Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 |
Accounting Policies [Abstract] | ' |
Nature of operations | ' |
Nature of operations | | Ignyta, Inc. (“Ignyta”) was founded in 2011 and is incorporated in the state of Delaware. On June 11, 2014, Ignyta, Inc. merged with and into Ignyta Operating, Inc. with Ignyta Operating, Inc. surviving the merger and changing its name to Ignyta, Inc. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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On October 31, 2013, Ignyta merged with and into IGAS Acquisition Corp., a wholly-owned subsidiary of Ignyta, Inc., a Nevada corporation previously named Infinity Oil & Gas Company (see Note 2). As used in these financial statements, unless the context indicates or otherwise requires, the “Company”, “we”, “us”, and “our” refer to Ignyta. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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In May 2013, Ignyta acquired Actagene Oncology, Inc. (“Actagene”), a San Diego based privately held biotechnology company developing precision medicines for high unmet need cancer indications, based on cancer genome mining and sequencing. With the acquisition, Ignyta changed its business strategy from a prior focus on molecular diagnostics for autoimmune disease to an integrated drug and diagnostic, or Rx/Dx, focus on drug and biomarker discovery and development for oncology (see Note 3). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The Company is a precision medicine biotechnology company dedicated to discovering or acquiring, then developing and commercializing, precisely targeted new drugs for cancer patients whose tumors harbor specific molecular alterations. The Company pursues an Rx/Dx strategy, where it aims to pair each of its innovative drugs with biomarker-based companion diagnostics, developed by the Company or by third parties with which it may partner, that are designed to identify the patients that are most likely to benefit from the use of the drugs that the Company may develop. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basis of Presentation | ' |
Basis of Presentation | | The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and related Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, from which the balance sheet information herein was derived. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Development stage | ' |
Development stage | | As of June 30, 2014, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure, and has not realized revenues from its planned principal operations. Accordingly, the Company is considered to be in the development stage. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Liquidity | ' |
Liquidity | | As of June 30, 2014, the Company had an accumulated deficit of approximately $25,102,000. The Company also had negative cash flow from operations of approximately $6,252,000 during the six months ended June 30, 2014. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | The Company expects that it will need additional capital to further fund development of, and seek regulatory approvals for, its product candidates, and begin to commercialize any approved products. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | We are currently focused primarily on the development of our RXDX-101, Spark-1, Spark-2 and Spark-3 programs, and we intend to devote resources to our newly-licensed RXDX-103 and RXDX-104 programs. We believe such activities will result in our continued incurrence of significant research and development and other expenses related to those programs. If the clinical trials for any of our products fail or produce unsuccessful results and those product candidates do not gain regulatory approval, or if any of our product candidates, if approved, fails to achieve market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. The Company intends to cover its future operating expenses through cash on hand and through additional financing from existing and prospective investors. We cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or to our stockholders. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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While we expect that our existing cash and cash equivalents will enable us to fund our operations and capital expenditure requirements for at least the next twelve months, having insufficient funds may require us to delay, reduce, or eliminate some or all of our development programs. Failure to obtain adequate financing could eventually adversely affect our ability to operate as a going concern. If we raise additional funds from the issuance of equity securities, substantial dilution to our existing stockholders would likely result. If we raise additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Use of estimates | ' |
Use of estimates | | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Significant estimates used in preparing the financial statements include those assumed in computing the valuation allowance on deferred tax assets and the valuation of warrants, and those assumed in calculating stock-based compensation expense. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Cash and cash equivalents | ' |
Cash and cash equivalents | | The Company considers all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents. Cash equivalents primarily represent amounts invested in money market funds whose cost equals market value. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investments | ' |
Investments | | Investments consist of corporate notes and bonds and commercial paper. The Company classifies investments as available-for-sale at the time of purchase. All investments are recorded at estimated fair value. Unrealized gains and losses for available-for-sale securities are included in accumulated other comprehensive income, a component of stockholders’ equity. The Company evaluates its investments as of each balance sheet date to assess whether those with unrealized loss positions are other-than-temporarily impaired. Impairments are considered to be other-than-temporary if they are related to deterioration in credit risk or if it is likely that the Company will sell the securities before the recovery of its cost basis. Realized gains and losses and declines in value judged to be other-than-temporary are determined based on the specific identification method and are reported in other income (expense), net in the Statements of Operations. No other-than-temporary impairment charges were recognized in the three and six months ended June 30, 2014 or in the fiscal years ended December 31, 2013, 2012 and 2011. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Fixed assets | ' |
Fixed assets | | Fixed assets are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally three to five years, or, in the case of leasehold improvements, over the lesser of the useful life of the related asset or the lease term. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impairment of long-lived assets | ' |
Impairment of long-lived assets | | In accordance with authoritative guidance related to impairment or disposal of long-lived assets, management reviews the Company’s long-lived asset groups for impairment whenever events indicate that their book value may not be recoverable. When management determines that one or more impairment indicators are present for an asset group, it compares the book value of the asset group to net future undiscounted cash flows that the asset group is expected to generate. If the book value of the asset group is greater than the net future undiscounted cash flows that the asset group is expected to generate, it compares the fair value to the book value of the asset group. If the fair value is less than the book value, it recognizes an impairment loss. The impairment loss would be the excess of the book value of the asset group over its fair value. To date, the Company has not experienced any impairment losses on its long-lived assets used in operations. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock-based compensation | ' |
Stock-based compensation | | The Company accounts for stock-based compensation in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation— | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | Stock Compensation, which establishes accounting for equity instruments exchanged for employee services. Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee’s requisite service period (generally the vesting period of the equity grant). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | The Company accounts for equity instruments, including restricted stock or stock options, issued to non-employees in accordance with authoritative guidance for equity based payments to non-employees. Stock options issued to non-employees are accounted for at their estimated fair value determined using the Black-Scholes option-pricing model. The fair value of options granted to non-employees is re-measured as they vest, and the resulting increase in value, if any, is recognized as expense during the period the related services are rendered. Restricted stock issued to non-employees is accounted for at its estimated fair value as it vests. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fair value of financial instruments | ' |
Fair value of financial instruments | | The Company’s financial instruments consist of cash and cash equivalents, investments, prepaid expenses and other assets, accounts payable, accrued expenses, and notes payable. Fair value estimates of these instruments at a specific point in time are made based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. As of June 30, 2014 and December 31, 2013, the book values are generally considered to be representative of their respective fair values because of the short-term nature of those instruments. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Derivative liabilities | ' |
Derivative liabilities | | The Company accounts for its warrants as either equity or liabilities based upon the characteristics and provisions of each instrument. Warrants classified as derivative liabilities are recorded on the Company’s balance sheet at their fair value on the date of issuance and revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for future events, expected volatility, expected life, yield, and risk free interest rate. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Income taxes | ' |
Income taxes | | Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the combination of the tax payable for the year and the change during the year in deferred tax assets and liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share ("EPS") | ' |
Earnings per share (“EPS”) | | Basic and diluted loss per common share have been computed by dividing the losses applicable to common stock by the weighted average number of common shares outstanding. The Company’s basic and fully diluted EPS calculation are the same since the increased number of shares that would be included in the diluted calculation from the assumed exercise of stock equivalents would be anti-dilutive to the net loss in each of the years shown in the financial statements. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Comprehensive income (loss) | ' |
Comprehensive income (loss) | | Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company is required to record all components of comprehensive income (loss) in the financial statements in the period in which they are recognized. Net income (loss) and other comprehensive income (loss), including unrealized gains and losses on investments, are reported net of their related tax effect, to arrive at comprehensive income (loss). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development costs | ' |
Research and development costs | | The Company is actively engaged in new product development efforts for which related costs are expensed as incurred. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fair value measurement | ' |
Fair value measurement | | Financial assets and liabilities are measured at fair value, which is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | • Level 1—Quoted prices in active markets for identical assets or liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | June 30, 2014 | | | December 31, 2013 | |
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 34,565 | | | $ | — | | | $ | — | | | $ | 34,565 | | | $ | 51,804 | | | $ | — | | | $ | — | | | $ | 51,804 | |
Short-term investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate debt securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial | | | — | | | | 27,532 | | | | — | | | | 27,532 | | | | — | | | | — | | | | — | | | | — | |
Industrial | | | — | | | | 6,265 | | | | — | | | | 6,265 | | | | — | | | | — | | | | — | | | | — | |
Utility | | | — | | | | 1,451 | | | | — | | | | 1,451 | | | | — | | | | — | | | | — | | | | — | |
Commercial paper | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial | | | — | | | | 5,591 | | | | — | | | | 5,591 | | | | — | | | | — | | | | — | | | | — | |
Industrial | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
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Total short-term investments | | $ | — | | | $ | 40,839 | | | $ | — | | | $ | 40,839 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
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Long-term investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Corporate debt securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial | | | — | | | | 12,778 | | | | — | | | | 12,778 | | | | — | | | | — | | | | — | | | | — | |
Industrial | | | — | | | | 6,965 | | | | — | | | | 6,965 | | | | — | | | | — | | | | — | | | | — | |
Utility | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
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Total long-term investments | | $ | — | | | $ | 19,743 | | | $ | — | | | | 19,743 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
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Total assets measured at fair value | | $ | 34,565 | | | $ | 60,582 | | | $ | — | | | $ | 95,147 | | | $ | 51,804 | | | $ | — | | | $ | — | | | $ | 51,804 | |
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Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liability | | | — | | | | — | | | | 182 | | | | 182 | | | | — | | | | — | | | | 129 | | | | 129 | |
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Total liabilities measured at fair value | | $ | — | | | $ | — | | | $ | 182 | | | $ | 182 | | | $ | — | | | $ | — | | | $ | 129 | | | $ | 129 | |
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| | The Company holds available-for-sale securities that consist of highly liquid, investment grade debt securities. The Company determines the fair value of its debt securities based upon one or more valuations reported by its investment accounting and reporting service provider. The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets or liabilities (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets or liabilities, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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The Company used Level 3 inputs for its valuation methodology for the warrant derivative liabilities. The estimated fair values were determined using a binomial option pricing model based on various | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | assumptions (see Note 9). The Company’s derivative liabilities are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to fair value of derivative liabilities. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | The following table presents the activity for liabilities measured at estimated fair value using unobservable inputs for the six months ended June 30, 2014: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
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| | Warrant Derivative | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Liability | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning Balance at December 31, 2011 | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuances | | | 24,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Ending Balance at December 31, 2012 | | $ | 24,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuances | | | 28,300 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments to estimated fair value | | | 76,600 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Ending Balance at December 31, 2013 | | $ | 129,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments to estimated fair value | | | 52,400 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Ending Balance at June 30, 2014 | | $ | 181,800 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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