COVER
COVER - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 10, 2021 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37797 | |
Entity Registrant Name | 9 METERS BIOPHARMA, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-3948465 | |
Entity Address, Address Line One | 8480 Honeycutt Road | |
Entity Address, Address Line Two | Suite 120 | |
Entity Address, City or Town | Raleigh | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27615 | |
City Area Code | 919 | |
Local Phone Number | 275-1933 | |
Title of 12(b) Security | Common Stock $0.0001 Par Value | |
Trading Symbol | NMTR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity common stock, shares outstanding (in shares) | 254,753,151 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001551986 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 64,023,462 | $ 37,851,388 |
Restricted deposit | 75,000 | 75,000 |
Prepaid expenses and other current assets | 1,684,227 | 1,000,587 |
Total current assets | 65,782,689 | 38,926,975 |
Property and equipment, net | 14,752 | 11,191 |
Right-of-use asset | 191,418 | 214,767 |
Other assets | 5,580 | 5,580 |
Total assets | 65,994,439 | 39,158,513 |
Current liabilities: | ||
Accounts payable | 1,635,575 | 1,487,948 |
Accrued expenses | 5,027,975 | 5,290,181 |
Convertible note payable, net | 0 | 14,216 |
Derivative liability | 0 | 7,000 |
Accrued interest | 0 | 488 |
Lease liability, current portion | 51,621 | 48,629 |
Total current liabilities | 6,715,171 | 6,848,462 |
Lease liability, net of current portion | 141,358 | 167,938 |
Total liabilities | 6,856,529 | 7,016,400 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock $0.0001 par value per share, 10,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2021 (unaudited) and December 31, 2020 | 0 | 0 |
Common stock $0.0001 par value per share, 550,000,000 and 350,000,000 shares authorized as of June 30, 2021 (unaudited) and December 31, 2020, respectively; 252,235,940 and 204,629,064 shares issued and outstanding as of June 30, 2021 (unaudited) and December 31, 2020, respectively | 25,224 | 20,463 |
Additional paid-in capital | 204,858,142 | 164,182,917 |
Accumulated deficit | (145,745,456) | (132,061,267) |
Total stockholders’ equity | 59,137,910 | 32,142,113 |
Total liabilities and stockholders’ equity | $ 65,994,439 | $ 39,158,513 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) - (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 550,000,000 | 350,000,000 |
Common stock, shares, issued (in shares) | 252,235,940 | 204,629,064 |
Common stock, shares, outstanding (in shares) | 252,235,940 | 204,629,064 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operating expenses: | ||||
Research and development | $ 5,707,290 | $ 444,817 | $ 8,897,592 | $ 3,043,802 |
Acquired in-process research and development | 0 | 32,266,893 | 0 | 32,266,893 |
General and administrative | 2,551,171 | 5,659,721 | 4,759,971 | 7,329,528 |
Warrant inducement expense | 0 | 6,467,048 | 0 | 7,157,887 |
Total operating expenses | 8,258,461 | 44,838,479 | 13,657,563 | 49,798,110 |
Loss from operations | (8,258,461) | (44,838,479) | (13,657,563) | (49,798,110) |
Other income (expense): | ||||
Interest income | 6,505 | 8,550 | 11,592 | 21,365 |
Interest expense | (1,154) | (1,019,307) | (45,218) | (1,592,292) |
Change in fair value of derivative liabilities | 0 | 193,000 | 7,000 | 531,000 |
Change in fair value of warrant liabilities | 0 | 1,058,700 | 0 | 2,637,500 |
Total other income (expense), net | 5,351 | 240,943 | (26,626) | 1,597,573 |
Loss before income taxes | (8,253,110) | (44,597,536) | (13,684,189) | (48,200,537) |
Income tax benefit | 0 | 0 | 0 | 0 |
Net loss | $ (8,253,110) | $ (44,597,536) | $ (13,684,189) | $ (48,200,537) |
Net loss per common share, basic (in dollars per share) | $ (0.03) | $ (0.57) | $ (0.06) | $ (0.81) |
Net loss per common share, diluted (in dollars per share) | $ (0.03) | $ (0.57) | $ (0.06) | $ (0.81) |
Weighted-average common shares, basic (in shares) | 249,552,315 | 78,584,900 | 230,522,313 | 59,873,598 |
Weighted-average common shares, diluted (in shares) | 249,552,315 | 78,584,900 | 230,522,313 | 59,873,598 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) | Total | Series A Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2019 | 0 | 39,477,667 | |||
Balance at Dec. 31, 2019 | $ (9,614,014) | $ 0 | $ 3,948 | $ 60,946,816 | $ (70,564,778) |
Stockholders' Equity [Roll Forward] | |||||
Stock issuance costs - Warrant exchange (FN-1) | (300,000) | (300,000) | |||
Warrant exchange (in shares) | 1,847,309 | ||||
Share-based compensation | 276,000 | 276,000 | |||
Warrant exchange | 690,839 | $ 185 | 690,654 | ||
Net loss | (3,603,001) | (3,603,001) | |||
Balance (in shares) at Mar. 31, 2020 | 0 | 41,324,976 | |||
Balance at Mar. 31, 2020 | (12,550,176) | $ 0 | $ 4,133 | 61,613,470 | (74,167,779) |
Balance (in shares) at Dec. 31, 2019 | 0 | 39,477,667 | |||
Balance at Dec. 31, 2019 | (9,614,014) | $ 0 | $ 3,948 | 60,946,816 | (70,564,778) |
Stockholders' Equity [Roll Forward] | |||||
Beneficial conversion feature | (207,632) | ||||
Net loss | (48,200,537) | ||||
Balance (in shares) at Jun. 30, 2020 | 0 | 136,232,886 | |||
Balance at Jun. 30, 2020 | 3,067,286 | $ 0 | $ 13,625 | 121,818,976 | (118,765,315) |
Balance (in shares) at Mar. 31, 2020 | 0 | 41,324,976 | |||
Balance at Mar. 31, 2020 | (12,550,176) | $ 0 | $ 4,133 | 61,613,470 | (74,167,779) |
Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 42,695,948 | ||||
Issuance of common stock | 28,754,026 | $ 4,270 | 28,749,756 | ||
Issuance of preferred stock and warrants (FN-1) (in shares) | 382,779 | ||||
Issuance of preferred stock and warrants (FN-1) | 22,560,994 | $ 38 | 22,560,956 | ||
Stock issuance costs - Warrant exchange (FN-1) | (3,589,703) | (3,589,703) | |||
Share-based compensation | 4,021,000 | 4,021,000 | |||
Exercise of warrants (in shares) | 12,230,418 | ||||
Exercise of warrants | 1,219,001 | $ 1,223 | 1,217,778 | ||
Inducement expense | 6,467,048 | 6,467,048 | |||
Conversion of convertible debt and accrued interest (in shares) | 1,287,696 | ||||
Conversion of convertible debt and accrued interest | 575,000 | $ 129 | 574,871 | ||
Beneficial conversion feature | 207,632 | 207,632 | |||
Conversion of preferred stock to common stock (in shares) | (382,779) | 38,277,900 | |||
Conversion of preferred stock to common stock | 0 | $ (38) | $ 3,828 | (3,790) | |
Issuance of RSUs (in shares) | 415,948 | ||||
Issuance of RSUs | 0 | $ 42 | (42) | ||
Net loss | (44,597,536) | (44,597,536) | |||
Balance (in shares) at Jun. 30, 2020 | 0 | 136,232,886 | |||
Balance at Jun. 30, 2020 | 3,067,286 | $ 0 | $ 13,625 | 121,818,976 | (118,765,315) |
Balance (in shares) at Dec. 31, 2020 | 0 | 204,629,064 | |||
Balance at Dec. 31, 2020 | 32,142,113 | $ 0 | $ 20,463 | 164,182,917 | (132,061,267) |
Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 422,000 | 422,000 | |||
Exercise of warrants (in shares) | 11,634,151 | ||||
Exercise of warrants | 6,857,028 | $ 1,163 | 6,855,865 | ||
Exercise of stock options (in shares) | 61,681 | ||||
Exercise of stock options | 75,903 | $ 6 | 75,897 | ||
Net loss | (5,431,079) | (5,431,079) | |||
Balance (in shares) at Mar. 31, 2021 | 0 | 216,324,896 | |||
Balance at Mar. 31, 2021 | 34,065,965 | $ 0 | $ 21,632 | 171,536,679 | (137,492,346) |
Balance (in shares) at Dec. 31, 2020 | 0 | 204,629,064 | |||
Balance at Dec. 31, 2020 | 32,142,113 | $ 0 | $ 20,463 | 164,182,917 | (132,061,267) |
Stockholders' Equity [Roll Forward] | |||||
Beneficial conversion feature | 0 | ||||
Net loss | (13,684,189) | ||||
Balance (in shares) at Jun. 30, 2021 | 0 | 252,235,940 | |||
Balance at Jun. 30, 2021 | 59,137,910 | $ 0 | $ 25,224 | 204,858,142 | (145,745,456) |
Balance (in shares) at Mar. 31, 2021 | 0 | 216,324,896 | |||
Balance at Mar. 31, 2021 | 34,065,965 | $ 0 | $ 21,632 | 171,536,679 | (137,492,346) |
Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 34,500,000 | ||||
Issuance of common stock | 34,500,000 | $ 3,450 | 34,496,550 | ||
Stock issuance costs - Warrant exchange (FN-1) | (2,901,123) | (2,901,123) | |||
Share-based compensation | 937,000 | 937,000 | |||
Exercise of warrants (in shares) | 1,134,100 | ||||
Exercise of warrants | 668,439 | $ 114 | 668,325 | ||
Exercise of stock options (in shares) | 276,944 | ||||
Exercise of stock options | 120,739 | $ 28 | 120,711 | ||
Net loss | (8,253,110) | (8,253,110) | |||
Balance (in shares) at Jun. 30, 2021 | 0 | 252,235,940 | |||
Balance at Jun. 30, 2021 | $ 59,137,910 | $ 0 | $ 25,224 | $ 204,858,142 | $ (145,745,456) |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (13,684,189) | $ (48,200,537) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 1,359,000 | 4,297,000 |
Accrued interest on convertible notes | 0 | 136,942 |
Amortization of debt discount | 43,983 | 1,154,847 |
Beneficial conversion feature | 0 | 207,632 |
Depreciation | 3,331 | 9,745 |
Loss on disposal and write-offs of property and equipment | 0 | 7,031 |
Change in fair value of derivative liabilities | (7,000) | (531,000) |
Change in fair value of warrant liabilities | 0 | (2,637,500) |
Warrant inducement expense | 0 | 7,157,887 |
Acquired in-process research and development | 0 | 28,754,026 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (683,640) | (506,221) |
Accounts payable | (102,373) | (526,498) |
Accrued expenses and other liabilities | (262,445) | 1,764,111 |
Accrued interest | (488) | 82,579 |
Net cash used in operating activities | (13,333,821) | (8,829,956) |
Cash flows from investing activities | ||
Purchase of property and equipment | (6,892) | (2,543) |
Purchase of in-process research and development, net of assets acquired | 0 | (3,184,454) |
Net cash used in investing activities | (6,892) | (3,186,997) |
Cash flows from financing activities | ||
Borrowings from convertible notes | 0 | 2,500,000 |
Payments of convertible notes | (58,199) | (1,469,804) |
Payments of debt issuance costs | 0 | (23,000) |
Proceeds from the exercise of stock options | 196,642 | 0 |
Proceeds from issuance of common stock | 34,500,000 | 0 |
Proceeds from issuance of preferred stock and warrants | 0 | 22,560,994 |
Payment of offering costs | (2,651,123) | (3,889,703) |
Proceeds from exercise of warrants | 7,525,467 | 1,219,001 |
Net cash provided by financing activities | 39,512,787 | 20,897,488 |
Net increase in cash and cash equivalents | 26,172,074 | 8,880,535 |
Cash and cash equivalents as of beginning of period | 37,851,388 | 4,592,932 |
Cash and cash equivalents as of end of period | 64,023,462 | 13,473,467 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 569 | 54,578 |
Supplemental disclosure of non-cash financing activities | ||
Conversion of convertible notes and accrued interest to common stock | 0 | 575,000 |
Non-cash addition of derivative liability | 0 | 370,000 |
Addition of non-cash stock issuance costs | $ 250,000 | $ 28,754,026 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Description 9 Meters Biopharma, Inc. (the “Company”) is a clinical-stage biopharmaceutical company focused on rare or debilitating digestive diseases or unique gastroenterology biology. The Company’s pipeline includes drug candidates vurolenatide, a proprietary long-acting GLP-1 agonist for short bowel syndrome (SBS), an orphan designated disease, larazotide, a Phase 3 tight junction regulator being evaluated for celiac disease and three early-stage candidates for undisclosed rare and/or orphan diseases. On April 30, 2020, the Company completed its merger with privately-held RDD Pharma, Ltd., an Israel corporation (“RDD”) (the “RDD Merger”) and changed its name from Innovate Biopharmaceuticals, Inc. to 9 Meters Biopharma, Inc. Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary for a fair statement of the balance sheets, operating results, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021 or any other future period. Certain information and footnote disclosure normally included in the annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. The Company’s financial position, results of operations and cash flows are presented in U.S. Dollars. These financial statements and related notes should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 22, 2021. Except as noted below under the section entitled “Recently Issued Accounting Standards—Accounting Pronouncements Adopted,” there have been no material changes to the Company’s significant accounting policies during the three and six months ended June 30, 2021, as compared to the significant accounting policies disclosed in Note 1 of the Company’s financial statements for the years ended December 31, 2020 and 2019 included in the Company’s Annual Report on Form 10-K. However, the following accounting policies are the most critical in fully understanding the Company’s financial condition and results of operations. Basis of Consolidation The accompanying consolidated financial statements reflect the operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Shelf Registration Filing On October 2, 2020, the Company filed a shelf registration statement that was declared effective on October 9, 2020 (the “Current Registration Statement”) and the previous shelf registration statement (the “Prior Registration Statement”) was terminated effective October 16, 2020. Pursuant to the Current Registration Statement, the Company may from time to time offer, issue and sell in one or more offerings of various types of securities up to an aggregate dollar amount of $200 million. On July 22, 2020, the Company filed a prospectus supplement and associated sales agreement related to an “at-the-market” offering (“ATM”) pursuant to which the Company may sell, from time to time, common stock with an aggregate offering price of up to $40 million through Truist Securities, Inc. (previously SunTrust Robinson Humphrey), or Truist, as sales agent, for general corporate purposes (the “Sales Agreement”). In October 2020, the Company entered into an amendment to the Sales Agreement to reflect the termination of the Prior Registration Statement and effectiveness of the Current Registration Statement. During the three and six months ended June 30, 2021, the Company did not sell any shares under the Sales Agreement. Warrant Exchange Pursuant to a securities purchase agreement entered into with certain institutional and accredited investors on April 29, 2019, the Company issued warrants with an initial exercise price of $2.13 per share and a term of five-and-a-half years (the “April Warrants”). In addition, the Company issued placement agent warrants on April 29, 2019 with an initial exercise price of $2.53 per share and a term of five years (the “Placement Agent Warrants”). On December 19, 2019, the Company and each of the purchasers of the April Warrants and the Placement Agent Warrants (collectively, the “Exchange Warrants”) entered into separate exchange agreements, pursuant to which the Company agreed to issue to the purchasers an aggregate of 5,441,023 shares of the Company’s common stock (the “Exchange Shares”), at a ratio of 1.2 Exchange Shares for each purchaser warrant in exchange for the cancellation and termination of all of the outstanding Exchange Warrants. During the six months ended June 30, 2020, Exchange Warrants to purchase an aggregate of 1,539,424 shares were exchanged for 1,847,309 shares of the Company’s common stock. All of the April Warrants and Placement Agent Warrants were exchanged as of June 30, 2020. Offer to Amend and Exercise On February 12, 2020, the Company offered to amend certain outstanding warrants in the Offer to Amend and Exercise. The warrants amended included the short-term warrants issued in 2019 that were classified as warrant liabilities (the “Short-Term Warrants”), warrants classified as equity issued in 2018 and the outstanding long-term warrants issued in 2019 that were classified as warrant liabilities (collectively, the “Long-Term Warrants”). On April 29, 2020, Short-Term Warrants and Long-Term Warrants to purchase an aggregate of 12,230,418 shares were tendered, amended and exercised for $0.10 per share for aggregate gross proceeds of approximately $1.2 million. All of the warrants classified as warrant liabilities were fully exercised at an exercise price of $0.10 per share and as such, there were no warrant liabilities outstanding as of June 30, 2021 or December 31, 2020. RDD Merger Financing On April 29, 2020, the Company entered into a securities purchase agreement with various accredited investors pursuant to which the Company agreed to issue and sell to the investors units (“Units”) consisting of (i) one share of Series A Convertible Preferred Stock (the "Series A Preferred Stock") and (ii) one five-year warrant (the "Preferred Warrants") to purchase one share of Series A Preferred Stock (the "RDD Merger Financing"). On May 4, 2020, the Company closed the RDD Merger Financing and the Company sold an aggregate of (i) 382,779 shares of Series A Preferred Stock, par value $0.0001 per share, which converted into 38,277,900 shares of common stock on June 30, 2020, upon receipt of approval by the Company’s stockholders (the “Automatic Conversion”), and (ii) Preferred Warrants to purchase up to 382,779 shares of Series A Preferred Stock, which following the Automatic Conversion became exercisable for 38,277,900 shares of common stock. The exercise price of the Preferred Warrants was $58.94 per share of Series A Preferred Stock, and following the Automatic Conversion, became $0.5894 per share of common stock, subject to adjustments as provided under the terms of the Preferred Warrants. In addition, broker warrants covering 8,112 Units and broker warrants covering 10,899 shares of Series A Preferred Stock, which following the Automatic Conversion became exercisable for 2,712,300 shares of common stock, were issued in connection with the RDD Merger Financing. Gross proceeds from the RDD Merger Financing were approximately $22.6 million with net proceeds of approximately $19.2 million after deducting commissions and estimated offering costs. See Note 3 — Merger & Acquisition for additional details. December 2020 Offering On December 11, 2020, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with William Blair & Company, L.L.C. and Truist, as representatives of the several underwriters named therein (the “Underwriters”), in connection with the public offering of 46,153,847 shares of the Company’s common stock at a price of $0.65 per share, less underwriting discounts and commissions (the “December 2020 Offering”). Pursuant to the terms of the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 6,923,077 shares of common stock at the same price, which the Underwriters exercised in full on December 14, 2020. On December 15, 2020, upon closing of the December 2020 Offering, the Company received net proceeds of approximately $32.0 million after deducting underwriting discounts and commissions and offering expenses. The shares issued in the December 2020 Offering were registered and sold under the Current Registration Statement. Of the shares of commons stock issued in the December 2020 Offering, the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors purchased an aggregate of 446,153 shares at the public offering price and on the same terms as the other purchasers in the offering. The underwriters received the same underwriting discount on the shares purchased by the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors. April 2021 Offering On March 30, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Citigroup Global Markets, Inc., William Blair & Company, L.L.C. and Truist, as representatives of the several underwriters named therein (the “Underwriters”), in connection with the public offering of 30,000,000 shares of the Company’s common stock at a price of $1.00 per share, less underwriting discounts and commissions (the “April 2021 Offering”). Pursuant to the terms of the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 4,500,000 shares of common stock at the same price, which the Underwriters exercised in full on March 31, 2021. On April 5, 2021, upon closing of the April 2021 Offering, the Company received net proceeds of approximately $31.5 million after deducting underwriting discounts and commissions and offering expenses. The shares issued in the April 2021 Offering were registered and sold under the Current Registration Statement. Of the shares of common stock issued in the April 2021 Offering, the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors purchased an aggregate of 450,000 shares at the public offering price and on the same terms as the other purchasers in the offering. The underwriters received the same underwriting discount on the shares purchased by the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors. Business Risks The Company faces risks, including those associated with biopharmaceutical companies whose products are in various stages of development. These risks include, among others, risks related to the potential effects of the ongoing coronavirus outbreak and related mitigation efforts on the Company's clinical, financial and operational activities, the Company’s need for additional financing to achieve key development milestones, the need to defend intellectual property rights, and the dependence on key members of management. The outbreak of COVID-19 began in December 2019 and on March 11, 2020, the World Health Organization declared the outbreak a pandemic. The COVID-19 pandemic and its resurgences is affecting the United States and global economies and may continue to affect the Company’s operations and those of third parties on which the Company relies, including by causing disruptions in the supply of the Company’s product candidates and the conduct of current and future clinical trials. In addition, the COVID-19 pandemic may affect the operations of the Food and Drug Administration (the “FDA”) and other health authorities, which could result in delays of reviews and approvals, including with respect to the Company’s product candidates. The COVID-19 pandemic has led to slower enrollment in the Company’s Phase 3 registration trial for larazotide and could continue to impact enrollment directly or indirectly for the next several months and possibly longer. Patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency. Such facilities and offices may also be required to focus limited resources on non-clinical trial matters, including treatment of COVID-19 patients, and may not be available, in whole or in part, for clinical trial services related to larazotide or the Company’s other product candidates. New and potentially more contagious variants, such as the Delta variant, could further affect the impact that the COVID-19 pandemic has on the Company’s operations. The impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital in the future, which could negatively impact the Company’s long-term liquidity. The Company’s assessment of the impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business, financing or clinical trial activities or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which the Company relies. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Areas of the financial statements where estimates may have the most significant effect include accrued expenses, share-based compensation, valuation of the derivative liability and warrant liabilities, valuation allowance for income tax assets, and management’s assessment of the Company’s ability to continue as a going concern. The Company considered the impact of the COVID-19 pandemic on its estimates and assumptions, and concluded there was not a material impact to its condensed consolidated financial statements as of and for the three and six months ended June 30, 2021. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could differ from these estimates. Accrued Expenses The Company incurs periodic expenses such as research and development, licensing fees, salaries and benefits, and professional fees. The Company is required to estimate its expenses resulting from obligations under contracts with clinical research organizations, vendors and consulting agreements that have been incurred by the Company prior to being invoiced. This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice monthly in arrears for services performed or when contractual milestones are met. The Company estimates accrued expenses as of each balance sheet date based on facts and circumstances known at that time. Accrued expenses consisted of the following: June 30, December 31, Accrued compensation and benefits $ 906,135 $ 1,111,028 Accrued clinical expenses 3,989,402 4,042,277 Other accrued expenses 132,438 136,876 Total $ 5,027,975 $ 5,290,181 Derivative Liability The Company accounts for derivative instruments in accordance with ASC 815, Derivative and Hedging, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the condensed consolidated balance sheet at fair value. The Company’s derivative financial instruments consisted of embedded options in the Company’s convertible notes. The embedded derivatives included provisions that provided the noteholder with certain conversion and put rights at various conversion or redemption values as well as certain call options for the Company. See Note 5—Debt for further details. Classification of Warrants The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging, to determine whether the warrants should be classified as equity or liability. Warrants that are freestanding financial instruments that contain net settlement options and may require the Company to settle these warrants in cash under certain circumstances are classified as liabilities. Warrant liabilities are initially recorded at fair value on the date of issuance and are subsequently re-measured to fair value at each balance sheet date until the warrant liabilities are exercised or settled. Changes in the fair value of warrant liabilities are recognized as a non-cash component of other income and expense in the accompanying condensed consolidated statements of operations and comprehensive loss. The Company had no warrant liabilities as of June 30, 2021 or December 31, 2020. On May 4, 2020, the Company issued the Preferred Warrants, which are freestanding financial instruments that give the warrant holder the right but not the obligation to purchase the equity security at the warrant exercise price. The Company is not required to settle these warrants in cash and as such, the Company has classified these warrants as equity on the accompanying condensed consolidated balance sheets. Research and Development Research and development expenses consist of costs incurred to further the Company’s research and development activities and include salaries and related employee benefits, manufacturing of pharmaceutical active ingredients and drug products, costs associated with clinical trials, nonclinical activities, regulatory activities, research-related overhead expenses and fees paid to expert consultants, external service providers and contract research organizations which conduct certain research and development activities on behalf of the Company. Costs incurred in the research and development of products are charged to research and development expense as incurred. Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of the vendors’ progress towards completion of specific tasks, using data such as patient enrollment, clinical site activations or information provided by vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. The estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Although the Company does not expect its estimates to be materially different from amounts incurred, the Company’s estimates and assumptions for clinical trial costs could differ significantly from actual costs incurred, which could result in increases or decreases in research and development expenses in future periods when actual results are known. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the goods have been received or when the activity is performed, rather than when payment is made. Acquired In-process Research and Development The Company has acquired, and may in the future acquire, rights to develop and commercialize new drug candidates and/or other in-process research and development assets. The up-front acquisition payments, as well as future milestone payments that are deemed probable to achieve and do not meet the definition of a derivative, are expensed as acquired in-process research and development provided that the drug has not achieved regulatory approval for marketing, and, absent obtaining such approval, have no alternative future use. Share-Based Compensation The Company recognizes share-based compensation expense for grants of stock options based on the grant-date fair value of those awards using the Black-Scholes option-pricing model. Share-based compensation expense is generally recognized on a straight-line basis over the requisite service period for awards with service conditions and graded vesting features. For awards with performance conditions, compensation cost is recognized from the time achievement of the performance criteria is probable over the expected term. Share-based compensation expense includes an estimate, which is made at the time of grant, of the number of awards that are expected to be forfeited. This estimate is revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Under the Black-Scholes option-pricing model, fair value is calculated based on assumptions with respect to: • Expected dividend yield. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on the Company’s common stock. • Expected stock-price volatility. Due to limited trading history as a public company, the expected volatility is derived from the average historical volatilities of publicly traded companies within the Company’s industry that the Company considers to be comparable to the Company’s business over a period approximately equal to the expected term. In evaluating comparable companies, the Company considers factors such as industry, stage of life cycle, financial leverage, size and risk profile. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term. • Expected term. The expected term represents the period that the stock-based awards are expected to be outstanding. Due to limited history of stock option exercises, the Company estimates the expected term of employee stock options with service conditions based on the simplified method, which calculates the expected term as the average of the time-to-vesting and the contractual life of the options. Pursuant to Accounting Standards Update (“ASU”) 2018-07, the Company has elected to use the contractual life of the option as the expected term for non-employee options. The expected term for performance options is the longer of the explicit or implicit service period. Periodically, the Board may approve the grant of restricted stock units (“RSUs”) pursuant to the Company’s 2012 Omnibus Incentive Plan, as amended, which represent the right to receive shares of the Company’s common stock based on terms of the agreement. The fair value of RSUs is recognized as share-based compensation expense generally on a straight-line basis over the service period, net of estimated forfeitures. The grant date fair value of an RSU represents the closing price of the Company’s common stock on the date of grant. Fair Value of Financial Instruments Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Financial instruments recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs to valuation techniques as follows: • Level 1 - defined as observable inputs based on unadjusted quoted prices for identical instruments in active markets; • Level 2 - defined as inputs other than Level 1 that are either directly or indirectly observable in the marketplace for identical or similar instruments in markets that are not active; and • Level 3 - defined as unobservable inputs in which little or no market data exists where valuations are derived from techniques in which one or more significant inputs are unobservable. The fair value of the embedded derivative issued in connection with the Unsecured Convertible Note and the Additional Note, further described in Note 5—Debt, was determined by using a Monte Carlo simulation technique (“MCS”) to value the embedded derivative associated with each note. As part of the MCS valuation, a discounted cash flow (“DCF”) model was used to value the debt on a stand-alone basis and determine the discount rate to utilize in both the DCF and MCS models. The significant estimates used in the DCF model include the time to maturity of the convertible debt and calculated discount rate, which includes an estimate of the Company’s specific risk premium. The MCS methodology calculates the theoretical value of an option based on certain parameters, including: (i) the threshold of exercising the option, (ii) the price of the underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate and (vi) the number of paths. These valuation techniques involve management’s estimates and judgment based on unobservable inputs and are classified in Level 3. The table below summarizes the valuation inputs into the MCS model for the derivative liability associated with the Unsecured Convertible Note and the Additional Note on their respective dates of issuance as of March 8, 2019 and January 10, 2020, respectively. Derivative Liability January 10, March 8, 2020 2019 Discount rate 21.6% 29.3% Expected stock price volatility 103.9% 101.1% Risk-free interest rate 1.6% 2.5% Expected term 2 years 2 years Price of the underlying common stock $0.65 $1.99 The following table summarizes the fair value hierarchy of financial liabilities measured at fair value as of December 31, 2020. December 31, 2020 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Derivative liability $ — $ — $ 7,000 $ 7,000 Warrant liabilities — — — — Total liabilities at fair value $ — $ — $ 7,000 $ 7,000 The following table summarizes the changes in fair value of the derivative liability classified in Level 3 during the six months ended June 30, 2021. Gains and losses reported in this table include changes in fair value that are attributable to unobservable inputs. Six Months Ended Beginning balance as of December 31, 2020 $ 7,000 Change in fair value of derivative liability (7,000) Ending balance as of June 30, 2021 $ — The amount of total gain for the period included in earnings attributable to the change in unrealized gains relating to the fair value liabilities still held at the end of the period $ — The unrealized gain relating to the change in fair value of the derivative liability of $7,000 for the six months ended June 30, 2021 is included in other income (expense) in the accompanying condensed consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2020, the Company recognized a gain in fair value of warrant liabilities of approximately $1.1 million and $2.6 million, respectively, in the accompanying condensed consolidated statements of operations and comprehensive loss. There were no warrant liabilities outstanding as of June 30, 2021 or December 31, 2020, and as such, there was no gain or loss in fair value of warrant liabilities during the six months ended June 30, 2021. During the three and six months ended June 30, 2020, the Company recognized warrant inducement expense of approximately $6.5 million and $7.2 million, respectively. There was no warrant inducement expense recognized during the six months ended June 30, 2021. The warrant inducement expense represents the accounting fair value of consideration issued to induce conversion of the Exchange Warrants. The table below summarizes the range of valuation inputs into the Black-Scholes model for the Exchange Warrants on their date of issuance and immediately prior to the exchange. Exchange Warrants May 1, 2019 January 6, 2020 Conversion price $2.13 - $2.53 $2.13 Expected stock price volatility 84.1% 87.3% Risk-free interest rate 2.2% 1.7% Expected term 5 - 5.5 years 4.9 years Price of the underlying common stock $1.54 $0.58 The table below summarizes the range of valuation inputs into the Black-Scholes model for the warrant liabilities as of February 11, 2020, immediately prior to the reduction in exercise price pursuant to the Offer to Amend and Exercise. Short-Term Warrants Long-Term Warrants February 11, 2020 Conversion price $ 4.00 $2.13 - $2.56 Expected stock price volatility 97.1 % 87.9% - 89.2% Risk-free interest rate 1.6 % 1.7 % Expected term 7 months 4 years 2 months Price of the underlying common stock $ 0.79 $ 0.79 ASC 820, Fair Value Measurement and Disclosures requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to estimate fair value. As of June 30, 2021 and December 31, 2020, the recorded values of cash and cash equivalents, restricted deposit, accounts payable, accrued expenses and convertible promissory notes approximated their fair values due to the short-term nature of the instruments. Deferred Offering Costs Deferred offering costs consist principally of legal, accounting and underwriters’ fees related to offerings or the Company’s shelf registration statement. Offering costs incurred prior to an offering are initially capitalized and then subsequently reclassified to additional paid-in capital upon completion of the offering. If the equity offering is not completed, any costs deferred will be expensed immediately upon termination of the offering. Patent Costs Costs associated with the submission of patent applications are expensed as incurred given the uncertainty of the future economic benefits of the patents. Patent and patent related legal and administrative costs included in general and administrative expenses were approximately $132,000 and $231,000 for the three and six months ended June 30, 2021, respectively, and $108,000 and $193,000 for the three and six months ended June 30, 2020, respectively. Net Loss Per Share The Company calculates net loss per share as a measurement of the Company’s performance while giving effect to all potentially dilutive shares that were outstanding during the reporting period. Because the Company had a net loss for all periods presented, the inclusion of common stock options or other similar instruments would be anti-dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted net loss per share are the same. For the three and six months ended June 30, 2021 and 2020, 47.2 million and 54.0 million shares, respectively, underlying potentially dilutive warrants and stock options issued and outstanding have been excluded from the computation of diluted weighted average shares outstanding because the effect would be anti-dilutive. The potentially dilutive securities consisted of the following: June 30, 2021 2020 Options outstanding under the Private Innovate Plan 5,800,518 6,028,781 Options outstanding under the Omnibus Plan 14,429,626 5,651,726 Options outstanding under the Option Grant Agreements granted to RDD Employees 985,807 1,014,173 Warrants issued at a weighted-average exercise price of $55.31 (expired July 2021) 154,403 154,403 Warrants issued at an exercise price of $2.54 2,233 2,233 Warrants issued at |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN | LIQUIDITY AND GOING CONCERN As of June 30, 2021, the Company had cash and cash equivalents of approximately $64.0 million. Based on current projections, the Company believes it has available resources to provide sufficient cash to satisfy its operational needs for at least one year from the date these financial statements are issued. The Company expects to incur substantial losses in the future as it conducts planned operating activities. Based on the Company’s limited operating history, recurring negative cash flows from operations, current plans and available resources, the Company will need substantial additional funding to support future operating activities. There can be no assurance that the Company will be able to obtain additional capital on terms acceptable to the Company, on a timely basis or at all. The failure to obtain sufficient additional funding or enter into strategic partnerships could adversely affect the Company’s ability |
MERGER AND ACQUISITION
MERGER AND ACQUISITION | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
MERGER AND ACQUISITION | MERGER AND ACQUISITION RDD Merger On April 30, 2020, the Company completed its merger with RDD. Upon closing of the RDD Merger, the Company issued the RDD shareholders upfront consideration consisting of 37,860,510 shares of the Company’s common stock. In addition, the Company assumed 1,014,173 options that had been previously issued to RDD employees. See Note 8—Share-based Compensation for additional details regarding the options assumed. Naia Acquisition On May 6, 2020, the Company consummated its merger with Naia Rare Diseases, Inc. in accordance with the terms of an Agreement and Plan of Merger (the “Naia Acquisition”). The consideration for the Naia Acquisition at closing consisted of $2.1 million in cash and 4,835,438 shares of common stock, plus the pre-payment of certain operating costs on behalf of Naia totaling $0.1 million. Consideration for the Naia Acquisition also included future development and sales milestone payments worth up to $80.4 million and royalties on net sales of certain products to which Naia has exclusive rights by license. Accounting Treatment Both the RDD Merger and the Naia Acquisition were accounted for as asset acquisitions under ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure | RELATED PARTY TRANSACTIONSMichael Rice, a member of our Board since March 2021, is a Founding Partner of LifeSci Advisors, LLC and LifeSci Communications, LLC. Prior to his becoming a director, on April 1, 2020 the Company entered into a master services agreement with both LifeSci Advisors, LLC and LifeSci Communications, LLC, to provide investor relations and public relations services, respectively. The Company incurred expenses with LifeSci Advisors, LLC of approximately $66,000 and $176,000 during the three and six months ended June 30, 2021, respectively. The Company incurred expenses with LifeSci Communications, LLC of approximately $63,000 and $190,000 during the three and six months ended June 30, 2021, respectively. The Company incurred expenses of approximately $18,000 with LifeSci Advisors, LLC for the three and six months ended June 30, 2020, and approximately $17,000 with LifeSci Communications, LLC for the three and six months ended June 30, 2020, respectively. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Unsecured Convertible Promissory Note On March 8, 2019, the Company entered into a securities purchase agreement (the “Note Purchase Agreement”) with a purchaser (the “Convertible Noteholder”). Pursuant to the Note Purchase Agreement, the Company issued the Convertible Noteholder an unsecured convertible promissory note (the “Unsecured Convertible Note”) in the principal amount of $5.5 million. The Convertible Noteholder had the right to elect to convert all or a portion of the Unsecured Convertible Note at any time and from time to time into the Company’s common stock at a conversion price of $3.25 per share, subject to adjustment for stock splits, dividends, combinations and similar events. The purchase price of the Unsecured Convertible Note was $5.0 million, and the Unsecured Convertible Note carried an original issuance discount (“OID”) of $0.5 million, which was included in the principal amount of the Unsecured Convertible Note. As a result of the redemption features of the Unsecured Convertible Note, the Company amortized the debt issuance costs and accreted the OID to interest expense over the estimated redemption period of 15 months, using the effective interest method. The various conversion and redemption features contained in the Unsecured Convertible Note were embedded derivative instruments, which were recorded as a debt discount and derivative liability at the issuance date at their estimated fair value of $1.3 million. Amortization of the debt discount and accretion of the OID for the Unsecured Convertible Note recorded as interest expense was approximately $0.4 million and $0.8 million for the three and six months ended June 30, 2020, respectively. The Unsecured Convertible Note was fully accreted as of June 30, 2020. The Unsecured Convertible Note bore interest at the rate of 10% per annum, compounding on a daily basis. During the three and six months ended June 30, 2020, the Company made principal payments in cash of $2.0 million on the Unsecured Convertible Note, consisting of $1.5 million in cash payments and $0.5 million in stock conversions. The Unsecured Convertible Note was paid in full as of December 31, 2020. Standstill Agreement On April 3, 2020, the Company entered into a standstill agreement with the Convertible Noteholder (the “Standstill Agreement”). Pursuant to the Standstill Agreement, the Convertible Noteholder would not seek to redeem any portion of the Unsecured Convertible Note between April 1, 2020 and May 31, 2020. The outstanding balance of the Unsecured Convertible Note was increased by $150,000 on April 3, 2020 as consideration for the Standstill Agreement and was recorded as interest expense during the year ended December 31, 2020. All other terms of the Unsecured Convertible Note remained in full force and effect. Additional Note On January 10, 2020, the Company entered into an additional securities purchase agreement and unsecured convertible promissory note with the Convertible Noteholder in the principal amount of $2,750,000 (the “Additional Note”). The Convertible Noteholder could elect to convert all or a portion of the Additional Note, at any time from time to time into the Company’s common stock at a conversion price of $3.25 per share, subject to adjustment for stock splits, dividends, combinations and similar events. The purchase price of the Additional Note was $2,500,000 and carried an original issuance discount of $250,000, which was included in the principal amount of the Additional Note. The various conversion and redemption features contained in the Additional Note were embedded derivative instruments, which were recorded as a debt discount and derivative liability at the issuance date at their estimated fair value of $0.4 million. Amortization of debt discount and accretion of the OID for the Additional Note recorded as interest expense was approximately $44,000 for the six months ended June 30, 2021, and $126,000 and $234,000 for the three and six months ended June 30, 2020, respectively. There was no interest expense incurred during the three months ended June 30, 2021. The Additional Note bore interest at the rate of 10% per annum, compounding on a daily basis. During the six months ended June 30, 2021, the Company paid the remaining balance of principal and interest on the Additional Note of approximately $59,000 in cash. There were no principal payments made on the Additional Note during the six months ended June 30, 2020. The Additional Note was paid in full as of June 30, 2021. The convertible notes payable as of December 31, 2020 consisted of the following: December 31, 2020 Convertible Notes $ 8,400,000 Less: principal payments of debt (8,341,801) Less: unamortized debt discount and OID accretion (43,983) Total $ 14,216 |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 6 Months Ended |
Jun. 30, 2021 | |
Disclosure Of License Agreements [Abstract] | |
LICENSE AGREEMENTS | LICENSE AGREEMENTS During 2016, the Company entered into a license agreement (the “Alba License”) with Alba Therapeutics Corporation (“Alba”) to obtain the rights to certain intellectual property relating to larazotide acetate and related compounds. Upon execution of the Alba License, the Company paid Alba a non-refundable license fee of $0.5 million. In addition, the Company is required to make milestone payments to Alba upon the achievement of certain clinical and regulatory milestones totaling up to $1.5 million and payments upon regulatory approval and commercial sales of a licensed product totaling up to $150 million, which is based on sales ranging from $100 million to $1.5 billion. During 2013, the Company entered into an exclusive license agreement with Seachaid Pharmaceuticals, Inc. (the “Seachaid Agreement”) to further develop and commercialize the licensed product, the compound known as APAZA. The Company was required to make an initial, non-refundable payment under the Seachaid Agreement in the amount of $0.2 million. The agreement also calls for milestone payments totaling up to $6.0 million to be paid when certain clinical and regulatory milestones are met. There are also commercialization milestone payments ranging from $1.0 million to $2.5 million depending on net sales of the products in a single calendar year, followed by royalty payments in the single digits based on net product sales. During 2014, the Company entered into an Asset Purchase Agreement with Repligen Corporation (“Repligen”) to acquire Repligen’s RG-1068 program for the development of Secretin for the Pancreatic Imaging Market and Magnetic Resonance Cholangiopancreatography. As consideration for the Asset Purchase Agreement, the Company agreed to make a non-refundable cash payment on the date of the agreement and future royalty payments consisting of a percentage between five and fifteen of annual net sales, with the royalty payment percentage increasing as annual net sales increase. In connection with the Naia Acquisition, we entered into two amended and restated license agreements with Amunix Pharmaceuticals, Inc. (“Amunix”), pursuant to which we received an exclusive, worldwide, royalty-bearing license, with rights of sublicense, to lead molecules GLP-1 and GLP-2 along with a related XTEN sequence and other intellectual property referenced therein (the “Amunix Licenses”). Also in connection with the Naia Acquisition, we entered into an amended and restated license agreement with Cedars-Sinai Medical Center (“Cedars”), pursuant to which we licensed the rights to GLP-1 Agonist for the treatment of SBS (the “Cedars License”). As consideration under the Amunix License for GLP-1, we agreed to pay Amunix certain royalty payments and (i) $70.4 million in milestone payments upon achievement of future development and sales milestones in the U.S. and major EU countries, (ii) $20.5 million in milestone payments upon achievement of future development and sales milestones in China and certain related territories, and (iii) $20.5 million in milestone payments upon achievement of future development and sales milestones in South Korean and certain other east Asian countries. As consideration under the Amunix License for GLP-2, we agreed to pay Amunix certain royalty payments and $60.1 million in milestone payments upon achievement of future development and sales milestones in the U.S. and major EU countries. As consideration under the Cedars License, we agreed to pay Cedars certain royalty payments and approximately $9.4 million in milestone payments upon achievement of future development and sales milestones. |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | STOCKHOLDERS’ EQUITY (DEFICIT) The Company’s authorized capital stock as amended in June 2021 consists of 560 million shares of capital stock, par value $0.0001 per share, of which 550 million shares are designated as common stock and 10 million shares are designated as preferred stock. Preferred Stock The Company’s amended and restated certificate of incorporation authorizes the Board to issue preferred stock in one or more classes or one or more series within any class from time to time. Voting powers, designations, preferences, qualifications, limitations, restrictions or other rights will be determined by the Board at that time. On April 29, 2020, the Board designated 600,000 shares of preferred stock as Series A Preferred Stock, par value of $0.0001 per share. On May 4, 2020, the Company closed the RDD Merger Financing, further described in Note 1—Summary of Significant Accounting Policies, pursuant to which the Company sold an aggregate of 382,779 shares of Series A Preferred Stock, par value $0.0001, which were convertible into 38,277,900 shares of common stock and Preferred Warrants to purchase up to 382,779 shares of Series A Preferred Stock, which became exercisable for 38,277,900 shares of common stock. The Series A Preferred Stock was classified as equity in accordance with ASC 480—Distinguishing Liabilities from Equity. Shares of the Series A Preferred Stock and the Preferred Warrants were valued using the relative fair value method. The Preferred Warrants were valued using a Black Scholes option pricing model. The Company determined the transaction created a beneficial conversion feature of approximately $3.1 million. The table below summarizes the inputs for the Black Scholes option pricing model on the date of issuance. May 4, 2020 Conversion price $ 0.5894 Expected stock price volatility 73.7 % Risk-free interest rate 0.4 % Expected term 5 years Price of the underlying common stock $ 0.50 As of May 4, 2020, the stated value of the issued and outstanding Series A Preferred Stock and the Preferred Warrants was approximately $12.5 million and $7.0 million, respectively. On June 30, 2020, the Company’s outstanding Series A Preferred Stock automatically converted into 38,277,900 shares of common stock upon receipt of stockholder approval. Each share of outstanding Series A Preferred Stock converted into 100 shares of Common Stock and each share of Series A Preferred Stock underlying the Preferred Warrants became exercisable for 100 shares of Common Stock. Upon conversion of the Series A Preferred Stock, the Company reclassified the carrying value of the Series A Preferred Stock to common stock and additional paid-in capital. There were no shares of preferred stock issued and outstanding as of June 30, 2021 or December 31, 2020. Common Stock The holders of the Company’s common stock (i) have equal ratable rights to dividends from funds legally available therefore, when, as and if declared by the Board; (ii) are entitled to share in all the Company’s assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of the Company’s affairs; (iii) do not have preemptive, subscription or conversion rights (and there are no redemption or sinking fund provisions or rights); and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote. There were 252,235,940 and 204,629,064 shares of common stock outstanding as of June 30, 2021 and December 31, 2020, respectively. The Company had reserved shares of common stock for future issuance as follows: June 30, December 31, 2021 2020 Outstanding stock options 21,215,951 17,641,380 Warrants to purchase common stock 25,977,065 38,727,616 Restricted stock units subject to vesting 203,667 203,667 Shares issuable upon conversion of convertible debt — 18,057 For possible future issuance under the Omnibus Plan 5,657,603 9,576,451 Total common shares reserved for future issuance 53,054,286 66,167,171 On December 19, 2019, the Company and each of the purchasers of the April Warrants and Placement Agent Warrants entered into the Exchange Agreements, pursuant to which the Company agreed to issue the purchasers an aggregate of 5,441,023 shares of common stock at a ratio of 1.2 Exchange Shares for each purchaser warrant in exchange for the cancellation and termination of all of the outstanding April Warrants and Placement Agent Warrants. During the six months ended June 30, 2020, the Company issued 1,847,309 shares of common stock in exchange for cancellation and termination of the remaining outstanding Exchange Warrants. As of June 30, 2020, all of the April Warrants and Placement Agent Warrants had been exchanged for common stock and there were no April Warrants or Placement Agent Warrants outstanding. On April 29, 2020, pursuant to the Offer to Amend and Exercise further described in Note 1—Summary of Significant Accounting Policies, warrants to purchase an aggregate of 12,230,418 shares of common stock were tendered, amended and exercised for aggregate gross proceeds of approximately $1.2 million. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company has two stock option plans in existence: the 2012 Omnibus Incentive Plan, as amended (the “Omnibus Plan”) and the Innovate 2015 Stock Incentive Plan (the “Private Innovate Plan”). In addition, the Company assumed 1,014,173 options in accordance with the terms of the RDD Merger Agreement. The Company’s stock options typically vest over a period of three The shares reserved for issuance under the Omnibus Plan automatically increase on the first day of each calendar year beginning in 2019 and ending in 2022 by an amount equal to the lesser of (i) five percent of the number of shares of common stock outstanding as of December 31 st of the immediately preceding calendar year or (ii) such lesser number of shares of common stock as determined by the Board (the “Evergreen Provision”). On January 1, 2020, the number of shares of common stock available under the Omnibus Plan automatically increased by 1,973,883, pursuant to the Evergreen Provision. Additionally, on June 30, 2020, stockholders approved an amendment to the Omnibus Plan to increase the aggregate number of shares of common stock available under the Omnibus Plan by 15,000,000 shares. The board of directors elected to forgo the increase from the Evergreen Provision that would have increased the option pool by 5% of the shares of common stock outstanding on January 1, 2021. Private Innovate Plan As of June 30, 2021, there were 5,800,518 stock options outstanding under the Private Innovate Plan. Since 2018, the Company has not issued, and does not intend to issue, any additional awards from the Private Innovate Plan. The following table summarizes stock option activity under the Private Innovate Plan: Number of Weighted-Average Aggregate Weighted-Average Outstanding at December 31, 2020 6,028,781 $ 1.53 $ 1,080,474 3.2 Options granted — — Options forfeited (5,652) 2.08 Options exercised (222,611) 0.48 Outstanding at June 30, 2021 5,800,518 1.57 1,386,955 3.0 Exercisable at June 30, 2021 5,800,518 1.57 1,386,955 3.0 Vested and expected to vest at June 30, 2021 5,800,518 $ 1.57 $ 1,386,955 3.0 There were no options granted under the Private Innovate Plan during the six months ended June 30, 2021 and 2020. The total fair value of stock option awards vested during the six months ended June 30, 2021 under the Private Innovate Plan was approximately $49,000. As of June 30, 2021, there was no unrecognized compensation cost related to unvested stock-based compensation arrangements under the Private Innovate Plan as all of the outstanding options are fully vested as of June 30, 2021. The Private Innovate Plan provides for accelerated vesting under certain change-of-control transactions, if approved by the Company’s board of directors. On April 23, 2021, the Company’s Board approved the extension of the exercise periods of certain option holders’ vested options for an additional twelve months. Pursuant to the Board’s approval, options to purchase 1,708,270 shares of the Company’s common stock were extended and the Company recognized an additional $0.3 million in non-cash stock compensation expense related to the modification during the three and six months ended June 30, 2021. All other terms of the options remain unchanged. Omnibus Plan As of June 30, 2021, there were options to purchase 14,429,626 shares of the Company’s common stock outstanding under the Omnibus Plan and 5,657,603 shares available for future grants under the Omnibus Plan. The range of assumptions used in estimating the fair value of the options granted under the Omnibus Plan using the Black-Scholes option pricing model for the periods presented were as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 Expected dividend yield 0% 0% 0% 0% Expected stock-price volatility 75% - 76% 72% - 74% 68% - 85% 72% - 74% Risk-free interest rate 0.8% - 1.1% 0.4% - 0.6% 0.1% - 1.1% 0.4% - 0.6% Expected term of options (in years) 2.3 - 6.1 years 5 - 10 years 2.3 - 6.1 years 5 - 10 years The following table summarizes stock option activity under the Amended Omnibus Plan: Number of Weighted-Average Aggregate Weighted-Average Outstanding at December 31, 2020 10,598,426 $ 1.01 $ 1,490,488 9.2 Options granted 4,055,747 1.66 Options forfeited (136,899) 0.72 Options exercised (87,648) 0.78 Outstanding at June 30, 2021 14,429,626 1.19 3,259,347 9.0 Exercisable at June 30, 2021 4,841,583 1.30 1,236,117 8.3 Vested and expected to vest at June 30, 2021 13,712,646 $ 1.18 $ 3,126,566 9.0 The weighted-average grant date fair value of options granted under the Omnibus Plan was $1.26 and $1.66 during the three and six months ended June 30, 2021, respectively. The weighted-average grant date fair value of options granted under the Omnibus Plan was $0.41 during the three and six months ended June 30, 2020. The total intrinsic value of options exercised was approximately $27,000 and $39,000 during the three and six months ended June 30, 2021, respectively. There were no options exercised during the three and six months ended June 30, 2020. The total fair value of stock option awards vested under the Omnibus Plan was approximately $201,000 during the six months ended June 30, 2021. As of June 30, 2021, there was approximately $6.0 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements under the Omnibus Plan. This cost is expected to be recognized over a weighted average period of 3.4 years. The Omnibus Plan provides for accelerated vesting, if approved by the Company’s Board. Upon expiration of the term of one of the Company’s now former board members, the Board approved the acceleration and extension of unvested options held by the board member. The Company recognized an additional $0.1 million in non-cash stock compensation expense related to the modification during the three and six months ended June 30, 2021. Upon consummation of the RDD Merger on April 30, 2020, the Company’s Board approved the acceleration of certain options for employees, board members and key consultants. The Company recognized an additional $2.7 million in non-cash stock compensation expense related to the modification during the three and six months ended June 30, 2020. There were no RSUs granted during the three and six months ended June 30, 2021. During the three and six months ended June 30, 2020, the Board approved grants of 415,948 RSUs, which vested immediately on the date of grant. There were 203,667 RSUs unvested as of June 30, 2021 and December 31, 2020 with a weighted-average grant date fair value of $1.07 per share. The Company recognized share-based compensation expense for RSUs of approximately $52,000 and $238,000 during the three months ended June 30, 2021 and 2020, respectively, and $104,000 and $255,000 during the six months ended June 30, 2021 and 2020, respectively. RDD Option Grants Pursuant to the RDD Merger Agreement, the Company assumed 1,014,173 option grant agreements awarded to RDD employees upon consummation of the RDD Merger (the “RDD Options”) on April 30, 2020. There were 985,807 RDD Options outstanding as of June 30, 2021 at a weighted-average exercise price of $0.63 per share. All of the RDD Options are fully vested and there were no RDD Options vested during the three and six months ended June 30, 2021. The total fair value of RDD Options vested during the three and six months ended June 30, 2020 was approximately $471,000. The range of assumptions used in estimating the fair value of the RDD Options using the Black-Scholes option pricing model for the periods presented were as follows: Three and Six Months Ended Expected dividend yield — % Expected stock-price volatility 72% - 74% Risk-free interest rate 0.4% - 0.6% Expected term of options (in years) 5.0 - 10.0 The following table summarizes stock option activity for the RDD Options: Number of Weighted-Average Aggregate Weighted-Average Outstanding at December 31, 2020 1,014,173 $ 0.63 $ 228,860 4.3 Options granted — — Options forfeited — — Options exercised (28,366) 0.74 Outstanding at June 30, 2021 985,807 0.63 463,065 3.8 Exercisable at June 30, 2021 985,807 0.63 463,065 3.8 Vested and expected to vest at June 30, 2021 985,807 $ 0.63 $ 463,065 3.8 During the six months ended June 30, 2021, there were 28,366 RDD Options exercised at a weighted-average exercise price of $0.74. The total intrinsic value of RDD Options exercised was approximately $27,000 during the six months ended June 30, 2021. Share-based Compensation Expense Total share-based compensation expense recognized in the accompanying condensed consolidated statements of operations and comprehensive loss was as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 Research and development $ 280,000 $ 1,460,550 $ 442,000 $ 1,588,550 General and administrative 657,000 2,560,450 917,000 2,708,450 Total share-based compensation $ 937,000 $ 4,021,000 $ 1,359,000 $ 4,297,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Employment Agreements The Company has entered into executive employment agreements with the executives (the “Executive Employment Agreements”). The Executive Employment Agreements provide an annual base salary and the opportunity to participate in the Company’s equity compensation, employee benefit and bonus plans once they are established and approved by the Board. The Executive Employment Agreements contain severance provisions if such executive is terminated under certain conditions that would provide the executive with up to 12 months of their base salary and up to 12 months of continuation of health insurance benefits. Periodically, the Company enters into separation and general release agreements with former executives of the Company that include separation benefits consistent with the former executives’ employment agreements. There was no severance expense recognized during the three and six months ended June 30, 2021. The Company recognized severance expense totaling $0.8 million during the three and six months ended June 30, 2020, which was paid in equal installments over 12 months from the date of separation. The accrued severance obligation was fully paid as of June 30, 2021. Office Lease In July 2020, the Company entered into a 4-year lease for office space that expires on September 30, 2024. Base annual rent is $72,000, or $6,000 per month. Monthly payments of $6,000 are due and payable over the 4-year term. The lease contains a 3-year renewal option. The Company recorded a right of use asset of $233,206 and an operating lease liability of $233,206 at the inception of the lease in July 2020. The Company estimated the present value of the lease payments over the remaining term of the leases using a discount rate of 12%, which represented the Company’s estimated incremental borrowing rate. The renewal options were excluded from the lease payments as the Company concluded the exercise of the option was not considered reasonably certain. Operating lease cost under ASC 842 was approximately $18,000 and $36,000 for the three and six months ended June 30, 2021, respectively, and $15,000 and $30,000 for the three and six months ended June 30, 2020, respectively. Operating lease cost is included in general and administrative expenses on the accompanying condensed consolidated statement of operations and comprehensive loss. The total cash paid for amounts included in the measurement of the operating lease liability and reported within operating activities was less than $0.1 million during the six months ended June 30, 2021. Future minimum payments under the Company’s lease liability were as follows: Year ending December 31, Operating Leases 2021 $ 36,000 2022 72,000 2023 72,000 2024 54,000 Total lease payment 234,000 Less: imputed interest (41,021) Total $ 192,979 Legal |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Lobesity Acquisition On July 19, 2021, the Company entered into and closed an Asset Purchase Agreement with Lobesity LLC, a Delaware limited liability company (“Lobesity”), pursuant to which the Company acquired global development rights to a proprietary and highly specific humanized monoclonal antibody that targets glucose-dependent insulinotropic polypeptide, as well as related intellectual property (the "Lobesity Acquisition"). The Company paid a combination of cash and equity consideration in the form of a $5 million upfront payment, as 40% cash and 60% equity (consisting of 2,417,211 shares of unregistered common stock priced at the Company’s 30-day volume weighted-price immediately prior to the closing), plus the right to contingent payments including certain worldwide regulatory and clinical milestone payments totaling up to $45.5 million, global sales-related milestone payments totaling up to $50 million, and, subject to certain adjustments, a mid-single digit royalty on worldwide net sales. To satisfy the Company’s post-closing rights to indemnification under the Asset Purchase Agreement, 604,303 of the shares issued to Lobesity are subject to holdback restrictions for 18 months following closing of the transaction. The Company’s right to indemnification will be satisfied through the recovery of these shares or paid in cash by Lobesity. The Company is currently assessing the accounting treatment for the acquisition of these assets. There is approximately $0.1 million associated with the Lobesity Acquisition classified as research and development expense during the three and six months ended June 30, 2021. Warrant Expiration |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary for a fair statement of the balance sheets, operating results, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021 or any other future period. Certain information and footnote disclosure normally included in the annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. The Company’s financial position, results of operations and cash flows are presented in U.S. Dollars. These financial statements and related notes should be read in conjunction with the audited financial statements and related notes thereto for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 22, 2021. Except as noted below under the section entitled “Recently Issued Accounting Standards—Accounting Pronouncements Adopted,” there have been no material changes to the Company’s significant accounting policies during the three and six months ended June 30, 2021, as compared to the significant accounting policies disclosed in Note 1 of the Company’s financial statements for the years ended December 31, 2020 and 2019 included in the Company’s Annual Report on Form 10-K. However, the following accounting policies are the most critical in fully understanding the Company’s financial condition and results of operations. |
Basis of Consolidation | Basis of ConsolidationThe accompanying consolidated financial statements reflect the operations of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Business Risks | Business RisksThe Company faces risks, including those associated with biopharmaceutical companies whose products are in various stages of development. These risks include, among others, risks related to the potential effects of the ongoing coronavirus outbreak and related mitigation efforts on the Company's clinical, financial and operational activities, the Company’s need for additional financing to achieve key development milestones, the need to defend intellectual property rights, and the dependence on key members of management. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Areas of the financial statements where estimates may have the most significant effect include accrued expenses, share-based compensation, valuation of the derivative liability and warrant liabilities, valuation allowance for income tax assets, and management’s assessment of the Company’s ability to continue as a going concern. The Company considered the impact of the COVID-19 pandemic on its estimates and assumptions, and concluded there was not a material impact to its condensed consolidated financial statements as of and for the three and six months ended June 30, 2021. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could differ from these estimates. |
Accrued Expenses | Accrued Expenses The Company incurs periodic expenses such as research and development, licensing fees, salaries and benefits, and professional fees. The Company is required to estimate its expenses resulting from obligations under contracts with clinical research organizations, vendors and consulting agreements that have been incurred by the Company prior to being invoiced. This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice monthly in arrears for services performed or when contractual milestones are met. The Company estimates accrued expenses as of each balance sheet date based on facts and circumstances known at that time. |
Derivative Liability | Derivative Liability The Company accounts for derivative instruments in accordance with ASC 815, Derivative and Hedging, |
Classification of Warrants | Classification of Warrants The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging, to determine whether the warrants should be classified as equity or liability. Warrants that are freestanding financial instruments that contain net settlement options and may require the Company to settle these warrants in cash under certain circumstances are classified as liabilities. Warrant liabilities are initially recorded at fair value on the date of issuance and are subsequently re-measured to fair value at each balance sheet date until the warrant liabilities are exercised or settled. Changes in the fair value of warrant liabilities are recognized as a non-cash component of other income and expense in the accompanying condensed consolidated statements of operations and comprehensive loss. The Company had no warrant liabilities as of June 30, 2021 or December 31, 2020. On May 4, 2020, the Company issued the Preferred Warrants, which are freestanding financial instruments that give the warrant holder the right but not the obligation to purchase the equity security at the warrant exercise price. The Company is |
Research and Development | Research and Development Research and development expenses consist of costs incurred to further the Company’s research and development activities and include salaries and related employee benefits, manufacturing of pharmaceutical active ingredients and drug products, costs associated with clinical trials, nonclinical activities, regulatory activities, research-related overhead expenses and fees paid to expert consultants, external service providers and contract research organizations which conduct certain research and development activities on behalf of the Company. Costs incurred in the research and development of products are charged to research and development expense as incurred. Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of the vendors’ progress towards completion of specific tasks, using data such as patient enrollment, clinical site activations or information provided by vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. The estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Although the Company does not expect its estimates to be materially different from amounts incurred, the Company’s estimates and assumptions for clinical trial costs could differ significantly from actual costs incurred, which could result in increases or decreases in research and development expenses in future periods when actual results are known. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the goods have been received or when the activity is performed, rather than when payment is made. |
Acquired In-process Research and Development | Acquired In-process Research and Development The Company has acquired, and may in the future acquire, rights to develop and commercialize new drug candidates and/or other in-process research and development assets. The up-front acquisition payments, as well as future milestone payments that are deemed probable to achieve and do not meet the definition of a derivative, are expensed as acquired in-process research and development provided that the drug has not achieved regulatory approval for marketing, and, absent obtaining such approval, have no alternative future use. |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation expense for grants of stock options based on the grant-date fair value of those awards using the Black-Scholes option-pricing model. Share-based compensation expense is generally recognized on a straight-line basis over the requisite service period for awards with service conditions and graded vesting features. For awards with performance conditions, compensation cost is recognized from the time achievement of the performance criteria is probable over the expected term. Share-based compensation expense includes an estimate, which is made at the time of grant, of the number of awards that are expected to be forfeited. This estimate is revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Under the Black-Scholes option-pricing model, fair value is calculated based on assumptions with respect to: • Expected dividend yield. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on the Company’s common stock. • Expected stock-price volatility. Due to limited trading history as a public company, the expected volatility is derived from the average historical volatilities of publicly traded companies within the Company’s industry that the Company considers to be comparable to the Company’s business over a period approximately equal to the expected term. In evaluating comparable companies, the Company considers factors such as industry, stage of life cycle, financial leverage, size and risk profile. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term. • Expected term. The expected term represents the period that the stock-based awards are expected to be outstanding. Due to limited history of stock option exercises, the Company estimates the expected term of employee stock options with service conditions based on the simplified method, which calculates the expected term as the average of the time-to-vesting and the contractual life of the options. Pursuant to Accounting Standards Update (“ASU”) 2018-07, the Company has elected to use the contractual life of the option as the expected term for non-employee options. The expected term for performance options is the longer of the explicit or implicit service period. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Financial instruments recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs to valuation techniques as follows: • Level 1 - defined as observable inputs based on unadjusted quoted prices for identical instruments in active markets; • Level 2 - defined as inputs other than Level 1 that are either directly or indirectly observable in the marketplace for identical or similar instruments in markets that are not active; and • Level 3 - defined as unobservable inputs in which little or no market data exists where valuations are derived from techniques in which one or more significant inputs are unobservable. The fair value of the embedded derivative issued in connection with the Unsecured Convertible Note and the Additional Note, further described in Note 5—Debt, was determined by using a Monte Carlo simulation technique (“MCS”) to value the embedded derivative associated with each note. As part of the MCS valuation, a discounted cash flow (“DCF”) model was used to value the debt on a stand-alone basis and determine the discount rate to utilize in both the DCF and MCS models. The significant estimates used in the DCF model include the time to maturity of the convertible debt and calculated discount rate, which includes an estimate of the Company’s specific risk premium. The MCS methodology calculates the theoretical value of an option based on certain parameters, including: (i) the threshold of exercising the option, (ii) the price of the underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate and (vi) the number of paths. These valuation techniques involve management’s estimates and judgment based on unobservable inputs and are classified in Level 3. The table below summarizes the valuation inputs into the MCS model for the derivative liability associated with the Unsecured Convertible Note and the Additional Note on their respective dates of issuance as of March 8, 2019 and January 10, 2020, respectively. Derivative Liability January 10, March 8, 2020 2019 Discount rate 21.6% 29.3% Expected stock price volatility 103.9% 101.1% Risk-free interest rate 1.6% 2.5% Expected term 2 years 2 years Price of the underlying common stock $0.65 $1.99 The following table summarizes the fair value hierarchy of financial liabilities measured at fair value as of December 31, 2020. December 31, 2020 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Derivative liability $ — $ — $ 7,000 $ 7,000 Warrant liabilities — — — — Total liabilities at fair value $ — $ — $ 7,000 $ 7,000 The following table summarizes the changes in fair value of the derivative liability classified in Level 3 during the six months ended June 30, 2021. Gains and losses reported in this table include changes in fair value that are attributable to unobservable inputs. Six Months Ended Beginning balance as of December 31, 2020 $ 7,000 Change in fair value of derivative liability (7,000) Ending balance as of June 30, 2021 $ — The amount of total gain for the period included in earnings attributable to the change in unrealized gains relating to the fair value liabilities still held at the end of the period $ — The unrealized gain relating to the change in fair value of the derivative liability of $7,000 for the six months ended June 30, 2021 is included in other income (expense) in the accompanying condensed consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2020, the Company recognized a gain in fair value of warrant liabilities of approximately $1.1 million and $2.6 million, respectively, in the accompanying condensed consolidated statements of operations and comprehensive loss. There were no warrant liabilities outstanding as of June 30, 2021 or December 31, 2020, and as such, there was no gain or loss in fair value of warrant liabilities during the six months ended June 30, 2021. During the three and six months ended June 30, 2020, the Company recognized warrant inducement expense of approximately $6.5 million and $7.2 million, respectively. There was no warrant inducement expense recognized during the six months ended June 30, 2021. The warrant inducement expense represents the accounting fair value of consideration issued to induce conversion of the Exchange Warrants. |
Deferred Offering Costs | Deferred Offering CostsDeferred offering costs consist principally of legal, accounting and underwriters’ fees related to offerings or the Company’s shelf registration statement. Offering costs incurred prior to an offering are initially capitalized and then subsequently reclassified to additional paid-in capital upon completion of the offering. If the equity offering is not completed, any costs deferred will be expensed immediately upon termination of the offering. |
Patent Costs | Patent Costs |
Net Loss Per Share | Net Loss Per Share |
Segments | Segments |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Pronouncements Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 amends the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improves consistent application of other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. The Company adopted this guidance effective January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements being Evaluated In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following: June 30, December 31, Accrued compensation and benefits $ 906,135 $ 1,111,028 Accrued clinical expenses 3,989,402 4,042,277 Other accrued expenses 132,438 136,876 Total $ 5,027,975 $ 5,290,181 |
Fair Value Measurement Inputs and Valuation Techniques | The table below summarizes the valuation inputs into the MCS model for the derivative liability associated with the Unsecured Convertible Note and the Additional Note on their respective dates of issuance as of March 8, 2019 and January 10, 2020, respectively. Derivative Liability January 10, March 8, 2020 2019 Discount rate 21.6% 29.3% Expected stock price volatility 103.9% 101.1% Risk-free interest rate 1.6% 2.5% Expected term 2 years 2 years Price of the underlying common stock $0.65 $1.99 Exchange Warrants May 1, 2019 January 6, 2020 Conversion price $2.13 - $2.53 $2.13 Expected stock price volatility 84.1% 87.3% Risk-free interest rate 2.2% 1.7% Expected term 5 - 5.5 years 4.9 years Price of the underlying common stock $1.54 $0.58 The table below summarizes the range of valuation inputs into the Black-Scholes model for the warrant liabilities as of February 11, 2020, immediately prior to the reduction in exercise price pursuant to the Offer to Amend and Exercise. Short-Term Warrants Long-Term Warrants February 11, 2020 Conversion price $ 4.00 $2.13 - $2.56 Expected stock price volatility 97.1 % 87.9% - 89.2% Risk-free interest rate 1.6 % 1.7 % Expected term 7 months 4 years 2 months Price of the underlying common stock $ 0.79 $ 0.79 May 4, 2020 Conversion price $ 0.5894 Expected stock price volatility 73.7 % Risk-free interest rate 0.4 % Expected term 5 years Price of the underlying common stock $ 0.50 |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following table summarizes the fair value hierarchy of financial liabilities measured at fair value as of December 31, 2020. December 31, 2020 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Derivative liability $ — $ — $ 7,000 $ 7,000 Warrant liabilities — — — — Total liabilities at fair value $ — $ — $ 7,000 $ 7,000 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following table summarizes the changes in fair value of the derivative liability classified in Level 3 during the six months ended June 30, 2021. Gains and losses reported in this table include changes in fair value that are attributable to unobservable inputs. Six Months Ended Beginning balance as of December 31, 2020 $ 7,000 Change in fair value of derivative liability (7,000) Ending balance as of June 30, 2021 $ — The amount of total gain for the period included in earnings attributable to the change in unrealized gains relating to the fair value liabilities still held at the end of the period $ — |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The potentially dilutive securities consisted of the following: June 30, 2021 2020 Options outstanding under the Private Innovate Plan 5,800,518 6,028,781 Options outstanding under the Omnibus Plan 14,429,626 5,651,726 Options outstanding under the Option Grant Agreements granted to RDD Employees 985,807 1,014,173 Warrants issued at a weighted-average exercise price of $55.31 (expired July 2021) 154,403 154,403 Warrants issued at an exercise price of $2.54 2,233 2,233 Warrants issued at an exercise price of $3.18 113,980 113,980 Warrants issued at an exercise price of $0.5894 25,706,449 40,990,200 Total 47,193,016 53,955,496 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The convertible notes payable as of December 31, 2020 consisted of the following: December 31, 2020 Convertible Notes $ 8,400,000 Less: principal payments of debt (8,341,801) Less: unamortized debt discount and OID accretion (43,983) Total $ 14,216 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The table below summarizes the valuation inputs into the MCS model for the derivative liability associated with the Unsecured Convertible Note and the Additional Note on their respective dates of issuance as of March 8, 2019 and January 10, 2020, respectively. Derivative Liability January 10, March 8, 2020 2019 Discount rate 21.6% 29.3% Expected stock price volatility 103.9% 101.1% Risk-free interest rate 1.6% 2.5% Expected term 2 years 2 years Price of the underlying common stock $0.65 $1.99 Exchange Warrants May 1, 2019 January 6, 2020 Conversion price $2.13 - $2.53 $2.13 Expected stock price volatility 84.1% 87.3% Risk-free interest rate 2.2% 1.7% Expected term 5 - 5.5 years 4.9 years Price of the underlying common stock $1.54 $0.58 The table below summarizes the range of valuation inputs into the Black-Scholes model for the warrant liabilities as of February 11, 2020, immediately prior to the reduction in exercise price pursuant to the Offer to Amend and Exercise. Short-Term Warrants Long-Term Warrants February 11, 2020 Conversion price $ 4.00 $2.13 - $2.56 Expected stock price volatility 97.1 % 87.9% - 89.2% Risk-free interest rate 1.6 % 1.7 % Expected term 7 months 4 years 2 months Price of the underlying common stock $ 0.79 $ 0.79 May 4, 2020 Conversion price $ 0.5894 Expected stock price volatility 73.7 % Risk-free interest rate 0.4 % Expected term 5 years Price of the underlying common stock $ 0.50 |
Schedule of Stock by Class | The Company had reserved shares of common stock for future issuance as follows: June 30, December 31, 2021 2020 Outstanding stock options 21,215,951 17,641,380 Warrants to purchase common stock 25,977,065 38,727,616 Restricted stock units subject to vesting 203,667 203,667 Shares issuable upon conversion of convertible debt — 18,057 For possible future issuance under the Omnibus Plan 5,657,603 9,576,451 Total common shares reserved for future issuance 53,054,286 66,167,171 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation, Activity | The following table summarizes stock option activity under the Private Innovate Plan: Number of Weighted-Average Aggregate Weighted-Average Outstanding at December 31, 2020 6,028,781 $ 1.53 $ 1,080,474 3.2 Options granted — — Options forfeited (5,652) 2.08 Options exercised (222,611) 0.48 Outstanding at June 30, 2021 5,800,518 1.57 1,386,955 3.0 Exercisable at June 30, 2021 5,800,518 1.57 1,386,955 3.0 Vested and expected to vest at June 30, 2021 5,800,518 $ 1.57 $ 1,386,955 3.0 The following table summarizes stock option activity under the Amended Omnibus Plan: Number of Weighted-Average Aggregate Weighted-Average Outstanding at December 31, 2020 10,598,426 $ 1.01 $ 1,490,488 9.2 Options granted 4,055,747 1.66 Options forfeited (136,899) 0.72 Options exercised (87,648) 0.78 Outstanding at June 30, 2021 14,429,626 1.19 3,259,347 9.0 Exercisable at June 30, 2021 4,841,583 1.30 1,236,117 8.3 Vested and expected to vest at June 30, 2021 13,712,646 $ 1.18 $ 3,126,566 9.0 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The range of assumptions used in estimating the fair value of the options granted under the Omnibus Plan using the Black-Scholes option pricing model for the periods presented were as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 Expected dividend yield 0% 0% 0% 0% Expected stock-price volatility 75% - 76% 72% - 74% 68% - 85% 72% - 74% Risk-free interest rate 0.8% - 1.1% 0.4% - 0.6% 0.1% - 1.1% 0.4% - 0.6% Expected term of options (in years) 2.3 - 6.1 years 5 - 10 years 2.3 - 6.1 years 5 - 10 years Three and Six Months Ended Expected dividend yield — % Expected stock-price volatility 72% - 74% Risk-free interest rate 0.4% - 0.6% Expected term of options (in years) 5.0 - 10.0 |
Share-based Payment Arrangement, Option, Activity | The following table summarizes stock option activity for the RDD Options: Number of Weighted-Average Aggregate Weighted-Average Outstanding at December 31, 2020 1,014,173 $ 0.63 $ 228,860 4.3 Options granted — — Options forfeited — — Options exercised (28,366) 0.74 Outstanding at June 30, 2021 985,807 0.63 463,065 3.8 Exercisable at June 30, 2021 985,807 0.63 463,065 3.8 Vested and expected to vest at June 30, 2021 985,807 $ 0.63 $ 463,065 3.8 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Total share-based compensation expense recognized in the accompanying condensed consolidated statements of operations and comprehensive loss was as follows: Three Months Ended Six Months Ended 2021 2020 2021 2020 Research and development $ 280,000 $ 1,460,550 $ 442,000 $ 1,588,550 General and administrative 657,000 2,560,450 917,000 2,708,450 Total share-based compensation $ 937,000 $ 4,021,000 $ 1,359,000 $ 4,297,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments for Operating Leases | Future minimum payments under the Company’s lease liability were as follows: Year ending December 31, Operating Leases 2021 $ 36,000 2022 72,000 2023 72,000 2024 54,000 Total lease payment 234,000 Less: imputed interest (41,021) Total $ 192,979 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Apr. 05, 2021USD ($) | Mar. 30, 2021$ / sharesshares | Dec. 15, 2020USD ($) | Dec. 11, 2020$ / sharesshares | Jun. 30, 2020shares | May 04, 2020USD ($)$ / sharesshares | Apr. 29, 2020USD ($)$ / sharesshares | Dec. 19, 2019shares | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2021USD ($)segment$ / sharesshares | Jun. 30, 2020USD ($)shares | Dec. 31, 2020USD ($)$ / shares | Oct. 02, 2020USD ($) | Jul. 22, 2020USD ($) | Apr. 29, 2019$ / shares |
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Sale of stock, shelf registration maximum equity offering price | $ | $ 200,000,000 | |||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 0.10 | |||||||||||||||
Expected term | 5 years | |||||||||||||||
Number of shares issued per warrant (in shares) | 1.2 | |||||||||||||||
Issuance of common stock (in shares) | 12,230,418 | |||||||||||||||
Proceeds from issuance of common stock | $ | $ 1,200,000 | $ 34,500,000 | $ 0 | |||||||||||||
Preferred stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||
Proceeds from issuance of preferred stock and warrants | $ | $ 22,600,000 | $ 0 | 22,560,994 | |||||||||||||
Proceeds from issuance of preferred stock and warrants, net. | $ | $ 19,200,000 | |||||||||||||||
Warrants, accumulated gross unrealized gain | $ | $ 7,000 | 7,000 | ||||||||||||||
Change in fair value of warrant liabilities | $ | 0 | $ 1,058,700 | 0 | 2,637,500 | ||||||||||||
Warrant inducement expense | $ | 0 | 6,467,048 | 0 | 7,157,887 | ||||||||||||
General and administrative expense | $ | 2,551,171 | 5,659,721 | $ 4,759,971 | $ 7,329,528 | ||||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 47,193,016 | 53,955,496 | ||||||||||||||
Number of operating segments | segment | 1 | |||||||||||||||
Patent Costs | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
General and administrative expense | $ | $ 132,000 | 108,000 | $ 231,000 | $ 193,000 | ||||||||||||
Warrant | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 2.13 | |||||||||||||||
Expected term | 5 years 6 months | |||||||||||||||
Number of securities called by warrants or rights (in shares) | 5,441,023 | 1,847,309 | 1,847,309 | |||||||||||||
Number of warrants purchased (in shares) | 1,539,424 | 1,539,424 | ||||||||||||||
Placement Agent Warrants | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 2.53 | |||||||||||||||
Expected term | 5 years | |||||||||||||||
Exchange Warrants | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Warrant inducement expense | $ | $ 6,500,000 | $ 0 | $ 7,200,000 | |||||||||||||
Private Placement | Series A Preferred Stock | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 58.94 | $ 0.5894 | $ 0.5894 | |||||||||||||
Expected term | 5 years | |||||||||||||||
Number of securities called by warrants or rights (in shares) | 382,779 | |||||||||||||||
Warrant issuable per investment unit (in shares) | 1 | |||||||||||||||
Broker Warrants | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Units warrant units issued (in shares) | 8,112 | |||||||||||||||
Broker Warrants | Series A Preferred Stock | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Number of securities called by warrants or rights (in shares) | 10,899 | |||||||||||||||
Public Stock Offering | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Number of shares issued in transaction (in shares) | 30,000,000 | 46,153,847 | ||||||||||||||
Shares issued, price per share (in usd per share) | $ / shares | $ 1 | $ 0.65 | ||||||||||||||
Consideration received on transaction | $ | $ 31,500,000 | $ 32,000,000 | ||||||||||||||
Public Stock Offering | Officers And Board Of Directors Chairman | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Number of shares issued in transaction (in shares) | 446,153 | |||||||||||||||
Over-Allotment Option | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Number of shares issued in transaction (in shares) | 4,500,000 | 6,923,077 | ||||||||||||||
Sale of stock, option period | 30 days | 30 days | ||||||||||||||
April 2021 Offering | Chief Executive Officer, Chief Financial Officer, And Chairman Of Board Of Directors | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Number of shares issued in transaction (in shares) | 450,000 | |||||||||||||||
Warrant | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Warrant liabilities outstanding | $ | $ 0 | $ 0 | $ 0 | |||||||||||||
Series A Preferred Stock | Private Placement | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Number of securities called by warrants or rights (in shares) | 382,779 | |||||||||||||||
Shares issuable per investment unit (in shares) | 1 | |||||||||||||||
Number of shares issued in transaction (in shares) | 382,779 | |||||||||||||||
Preferred stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||||
Common shares issuable upon conversion (in shares) | 38,277,900 | |||||||||||||||
Series A Preferred Stock | Broker Warrants | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Common shares issuable upon conversion (in shares) | 2,712,300 | |||||||||||||||
SunTrust Robinson Humphrey | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Sale of stock, ATM maximum equity offering price | $ | $ 40,000,000 | |||||||||||||||
Common Stock | ||||||||||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||||||||||
Issuance of common stock (in shares) | 34,500,000 | 42,695,948 | ||||||||||||||
Conversion of preferred stock to common stock (in shares) | 38,277,900 | 38,277,900 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accrued Expenses (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Accrued compensation and benefits | $ 906,135 | $ 1,111,028 |
Accrued clinical expenses | 3,989,402 | 4,042,277 |
Other accrued expenses | 132,438 | 136,876 |
Total | $ 5,027,975 | $ 5,290,181 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Valuation Input for Warrant and Derivative Liabilities (Details) | May 04, 2020$ / shares | Feb. 11, 2020$ / sharesyear | Jan. 10, 2020year$ / shares | Jan. 06, 2020$ / sharesyear | May 01, 2019$ / sharesyear | Mar. 08, 2019year$ / shares |
Discount rate | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | 0.216 | 0.293 | ||||
Conversion price | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.5894 | |||||
Conversion price | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 2.13 | |||||
Conversion price | Short-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 4 | |||||
Expected stock price volatility | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | 1.039 | 1.011 | ||||
Warrants and rights outstanding, measurement input | 0.737 | |||||
Expected stock price volatility | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.873 | 0.841 | ||||
Expected stock price volatility | Short-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.971 | |||||
Risk-free interest rate | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | 0.016 | 0.025 | ||||
Warrants and rights outstanding, measurement input | 0.004 | |||||
Risk-free interest rate | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.017 | 0.022 | ||||
Risk-free interest rate | Short-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.016 | |||||
Risk-free interest rate | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.017 | |||||
Expected term | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | year | 2 | 2 | ||||
Expected term | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | year | 4.9 | |||||
Expected term | Short-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | year | 0.58 | |||||
Expected term | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | year | 4.2 | |||||
Price of the underlying common stock | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | 0.65 | 1.99 | ||||
Warrants and rights outstanding, measurement input | 0.50 | |||||
Price of the underlying common stock | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.58 | 1.54 | ||||
Price of the underlying common stock | Short-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.79 | |||||
Price of the underlying common stock | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.79 | |||||
Minimum | Conversion price | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 2.13 | |||||
Minimum | Conversion price | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 2.13 | |||||
Minimum | Expected stock price volatility | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.879 | |||||
Minimum | Expected term | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | year | 5 | |||||
Maximum | Conversion price | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 2.53 | |||||
Maximum | Conversion price | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 2.56 | |||||
Maximum | Expected stock price volatility | Long-term Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Warrants and rights outstanding, measurement input | 0.892 | |||||
Maximum | Expected term | Exchange Warrants | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Derivative liability, measurement input | year | 5.5 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Fair Value Hierarchy of Financial Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring | Dec. 31, 2020USD ($) |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability | $ 7,000 |
Warrant liabilities | 0 |
Total liabilities at fair value | 7,000 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability | 0 |
Warrant liabilities | 0 |
Total liabilities at fair value | 0 |
Significant Other Observable Inputs (Level 2) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability | 0 |
Warrant liabilities | 0 |
Total liabilities at fair value | 0 |
Significant Unobservable Inputs (Level 3) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability | 7,000 |
Warrant liabilities | 0 |
Total liabilities at fair value | $ 7,000 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Changes in Fair Value Derivative Liability (Details) | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Beginning balance | $ 7,000 |
Ending balance | 0 |
The amount of total gain for the period included in earnings attributable to the change in unrealized gains relating to the fair value liabilities still held at the end of the period | 0 |
Derivative Liability | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Change in fair value of derivative liability | $ (7,000) |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potential Dilutive Securities (Details) - $ / shares | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Apr. 29, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 47,193,016 | 53,955,496 | |
Exercise price of warrants or rights (in dollars per share) | $ 0.10 | ||
Stock options | Private Innovate 2015 Stock Incentive Plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,800,518 | 6,028,781 | |
Stock options | Omnibus Plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 14,429,626 | 5,651,726 | |
Stock options | RDD Employees | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 985,807 | 1,014,173 | |
Warrant | Warrants issued at a weighted-average exercise price of $55.31 (expired July 2021) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 154,403 | 154,403 | |
Exercise price of warrants or rights (in dollars per share) | $ 55.31 | ||
Warrant | Warrants issued at an exercise price of $2.54 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,233 | 2,233 | |
Exercise price of warrants or rights (in dollars per share) | $ 2.54 | ||
Warrant | Warrants issued at an exercise price of $3.18 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 113,980 | 113,980 | |
Exercise price of warrants or rights (in dollars per share) | $ 3.18 | ||
Warrant | Warrants issued at an exercise price of $0.5894 | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 25,706,449 | 40,990,200 | |
Exercise price of warrants or rights (in dollars per share) | $ 0.5894 |
LIQUIDITY AND GOING CONCERN Nar
LIQUIDITY AND GOING CONCERN Narrative (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 64,023,462 | $ 37,851,388 | $ 13,473,467 | $ 4,592,932 |
MERGER AND ACQUISITION (Details
MERGER AND ACQUISITION (Details) - USD ($) $ in Millions | May 06, 2020 | Apr. 30, 2020 |
RDD Merger | ||
Business Acquisition [Line Items] | ||
Common stock consideration (in shares) | 37,860,510 | |
Stock options outstanding (in shares) | 1,014,173 | |
Value of common stock acquired | $ 26.6 | |
Liabilities assumed | 1.3 | |
Net assets received | $ 0.1 | |
Naia Acquisition | ||
Business Acquisition [Line Items] | ||
Common stock consideration (in shares) | 4,835,438 | |
Cash consideration | $ 2.1 | |
Pre-payment consideration for operating costs | 0.1 | |
Milestone payments | 80.4 | |
Value of common stock acquired | 2.2 | |
Liabilities assumed | $ 0.1 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
LifeSci Advisors, LLC | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expense | $ 66 | $ 18 | $ 176 | $ 18 |
LifeSci Communications, LLC | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, expense | $ 63 | $ 17 | $ 190 | $ 17 |
DEBT - Unsecured Convertible Pr
DEBT - Unsecured Convertible Promissory Note (Details) - USD ($) | Mar. 08, 2019 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Short-term Debt [Line Items] | |||||
Amortization of debt discount | $ 43,983 | $ 1,154,847 | |||
Repayments of debt | $ 58,199 | 1,469,804 | |||
Unsecured Convertible Promissory Note | |||||
Short-term Debt [Line Items] | |||||
Amortization of debt discount | 800,000 | ||||
Repayments of debt, portion paid in stock conversions | $ 500,000 | 500,000 | |||
Unsecured Convertible Promissory Note | |||||
Short-term Debt [Line Items] | |||||
Principal amount | $ 5,500,000 | $ 8,400,000 | |||
Conversion price (in dollars per share) | $ 3.25 | ||||
Proceeds from notes payable | $ 5,000,000 | ||||
Unamortized discount | (500,000) | ||||
Debt discount and derivative liability at the issuance date | $ 1,300,000 | ||||
Amortization of debt discount | 400,000 | ||||
Debt interest rate | 10.00% | ||||
Repayments of debt | 2,000,000 | 2,000,000 | |||
Repayments of debt, portion paid in cash | $ 1,500,000 | $ 1,500,000 | |||
Debt Instrument, Redemption, Period One | Unsecured Convertible Promissory Note | |||||
Short-term Debt [Line Items] | |||||
Debt instrument, redemption period | 15 months |
DEBT - Standstill Agreement (De
DEBT - Standstill Agreement (Details) $ in Thousands | Apr. 03, 2020USD ($) |
Standstill Agreement | Unsecured Convertible Promissory Note | |
Debt Instrument [Line Items] | |
Increase in outstanding balance | $ 150 |
DEBT - Additional Note (Details
DEBT - Additional Note (Details) - USD ($) | Jan. 10, 2020 | Mar. 08, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||||
Amortization of debt discount | $ 43,983 | $ 1,154,847 | |||||
Repayments of debt | 58,199 | 1,469,804 | |||||
Unsecured Convertible Promissory Note | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 5,500,000 | $ 8,400,000 | |||||
Conversion price (in dollars per share) | $ 3.25 | ||||||
Proceeds from notes payable | $ 5,000,000 | ||||||
Unamortized discount | 500,000 | ||||||
Debt discount and derivative liability at the issuance date | $ 1,300,000 | ||||||
Amortization of debt discount | $ 400,000 | ||||||
Debt interest rate | 10.00% | ||||||
Repayments of debt | 2,000,000 | 2,000,000 | |||||
Additional Note | Unsecured Convertible Promissory Note | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 2,750,000 | ||||||
Conversion price (in dollars per share) | $ 3.25 | ||||||
Proceeds from notes payable | $ 2,500,000 | ||||||
Unamortized discount | 250,000 | ||||||
Debt discount and derivative liability at the issuance date | $ 400,000 | ||||||
Amortization of debt discount | $ 0 | $ 126,000 | 44,000 | 234,000 | |||
Debt interest rate | 10.00% | ||||||
Repayments of debt | $ 59,000 | 0 | |||||
Unsecured Convertible Promissory Note | |||||||
Debt Instrument [Line Items] | |||||||
Amortization of debt discount | $ 800,000 |
DEBT - Schedule of Convertible
DEBT - Schedule of Convertible Note (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Mar. 08, 2019 |
Short-term Debt [Line Items] | |||
Total | $ 0 | $ 14,216 | |
Unsecured Convertible Promissory Note | |||
Short-term Debt [Line Items] | |||
Convertible Note | 8,400,000 | $ 5,500,000 | |
Less: principal payments of debt | (8,341,801) | ||
Less: unamortized debt discount and OID accretion | (43,983) | ||
Total | $ 14,216 |
LICENSE AGREEMENTS (Details)
LICENSE AGREEMENTS (Details) $ in Millions | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2014 | Dec. 31, 2013USD ($) | May 06, 2020license_agreement | |
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Number of amended and restated license agreements | license_agreement | 2 | |||||
Accrued milestone fees | $ 0 | $ 0 | ||||
Minimum | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Royalty payment percentage | 5.00% | |||||
Maximum | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Royalty payment percentage | 15.00% | |||||
Alba Agreement | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
License fees | $ 0.5 | |||||
Milestone payment | 1.5 | |||||
Sales range minimum | 100 | |||||
Sales range maximum | 1,500 | |||||
Alba Agreement | License and Service | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
License and services revenue | $ 150 | |||||
Seachaid Agreement | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
License fees | $ 0.2 | |||||
Milestone payment | 6 | |||||
Sales range minimum | 1 | |||||
Sales range maximum | $ 2.5 | |||||
Cedars License | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Milestone payment | 9.4 | |||||
U.S and EU | Amunix License, GLP-1 | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Milestone payment | 70.4 | |||||
U.S and EU | Amunix License, GLP-2 | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Milestone payment | 60.1 | |||||
China and Related Territories | Amunix License, GLP-1 | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Milestone payment | 20.5 | |||||
South Korea and Eastern Asia | Amunix License, GLP-2 | ||||||
Assets Sold under Agreements to Repurchase [Line Items] | ||||||
Milestone payment | $ 20.5 |
STOCKHOLDERS_ EQUITY (DEFICIT_2
STOCKHOLDERS’ EQUITY (DEFICIT) - Narrative (Details) - USD ($) | May 04, 2020 | Apr. 29, 2020 | Dec. 19, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Jul. 22, 2020 |
Class of Stock [Line Items] | |||||||
Capital stock authorized (in shares) | 560,000,000 | ||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares authorized (in shares) | 550,000,000 | 350,000,000 | |||||
Preferred stock, shares authorized (in shares) | 600,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Conversion feature | $ 3,100,000 | ||||||
Preferred stock, value, issued | 12,500,000 | $ 0 | $ 0 | ||||
Preferred stock, value, outstanding | $ 7,000,000 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||
Common stock, shares, outstanding (in shares) | 252,235,940 | 204,629,064 | |||||
Number of shares issued per warrant (in shares) | 1.2 | ||||||
Exercise of warrants (in shares) | 1,847,309 | ||||||
Issuance of common stock (in shares) | 12,230,418 | ||||||
Proceeds from issuance of common stock | $ 1,200,000 | $ 34,500,000 | $ 0 | ||||
Warrant | |||||||
Class of Stock [Line Items] | |||||||
Number of securities called by warrants or rights (in shares) | 5,441,023 | 1,847,309 | |||||
SunTrust Robinson Humphrey | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock, ATM maximum equity offering price | $ 40,000,000 | ||||||
Sale of stock, agent commissions fee | 3.00% | ||||||
At-the-Market Offering | Truist Securities, Inc | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued in transaction (in shares) | 0 | 0 | |||||
Series A Preferred Stock | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | ||||||
Number of shares issued in transaction (in shares) | 382,779 | ||||||
Common shares issuable upon conversion (in shares) | 38,277,900 | ||||||
Number of securities called by each warrant (in shares) | 100 | ||||||
Number of securities called by warrants or rights (in shares) | 382,779 | ||||||
Preferred Stock Warrant | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Number of securities called by each warrant (in shares) | 100 |
STOCKHOLDERS_ EQUITY (DEFICIT_3
STOCKHOLDERS’ EQUITY (DEFICIT) - Warrants Valuation Inputs (Details) | May 04, 2020$ / shares |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected term | 5 years |
Conversion price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.5894 |
Expected stock price volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.737 |
Risk-free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.004 |
Price of the underlying common stock | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.50 |
STOCKHOLDERS_ EQUITY (DEFICIT_4
STOCKHOLDERS’ EQUITY (DEFICIT) - Reserve Shares of Common Stock (Details) - shares | Jun. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Capital shares reserved for future issuance (in shares) | 53,054,286 | 66,167,171 |
Outstanding stock options | ||
Class of Stock [Line Items] | ||
Capital shares reserved for future issuance (in shares) | 21,215,951 | 17,641,380 |
Warrants to purchase common stock | ||
Class of Stock [Line Items] | ||
Capital shares reserved for future issuance (in shares) | 25,977,065 | 38,727,616 |
Restricted stock units subject to vesting | ||
Class of Stock [Line Items] | ||
Capital shares reserved for future issuance (in shares) | 203,667 | 203,667 |
Shares issuable upon conversion of convertible debt | ||
Class of Stock [Line Items] | ||
Capital shares reserved for future issuance (in shares) | 0 | 18,057 |
For possible future issuance under the Omnibus Plan | ||
Class of Stock [Line Items] | ||
Capital shares reserved for future issuance (in shares) | 5,657,603 | 9,576,451 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) | Apr. 23, 2021shares | Jan. 01, 2021 | Jun. 30, 2020shares | Jan. 01, 2020shares | Jun. 30, 2021USD ($)plan$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2021USD ($)plan$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2018 | Dec. 31, 2020$ / sharesshares | Apr. 30, 2020shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of stock option plans | plan | 2 | 2 | |||||||||
Sale of stock, extended option period | 12 months | ||||||||||
Noncash expense | $ | $ 1,359,000 | $ 4,297,000 | |||||||||
Total share-based compensation | $ | $ 937,000 | $ 4,021,000 | $ 1,359,000 | $ 4,297,000 | |||||||
Restricted Stock Units (RSUs) | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options granted (in shares) | shares | 0 | 415,948 | 0 | 415,948 | |||||||
Weighted-average grant date fair value of shares granted (in dollars per share) | $ / shares | $ 1.07 | ||||||||||
RSUs unvested | shares | 203,667 | 203,667 | 203,667 | ||||||||
Total share-based compensation | $ | $ 52,000 | $ 238,000 | $ 104,000 | $ 255,000 | |||||||
Omnibus Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options outstanding (in shares) | shares | 14,429,626 | 14,429,626 | 10,598,426 | ||||||||
Expected term | 10 years | ||||||||||
Purchase price of common stock, percent | 5.00% | 5.00% | |||||||||
Number of additional shares authorized (in shares) | shares | 15,000,000 | 1,973,883 | |||||||||
Options granted (in shares) | shares | 4,055,747 | ||||||||||
Fair value of stock option awards vested | $ | $ 201,000 | ||||||||||
Unrecognized compensation cost | $ | $ 6,000,000 | $ 6,000,000 | |||||||||
Options available for future grants (in shares) | shares | 5,657,603 | 5,657,603 | |||||||||
Weighted-average grant date fair value of shares granted (in dollars per share) | $ / shares | $ 1.26 | $ 0.41 | $ 1.66 | $ 0.41 | |||||||
Total intrinsic value of options exercised | $ | $ 27,000 | $ 39,000 | |||||||||
Weighted-average period for recognizing cost | 3 years 4 months 24 days | ||||||||||
Weighted-average exercise price of options outstanding (in dollars per share) | $ / shares | $ 1.19 | $ 1.19 | $ 1.01 | ||||||||
Options exercised (in shares) | shares | 87,648 | ||||||||||
Options exercised (in dollars per share) | $ / shares | $ 0.78 | ||||||||||
Omnibus Plan | Minimum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 3 years | ||||||||||
Omnibus Plan | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period | 4 years | ||||||||||
Private Innovate 2015 Stock Incentive Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options outstanding (in shares) | shares | 5,800,518 | 5,800,518 | 6,028,781 | ||||||||
Options granted (in shares) | shares | 0 | 0 | |||||||||
Fair value of stock option awards vested | $ | $ 49,000 | ||||||||||
Unrecognized compensation cost | $ | $ 0 | $ 0 | |||||||||
Weighted-average exercise price of options outstanding (in dollars per share) | $ / shares | $ 1.57 | $ 1.57 | $ 1.53 | ||||||||
Options exercised (in shares) | shares | 222,611 | ||||||||||
Options exercised (in dollars per share) | $ / shares | $ 0.48 | ||||||||||
RDD Merger | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options outstanding (in shares) | shares | 985,807 | 985,807 | |||||||||
Fair value of stock option awards vested | $ | $ 471,000 | $ 471,000 | |||||||||
Unrecognized compensation cost | $ | $ 0 | $ 0 | |||||||||
Total intrinsic value of options exercised | $ | $ 27,000 | ||||||||||
Weighted-average exercise price of options outstanding (in dollars per share) | $ / shares | $ 0.63 | $ 0.63 | |||||||||
Options exercised (in shares) | shares | 28,366 | ||||||||||
Options exercised (in dollars per share) | $ / shares | $ 0.74 | ||||||||||
Private Plan Option Modifications | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options outstanding (in shares) | shares | 1,708,270 | ||||||||||
Noncash expense | $ | $ 300,000 | $ 300,000 | |||||||||
Omnibus Plan Modifications | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Noncash expense | $ | $ 100,000 | $ 100,000 | |||||||||
Non-cash compensation expense | $ | $ 2,700,000 | $ 2,700,000 | |||||||||
RDD Merger | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options outstanding (in shares) | shares | 1,014,173 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Private Innovate 2015 Stock Incentive Plan | |||
Number of Shares | |||
Beginning balance (in shares) | 6,028,781 | ||
Options granted (in shares) | 0 | 0 | |
Options forfeited (in shares) | (5,652) | ||
Options exercised (in shares) | (222,611) | ||
Ending balance (in shares) | 5,800,518 | 6,028,781 | |
Exercisable (in shares) | 5,800,518 | ||
Vested and expected to vest (in shares) | 5,800,518 | ||
Weighted-Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 1.53 | ||
Options granted (in usd per share) | 0 | ||
Options forfeited (in usd per share) | 2.08 | ||
Options exercised (in dollars per share) | 0.48 | ||
Ending balance (in dollars per share) | 1.57 | $ 1.53 | |
Exercisable (in usd per share) | 1.57 | ||
Vested and expected to vest (in usd per share) | $ 1.57 | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 1,386,955 | $ 1,080,474 | |
Exercisable | 1,386,955 | ||
Vested and expected to vest | $ 1,386,955 | ||
Weighted-Average Remaining Contractual Life (in years) | |||
Outstanding (in years) | 3 years | 3 years 2 months 12 days | |
Exercisable (in years) | 3 years | ||
Vested and expected to vest (in years) | 3 years | ||
Omnibus Plan | |||
Number of Shares | |||
Beginning balance (in shares) | 10,598,426 | ||
Options granted (in shares) | 4,055,747 | ||
Options forfeited (in shares) | (136,899) | ||
Options exercised (in shares) | (87,648) | ||
Ending balance (in shares) | 14,429,626 | 10,598,426 | |
Exercisable (in shares) | 4,841,583 | ||
Vested and expected to vest (in shares) | 13,712,646 | ||
Weighted-Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 1.01 | ||
Options granted (in usd per share) | 1.66 | ||
Options forfeited (in usd per share) | 0.72 | ||
Options exercised (in dollars per share) | 0.78 | ||
Ending balance (in dollars per share) | 1.19 | $ 1.01 | |
Exercisable (in usd per share) | 1.30 | ||
Vested and expected to vest (in usd per share) | $ 1.18 | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 3,259,347 | $ 1,490,488 | |
Exercisable | 1,236,117 | ||
Vested and expected to vest | $ 3,126,566 | ||
Weighted-Average Remaining Contractual Life (in years) | |||
Outstanding (in years) | 9 years | 9 years 2 months 12 days | |
Exercisable (in years) | 8 years 3 months 18 days | ||
Vested and expected to vest (in years) | 9 years | ||
RDD Options | |||
Number of Shares | |||
Beginning balance (in shares) | 1,014,173 | ||
Options granted (in shares) | 0 | ||
Options forfeited (in shares) | 0 | ||
Options exercised (in shares) | (28,366) | ||
Ending balance (in shares) | 985,807 | 1,014,173 | |
Exercisable (in shares) | 985,807 | ||
Vested and expected to vest (in shares) | 985,807 | ||
Weighted-Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 0.63 | ||
Options granted (in usd per share) | 0 | ||
Options forfeited (in usd per share) | 0 | ||
Options exercised (in dollars per share) | 0.74 | ||
Ending balance (in dollars per share) | 0.63 | $ 0.63 | |
Exercisable (in usd per share) | 0.63 | ||
Vested and expected to vest (in usd per share) | $ 0.63 | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 463,065 | $ 228,860 | |
Exercisable | 463,065 | ||
Vested and expected to vest | $ 463,065 | ||
Weighted-Average Remaining Contractual Life (in years) | |||
Outstanding (in years) | 3 years 9 months 18 days | 4 years 3 months 18 days | |
Exercisable (in years) | 3 years 9 months 18 days | ||
Vested and expected to vest (in years) | 3 years 9 months 18 days |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Options Assumptions (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Omnibus Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected stock-price volatility, minimum | 75.00% | 72.00% | 68.00% | 72.00% |
Expected stock-price volatility, maximum | 76.00% | 74.00% | 85.00% | 74.00% |
Risk-free interest rate, minimum | 0.80% | 0.40% | 0.10% | 0.40% |
Risk-free interest rate, maximum | 1.10% | 0.60% | 1.10% | 0.60% |
Omnibus Plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term of options | 2 years 3 months 18 days | 5 years | 2 years 3 months 18 days | 5 years |
Omnibus Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term of options | 6 years 1 month 6 days | 10 years | 6 years 1 month 6 days | 10 years |
RDD Merger | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | 0.00% | ||
Expected stock-price volatility, minimum | 72.00% | 72.00% | ||
Expected stock-price volatility, maximum | 74.00% | 74.00% | ||
Risk-free interest rate, minimum | 0.40% | 0.40% | ||
Risk-free interest rate, maximum | 0.60% | 0.60% | ||
RDD Merger | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term of options | 5 years | 5 years | ||
RDD Merger | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term of options | 10 years | 10 years |
SHARED-BASED COMPENSATION - Fin
SHARED-BASED COMPENSATION - Financial Statements (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation | $ 937,000 | $ 4,021,000 | $ 1,359,000 | $ 4,297,000 |
Research and Development Expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation | 280,000 | 1,460,550 | 442,000 | 1,588,550 |
General and Administrative Expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation | $ 657,000 | $ 2,560,450 | $ 917,000 | $ 2,708,450 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Severance provisions, annual base salary | 12 months | |||||
Severance provisions, continuation of health insurance benefits | 12 months | |||||
Severance costs | $ 0 | $ 800,000 | $ 0 | $ 800,000 | ||
Term of contract | 4 years | |||||
Operating lease annual rental payments | $ 72,000 | |||||
Operating lease monthly rental payments | $ 6,000 | |||||
Renewal term | 3 years | |||||
Right-of-use asset | $ 233,206 | 191,418 | 191,418 | $ 214,767 | ||
Operating lease, liability | $ 233,206 | $ 192,979 | $ 192,979 | |||
Operating lease, weighted average discount rate, percent | 12.00% | 12.00% | ||||
Operating lease, cost | $ 18,000 | $ 15,000 | $ 36,000 | $ 30,000 | ||
Cash paid for operating lease | $ 100,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Minimum Payments for Operating Lease Liabilities (Details) - USD ($) | Jun. 30, 2021 | Jul. 31, 2020 |
Operating Leases | ||
2021 | $ 36,000 | |
2022 | 72,000 | |
2023 | 72,000 | |
2024 | 54,000 | |
Total lease payment | 234,000 | |
Less: imputed interest | (41,021) | |
Total | $ 192,979 | $ 233,206 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Jul. 19, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Jul. 30, 2021 |
Lobesity LLC | ||||
Subsequent Event [Line Items] | ||||
Research and development expense | $ 0.1 | $ 0.1 | ||
Subsequent Event | Warrant | ||||
Subsequent Event [Line Items] | ||||
Number of warrants expired (in shares) | 154,403 | |||
Subsequent Event | Lobesity LLC | ||||
Subsequent Event [Line Items] | ||||
Upfront payment | $ 5 | |||
Percentage paid in cash | 40.00% | |||
Percentage paid in equity | 60.00% | |||
Common stock consideration (in shares) | 2,417,211 | |||
Weighted price period | 30 days | |||
Regulatory and clinical milestone payments | $ 45.5 | |||
Sales related milestone payments | $ 50 | |||
Number of shares subject to restrictions (in shares) | 604,303 | |||
Restriction period | 18 months |