| Organization and Basis of Presentation (Policies) | 3 Months Ended |
| Mar. 31, 2016 |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Nature of Operations | Organization and Nature of Operations
Ignyta, Inc. (“Ignyta” or the “Company”) is
incorporated in the state of Delaware and was founded in 2011 (with
the name “NexDx, Inc.”). The Company changed its name
to “Ignyta, Inc.” on October 8, 2012. The Company
is a precision oncology biotechnology company. Its goal is not just
to shrink tumors, but to eradicate residual disease – the
source of cancer relapse and recurrence – in precisely
defined patient populations. The Company is pursuing an integrated
therapeutic, or Rx, and companion diagnostic, or Dx, strategy for
treating cancer patients. Its Rx efforts are focused on
discovering, in-licensing or acquiring, then developing and
commercializing molecularly targeted therapies that, sequentially
or in combination, are foundational for eradicating residual
disease. Its Dx efforts aim to pair these product candidates with
biomarker-based companion diagnostics that are designed to
precisely identify, at the molecular level, the patients who are
most likely to benefit from the therapies it develops.
On October 31, 2013, the Company merged with and into IGAS
Acquisition Corp., a wholly owned subsidiary of Ignyta, Inc., a
Nevada corporation previously named “Infinity Oil &
Gas Company” (“Parent”), formerly a “shell
company” under applicable rules of the Securities and
Exchange Commission (the “SEC”). The Company changed
its name to Ignyta Operating, Inc. in connection with this merger,
and it survived the merger as a wholly owned subsidiary of Parent.
In the merger, Parent acquired the business of the Company and
continued the business operations of the Company. The merger was
accounted for as a reverse merger and recapitalization, with the
Company as the acquirer and Parent as the acquired company for
financial reporting purposes. As a result, the assets and
liabilities and the operations that are reflected in the historical
financial statements prior to the merger are those of the Company
and are recorded at the historical cost basis of the Company, and
the financial statements after completion of the merger will
include the assets and liabilities of Parent and the Company, the
historical operations of the Company and the operations of the
combined enterprise of Parent and the Company from and after the
closing date of the merger. On June 12, 2014, Parent merged
with and into the Company, with the Company surviving the merger
and changing its name to “Ignyta, Inc.” (the
“Reincorporation Merger”). This Reincorporation Merger
had no material impact on the accounting of the Company.
Operating segments are identified as components of an enterprise
about which separate discrete financial information is available
for evaluation by the chief operating decision-maker in making
decisions regarding resource allocation and assessing performance.
The Company views its operations and manages its business as one
operating segment. |
| 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 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. 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,
2015. |
| Liquidity | Liquidity
The Company had negative cash flow from operations of approximately
$20.2 million during the first quarter of 2016 and, as of
March 31, 2016, had an accumulated deficit of approximately
$173.5 million. The Company is focused primarily on its development
programs, and management believes such activities will result in
the continued incurrence of significant research and development
and other expenses related to those programs. 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. If the clinical
trials for any of the Company’s products fail or produce
unsuccessful results and those product candidates do not gain
regulatory approval, or if any of its product candidates, if
approved, fails to achieve market acceptance, the Company may never
become profitable. Even if the Company achieves profitability in
the future, it 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. The Company
cannot be sure that additional financing will be available when
needed or that, if available, financing will be obtained on terms
favorable to the Company or to its stockholders.
As of March 31, 2016, the Company had cash, cash equivalents
and available-for-sale securities totaling $151.2 million. In
addition, our May 2016 underwritten public offering resulted in
aggregate gross proceeds of approximately $57.5 million and
aggregate net proceeds, after deducting underwriting discounts and
commissions and other offering fees and expenses, of approximately
$53.8 million. While the Company expects that its existing
cash, cash equivalents and available-for-sale securities and the
funds it raised in May 2016 will enable it to fund its operations
and capital expenditure requirements for at least the next twelve
months, having insufficient funds may require the Company to delay,
reduce, limit or terminate some or all of its development programs
or future commercialization efforts or grant rights to develop and
market product candidates that it would otherwise prefer to develop
and market on its own. Failure to obtain adequate financing could
eventually adversely affect the Company’s ability to operate
as a going concern. If the Company raises additional funds from the
issuance of equity securities, substantial dilution to its existing
stockholders would likely result. If the Company raises 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 its ability to
operate its 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.
Significant estimates used in preparing the financial statements
include those assumed in estimating expenses for the
Company’s pre-clinical studies and clinical trials, computing
the valuation allowance on deferred tax assets, calculating
stock-based compensation expense and for determining the value of
leased property during the construction period for which the
Company has been deemed the accounting owner. Actual results could
differ from those estimates. |
| 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. |
| Investment Securities | Investment Securities
Investment securities consist of government and government agency
obligations, corporate notes and bonds and commercial paper. The
Company classifies its investment securities as available-for-sale
at the time of purchase. All investment securities are recorded at
estimated fair value. Unrealized gains and losses for
available-for-sale investment securities are included in
accumulated other comprehensive income or loss, a component of
stockholders’ equity.
The Company evaluates its investment securities 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. No
other-than-temporary impairment charges have been recognized since
inception. |
| Fair Value of Financial Instruments | Fair Value of Financial Instruments
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 Company’s financial instruments consist of cash and cash
equivalents, investment securities, prepaid expenses and other
assets, accounts payable, accrued expenses, and notes payable. The
valuation of assets and liabilities is subject to fair value
measurements using a three tiered approach, and fair value
measurement is classified and disclosed in one of the following
categories:
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; or
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.
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 judgment and therefore cannot be determined with precision.
The Company reports its available-for-sale securities at their
estimated fair values based on quoted market prices for identical
or similar instruments. The book values of cash and cash
equivalents, prepaid expenses and other assets, accounts payable,
accrued expenses, notes payable and other liabilities are
reasonable estimates of fair value because of the short-term nature
of these items. |
| Credit Risk | Credit Risk
Cash is invested in accordance with a policy approved by the
Company’s board of directors which specifies the categories,
allocations, and ratings of securities that the Company may
consider for investment. Management does not believe that the
Company’s cash, cash equivalents and available-for-sale
investment securities have significant risk of default or
illiquidity. This determination is based on discussions with the
Company’s treasury managers and a review of the
Company’s holdings. While the Company believes that its cash,
cash equivalents and available-for-sale investment securities are
well diversified and do not contain excessive risk, the Company
cannot provide absolute assurance that its investments will not be
subject to future adverse changes in market value.
The Company maintains cash balances at various financial
institutions. Accounts at these institutions are secured by the
Federal Deposit Insurance Corporation. At times these balances
exceed federally insured limits. The Company has not experienced
any losses in such accounts. With respect to the Company’s
cash equivalents and available-for-sale investment securities, the
primary exposure to market risk is interest rate sensitivity. This
means that a change in prevailing interest rates may cause the
value of the investment to fluctuate. For example, if the Company
purchases a security that was issued with a fixed interest rate and
the prevailing interest rate later rises, the value of this
investment will probably decline. Currently, the Company’s
holdings are in money market funds and available-for-sale
investment securities, and therefore this interest rate risk is
minimal. To minimize interest rate risk going forward, the Company
intends to continue to maintain its portfolio of cash, cash
equivalents and available-for-sale investment securities in a
variety of securities consisting of money market funds and debt
securities, all with various maturities. In general, money market
funds are not subject to market risk because the interest paid on
such funds fluctuates with the prevailing interest rate. The
Company also attempts to time the maturities of its investments to
correspond with expected cash needs, allowing it to avoid realizing
any potential losses from having to sell securities prior to their
maturities. |
| Property and Equipment | Property and Equipment
Property and equipment are recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful
lives of the related assets, which generally range from three to
seven years, or, in the case of leasehold improvements, over the
lesser of the useful life of the related asset or the lease
term.
The Company reviews property and equipment for impairment whenever
events or changes in circumstances indicate that the carrying value
of an asset may not be recoverable. An impairment loss would be
recognized when estimated future undiscounted cash flows relating
to the asset are less than its carrying amount. An impairment loss
is measured as the amount by which the carrying amount of an asset
exceeds its fair value. To date, the Company has not experienced
any impairment losses on its property and equipment.
The Company establishes assets and corresponding financing
liabilities for the construction costs incurred under build-to-suit
lease arrangements when it is determined that the Company takes
construction risks during the construction period and is deemed the
accounting owner of the property during construction. At the end of
the construction period, the Company assesses whether the
arrangement qualifies for sales recognition under the
sale-leaseback accounting guidance in ASC 840. |
| Clinical Trial and Pre-Clinical Study Accruals | Clinical Trial and Pre-Clinical Study Accruals
The Company makes estimates of accrued expenses as of each balance
sheet date in its financial statements based on the facts and
circumstances known to it at that time. Accrued expenses for
pre-clinical studies and clinical trials are based on estimates of
costs incurred and fees that may be associated with services
provided by contract research organizations, clinical trial
investigational sites, and other related vendors. Payments under
certain contracts with such parties depend on factors such as
successful enrollment of patients, site initiation and the
completion of milestones. In accruing service fees, management
estimates the time period over which services will be performed and
the level of effort to be expended in each period. If possible, the
Company obtains information regarding unbilled services directly
from these service providers. However, the Company may be required
to estimate these services based on other information available to
it. If the Company underestimates or overestimates the activity or
fees associated with a study or service at a given point in time,
adjustments to research and development expenses may be necessary
in future periods. Historically, estimated accrued liabilities have
approximated actual expense incurred. Subsequent changes in
estimates may result in a material change in the Company’s
accruals. |
| 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.
The Company follows the accounting guidance on accounting for
uncertainty in income taxes. The guidance prescribes a recognition
threshold and measurement attribute criteria for the financial
statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be
recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities based on the
technical merits of the position. |
| Research and Development | Research and Development
Costs incurred in connection with research and development
activities are expensed as incurred. Research and development
expenses consist of (i) external research and development
expenses incurred under arrangements with third parties, such as
contract research organizations, investigational sites and
consultants; (ii) employee-related expenses, including
salaries, benefits, travel and stock compensation expense;
(iii) the cost of acquiring, developing and manufacturing
clinical study materials; (iv) facilities and other expenses,
which include direct and allocated expenses for rent and
maintenance of facilities and laboratory and other supplies, and
(v) license fees and other expenses relating to the
acquisition of rights to our development programs.
The Company enters into consulting, research and other agreements
with commercial firms, researchers, universities and others for the
provision of goods and services. Under such agreements, the Company
may pay for services on a monthly, quarterly, project or other
basis. Such arrangements are generally cancellable upon reasonable
notice and payment of costs incurred. Costs are considered incurred
based on an evaluation of the progress to completion of specific
tasks under each contract using information and data provided to
the Company by its clinical sites and vendors and other
information. These costs consist of direct and indirect costs
associated with specific projects, as well as fees paid to various
entities that perform certain research on behalf of the
Company.
In certain circumstances, the Company is required to make advance
payments to vendors for goods or services that will be received in
the future for use in research and development activities. In such
circumstances, the advance payments are deferred and are expensed
when the activity has been performed or when the goods have been
received. |
| Stock-Based Compensation | Stock-Based Compensation
Stock-based compensation cost for equity awards to employees and
members of the Company’s board of directors is measured at
the grant date, based on the calculated fair value of the award
using the Black-Scholes option-pricing model, and is recognized as
an expense, under the straight-line method, over the requisite
service period (generally the vesting period of the equity grant).
Stock options issued to non-employees are accounted for at their
estimated fair values 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 an 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. |
| 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 available-for-sale investments, are
reported net of their related tax effect, to arrive at
comprehensive income (loss). |
| Net Loss per Share | Net Loss per Share
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 loss per common share calculations 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.
The calculations of net loss per share excluded potentially
dilutive securities (consisting of outstanding options, warrants,
restricted stock and restricted stock units) of approximately
5.8 million and 4.1 million shares as of March 31,
2016 and 2015, respectively. |
| Reclassifications | Reclassifications
In April 2015, the FASB issued an accounting standard update
which requires presentation of debt issuance costs as a direct
deduction from the carrying amount of a recognized debt liability
on the balance sheet, consistent with the treatment of debt
discounts. The update did not change the guidance on the
recognition and measurement of debt issuance costs. The Company
adopted this guidance at the beginning of fiscal 2016. Accordingly,
the Company reclassified its previously incurred debt issuance
costs to a liability as a direct deduction from the carrying value
of its notes payable, consistent with the presentation of its other
debt discounts. This accounting treatment was applied retroactively
to amounts presented in the Company’s balance sheet as of
December 31, 2015. These changes had no impact on the
Company’s previously reported results of operations. |
| Recent Accounting Pronouncements | Recent Accounting Pronouncements
In March 2016, the FASB issued amended guidance on employee
share-based payment accounting. This update involves several
aspects of the accounting for share-based payment transactions,
including income tax effects, forfeitures and classifications on
the statement of cash flows. This guidance is effective for the
fiscal year beginning January 1, 2017, and early adoption is
permitted. The Company is currently evaluating the impact of this
guidance on its financial statements.
In February 2016, the FASB issued lease guidance, which is intended
to increase the transparency and comparability among organizations
by recognizing lease assets and lease liabilities on the balance
sheet and disclosing key information about leasing arrangements. In
order to meet that objective, the new standard requires recognition
of the assets and liabilities that arise from leases. A lessee will
be required to recognize on the balance sheet the assets and
liabilities for leases with lease terms of more than
12 months. The new standard is effective for public companies
for the Company’s fiscal year beginning January 1, 2019,
and early adoption is permitted. The Company is currently
evaluating the effect that adopting this standard will have on its
financial statements and related disclosures.
In January 2016, the FASB issued new guidance which addresses
certain aspects of recognition, measurement, presentation and
disclosure of certain assets and liabilities in financial
statements. This guidance will be effective in the first quarter of
fiscal year 2018 and early adoption is not permitted. The Company
is currently evaluating the impact that this guidance will have on
its financial statements.
No other new accounting pronouncement issued or effective during
the three months ended March 31, 2016 had, or is expected to
have, a material impact on the Company’s financial
statements. |
| Fair Value Measurements | The Company holds available-for-sale securities that consist of
highly liquid, investment grade debt securities. The Company
determines the fair value of its available-for-sale 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.
The fair value of cash, cash equivalents and available-for-sale
investment securities were as follows ( in thousands
As of March 31, 2016 As of December 31,
2015
Level 1
Level 2
Level 3 Total
Level 1
Level 2
Level 3 Total
Cash and cash equivalents $ 38,347 $
— $
— $ 38,347 $ 46,383 $
— $
— $ 46,383
Short-term investments:
Commercial paper
—
—
—
—
— 7,992
— 7,992
Corporate debt securities
— 52,417
— 52,417
— 70,426
— 70,426
U.S. government and agency obligations 23,171
—
— 23,171 7,002
—
— 7,002
Total short-term investments 23,171 52,417
— 75,588 7,002 78,418
— 85,420
Long-term investments:
Corporate debt securities
— 17,216
— 17,216
— 24,356
— 24,356
U.S. government and agency obligations 20,041
—
— 20,041 15,990
—
— 15,990
Total long-term investments 20,041 17,216
— 37,257 15,990 24,356
— 40,346
Total assets at fair value $ 81,559 $ 69,633 $
— $ 151,192 $ 69,375 $ 102,774 $
— $ 172,149 |
