Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 09, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Millendo Therapeutics, Inc. | |
Entity Central Index Key | 0001544227 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,412,058 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 55,274 | $ 73,286 |
Short-term restricted cash | 699 | 45 |
Marketable securities | 4,385 | |
Prepaid expenses and other current assets | 6,416 | 3,373 |
Refundable tax credit | 2,123 | 2,333 |
Total current assets | 64,512 | 83,422 |
Long-term restricted cash | 658 | 439 |
Operating lease right of use assets | 2,349 | |
Other assets | 805 | 213 |
Total assets | 68,324 | 84,074 |
Current liabilities: | ||
Current portion of debt | 199 | 189 |
Accounts payable | 3,091 | 1,998 |
Accrued expenses | 6,147 | 7,630 |
Operating lease liabilities — current | 1,492 | |
Total current liabilities | 10,929 | 9,817 |
Debt, net of current portion | 278 | 383 |
Operating lease liabilities | 1,865 | |
Other liabilities | 227 | 752 |
Total liabilities | 13,299 | 10,952 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value: 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value: 100,000,000 shares authorized; 13,412,058 and 13,357,999 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 13 | 13 |
Additional paid-in capital | 237,136 | 234,876 |
Accumulated deficit | (184,323) | (164,086) |
Accumulated other comprehensive income | 140 | 148 |
Total stockholders’ equity attributable to Millendo Therapeutics, Inc. | 52,966 | 70,951 |
Equity attributable to noncontrolling interests | 2,059 | 2,171 |
Total stockholders' equity | 55,025 | 73,122 |
Total liabilities and stockholders' equity | $ 68,324 | $ 84,074 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
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 | 13,412,058 | 13,357,999 |
Common stock, shares outstanding | 13,412,058 | 13,357,999 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating expenses: | ||||
Research and development | $ 5,981 | $ 3,200 | $ 12,185 | $ 5,969 |
General and administrative | 4,179 | 1,786 | 8,632 | 3,405 |
Loss from operations | 10,160 | 4,986 | 20,817 | 9,374 |
Other expenses: | ||||
Interest expense (income), net | (313) | (6) | (628) | (15) |
Other loss | 24 | 62 | 48 | 69 |
Net loss | (9,871) | (5,042) | (20,237) | (9,428) |
Net loss attributable to noncontrolling interest | 196 | 321 | ||
Net loss attributable to common stockholders | $ (9,871) | $ (4,846) | $ (20,237) | $ (9,107) |
Net loss per share of common stock, basic and diluted | $ (0.74) | $ (6.82) | $ (1.51) | $ (12.82) |
Weighted-average shares of common stock outstanding, basic and diluted | 13,379,842 | 710,390 | 13,368,981 | 710,390 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | $ 1 | $ 28 | $ (8) | $ 47 |
Comprehensive loss | (9,870) | (4,818) | (20,245) | (9,060) |
Comprehensive income attributable to noncontrolling interest | 4 | 7 | ||
Comprehensive loss attributable to Millendo Therapeutics, Inc. | $ (9,870) | $ (4,822) | $ (20,245) | $ (9,067) |
Consolidated statements of conv
Consolidated statements of convertible preferred stock, redeemable noncontrolling interests and stockholders' (deficit) equity - 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, 2017 | $ 132,922 | $ 10,584 | ||||||||
Convertible Preferred Stock, balance at beginning (in shares) at Dec. 31, 2017 | 90,848,515 | |||||||||
Convertible Preferred Stock | ||||||||||
Foreign currency translation adjustment | 7 | |||||||||
Net income (loss) | (321) | |||||||||
Convertible Preferred Stock, balance at end at Jun. 30, 2018 | $ 132,922 | 10,270 | ||||||||
Convertible Preferred Stock, balance at end (in shares) at Jun. 30, 2018 | 90,848,515 | |||||||||
Balance at beginning at Dec. 31, 2017 | $ (130,694) | $ 6,192 | $ (136,894) | $ 8 | $ 2,171 | $ (128,523) | ||||
Balance at beginning (in shares) at Dec. 31, 2017 | 464,043 | 246,347 | ||||||||
Stockholder's equity | ||||||||||
Stock-based compensation expense | 336 | 336 | 336 | |||||||
Foreign currency translation adjustment | 40 | 40 | 40 | |||||||
Net income (loss) | (9,107) | (9,107) | (9,107) | |||||||
Balance at end at Jun. 30, 2018 | (139,425) | 6,528 | (146,001) | 48 | 2,171 | (137,254) | ||||
Balance at end (in shares) at Jun. 30, 2018 | 464,043 | 246,347 | ||||||||
Convertible Preferred Stock, balance at beginning at Mar. 31, 2018 | $ 132,922 | 10,462 | ||||||||
Convertible Preferred Stock, balance at beginning (in shares) at Mar. 31, 2018 | 90,848,515 | |||||||||
Convertible Preferred Stock | ||||||||||
Foreign currency translation adjustment | 4 | |||||||||
Net income (loss) | (196) | |||||||||
Convertible Preferred Stock, balance at end at Jun. 30, 2018 | $ 132,922 | $ 10,270 | ||||||||
Convertible Preferred Stock, balance at end (in shares) at Jun. 30, 2018 | 90,848,515 | |||||||||
Balance at beginning at Mar. 31, 2018 | (134,762) | 6,369 | (141,155) | 24 | 2,171 | (132,591) | ||||
Balance at beginning (in shares) at Mar. 31, 2018 | 464,043 | 246,347 | ||||||||
Stockholder's equity | ||||||||||
Stock-based compensation expense | 159 | 159 | 159 | |||||||
Foreign currency translation adjustment | 24 | 24 | 24 | |||||||
Net income (loss) | (4,846) | (4,846) | (4,846) | |||||||
Balance at end at Jun. 30, 2018 | (139,425) | 6,528 | (146,001) | 48 | 2,171 | (137,254) | ||||
Balance at end (in shares) at Jun. 30, 2018 | 464,043 | 246,347 | ||||||||
Balance at beginning at Dec. 31, 2018 | 70,951 | $ 13 | 234,876 | (164,086) | 148 | 2,171 | 73,122 | |||
Balance at beginning (in shares) at Dec. 31, 2018 | 13,357,999 | |||||||||
Stockholder's equity | ||||||||||
Exercise of stock options | 166 | 166 | $ 166 | |||||||
Exercise of stock options (in shares) | 45,947 | 45,947 | ||||||||
Exercise of BSPCE warrants | 160 | 160 | (112) | $ 48 | ||||||
Exercise of BSPCE warrants (in shares) | 8,112 | |||||||||
Stock-based compensation expense | 1,934 | 1,934 | 1,934 | |||||||
Foreign currency translation adjustment | (8) | (8) | (8) | |||||||
Net income (loss) | (20,237) | (20,237) | (20,237) | |||||||
Balance at end at Jun. 30, 2019 | 52,966 | $ 13 | 237,136 | (184,323) | 140 | 2,059 | 55,025 | |||
Balance at end (in shares) at Jun. 30, 2019 | 13,412,058 | |||||||||
Balance at beginning at Mar. 31, 2019 | 61,515 | $ 13 | 235,815 | (174,452) | 139 | 2,171 | 63,686 | |||
Balance at beginning (in shares) at Mar. 31, 2019 | 13,357,999 | |||||||||
Stockholder's equity | ||||||||||
Exercise of stock options | 166 | 166 | 166 | |||||||
Exercise of stock options (in shares) | 45,947 | |||||||||
Exercise of BSPCE warrants | 160 | 160 | (112) | 48 | ||||||
Exercise of BSPCE warrants (in shares) | 8,112 | |||||||||
Stock-based compensation expense | 995 | 995 | 995 | |||||||
Foreign currency translation adjustment | 1 | 1 | 1 | |||||||
Net income (loss) | (9,871) | (9,871) | (9,871) | |||||||
Balance at end at Jun. 30, 2019 | $ 52,966 | $ 13 | $ 237,136 | $ (184,323) | $ 140 | $ 2,059 | $ 55,025 | |||
Balance at end (in shares) at Jun. 30, 2019 | 13,412,058 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net loss | $ (20,237) | $ (9,428) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 19 | 15 |
Stock-based compensation expense | 1,934 | 336 |
Amortization of operating lease right of use assets | (206) | |
Unrealized foreign currency loss | 61 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (2,910) | (761) |
Other assets | 62 | |
Accounts payable | 1,056 | (367) |
Accrued expenses and other liabilities | (892) | 446 |
Cash used in operating activities | (21,174) | (9,698) |
Investing activities: | ||
Purchase of property and equipment | (277) | (7) |
Proceeds from sale of marketable securities | 4,385 | |
Net cash paid in Alize asset purchase | (524) | |
Cash provided by (used in) investing activities | 4,108 | (531) |
Financing activities: | ||
Repayment of debt | (90) | (84) |
Payment of financing costs | (162) | (482) |
Proceeds from option and BSPCE warrant exercises | 214 | |
Cash used in financing activities | (38) | (566) |
Effect of foreign currency exchange rate changes on cash | (35) | (4) |
Net decrease in cash, cash equivalents and restricted cash | (17,139) | (10,799) |
Cash, cash equivalents and restricted cash at beginning of period | 73,770 | 17,623 |
Cash, cash equivalents and restricted cash at end of period | 56,631 | 6,824 |
Supplemental schedule of non-cash investing and financing activities: | ||
Right of use assets acquired under operating leases | 1,840 | |
Financing costs in accounts payable and accrued expenses | $ 83 | $ 159 |
Organization and description of
Organization and description of business | 6 Months Ended |
Jun. 30, 2019 | |
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 primarily focused on developing novel treatments for orphan endocrine diseases where current therapies do not exist or are insufficient. The Company is currently advancing three product candidates. The Company’s most advanced product candidate, livoletide (AZP‑531), is a potential treatment for Prader‑Willi syndrome (“PWS”), a rare and complex genetic endocrine disease characterized by hyperphagia, or insatiable hunger. The Company is also developing nevanimibe (ATR‑101) as a potential treatment for patients with classic congenital adrenal hyperplasia (“CAH”), a rare, monogenic adrenal disease that requires lifelong treatment with exogenous cortisol, often at high doses. The Company has added a new product candidate to its research and development pipeline: The Company has been investigating nevanimibe (ATR-101) as a potential treatment for patients with endogenous Cushing’s syndrome (“CS”), a rare endocrine disease characterized by excessive cortisol production from the adrenal glands. As a result of slower than anticipated enrollment in its CS Phase 2 clinical trial, the Company elected to discontinue this trial in August 2019, suspend development of nevanimibe for the treatment of CS, and focus its resources on other programs in its research and development pipeline. The Company’s operations to date have focused on acquiring technology and assets, conducting preclinical studies and clinical trials, organization and staffing, business planning, and raising capital. The Company does not have any products 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. 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 unaudited interim 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 June 30, 2019, the Company had cash, cash equivalents, marketable securities and restricted cash of $56.6 million and an accumulated deficit of $184.3 million. In April 2019, the Company entered into an “at-the-market” (“ATM”) equity distribution agreement with Citigroup Global Markets Inc. acting as sole agent with an aggregate offering value of up to $50.0 million, which allows the Company to sell its common shares through the facilities of the Nasdaq Capital Market . Subject to the terms of the equity distribution agreement, the Company is able to determine, at its sole discretion, the timing and number of shares to be sold under this ATM facility. No common shares have been issued to date under the Company’s ATM equity distribution agreement. 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, marketable securities and restricted cash at June 30, 2019 are sufficient to fund operations into the fourth quarter of 2020. |
Basis of presentation and summa
Basis of presentation and summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2019 | |
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 unaudited interim consolidated financial statements include the accounts of Millendo Therapeutics, Inc. and its subsidiaries, and all intercompany amounts have been eliminated. The unaudited interim 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 unaudited interim 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. Unaudited interim financial statements The Company has prepared the accompanying unaudited interim consolidated financial statements based on Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. These unaudited interim consolidated financial statements include, in the Company’s opinion, all adjustments, consisting only of normal recurring adjustments that the Company considers necessary for a fair presentation of its consolidated financial position and results of operations for these periods. The Company’s historical results are not necessarily indicative of the results to be expected in the future and the Company’s operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10‑K filed with the SEC on April 1, 2019. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies except as follows: Leases 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. The Company adopted ASU 2016‑02 using a modified retrospective transition approach as of January 1, 2019 and will not restate its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption. The Company has elected to adopt the package of transition practical expedients and, therefore, have not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. As a result of the adoption of ASC 842, the Company recognized an operating lease liability of $2.0 million based on the present value of the minimum rental payments of the leases and a corresponding operating lease right of use (“ROU”) asset of $0.9 million within the Company’s consolidated balance sheet. The Company’s ROU asset is exclusive of any early lease termination obligations whereby future contractual lease payments exceed estimated sublease income. Under ASC 842, the Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. When readily determinable, the Company uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has noncancelable operating leases for office and laboratory space which have remaining lease terms between two and seven years. In connection with the Merger, the Company assumed a sublease agreement for office and laboratory space located in Waltham, Massachusetts. The term of the sublease expires in November 2020. In February 2019 and October 2018, the Company entered into two additional noncancelable operating leases for office space in Ann Arbor, Michigan for the Company’s headquarters; one that the Company took possession of in April 2019, and the other that the Company took possession of in July 2019, respectively. In April 2019, the Company entered into a lease agreement for office space in Lexington, Massachusetts to expand its operations. As of June 30, 2019, the operating lease ROU asset and the operating lease liabilities were $2.3 million and $3.4 million, respectively. The discount rate used to account for the Company's operating leases under ASC 842 is the Company’s estimated incremental borrowing rate of 7.0%. The Company has options to extend certain of its leases for another five to nine years. These options to extend were not recognized as part of the Company’s measurement of the ROU assets and operating lease liabilities for the three and six months ended June 30, 2019 nor were the future payments related to the lease the Company entered into in October 2018. Rent expense related to the Company's operating leases was approximately $156,000 and $46,000 for the three months ended June 30, 2019 and 2018, respectively, and approximately $223,000 and $94,000 for the six months ended June 30, 2019 and 2018, respectively. Cash paid for amounts included in the measurement of the lease liabilities was approximately $0.4 million and $0.5 million and the Company received approximately $85,000 and $0.2 million in sublease payments related to its Waltham, Massachusetts lease during the three and six months ended June 30, 2019, respectively. The weighted average remaining term of the Company’s noncancelable operating leases is 3.49 years. Future minimum rental payments under the Company’s noncancelable operating leases at June 30, 2019 is as follows (amounts in thousands): 2019 $ 759 2020 1,448 2021 440 2022 451 2023 463 Thereafter 196 Total 3,757 Present Value Adjustment (400) Lease liability at June 30, 2019 $ 3,357 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. Restricted cash Restricted cash relates to amounts used to secure the Company’s credit card facility balances held on deposit with major financial institutions, to collateralize a letter of credit in the name of the Company’s landlord pursuant to a certain operating lease agreement, and to fund an escrow arrangement in connection with a sublease agreement also pursuant to that same operating lease agreement. 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. As of June 30, 2019, deferred offering costs were $0.2 million. 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 during the three and six months ended June 30, 2018) 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 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: June 30, 2019 2018 Stock options 2,640,077 661,490 Convertible preferred stock — 6,759,109 Common stock warrants 17,125 — Preferred stock warrants — 17,125 BSA and BSPCE warrants 148,607 156,719 2,805,809 7,594,443 Recent accounting pronouncements In August 2018, the FASB issued ASU No. 2018‑13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) . 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 August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This standard was effective January 1, 2019 and required adoption on a retrospective basis unless it was impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company adopted this standard which did not have a material impact 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. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief , which amends ASU 2016-13 by providing entities with an option to irrevocably elect the fair value option to be applied on an instrument-by-instrument basis for eligible financial instruments that are within the scope of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. ASU 2016‑13, as amended, 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. |
Fair value measurements
Fair value measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair value measurements | |
Fair value measurements | 3. 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): June 30, 2019 (Level 1) (Level 2) (Level 3) Assets Money market funds (included in cash and cash equivalents) $ 52,079 $ — $ — Marketable securities - U.S. government agency $ — $ — $ — Marketable securities - Corporate debt securities $ — $ — $ — 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 $ — Prior to the Merger in December 2018, the Company’s preferred stock warrants were liability classified and remeasured at each reporting period using level 3 inputs. There were no changes in the fair value of the preferred stock warrant liability during the three or six months ended June 30, 2018. |
Accrued expenses
Accrued expenses | 6 Months Ended |
Jun. 30, 2019 | |
Accrued expenses | |
Accrued expenses | 4. Accrued expenses Accrued expenses consist of (amounts in thousands): June 30, December 31, 2019 2018 Compensation and related benefits $ 2,028 $ 3,537 Professional fees 1,751 1,140 Preclinical and clinical costs 2,002 1,811 Lease termination — 630 Other 366 512 Total $ 6,147 $ 7,630 In connection with the adoption of ASC 842 on January 1, 2019, the lease termination balance as of December 31, 2018 was reclassified into the Company’s operating lease liability. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt | |
Debt | 5. Debt Bpifrance Reimbursable Advance In December 2017, in connection with its acquisition of Alizé Pharma SAS (“Alizé”), 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, beginning January 1, 2016, Bpifrance may require the Company to pay, by no later than March 31st of each year, a reimbursement annuity equal to 20% of the proceeds generated by the Company from license, assignment or use of livoletide. Under no circumstance, however, 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. During the three months ended June 30, 2019 and 2018, the Company made principal payments of $45,000 and $41,000, respectively. During the six months ended June 30, 2019 and 2018, the Company made principal payments of $90,000 and $84,000, respectively. At June 30, 2019, the balance outstanding was $0.5 million (or €0.4 million). |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2019 | |
Litigation | |
Litigation | 6. 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 OvaScience and certain former officers and directors 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 OvaScience, as a nominal defendant, certain former officers and directors of OvaScience and one current director of the Company (a former director of OvaScience) 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 allegedly excessive director pay and additionally alleged claims of abuse of control and corporate waste. On October 27, 2017, the defendants filed a motion to dismiss the amended complaint. The court heard oral argument on the motion to dismiss on April 5, 2018. On April 13, 2018, the court granted the defendants’ motion to dismiss the amended complaint for failure to state a claim for relief under Section 14(a). The court also dismissed the plaintiffs’ pendent state law claims without prejudice, based on lack of subject matter jurisdiction. On April 25, 2018, the plaintiffs moved for leave to amend the complaint, and to stay this case pending the outcome of the Dahhan Action. The Company does not believe that the proposed amended complaint cures the defects in the current complaint, but informed plaintiffs’ counsel that, in the interest of judicial economy, defendants would not oppose the proposed amendment if the court would consider staying the case pending the resolution of the Dahhan Action. On April 27, 2018, the court granted the plaintiffs’ motion for leave to amend the complaint and for a stay. On April 30, 2018, the plaintiffs filed their second amended complaint. On May 23, 2018, the court entered an order staying this case pending the resolution of the Dahhan Action. 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 . 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, Wheby, 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 to moot plaintiffs’ claims. The Cunningham plaintiff voluntarily dismissed his complaint on December 10, 2018, the Wheby plaintiff voluntarily dismissed his complaint on February 28, 2019, and the Adlard plaintiff voluntarily dismissed his complaint on July 30, 2019. On March 18, 2019, the court dismissed the Cuenca Aubets and Kim actions for failure to serve. 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. |
Stock based compensation
Stock based compensation | 6 Months Ended |
Jun. 30, 2019 | |
Stock based compensation | |
Stock based compensation | 7. Stock‑based compensation On June 11, 2019, the Company held its 2019 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) and the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP,” and together with the 2019 Plan, the “Plans”). The 2019 Plan is the successor to the Private Millendo 2012 Stock Plan and the OvaScience 2012 Stock Incentive Plan (each, as amended, the “Prior Plans”) and allows the Company to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by the Company’s board of directors (the “Board”) or the compensation committee of the Board. No additional awards will be granted under either of the Prior Plans. The 2019 ESPP enables employees to purchase shares of the Company’s common stock through offerings of rights to purchase the Company’s common stock to all eligible employees. The Plans were adopted by the Company’s Board on April 29, 2019, subject to approval by the Company’s stockholders, and became effective with such stockholder approval on June 11, 2019. Outstanding awards under the Prior Plans continue to be subject to the terms and conditions of the Prior Plans. The aggregate number of shares of our common stock that may be issued under the 2019 Plan will not exceed 2,919,872. The number of shares of our common stock reserved for issuance under the 2019 Plan will automatically increase on January 1 of each year, for a period of ten years, from January 1, 2020 continuing through January 1, 2029, by 4% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board. The aggregate number of shares of our common stock that may be issued under the 2019 ESPP is 133,580 shares, plus the number of shares of our common stock that are automatically added on January 1st of each year for a period of up to ten years from January 1, 2020 continuing through January 1, 2029, by 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board. 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. The Company recorded stock‑based compensation expense in the following expense categories of its accompanying consolidated statements of operations and comprehensive loss for the three months ended June 30, 2019 and 2018 and six months ended June 30, 2019 and 2018, respectively (amounts in thousands): Three months Six months ended ended June 30, June 30, 2019 2018 2019 2018 Research and development $ 378 $ 67 $ 801 $ 138 General and administrative 616 92 1,133 198 Total $ 994 $ 159 $ 1,934 $ 336 Stock options Options issued under the 2019 Plan may have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Board. 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 six months ended June 30, 2019: Weighted Weighted-average average remaining exercise price contractual Shares per share life (years) Outstanding at December 31, 2018 1,764,287 $ 26.81 8.0 Granted 1,028,701 10.23 Exercised (45,947) 3.63 Forfeited (106,964) 86.07 Outstanding at June 30, 2019 2,640,077 $ 18.36 7.9 Vested and exercisable at June 30, 2019 893,208 $ 30.71 5.1 Vested and expected to vest at June 30, 2019 2,640,077 $ 18.36 7.9 As of June 30, 2019, the unrecognized compensation cost related to 1,746,869 unvested stock options expected to vest was $12.1 million. This unrecognized compensation will be recognized over an estimated weighted‑average amortization period of 3.1 years. The aggregate intrinsic value of options outstanding and options exercisable as of June 30, 2019 was $5.8 million and $3.6 million, respectively. The options granted during the three and six months ended June 30, 2019 had an estimated weighted average grant date fair value of $8.50 and $7.09, respectively. There were no options granted during the three or six months ended June 30, 2018. The grant date fair value of each option grant was estimated during the three and six months ended June 30, 2019 using the following assumptions within the Black‑Scholes option‑pricing model: Three months ended Six months ended June 30, June 30, 2019 2019 Expected term (in years) 5.93 6.01 Expected volatility 79 % 80 % Risk-free interest rate 1.91 % 2.35 % Expected dividend yield 0 % 0 % At the time of the Alizé acquisition in December 2017, 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 June 30, 2019, all BSAs and BSPCEs were vested. In June 2019, a total of 600 BSPCE warrants were exercised resulting in the issuance of 8,112 shares of the Company’s common stock. As of June 30, 2019, there were an aggregate of 148,607 shares of common stock issuable upon the exercise of the warrants with a weighted‑average exercise price of $6.90 per share. These instruments are included in the equity attributable to noncontrolling interests. |
Subsequent events
Subsequent events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent events | |
Subsequent events | 8. Subsequent events Subsequent events were evaluated through the filing date of this Quarterly Report. |
Basis of presentation and sum_2
Basis of presentation and summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Basis of presentation and summary of significant accounting policies | |
Basis of presentation and consolidation principles | Basis of presentation and consolidation principles The accompanying unaudited interim consolidated financial statements include the accounts of Millendo Therapeutics, Inc. and its subsidiaries, and all intercompany amounts have been eliminated. The unaudited interim 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 unaudited interim 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. |
Unaudited interim financial statements | Unaudited interim financial statements The Company has prepared the accompanying unaudited interim consolidated financial statements based on Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods. These unaudited interim consolidated financial statements include, in the Company’s opinion, all adjustments, consisting only of normal recurring adjustments that the Company considers necessary for a fair presentation of its consolidated financial position and results of operations for these periods. The Company’s historical results are not necessarily indicative of the results to be expected in the future and the Company’s operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10‑K filed with the SEC on April 1, 2019. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies except as follows: |
Leases | Leases 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. The Company adopted ASU 2016‑02 using a modified retrospective transition approach as of January 1, 2019 and will not restate its comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption. The Company has elected to adopt the package of transition practical expedients and, therefore, have not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. As a result of the adoption of ASC 842, the Company recognized an operating lease liability of $2.0 million based on the present value of the minimum rental payments of the leases and a corresponding operating lease right of use (“ROU”) asset of $0.9 million within the Company’s consolidated balance sheet. The Company’s ROU asset is exclusive of any early lease termination obligations whereby future contractual lease payments exceed estimated sublease income. Under ASC 842, the Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. When readily determinable, the Company uses the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, including the lease term. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has noncancelable operating leases for office and laboratory space which have remaining lease terms between two and seven years. In connection with the Merger, the Company assumed a sublease agreement for office and laboratory space located in Waltham, Massachusetts. The term of the sublease expires in November 2020. In February 2019 and October 2018, the Company entered into two additional noncancelable operating leases for office space in Ann Arbor, Michigan for the Company’s headquarters; one that the Company took possession of in April 2019, and the other that the Company took possession of in July 2019, respectively. In April 2019, the Company entered into a lease agreement for office space in Lexington, Massachusetts to expand its operations. As of June 30, 2019, the operating lease ROU asset and the operating lease liabilities were $2.3 million and $3.4 million, respectively. The discount rate used to account for the Company's operating leases under ASC 842 is the Company’s estimated incremental borrowing rate of 7.0%. The Company has options to extend certain of its leases for another five to nine years. These options to extend were not recognized as part of the Company’s measurement of the ROU assets and operating lease liabilities for the three and six months ended June 30, 2019 nor were the future payments related to the lease the Company entered into in October 2018. Rent expense related to the Company's operating leases was approximately $156,000 and $46,000 for the three months ended June 30, 2019 and 2018, respectively, and approximately $223,000 and $94,000 for the six months ended June 30, 2019 and 2018, respectively. Cash paid for amounts included in the measurement of the lease liabilities was approximately $0.4 million and $0.5 million and the Company received approximately $85,000 and $0.2 million in sublease payments related to its Waltham, Massachusetts lease during the three and six months ended June 30, 2019, respectively. The weighted average remaining term of the Company’s noncancelable operating leases is 3.49 years. Future minimum rental payments under the Company’s noncancelable operating leases at June 30, 2019 is as follows (amounts in thousands): 2019 $ 759 2020 1,448 2021 440 2022 451 2023 463 Thereafter 196 Total 3,757 Present Value Adjustment (400) Lease liability at June 30, 2019 $ 3,357 |
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. |
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 during the three and six months ended June 30, 2018) 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 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: June 30, 2019 2018 Stock options 2,640,077 661,490 Convertible preferred stock — 6,759,109 Common stock warrants 17,125 — Preferred stock warrants — 17,125 BSA and BSPCE warrants 148,607 156,719 2,805,809 7,594,443 |
Restricted cash | Restricted cash Restricted cash relates to amounts used to secure the Company’s credit card facility balances held on deposit with major financial institutions, to collateralize a letter of credit in the name of the Company’s landlord pursuant to a certain operating lease agreement, and to fund an escrow arrangement in connection with a sublease agreement also pursuant to that same operating lease agreement. |
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. As of June 30, 2019, deferred offering costs were $0.2 million. |
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 (Topic 820) . 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 August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, which makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This standard was effective January 1, 2019 and required adoption on a retrospective basis unless it was impracticable to apply, in which case the Company would be required to apply the amendments prospectively as of the earliest date practicable. The Company adopted this standard which did not have a material impact 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. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief , which amends ASU 2016-13 by providing entities with an option to irrevocably elect the fair value option to be applied on an instrument-by-instrument basis for eligible financial instruments that are within the scope of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. ASU 2016‑13, as amended, 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. |
Basis of presentation and sum_3
Basis of presentation and summary of significant accounting policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Basis of presentation and summary of significant accounting policies | |
Schedule of future minimum rental payments under company's noncancelable operating leases | Future minimum rental payments under the Company’s noncancelable operating leases at June 30, 2019 is as follows (amounts in thousands): 2019 $ 759 2020 1,448 2021 440 2022 451 2023 463 Thereafter 196 Total 3,757 Present Value Adjustment (400) Lease liability at June 30, 2019 $ 3,357 |
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: June 30, 2019 2018 Stock options 2,640,077 661,490 Convertible preferred stock — 6,759,109 Common stock warrants 17,125 — Preferred stock warrants — 17,125 BSA and BSPCE warrants 148,607 156,719 2,805,809 7,594,443 |
Fair value measurements (Tables
Fair value measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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): June 30, 2019 (Level 1) (Level 2) (Level 3) Assets Money market funds (included in cash and cash equivalents) $ 52,079 $ — $ — Marketable securities - U.S. government agency $ — $ — $ — Marketable securities - Corporate debt securities $ — $ — $ — 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 $ — |
Accrued expenses (Tables)
Accrued expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued expenses | |
Schedule of accrued expenses | Accrued expenses consist of (amounts in thousands): June 30, December 31, 2019 2018 Compensation and related benefits $ 2,028 $ 3,537 Professional fees 1,751 1,140 Preclinical and clinical costs 2,002 1,811 Lease termination — 630 Other 366 512 Total $ 6,147 $ 7,630 |
Stock based compensation (Table
Stock based compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 three months ended June 30, 2019 and 2018 and six months ended June 30, 2019 and 2018, respectively (amounts in thousands): Three months Six months ended ended June 30, June 30, 2019 2018 2019 2018 Research and development $ 378 $ 67 $ 801 $ 138 General and administrative 616 92 1,133 198 Total $ 994 $ 159 $ 1,934 $ 336 |
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 six months ended June 30, 2019: Weighted Weighted-average average remaining exercise price contractual Shares per share life (years) Outstanding at December 31, 2018 1,764,287 $ 26.81 8.0 Granted 1,028,701 10.23 Exercised (45,947) 3.63 Forfeited (106,964) 86.07 Outstanding at June 30, 2019 2,640,077 $ 18.36 7.9 Vested and exercisable at June 30, 2019 893,208 $ 30.71 5.1 Vested and expected to vest at June 30, 2019 2,640,077 $ 18.36 7.9 |
Summary of grant date fair value assumptions | The grant date fair value of each option grant was estimated during the three and six months ended June 30, 2019 using the following assumptions within the Black‑Scholes option‑pricing model: Three months ended Six months ended June 30, June 30, 2019 2019 Expected term (in years) 5.93 6.01 Expected volatility 79 % 80 % Risk-free interest rate 1.91 % 2.35 % Expected dividend yield 0 % 0 % |
Organization and description _2
Organization and description of business (Details) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Exchange ratio | 0.0744 | ||
Cash, cash equivalents and marketable securities | $ 56,600 | ||
Accumulated deficit | $ (184,323) | $ (164,086) | |
Maximum | |||
Aggregate offering value | $ 50,000 |
Basis of presentation and sum_4
Basis of presentation and summary of significant accounting policies - Lease (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2019item | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jan. 01, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Number of non-cancelable operating lease | item | 2 | |||||
Operating lease liability | $ 3,357,000 | $ 3,357,000 | ||||
Right of use assets | $ 2,349,000 | $ 2,349,000 | ||||
Operating lease discount rate | 7.00% | 7.00% | ||||
Lease extension | true | |||||
Operating lease expense | $ 156,000 | $ 46,000 | $ 223,000 | $ 94,000 | ||
Cash paid for amount included in lease liabilities | 400,000 | 500,000 | ||||
Sublease income | $ 85,000 | $ 200,000 | ||||
Noncancelable operating leases term | 3 years 5 months 27 days | 3 years 5 months 27 days | ||||
Adjustment | ASU 2016-02 | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease liability | $ 2,000,000 | |||||
Right of use assets | $ 900,000 | |||||
Minimum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease term | 2 years | 2 years | ||||
Operating lease renewal term | 5 years | 5 years | ||||
Maximum | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease term | 7 years | 7 years | ||||
Operating lease renewal term | 9 years | 9 years |
Basis of presentation and sum_5
Basis of presentation and summary of significant accounting policies - Future minimum rental payments under operating leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Basis of presentation and summary of significant accounting policies | |
2019 | $ 759 |
2020 | 1,448 |
2021 | 440 |
2022 | 451 |
2023 | 463 |
Thereafter | 196 |
Total | 3,757 |
Present Value Adjustment | (400) |
Lease liability at June 30, 2019 | 3,357 |
Deferred offering costs | $ 200 |
Basis of presentation and sum_6
Basis of presentation and summary of significant accounting policies - Net loss per share (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
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 | 2,805,809 | 7,594,443 |
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 | 2,640,077 | 661,490 |
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 | 148,607 | 156,719 |
Fair value measurements - Recur
Fair value measurements - Recurring basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Assets | |||
Fair Value Adjustment of Warrants | $ 0 | $ 0 | |
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 | $ 52,079 | $ 52,079 | $ 25,145 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accrued expenses | ||
Compensation and related benefits | $ 2,028 | $ 3,537 |
Professional fees | 1,751 | 1,140 |
Preclinical and clinical costs | 2,002 | 1,811 |
Lease termination | 630 | |
Other | 366 | 512 |
Total | $ 6,147 | $ 7,630 |
Debt - Bpifrance Reimbursable A
Debt - Bpifrance Reimbursable Advance (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Dec. 31, 2017USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2017USD ($) | |
Debt | |||||||||
Repayment of debt | $ | $ 90,000 | $ 84,000 | |||||||
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 | ||||||||
Reimbursement annuity (percent) | 20.00% | ||||||||
Repayment of debt | $ | $ 45,000 | $ 41,000 | $ 90,000 | $ 84,000 | |||||
Balance outstanding | € 400,000 | $ 500,000 |
Litigation (Details)
Litigation (Details) | 25 Months Ended |
Nov. 21, 2018item | |
Litigation | |
Number of lawsuits | 5 |
Stock based compensation (Detai
Stock based compensation (Details) | 6 Months Ended |
Jun. 30, 2019shares | |
Share-based compensation | |
Vesting period (in years) | 4 years |
2019 Plan | |
Share-based compensation | |
Vesting period (in years) | 10 years |
Percentage of common stock outstanding | 4.00% |
2019 Plan | Maximum | |
Share-based compensation | |
Aggregate number of shares issued | 2,919,872 |
ESPP | |
Share-based compensation | |
Aggregate number of shares issued | 133,580 |
Vesting period (in years) | 10 years |
Percentage of common stock outstanding | 1.00% |
Stock based compensation - Stoc
Stock based compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock based compensation expense | $ 994 | $ 159 | $ 1,934 | $ 336 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock based compensation expense | 378 | 67 | 801 | 138 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock based compensation expense | $ 616 | $ 92 | $ 1,133 | $ 198 |
Stock based compensation - St_2
Stock based compensation - Stock options (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
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) | 1,764,287 | ||||
Granted (in shares) | 0 | 1,028,701 | 0 | ||
Exercised (in shares) | (45,947) | ||||
Forfeited (in shares) | (106,964) | ||||
Outstanding at end (in shares) | 2,640,077 | 2,640,077 | 1,764,287 | ||
Vested and exercisable at end (in shares) | 893,208 | 893,208 | |||
Vested and expected to vest at end (in shares) | 2,640,077 | 2,640,077 | |||
Weighted average exercise price per share | |||||
Outstanding at beginning (in dollars per share) | $ 26.81 | ||||
Granted (in dollars per share) | 10.23 | ||||
Exercised (in dollars per share) | 3.63 | ||||
Forfeited (in dollars per share) | 86.07 | ||||
Outstanding at end (in dollars per share) | $ 18.36 | 18.36 | $ 26.81 | ||
Vested and exercisable at end (in dollars per share) | 30.71 | 30.71 | |||
Vested and expected to vest at end (in dollars per share) | $ 18.36 | $ 18.36 | |||
Weighted-average remaining contractual life (years) | |||||
Outstanding (in years) | 7 years 10 months 24 days | 8 years | |||
Vested and exercisable at end (in years) | 5 years 1 month 6 days | ||||
Vested and expected to vest at end (in years) | 7 years 10 months 24 days | ||||
Unvested stock options (in shares) | 1,746,869 | 1,746,869 | |||
Unrecognized compensation cost | $ 12.1 | $ 12.1 | |||
Weighted average amortization period | 3 years 1 month 6 days | ||||
Aggregate intrinsic value of options outstanding | 5.8 | $ 5.8 | |||
Aggregate intrinsic value of options exercisable | $ 3.6 | $ 3.6 | |||
Weighted average grant date fair value, options granted | $ 8.50 | $ 7.09 |
Stock based compensation - Gran
Stock based compensation - Grant date fair value of option (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 5 years 11 months 5 days | 6 years 4 days |
Expected volatility | 79.00% | 80.00% |
Risk-free interest rate | 1.91% | 2.35% |
Expected dividend yield | 0.00% | 0.00% |
Stock based compensation - Aliz
Stock based compensation - Alizé acquisition (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019$ / sharesshares | Jun. 30, 2019$ / sharesshares | Jun. 30, 2019$ / sharesshares | Dec. 19, 2017€ / sharesshares | |
BSPCE warrants | ||||
Class of Warrant or Right [Line Items] | ||||
BSPCE Warrants exercised | 600 | 600 | 600 | |
Shares issued on exercise of BSPCE Warrants | 8,112 | |||
Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Shares issued on exercise of BSPCE Warrants | 8,112 | 8,112 | ||
Alize | ||||
Class of Warrant or Right [Line Items] | ||||
Weighted average exercise prices | $ / shares | $ 6.90 | $ 6.90 | $ 6.90 | |
Number of shares issuable upon the exercise of the warrants | 148,607 | 148,607 | 148,607 | |
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 |