 8,975,960 |
Proceeds from registered direct offering, net | 5,136,184 | 0 |
Proceeds from sale of shares pursuant to common stock private placement, net | 3,887,991 | 0 |
Proceeds from exercise of stock options and warrants | 92,342 | 256,816 |
Proceeds from shares purchased through employee stock purchase plan | 132,910 | 127,537 |
Restricted Stock Units withheld for taxes | (93,869) | (18,057) |
Payment of contingent consideration | 0 | (379,255) |
Payment of long-term debt | 0 | (48,684) |
Net cash provided by financing activities | 44,583,521 | 8,914,317 |
Increase (decrease) in cash, cash equivalents and restricted cash | 41,875,420 | (1,181,464) |
Cash, cash equivalents, and restricted cash at beginning of period | 3,728,918 | 10,746,756 |
Cash, cash equivalents, and restricted cash at end of period | 45,604,338 | 9,565,292 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 0 | 525,000 |
Cash paid for taxes | 316,000 | 852,025 |
Supplemental disclosures of non-cash activities | ||
Issuance of common stock in Aevi Merger | 15,495,578 | 0 |
Leased asset obtained in exchange for new operating lease liability | 376,448 | 743,025 |
Cash and cash equivalents | 45,390,553 | 9,386,865 |
Restricted cash, current | 33,449 | 26,265 |
Restricted cash, non-current | $ 180,336 | $ 152,162 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited) - USD ($) | Total | Common stock | Preferred Stock | Additional paid in capital | Accumulated deficit |
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 | $ (98,218,070) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares of common stock in underwritten public offering, net of offering costs (in shares) | 1,818,182 | ||||
Issuance of shares of common stock in underwritten public offering, net of offering costs | 8,975,960 | $ 1,818 | 8,974,142 | ||
Exercise of stock options and warrants (in shares) | 74,413 | ||||
Exercise of stock options and warrants | 256,816 | $ 74 | 256,742 | ||
Restricted Stock Units vested during period (in shares) | 161,250 | ||||
Restricted Stock Units vested during period | 0 | $ 162 | (162) | ||
Restricted Stock Units withheld for taxes (in shares) | (3,723) | ||||
Restricted Stock Units withheld for taxes | (18,057) | $ (4) | (18,053) | ||
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 | 1,123,402 | 1,123,402 | |||
Net loss | (13,677,147) | (13,677,147) | |||
Balance at the end (in shares) at Jun. 30, 2019 | 42,898,251 | 2,857,143 | |||
Balance at the end at Jun. 30, 2019 | 17,696,259 | $ 42,898 | $ 2,857 | 129,545,721 | (111,895,217) |
Balance at the beginning (in shares) at Mar. 31, 2019 | 42,753,659 | 2,857,143 | |||
Balance at the beginning at Mar. 31, 2019 | 23,120,530 | $ 42,754 | $ 2,857 | 128,747,037 | (105,672,118) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and warrants (in shares) | 43,125 | ||||
Exercise of stock options and warrants | 162,639 | $ 43 | 162,596 | ||
Restricted Stock Units vested during period (in shares) | 61,250 | ||||
Restricted Stock Units vested during period | 0 | $ 61 | (61) | ||
Restricted Stock Units withheld for taxes (in shares) | (3,723) | ||||
Restricted Stock Units withheld for taxes | (18,057) | $ (4) | (18,053) | ||
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 | 526,709 | 526,709 | |||
Net loss | (6,223,099) | (6,223,099) | |||
Balance at the end (in shares) at Jun. 30, 2019 | 42,898,251 | 2,857,143 | |||
Balance at the end at Jun. 30, 2019 | 17,696,259 | $ 42,898 | $ 2,857 | 129,545,721 | (111,895,217) |
Balance at the beginning (in shares) at Dec. 31, 2019 | 44,384,222 | 2,857,143 | |||
Balance at the beginning at Dec. 31, 2019 | 20,995,565 | $ 44,384 | $ 2,857 | 135,238,941 | (114,290,617) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | ||||
Balance at the end (in shares) at Mar. 31, 2020 | 59,560,252 | 1,257,143 | |||
Balance at the end at Mar. 31, 2020 | 25,588,742 | $ 59,560 | $ 1,257 | 160,935,648 | (135,407,723) |
Balance at the beginning (in shares) at Dec. 31, 2019 | 44,384,222 | 2,857,143 | |||
Balance at the beginning at Dec. 31, 2019 | 20,995,565 | $ 44,384 | $ 2,857 | 135,238,941 | (114,290,617) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares of common stock in underwritten public offering, net of offering costs (in shares) | 15,180,000 | ||||
Issuance of shares of common stock in underwritten public offering, net of offering costs | 35,427,963 | $ 15,180 | 35,412,783 | ||
Exercise of stock options and warrants (in shares) | 50,239 | ||||
Exercise of stock options and warrants | 92,342 | $ 50 | 92,292 | ||
Restricted Stock Units vested during period (in shares) | 111,667 | ||||
Restricted Stock Units vested during period | 0 | $ 111 | (111) | ||
Restricted Stock Units withheld for taxes (in shares) | (35,279) | ||||
Restricted Stock Units withheld for taxes | (93,869) | $ (35) | (93,834) | ||
Shares purchased through employee stock purchase plan (in shares) | 58,336 | ||||
Shares purchased through employee stock purchase plan | 132,910 | $ 58 | 132,852 | ||
Stock-based compensation | 3,901,897 | 3,901,897 | |||
Net loss | (34,398,410) | (34,398,410) | |||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,951,219 | ||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,887,991 | $ 1,951 | 3,886,040 | ||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | (1,600,000) | |||
Conversion of preferred stock to common stock | 0 | $ 8,000 | $ (1,600) | (6,400) | |
Issuance of shares related to Aevi Merger (in shares) | 3,893,361 | ||||
Issuance of shares related to Aevi Merger | 15,495,578 | $ 3,894 | 15,491,684 | ||
Issuance of shares pursuant to registered direct offering, net of offering costs (in shares) | 1,306,282 | ||||
Issuance of shares pursuant to registered direct offering, net of offering costs | 5,136,184 | $ 1,306 | 5,134,878 | ||
Balance at the end (in shares) at Jun. 30, 2020 | 74,900,047 | 1,257,143 | |||
Balance at the end at Jun. 30, 2020 | 50,578,151 | $ 74,899 | $ 1,257 | 199,191,022 | (148,689,027) |
Balance at the beginning (in shares) at Mar. 31, 2020 | 59,560,252 | 1,257,143 | |||
Balance at the beginning at Mar. 31, 2020 | 25,588,742 | $ 59,560 | $ 1,257 | 160,935,648 | (135,407,723) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares of common stock in underwritten public offering, net of offering costs (in shares) | 15,180,000 | ||||
Issuance of shares of common stock in underwritten public offering, net of offering costs | 35,427,963 | $ 15,180 | 35,412,783 | ||
Exercise of stock options and warrants (in shares) | 25,071 | ||||
Exercise of stock options and warrants | 18,135 | $ 25 | 18,110 | ||
Restricted Stock Units vested during period (in shares) | 111,667 | ||||
Restricted Stock Units vested during period | 0 | $ 111 | (111) | ||
Restricted Stock Units withheld for taxes (in shares) | (35,279) | ||||
Restricted Stock Units withheld for taxes | (93,869) | $ (35) | (93,834) | ||
Shares purchased through employee stock purchase plan (in shares) | 58,336 | ||||
Shares purchased through employee stock purchase plan | 132,910 | $ 58 | 132,852 | ||
Stock-based compensation | 2,785,574 | 2,785,574 | |||
Net loss | (13,281,304) | (13,281,304) | |||
Balance at the end (in shares) at Jun. 30, 2020 | 74,900,047 | 1,257,143 | |||
Balance at the end at Jun. 30, 2020 | $ 50,578,151 | $ 74,899 | $ 1,257 | $ 199,191,022 | $ (148,689,027) |
Business
Business | 6 Months Ended |
Jun. 30, 2020 | |
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 development and commercialization of treatments for rare pediatric and orphan diseases. The Company is advancing an emerging clinical-stage pipeline of innovative therapies that address unmet patient needs within rare pediatric and orphan diseases. The Company's pediatric rare disease pipeline includes CERC-801, CERC-802 and CERC-803 ("CERC-800 compounds"), which are therapies for inherited metabolic disorders known as Congenital Disorders of Glycosylation ("CDGs"). The U.S. Food and Drug Administration ("FDA") granted Rare Pediatric Disease Designation ("RPDD") and Orphan Drug Designation ("ODD") to all three CERC-800 compounds, thus potentially qualifying the Company to receive a Priority Review Voucher ("PRV") upon approval of each new drug application ("NDA"). The Company is also developing CERC-002, CERC-006 and CERC-007. CERC-002 is an anti-LIGHT ( L ymphotoxin-like, exhibits I nducible expression, and competes with HSV G lycoprotein D for H VEM, a receptor expressed by T lymphocytes) monoclonal antibody being developed for the treatment of COVID-19 acute respiratory distress syndrome ("ARDS") and Pediatric-onset Crohn's Disease. CERC-006 is a dual mTOR inhibitor being developed for the treatment of complex Lymphatic Malformations and has been granted ODD and RPDD by the FDA, thus potentially qualifying the Company to receive a PRV upon approval of an NDA. CERC-007 is an anti-IL-18 monoclonal antibody being developed for the treatment of autoimmune inflammatory diseases such as Adult Onset Stills Disease ("AOSD") and Multiple Myeloma. The Company continues to explore strategic alternatives for its commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. The Company has been in discussions with Simon Pedder, a former member of its Board of Directors, about potentially transferring its non-core neurology pipeline assets, CERC-301 and CERC-406, to a new company formed by Dr. Pedder, although it has not agreed to binding terms, and any such transaction might not happen until the second half of 2020, if at all. On June 11, 2020, the Company closed on an underwritten public offering of 15,180,000 shares of its common stock (inclusive of 1,980,000 shares that were sold pursuant to the underwriter’s full exercise of its option to purchase additional shares of Cerecor’s common stock) for net proceeds of approximately $35.4 million. On February 3, 2020, the Company consummated its two-step merger (the "Merger") with Aevi Genomic Medicine, Inc. ("Aevi") in accordance with the terms of the Agreement and Plan of Merger and Reorganization (the "Merger Agreement") dated December 5, 2019. The Merger consideration included stock valued at approximately $15.5 million, resulting in the issuance of approximately 3.9 million shares of Cerecor common stock to Aevi stockholders, forgiveness of a $4.1 million loan that Cerecor loaned Aevi in December 2019 (the "Aevi Loan"), and contingent value rights ("CVRs") for up to an additional $6.5 million in subsequent payments based on development milestones. As part of the Merger, Cerecor acquired the rights to CERC-002, CERC-006 and CERC-007, expanding Cerecor's pipeline to six clinical stage assets being developed for rare pediatric and orphan diseases. Effective upon the consummation of the Merger, Cerecor entered into an employment agreement with Aevi Chief Executive Officer Mike Cola for him to serve as Cerecor's Chief Executive Officer and an employment agreement with Aevi Chief Scientific Officer Dr. Garry Neil for him to serve as Cerecor's Chief Medical Officer, and appointed Mike Cola and Dr. Sol Barer to the Company's Board of Directors. Dr. Neil was promoted to Cerecor's Chief Scientific Officer in March 2020. See Note 6 for more information. During the fourth quarter of 2019, the Company entered into, and closed, 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 "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 Divestiture"). Aytu paid consideration of $4.5 million in cash and approximately 9.8 million shares of Aytu convertible preferred stock (the "Investment"), and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield CSF, LLC of $15.1 million and other liabilities of $11.0 million. The Company recognized a gain of $8.0 million upon the closing of the Aytu Divestiture for the year ended December 31, 2019. As a result of the sale of the Pediatric Portfolio, the Pediatric Portfolio met all conditions required in order to be classified as discontinued operations. Therefore, operating results from the Pediatric Portfolio are reported within income (loss) from discontinued operations, net of tax for all periods presented. In addition, assets and liabilities related to the Pediatric Portfolio are reported as assets and liabilities of discontinued operations in the accompanying condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019. See Note 3 for more information regarding the Aytu Divestiture and its accounting treatment, including the nature of the Company's involvement subsequent to the divestiture. Cerecor was incorporated and commenced operation in 2011 and completed its initial public offering in October 2015. Liquidity In June 2020, the Company closed an underwritten public offering of 15,180,000 shares of its common stock (inclusive of 1,980,000 shares that were sold pursuant to the underwriter’s full exercise of its option to purchase additional shares of Cerecor’s common stock) for net proceeds of approximately $35.4 million. In March 2020, the Company entered into a securities purchase agreement with its largest stockholder, Armistice Capital, LLC ("Armistice"), pursuant to which the Company sold 1,951,219 shares of the Company’s common stock for net proceeds of approximately $3.9 million. In February 2020, the Company closed a registered direct offering with institutional investors of 1,306,282 shares of the Company's common stock for net proceeds of approximately $5.1 million. See Note 9 for more information regarding these financings. Additionally, in April 2020, the Company converted its shares of Aytu preferred stock that were acquired in the fourth quarter of 2019 and subsequently sold that common stock, which generated net proceeds of approximately $12.8 million. As of June 30, 2020, Cerecor had $45.4 million in cash and cash equivalents. 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 existing pipeline assets and acquisitions or in-licensing of new assets. For the six months ended June 30, 2020, Cerecor generated a net loss of $34.4 million and negative cash flow from operations of $14.3 million. As of June 30, 2020, Cerecor had an accumulated deficit of $148.7 million. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern; however, the Company expects to incur additional losses in the future in connection with its research and development activities and will require additional financing to fund its operations and to continue to execute its business strategy. The Company plans to use its current cash on hand, the anticipated cash flows from the Company's profits from Millipred product sales and/or the potential proceeds from a possible out-license or sale of Millipred to a third party to offset costs related to its pipeline assets, business development, and costs associated with its organizational infrastructure; however, 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. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise additional equity and/or debt capital, sell assets and/or obtain government funding; however, there can be no assurance that it will be able to do so nor that such activities will generate sufficient amounts, if any, on terms acceptable to the Company. Over the long term, the Company's ultimate ability to achieve and maintain profitability will be dependent on, among other things, the development, regulatory approval, and commercialization of its pipeline assets, and the potential sale of any PRVs it receives, in order to support its cost structure and pipeline asset development. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 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, 2019 audited consolidated financial statements. Significant Accounting Policies During the six months ended June 30, 2020, 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, 2019, as filed with the SEC on March 11, 2020, except for the policy related to the Payroll Protection Program Loan and the recently adopted accounting standards described below. Payroll Protection Program Loan The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") provides stimulus measures, including the Payroll Protection Loan Program ("PPP"), to provide certain small businesses with liquidity to support their operations (such as to retain employees and maintain payroll and lease payments) during the COVID-19 pandemic. Cerecor received a $0.4 million PPP Loan during the second quarter of 2020. PPP Loans have a 1% fixed annual interest rate and mature in two years, however are eligible for forgiveness under certain conditions. If there is reasonable assurance that the PPP Loan will be forgiven, the Company may elect to account for the loan either as debt under ASC 470 or as a government grant. If accounted for as a government grant, the Company may elect to present the loan as either a credit in the income statement within other income or as reduction to the related expense. As discussed in Note 14, as of June 30, 2020, the Company believes it meets the criteria for forgiveness including having incurred the related expenses prior to June 30, 2020. Therefore, the Company elected to recognized the PPP Loan as other income within the accompanying condensed consolidated statement of operations for the three and six months ended June 30, 2020. Recently Adopted 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. Upon adoption of the new standard on January 1, 2020, the Company began recognizing an allowance using a forward-looking approach to estimate the expected credit loss related to financial assets. The Company began monitoring the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in the customers’ credit profiles. Over 95% of sales were generated from three major industry wholesalers for the three and six months ended June 30, 2020. Additionally, pursuant to the new standard, at each reporting period, the Company adjusts the Guarantee liability through earnings based on expected credit losses in accordance with Topic 326. The Company evaluated the impact of the adoption of this standard on its financial statements, concluding there was no significant impact on the Company's results of operations, financial position, cash flows 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 became effective for the Company on January 1, 2020. The Company evaluated the impact of the adoption of this new standard on its financial statements, concluding there was no significant impact. Income Tax Simplification |
Aytu Divestiture
Aytu Divestiture | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Aytu Divestiture | Aytu Divestiture Overview of Sale of Pediatric Portfolio and Related Commercial Infrastructure to Aytu BioScience 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. The Aytu Divestiture closed on November 1, 2019. Aytu paid consideration of $4.5 million in cash and approximately 9.8 million shares of Aytu convertible preferred stock, and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield CSF, LLC of $15.1 million and certain other liabilities of $11.0 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 Pediatric Portfolio. Armistice, a significant stockholder of the Company and Armistice's Chief Investment Officer, Steve Boyd, serves on each company's board of directors. Upon closing the Aytu Divestiture, Cerecor terminated all of its sales force personnel, which included those offered employment by Aytu, as well as any remaining sales force personnel. Additionally, Cerecor retained all rights to Millipred ® . Pursuant to a transition services agreement entered into between Aytu and Cerecor, Aytu is managing Millipred ® commercial operations for a monthly fee of $12,000 for up to 18 months or until the Company establishes an independent commercial infrastructure for the product. Deerfield Guarantee On November 1, 2019, in conjunction with the closing of the Aytu Divestiture, the Company entered into a Guarantee in favor of Deerfield CSF, LLC ("Deerfield"), which guarantees the payment by Aytu of the assumed liabilities to Deerfield, which includes the debt obligation ("Fixed Payment Guarantee") and the contingent consideration related to future potential royalties on Avadel's pediatric products ("Deferred Payment Guarantee"), collectively referred to as the "Guarantee". Additionally, on November 1, 2019, the Company entered into a Contribution Agreement with Armistice and Avadel that governs contribution rights and obligations of the Company, Armistice and Avadel with respect to amounts that are paid by Armistice and Avadel to Deerfield under certain guarantees made by Armistice and Avadel to Deerfield. The debt obligation assumed by Aytu consists of fixed monthly payments to Deerfield of $0.1 million until January 2021 and an additional balloon payment of $15.0 million to Deerfield on January 31, 2021. In May 2020, Aytu paid the $15.0 million balloon payment to Deerfield before it came due, thus satisfying that portion of the debt obligation assumed as part of the divestiture. Therefore, Cerecor's Fixed Payment Guarantee will end on January 31, 2021, upon the final monthly payment of $0.1 million. The contingent consideration assumed by Aytu consists of quarterly deferred payments equal to 15% of net sales of certain Pediatric Portfolio or at least $0.3 million paid in arrears each quarter until the earlier of (i) February 5, 2026, or (ii) when $12.5 million in aggregate deferred payments have been paid to Deerfield. Of the contingent consideration, $3.2 million was paid to Deerfield prior to the Aytu Divestiture and therefore as of November 1, 2019, Aytu was responsible for the remaining $9.3 million. Aytu is required to pay an amount equal to at least $0.1 million per month. Cerecor's Deferred Payment Guarantee will end upon the earlier of (i) February 5, 2026, or (ii) upon $12.5 million in aggregate deferred payments has been paid to Deerfield. Cerecor is required to make payment under the Guarantee upon demand by Deerfield, which Deerfield can demand at any time if all or any part of the fixed payments and/or deferred payments are not paid by Aytu when due or upon breach of a covenant. As of June 30, 2020, the estimated maximum potential amount of future payments under the Guarantee was $9.0 million, consisting of $0.6 million for the Fixed Payment Guarantee and $8.4 million for the Deferred Payment Guarantee (utilizing the $0.3 million per quarter minimum payment). The fair value of the Guarantee, which relates to the Company's obligation to make future payments if Aytu defaults, was determined at the time of the divestiture as the difference between (i) the estimated fair value of the debt and contingent payments, respectively, using Cerecor's estimated cost of debt and (ii) the estimated fair value of the debt and contingent payments, respectively, using Aytu's estimated cost of debt. Subsequent to the close of the Aytu Divestiture, at each reporting period, the value of the Guarantee is determined based on the expected credit loss of the Guarantee with changes recorded in (loss) income from discontinued operations, net of tax within the consolidated statements of operations. In 2020, Aytu's credit rating significantly improved as a result of recent developments to Aytu's business, including but not limited to, recent financings and expansion of its revenue products that substantially enhanced Aytu's cash position and its ability to meet its financial commitments. Based on these facts, management concluded that the expected credit loss of the Guarantee was de minimis as of March 31, 2020 and June 30, 2020. Therefore, no change in value was recognized in income from discontinued operations, net of tax within the accompanying condensed consolidated statement of operations for the three months ended June 30, 2020 and a $1.8 million gain on the change in value was recognized in income from discontinued operations, net of tax within the accompanying condensed consolidated statement of operations for the six months ended June 30, 2019. Discontinued Operations As a result of the sale of the Pediatric Portfolio, the operating results from the Pediatric Portfolio are reported as (loss) income from discontinued operations, net of tax in the accompanying condensed consolidated statements of operations. Accordingly, the accompanying condensed consolidated financial statements for the three and six months ended June 30, 2020 and 2019 and as of December 31, 2019 reflect the operations and related assets and liabilities of the Pediatric Portfolio as a discontinued operation. The following tables summarizes the assets and liabilities of the discontinued operations as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, (unaudited) 2019 Assets Current assets: Accounts receivable, net $ — $ 497,577 Total current assets of discontinued operations $ — $ 497,577 Liabilities Current liabilities: Accounts payable $ — $ 387,975 Accrued expenses and other current liabilities 5,549,751 3,503,037 Total current liabilities of discontinued operations 5,549,751 3,891,012 Other long-term liabilities — 1,755,000 Total long-term liabilities of discontinued operations $ — $ 1,755,000 Cerecor retains continuing involvement with the divested Pediatric Portfolio related to future sales returns made after November 1, 2019 of sales of the Pediatric Portfolio prior to the close date of the Aytu Divestiture and the Deerfield Guarantee (discussed in detail above). Pursuant to the Aytu Purchase Agreement, Aytu assumed sales returns of the Pediatric Portfolio made after the closing date of November 1, 2019 and primarily relating to sales prior to November 1, 2019 only to the extent such post-Closing sales returns exceed $2.0 million and are less than $2.8 million (in other words, Aytu will only assume $0.8 million of such returns). Therefore, Cerecor is liable for future sales returns of the Pediatric Portfolio sold prior to November 1, 2019 in excess of the $0.8 million assumed by Aytu. As of June 30, 2020, the Company estimated its sales return reserve from discontinued operations to be $1.6 million, which is included above in accrued expenses and other current liabilities from discontinued operations. Changes in the Company's estimate of sales returns related to the Pediatric Portfolio is included within discontinued operations on the statement of operations and is shown within product sales, net in the table summarizing the results of discontinued operations below. In future periods, as additional information becomes available to the Company, the Company expects to recognize expense (or a benefit) related to actual sales returns of the Pediatric Portfolio in excess (or less than) the returns reserve recorded as of November 1, 2019, which will be recognized within discontinued operations. The Company expects this involvement to continue until sales returns are no longer accepted on sales of the Pediatric Portfolio made prior to November 1, 2019, which, in line with the products' return policies, returns on these products may be accepted through 2023. The remaining liability within accrued expenses and other liabilities of discontinued operations as of June 30, 2020 largely relates to cash Cerecor collected on behalf of Aytu for post-divestiture sales of the Pediatric Portfolio, which will be remitted to Aytu. The collection of accounts receivable from Cerecor to Aytu was fully transitioned to Aytu during the second quarter of 2020. The following table summarizes the results of discontinued operations for the three and six months ended June 30, 2020 and 2019: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Product revenue, net $ (455,463) $ 3,057,462 $ (1,172,805) $ 5,892,537 Operating expenses: Cost of product sales — 1,354,855 — 2,550,199 General and administrative — 41,374 — 82,747 Sales and marketing — 2,610,990 — 5,323,616 Amortization expense — 744,099 — 1,488,199 Impairment of intangible assets — 1,449,121 — 1,449,121 Change in fair value of contingent consideration — 284,800 — 444,261 Total operating expenses — 6,485,239 — 11,338,143 Other (expense) income: Change in value of Guarantee — — 1,755,000 — Interest expense, net — (238,158) — (476,316) Total other (expense) income — (238,158) 1,755,000 (476,316) (Loss) income from discontinued operations before tax (455,463) (3,665,935) 582,195 (5,921,922) Income tax expense — 12,971 — 48,658 (Loss) income from discontinued operations, net of tax $ (455,463) $ (3,678,906) $ 582,195 $ (5,970,580) The significant non-cash operating items from the discontinued operations for the six months ended June 30, 2020 and 2019 are contained below. There were no non-cash investing items from the discontinued operations for the six months ended June 30, 2020 and 2019. Six Months Ended June 30, 2020 2019 Operating activities Amortization $ — $ 1,488,199 Impairment of intangible assets — 1,449,121 Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio — 202,330 Change in fair value of contingent consideration liability — 444,261 Change in value of Guarantee (1,755,000) — |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2020 | |
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 drugs to its customers. Revenue from sales of prescription drugs was $1.3 million and $1.4 million for the three months ended June 30, 2020 and 2019, respectively. Revenue from sales of prescription drugs was $4.1 million and $4.0 million for the six months ended June 30, 2020 and 2019, respectively. As is typical in the pharmaceutical industry, the Company sells its 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 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2020 | |
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 December 2018, upon Armistice exercising 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 the Company’s common stock, other than being non-voting, and is convertible into shares of common stock on a 1-for-5 ratio. During the first quarter of 2020, Armistice converted 1.6 million shares of Series B Convertible Preferred Stock into 8.0 million shares of Cerecor's common stock. 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 issued in 2015 to the underwriters of the Company's initial public offering ("IPO"), which are included under the "if-converted method" when dilutive; and (iii) 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) income per share of common stock and preferred stock for the three and six months ended June 30, 2020 and 2019, which includes both classes of participating securities: Three Months Ended June 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (11,659,008) $ (414,027) $ (1,166,833) $ (41,436) Denominator: Weighted average shares 62,806,926 62,806,926 1,257,143 1,257,143 Basic and diluted net loss per share $ (0.18) $ (0.01) $ (0.93) $ (0.03) Three Months Ended June 30, 2019 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (1,907,520) $ (2,758,276) $ (636,673) $ (920,630) Denominator: Weighted average shares 42,801,045 42,801,045 2,857,143 2,857,143 Basic and diluted net loss per share $ (0.05) $ (0.06) $ (0.23) $ (0.32) Six Months Ended June 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (31,098,910) $ 517,591 $ (3,881,695) $ 64,604 Denominator: Weighted average shares 58,370,843 58,370,843 1,457,143 1,457,143 Basic and diluted net (loss) income per share $ (0.53) $ 0.01 $ (2.66) $ 0.04 Six Months Ended June 30, 2019 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (5,752,395) $ (4,456,606) $ (1,954,172) $ (1,513,974) Denominator: Weighted average shares 42,052,100 42,052,100 2,857,143 2,857,143 Basic and diluted net loss per share $ (0.14) $ (0.10) $ (0.68) $ (0.53) The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the three months ended June 30, 2020 and 2019, as they could have been anti-dilutive: Three and Six Months Ended June 30, 2020 2019 Stock options 9,363,265 5,476,547 Warrants on common stock 4,024,708 4,024,708 Restricted Stock Units 155,833 278,750 Underwriters' unit purchase option 40,000 40,000 |
Asset Acquisition
Asset Acquisition | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations and Asset Acquisitions [Abstract] [Abstract] | |
Asset Acquisition | Asset Acquisition Aevi Merger On February 3, 2020, the Company consummated its two-step merger with Aevi, in accordance with the terms of the Merger Agreement dated December 5, 2019, by and between Cerecor, Genie Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Cerecor (“Merger Sub”), Second Genie Merger Sub, LLC (“Second Merger Sub”), a Delaware limited liability company and wholly owned subsidiary of Cerecor, and Aevi. On February 3, 2020, Merger Sub merged with and into Aevi, with Aevi as the surviving corporation, and as part of the same transaction, Aevi then merged with and into Second Merger Sub, with Second Merger Sub as the surviving entity. The surviving entity from the second merger was renamed Aevi Genomic Medicine, LLC and is disregarded as an entity separate from Cerecor for U.S. federal income tax purposes. Cerecor retained its public reporting and current NASDAQ listing status. Effective upon the consummation of the Merger, Cerecor entered into an employment agreement with Aevi CEO Mike Cola for him to serve as Cerecor's Chief Executive Officer and an employment agreement with Aevi CSO Dr. Garry Neil for him to serve as Cerecor's Chief Medical Officer, and appointed Mike Cola and Dr. Sol Barer to the Company's Board of Directors. Dr. Neil was promoted to Cerecor's Chief Scientific Officer in March 2020. Additionally, the Company extended employment agreements to seven other individuals who were previously employed by Aevi. The Merger consideration included stock valued at approximately $15.5 million, resulting in the issuance of approximately 3.9 million shares of Cerecor common stock to Aevi stockholders, forgiveness of a $4.1 million loan that Cerecor loaned Aevi in December 2019 contingent value rights for up to an additional $6.5 million in subsequent payments based on certain development milestones, payable in either shares of the Company's common stock or in cash at the election of the Company, and transaction costs of $1.5 million. The fair value of the common stock transferred at closing was approximately $15.5 million using the Company's closing stock price on February 3, 2020. The assets acquired consisted primarily of $24.0 million of acquired in-process research and development ("IPR&D"), $0.3 million of cash and $0.7 million of assembled workforce. The Company assumed net liabilities of $5.1 million. The Company recorded this transaction as an asset purchase as opposed to a business combination as management concluded that substantially all the value received was related to one group of similar identifiable assets which was the IPR&D for two early phase therapies for rare and orphan diseases (CERC-006 and CERC-007). The Company considered these assets similar due to similarities in the risks of development, stage of development, regulatory pathway, patient populations and economics of commercialization. The fair value of the IPR&D was immediately recognized as acquired in-process research and development expense in the Company's consolidated statement of operations because the IPR&D asset has no alternate use due to the stage of development. The $1.5 million of transaction costs incurred were recorded to acquired IPR&D expense. The assembled workforce asset was recorded to intangible assets and will be amortized over an estimated useful life of two years. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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: June 30, 2020 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* $ 43,800,469 $ — $ — Investment in Aytu $ — $ — $ — Liabilities Warrant liability** $ — $ — $ 20 Unit purchase option liability** $ — $ — $ 106 December 31, 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* $ 2,240,230 $ — $ — Investment in Aytu $ — $ 7,628,947 $ — Liabilities Warrant liability** $ — $ — $ 3,460 Unit purchase option liability** $ — $ — $ 10,594 *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 June 30, 2020 and December 31, 2019, the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and other current liabilities, warrant liability, and the underwriters' unit purchase option liability. 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. Level 2 Valuation As part of the consideration for the Aytu Divestiture, Aytu issued to Cerecor 9,805,845 shares of Aytu Series G Convertible Preferred Stock (the "Aytu Series G Preferred Stock" or "Aytu Preferred Stock"). Subsequent to the initial measurement, at each reporting period, the Investment in Aytu was remeasured at the current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations. In April 2020, Cerecor was permitted to convert the Aytu Preferred Stock into 9,805,845 shares of Aytu’s common stock (the "Aytu Common Shares"), and subsequently sold all of the Aytu Common Shares in a series of transactions in April, pursuant to an effective registration statement, which generated net proceeds of approximately $12.8 million. The sale resulted in a realized gain of $5.2 million, which was recognized in change in fair value of Investment in Aytu within the accompanying condensed consolidated statement of operations for the six months ended June 30, 2020. 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 six months ended June 30, 2020 and 2019: Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2019 $ 3,460 $ 10,594 $ — $ 14,054 Change in fair value (3,440) (10,488) — (13,928) Balance at June 30, 2020 $ 20 $ 106 $ — $ 126 Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2018 $ 2,950 $ 7,216 $ 1,256,210 $ 1,266,376 Change in fair value 8,570 20,098 (1,256,210) (1,227,542) Balance at June 30, 2019 $ 11,520 $ 27,314 $ — $ 38,834 In 2014, the Company issued warrants to purchase 625,208 shares of convertible preferred stock. Upon the closing of the Company's 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 June 30, 2020, include (i) volatility of 74.2%, (ii) risk free interest rate of 0.16%, (iii) strike price of $8.40, (iv) fair value of common stock of $2.60, and (v) expected life of 0.3 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 June 30, 2020, include (i) volatility of 74.2%, (ii) risk free interest rate of 0.16% , (iii) unit strike price of $7.47, (iv) fair value of underlying equity of $2.60, and (v) expected life of 0.3 years. The Company's historical business acquisition of TRx Pharmaceuticals, LLC ("TRx") in November 2017 (the "TRx Acquisition") involved the potential for future payment of consideration that is contingent upon the achievement of operational and commercial milestones. 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 were remeasured at the current fair value with changes recorded in the consolidated statement of operations. 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 was 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, 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 June 30, 2020 or as of June 30, 2019. |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of June 30, 2020 and December 31, 2019 consisted of the following: As of June 30, 2020 December 31, 2019 Research and development expenses $ 1,899,830 $ 920,901 Compensation and benefits 1,670,669 1,591,964 General and administrative 912,943 360,016 Sales and marketing 212,807 120,056 Sales returns and allowances 1,144,427 2,284,175 Medicaid rebates 101,458 118,271 Lease liability, current 431,543 155,815 Other 113,981 89,054 Total accrued expenses and other current liabilities $ 6,487,658 $ 5,640,252 During the first quarter of 2020, the Company and an executive entered into a separation agreement in which the executive resigned his employment at the Company effective June 30, 2020. Following June 30, 2020, the former executive will receive continued payments of his base salary for a total of nine months, which resulted in an accrual of $0.3 million recognized in accrued expenses and other current liabilities on the Company's accompanying condensed consolidated balance sheet as of June 30, 2020 and is shown within the compensation and benefits line above. |
Capital Structure
Capital Structure | 6 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020, 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. Common Stock June 2020 Financing On June 11, 2020, the Company closed an underwritten public offering of 15,180,000 shares of its common stock (inclusive of 1,980,000 shares that were sold pursuant to the underwriter’s full exercise of its option to purchase additional shares of Cerecor’s common stock) for net proceeds of approximately $35.4 million. Armistice participated in the offering by purchasing 2,000,000 shares of common stock, on the same terms as all other investors. Additionally, certain of the Company's officers participated in the offering by purchasing an aggregate of 110,000 shares of common stock, on the same terms as all other investors. March 2020 Financing On March 17, 2020, the Company entered into a securities purchase agreement with Armistice pursuant to which the Company sold 1,951,219 shares of the Company’s common stock for net proceeds of approximately $3.9 million. February 2020 Financing On February 6, 2020, the Company closed a registered direct offering with certain institutional investors for the sale by the Company of 1,306,282 shares of the Company's common stock for net proceeds of approximately $5.1 million. Armistice participated in the offering by purchasing 1,256,282 shares of common stock from the Company, on the same terms as all other investors. Aevi Merger On February 3, 2020, under the terms of the Aevi Merger noted above in Note 6, the Company issued 3.9 million shares of 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 net proceeds of approximately $3.7 million. March 2019 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 for net proceeds of approximately $9.0 million. Armistice participated in the offering by purchasing 363,637 shares of common stock of the Company, on the same terms as all other investors. Voting The 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 June 30, 2020, 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 7) 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 its largest stockholder, Armistice, whose Chief Investment Officer, Steve Boyd, is a Cerecor director, in order to generate cash to continue to develop its 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 of 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 in December 2018 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"). During the first quarter of 2020, Armistice converted 1,600,000 shares of Series B Convertible Preferred Stock (of its 2,857,143 million shares of convertible preferred stock) into 8,000,000 shares of Cerecor's common stock. 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. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | 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. A Third Amended and Restated Equity Incentive Plan (the "2016 Third Amended Plan") was approved by the Company's stockholders in June 2020 which increased the share reserve by an additional 2,014,400 shares. During the term of the 2016 Third 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 June 30, 2020, there were 3,464,032 shares available for future issuance under the 2016 Third Amended Plan. Option grants expire after ten years. Employee options typically vest over three one Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 390,506 $ 120,709 $ 772,275 $ 178,085 General and administrative 2,307,998 196,211 2,987,598 665,336 Sales and marketing 87,070 56,823 142,024 77,651 Total stock-based compensation, continuing operations 2,785,574 373,743 3,901,897 921,072 Total stock-based compensation, discontinued operations — 152,966 — 202,330 Total stock-based compensation $ 2,785,574 $ 526,709 $ 3,901,897 $ 1,123,402 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 six months ended June 30, 2020 is as follows: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2019 4,180,606 $ 4.80 $ 2.67 7.9 Granted 5,165,956 $ 3.52 $ 2.24 Exercised (50,239) $ 1.84 $ 1.22 Forfeited (629,300) $ 3.26 $ 1.95 Expired (303,758) $ 5.30 $ 3.03 Balance at June 30, 2020 8,363,265 $ 4.13 $ 2.45 7.8 Exercisable at June 30, 2020 2,719,729 $ 4.67 $ 2.60 5.1 In February 2020, the Company granted options to purchase 2.4 million shares of common stock as inducement option grants, pursuant to NASDAQ Listing Rule 5635(c)(4), to certain executives who joined the Company in connection with the Aevi Merger. In March 2020, our Chief Executive Officer entered into an amended employment agreement in which his base salary in cash was reduced from an annual rate of $450,000 to an annual rate of $35,568 (the "Reduction"). In consideration for the Reduction, on a quarterly basis, the Company grants stock options, which vest immediately (the "Salary Options"), for the purchase of a number of shares of the Company’s common stock with a total value (based on the Black-Scholes valuation methodology) based on a pro rata total annual value of $414,432 of the foregone salary. Finally, in April 2020, the Company granted options with service-based vesting conditions as part of its annual grant to employees. 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 June 30, 2020, the aggregate intrinsic value of options outstanding was $0.7 million. The aggregate intrinsic value of options currently exercisable as of June 30, 2020 was $0.6 million. There were 844,978 options that vested during the six months ended June 30, 2020 with a weighted average exercise price of $4.96 per share. The total grant date fair value of shares which vested during the six months ended June 30, 2020 was $2.3 million. The Company recognized stock-based compensation expense of $1.7 million and $2.5 million related to stock options with service-based vesting conditions for the three and six months ended June 30, 2020, respectively. At June 30, 2020, there was $11.1 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 3.2 years. Stock options with market-based vesting conditions The Company has granted options that contain market-based vesting conditions. The following table summarizes the Company's market-based option activity for the six months ended June 30, 2020: 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, 2019 300,000 $ 4.98 9.4 Granted 1,000,000 $ 3.29 10 Forfeited (300,000) Balance at June 30, 2020 1,000,000 $ 3.29 10 Exercisable at June 30, 2020 500,000 $ 45,000 (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 2020, 300,000 unvested market-based stock options were forfeited as a result of the resignation of an executive during the quarter. The forfeiture resulted in the reversal of the full expense previously recognized to date on this award of $0.4 million, which was recorded to general and administrative expense for the three and six months ended June 30, 2020. On June 18, 2020, the Company granted its recently appointed Chairman of the Board an option to purchase 1,000,000 shares of Company common stock with market-based vesting conditions. 500,000 of the shares vested immediately on the date of grant with an exercise price of the closing stock price on the date of grant of $2.51. 250,000 of the shares vest upon the Company's common stock reaching a 50% premium to the stock price on June 18, 2020 and will have an exercise price of the stock at that time and 250,000 of the shares vest upon the Company's common stock reaching a 75% premium to the stock price on June 18, 2020 and will have an exercise price of stock at that time. 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 $0.5 million and $0.6 million related to stock options with market-based vesting conditions for the three and six months ended June 30, 2020, respectively, which includes the reversal of the former Executive Chairman's forfeited options and the expense related to the market-based options granted during the quarter. At June 30, 2020, there was $0.7 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 0.7 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 for the six months ended June 30, 2020: Service-based options Expected dividend yield —% Expected volatility 69.9% - 79.9% Expected life (in years) 1.75 - 6.25 Risk-free interest rate 0.19% - 1.48% 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 the six months ended June 30, 2020: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2019 267,500 $ 4.92 Granted — Vested (111,667) $ 4.93 Unvested RSUs at June 30, 2020 155,833 $ 4.91 The Company recognized stock-based compensation expense of $0.6 million and $0.8 million related to RSUs for the three and six months ended June 30, 2020, respectively. At June 30, 2020, there was $43,202 of total unrecognized compensation cost related to the RSU grants. This compensation cost is expected to be recognized over a weighted-average period of 2.0 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 increases 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 were increased by 443,842 on January 1, 2020. As of June 30, 2020, 1,504,388 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 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized an income tax benefit of $0.5 million and $2.6 million for the three and six months ended June 30, 2020, respectively. The benefit recognized was a result of a current year tax law change and the ability of the Company to now carry back certain losses due to the CARES Act. The tax provisions within the CARES Act included temporary changes regarding the utilization and five year carry back of losses generated in 2018, 2019 and 2020, temporary changes regarding interest deductions, technical corrections from prior tax legislation related to qualified improvement property, and various other measures. In the second quarter of 2020, the Company filed a refund claim with the Internal Revenue Service related to its 2017 tax liability by carrying back losses not previously claimed. In June 2020, the state of Maryland issued a report announcing that the state decoupled from the CARES Act loss carryback provisions for the 2020 year only, but carrybacks are presently allowed under current law for 2018 and 2019. As a result, the Company recognized a $2.2 million benefit in the first quarter of 2020 related to the federal tax carryback and an additional $0.5 million in the second quarter of 2020 related to the Maryland tax carryback. The Company intends to file a claim related to the Maryland tax liability during the third quarter of 2020. The expense recognized for the three and six months ended June 30, 2019 of $0.1 million and $0.2 million, respectively, was a result of interest on an unpaid tax liability related to the 2017 tax year and state taxes. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company currently occupies two leased properties, both of which serve as administrative office space. The Company determined that both leases are operating leases based on the lease classification test performed at lease commencement. The annual base rent for the Company's corporate headquarters located in Rockville, Maryland (the "Headquarters' Lease") is $161,671, subject to annual 2.5% increases over the term of the lease. The lease provided 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 occurred 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 was 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 Company entered into a sublease for additional administrative office space in Chesterbrook, Pennsylvania in May 2020 (the "Chesterbrook Lease"). The annual base rent for the Chesterbrook Lease is $280,185. The lease expires in November 2021. The weighted average remaining term of the operating leases at June 30, 2020 was 7.7 years. Supplemental balance sheet information related to the leased property is as follows: As of June 30, 2020 December 31, 2019 Property and equipment, net $ 1,056,441 $ 718,626 Accrued expenses and other current liabilities $ 431,543 $ 155,815 Other long-term liabilities 1,191,560 1,111,965 Total operating lease liabilities $ 1,623,103 $ 1,267,780 The operating lease right-of-use ("ROU") assets are included in property and equipment and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in our condensed consolidated balance sheets. The Company utilized a weighted average discount rate of 7.2% to determine the present value of the lease payments. The components of lease expense for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Operating lease cost* $ 87,199 $ 39,534 $ 141,708 $ 94,140 *Includes short-term leases, which are immaterial. The following table shows a maturity analysis of the operating lease liability as of June 30, 2020: Undiscounted Cash Flows July 1, 2020 through December 31, 2020 $ 220,689 2021 426,346 2022 173,748 2023 178,092 2024 182,544 2025 187,108 Thereafter 813,638 Total lease payments $ 2,182,165 Less implied interest (559,062) Total $ 1,623,103 |
Commitments And Contingencies
Commitments And Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Litigation - General The Company may become party to 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 its financial position or results of operations except as otherwise disclosed in this report. 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 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 under the TRx Purchase Agreement, 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. However, on December 19, 2019, Cerecor received a letter from an attorney on behalf of the former TRx owners dated December 18, 2019 that enclosed a draft complaint seeking relief against Cerecor and one of the members of its board of directors. The parties met for a pre-lawsuit mediation in June 2020, however no resolution was reached. As of the date of this filing, no lawsuit has been filed. The proposed complaint indicates that the former TRx owners would seek the following relief: (a) $3.0 million on the grounds that commercially reasonable efforts to sell the acquired TRx products would have resulted in the gross profit earn-out target being reached; (b) that the $3.0 million amount be trebled as a result of Cerecor's alleged improper conduct; (c) $9.2 million as a result of alleged losses resulting from the alleged improper treatment of the former TRx owners as affiliates; and (d) the removal of any restrictions on the former TRx owners shares of common stock in Cerecor. Cerecor disputes that the former TRx owners are entitled to the relief sought and intends to vigorously defend against any lawsuit filed on behalf of the former TRx owners. A loss in this matter is possible in a range of $0 to $18.2 million. As a loss in this matter is not considered probable, there has been no accrual recorded as of June 30, 2020. Karbinal Royalty Make-Whole Provision 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 Aytu Divestiture, 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, under the original license agreement, the Company could ultimately be 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. Millipred License and Supply Agreement The Company has a License and Supply Agreement for Millipred with Watson Laboratories, Inc., which is now part of Teva Pharmaceutical Industries Ltd. ("Teva"). Pursuant to the License and Supply Agreement, the Company is required to make license payments of $75,000 in February and August of each year through April 2021, and purchase inventory on an ad-hoc basis. The License and Supply Agreement expires on April 1, 2021, however if neither party terminates the agreement prior to April 1, 2021, then the agreement will automatically renew for successive one-year periods. Effective upon the consummation of the Merger, Cerecor appointed Dr. Sol Barer to the Company's Board of Directors. Dr. Barer also serves as Teva's Chairman of the Board. Possible Future Milestone Proceeds for Out-Licensed Compounds CERC-611 License Assignment 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 year ended December 31, 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 released 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. 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. CERC-501 Sale to Janssen 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. Related Party and Acquisition Related Contingent Liabilities CERC-006 Royalty Agreement with Certain Related Parties As discussed in detail in Note 6, on February 3, 2020, the Company consummated a Merger with Aevi. Effective upon the closing of the Merger, Cerecor entered into an employment agreement with Mike Cola for him to serve as Cerecor's Chief Executive Officer and with Dr. Garry Neil for him to serve as Cerecor's Chief Medical Officer. Prior to Cerecor entering into the Merger Agreement, in July 2019, Aevi entered into a royalty agreement with Mike Cola, our current Chief Executive Officer, Joseph J. Grano, Jr., Kathleen Jane Grano, Joseph C. Grano, The Grano Children's Trust, Joseph C. Grano, trustee and LeoGroup Private Investment Access, LLC on behalf of Garry A. Neil, our current Chief Medical Officer (collectively, the "Investors") in exchange for a one-time aggregate payment of $2 million (the "Royalty Agreement"). Collectively, the Investors will be entitled to an aggregate amount equal to a low-single digit percentage of the aggregate net sales of Astellas Pharma Inc.'s second generation mTORC1/2 inhibitor, CERC-006. At any time beginning three years after the date of the first public launch of CERC-006, Cerecor may exercise, at its sole discretion, a buyout option that terminates any further obligations under the Royalty Agreement in exchange for a payment to Investors of an aggregate of 75% of the net present value of the royalty payments. A majority of the independent members of the board of directors and the audit committee of Aevi approved the Royalty Agreement. Cerecor assumed this Royalty Agreement upon closing of the Merger with Aevi and it is recorded within royalty obligation within the Company's accompanying condensed consolidated balance sheet as of June 30, 2020. Because there is a significant related party relationship between the Company and the Investors, the Company treated its obligation to make royalty payments under the Royalty Agreement as an implicit obligation to repay the funds advanced by the Investors. As the Company makes royalty payments in accordance with the Royalty Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates, which would result in a corresponding increase in the liability balance. Aevi Merger possible future milestone payments As detailed in Note 6, on February 3, 2020, the Company consummated its merger with Aevi, thus acquiring the rights to three early stage compounds for rare and orphan diseases (CERC-002, CERC-006 and CERC-007) and one other preclinical orphan disease compound, CERC-005. Consideration for the transaction included approximately 3.9 million shares of Cerecor common stock to Aevi stockholders, forgiveness of a $4.1 million loan that Cerecor loaned Aevi in December 2019, and certain contingent development milestones worth up to an additional $6.5 million. The contingent consideration of up to an additional $6.5 million relates to two future development milestones. The first milestone is the enrollment of a patient in a Phase II study related to CERC-002 for use in Pediatric Onset Crohn's Disease, CERC-006 or CERC-007 prior to February 3, 2022. If this milestone is met, the Company is required to make a milestone payment of $2.0 million. The second milestone is the receipt of a NDA approval for either CERC-006 or CERC-007 from the FDA on or prior to February 3, 2025. If this milestone is met, the Company is required to make a milestone payment of $4.5 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 the consummation of the Merger on February 3, 2020 and as of June 30, 2020, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. Ichorion Asset Acquisition possible future milestone payments On September 24, 2018, the Company acquired Ichorion Therapeutics, Inc. (the "Ichorion Acquisition") 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 Company recorded this transaction as an asset acquisition. 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. |
Payroll Protection Program Loan
Payroll Protection Program Loan | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Payroll Protection Program Loan | Payroll Protection Program LoanThe CARES Act provides stimulus measures, including the Payroll Protection Loan Program ("PPP"), to provide certain small businesses with liquidity to support their operations during the COVID-19 pandemic. Cerecor received a $0.4 million PPP Loan during the second quarter of 2020. PPP Loans have a 1% fixed annual interest rate and mature in two years, however are eligible for forgiveness under certain conditions. Cerecor used the loaned funds during the second quarter of 2020 to retain employees and maintain payroll and lease payments, as specified under the Paycheck Protection Program Rule. The Company believes it meets the criteria for forgiveness and plans to submit an application for forgiveness with its lender in the second half of 2020. Once approved by the lender, the lender will submit the forgiveness application to the Small Business Administration (the "SBA") for ultimate approval. The SBA has 90 days from receipt to approve or reject the forgiveness application. The Company incurred the related expense prior to June 30, 2020 and recognized the PPP Loan of $0.4 million as other income within the accompanying condensed consolidated statement of operations for the three and six months ended June 30, 2020. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 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, 2019 audited consolidated financial statements. |
Payroll Protection Program Loan | Payroll Protection Program Loan The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") provides stimulus measures, including the Payroll Protection Loan Program ("PPP"), to provide certain small businesses with liquidity to support their operations (such as to retain employees and maintain payroll and lease payments) during the COVID-19 pandemic. Cerecor received a $0.4 million PPP Loan during the second quarter of 2020. PPP Loans have a 1% fixed annual interest rate and mature in two years, however are eligible for forgiveness under certain conditions. If there is reasonable assurance that the PPP Loan will be forgiven, the Company may elect to account for the loan either as debt under ASC 470 or as a government grant. If accounted for as a government grant, the Company may elect to present the loan as either a credit in the income statement within other income or as reduction to the related expense. As discussed in Note 14, as of June 30, 2020, the Company believes it meets the criteria for forgiveness including having incurred the related expenses prior to June 30, 2020. Therefore, the Company elected to recognized the PPP Loan as other income within the accompanying condensed consolidated statement of operations for the three and six months ended June 30, 2020. |
Recently Adopted Accounting Pronouncements | Recently Adopted 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. Upon adoption of the new standard on January 1, 2020, the Company began recognizing an allowance using a forward-looking approach to estimate the expected credit loss related to financial assets. The Company began monitoring the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in the customers’ credit profiles. Over 95% of sales were generated from three major industry wholesalers for the three and six months ended June 30, 2020. Additionally, pursuant to the new standard, at each reporting period, the Company adjusts the Guarantee liability through earnings based on expected credit losses in accordance with Topic 326. The Company evaluated the impact of the adoption of this standard on its financial statements, concluding there was no significant impact on the Company's results of operations, financial position, cash flows 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 became effective for the Company on January 1, 2020. The Company evaluated the impact of the adoption of this new standard on its financial statements, concluding there was no significant impact. Income Tax Simplification |
Aytu Divestiture (Tables)
Aytu Divestiture (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The following tables summarizes the assets and liabilities of the discontinued operations as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, (unaudited) 2019 Assets Current assets: Accounts receivable, net $ — $ 497,577 Total current assets of discontinued operations $ — $ 497,577 Liabilities Current liabilities: Accounts payable $ — $ 387,975 Accrued expenses and other current liabilities 5,549,751 3,503,037 Total current liabilities of discontinued operations 5,549,751 3,891,012 Other long-term liabilities — 1,755,000 Total long-term liabilities of discontinued operations $ — $ 1,755,000 Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Product revenue, net $ (455,463) $ 3,057,462 $ (1,172,805) $ 5,892,537 Operating expenses: Cost of product sales — 1,354,855 — 2,550,199 General and administrative — 41,374 — 82,747 Sales and marketing — 2,610,990 — 5,323,616 Amortization expense — 744,099 — 1,488,199 Impairment of intangible assets — 1,449,121 — 1,449,121 Change in fair value of contingent consideration — 284,800 — 444,261 Total operating expenses — 6,485,239 — 11,338,143 Other (expense) income: Change in value of Guarantee — — 1,755,000 — Interest expense, net — (238,158) — (476,316) Total other (expense) income — (238,158) 1,755,000 (476,316) (Loss) income from discontinued operations before tax (455,463) (3,665,935) 582,195 (5,921,922) Income tax expense — 12,971 — 48,658 (Loss) income from discontinued operations, net of tax $ (455,463) $ (3,678,906) $ 582,195 $ (5,970,580) The significant non-cash operating items from the discontinued operations for the six months ended June 30, 2020 and 2019 are contained below. There were no non-cash investing items from the discontinued operations for the six months ended June 30, 2020 and 2019. Six Months Ended June 30, 2020 2019 Operating activities Amortization $ — $ 1,488,199 Impairment of intangible assets — 1,449,121 Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio — 202,330 Change in fair value of contingent consideration liability — 444,261 Change in value of Guarantee (1,755,000) — |
Net Loss Per Share - (Tables)
Net Loss Per Share - (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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) income per share of common stock and preferred stock for the three and six months ended June 30, 2020 and 2019, which includes both classes of participating securities: Three Months Ended June 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (11,659,008) $ (414,027) $ (1,166,833) $ (41,436) Denominator: Weighted average shares 62,806,926 62,806,926 1,257,143 1,257,143 Basic and diluted net loss per share $ (0.18) $ (0.01) $ (0.93) $ (0.03) Three Months Ended June 30, 2019 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (1,907,520) $ (2,758,276) $ (636,673) $ (920,630) Denominator: Weighted average shares 42,801,045 42,801,045 2,857,143 2,857,143 Basic and diluted net loss per share $ (0.05) $ (0.06) $ (0.23) $ (0.32) Six Months Ended June 30, 2020 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (31,098,910) $ 517,591 $ (3,881,695) $ 64,604 Denominator: Weighted average shares 58,370,843 58,370,843 1,457,143 1,457,143 Basic and diluted net (loss) income per share $ (0.53) $ 0.01 $ (2.66) $ 0.04 Six Months Ended June 30, 2019 Common stock Preferred stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net loss $ (5,752,395) $ (4,456,606) $ (1,954,172) $ (1,513,974) Denominator: Weighted average shares 42,052,100 42,052,100 2,857,143 2,857,143 Basic and diluted net loss per share $ (0.14) $ (0.10) $ (0.68) $ (0.53) |
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 months ended June 30, 2020 and 2019, as they could have been anti-dilutive: Three and Six Months Ended June 30, 2020 2019 Stock options 9,363,265 5,476,547 Warrants on common stock 4,024,708 4,024,708 Restricted Stock Units 155,833 278,750 Underwriters' unit purchase option 40,000 40,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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: June 30, 2020 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* $ 43,800,469 $ — $ — Investment in Aytu $ — $ — $ — Liabilities Warrant liability** $ — $ — $ 20 Unit purchase option liability** $ — $ — $ 106 December 31, 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* $ 2,240,230 $ — $ — Investment in Aytu $ — $ 7,628,947 $ — Liabilities Warrant liability** $ — $ — $ 3,460 Unit purchase option liability** $ — $ — $ 10,594 *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 six months ended June 30, 2020 and 2019: Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2019 $ 3,460 $ 10,594 $ — $ 14,054 Change in fair value (3,440) (10,488) — (13,928) Balance at June 30, 2020 $ 20 $ 106 $ — $ 126 Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2018 $ 2,950 $ 7,216 $ 1,256,210 $ 1,266,376 Change in fair value 8,570 20,098 (1,256,210) (1,227,542) Balance at June 30, 2019 $ 11,520 $ 27,314 $ — $ 38,834 |
Accrued Expenses And Other Cu_2
Accrued Expenses And Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities as of June 30, 2020 and December 31, 2019 consisted of the following: As of June 30, 2020 December 31, 2019 Research and development expenses $ 1,899,830 $ 920,901 Compensation and benefits 1,670,669 1,591,964 General and administrative 912,943 360,016 Sales and marketing 212,807 120,056 Sales returns and allowances 1,144,427 2,284,175 Medicaid rebates 101,458 118,271 Lease liability, current 431,543 155,815 Other 113,981 89,054 Total accrued expenses and other current liabilities $ 6,487,658 $ 5,640,252 |
Capital Structure (Tables)
Capital Structure (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
CAPITAL STRUCTURE | |
Schedule of outstanding common stock warrants | At June 30, 2020, 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 7) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 six months ended June 30, 2020 and 2019 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 390,506 $ 120,709 $ 772,275 $ 178,085 General and administrative 2,307,998 196,211 2,987,598 665,336 Sales and marketing 87,070 56,823 142,024 77,651 Total stock-based compensation, continuing operations 2,785,574 373,743 3,901,897 921,072 Total stock-based compensation, discontinued operations — 152,966 — 202,330 Total stock-based compensation $ 2,785,574 $ 526,709 $ 3,901,897 $ 1,123,402 |
Summary of option activity | A summary of option activity for the six months ended June 30, 2020 is as follows: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2019 4,180,606 $ 4.80 $ 2.67 7.9 Granted 5,165,956 $ 3.52 $ 2.24 Exercised (50,239) $ 1.84 $ 1.22 Forfeited (629,300) $ 3.26 $ 1.95 Expired (303,758) $ 5.30 $ 3.03 Balance at June 30, 2020 8,363,265 $ 4.13 $ 2.45 7.8 Exercisable at June 30, 2020 2,719,729 $ 4.67 $ 2.60 5.1 The Company has granted options that contain market-based vesting conditions. The following table summarizes the Company's market-based option activity for the six months ended June 30, 2020: 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, 2019 300,000 $ 4.98 9.4 Granted 1,000,000 $ 3.29 10 Forfeited (300,000) Balance at June 30, 2020 1,000,000 $ 3.29 10 Exercisable at June 30, 2020 500,000 $ 45,000 |
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 for the six months ended June 30, 2020: Service-based options Expected dividend yield —% Expected volatility 69.9% - 79.9% Expected life (in years) 1.75 - 6.25 Risk-free interest rate 0.19% - 1.48% |
Nonvested Restricted Stock Shares Activity | The following table summarizes the Company's RSU activity for the six months ended June 30, 2020: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2019 267,500 $ 4.92 Granted — Vested (111,667) $ 4.93 Unvested RSUs at June 30, 2020 155,833 $ 4.91 |
Leases - (Tables)
Leases - (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Assets And Liabilities Lessee | Supplemental balance sheet information related to the leased property is as follows: As of June 30, 2020 December 31, 2019 Property and equipment, net $ 1,056,441 $ 718,626 Accrued expenses and other current liabilities $ 431,543 $ 155,815 Other long-term liabilities 1,191,560 1,111,965 Total operating lease liabilities $ 1,623,103 $ 1,267,780 |
Lease, Cost | The components of lease expense for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Operating lease cost* $ 87,199 $ 39,534 $ 141,708 $ 94,140 |
Lessee, Operating Lease, Liability, Maturity | The following table shows a maturity analysis of the operating lease liability as of June 30, 2020: Undiscounted Cash Flows July 1, 2020 through December 31, 2020 $ 220,689 2021 426,346 2022 173,748 2023 178,092 2024 182,544 2025 187,108 Thereafter 813,638 Total lease payments $ 2,182,165 Less implied interest (559,062) Total $ 1,623,103 |
Business (Details)
Business (Details) | Jun. 11, 2020USD ($)shares | Mar. 17, 2020USD ($)shares | Feb. 06, 2020USD ($)shares | Feb. 03, 2020USD ($)shares | Sep. 04, 2019USD ($)shares | Jun. 30, 2020USD ($)shares | Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($)shares | Feb. 29, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)product | Jun. 30, 2019USD ($) | Nov. 01, 2019shares |
Subsequent Event [Line Items] | ||||||||||||||||
Sale of stock (in shares) | shares | 15,180,000 | 15,180,000 | ||||||||||||||
Net proceeds | $ 35,400,000 | $ 35,400,000 | ||||||||||||||
Cash and cash equivalents | 45,390,553 | $ 3,609,438 | $ 45,390,553 | $ 3,609,438 | $ 9,386,865 | $ 45,390,553 | $ 9,386,865 | |||||||||
Net loss | 13,281,304 | $ 6,223,099 | 34,398,410 | 13,677,147 | ||||||||||||
Net cash used in operating activities | 14,294,187 | $ 9,838,855 | ||||||||||||||
Accumulated deficit | $ 148,689,027 | 114,290,617 | $ 148,689,027 | 114,290,617 | $ 148,689,027 | |||||||||||
Neurological Clinical And Preclinical Stage Compounds | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Number of products in development | product | 3 | |||||||||||||||
Over-Allotment Option | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Sale of stock (in shares) | shares | 1,980,000 | 1,980,000 | ||||||||||||||
Armistice Purchase Agreement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Sale of stock (in shares) | shares | 1,951,219 | 1,200,000 | 1,951,219 | |||||||||||||
Net proceeds | $ 3,900,000 | $ 3,700,000 | $ 3,900,000 | |||||||||||||
Registered Direct Offering | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Sale of stock (in shares) | shares | 1,306,282 | 1,306,282 | ||||||||||||||
Net proceeds | $ 5,100,000 | |||||||||||||||
Armistice | Registered Direct Offering | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Sale of stock (in shares) | shares | 1,256,282 | |||||||||||||||
Armistice | Registered Direct Offering | Common stock | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Net proceeds | $ 5,100,000 | |||||||||||||||
Aevi | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Loan forgiven | $ 4,100,000 | 4,100,000 | ||||||||||||||
Pediatric Portfolio | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Proceeds from sale of assets | 4,500,000 | |||||||||||||||
Assumption of debt on sale of assets | 15,100,000 | 15,100,000 | ||||||||||||||
Gain on disposal | 8,000,000 | |||||||||||||||
Pediatric Portfolio | AYTU | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Liabilities assumed by buyer | $ 11,000,000 | $ 11,000,000 | ||||||||||||||
Aevi | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Consideration transferred, shares issued | $ 15,500,000 | |||||||||||||||
Shares issued (in shares) | shares | 3,900,000 | |||||||||||||||
Contingent consideration | $ 6,500,000 | |||||||||||||||
AYTU | Convertible Preferred Stock | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Investment (in shares) | shares | 9,800,000 | 9,800,000 | 9,800,000 | |||||||||||||
AYTU | Common stock | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Net proceeds | $ 12,800,000 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Payroll Protection Program Loan, CARES Act | ||
Concentration Risk [Line Items] | ||
Principal amount | $ 400,000 | $ 400,000 |
Customer Concentration Risk | Sales Revenue | Three Wholesalers | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 95.00% | 95.00% |
Aytu Divestiture - Narrative (D
Aytu Divestiture - Narrative (Details) - USD ($) shares in Millions | Nov. 01, 2019 | May 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Oct. 31, 2019 | Jan. 31, 2021 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Maximum future payments | $ 9,000,000 | $ 9,000,000 | |||||||
Change in fair value on guarantee | 0 | 1,755,000 | $ 0 | ||||||
Pediatric Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Proceeds from sale of assets | $ 4,500,000 | ||||||||
Assumption of debt on sale of assets | $ 15,100,000 | ||||||||
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Proceeds from sale of assets | $ 4,500,000 | ||||||||
Assumption of debt on sale of assets | 15,100,000 | ||||||||
Change in fair value on guarantee | 0 | $ 0 | 1,755,000 | $ 0 | |||||
Sales returns disposed of | $ 800,000 | ||||||||
Sales return reserve | 1,600,000 | 1,600,000 | |||||||
Convertible Preferred Stock | AYTU | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Investment (in shares) | 9.8 | 9.8 | |||||||
AYTU | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Monthly commercial operation payments | $ 12,000 | ||||||||
AYTU | Pediatric Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Liabilities assumed by buyer | $ 11,000,000 | ||||||||
AYTU | Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Liabilities assumed by buyer | 11,000,000 | ||||||||
Minimum | Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Sales returns disposed of | 2,000,000 | ||||||||
Maximum | Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Sales returns disposed of | $ 2,800,000 | ||||||||
Maximum | AYTU | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Duration of monthly commercial operation payments | 18 months | ||||||||
Deerfield Obligation | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Contingent consideration paid | $ 3,200,000 | ||||||||
Deerfield Obligation | Forecast | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Periodic payment | $ 100,000 | ||||||||
Fixed Payment Guarantee | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Maximum future payments | 600,000 | 600,000 | |||||||
Deferred Payment Guarantee | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Maximum future payments | 8,400,000 | $ 8,400,000 | |||||||
AYTU | Deerfield Obligation | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Periodic payment | $ 300,000 | ||||||||
Debt repayment | $ 15,000,000 | ||||||||
Remaining contingent consideration | $ 9,300,000 | ||||||||
AYTU | Deerfield Obligation | Pediatric Portfolio | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Periodic payment | $ 300,000 | ||||||||
Quarterly deferred payments, percentage of net sales of pediatric products | 15.00% | ||||||||
Future aggregate deferred payments | $ 12,500,000 | ||||||||
AYTU | Deerfield Obligation | Forecast | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||
Periodic payment | 100,000 | ||||||||
Balloon payment to be paid | $ 15,000,000 |
Aytu Divestiture - Summary of A
Aytu Divestiture - Summary of Assets and Liabilities (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Total current assets of discontinued operations | $ 0 | $ 497,577 |
Current liabilities: | ||
Total current liabilities of discontinued operations | 5,549,751 | 3,891,012 |
Total long-term liabilities of discontinued operations | 0 | 1,755,000 |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Current assets: | ||
Accounts receivable, net | 0 | 497,577 |
Total current assets of discontinued operations | 0 | 497,577 |
Current liabilities: | ||
Accounts payable | 0 | 387,975 |
Accrued expenses and other current liabilities | 5,549,751 | 3,503,037 |
Total current liabilities of discontinued operations | 5,549,751 | 3,891,012 |
Other long-term liabilities | 0 | 1,755,000 |
Total long-term liabilities of discontinued operations | $ 0 | $ 1,755,000 |
Aytu Divestiture - Summary of I
Aytu Divestiture - Summary of Income Statement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other (expense) income: | ||||
Change in value of Guarantee | $ 0 | $ 1,755,000 | $ 0 | |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Product revenue, net | (455,463) | $ 3,057,462 | (1,172,805) | 5,892,537 |
Operating expenses: | ||||
Cost of product sales | 0 | 1,354,855 | 0 | 2,550,199 |
General and administrative | 0 | 41,374 | 0 | 82,747 |
Sales and marketing | 0 | 2,610,990 | 0 | 5,323,616 |
Amortization expense | 0 | 744,099 | 0 | 1,488,199 |
Impairment of intangible assets | 0 | 1,449,121 | 0 | 1,449,121 |
Change in fair value of contingent consideration | 0 | 284,800 | 0 | 444,261 |
Total operating expenses | 0 | 6,485,239 | 0 | 11,338,143 |
Other (expense) income: | ||||
Change in value of Guarantee | 0 | 0 | 1,755,000 | 0 |
Interest expense, net | 0 | (238,158) | 0 | (476,316) |
Total other (expense) income | 0 | (238,158) | 1,755,000 | (476,316) |
(Loss) income from discontinued operations before tax | (455,463) | (3,665,935) | 582,195 | (5,921,922) |
Income tax expense | 0 | 12,971 | 0 | 48,658 |
(Loss) income from discontinued operations, net of tax | $ (455,463) | $ (3,678,906) | $ 582,195 | $ (5,970,580) |
Aytu Divestiture - Summary of C
Aytu Divestiture - Summary of Cash Flows (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||||
Change in value of Guarantee | $ 0 | $ (1,755,000) | $ 0 | |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||||
Operating activities | ||||
Amortization | 0 | 1,488,199 | ||
Impairment of intangible assets | 0 | $ 1,449,121 | 0 | 1,449,121 |
Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio | 0 | 202,330 | ||
Change in fair value of contingent consideration | 0 | 284,800 | 0 | 444,261 |
Change in value of Guarantee | $ 0 | $ 0 | $ (1,755,000) | $ 0 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers - (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,337,764 | $ 1,391,942 | $ 4,091,628 | $ 3,968,310 |
Customer Concentration Risk | Sales Revenue | Major Customer Number One | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 50.00% | 44.00% | ||
Customer Concentration Risk | Sales Revenue | Major Customer Number Two | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 30.00% | 29.00% | ||
Customer Concentration Risk | Sales Revenue | Major Customer Number Three | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 18.00% | 26.00% |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | Dec. 26, 2018shares | Dec. 31, 2018shares | Mar. 31, 2020shares | Jun. 30, 2020shares | Dec. 31, 2019shares | Dec. 27, 2018shares |
Subsidiary, Sale of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | ||||
Preferred Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Conversion of preferred stock to common stock (in shares) | (1,600,000) | |||||
Common stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | 8,000,000 | ||||
Series B Preferred Stock | Preferred Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | |||
Shares converted (in shares) | 1,600,000 | |||||
Private Placement | Series B Preferred Stock | Preferred Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 | 2,857,143 |
Net Loss Per Share - (Details)
Net Loss Per Share - (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Common stock | ||||
Numerator: | ||||
Allocation of undistributed net (loss) income | $ (11,659,008) | $ (1,907,520) | $ (31,098,910) | $ (5,752,395) |
Allocation of undistributed net (loss) income | $ (414,027) | $ (2,758,276) | $ 517,591 | $ (4,456,606) |
Denominator: | ||||
Weighted average shares (in shares) | 62,806,926 | 42,801,045 | 58,370,843 | 42,052,100 |
Continuing operations, basic and diluted net (loss) income per share (in dollars per share) | $ (0.18) | $ (0.05) | $ (0.53) | $ (0.14) |
Discontinued operations, basic and diluted net (loss) income per share (in dollars per share) | $ (0.01) | $ (0.06) | $ 0.01 | $ (0.10) |
Preferred Stock | ||||
Numerator: | ||||
Allocation of undistributed net (loss) income | $ (1,166,833) | $ (636,673) | $ (3,881,695) | $ (1,954,172) |
Allocation of undistributed net (loss) income | $ (41,436) | $ (920,630) | $ 64,604 | $ (1,513,974) |
Denominator: | ||||
Weighted average shares (in shares) | 1,257,143 | 2,857,143 | 1,457,143 | 2,857,143 |
Continuing operations, basic and diluted net (loss) income per share (in dollars per share) | $ (0.93) | $ (0.23) | $ (2.66) | $ (0.68) |
Discontinued operations, basic and diluted net (loss) income per share (in dollars per share) | $ (0.03) | $ (0.32) | $ 0.04 | $ (0.53) |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock options | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 9,363,265 | 5,476,547 | 9,363,265 | 5,476,547 |
Warrants on common stock | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 4,024,708 | 4,024,708 | 4,024,708 | 4,024,708 |
Restricted Stock Units | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 155,833 | 278,750 | 155,833 | 278,750 |
Underwriters' unit purchase option | ||||
Anti-dilutive securities | ||||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 40,000 | 40,000 | 40,000 | 40,000 |
Asset Acquisition (Details)
Asset Acquisition (Details) shares in Millions | Feb. 03, 2020USD ($)milestoneshares | Dec. 31, 2019USD ($) | Mar. 31, 2020 | Jun. 30, 2020USD ($) |
Aevi | ||||
Business Acquisition [Line Items] | ||||
Forgiveness of loan | $ 4,100,000 | $ 4,100,000 | ||
Aevi | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred, shares issued | $ 15,500,000 | |||
Shares issued (in shares) | shares | 3.9 | |||
Contingent consideration | $ 6,500,000 | |||
Transaction costs | 1,500,000 | |||
Fair value assigned to intangible asset at purchase | 24,000,000 | |||
Cash acquired | 300,000 | |||
Net liabilities assumed | $ 5,100,000 | |||
Number of contingent consideration milestones | milestone | 2 | |||
Milestone payment | $ 0 | $ 0 | ||
Aevi | Assembled Workforce | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 700,000 | |||
Useful life | 2 years | 2 years | ||
Aevi | Milestone One | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 2,000,000 | |||
Aevi | Milestone Two | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 4,500,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Aytu | $ 0 | $ 7,628,947 |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 43,800,469 | 2,240,230 |
Investment in Aytu | 0 | 0 |
Recurring basis | Level 1 | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Recurring basis | Level 1 | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Investment in Aytu | 0 | 7,628,947 |
Recurring basis | Level 2 | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Recurring basis | Level 2 | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Recurring basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Investment in Aytu | 0 | 0 |
Recurring basis | Level 3 | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 20 | 3,460 |
Recurring basis | Level 3 | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 106 | $ 10,594 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Jun. 30, 2020USD ($)$ / sharesmilestone | Jun. 11, 2020USD ($) | Feb. 03, 2020USD ($) | Jun. 30, 2019USD ($)milestone | Jun. 30, 2020USD ($)$ / shares | Apr. 30, 2020USD ($)shares | Nov. 30, 2017USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($)$ / sharesclass_of_stock | Jun. 30, 2019USD ($)class_of_stock | Dec. 31, 2018USD ($)shares | Nov. 17, 2017USD ($) | Dec. 31, 2015shares | Dec. 31, 2014shares |
Level 3 Valuation | ||||||||||||||
Net proceeds | $ 35,400,000 | $ 35,400,000 | ||||||||||||
Number of shares available under warrant (in shares) | shares | 4,000,000 | |||||||||||||
Warrants outstanding term | 5 years 6 months | |||||||||||||
Number of changes in valuation techniques | class_of_stock | 0 | 0 | ||||||||||||
Amount of transfers of assets from level 2 to level 1 | $ 0 | $ 0 | 0 | $ 0 | $ 0 | |||||||||
Amount of transfers of assets from level 1 to level 2 | $ 0 | 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 | ||||||||||||||
Realized gain | $ 5,200,000 | |||||||||||||
Warrant liability | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants outstanding term | 3 months 18 days | 3 months 18 days | 3 months 18 days | |||||||||||
Equity Unit Purchase Option | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants outstanding term | 3 months 18 days | 3 months 18 days | 3 months 18 days | |||||||||||
Volatility | Warrant liability | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | 0.742 | 0.742 | 0.742 | |||||||||||
Volatility | Equity Unit Purchase Option | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | 0.742 | 0.742 | 0.742 | |||||||||||
Risk Free Interest Rate | Warrant liability | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | 0.0016 | 0.0016 | 0.0016 | |||||||||||
Risk Free Interest Rate | Equity Unit Purchase Option | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | 0.0016 | 0.0016 | 0.0016 | |||||||||||
Strike Price (in dollars per share) | Warrant liability | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | $ / shares | 8.40 | 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 | 7.47 | |||||||||||
Share Price (in dollars per share) | Warrant liability | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | $ / shares | 2.60 | 2.60 | 2.60 | |||||||||||
Share Price (in dollars per share) | Equity Unit Purchase Option | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Warrants measurement input | $ / shares | 2.60 | 2.60 | 2.60 | |||||||||||
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 | |||||||||||||
TRx | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Potential milestone payment | $ 3,000,000 | |||||||||||||
Contingent payments | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||
Number of contingent consideration milestones | milestone | 2 | 2 | ||||||||||||
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 | |||||||||||||
AYTU | Common stock | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Net proceeds | $ 12,800,000 | |||||||||||||
Pediatric Portfolio | Convertible Preferred Stock | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Shares received as consideration (in shares) | shares | 9,805,845 | |||||||||||||
Assembled Workforce | Aevi | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Intangible assets acquired | $ 700,000 | |||||||||||||
Useful life | 2 years | 2 years | ||||||||||||
Assembled Workforce | Aevi | Level 3 | ||||||||||||||
Level 3 Valuation | ||||||||||||||
Intangible assets acquired | $ 700,000 |
Fair Value Measurements - Rollf
Fair Value Measurements - Rollforward (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Change in fair value | $ 0 | $ (1,277,150) | $ 0 | $ (1,256,210) |
Recurring basis | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 14,054 | 1,266,376 | ||
Change in fair value | (13,928) | (1,227,542) | ||
Ending balance | 126 | 38,834 | 126 | 38,834 |
Warrant liability | Recurring basis | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 3,460 | 2,950 | ||
Change in fair value | (3,440) | 8,570 | ||
Ending balance | 20 | 11,520 | 20 | 11,520 |
Unit purchase option liability | Recurring basis | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 10,594 | 7,216 | ||
Change in fair value | (10,488) | 20,098 | ||
Ending balance | 106 | 27,314 | 106 | 27,314 |
Contingent consideration | Recurring basis | Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | ||||
Beginning balance | 0 | 1,256,210 | ||
Change in fair value | 0 | (1,256,210) | ||
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Accrued Expenses And Other Cu_3
Accrued Expenses And Other Current Liabilities (Details) - USD ($) | Apr. 24, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Research and development expenses | $ 1,899,830 | $ 920,901 | |
Compensation and benefits | 1,670,669 | 1,591,964 | |
General and administrative | 912,943 | 360,016 | |
Sales and marketing | 212,807 | 120,056 | |
Sales returns and allowances | 1,144,427 | 2,284,175 | |
Medicaid rebates | 101,458 | 118,271 | |
Lease liability, current | 431,543 | 155,815 | |
Other | 113,981 | 89,054 | |
Total accrued expenses and other current liabilities | 6,487,658 | $ 5,640,252 | |
Written notice, term | 30 days | ||
Accrued severance | $ 800,000 | 800,000 | |
Accrued severance costs, term | 18 months | ||
Executive Officer | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Accrued compensation | $ 300,000 |
Capital Structure - Common Stoc
Capital Structure - Common Stock (Details) $ / shares in Units, $ in Millions | Jun. 11, 2020USD ($)shares | Mar. 17, 2020USD ($)shares | Feb. 06, 2020USD ($)shares | Feb. 03, 2020shares | Sep. 04, 2019USD ($)shares | Mar. 08, 2019USD ($)shares | Dec. 26, 2018shares | Jun. 30, 2020USD ($)class_of_stock$ / sharesshares | Mar. 31, 2020USD ($)shares | Feb. 29, 2020USD ($)shares | Dec. 31, 2018$ / sharesshares | Mar. 31, 2020shares | Jun. 30, 2020class_of_stockVote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 27, 2018$ / sharesshares | 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 | ||||||||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Sale of stock (in shares) | 15,180,000 | 15,180,000 | |||||||||||||||
Net proceeds | $ | $ 35.4 | $ 35.4 | |||||||||||||||
Number of shares available under warrant (in shares) | 4,000,000 | 4,000,000 | |||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 | $ 12.50 | |||||||||||||||
Warrants outstanding term | 5 years 6 months | 5 years 6 months | |||||||||||||||
Preferred Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Conversion of preferred stock to common stock (in shares) | (1,600,000) | ||||||||||||||||
Common Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Number of shares available under warrant (in shares) | 22,328 | ||||||||||||||||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | 8,000,000 | |||||||||||||||
Series B Preferred Stock | Preferred Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | ||||||||||||||
Number of shares available under warrant (in shares) | 625,208 | ||||||||||||||||
Shares converted (in shares) | 1,600,000 | ||||||||||||||||
Common Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Number of votes per share | Vote | 1 | ||||||||||||||||
Number of preemptive, conversion or subscription rights | class_of_stock | 0 | ||||||||||||||||
Number of redemption or sinking fund provisions | class_of_stock | 0 | ||||||||||||||||
Underwritten Public Offering | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 15,180,000 | ||||||||||||||||
Net proceeds | $ | $ 35.4 | ||||||||||||||||
Over-Allotment Option | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 1,980,000 | 1,980,000 | |||||||||||||||
Armistice Purchase Agreement | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 1,951,219 | 1,200,000 | 1,951,219 | ||||||||||||||
Net proceeds | $ | $ 3.9 | $ 3.7 | $ 3.9 | ||||||||||||||
Registered Direct Offering | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 1,306,282 | 1,306,282 | |||||||||||||||
Net proceeds | $ | $ 5.1 | ||||||||||||||||
Bought Deal | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 1,818,182 | ||||||||||||||||
Net proceeds | $ | $ 9 | ||||||||||||||||
Private Placement | |||||||||||||||||
Common Stock | |||||||||||||||||
Number of shares available under warrant (in shares) | 14,285,714 | ||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.40 | ||||||||||||||||
Proceeds from warrant exercises | $ | $ 5.7 | ||||||||||||||||
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 | 2,857,143 | |||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 2 | ||||||||||||||||
Armistice | Underwritten Public Offering | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 2,000,000 | ||||||||||||||||
Armistice | Registered Direct Offering | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 1,256,282 | ||||||||||||||||
Armistice | Registered Direct Offering | Common Stock | |||||||||||||||||
Common Stock | |||||||||||||||||
Net proceeds | $ | $ 5.1 | ||||||||||||||||
Armistice | Bought Deal | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 363,637 | ||||||||||||||||
Officers | |||||||||||||||||
Common Stock | |||||||||||||||||
Sale of stock (in shares) | 110,000 | ||||||||||||||||
Aevi | |||||||||||||||||
Common Stock | |||||||||||||||||
Shares issued (in shares) | 3,900,000 |
Capital Structure - Warrants (D
Capital Structure - Warrants (Details) - $ / shares | Jun. 30, 2020 | Dec. 31, 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) - USD ($) | Jun. 18, 2020 | Feb. 29, 2020 | Jan. 01, 2020 | May 18, 2016 | Apr. 05, 2016 | Jun. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Feb. 28, 2020 | Aug. 31, 2019 | May 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Annual share reserve increase (as a percent) | 4.00% | |||||||||||||||
Total stock-based compensation | $ 2,785,574 | $ 526,709 | $ 3,901,897 | $ 1,123,402 | ||||||||||||
Research and development | ||||||||||||||||
Total stock-based compensation | 390,506 | 120,709 | 772,275 | 178,085 | ||||||||||||
General and administrative | ||||||||||||||||
Total stock-based compensation | 2,307,998 | 196,211 | 2,987,598 | 665,336 | ||||||||||||
Sales and marketing | ||||||||||||||||
Total stock-based compensation | 87,070 | 56,823 | 142,024 | 77,651 | ||||||||||||
Total stock-based compensation, continuing operations | ||||||||||||||||
Total stock-based compensation | 2,785,574 | 373,743 | 3,901,897 | 921,072 | ||||||||||||
Total stock-based compensation, discontinued operations | ||||||||||||||||
Total stock-based compensation | 0 | $ 152,966 | 0 | $ 202,330 | ||||||||||||
Service Based Options | ||||||||||||||||
Total stock-based compensation | $ 1,700,000 | $ 2,500,000 | ||||||||||||||
Option Activity, Number of shares | ||||||||||||||||
Balance, beginning of period (in shares) | 4,180,606 | 4,180,606 | ||||||||||||||
Granted (in shares) | 5,165,956 | |||||||||||||||
Options exercises in period (in shares) | (50,239) | |||||||||||||||
Forfeitures (in shares) | (629,300) | |||||||||||||||
Expired (in shares) | (303,758) | |||||||||||||||
Balance, end of period (in shares) | 8,363,265 | 8,363,265 | 8,363,265 | 4,180,606 | ||||||||||||
Exercisable (in shares) | 2,719,729 | 2,719,729 | 2,719,729 | |||||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||||||
Beginning of period (in dollars per share) | $ 4.80 | $ 4.80 | ||||||||||||||
Granted (in dollars per share) | 3.52 | |||||||||||||||
Exercised (in dollars per share) | 1.84 | |||||||||||||||
Forfeitures (in dollars per share) | 3.26 | |||||||||||||||
Expired (in dollars per share) | 5.30 | |||||||||||||||
End of period (in dollars per share) | $ 4.13 | $ 4.13 | 4.13 | $ 4.80 | ||||||||||||
Exercisable (in dollars per share) | 4.67 | 4.67 | 4.67 | |||||||||||||
Option Activity, Fair value of options granted | ||||||||||||||||
Beginning of period (in dollars per share) | $ 2.67 | 2.67 | ||||||||||||||
Granted (in dollars per share) | 2.24 | |||||||||||||||
Exercised (in dollars per share) | 1.22 | |||||||||||||||
Forfeited (in dollars per share) | 1.95 | |||||||||||||||
Expired (in dollars per share) | 3.03 | |||||||||||||||
End of period (in dollars per share) | 2.45 | 2.45 | 2.45 | $ 2.67 | ||||||||||||
Exercisable (in dollars per share) | $ 2.60 | $ 2.60 | $ 2.60 | |||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Balance | 7 years 9 months 18 days | 7 years 10 months 24 days | ||||||||||||||
Exercisable | 5 years 1 month 6 days | |||||||||||||||
Granted (in shares) | 5,165,956 | |||||||||||||||
Compensation committee of annual value | $ 414,432 | |||||||||||||||
Outstanding intrinsic value | $ 700,000 | $ 700,000 | $ 700,000 | |||||||||||||
Exercisable aggregate intrinsic value | $ 600,000 | $ 600,000 | $ 600,000 | |||||||||||||
Options vested (in shares) | 844,978 | |||||||||||||||
Weighted average exercise price (in dollars per share) | $ 4.96 | $ 4.96 | $ 4.96 | |||||||||||||
Fair value of options vested in period | $ 2,300,000 | |||||||||||||||
Compensation not yet recognized | $ 11,100,000 | $ 11,100,000 | $ 11,100,000 | |||||||||||||
Period for recognition | 3 years 2 months 12 days | |||||||||||||||
Fair value assumptions | ||||||||||||||||
Expected annual dividend yield | 0.00% | |||||||||||||||
Expected volatility, minimum | 69.90% | |||||||||||||||
Expected volatility, maximum | 79.90% | |||||||||||||||
Risk-free interest rate, minimum | 0.19% | |||||||||||||||
Risk-free interest rate, maximum | 1.48% | |||||||||||||||
Market Based Options | ||||||||||||||||
Total stock-based compensation | $ 500,000 | $ 600,000 | ||||||||||||||
Option Activity, Number of shares | ||||||||||||||||
Balance, beginning of period (in shares) | 300,000 | 300,000 | ||||||||||||||
Granted (in shares) | 1,000,000 | |||||||||||||||
Forfeitures (in shares) | (300,000) | (300,000) | ||||||||||||||
Balance, end of period (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | 300,000 | ||||||||||||
Exercisable (in shares) | 500,000 | 500,000 | 500,000 | |||||||||||||
Option Activity, Weighted-average exercise price | ||||||||||||||||
Beginning of period (in dollars per share) | $ 4.98 | $ 4.98 | ||||||||||||||
Granted (in dollars per share) | 3.29 | |||||||||||||||
End of period (in dollars per share) | $ 3.29 | $ 3.29 | $ 3.29 | $ 4.98 | ||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Balance | 10 years | 9 years 4 months 24 days | ||||||||||||||
Granted | 10 years | |||||||||||||||
Granted (in shares) | 1,000,000 | |||||||||||||||
Exercisable aggregate intrinsic value | $ 45,000 | $ 45,000 | $ 45,000 | |||||||||||||
Compensation not yet recognized | $ 700,000 | 700,000 | $ 700,000 | |||||||||||||
Period for recognition | 8 months 12 days | |||||||||||||||
Compensation expense, forfeitures | 400,000 | $ 400,000 | ||||||||||||||
Restricted Stock Awards | ||||||||||||||||
Award vesting period | 4 years | |||||||||||||||
Total stock-based compensation | $ 600,000 | $ 800,000 | ||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Period for recognition | 2 years | |||||||||||||||
Non-vested RSUs Outstanding | ||||||||||||||||
Unvested RSUs at December 31, 2019 (in shares) | 267,500 | 267,500 | ||||||||||||||
Granted (in shares) | 0 | |||||||||||||||
Vested (in shares) | (111,667) | |||||||||||||||
Unvested RSUs at June 30, 2020 (in shares) | 155,833 | 155,833 | 155,833 | 267,500 | ||||||||||||
Weighted average grant date fair value | ||||||||||||||||
Unvested RSUs at December 31, 2019 (in dollars per share) | $ 4.92 | $ 4.92 | ||||||||||||||
Granted (in dollars per share) | ||||||||||||||||
Vested (in dollars per share) | 4.93 | |||||||||||||||
Unvested RSUs at June 30, 2020 (in dollars per share) | $ 4.91 | $ 4.91 | $ 4.91 | $ 4.92 | ||||||||||||
Unrecognized compensation cost | $ 43,202 | $ 43,202 | $ 43,202 | |||||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||||||
Total stock-based compensation | $ 54,590 | $ 100,000 | ||||||||||||||
Minimum | Service Based Options | ||||||||||||||||
Fair value assumptions | ||||||||||||||||
Expected term of options (in years) | 1 year 9 months | |||||||||||||||
Maximum | Service Based Options | ||||||||||||||||
Fair value assumptions | ||||||||||||||||
Expected term of options (in years) | 6 years 3 months | |||||||||||||||
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) | 464,476 | 3,464,032 | 3,464,032 | 3,464,032 | ||||||||||||
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 | |||||||||||||||
2016 Third Amended Plan | ||||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 2,014,400 | |||||||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||||||
Common stock remaining for future issuance (in shares) | 1,504,388 | 1,504,388 | 1,504,388 | |||||||||||||
Weighted average grant date fair value | ||||||||||||||||
Purchase price of common stock, percentage | 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) | 443,842 | |||||||||||||||
Director | 2016 Plan | Minimum | Equity Option | ||||||||||||||||
Award vesting period | 1 year | |||||||||||||||
Director | 2016 Plan | Maximum | Equity Option | ||||||||||||||||
Award vesting period | 3 years | |||||||||||||||
Executive Officer | Service Based Options | ||||||||||||||||
Option Activity, Number of shares | ||||||||||||||||
Granted (in shares) | 2,400,000 | |||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Granted (in shares) | 2,400,000 | |||||||||||||||
Chief Executive Officer | Service Based Options | ||||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Annual base salary | $ 450,000 | $ 35,568 | ||||||||||||||
Chairman of the Board | ||||||||||||||||
Option Activity, Number of shares | ||||||||||||||||
Granted (in shares) | 1,000,000 | |||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Granted (in shares) | 1,000,000 | |||||||||||||||
Chairman of the Board | Tranche One | ||||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Options vested (in shares) | 500,000 | |||||||||||||||
Options vested, exercise price (in dollars per share) | $ 2.51 | |||||||||||||||
Chairman of the Board | Tranche Two | ||||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Options vested (in shares) | 250,000 | |||||||||||||||
Premium on stock price, threshold percentage | 50.00% | |||||||||||||||
Chairman of the Board | Tranche Three | ||||||||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | ||||||||||||||||
Options vested (in shares) | 250,000 | |||||||||||||||
Premium on stock price, threshold percentage | 75.00% | |||||||||||||||
Employee | 2016 Plan | Minimum | Equity Option | ||||||||||||||||
Award vesting period | 3 years | |||||||||||||||
Employee | 2016 Plan | Maximum | Equity Option | ||||||||||||||||
Award vesting period | 4 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Income tax (benefit) expense | $ (453,957) | $ 53,446 | $ (2,610,812) | $ 184,119 | |
Benefit for tax carryback | $ 500,000 | $ 500,000 | $ 2,200,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020USD ($)renewal_optioncontract | |
Lessee, Lease, Description [Line Items] | |
Number of contracts | contract | 2 |
Remaining lease team | 7 years 8 months 12 days |
Discount rate | 7.20% |
Building | Maryland | |
Lessee, Lease, Description [Line Items] | |
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 |
Building | Pennsylvania | |
Lessee, Lease, Description [Line Items] | |
Annual base rent | $ 280,185 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Property and equipment, net | $ 1,056,441 | $ 718,626 |
Accrued expenses and other current liabilities | 431,543 | 155,815 |
Other long-term liabilities | 1,191,560 | 1,111,965 |
Total operating lease liabilities | $ 1,623,103 | $ 1,267,780 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 87,199 | $ 39,534 | $ 141,708 | $ 94,140 |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
July 1, 2020 through December 31, 2020 | $ 220,689 | |
2021 | 426,346 | |
2022 | 173,748 | |
2023 | 178,092 | |
2024 | 182,544 | |
2025 | 187,108 | |
Thereafter | 813,638 | |
Total lease payments | 2,182,165 | |
Less implied interest | (559,062) | |
Operating lease liability | $ 1,623,103 | $ 1,267,780 |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ / shares in Units, shares in Millions | Apr. 01, 2021 | Feb. 03, 2020USD ($)milestoneshares | Dec. 18, 2019USD ($) | Aug. 08, 2019USD ($) | Sep. 24, 2018USD ($)therapymilestoneshares | Feb. 16, 2018unit$ / shares | Dec. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Nov. 30, 2017USD ($) | Aug. 31, 2017USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2023USD ($) |
Operating Leased Assets [Line Items] | |||||||||||||||||||
Total revenue | $ 1,337,764 | $ 1,391,942 | $ 4,091,628 | $ 3,968,310 | |||||||||||||||
Potential future regulatory milestone | $ 20,000,000 | ||||||||||||||||||
Payment received | $ 2,000,000 | ||||||||||||||||||
Period after public launch to terminate agreement | 3 years | ||||||||||||||||||
Percentage of net present value of royalty payments | 75.00% | ||||||||||||||||||
Aevi | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Forgiveness of loan | $ 4,100,000 | $ 4,100,000 | |||||||||||||||||
Karbinal Agreement | TRIS Pharma | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Minimum quantity required | unit | 70,000 | ||||||||||||||||||
Make whole payment per unit (in dollars per share) | $ / shares | $ 30 | ||||||||||||||||||
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 | 1,300,000 | ||||||||||||||||||
License and other revenue | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Total revenue | $ 25,000,000 | ||||||||||||||||||
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 | ||||||||||||||||||
Armistice | CERC-611 | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Installment payment | $ 100,000 | ||||||||||||||||||
Total revenue | $ 100,000 | ||||||||||||||||||
Aevi | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Unregistered shares of common stock issued or issuable as part of acquisition (in shares) | shares | 3.9 | ||||||||||||||||||
Contingent consideration | $ 6,500,000 | ||||||||||||||||||
Number of contingent consideration milestones | milestone | 2 | ||||||||||||||||||
Milestone payment | $ 0 | 0 | |||||||||||||||||
Aevi | Milestone One | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Contingent consideration | 2,000,000 | ||||||||||||||||||
Aevi | Milestone Two | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Contingent consideration | $ 4,500,000 | ||||||||||||||||||
Ichorion | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Number of contingent consideration milestones | milestone | 3 | ||||||||||||||||||
Contingent consideration | $ 15,000,000 | ||||||||||||||||||
Milestone payment | $ 0 | ||||||||||||||||||
Issuance of shares in acquisition of Ichorion assets (in shares) | shares | 5.8 | ||||||||||||||||||
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 | Teva | Millipred | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Semi-annual license payment | $ 75,000 | ||||||||||||||||||
Renewal period | 1 year | ||||||||||||||||||
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 | ||||||||||||||||||
Contingent consideration | Former TRx Owners | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Damages sought | $ 3,000,000 | ||||||||||||||||||
Loss From Improper Treatment | Former TRx Owners | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Damages sought | 9,200,000 | ||||||||||||||||||
Minimum | Former TRx Owners | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Estimate of possible loss | 0 | ||||||||||||||||||
Maximum | Former TRx Owners | |||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||
Estimate of possible loss | $ 18,200,000 |
Payroll Protection Program Lo_2
Payroll Protection Program Loan (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Other income | $ 395,800 | $ 0 | $ 395,800 | $ (9,400) |
Payroll Protection Program Loan, CARES Act | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 400,000 | |||
Other income | $ 400,000 | $ 400,000 |