Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Millendo Therapeutics, Inc. | ||
Entity Central Index Key | 0001544227 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 29.9 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 13,357,999 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated balance sheets
Consolidated balance sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 73,286 | $ 17,578 |
Short-term restricted cash | 45 | 45 |
Marketable securities | 4,385 | |
Prepaid expenses and other current assets | 3,373 | 1,084 |
Refundable tax credit | 2,333 | 1,031 |
Total current assets | 83,422 | 19,738 |
Long-term restricted cash | 439 | |
Other assets | 213 | 74 |
Total assets | 84,074 | 19,812 |
Current liabilities: | ||
Current portion of debt | 189 | 174 |
Accounts payable | 1,998 | 1,298 |
Accrued expenses | 7,630 | 2,619 |
Total current liabilities | 9,817 | 4,091 |
Debt, net of current portion | 383 | 599 |
Preferred stock warrant liability | 139 | |
Other liabilities | 752 | |
Total liabilities | 10,952 | 4,829 |
Commitments and contingencies (Note 10) | ||
Convertible preferred stock: | ||
Redeemable noncontrolling interests | 0 | 10,584 |
Stockholders’ equity (deficit): | ||
Preferred stock, $0.001 par value: 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock | 13 | |
Additional paid-in capital | 234,876 | 6,192 |
Accumulated deficit | (164,086) | (136,894) |
Accumulated other comprehensive income | 148 | 8 |
Total stockholders’ equity (deficit) attributable to Millendo Therapeutics, Inc. | 70,951 | (130,694) |
Equity attributable to noncontrolling interests | 2,171 | 2,171 |
Total stockholders’ equity (deficit) | 73,122 | (128,523) |
Total liabilities, convertible preferred stock, redeemable noncontrolling interests and stockholders’ equity (deficit) | $ 84,074 | 19,812 |
Convertible preferred stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | 132,922 | |
Series A preferred stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | 15,220 | |
Series A-1 preferred stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | 7,566 | |
Series B preferred stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | 71,778 | |
Series B-1 preferred stock | ||
Convertible preferred stock: | ||
Convertible preferred stock | $ 38,358 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Convertible preferred stock, shares issued | 0 | |
Convertible preferred stock, shares outstanding | 0 | |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 13,357,999 | 246,347 |
Common stock, shares outstanding | 13,357,999 | 246,347 |
Convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares outstanding | 90,848,515 | |
Series A preferred stock | ||
Convertible preferred stock, shares authorized | 0 | 15,379,452 |
Convertible preferred stock, shares issued | 0 | 15,269,452 |
Convertible preferred stock, shares outstanding | 0 | 15,269,452 |
Series A-1 preferred stock | ||
Convertible preferred stock, shares authorized | 0 | 9,359,000 |
Convertible preferred stock, shares issued | 0 | 6,540,763 |
Convertible preferred stock, shares outstanding | 0 | 6,540,763 |
Series B preferred stock | ||
Convertible preferred stock, shares authorized | 0 | 48,600,000 |
Convertible preferred stock, shares issued | 0 | 48,402,121 |
Convertible preferred stock, shares outstanding | 0 | 48,402,121 |
Series B-1 preferred stock | ||
Convertible preferred stock, shares authorized | 0 | 29,525,000 |
Convertible preferred stock, shares issued | 0 | 20,636,179 |
Convertible preferred stock, shares outstanding | 0 | 20,636,179 |
Common-1 stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 0 | 8,924,000 |
Common stock, shares issued | 0 | 464,043 |
Common stock, shares outstanding | 0 | 464,043 |
Consolidated statements of oper
Consolidated statements of operations and comprehensive loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses: | ||
Research and development | $ 14,425 | $ 14,526 |
Acquired in-process research and development | 63,844 | |
General and administrative | 8,691 | 5,956 |
Other general expenses | 3,758 | |
Loss from operations | 26,874 | 84,326 |
Other expenses: | ||
Interest expense, net | 134 | 288 |
Foreign currency losses | 209 | |
Change in fair value of preferred stock warrant liability | (40) | (28) |
Net loss | (27,177) | (84,586) |
Net (income) loss attributable to noncontrolling interest | (15) | 8 |
Net loss attributable to common stockholders | $ (27,192) | $ (84,578) |
Net loss per share of common stock, basic and diluted | $ (17.58) | $ (321.81) |
Weighted-average shares of common stock outstanding, basic and diluted | 1,547,051 | 262,823 |
Other comprehensive income: | ||
Foreign currency translation adjustment | $ 140 | $ 10 |
Comprehensive loss | (27,052) | (84,568) |
Comprehensive income attributable to noncontrolling interest | 2 | |
Comprehensive loss attributable to Millendo Therapeutics, Inc. | $ (27,052) | $ (84,570) |
Consolidated statements of conv
Consolidated statements of convertible preferred stock, redeemable noncontrolling interests and stockholders’ equity (deficit) - USD ($) $ in Thousands | Total stockholders’ (deficit) equity attributable to Millendo Therapeutics, Inc. | Common StockCommon-1 stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Equity Attributable to Noncontrolling Interests | Convertible preferred stock | Redeemable Noncontrolling Interests | Total |
Convertible Preferred Stock, balance at beginning at Dec. 31, 2016 | $ 86,998 | |||||||||
Convertible Preferred Stock, balance at beginning (in shares) at Dec. 31, 2016 | 63,671,573 | |||||||||
Convertible Preferred Stock | ||||||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma | $ 45,924 | $ 10,590 | ||||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 27,176,942 | |||||||||
Foreign currency translation adjustment | 2 | |||||||||
Net income (loss) | (8) | |||||||||
Convertible Preferred Stock, balance at end at Dec. 31, 2017 | $ 132,922 | 10,584 | ||||||||
Convertible Preferred Stock, balance at end (in shares) at Dec. 31, 2017 | 90,848,515 | |||||||||
Balance at beginning at Dec. 31, 2016 | $ (51,202) | $ 1,114 | $ (52,316) | $ (51,202) | ||||||
Balance at beginning (in shares) at Dec. 31, 2016 | 245,739 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exercise of stock options (in shares) | 608 | 608 | ||||||||
Issuance of Common-1 stock, Series A-1 preferred stock, Series B-1 preferred stock, and noncontrolling interest in connection with asset purchase of Alizé Pharma | 4,316 | 4,316 | $ 2,171 | $ 6,487 | ||||||
Issuance of Common-1 stock, Series A-1 preferred stock, Series B-1 preferred stock, and noncontrolling interest in connection with asset purchase of Alizé Pharma (in shares) | 464,043 | |||||||||
Stock-based compensation expense | 762 | 762 | 762 | |||||||
Foreign currency translation adjustment | 8 | $ 8 | 8 | |||||||
Net income (loss) | (84,578) | (84,578) | (84,578) | |||||||
Balance at end at Dec. 31, 2017 | (130,694) | 6,192 | (136,894) | 8 | 2,171 | $ (128,523) | ||||
Balance at end (in shares) at Dec. 31, 2017 | 464,043 | 246,347 | ||||||||
Convertible Preferred Stock | ||||||||||
Conversion of convertible preferred stock into common stock | $ (132,922) | |||||||||
Conversion of convertible preferred stock into common stock (in shares) | (90,848,515) | |||||||||
Repurchase of noncontrolling interest | (10,599) | |||||||||
Net income (loss) | $ 15 | |||||||||
Convertible Preferred Stock, balance at end (in shares) at Dec. 31, 2018 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exercise of stock options (in shares) | 0 | |||||||||
Conversion of convertible preferred stock into common stock | 132,922 | $ 7 | 132,915 | $ 132,922 | ||||||
Conversion of convertible preferred stock into common stock (in shares) | 6,759,109 | |||||||||
Reclassification of preferred stock warrant liability | 99 | 99 | 99 | |||||||
Conversion of common-1 stock into common stock (in shares) | (464,043) | 464,043 | ||||||||
Conversion of convertible promissory note into common stock | 7,724 | $ 1 | 7,723 | 7,724 | ||||||
Conversion of convertible promissory note into common stock (in shares) | 499,504 | |||||||||
Private placement of common stock (pre-Merger), net of issuance costs | 20,054 | $ 1 | 20,053 | 20,054 | ||||||
Private placement of common stock (pre-Merger), net of issuance costs (in shares) | 1,320,129 | |||||||||
Record pre-merger OvaScience stockholders' equity and elimination of OvaScience historical accumulated deficit | 37,994 | $ 2 | 37,992 | 37,994 | ||||||
Record pre-merger OvaScience stockholders' equity and elimination of OvaScience historical accumulated deficit (in shares) | 2,388,338 | |||||||||
Private placement of common stock (post-Merger), net of issuance costs | 18,687 | $ 1 | 18,686 | 18,687 | ||||||
Private placement of common stock (post-Merger), net of issuance costs (in shares) | 1,230,158 | |||||||||
Repurchase of redeemable noncontrolling interest | 9,790 | $ 1 | 9,789 | 9,790 | ||||||
Repurchase of redeemable noncontrolling interest (in shares) | 450,371 | |||||||||
Stock-based compensation expense | 1,427 | 1,427 | 1,427 | |||||||
Foreign currency translation adjustment | 140 | 140 | 140 | |||||||
Net income (loss) | (27,192) | (27,192) | (27,192) | |||||||
Balance at end at Dec. 31, 2018 | $ 70,951 | $ 13 | $ 234,876 | $ (164,086) | $ 148 | $ 2,171 | $ 73,122 | |||
Balance at end (in shares) at Dec. 31, 2018 | 13,357,999 |
Consolidated statements of cash
Consolidated statements of cash flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | ||
Net loss | $ (27,177) | $ (84,586) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 32 | 28 |
Stock-based compensation expense | 1,427 | 762 |
Write-off of deferred financing costs | 871 | 1,364 |
Non-cash interest | 204 | 120 |
Acquired in-process research and development | 63,844 | |
Change in fair value of preferred stock warrant liability | (40) | (28) |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (2,524) | 1,002 |
Accounts payable | 320 | (1,452) |
Accrued expenses and other liabilities | 3,240 | (1,394) |
Cash used in operating activities | (23,647) | (20,340) |
Investing activities: | ||
Purchase of property and equipment | (36) | (4) |
Proceeds from sale of marketable securities | 2,492 | |
Net cash (paid) acquired in Alizé asset purchase | (524) | 462 |
Cash provided by investing activities | 1,932 | 458 |
Financing activities: | ||
Cash acquired in connection with the Merger | 33,316 | |
Proceeds from convertible promissory notes | 8,000 | |
Proceeds from term loan and related warrants | 6,000 | |
Repayment of debt | (169) | (10,042) |
Proceeds from sale of private placement, net of issuance costs | 38,756 | |
Payment of financing costs | (1,351) | (423) |
Purchase of redeemable noncontrolling interest | (808) | |
Proceeds from the exercise of stock options | 2 | |
Cash provided by (used in) financing activities | 77,744 | (4,463) |
Effect of foreign currency exchange rate changes on cash | 118 | 19 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 56,147 | (24,326) |
Cash, cash equivalents and restricted cash at beginning of period | 17,623 | 41,949 |
Cash, cash equivalents and restricted cash at end of period | 73,770 | 17,623 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 213 | |
Cash paid for taxes | 4 | |
Supplemental schedule of non-cash investing and financing activities: | ||
Fair market value of securities issued in connection with Alizé asset purchase | 63,002 | |
Conversion of convertible preferred stock into common stock | 132,922 | |
Reclassification of preferred stock warrant liability | 99 | |
Conversion of convertible promissory note into common stock | 7,724 | |
Exchange of noncontrolling interest | 9,790 | |
Alizé acquisition costs included in accrued expenses | $ 524 | |
Financing costs in accounts payable and accrued expenses | $ 15 |
Organization and description of
Organization and description of business | 12 Months Ended |
Dec. 31, 2018 | |
Organization and description of business | |
Organization and description of business | 1. Organization and description of business Description of Business Millendo Therapeutics, Inc., a Delaware corporation, together with its subsidiaries, is a late‑stage biopharmaceutical company focused on developing novel treatments for orphan endocrine diseases where current therapies do not exist or are insufficient. The Company is currently advancing two product candidates to treat three indications. The Company’s most advanced product candidate, livoletide (AZP‑531), is a potential treatment for Prader‑Willi syndrome, or PWS, a rare and complex genetic endocrine disease characterized by hyperphagia, or insatiable hunger. The Company is also developing nevanimibe (ATR‑101) with a primary focus on treating patients with classic congenital adrenal hyperplasia, or CAH, a rare, monogenic adrenal disease that requires lifelong treatment with exogenous cortisol, often at high doses. The Company is also investigating nevanimibe for the treatment of patients with endogenous Cushing’s syndrome, or CS, a rare endocrine disease characterized by excessive cortisol production from the adrenal glands. The Company’s operations to date have focused on organization and staffing, business planning, raising capital, acquiring technology and assets, and conducting preclinical studies and clinical trials. The Company does not have any product candidates approved for sale and has not generated any revenue from product sales. The Company’s product candidates are subject to long development cycles and the Company may be unsuccessful in its efforts to develop, obtain regulatory approval for or market its product candidates. The Company is subject to a number of risks including, but not limited to, the need to obtain adequate additional funding for the ongoing and planned clinical development of its product candidates. Because of the numerous risks and uncertainties associated with pharmaceutical products and development, the Company is unable to accurately predict the timing or amount of funds required to complete development of its product candidates, and costs could exceed the Company’s expectations for a number of reasons, including reasons beyond the Company’s control. Merger with OvaScience In December 2018, OvaScience, Inc., a Delaware corporation (“OvaScience”), now known as Millendo Therapeutics, Inc. (the “Company”), completed its merger (the “Merger”) with privately-held Millendo Therapeutics, Inc. (“Private Millendo”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated August 8, 2018, as amended on September 25, 2018 and November 1, 2018 (the “Merger Agreement”), whereby Orion Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of OvaScience (the “Merger Sub”), merged with and into Private Millendo, with Private Millendo continuing as a wholly owned subsidiary of OvaScience. Under the terms of the Merger Agreement, OvaScience issued shares of its common stock to Private Millendo’s stockholders, at an exchange ratio of 0.0744 shares of OvaScience common stock, for each share of Private Millendo common stock outstanding immediately prior to the Merger. OvaScience also assumed all of the stock options outstanding under the Private Millendo 2012 Equity Incentive Plan, as amended (the “Private Millendo Plan”), with such stock options henceforth representing the right to purchase a number of shares of OvaScience’s common stock equal to 0.0744 multiplied by the number of shares of Private Millendo common stock previously represented by such options. The Company’s shares of common stock listed on The Nasdaq Capital Market, previously trading through the close of business on Friday, December 7, 2018 (the “Merger Date”) under the ticker symbol “OVAS,” commenced trading on The Nasdaq Capital Market, under the ticker symbol “MLND,” on Monday, December 10, 2018. See discussions of the transactions in connection with the Merger within Note 3. The Merger was accounted for as a reverse acquisition and recapitalization, with Private Millendo being treated as the accounting acquirer. As such, the results of operations and cash flows prior to the Merger Date, relate to Private Millendo and its subsidiaries. Subsequent to the Merger Date, the information relates to the consolidated entities of Millendo Therapeutics, Inc. All share and per share amounts in the consolidated financial statements and related notes have been retroactively adjusted, where applicable, for all periods presented to give effect to the exchange ratio applied in connection with the Merger. Liquidity The Company has incurred net losses since inception and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its potential product candidates. As of December 31, 2018, the Company had cash, cash equivalents and marketable securities of $77.7 million. The Company will likely require additional capital in the future through equity or debt financings, partnerships, collaborations, or other sources to carry out the Company’s planned development activities. If additional capital is not secured when required, the Company may need to delay or curtail its operations until such funding is received. Various internal and external factors will affect whether and when the Company’s product candidates become approved drugs. The regulatory approval and market acceptance of the Company’s proposed future products (if any), length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The Company believes its cash, cash equivalents and marketable securities at December 31, 2018 is sufficient to fund operations into the second half of 2020. |
Basis of presentation and summa
Basis of presentation and summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Basis of presentation and summary of significant accounting policies | |
Basis of presentation and summary of significant accounting policies | 2. Basis of presentation and summary of significant accounting policies Basis of presentation and consolidation principles The accompanying consolidated financial statements include the accounts of Millendo Therapeutics, Inc. and its subsidiaries, and all intercompany amounts have been eliminated. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include the accounts of the Company’s subsidiaries in which the Company holds a controlling financial interest as of the financial statement date. Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents, and marketable securities. The Company generally invests its cash in deposits with high credit quality financial institutions. Deposits at banks may exceed the insurance provided on such deposits. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Cash and cash equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Cash equivalents as of December 31, 2018 and 2017 consisted of money market funds. Marketable securities The Company classifies its marketable securities as available-for-sale securities and the securities are stated at fair value. At December 31, 2018, the balance in the Company’s accumulated other comprehensive income included activity related to the Company’s available-for-sale marketable securities. There were no material realized gains or losses recognized on the maturity of available-for-sale securities during the year ended December 31, 2018 and, as a result, the Company did not reclassify any amount out of accumulated other comprehensive loss for the same period. Restricted cash Restricted cash relates to amount used to secure the Company’s credit card facility balances held on deposit with major financial institutions and to collateralize a letter of credit in the name of the Company’s landlord pursuant to a certain operating lease agreement . The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in the Company's consolidated balance sheets to the total of the amount presented in the consolidated statements of cash flows: December 31, 2018 2017 (in thousands) Cash and cash equivalents $ 73,286 $ 17,578 Restricted cash 45 45 Long-term restricted cash 439 — Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 73,770 $ 17,623 Refundable tax credit In connection with the acquisition of Alizé (see Note 4), the Company obtained French research tax credits (crédit d’impôt recherche) or (“CIR”). CIR earned are refundable or they can offset French corporate income tax due. Since the French research tax credit can be recovered in cash, the Company has elected to treat this as a grant. During the year ended December 31, 2018 and 2017, the Company recognized a reduction of research and development expenses of $1.4 million and $35,000, respectively, and had a research tax credit receivable of $2.3 million and $1.0 million at December 31, 2018 and 2017, respectively. On January 15, 2019, the Company received a payment of $1.0 million for the 2017 refundable tax credit. Fair value of financial instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts reflected in the Company’s consolidated balance sheets for cash equivalents, marketable securities, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to their short term nature. The carrying value of the Company’s preferred stock warrant liability at December 31, 2017 is the estimated fair value of the liability. The carrying value of the Company’s debt assumed from Alizé approximates fair value as of December 31, 2018 and 2017. Preferred stock warrants The Company accounts for its warrants issued in connection with financing transactions based upon the characteristics and provisions of the instrument. The preferred stock warrants are recorded at fair value at each reporting period and classified as liabilities in the Company’s consolidated balance sheets. Any changes to fair value are recorded as a component of other expense within the Company’s consolidated statements of operations and comprehensive loss. Redeemable noncontrolling interests Redeemable noncontrolling interest represented the 16.4% interest in Alizé that was held by other investors until December 2018. The Company was subject to a put call agreement (see Note 4) with these investors, that was settled in December 2018, resulting in the Company acquiring the remaining issued and outstanding share capital of Alizé in exchange for cash and shares of the Company’s common stock. The exchange ratio of shares was fixed at the amounts determined on the acquisition date. There were no redeemable noncontrolling interests outstanding as of December 31, 2018. Other assets Other assets includes property and equipment and other assets. Property and equipment, less accumulated depreciation, are recorded at cost and are depreciated on a straight‑line basis over their estimated useful lives which range from three to five years except for leasehold improvements which are amortized over the shorter of the asset life or lease term. Repairs and maintenance costs are expensed as incurred. Long‑lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has not recognized any impairment or disposition of long‑lived assets through December 31, 2018. Deferred offering costs The Company capitalizes costs that are directly associated with in-process equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. During the years ended December 31, 2018 and 2017, the Company expensed $0.9 million and $1.4 million, respectively, in offering costs. The expense was recorded as a component of general and administrative expenses. Research and development expenses Research and development costs are expensed as incurred and consist primarily of personnel expenses, costs of funding research performed by third parties, expenses incurred under agreements with contract manufacturing organizations, payments under third‑party licensing agreements other than IPR&D, consultant fees and expenses associated with outsourced professional scientific development services, expenses related to regulatory activities and allocated expense for facility costs. Milestone payment obligations incurred prior to regulatory approval of the product, which are accrued when the event requiring payment of the milestone occurs, are included in research and development expenses. Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered. At the end of each reporting period, the Company compares payments made to third‑party service providers to the estimated progress toward completion of the applicable research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs. As of December 31, 2018 and 2017, the Company has not made any material adjustments to its prior estimates of accrued research and development expenses. Acquired in‑process research and development (“IPR&D”) expense consists of the initial up‑front payments incurred in connection with the acquisition or licensing of product candidates that do not meet the definition of a business under FASB ASC Topic 805, Business Combinations . The Company’s acquired IPR&D expense of $63.8 million reflects the fair value of consideration ascribed to the livoletide product candidate in connection with its acquisition of Alizé in December 2017 (see Note 4). Stock‑based compensation The Company measures and recognizes compensation expense for all stock options awarded to employees and nonemployees based on the estimated fair market value of the award on the grant date. The Company uses the Black‑Scholes option pricing model to value its stock option awards. The Company recognizes compensation expense on a straight‑line basis over the requisite service period, which is generally the vesting period of the award. The Company accounts for forfeitures of stock options as they occur. Stock‑based awards issued to nonemployees were revalued at each reporting period until the award vests. October 1, 2018, the Company early adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments granted to nonemployees for goods and services. As a result of the adoption, stock-based awards issued to nonemployees are no longer required to be revalued at each reporting period. The adoption of ASU No. 2018-07 did not have a material effect on the consolidated financial statements. Estimating the fair market value of options requires the input of subjective assumptions, including the estimated fair value of the Company’s common stock, the expected life of the options, stock price volatility, the risk‑free interest rate and expected dividends. The assumptions used in the Company’s Black‑Scholes option‑pricing model represent management’s best estimates and involve a number of variables, uncertainties and assumptions and the application of management’s judgment, as they are inherently subjective. Income taxes On December 22, 2017 the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). This legislation makes significant changes in the U.S. tax laws including reducing the corporate rate from 34% to 21% beginning in 2018 and creating a territorial tax system with a one‑time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. The provisions of the Tax Act did not have any impact to the Company’s effective tax rate due to the full valuation allowance position. As a result of the reduced corporate rate, the Company’s deferred tax assets were revalued from 34% to 21%, which was fully offset by a reduction in the valuation allowance. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company’s financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2018 and 2017, the Company has concluded that a full valuation allowance is necessary for all of its net deferred tax assets. The Company had no material amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. In accordance with guidance issued by Financial Accounting Standards Board (“FASB”), companies should make and disclose a policy election as to whether they will recognize deferred taxes for basis differences expected to reverse as Global Intangible Low ‑ Taxed Income (“GILTI”) or whether they will account for GILTI as period costs if and when incurred. The Company has elected to recognize the resulting tax with respect to the GILTI provision as a period cost. No costs were incurred by the Company through December 31, 2018 as a result of GILTI. Net loss per share Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted‑average number of shares of common stock (including shares of common‑1 stock) outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, convertible preferred stock, preferred stock warrants, restricted stock, and stock options, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share, the weighted‑average number of shares of common stock remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti‑dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted‑average shares of common stock outstanding, as they would be anti‑dilutive (amounts shown as common stock equivalents): Year ended December 31, 2018 2017 Stock options 1,764,287 703,479 Convertible preferred stock — 6,759,109 Common stock warrants 17,125 — Preferred stock warrants — 17,125 BSA and BSPCE warrants 156,719 156,719 1,938,131 7,636,432 Segment information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision‑making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment. Foreign currency Results of foreign operations are translated from their functional currency into U.S. dollars (reporting currency) using average exchange rates in effect during the year, while assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date. The resulting translation adjustments are recorded in accumulated other comprehensive loss. Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency are included in income in the period in which the change occurs and reported within other expenses in the consolidated statements of operations and comprehensive loss. Recent accounting pronouncements In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . ASU 2018-13 resulted in certain modifications to fair value measurement disclosures, primarily related to level 3 fair value measurements. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting . ASU 2018-07 is intended to reduce the cost and complexity and to improve financial reporting for non-employee share-based payments. The ASU expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees), to include share-based payments issued to non-employees for goods or services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. This update is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. Upon transition, entities will remeasure unsettled liability-classified awards and any unmeasured equity-classified awards for non-employees at fair value as of the adoption date. A cumulative-effect adjustment to retained earnings will be required as of the beginning of the fiscal year of adoption. The Company adopted ASU No. 2018-07 on October 1, 2018, which did not have a material effect on the consolidated financial statements. In March 2018, the FASB issued ASU 2018‑05, which amends Income Taxes (Topic) 740 by incorporating the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin 118 (“SAB 118”) issued on December 22, 2017. SAB 118 provide guidance on accounting for the effects of the Tax Act. The Company recognized the income tax effects of the Tax Act in the 2017 consolidated financial statements in accordance with SAB 118. See Note 13 of the consolidated financial statements for additional disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) . ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new standard is effective for fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 in 2018 and as a result there was no impact to the prior periods. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This standard is effective January 1, 2019 and will require adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently evaluating the potential impact of the adoption of this standard on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) , which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Additionally, ASU 2016-13 requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected through the use of an allowance of expected credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and requires a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the Company as the lessee to recognize most leases on the balance sheet thereby resulting in the recognition of right of use assets and lease obligations for those leases currently classified as operating leases. ASU 2016-02 became effective for the Company on January 1, 2019 and the Company elected the optional transition method as well as the package of practical expedients upon adoption. While the Company is still finalizing its adoption procedures, the Company estimates the primary impact to the consolidated financial position upon adoption will be the recognition, on a discounted basis, of the minimum commitments under noncancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets of approximately $0.9 million and lease obligations for approximately $2.0 million. In January 2016, the FASB issued authoritative guidance under ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 revises the classification, measurement and disclosure of investments in equity securities. The Company adopted this standard effective January 1, 2018. The adoption of ASU 2016-01 did not have an impact on the Company’s consolidated financial statements. Subsequent events Subsequent events were evaluated through the filing date of this Annual Report. In February 2019, the Company entered into a five-year lease agreement for office space commencing April 1, 2019. Annual rent payments range from $374,000 in the first year and escalates to $421,000 in the fifth year. |
OvaScience Merger
OvaScience Merger | 12 Months Ended |
Dec. 31, 2018 | |
OvaScience Merger | |
OvaScience Merger | 3. OvaScience Merger As described in Note 1, Private Millendo merged with the Company in December 2018. The Merger was accounted for as a reverse recapitalization with Private Millendo as the accounting acquirer. The primary pre-combination assets of OvaScience was cash, cash equivalents and marketable securities. Under reverse recapitalization accounting, the assets and liabilities of OvaScience were recorded at their fair value which approximated book value due to the short-term nature of the instruments. No goodwill or intangible assets were recognized. Consequently, the consolidated financial statements of Millendo reflect the operations of OvaScience for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former stockholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer. As part of the reverse recapitalization, the Company obtained approximately $40.2 million of cash and marketable securities. The Company also obtained prepaids and other assets of $1.3 million and assumed payables and accruals of approximately $3.5 million, which includes a $1.4 million lease termination liability. All of the development programs have been terminated and were deemed to have no value at the transaction date and the Company is winding down the legacy OvaScience operations. Additionally, the Company incurred approximately $1.8 million in severance costs as a result of resignations of executive officers immediately prior to the Merger and approximately $43,000 in share based compensation expense as a result of the acceleration of vesting of stock options at the time of Merger. |
Alize Pharma SAS Acquisition
Alize Pharma SAS Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Alize Pharma SAS Acquisition | |
Alize Pharma SAS Acquisition | 4. Alizé Pharma SAS Acquisition In December 2017, the Company entered into agreements to acquire 100% of the outstanding ownership interests of Alizé, a privately held biotechnology company based in Lyon, France focused on the development of a treatment for patients with PWS, through its lead product candidate, livoletide. On December 19, 2017, the Company acquired 83.6% of the issued and outstanding share capital of Alizé pursuant to a Share Sale and Contribution Agreement. The consideration included an upfront payment of $1.0 million (including approximately $0.3 million to a former shareholder of Alizé and approximately $0.7 million of transaction expenses on behalf of the acquired company), the issuance of 6,540,763 shares of the Company’s Series A‑1 preferred stock, 20,636,179 shares of the Company’s Series B‑1 preferred stock and 464,043 shares of the Company’s common‑1 stock with an aggregate fair market value of $50.8 million. Upon consummation of the Merger the Series A-1 preferred stock, Series B-1 preferred stock, and common-1 stock were converted to 2,486,003 shares of common stock. The remaining 16.4% of Alizé was held by Otonnale SAS (“Otonnale”) and was subject to a put‑call agreement until December 2018 when it was settled and the Company purchased the remaining 16.4% of Alizé in exchange for a cash payment of $0.8 million and the issuance of 442,470 shares of the Company’s common stock. Additionally, the Company issued 7,901 shares of common stock to Eumedix FR S.À R.L. (“Eumedix”) as consideration for advisory services that Eumedix performed for Otonnale in connection with the transaction. Additionally, the Company assumed 6,219 warrants in the form of bons de souscription d’actions (“BSAs”) and 5,360 warrants in the form of bons de souscription de parts de créateur d’entreprise (“BSPCEs”) that were held by employees, directors and consultants of Alizé. The outstanding BSAs and BSPCEs were amended whereby, upon exercise, the holders will receive shares of the Company’s preferred stock and common stock. The estimated aggregate fair value of the amended BSAs and BSPCEs was $2.2 million and included in the consideration to acquire Alizé. The Share and Contribution Agreement with Alizé was accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in the livoletide development program. The $63.8 million in estimated fair value allocated to livoletide was expensed, as the Company determined the asset has no alternative future use. The purchase price was calculated as follows (amounts in thousands): Consideration Fair market value of Millendo securities issued $ 52,985 Fair value of noncontrolling interest 10,017 Acquisition costs and payments to sellers 1,570 Less: cash acquired (1,508) Total consideration given, net of cash acquired $ 63,064 The following table summarizes the assets acquired and liabilities assumed as of the acquisition date (amounts in thousands): Assets Acquired and Liabilities Assumed Assets acquired: Prepaid expenses and other assets $ 472 Refundable tax credit 981 Property and equipment 14 In-process research and development asset 63,844 Total assets acquired 65,311 Liabilities assumed: Accounts payable 1,150 Accrued expenses and other current liabilities 294 Debt 803 Total liabilities assumed 2,247 Net assets acquired $ 63,064 The estimated fair market value of the Millendo securities issued to Alizé was based on the present value of the future estimated cash flows of the combined company (“Income Approach”). The Income Approach starts with the forecast of the expected future estimated cash flows of the combined company and requires several judgments and assumptions to determine the fair value of intangible assets, including growth rates, discount rates, probability of achieving commercialization, expected levels of cash flows and tax rates. A change in these assumptions would impact the consideration received and expensed in 2017. The change could be material. For example, a 1% change in the discount rate used would increase (decrease) the fair value of the equity issued by approximately 15%. The Company placed a weighting on multiple forecast scenarios when determining its enterprise value. The weighted average scenario selected was within 20% of the high and low ranges of the Company’s forecasts. These non‑recurring fair value measurements are Level 3 measurements in the fair value hierarchy. |
Marketable securities
Marketable securities | 12 Months Ended |
Dec. 31, 2018 | |
Marketable securities | |
Marketable securities | 5. Marketable securities The following summarizes the available-for-sale securities held as of December 31, 2018 (amounts in thousands): December 31, 2018 Amortized cost Unrealized gains Unrealized losses Fair value U.S. government agency $ 2,994 $ — $ — $ 2,994 Corporate debt securities $ 1,391 $ — $ — $ 1,391 Marketable securities were acquired in connection with the Merger. There were immaterial unrealized losses recorded from the date of Merger through December 31, 2018. The Company does not have any marketable securities as of December 31, 2017. No available-for-sale securities held as of December 31, 2018 had remaining maturities greater than one year. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair value measurements | |
Fair value measurements | 6. Fair value measurements The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis (amounts in thousands): December 31, 2018 (Level 1) (Level 2) (Level 3) Assets Money market funds (included in cash and cash equivalents) $ 25,145 $ — $ — Marketable securities - U.S. government agency $ — $ 2,994 $ — Marketable securities - Corporate debt securities $ — $ 1,391 $ — Liabilities Preferred stock warrant liability $ — $ — $ — December 31, 2017 (Level 1) (Level 2) (Level 3) Assets Money market funds (included in cash and cash equivalents) $ — $ — $ — Marketable securities - U.S. government agency $ — $ — $ — Marketable securities - Corporate debt securities $ — $ — $ — Liabilities Preferred stock warrant liability $ — $ — $ 139 The Company’s preferred stock warrants were classified as liabilities, recorded at fair value and subject to re‑measurement at each balance sheet date until they were converted into common stock warrants in connection with the completion of the Merger. The common stock warrants are equity classified as of the Merger date and are no longer subject to remeasurement. The reconciliation of the preferred stock warrant liability measured at fair value, until the reclassification into equity at the time of the Merger, on a recurring basis using significant unobservable inputs (Level 3) was as follows (amounts in thousands): Preferred stock warrant liability Balance at January 1, 2017 $ 167 Additions — Change in fair value (28) Balance at December 31, 2017 139 Change in fair value (40) Reclassification to equity (99) Balance at December 31, 2018 $ — The Series A and Series B preferred stock warrant liabilities are estimated using an option pricing model. The significant assumptions used in valuing the warrants include expected term, expected volatility, risk‑free interest rate and expected dividend yield. As of Merger date, immediately prior to reclassifying the warrants to equity, and as of December 31, 2017 the significant weighted‑average assumptions were as follows: Year ended December 31, 2018 2017 Expected term (in years) 1.75 1.41 Expected volatility 71 % 72 % Risk free rate 2.58 % 1.76 % Dividend yield — % — % |
Accrued expenses
Accrued expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued expenses | |
Accrued expenses | 7. Accrued expenses Accrued expenses consist of (amounts in thousands): December 31, 2018 2017 Compensation and related benefits $ 3,537 $ 1,365 Professional fees 1,140 695 Preclinical and clinical costs 1,811 390 Lease termination 630 — Other 512 169 Total $ 7,630 $ 2,619 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt | |
Debt | 8. Debt Bpifrance Reimbursable Advance In December 2017, in connection with its acquisition of Alizé (see Note 4), the Company assumed €0.7 million of debt that Alizé had outstanding with Bpifrance Financing (“Bpifrance”). The original advance amount of €0.8 million (“the Bpifrance Advance”) was provided to Alizé as an innovation aid that required Alizé to carry out certain activities related to its livoletide clinical development program and incur a certain level of program expenditures. No interest is charged or accrued under the advance. The Company is required to make quarterly principal payments, which began in December 2016 and continue through September 2021. The quarterly principal payments escalate over the repayment period beginning with €17,500 per quarter and increasing to €50,000 through maturity. In addition to the quarterly payments, the Company could be obligated to pay on an accelerated basis the principal payments, if applicable, no later than March 31st of each year starting from January 1, 2016, a reimbursement annuity equal to 20% of the proceeds generated by the Company from license, assignment or use of the livoletide. Under no circumstance would the Company be required to reimburse to Bpifrance principal amounts greater than the original advance it received. The Company is permitted to repay the Bpifrance Advance at any time, at which point it would be released from all commitments and obligations under the Bpifrance Advance agreement. The Bpifrance Advance Agreement does not contain any ongoing financial covenants. At December 31, 2018, the balance outstanding was $0.6 million (€0.5 million). Convertible promissory notes In August 2018, the Company issued convertible promissory notes (as amended) to several of its existing investors and received cash proceeds of $8.0 million. The notes accrued simple interest of 6.0% per annum and all principal and interest was due at maturity, if not converted. Upon consummation of the Merger, the outstanding principal and interest converted into 499,504 shares of the Company’s common stock. The Company recorded debt issuance costs of $0.5 million in connection with the promissory notes. The debt discount was amortized into interest expense over the term of the promissory notes using the effective interest method. At the time of conversion, the unamortized debt discount of $0.4 million was reclassified to equity. For the year ended December 31, 2018, the Company recognized interest expense of $0.2 million of which $52,000 was attributable to the amortization of the debt discount. Comerica Bank Term Loan agreement The Company entered into, and subsequently amended, a Loan and Security Agreement (the “Loan Agreement”) with Comerica bank and borrowed $4.0 million with an option to borrow an additional $6.0 million which the Company was eligible for in 2017 and completed. Borrowings under the amended Loan Agreement bore interest at a variable rate equal to the prime rate, but in no event less than 2.5% per annum, plus 1.5% per annum. The Company was obligated to make monthly principal payments beginning in July 2017 and the loan matured in December 2019. In July 2017, the Company repaid the $10.0 million loan balance in full and wrote off $91,000 of unamortized debt discount. |
License agreements
License agreements | 12 Months Ended |
Dec. 31, 2018 | |
License agreements | |
License agreements | 9. License agreements University of Michigan License Agreement In June 2013, the Company entered into a license agreement with the Regents of the University of Michigan (the “University of Michigan”) for a worldwide, exclusive, sublicensable license to the University of Michigan’s interest in certain patent rights jointly owned with the Company, covering the use of ATR‑101 for the treatment of certain indications (the “UM License Agreement”). The Company is obligated to make payments to the University of Michigan totaling up to $2.5 million upon the achievement of certain development and commercial milestones. There was no expense recognized during the year ended December 31, 2018 related to milestone payments. The Company recognized $0.1 million of expense in connection with the achievement of certain milestones under the license agreement during the year ended December 31, 2017. The Company is also required to pay the University of Michigan a low‑single digit royalty percentage on net sales of applicable products, if any. In addition, $20,000 in annual minimum royalties are due under the UM License Agreement for each of 2019 through 2023. Further, beginning in 2024, the Company is required to pay an annual fee of $0.2 million which is creditable against royalties due, if any, until the expiration or termination of the UM License Agreement. Assignment agreement with Erasmus University Medical Center and the University of Turin In connection with its acquisition of Alizé, the Company assumed Alizé’s obligations under an assignment agreement with Erasmus University Medical Center, the University of Turin and certain individuals (collectively “the Assignors”), for certain patents and patent applications relating to livoletide. In connection with the assignment, the Company agreed to pay the Assignors a flat, low single digit royalty on net commercial sales of products containing livoletide that are covered by the claims of the assigned intellectual property. Further, upon approval of livoletide by the FDA or EMA, the Company is required to pay the Assignors CDN$100,000, which amount will be deducted from any future royalty payments due to the Assignors. The Company also agreed to pay the Assignors a low single digit percentage of any amounts received in connection with its license of the assigned intellectual property or products containing livoletide that are covered by the claims of the assigned intellectual property. AstraZeneca License Agreement In August 2015, the Company entered into a license agreement with AstraZeneca for a worldwide, exclusive license to certain patent rights and know‑how to make, use, sell, offer for sale and import MLE4901 (the “AZ License Agreement”). The Company terminated the AZ License Agreement in July 2017 and, as of December 31, 2017, had no further obligations thereunder. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments | |
Commitments | 10. Commitments Operating leases The Company leases its office and operating space under operating leases expiring at various dates through December 2025. Rent expense under the leases totaled $0.2 million and $0.1 million for the years ended December 31, 2018 and 2017, respectively. The Company recognizes rent expense on a straight‑line basis over the lease period and has accrued for rent expense incurred but not yet paid. Future minimum rental payments under operating leases with noncancelable terms as of December 31, 2018 are as follows (amounts in thousands): Year Ending December 31, 2019 $ 1,208 2020 1,327 2021 414 2022 425 2023 436 Thereafter 293 Total $ 4,103 In connection with the Merger, the Company assumed a sublease agreement for its office space located in Waltham, Massachusetts. The sublease commences on January 15, 2019 and expires on November 30, 2020. The total minimum sublease rentals to be received under the agreement is $0.6 million. Employment benefit plan The Company maintains a defined contribution 401(k) plan in which employees may contribute up to 100% of their salary and bonus, subject to statutory maximum contribution amounts. The Company contributes a safe harbor minimum contribution equivalent to 3% of employees’ compensation. The Company generally assumes all administrative costs of the plan. For the years ended December 31, 2018 and 2017, the expense relating to the contributions made was $0.1 million and $0.1 million, respectively. Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. On November 9, 2016, a purported shareholder derivative action was filed in the Business Litigation Session of the Suffolk County Superior Court in the Commonwealth of Massachusetts ( Cima v. Dipp , No. 16-3443-BLS1 (Mass. Sup. Ct.)) against certain former officers and directors of OvaScience and one current director of the Company (a former director of OvaScience) and OvaScience as a nominal defendant alleging breaches of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and corporate waste for purported actions related to OvaScience’s January 2015 follow-on public offering. On February 22, 2017, the court approved the parties’ joint stipulation to stay all proceedings in the action until further notice. Following a status conference in December 2017, the stay was lifted. On January 25, 2018, at the parties’ request, the court entered a second order staying all proceedings in the action until further order of the court. The Company believes that the complaint is without merit and intends to defend against the litigation. There can be no assurance, however, that the Company will be successful. At present, the Company is unable to estimate potential losses, if any, related to the lawsuit . On March 24, 2017, a purported shareholder class action lawsuit was filed in the U.S. District Court for the District of Massachusetts ( Dahhan v. OvaScience, Inc. , No. 1:17-cv-10511-IT (D. Mass.)) against certain former officers and directors of OvaScience and one current director of the Company (a former director of OvaScience) alleging violations of Sections 10(b) and 20(a) of the Exchange Act (the "Dahhan Action"). On July 5, 2017, the court entered an order approving the appointment of Freedman Family Investments LLC as lead plaintiff, the firm of Robins Geller Rudman & Dowd LLP as lead counsel and the Law Office of Alan L. Kovacs as local counsel. Plaintiff filed an amended complaint on August 25, 2017. The Company filed a motion to dismiss the amended complaint, which the court denied on July 31, 2018. On August 14, 2018, the Company answered the amended complaint. The parties presently are engaged in discovery. The Company believes that the amended complaint is without merit and intends to defend against the litigation. There can be no assurance, however, that the Company will be successful. A resolution of this lawsuit adverse to the Company or the other defendants could have a material effect on the Company’s consolidated financial position and results of operations. At present, the Company is unable to estimate potential losses, if any, related to the lawsuit . On July 27, 2017, a purported shareholder derivative complaint was filed in the U.S. District Court for the District of Massachusetts ( Chiu v. Dipp , No. 1:17-cv-11382-IT (D. Mass.)) against certain former officers and directors of OvaScience and one current director of the Company (a former director of OvaScience) as a nominal defendant alleging breach of fiduciary duty, unjust enrichment and violations of Section 14(a) of the Exchange Act alleging that compensation awarded to the director defendants was excessive and seeking redress for purported actions related to OvaScience’s January 2015 follow-on public offering and other public statements. On September 26, 2017, the plaintiff filed an amended complaint which eliminated all claims regarding . Between October 16, 2018 and November 21, 2018, five putative class action lawsuits were filed in various federal District Courts against OvaScience, Inc. and the OvaScience Board of Directors related to OvaScience’s proposed merger with Millendo Therapeutics, Inc.: Cunningham v. Kroeger, et al. , No. 1:18-cv-01595 (D. Del. filed Oct. 16, 2018); Adlard v. OvaScience, Inc., et al. , No. 1:18-cv-12332 (D. Mass. filed Nov. 6, 2018); Wheby v. OvaScience, Inc., et al. , No. 1:18-cv-1811 (D. Del. filed Nov. 16, 2018); Cuenca Aubets v. OvaScience, Inc., et al. , No. 1:18-cv-10882 (S.D.N.Y. filed Nov. 20, 2018); and Kim v. OvaScience, Inc., et al. , No. 1:18-cv-10939 (S.D.N.Y. filed Nov. 21, 2018). The Complaints each alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder, and as against the individual defendants, violations of Section 20(a) of the Securities Exchange Act of 1934. The Cunningham plaintiff alleged that OvaScience’s Form S-4 Registration Statement filed on September 26, 2018 omitted or misrepresented material information regarding OvaScience’s proposed merger with Millendo Therapeutics, Inc. The Adlard, Whelby, Cuenca Aubets and Kim plaintiffs alleged that OvaScience’s Definitive Proxy Statement on Schedule 14A filed on November 6, 2018, omitted or misrepresented material information regarding OvaScience’s proposed merger with Millendo Therapeutics, Inc. OvaScience subsequently supplemented its disclosures. The Cunningham plaintiff voluntarily dismissed his complaint on December 10, 2018, and the Wheby, Jr. plaintiff voluntarily dismissed his complaint on February 28, 2019. On March 18, 2019, the court dismissed the Cuenca Aubets and Kim actions for failure to serve. The Company currently is in negotiation with counsel for the plaintiffs regarding their demands for attorneys’ fees. There can be no assurance that the negotiations will be successful. If the negotiations are not successful, the Company may be required to litigate the fee applications and/or the underlying actions. In addition to the matters described above, the Company may be a party to litigation and subject to claims incident to the ordinary course of business from time to time. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. |
Common stock and convertible pr
Common stock and convertible preferred stock | 12 Months Ended |
Dec. 31, 2018 | |
Common stock and convertible preferred stock | |
Common stock and convertible preferred stock | 11. Common stock and convertible preferred stock Common stock Upon completion of the Merger in December 2018, the Company issued shares of its common stock to Private Millendo’s stockholders, at an exchange ratio of 0.0744 shares of the Company’s common stock, for each share of Private Millendo common stock outstanding immediately prior to the Merger . In addition, the Company sold 1,230,158 shares of common stock at $16.26 per share and received $18.7 million in net proceeds. Concurrent with the Merger, the Company issued 499,504 shares upon conversion of the promissory notes (see Note 8). In connection with the acquisition of the remaining 16.4% of Alizé, the Company issued 450,371 shares of its common-1 stock. Upon consummation of the Merger, the common-1 shares were converted into common stock on a 1:1 basis. During the year ended December 31, 2018 there were no exercises of stock options. During the year ended December 31, 2017, the Company issued 608 shares of common stock in connection with the exercise of stock options. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Subject to preferences that may apply to any outstanding preferred stock, holders of common stock are entitled to receive ratably any dividends that the Company’s board of directors may declare out of funds legally available for that purpose on a non-cumulative basis. No dividends had been declared through December 31, 2018. Convertible preferred stock In connection with the Alizé acquisition, the Company issued 6,540,763 and 20,636,179 shares of its Series A‑1 and Series B‑1 preferred stock, respectively. No shares were issued and outstanding as of December 31, 2018. The Company had Series A, Series A‑1, Series B and Series B‑1 convertible preferred stock, that were classified outside of stockholders’ equity (deficit) because the shares contain deemed liquidation rights that were contingent redemption features not solely within the control of the Company. As a result, all of the Company’s convertible preferred stock was classified as temporary equity. Upon completion of the Merger in December 2018, all of the outstanding shares of the Company's convertible preferred stock were converted into an aggregate of 6,759,109 shares of common stock. As of December 31, 2018, no preferred stock was issued or outstanding. Dividends The holders of Series B and Series B‑1 preferred stock, in preference to holders of any other class or series of the Company’s stock, were entitled to non‑cumulative dividends at a rate of 8.0%, if and when declared by the Company’s board of directors. After payment to the holders of the Series B and Series B‑1 preferred stock, the holders of Series A and Series A‑1 preferred stock, in preference to holders of any other class or series of the Company’s stock, were entitled to non‑cumulative dividends at a rate of 8.0%, if and when declared by the Company’s board of directors. In the event a dividend was declared to common stockholders, holders of Series A, Series A‑1, Series B and Series B‑1 preferred stock would also receive an equivalent dividend on an “as‑converted” basis. No dividends were declared or paid during the years ended December 31, 2018 and 2017. Voting The holders of Series A, Series A‑1, Series B and Series B‑1 preferred stock were entitled to one vote for each share of common stock into which their shares of preferred stock may have converted and, subject to certain preferred stock class votes specified in the Company’s certificate of incorporation or as required by law, the holders of the preferred stock and common stock voted together on an as‑converted basis. Liquidation preference In the event of a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, or in the event of a deemed liquidation event, which includes a sale of the Company as defined in the Company’s articles of incorporation, holders of Series A, Series A-1, Series B, and B-1 preferred stock are entitled to receive, in preference to all other stockholders, an amount equal to their original investment amount plus any declared and unpaid dividends. If upon the occurrence of such event, the assets and funds available for distribution are insufficient to pay such holders the full amount to which they are entitled, then the entire assets and funds legally available for distribution shall be distributed ratably among the holders of the Series B and Series B-1 preferred stock in proportion to the full amounts to which they would otherwise be entitled. After payment in full of the liquidation preference of the Series B and Series B-1 preferred stock, holders of Series A and Series A-1 preferred stock are entitled to receive, in preference to all holders of common stock, an amount equal to their original investment amount plus any declared and unpaid dividends. If upon the occurrence of such event, the assets and funds available for distribution are insufficient to pay such holders the full amount to which they are entitled, then the entire remaining assets and funds legally available for distribution shall be distributed ratably among the holders of the Series A and Series A-1 preferred stock in proportion to the full amounts to which they would otherwise be entitled. After payment of the liquidation preference on shares of Series A, Series A-1, Series B, and Series B-1 preferred stock has been made, any remaining assets shall be distributed ratably to common and preferred stockholders, on an as converted basis, until such time as each holder of preferred stock has received an aggregate amount per share equal to three times the original issue price of such share. Thereafter, the remaining assets of the company available for distribution shall be distributed ratably to holders of common stock. Conversion Each share of Series A, Series A‑1, Series B, and Series B‑1 preferred stock was convertible into common stock at any time at the option of the holder thereof at the conversion price then in effect. All shares of Series A, Series A‑1, Series B and Series B‑1 preferred stock were convertible into common stock at the affirmative election of the holders of at least a majority of the outstanding shares of preferred stock at the conversion price then in effect. The conversion price for the Series A and Series A-1 preferred stock was $1.00 and the conversion price for the Series B and Series B-1 preferred stock was $1.49776 (each subject to adjustments upon the occurrence of certain dilutive events). Upon any automatic conversion, any declared and unpaid dividends would be payable to the holders of preferred stock. Convertible preferred stock warrants Prior to completing the Merger in December 2018, the Company had issued warrants to purchase up to 110,000 shares of Series A preferred stock (Series A warrants) and up to 120,179 shares of Series B preferred stock (Series B warrants). The Series A warrants and Series B warrants expire in April 2024 and July 2026, respectively. The warrants were liability classified because they were exercisable for contingently redeemable preferred stock, and the value of the warrants were remeasured at each reporting period (see Note 6). Upon completion of the Merger, the warrants automatically converted into warrants for common stock. As of December 31, 2018, there were 17,125 common stock warrants outstanding with a weighted average exercise price of $16.93 per share. |
Stock based compensation
Stock based compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock based compensation | |
Stock based compensation | 12. Stock‑based compensation In December 2018, the Company assumed Private Millendo’s 2012 Stock Plan, as amended (the “Millendo Plan”). There were 1,494,431 authorized shares of common stock to be issued under the Millendo Plan. In addition, the Company’s 2012 Stock Incentive Plan, as amended (the “2012 Plan”) will continue. The number of shares of the Company’s common stock that are reserved for issuance under the 2012 Plan is equal to the sum of (1) 96,883 shares of common stock issuable under the 2012 Plan plus the number of shares of the Company’s common stock subject to outstanding awards under the 2011 Stock Incentive Plan (the “2011 Plan”), that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (up to 45,308 shares) plus (2) an annual increase, to be added on the first day of each year beginning in 2013 and each subsequent anniversary until the expiration of the 2012 Plan, equal to the lowest of 65,000 shares of its common stock, 4.0% of the number of shares of the Company’s common stock outstanding on the first day of the year and an amount determined by the Company’s board of directors. The Millendo Plan and the 2012 Plan provide for the issuance of stock options, stock appreciation rights, restricted stock units and other stock-based or cash awards to purchase shares of common stock to eligible employees, officers, directors and consultants. As of December 31, 2018 there were 838,329 shares of common stock available for future issuance under both plans in the aggregate. The amount, terms of grants, and exercisability provisions are determined and set by the Company’s board of directors. The Company measures employee and nonemployee stock‑based awards at grant‑date fair value and records compensation expense on a straight‑line basis over the vesting period of the award. Stock‑based awards issued to nonemployees are revalued until the award vests. The Company recorded stock‑based compensation expense in the following expense categories of its accompanying consolidated statements of operations and comprehensive loss for the years ended December 31, 2018 and 2017 (amounts in thousands): Year Ended December 31, 2018 2017 Research and development $ 606 $ 315 General and administrative 778 447 Other general expenses 43 — Total $ 1,427 $ 762 Options issued may have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the board of directors. Vesting generally occurs over a period of not greater than four years. The following table summarizes the activity related to stock option grants to employees and nonemployees for the years ended December 31, 2018 and 2017: Weighted- Weighted- average average exercise remaining price contractual Shares per share life (years) Outstanding at January 1, 2017 $ Exercised (608) Forfeited (16,315) Outstanding at December 31, 2017 703,479 Options assumed from OvaScience Merger 423,316 78.70 Granted 776,140 Cancelled (72,049) 16.40 Forfeited (66,599) 8.54 Outstanding at December 31, 2018 1,764,287 $ 26.81 8.0 Vested and exercisable at December 31, 2018 925,343 $ 38.50 4.9 Vested and expected to vest at December 31, 2018 1,764,287 $ 26.81 8.0 As of December 31, 2018, the unrecognized compensation cost related to 838,944 unvested stock options expected to vest was $6.8 million. This unrecognized compensation will be recognized over an estimated weighted‑average amortization period of 3.29 years. There were no options exercised during the year ended December 31, 2018. The aggregate intrinsic value of options exercised during the year ended December 31, 2017 was $3,000. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2018 was $2.2 million and $1.8 million, respectively. The options granted during the year ended December 31, 2018 had an estimated weighted average grant date fair value of $9.72. There were no options granted during 2017. The fair value of options is estimated using the Black‑Scholes option pricing model, which takes into account inputs such as the exercise price, the value of the underlying common stock at the grant date, expected term, expected volatility, risk‑free interest rate and dividend yield. The fair value of each grant of options during the year ended December 31, 2018 was determined using the methods and assumptions discussed below. · The expected term of employee options with service‑based vesting is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin (“SAB”) No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of nonemployee options is equal to the contractual term. · The expected volatility is based on historical volatilities of similar entities within the Company’s industry which were commensurate with the expected term assumption as described in SAB No. 107. · The risk‑free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. · The expected dividend yield is 0% because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend on its common stock. · Prior to the Merger, the Company’s common stock was not publicly traded. The Company’s board of directors periodically estimated the fair value of the Company’s common stock considering, among other things, contemporaneous valuations of its common stock prepared by an unrelated third‑party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants 2013 Practice Aid, Valuation of Privately‑Held‑Company Equity Securities Issued as Compensation. Following the Merger, the fair market value of the Company’s common stock will be determined based on the closing price of its common stock on the Nasdaq Capital Market. The grant date fair value of each option grant was estimated throughout the year using the Black‑Scholes option‑pricing model using the following assumptions for the Plan: Year Ended December 31, 2018 Expected term (in years) 6.08 Expected volatility 66 % Risk-free interest rate 2.77 % Expected dividend yield 0 % Fair market value of common stock $ 15.82 As discussed in Note 4, at the time of the Alizé acquisition, Alizé had 6,219 non‑employee (BSA) warrants and 5,360 employee (BSPCE) warrants outstanding, which have weighted‑average exercise prices of €80.06 and €83.40, respectively. As of December 31, 2018, all BSAs and BSPCEs were vested. As of December 31, 2018, there were an aggregate of 156,719 shares of common stock issuable upon the exercise of the warrants with a weighted‑average exercise price of $7.26 per share. These instruments are included in the equity attributable to noncontrolling interests. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income taxes | |
Income taxes | 13. Income taxes As of December 31, 2018 and 2017, the Company had approximately $249.6 million and $58.4 million of federal net operating loss carryforwards and $12.2 million and $6.6 million of research tax credit carryforwards, respectively. The net operating loss carryforwards and research tax credit carryforwards begin to expire in 2031 and 2029, respectively. As of December 31, 2018 and 2017, the Company had foreign net operating loss carryforwards of approximately $105.0 million and $21.3 million, respectively, which can be carried forward indefinitely. As of December 31, 2018 and 2017, the Company had state net operating losses of $249.2 million and $58.4 million, respectively, which begin to expire in 2031. Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) provides for limitation on the use of net operating loss and research and development tax credit carryforwards following certain ownership changes (as defined in Code) that could limit the Company’s ability to utilize these carryforwards. Pursuant to Section 382 of the Code, an ownership change occurs when the stock ownership of a 5% stockholder increases by more than 50% over a three‑year testing period. The Company may have experienced various ownership changes, as defined by the Code, as a result of past financings and may in the future experience an ownership change. Accordingly, the Company’s ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provided guidance on accounting for the federal tax rate change and other tax effects of the Tax Act. SAB 118 provided a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes. In connection with the Company’s adoption of the Tax Act and in consideration of SAB 118, there were no material adjustments made to the provisional amounts recognized in 2017 in connection with the enactment of the Tax Reform Act. The accounting for the income tax effects of the Tax Reform Act is complete as of December 31, 2018. The components of the net deferred income tax asset as of December 31, 2018 and 2017 are as follows (amounts in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 87,446 $ 20,978 Research and development credit carryforwards 12,196 6,582 Stock-based compensation 5,209 168 Accruals 1,233 260 Capitalized start-up costs 1,031 1,109 Other 936 8 Gross deferred tax asset 108,051 29,105 Less: valuation allowance (108,051) (29,105) Net deferred tax asset $ — $ — In assessing the realizability of deferred tax assets, the Company considers whether it is more‑likely‑than‑not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against its net deferred tax assets as of December 31, 2018 and 2017, respectively, because the Company has determined that is it more likely than not that these assets will not be fully realized due to historic net operating losses incurred. The valuation allowance increased by $78.9 million during the year ended December 31, 2018, primarily due to the Merger with OvaScience, Inc. and the generation of net operating losses and credit carry forwards during 2018. The Company does not have unrecognized tax benefits as of December 31, 2018 and 2017, respectively. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: December 31, 2018 2017 Federal income tax benefit at statutory rate 21.0 % 34.0 % State income tax, net of federal benefit 4.1 % 0.9 % Permanent differences (4.1) % (26.6) % Rate change (3.3) % (9.3) % Research and development credit benefit 5.0 % 4.3 % Change in valuation allowance (22.7) % (3.3) % Effective income tax rate — % — % The Company files income tax returns in the U.S. Federal, various states and foreign jurisdictions. The statute of limitations for assessment by the Internal Revenue Service (IRS) and state tax authorities is open for the Company’s 2015 to 2017 tax years. Federal and state carryforward attributes that were generated prior to the tax year ended December 31, 2015 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in a period for which the statute of limitations remains open. The statute of limitations for assessment by the authorities in the various foreign jurisdictions in which the Company files ranges from one to five years and is open for the Company’s 2015 to 2017 tax years. There are currently no federal, state or foreign income tax audits in progress. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related party transactions | |
Related party transactions | 14. Related party transactions During the year ended December 31, 2018, the Company received $8 million upon issuing convertible promissory notes to several of its existing preferred stock investors. The notes were converted in December 2018 in connection with the Merger. The Company also received gross proceeds of $21.5 million from those same investors from the sale of common stock immediately prior to the Merger. |
Basis of presentation and sum_2
Basis of presentation and summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of presentation and summary of significant accounting policies | |
Basis of presentation and consolidation principles | Basis of presentation and consolidation principles The accompanying consolidated financial statements include the accounts of Millendo Therapeutics, Inc. and its subsidiaries, and all intercompany amounts have been eliminated. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include the accounts of the Company’s subsidiaries in which the Company holds a controlling financial interest as of the financial statement date. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents, and marketable securities. The Company generally invests its cash in deposits with high credit quality financial institutions. Deposits at banks may exceed the insurance provided on such deposits. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Cash equivalents as of December 31, 2018 and 2017 consisted of money market funds. |
Marketable securities | Marketable securities The Company classifies its marketable securities as available-for-sale securities and the securities are stated at fair value. At December 31, 2018, the balance in the Company’s accumulated other comprehensive income included activity related to the Company’s available-for-sale marketable securities. There were no material realized gains or losses recognized on the maturity of available-for-sale securities during the year ended December 31, 2018 and, as a result, the Company did not reclassify any amount out of accumulated other comprehensive loss for the same period. |
Restricted cash | Restricted cash Restricted cash relates to amount used to secure the Company’s credit card facility balances held on deposit with major financial institutions and to collateralize a letter of credit in the name of the Company’s landlord pursuant to a certain operating lease agreement . The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in the Company's consolidated balance sheets to the total of the amount presented in the consolidated statements of cash flows: December 31, 2018 2017 (in thousands) Cash and cash equivalents $ 73,286 $ 17,578 Restricted cash 45 45 Long-term restricted cash 439 — Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 73,770 $ 17,623 |
Refundable tax credit | Refundable tax credit In connection with the acquisition of Alizé (see Note 4), the Company obtained French research tax credits (crédit d’impôt recherche) or (“CIR”). CIR earned are refundable or they can offset French corporate income tax due. Since the French research tax credit can be recovered in cash, the Company has elected to treat this as a grant. During the year ended December 31, 2018 and 2017, the Company recognized a reduction of research and development expenses of $1.4 million and $35,000, respectively, and had a research tax credit receivable of $2.3 million and $1.0 million at December 31, 2018 and 2017, respectively. On January 15, 2019, the Company received a payment of $1.0 million for the 2017 refundable tax credit. |
Fair value of financial instruments | Fair value of financial instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts reflected in the Company’s consolidated balance sheets for cash equivalents, marketable securities, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to their short term nature. The carrying value of the Company’s preferred stock warrant liability at December 31, 2017 is the estimated fair value of the liability. The carrying value of the Company’s debt assumed from Alizé approximates fair value as of December 31, 2018 and 2017. |
Preferred stock warrants | Preferred stock warrants The Company accounts for its warrants issued in connection with financing transactions based upon the characteristics and provisions of the instrument. The preferred stock warrants are recorded at fair value at each reporting period and classified as liabilities in the Company’s consolidated balance sheets. Any changes to fair value are recorded as a component of other expense within the Company’s consolidated statements of operations and comprehensive loss. |
Redeemable noncontrolling interests | Redeemable noncontrolling interests Redeemable noncontrolling interest represented the 16.4% interest in Alizé that was held by other investors until December 2018. The Company was subject to a put call agreement (see Note 4) with these investors, that was settled in December 2018, resulting in the Company acquiring the remaining issued and outstanding share capital of Alizé in exchange for cash and shares of the Company’s common stock. The exchange ratio of shares was fixed at the amounts determined on the acquisition date. There were no redeemable noncontrolling interests outstanding as of December 31, 2018. |
Other assets | Other assets Other assets includes property and equipment and other assets. Property and equipment, less accumulated depreciation, are recorded at cost and are depreciated on a straight‑line basis over their estimated useful lives which range from three to five years except for leasehold improvements which are amortized over the shorter of the asset life or lease term. Repairs and maintenance costs are expensed as incurred. Long‑lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company has not recognized any impairment or disposition of long‑lived assets through December 31, 2018. |
Deferred offering costs | Deferred offering costs The Company capitalizes costs that are directly associated with in-process equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds from the applicable financing. If a financing is abandoned, deferred offering costs are expensed. During the years ended December 31, 2018 and 2017, the Company expensed $0.9 million and $1.4 million, respectively, in offering costs. The expense was recorded as a component of general and administrative expenses. |
Research and development expenses | Research and development expenses Research and development costs are expensed as incurred and consist primarily of personnel expenses, costs of funding research performed by third parties, expenses incurred under agreements with contract manufacturing organizations, payments under third‑party licensing agreements other than IPR&D, consultant fees and expenses associated with outsourced professional scientific development services, expenses related to regulatory activities and allocated expense for facility costs. Milestone payment obligations incurred prior to regulatory approval of the product, which are accrued when the event requiring payment of the milestone occurs, are included in research and development expenses. Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered. At the end of each reporting period, the Company compares payments made to third‑party service providers to the estimated progress toward completion of the applicable research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs. As of December 31, 2018 and 2017, the Company has not made any material adjustments to its prior estimates of accrued research and development expenses. Acquired in‑process research and development (“IPR&D”) expense consists of the initial up‑front payments incurred in connection with the acquisition or licensing of product candidates that do not meet the definition of a business under FASB ASC Topic 805, Business Combinations . The Company’s acquired IPR&D expense of $63.8 million reflects the fair value of consideration ascribed to the livoletide product candidate in connection with its acquisition of Alizé in December 2017 (see Note 4). |
Stock based compensation | Stock‑based compensation The Company measures and recognizes compensation expense for all stock options awarded to employees and nonemployees based on the estimated fair market value of the award on the grant date. The Company uses the Black‑Scholes option pricing model to value its stock option awards. The Company recognizes compensation expense on a straight‑line basis over the requisite service period, which is generally the vesting period of the award. The Company accounts for forfeitures of stock options as they occur. Stock‑based awards issued to nonemployees were revalued at each reporting period until the award vests. October 1, 2018, the Company early adopted ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments granted to nonemployees for goods and services. As a result of the adoption, stock-based awards issued to nonemployees are no longer required to be revalued at each reporting period. The adoption of ASU No. 2018-07 did not have a material effect on the consolidated financial statements. Estimating the fair market value of options requires the input of subjective assumptions, including the estimated fair value of the Company’s common stock, the expected life of the options, stock price volatility, the risk‑free interest rate and expected dividends. The assumptions used in the Company’s Black‑Scholes option‑pricing model represent management’s best estimates and involve a number of variables, uncertainties and assumptions and the application of management’s judgment, as they are inherently subjective. |
Income taxes | Income taxes On December 22, 2017 the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”). This legislation makes significant changes in the U.S. tax laws including reducing the corporate rate from 34% to 21% beginning in 2018 and creating a territorial tax system with a one‑time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. The provisions of the Tax Act did not have any impact to the Company’s effective tax rate due to the full valuation allowance position. As a result of the reduced corporate rate, the Company’s deferred tax assets were revalued from 34% to 21%, which was fully offset by a reduction in the valuation allowance. The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the period in which temporary differences are expected to be settled, is reflected in the Company’s financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. As of December 31, 2018 and 2017, the Company has concluded that a full valuation allowance is necessary for all of its net deferred tax assets. The Company had no material amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. In accordance with guidance issued by Financial Accounting Standards Board (“FASB”), companies should make and disclose a policy election as to whether they will recognize deferred taxes for basis differences expected to reverse as Global Intangible Low ‑ Taxed Income (“GILTI”) or whether they will account for GILTI as period costs if and when incurred. The Company has elected to recognize the resulting tax with respect to the GILTI provision as a period cost. No costs were incurred by the Company through December 31, 2018 as a result of GILTI. |
Net loss per share | Net loss per share Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted‑average number of shares of common stock (including shares of common‑1 stock) outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, convertible preferred stock, preferred stock warrants, restricted stock, and stock options, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share, the weighted‑average number of shares of common stock remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti‑dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted‑average shares of common stock outstanding, as they would be anti‑dilutive (amounts shown as common stock equivalents): Year ended December 31, 2018 2017 Stock options 1,764,287 703,479 Convertible preferred stock — 6,759,109 Common stock warrants 17,125 — Preferred stock warrants — 17,125 BSA and BSPCE warrants 156,719 156,719 1,938,131 7,636,432 |
Segment information | Segment information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision‑making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment. |
Foreign currency | Foreign currency Results of foreign operations are translated from their functional currency into U.S. dollars (reporting currency) using average exchange rates in effect during the year, while assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date. The resulting translation adjustments are recorded in accumulated other comprehensive loss. Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency are included in income in the period in which the change occurs and reported within other expenses in the consolidated statements of operations and comprehensive loss. |
Recent accounting pronouncements | Recent accounting pronouncements In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . ASU 2018-13 resulted in certain modifications to fair value measurement disclosures, primarily related to level 3 fair value measurements. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its disclosures. In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting . ASU 2018-07 is intended to reduce the cost and complexity and to improve financial reporting for non-employee share-based payments. The ASU expands the scope of Topic 718, Compensation-Stock Compensation (which currently only includes share-based payments to employees), to include share-based payments issued to non-employees for goods or services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. This update is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted. Upon transition, entities will remeasure unsettled liability-classified awards and any unmeasured equity-classified awards for non-employees at fair value as of the adoption date. A cumulative-effect adjustment to retained earnings will be required as of the beginning of the fiscal year of adoption. The Company adopted ASU No. 2018-07 on October 1, 2018, which did not have a material effect on the consolidated financial statements. In March 2018, the FASB issued ASU 2018‑05, which amends Income Taxes (Topic) 740 by incorporating the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin 118 (“SAB 118”) issued on December 22, 2017. SAB 118 provide guidance on accounting for the effects of the Tax Act. The Company recognized the income tax effects of the Tax Act in the 2017 consolidated financial statements in accordance with SAB 118. See Note 13 of the consolidated financial statements for additional disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) . ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The new standard is effective for fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 in 2018 and as a result there was no impact to the prior periods. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This standard is effective January 1, 2019 and will require adoption on a retrospective basis unless it is impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently evaluating the potential impact of the adoption of this standard on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) , which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Additionally, ASU 2016-13 requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected through the use of an allowance of expected credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and requires a modified retrospective approach. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires the Company as the lessee to recognize most leases on the balance sheet thereby resulting in the recognition of right of use assets and lease obligations for those leases currently classified as operating leases. ASU 2016-02 became effective for the Company on January 1, 2019 and the Company elected the optional transition method as well as the package of practical expedients upon adoption. While the Company is still finalizing its adoption procedures, the Company estimates the primary impact to the consolidated financial position upon adoption will be the recognition, on a discounted basis, of the minimum commitments under noncancelable operating leases on the consolidated balance sheets resulting in the recording of right of use assets of approximately $0.9 million and lease obligations for approximately $2.0 million. In January 2016, the FASB issued authoritative guidance under ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . ASU 2016-01 revises the classification, measurement and disclosure of investments in equity securities. The Company adopted this standard effective January 1, 2018. The adoption of ASU 2016-01 did not have an impact on the Company’s consolidated financial statements. |
Subsequent events | Subsequent events Subsequent events were evaluated through the filing date of this Annual Report. In February 2019, the Company entered into a five-year lease agreement for office space commencing April 1, 2019. Annual rent payments range from $374,000 in the first year and escalates to $421,000 in the fifth year. |
Basis of presentation and sum_3
Basis of presentation and summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of presentation and summary of significant accounting policies | |
Schedule of reconciliation of the components of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in the Company's consolidated balance sheets to the total of the amount presented in the consolidated statements of cash flows: December 31, 2018 2017 (in thousands) Cash and cash equivalents $ 73,286 $ 17,578 Restricted cash 45 45 Long-term restricted cash 439 — Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 73,770 $ 17,623 |
Schedule of potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | The following potentially dilutive securities have been excluded from the computation of diluted weighted‑average shares of common stock outstanding, as they would be anti‑dilutive (amounts shown as common stock equivalents): Year ended December 31, 2018 2017 Stock options 1,764,287 703,479 Convertible preferred stock — 6,759,109 Common stock warrants 17,125 — Preferred stock warrants — 17,125 BSA and BSPCE warrants 156,719 156,719 1,938,131 7,636,432 |
Alize Pharma SAS Acquisition (T
Alize Pharma SAS Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Alize Pharma SAS Acquisition | |
Schedule of asset acquisition purchase consideration | The purchase price was calculated as follows (amounts in thousands): Consideration Fair market value of Millendo securities issued $ 52,985 Fair value of noncontrolling interest 10,017 Acquisition costs and payments to sellers 1,570 Less: cash acquired (1,508) Total consideration given, net of cash acquired $ 63,064 |
Schedule of asset acquired and labilities assumed | The following table summarizes the assets acquired and liabilities assumed as of the acquisition date (amounts in thousands): Assets Acquired and Liabilities Assumed Assets acquired: Prepaid expenses and other assets $ 472 Refundable tax credit 981 Property and equipment 14 In-process research and development asset 63,844 Total assets acquired 65,311 Liabilities assumed: Accounts payable 1,150 Accrued expenses and other current liabilities 294 Debt 803 Total liabilities assumed 2,247 Net assets acquired $ 63,064 |
Marketable securities (Tables)
Marketable securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Marketable securities | |
Schedule of available-for-sale securities | The following summarizes the available-for-sale securities held as of December 31, 2018 (amounts in thousands): December 31, 2018 Amortized cost Unrealized gains Unrealized losses Fair value U.S. government agency $ 2,994 $ — $ — $ 2,994 Corporate debt securities $ 1,391 $ — $ — $ 1,391 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair value measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis (amounts in thousands): December 31, 2018 (Level 1) (Level 2) (Level 3) Assets Money market funds (included in cash and cash equivalents) $ 25,145 $ — $ — Marketable securities - U.S. government agency $ — $ 2,994 $ — Marketable securities - Corporate debt securities $ — $ 1,391 $ — Liabilities Preferred stock warrant liability $ — $ — $ — December 31, 2017 (Level 1) (Level 2) (Level 3) Assets Money market funds (included in cash and cash equivalents) $ — $ — $ — Marketable securities - U.S. government agency $ — $ — $ — Marketable securities - Corporate debt securities $ — $ — $ — Liabilities Preferred stock warrant liability $ — $ — $ 139 |
Schedule of preferred stock warrant liability measured at fair value on a recurring basis using significant unobservable inputs | The reconciliation of the preferred stock warrant liability measured at fair value, until the reclassification into equity at the time of the Merger, on a recurring basis using significant unobservable inputs (Level 3) was as follows (amounts in thousands): Preferred stock warrant liability Balance at January 1, 2017 $ 167 Additions — Change in fair value (28) Balance at December 31, 2017 139 Change in fair value (40) Reclassification to equity (99) Balance at December 31, 2018 $ — |
Schedule of significant weighted-average assumptions | As of Merger date, immediately prior to reclassifying the warrants to equity, and as of December 31, 2017 the significant weighted‑average assumptions were as follows: Year ended December 31, 2018 2017 Expected term (in years) 1.75 1.41 Expected volatility 71 % 72 % Risk free rate 2.58 % 1.76 % Dividend yield — % — % |
Accrued expenses (Tables)
Accrued expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued expenses | |
Schedule of accrued expenses | Accrued expenses consist of (amounts in thousands): December 31, 2018 2017 Compensation and related benefits $ 3,537 $ 1,365 Professional fees 1,140 695 Preclinical and clinical costs 1,811 390 Lease termination 630 — Other 512 169 Total $ 7,630 $ 2,619 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments | |
Schedule of future minimum rental payments under operating leases with noncancelable terms | Future minimum rental payments under operating leases with noncancelable terms as of December 31, 2018 are as follows (amounts in thousands): Year Ending December 31, 2019 $ 1,208 2020 1,327 2021 414 2022 425 2023 436 Thereafter 293 Total $ 4,103 |
Stock based compensation (Table
Stock based compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock based compensation | |
Schedule of stock based compensation expense | The Company recorded stock‑based compensation expense in the following expense categories of its accompanying consolidated statements of operations and comprehensive loss for the years ended December 31, 2018 and 2017 (amounts in thousands): Year Ended December 31, 2018 2017 Research and development $ 606 $ 315 General and administrative 778 447 Other general expenses 43 — Total $ 1,427 $ 762 |
Summary of the activity related to stock option grants to employees and nonemployees | The following table summarizes the activity related to stock option grants to employees and nonemployees for the years ended December 31, 2018 and 2017: Weighted- Weighted- average average exercise remaining price contractual Shares per share life (years) Outstanding at January 1, 2017 $ Exercised (608) Forfeited (16,315) Outstanding at December 31, 2017 703,479 Options assumed from OvaScience Merger 423,316 78.70 Granted 776,140 Cancelled (72,049) 16.40 Forfeited (66,599) 8.54 Outstanding at December 31, 2018 1,764,287 $ 26.81 8.0 Vested and exercisable at December 31, 2018 925,343 $ 38.50 4.9 Vested and expected to vest at December 31, 2018 1,764,287 $ 26.81 8.0 |
Summary of grant date fair value assumptions | The grant date fair value of each option grant was estimated throughout the year using the Black‑Scholes option‑pricing model using the following assumptions for the Plan: Year Ended December 31, 2018 Expected term (in years) 6.08 Expected volatility 66 % Risk-free interest rate 2.77 % Expected dividend yield 0 % Fair market value of common stock $ 15.82 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income taxes | |
Schedule of components of the net deferred income tax asset | The components of the net deferred income tax asset as of December 31, 2018 and 2017 are as follows (amounts in thousands): December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 87,446 $ 20,978 Research and development credit carryforwards 12,196 6,582 Stock-based compensation 5,209 168 Accruals 1,233 260 Capitalized start-up costs 1,031 1,109 Other 936 8 Gross deferred tax asset 108,051 29,105 Less: valuation allowance (108,051) (29,105) Net deferred tax asset $ — $ — |
Schedule of reconciliation of income tax expense (benefit) at the statutory federal income tax rate | A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows: December 31, 2018 2017 Federal income tax benefit at statutory rate 21.0 % 34.0 % State income tax, net of federal benefit 4.1 % 0.9 % Permanent differences (4.1) % (26.6) % Rate change (3.3) % (9.3) % Research and development credit benefit 5.0 % 4.3 % Change in valuation allowance (22.7) % (3.3) % Effective income tax rate — % — % |
Organization and description _2
Organization and description of business (Details) $ in Millions | Dec. 31, 2018USD ($) | Dec. 07, 2018 |
Organization and description of business | ||
Exchange ratio | 0.0744 | 0.0744 |
Cash, Cash Equivalents, and marketable securities | $ 77.7 |
Basis of presentation and sum_4
Basis of presentation and summary of significant accounting policies (Details) - USD ($) | Jan. 15, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted cash | ||||
Cash and cash equivalents | $ 73,286,000 | $ 17,578,000 | ||
Restricted cash | 45,000 | 45,000 | ||
Long-term restricted cash | 439,000 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 73,770,000 | 17,623,000 | $ 41,949,000 | |
Reduction of research and development expenses | 1,400,000 | 35,000 | ||
Research tax credit receivable | 2,300,000 | 1,000,000 | ||
Redeemable noncontrolling interests | ||||
Redeemable noncontrolling interests | $ 0 | $ 10,584,000 | ||
Subsequent event | ||||
Restricted cash | ||||
Payments received for refundable tax credit | $ 1,000,000 | |||
Otonnale | Alize | ||||
Restricted cash | ||||
Ownership interest held by other investors | 16.40% |
Basis of presentation and sum_5
Basis of presentation and summary of significant accounting policies - Property and equipment (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Other Assets | ||
Deferred offering cost expensed | $ 900 | $ 1,400 |
Acquired IPR&D expense | $ 63,844 | |
U.S. corporate income tax rate | 21.00% | 34.00% |
Cost as a result of GILTI | $ 0 | |
Number of segments | segment | 1 | |
Minimum | ||
Other Assets | ||
Estimated useful life of property and equipment | 3 years | |
Maximum | ||
Other Assets | ||
Estimated useful life of property and equipment | 5 years |
Basis of presentation and sum_6
Basis of presentation and summary of significant accounting policies - Net loss per share (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | ||
Securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | 1,938,131 | 7,636,432 |
Stock options | ||
Potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | ||
Securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | 1,764,287 | 703,479 |
Convertible preferred stock | ||
Potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | ||
Securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | 6,759,109 | |
Common stock warrants | ||
Potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | ||
Securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | 17,125 | |
Preferred stock warrants | ||
Potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | ||
Securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | 17,125 | |
Warrant | ||
Potentially dilutive securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | ||
Securities have been excluded from the computation of diluted weighted average shares of common stock outstanding | 156,719 | 156,719 |
Basis of presentation and sum_7
Basis of presentation and summary of significant accounting policies - Recent accounting pronouncements and subsequent events (Details) - USD ($) | 1 Months Ended | |
Feb. 28, 2019 | Jan. 01, 2019 | |
Subsequent event | ||
Recent accounting pronouncements and subsequent events | ||
Lease term | 5 years | |
Adjustment | ASU 2016-02 | ||
Recent accounting pronouncements and subsequent events | ||
Right of use assets | $ 900,000 | |
Lease obligations | $ 2,000,000 | |
Minimum | Subsequent event | ||
Recent accounting pronouncements and subsequent events | ||
Annual rent payment | $ 374,000 | |
Maximum | Subsequent event | ||
Recent accounting pronouncements and subsequent events | ||
Annual rent payment | $ 421,000 |
OvaScience Merger (Details)
OvaScience Merger (Details) - USD ($) | 3 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 06, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
OvaScience Merger | ||||
Severance costs | $ 1,800,000 | |||
Stock based compensation expense | $ 1,427,000 | $ 762,000 | ||
OvaScience | ||||
OvaScience Merger | ||||
Goodwill or intangible assets recognized | $ 0 | 0 | ||
Cash and marketable securities obtained | 40,200,000 | 40,200,000 | ||
Prepaid expenses and other assets | 1,300,000 | 1,300,000 | ||
Assumed payables and accruals | 3,500,000 | 3,500,000 | ||
Lease termination liability | 1,400,000 | $ 1,400,000 | ||
Stock based compensation expense | $ 43,000 |
Alize Pharma SAS Acquisition (D
Alize Pharma SAS Acquisition (Details) - USD ($) $ in Thousands | Dec. 19, 2017 | Dec. 09, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Alize Pharma SAS Acquisition | ||||||
Conversion of convertible preferred stock into common stock (in shares) | 6,759,109 | |||||
Warrants | 17,125 | 17,125 | ||||
Common Stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Conversion of convertible preferred stock into common stock (in shares) | 6,759,109 | |||||
Common-1 stock | Common Stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Common-1 stock or common stock in connection with asset purchase of Alizé Pharma (in shares) | 464,043 | |||||
Alize | ||||||
Alize Pharma SAS Acquisition | ||||||
Ownership interest acquired | 16.40% | 16.40% | ||||
Upfront payment | $ 800 | |||||
Shares issued in connection with acquisition | 450,371 | |||||
Alize | Warrant | ||||||
Alize Pharma SAS Acquisition | ||||||
Estimated aggregate fair value | $ 2,200 | |||||
Alize | Warrant | BSA warrants | ||||||
Alize Pharma SAS Acquisition | ||||||
Warrants | 6,219 | |||||
Alize | Warrant | BSPCE warrants | ||||||
Alize Pharma SAS Acquisition | ||||||
Warrants | 5,360 | |||||
Alize | Series A-1 preferred stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 6,540,763 | |||||
Alize | Series B-1 preferred stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 20,636,179 | |||||
Alize | Otonnale | ||||||
Alize Pharma SAS Acquisition | ||||||
Shares issued in connection with acquisition | 442,470 | |||||
Alize | Otonnale | Exercise of put-call option | ||||||
Alize Pharma SAS Acquisition | ||||||
Ownership interest acquired | 16.40% | |||||
Alize | Eumedix | Exercise of put-call option | Series A-1 preferred stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 7,901 | |||||
Share Sale and Contribution Agreement | Alize | ||||||
Alize Pharma SAS Acquisition | ||||||
Ownership interest acquired | 83.60% | 100.00% | 100.00% | |||
Upfront payment | $ 1,000 | $ 1,570 | ||||
Payment to former shareholders | 300 | |||||
Transaction expenses | 700 | |||||
Aggregate fair market value of shares issued | $ 50,800 | $ 52,985 | ||||
Share Sale and Contribution Agreement | Alize | Series A-1 preferred stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 6,540,763 | |||||
Share Sale and Contribution Agreement | Alize | Series B-1 preferred stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 20,636,179 | |||||
Share Sale and Contribution Agreement | Alize | Common-1 stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Issuance of Common-1 stock or common stock in connection with asset purchase of Alizé Pharma (in shares) | 464,043 | |||||
Share Sale and Contribution Agreement | Alize | Series A1, Series B1 Preferred Stock and Common Stock | ||||||
Alize Pharma SAS Acquisition | ||||||
Conversion of convertible preferred stock into common stock (in shares) | 2,486,003 |
Alize Pharma SAS Acquisition -
Alize Pharma SAS Acquisition - Purchase price (Details) - Alize - USD ($) $ in Thousands | Dec. 19, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Alize Pharma SAS Acquisition | |||
Acquisition costs and payments to sellers | $ 800 | ||
Share Sale and Contribution Agreement | |||
Alize Pharma SAS Acquisition | |||
Fair market value of Millendo securities issued | $ 50,800 | $ 52,985 | |
Fair value of noncontrolling interest | 10,017 | ||
Acquisition costs and payments to sellers | $ 1,000 | 1,570 | |
Less: cash acquired | (1,508) | ||
Total consideration given, net of cash acquired | $ 63,064 |
Alize Pharma SAS Acquisition _2
Alize Pharma SAS Acquisition - Summarizes the assets acquired and liabilities assumed (Details) - Share Sale and Contribution Agreement - Alize $ in Thousands | Dec. 19, 2017USD ($) |
Assets acquired: | |
Prepaid expenses and other assets | $ 472 |
Refundable tax credit | 981 |
Property and equipment | 14 |
In-process research and development asset | 63,844 |
Total assets acquired | 65,311 |
Liabilities assumed: | |
Accounts payable | 1,150 |
Accrued expenses and other current liabilities | 294 |
Assumed debt outstanding | 803 |
Total liabilities assumed | 2,247 |
Net assets acquired | $ 63,064 |
Change in the discount rate (in percentage) | 1.00% |
Change in the fair value of the equity issued (in percentage) | 15.00% |
Weighted average scenario (in percentage) | 20.00% |
Marketable securities (Details)
Marketable securities (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Marketable securities | |
Available-for-sale securities held | $ 0 |
U.S. government agency | |
Marketable securities | |
Amortized cost | 2,994 |
Fair value | 2,994 |
Corporate debt securities | |
Marketable securities | |
Amortized cost | 1,391 |
Fair value | $ 1,391 |
Fair value measurements - Recur
Fair value measurements - Recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Liabilities | ||
Preferred stock warrant liability | $ 139 | |
U.S. government agency | ||
Assets | ||
Marketable securities | $ 2,994 | |
Corporate debt securities | ||
Assets | ||
Marketable securities | 1,391 | |
Recurring | Level 3 | ||
Liabilities | ||
Preferred stock warrant liability | $ 139 | |
Recurring | U.S. government agency | Level 2 | ||
Assets | ||
Marketable securities | 2,994 | |
Recurring | Corporate debt securities | Level 2 | ||
Assets | ||
Marketable securities | 1,391 | |
Recurring | Money market funds | Level 1 | ||
Assets | ||
Money market funds | $ 25,145 |
Fair value measurements - Recon
Fair value measurements - Reconciliation of the preferred stock warrant liability (Details) - Level 3 - Preferred stock warrants - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of the preferred stock warrant liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ||
Balance at beginning | $ 139 | $ 167 |
Change in fair value | (40) | (28) |
Reclassification to equity | $ (99) | |
Balance at end | $ 139 |
Fair value measurements - Signi
Fair value measurements - Significant weighted average assumptions (Details) - Option pricing model | Dec. 31, 2018 | Dec. 31, 2017 |
Expected term (in years) | ||
Significant weighted average assumptions | ||
Preferred stock warrant liabilities, estimated term | 1 year 9 months | 1 year 4 months 28 days |
Expected volatility | ||
Significant weighted average assumptions | ||
Preferred stock warrant liabilities, estimated value | 0.71 | 0.72 |
Risk free rate | ||
Significant weighted average assumptions | ||
Preferred stock warrant liabilities, estimated value | 0.0258 | 0.0176 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued expenses | ||
Compensation and related benefits | $ 3,537 | $ 1,365 |
Professional fees | 1,140 | 695 |
Preclinical and clinical costs | 1,811 | 390 |
Lease termination | 630 | |
Other | 512 | 169 |
Total | $ 7,630 | $ 2,619 |
Debt - Bpifrance Reimbursable A
Debt - Bpifrance Reimbursable Advance (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | |
Debt | |||||||
Interest charged under the advance | $ | $ 134 | $ 288 | |||||
Reimbursement annuity (percent) | 20.00% | 20.00% | |||||
Alize | Bpifrance | |||||||
Debt | |||||||
Assumed debt outstanding | € 700,000 | ||||||
Original advance amount | € 800,000 | ||||||
Interest charged under the advance | $ | $ 0 | ||||||
Interest accrued under the advance | $ | $ 0 | ||||||
Quarterly principal payments | € 17,500 | ||||||
Final principal payments | 50,000 | ||||||
Balance outstanding | € 500,000 | $ 600 |
Debt - Convertible promissory n
Debt - Convertible promissory notes (Details) - USD ($) | Dec. 07, 2018 | Aug. 31, 2018 | Dec. 31, 2018 |
Long-term debt | |||
Proceeds from issuance of convertible promissory notes | $ 8,000,000 | ||
Interest rate (as a percent) | 6.00% | ||
Shares issued upon conversion of promissory notes | 499,504 | 499,504 | |
Debt issuance costs | $ 500,000 | ||
Unamortized debt discount reclassified to equity | $ 400,000 | ||
Interest expense on debt | $ 200,000 | ||
Amortization of the debt discount | $ 52,000 |
Debt - Comerica Bank Term Loan
Debt - Comerica Bank Term Loan agreement (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2018 | Jul. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt | |||||
Amount borrowed | $ 6,000,000 | ||||
Minimum interest rate (as a percent) | 6.00% | ||||
Repayment of debt | $ 169,000 | 10,042,000 | |||
Write-off of deferred financing costs | $ 871,000 | $ 1,364,000 | |||
Loan and Security Agreement | |||||
Debt | |||||
Amount borrowed | $ 6,000,000 | $ 4,000,000 | |||
Repayment of debt | 10,000,000 | ||||
Write-off of deferred financing costs | $ 91,000 | ||||
Loan and Security Agreement | Prime rate | |||||
Debt | |||||
Variable interest rate (as a percent) | 1.50% | ||||
Loan and Security Agreement | Prime rate | Minimum | |||||
Debt | |||||
Minimum interest rate (as a percent) | 2.50% |
License agreements (Details)
License agreements (Details) | 12 Months Ended | ||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) | Jun. 13, 2013USD ($) | |
UM License Agreement | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Payments upon the achievement of milestones | $ 2,500,000 | ||||
Expense in connection with achievement of certain milestones | $ 0 | $ 100,000 | |||
Annual minimum royalties | $ 20,000 | ||||
Annual fee | $ 200,000 | ||||
Assignors | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Payments upon the achievement of milestones | $ 100,000 | ||||
AstraZeneca License Agreement | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Contractual obligation | $ 0 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 15, 2019 | |
Operating leases | |||
Rent expense | $ 200 | $ 100 | |
Future minimum rental payments under operating leases with noncancelable terms | |||
2019 | 1,208 | ||
2020 | 1,327 | ||
2021 | 414 | ||
2022 | 425 | ||
2023 | 436 | ||
Thereafter | 293 | ||
Total | $ 4,103 | ||
Employment benefit plan | |||
Employees contribution (as a percent) | 100.00% | ||
Safe harbor minimum contribution (as a percent) | 3.00% | ||
Expense relating to contributions | $ 100 | $ 100 | |
Waltham, Massachusetts | Forecast | |||
Operating leases | |||
Minimum rental receivable | $ 600 |
Common stock and convertible _2
Common stock and convertible preferred stock (Details) $ / shares in Units, $ in Millions | Dec. 07, 2018USD ($)$ / sharesshares | Dec. 31, 2018Vote$ / sharesshares | Aug. 31, 2018shares | Dec. 06, 2018USD ($) | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017shares |
Class of Stock | ||||||
Exchange ratio | 0.0744 | 0.0744 | 0.0744 | |||
Number of shares sold | 1,230,158 | |||||
Share price (per share) | $ / shares | $ 16.26 | $ 15.82 | $ 15.82 | |||
Proceeds from the sale of common stock | $ | $ 18.7 | $ 21.5 | ||||
Shares issued upon conversion of promissory notes | 499,504 | 499,504 | ||||
Exercise of stock options (in shares) | 0 | 608 | ||||
Number of votes per share | Vote | 1 | |||||
Dividend declared | $ / shares | $ 0 | |||||
Alize | ||||||
Class of Stock | ||||||
Voting interest acquired | 16.40% | 16.40% | ||||
Shares issued in connection with acquisition | 450,371 | |||||
Conversion ratio | $ / shares | $ 1 | $ 1 |
Common stock and convertible _3
Common stock and convertible preferred stock - Convertible preferred stock (Details) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2018Vote$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 06, 2018shares | Dec. 31, 2016shares | |
Class of Stock | |||||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Conversion of convertible preferred stock into common stock (in shares) | 6,759,109 | ||||
Dividend declared | $ / shares | $ 0 | $ 0 | |||
Dividend paid | $ / shares | $ 0 | $ 0 | |||
Number of votes per share | Vote | 1 | ||||
Common stock warrants outstanding | 17,125 | 17,125 | |||
Exercise price of warrants | $ / shares | $ 16.93 | $ 16.93 | |||
Series A preferred stock | |||||
Class of Stock | |||||
Preferred stock, shares issued | 0 | 0 | 15,269,452 | ||
Preferred stock, shares outstanding | 0 | 0 | 15,269,452 | ||
Dividend rate | 8.00% | ||||
Number of votes per share | Vote | 1 | ||||
Conversion price | $ / shares | $ 1 | $ 1 | |||
Warrants to purchase shares of common stock | 110,000 | ||||
Convertible preferred stock | |||||
Class of Stock | |||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 27,176,942 | ||||
Preferred stock, shares outstanding | 90,848,515 | 63,671,573 | |||
Series A-1 preferred stock | |||||
Class of Stock | |||||
Preferred stock, shares issued | 0 | 0 | 6,540,763 | ||
Preferred stock, shares outstanding | 0 | 0 | 6,540,763 | ||
Dividend rate | 8.00% | ||||
Number of votes per share | Vote | 1 | ||||
Conversion price | $ / shares | $ 1 | $ 1 | |||
Series B preferred stock | |||||
Class of Stock | |||||
Preferred stock, shares issued | 0 | 0 | 48,402,121 | ||
Preferred stock, shares outstanding | 0 | 0 | 48,402,121 | ||
Dividend rate | 8.00% | ||||
Number of votes per share | Vote | 1 | ||||
Conversion price | $ / shares | $ 1.49776 | $ 1.49776 | |||
Warrants to purchase shares of common stock | 120,179 | ||||
Series B-1 preferred stock | |||||
Class of Stock | |||||
Preferred stock, shares issued | 0 | 0 | 20,636,179 | ||
Preferred stock, shares outstanding | 0 | 0 | 20,636,179 | ||
Dividend rate | 8.00% | ||||
Number of votes per share | Vote | 1 | ||||
Conversion price | $ / shares | $ 1.49776 | $ 1.49776 | |||
Alize | |||||
Class of Stock | |||||
Exercise price of warrants | $ / shares | $ 7.26 | $ 7.26 | |||
Alize | Series A-1 preferred stock | |||||
Class of Stock | |||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 6,540,763 | ||||
Alize | Series B-1 preferred stock | |||||
Class of Stock | |||||
Issuance of Series A-1 preferred stock, Series B-1 preferred stock in connection with asset purchase of Alizé Pharma (in shares) | 20,636,179 |
Stock based compensation (Detai
Stock based compensation (Details) | Dec. 31, 2018shares |
Share-based compensation | |
Shares available for future issuance | 838,329 |
Millendo Plan | |
Share-based compensation | |
Number of shares authorized | 1,494,431 |
2012 Plan | |
Share-based compensation | |
Shares available for future issuance | 96,883 |
2012 Plan | Minimum | |
Share-based compensation | |
Shares available for future issuance | 65,000 |
Percentage of common stock outstanding | 4.00% |
2011 Plan | |
Share-based compensation | |
Shares available for future issuance | 45,308 |
Stock based compensation - Stoc
Stock based compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 1,427 | $ 762 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 606 | 315 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 778 | $ 447 |
Other general expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 43 |
Stock based compensation - St_2
Stock based compensation - Stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock based compensation | |||
Contractual life (in years) | P10Y | ||
Vesting period (in years) | 4 years | ||
The activity related to stock option grants to employees and nonemployees | |||
Outstanding at beginning (in shares) | 703,479 | 720,402 | |
Options assumed from OvaScience Merger (in shares) | 423,316 | ||
Granted (in shares) | 776,140 | 0 | |
Exercised (in shares) | 0 | (608) | |
Cancelled (in shares) | (72,049) | ||
Forfeited (in shares) | (66,599) | (16,315) | |
Outstanding at end (in shares) | 1,764,287 | 703,479 | 720,402 |
Vested and exercisable at end (in shares) | 925,343 | ||
Vested and expected to vest at end (in shares) | 1,764,287 | ||
Weighted average exercise price per share | |||
Outstanding at beginning (in dollars per share) | $ 4.91 | $ 4.97 | |
Options assumed from OvaScience Merger (in dollars per share) | 78.70 | ||
Granted (in dollars per share) | 15.82 | ||
Exercised (in dollars per share) | 3.41 | ||
Cancelled (in dollars per share) | 16.40 | ||
Forfeited (in dollars per share) | 8.54 | 5.23 | |
Outstanding at end (in dollars per share) | 26.81 | $ 4.91 | $ 4.97 |
Vested and exercisable at end (in dollars per share) | 38.50 | ||
Vested and expected to vest at end (in dollars per share) | $ 26.81 | ||
Weighted-average remaining contractual life (years) | |||
Outstanding (in years) | 8 years | 7 years 9 months 18 days | 8 years 9 months 18 days |
Vested and exercisable at end (in years) | 4 years 10 months 24 days | ||
Vested and expected to vest at end (in years) | 8 years | ||
Unvested stock options (in shares) | 838,944 | ||
Unrecognized compensation cost | $ 6,800 | ||
Weighted average amortization period | 3 years 3 months 15 days | ||
Total aggregate intrinsic value of options exercised | $ 3,000 | ||
Aggregate intrinsic value of options outstanding | $ 2,200 | ||
Aggregate intrinsic value of options exercisable | $ 1,800 | ||
Weighted average grant date fair value, options granted | $ 9.72 |
Stock based compensation - Gran
Stock based compensation - Grant date fair value of option (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 07, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 6 years 29 days | |
Expected volatility | 66.00% | |
Risk-free interest rate | 2.77% | |
Expected dividend yield | 0.00% | |
Share price (per share) | $ 15.82 | $ 16.26 |
Stock based compensation - Aliz
Stock based compensation - Alizé acquisition (Details) | Dec. 31, 2018$ / sharesshares | Dec. 19, 2017€ / sharesshares |
Class of Warrant or Right [Line Items] | ||
Common stock warrants outstanding | 17,125 | |
Weighted average exercise prices | $ / shares | $ 16.93 | |
Alize | ||
Class of Warrant or Right [Line Items] | ||
Weighted average exercise prices | $ / shares | $ 7.26 | |
Number of shares issuable upon the exercise of the warrants | 156,719 | |
Alize | Warrant | BSA warrants | ||
Class of Warrant or Right [Line Items] | ||
Common stock warrants outstanding | 6,219 | |
Weighted average exercise prices | € / shares | € 80.06 | |
Alize | Warrant | BSPCE warrants | ||
Class of Warrant or Right [Line Items] | ||
Common stock warrants outstanding | 5,360 | |
Weighted average exercise prices | € / shares | € 83.40 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Operating Loss Carryforwards [Line Items] | ||
Research tax credit carryforwards | $ 12.2 | $ 6.6 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 249.6 | 58.4 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 105 | 21.3 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 249.2 | $ 58.4 |
Income taxes - Net deferred inc
Income taxes - Net deferred income tax asset (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 87,446 | $ 20,978 |
Research and development credit carryforwards | 12,196 | 6,582 |
Stock-based compensation | 5,209 | 168 |
Accruals | 1,233 | 260 |
Capitalized start‑up costs | 1,031 | 1,109 |
Other | 936 | 8 |
Gross deferred tax asset | 108,051 | 29,105 |
Less: valuation allowance | $ (108,051) | $ (29,105) |
Income taxes - Valuation allowa
Income taxes - Valuation allowance (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income taxes | |
Increase in valuation allowance | $ 78.9 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of income tax expense (benefit) (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of income tax expense (benefit) at the statutory federal income tax rate | ||
Federal income tax benefit at statutory rate | 21.00% | 34.00% |
State income tax, net of federal benefit | 4.10% | 0.90% |
Permanent differences | (4.10%) | (26.60%) |
Rate change | (3.30%) | (9.30%) |
Research and development credit benefit | 5.00% | 4.30% |
Change in valuation allowance | (22.70%) | (3.30%) |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Thousands | Dec. 07, 2018 | Dec. 06, 2018 | Dec. 31, 2018 |
Related party transactions | |||
Proceeds from Convertible Debt | $ 8,000 | ||
Proceeds from the sale of common stock | $ 18,700 | $ 21,500 |