Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 05, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Aclaris Therapeutics, Inc. | |
Entity Central Index Key | 0001557746 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | 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 | 41,368,224 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 31,654 | $ 57,019 |
Marketable securities | 83,863 | 110,953 |
Accounts receivable, net | 19,370 | 4,861 |
Inventory | 185 | 791 |
Prepaid expenses and other current assets | 2,822 | 5,875 |
Total current assets | 137,894 | 179,499 |
Property and equipment, net | 4,241 | 4,280 |
Intangible assets | 69,781 | 72,951 |
Goodwill | 18,504 | |
Other assets | 5,323 | 332 |
Total assets | 217,239 | 275,566 |
Current liabilities: | ||
Accounts payable | 14,160 | 14,755 |
Accrued expenses | 27,597 | 11,986 |
Current portion of lease liabilities | 991 | 601 |
Total current liabilities | 42,748 | 27,342 |
Other liabilities | 5,120 | 1,703 |
Long-term debt | 29,924 | 29,914 |
Contingent consideration | 1,668 | 934 |
Deferred tax liability | 549 | 549 |
Total liabilities | 80,009 | 60,442 |
Stockholders' Equity: | ||
Preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at June 30, 2019 and December 31, 2018 | ||
Common stock, $0.00001 par value; 100,000,000 shares authorized at June 30, 2019 and December 31, 2018; 41,278,570 and 41,210,725 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | ||
Additional paid-in capital | 516,836 | 507,366 |
Accumulated other comprehensive loss | 8 | (69) |
Accumulated deficit | (379,614) | (292,173) |
Total stockholders’ equity | 137,230 | 215,124 |
Total liabilities and stockholders’ equity | $ 217,239 | $ 275,566 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 41,278,570 | 41,210,725 |
Common stock, shares outstanding | 41,278,570 | 41,210,725 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue, net | $ 5,865 | $ 3,676 | $ 10,906 | $ 4,794 |
Cost of revenue | 1,181 | 2,148 | ||
Costs and expenses: | ||||
Cost of revenue (excludes amortization) | 2,703 | 1,181 | 5,480 | 2,148 |
Research and development | 17,622 | 13,984 | 37,541 | 27,590 |
Sales and marketing | 7,177 | 12,368 | 17,008 | 23,601 |
General and administrative | 7,990 | 8,121 | 16,180 | 14,381 |
Goodwill impairment | 18,504 | 18,504 | ||
Amortization of definite-lived intangible | 1,660 | 3,319 | ||
Total costs and expenses | 55,656 | 35,654 | 98,032 | 67,720 |
Loss from operations | (49,791) | (31,978) | (87,126) | (62,926) |
Other income (expense), net | (85) | 760 | (315) | 1,479 |
Net loss | $ (49,876) | $ (31,218) | $ (87,441) | $ (61,447) |
Net loss per share, basic and diluted | $ (1.21) | $ (1.01) | $ (2.12) | $ (1.99) |
Weighted average common shares outstanding, basic and diluted (in shares) | 41,274,808 | 30,944,899 | 41,261,808 | 30,915,577 |
Other comprehensive income (loss): | ||||
Unrealized gain on marketable securities, net of tax of $0 | $ 30 | $ 111 | $ 64 | $ 46 |
Foreign currency translation adjustments | 27 | 28 | 13 | 12 |
Total other comprehensive income | 57 | 139 | 77 | 58 |
Comprehensive loss | (49,819) | (31,079) | (87,364) | (61,389) |
Product sales | ||||
Revenue, net | 4,979 | 1,533 | 8,757 | 1,533 |
Contract research | ||||
Revenue, net | $ 886 | 1,143 | $ 2,149 | 2,261 |
Other revenue | ||||
Revenue, net | $ 1,000 | $ 1,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed Consolidated Statements Of Operations And Comprehensive Loss | ||
Unrealized gain (loss) on marketable securities, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2017 | $ 384,943 | $ (246) | $ (159,435) | $ 225,262 | |
Balance at beginning of period (in shares) at Dec. 31, 2017 | 30,856,505 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of stock options and vesting of RSUs | 378 | 378 | |||
Exercise of stock options and vesting of RSUs, shares | 49,124 | ||||
Unrealized gain (loss) on marketable securities | (65) | (65) | |||
Foreign currency translation adjustment | (17) | (17) | |||
Stock-based compensation expense | 5,143 | 5,143 | |||
Net loss | (30,229) | (30,229) | |||
Balance at end of period at Mar. 31, 2018 | 390,464 | (328) | (189,664) | 200,472 | |
Balance at end of period (in shares) at Mar. 31, 2018 | 30,905,629 | ||||
Balance at beginning of period at Dec. 31, 2017 | 384,943 | (246) | (159,435) | 225,262 | |
Balance at beginning of period (in shares) at Dec. 31, 2017 | 30,856,505 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Unrealized gain (loss) on marketable securities | 46 | ||||
Net loss | (61,447) | ||||
Balance at end of period at Jun. 30, 2018 | 395,273 | (188) | (220,882) | 174,203 | |
Balance at end of period (in shares) at Jun. 30, 2018 | 30,965,296 | ||||
Balance at beginning of period at Mar. 31, 2018 | 390,464 | (328) | (189,664) | 200,472 | |
Balance at beginning of period (in shares) at Mar. 31, 2018 | 30,905,629 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of stock options and vesting of RSUs | (440) | (440) | |||
Exercise of stock options and vesting of RSUs, shares | 59,667 | ||||
Unrealized gain (loss) on marketable securities | 111 | 111 | |||
Foreign currency translation adjustment | 29 | 29 | |||
Stock-based compensation expense | 5,249 | 5,249 | |||
Net loss | (31,218) | (31,218) | |||
Balance at end of period at Jun. 30, 2018 | 395,273 | (188) | (220,882) | 174,203 | |
Balance at end of period (in shares) at Jun. 30, 2018 | 30,965,296 | ||||
Balance at beginning of period at Dec. 31, 2018 | 507,366 | (69) | (292,173) | $ 215,124 | |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 41,210,725 | 41,210,725 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of stock options and vesting of RSUs | (188) | $ (188) | |||
Exercise of stock options and vesting of RSUs, shares | 58,918 | ||||
Unrealized gain (loss) on marketable securities | 34 | 34 | |||
Foreign currency translation adjustment | (14) | (14) | |||
Stock-based compensation expense | 4,862 | 4,862 | |||
Net loss | (37,565) | (37,565) | |||
Balance at end of period at Mar. 31, 2019 | 512,040 | (49) | (329,738) | 182,253 | |
Balance at end of period (in shares) at Mar. 31, 2019 | 41,269,643 | ||||
Balance at beginning of period at Dec. 31, 2018 | 507,366 | (69) | (292,173) | $ 215,124 | |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 41,210,725 | 41,210,725 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Unrealized gain (loss) on marketable securities | $ 64 | ||||
Net loss | (87,441) | ||||
Balance at end of period at Jun. 30, 2019 | 516,836 | 8 | (379,614) | $ 137,230 | |
Balance at end of period (in shares) at Jun. 30, 2019 | 41,278,570 | 41,278,570 | |||
Balance at beginning of period at Mar. 31, 2019 | 512,040 | (49) | (329,738) | $ 182,253 | |
Balance at beginning of period (in shares) at Mar. 31, 2019 | 41,269,643 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Exercise of stock options and vesting of RSUs | (18) | (18) | |||
Exercise of stock options and vesting of RSUs, shares | 8,927 | ||||
Unrealized gain (loss) on marketable securities | 30 | 30 | |||
Foreign currency translation adjustment | 27 | 27 | |||
Stock-based compensation expense | 4,814 | 4,814 | |||
Net loss | (49,876) | (49,876) | |||
Balance at end of period at Jun. 30, 2019 | $ 516,836 | $ 8 | $ (379,614) | $ 137,230 | |
Balance at end of period (in shares) at Jun. 30, 2019 | 41,278,570 | 41,278,570 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (87,441) | $ (61,447) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,457 | 537 |
Stock-based compensation expense | 9,676 | 10,392 |
Change in fair value of contingent consideration | 734 | 866 |
Goodwill impairment charge | 18,504 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (14,509) | (1,701) |
Inventory | 606 | (1,026) |
Prepaid expenses and other assets | 1,973 | 2,345 |
Accounts payable | (583) | 4,693 |
Accrued expenses | 13,887 | 1,636 |
Net cash used in operating activities | (52,696) | (43,705) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (525) | (650) |
Purchases of marketable securities | (89,407) | (74,246) |
Proceeds from sales and maturities of marketable securities | 117,500 | 144,375 |
Net cash provided by investing activities | 27,568 | 69,479 |
Cash flows from financing activities: | ||
Finance lease payments | (240) | (335) |
Proceeds from the exercise of employee stock options | 3 | 394 |
Net cash (used in) provided by financing activities | (237) | 59 |
Net increase (decrease) in cash and cash equivalents | (25,365) | 25,833 |
Cash and cash equivalents at beginning of period | 57,019 | 20,202 |
Cash and cash equivalents at end of period | 31,654 | 46,035 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Additions to property and equipment included in accounts payable | $ 392 | 442 |
Property and equipment obtained pursuant to capital lease financing arrangements | 1,896 | |
Offering costs included in accounts payable | $ 20 |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization and Nature of Business | |
Organization and Nature of Business | 1. Organization and Nature of Business Overview Aclaris Therapeutics, Inc. was incorporated under the laws of the State of Delaware in 2012. In July 2015, Aclaris Therapeutics International Limited (“ATIL”) was established under the laws of the United Kingdom as a wholly-owned subsidiary of Aclaris Therapeutics, Inc. In March 2016, Vixen Pharmaceuticals, Inc. (“Vixen”) became a wholly-owned subsidiary of Aclaris Therapeutics, Inc., and in September 2018, Vixen was dissolved. In August 2017, Confluence Life Sciences, Inc. (now known as Aclaris Life Sciences, Inc.) (“Confluence”) was acquired by Aclaris Therapeutics, Inc. and became a wholly-owned subsidiary thereof. Aclaris Therapeutics, Inc., ATIL, Vixen and Confluence are referred to collectively as the “Company.” The Company is a physician-led biopharmaceutical company focused on immuno-inflammatory and dermatological diseases. The Company currently has two commercial products and a diverse pipeline of drug candidates. RHOFADE (oxymetazoline hydrochloride) cream, 1% (“RHOFADE”) was approved by the U.S. Food and Drug Administration (“FDA”) in January 2017 for the topical treatment of persistent facial erythema (redness) associated with rosacea in adults. The Company’s other commercial product, ESKATA (hydrogen peroxide) topical solution, 40% (w/w) (“ESKATA”), is a proprietary formulation of high-concentration hydrogen peroxide which was approved by the FDA in December 2017 as an office-based prescription treatment for raised seborrheic keratosis (“SK”), a common non-malignant skin tumor. The Company launched ESKATA in the United States in May 2018. In August 2019, the Company voluntarily discontinued the commercialization of ESKATA in the United States. The Company continues to maintain the New Drug Application (“NDA”) for ESKATA in the United States. The Company is currently seeking a strategic partner to commercialize ESKATA, both in the United States and worldwide (excluding Canada). Liquidity The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. At June 30, 2019, the Company had cash, cash equivalents and marketable securities of $115,517 and an accumulated deficit of $379,614. Since inception, the Company has incurred net losses and negative cash flows from its operations. Prior to the acquisition of Confluence in August 2017, the Company had never generated any revenue. There can be no assurance that profitable operations will ever be achieved, and, if achieved, will be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing of the Company’s drug candidates, and commercialization of the Company’s marketed product(s) will require significant additional financing. The future viability of the Company is dependent on its ability to generate cash from operating activities or to raise additional capital to finance its operations. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements of the Company include the accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly-owned subsidiaries, ATIL, Confluence and Vixen. All significant intercompany transactions have been eliminated. Based upon the combination of revenue from product sales and contract research services, the Company believes that gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations. 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 and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, variable consideration included in product sales, net, research and development expenses, contingent consideration and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates. Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of June 30, 2019, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018, the condensed consolidated statement of stockholders’ equity for the three and six months ended June 30, 2019 and 2018, and the condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 18, 2019 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2019, the results of its operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018, its changes in stockholders’ equity for the three and six months ended June 30, 2019 and 2018 and its cash flows for the six months ended June 30, 2019 and 2018. The condensed consolidated balance sheet data as of December 31, 2018 was derived from audited financial statements but does not include all disclosures required by GAAP. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2019 and 2018 are unaudited. The results for the three and six months ended June 30, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019, any other interim periods, or any future year or period. The unaudited interim financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 included in the Company’s annual report on Form 10-K filed with the SEC on March 18, 2019. Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s annual report on Form 10-K filed with the SEC on March 18, 2019. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies other than those noted below. Revenue Recognition The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition in accordance with ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) performance obligations are satisfied. At contract inception, the Company assesses the goods or services promised within a contract with a customer to identify the performance obligations, and to determine if they are distinct. The Company recognizes the revenue that is allocated to each distinct performance obligation when (or as) that performance obligation is satisfied. The Company only recognizes revenue when collection of the consideration it is entitled to under a contract with a customer is probable. Product Sales, net The Company sells RHOFADE, and during the three and six months ended June 30, 2019 and 2018 sold ESKATA, to a limited number of wholesalers in the United States (collectively, its “Customers”). These Customers subsequently resell the Company’s products to pharmacies and health care providers. In addition to distribution agreements with Customers, the Company has entered and may continue to enter into arrangements with health care providers, third-party payors, pharmacy benefit managers, and/or group purchasing organizations (“GPOs”) which provide for government mandated or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s marketed product(s). The Company discontinued selling ESKATA in August 2019. The Company recognizes revenue from product sales at the point the Customer obtains control of the product, which generally occurs upon delivery, and includes estimates of variable consideration in the same period revenue is recognized. Components of variable consideration include trade discounts and allowances, product returns, government rebates, discounts and rebates, other incentives such as patient co-pay assistance, and other fee for service amounts. Variable consideration is recorded on the condensed consolidated balance sheet as either a reduction of accounts receivable, if payable to a Customer, or as a current liability, if payable to a third party other than a Customer. The Company considers all relevant information when estimating variable consideration such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of net revenue the Company can recognize is constrained by estimates of variable consideration which are included in the transaction price. Payment terms with Customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. The Company expenses incremental costs of obtaining a contract with a Customer, including sales commissions, when incurred as the period of benefit is less than one year. Shipping and handling costs for product shipments to Customers are recorded as sales and marketing expenses in the condensed consolidated statement of operations. Trade Discounts and Allowances - The Company may provide Customers with trade discounts, rebates, allowances or other incentives. The Company records an estimate for these items as a reduction of revenue in the same period the revenue is recognized. Government and Payor Rebates - The Company has contracted and may continue to contract with certain third-party payors, primarily health insurance companies, pharmacy benefit managers and/or government programs, for the payment of rebates with respect to utilization of its marketed product(s). The Company also has agreements with GPOs that provide for administrative fees and discounted pricing in the form of volume-based rebates. The Company is also subject to discount obligations under state Medicaid programs and Medicare. The Company records an estimate for these rebates as a reduction of revenue in the same period the revenue is recognized. Other Incentives - Other incentives includes the Company’s co-pay assistance program which is intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors. The Company estimates and records an accrual for these incentives as a reduction of revenue in the period the revenue is recognized. The Company estimates amounts for co-pay assistance based upon the number of claims and the cost per claim that the Company expects to receive associated with product that has been sold to Customers but remains in the distribution channel at the end of each reporting period. Product Returns - Consistent with industry practice, the Company has a product returns policy that provides Customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The right of return lapses upon shipment of the goods to a patient. The Company records an estimate for the amount of its products which may be returned as a reduction of revenue in the period the related revenue is recognized. The Company’s estimates for product returns are based upon available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. There is no returns liability associated with sales of ESKATA as the Company has a no returns policy for this product. Product sales, net consisted of the following: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 ESKATA $ 272 $ 1,533 $ 344 $ 1,533 RHOFADE 4,707 — 8,413 — Total product sales, net $ 4,979 $ 1,533 $ 8,757 $ 1,533 Contract Research The Company earns contract research revenue from the provision of laboratory services to clients through Confluence, its wholly-owned subsidiary. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis and are generally billed on a monthly basis in arrears for services rendered. Revenue related to these contracts is generally recognized as the laboratory services are performed, based upon the rates specified in the contracts. Under ASC Topic 606, the Company elected to apply the “right to invoice” practical expedient when recognizing contract research revenue. The Company recognizes contract research revenue in the amount to which it has the right to invoice. The Company has also received revenue from grants under the Small Business Innovation Research program of the National Institutes of Health (“NIH”). During the six months ended June 30, 2018, the Company had two active grants from NIH which were related to early-stage research. There are no remaining funds available to the Company under the grants. The Company recognizes revenue related to grants as amounts become reimbursable under each grant, which is generally when research is performed, and the related costs are incurred. Other Revenue Licenses of Intellectual Property – The Company recognizes revenue received from non-refundable, upfront fees related to the licensing of intellectual property when the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the license has been transferred to the customer, and the customer is able to use and benefit from the license. Milestone Payments - At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the amount allocated to the license of intellectual property. Milestone payments that are not within the control of the Company or the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. Inventory Inventory includes the third-party cost of manufacturing and assembly of finished product, quality control and other overhead costs. Inventory is stated at the lower of cost or net realizable value. Inventory is adjusted for short-dated, unmarketable inventory equal to the difference between the cost of inventory and the estimated value based upon assumptions about future demand and market conditions. The Company had $185 and $791 of inventory as of June 30, 2019 and December 31, 2018, respectively, which was comprised primarily of finished goods. Intangible Assets Intangible assets include both finite-lived and indefinite-lived assets. Finite-lived intangible assets are amortized over their estimated useful life based on the pattern over which the intangible assets are consumed or otherwise used up. If that pattern cannot be reliably determined, the straight-line method of amortization is used. Finite-lived intangible assets consist of a research technology platform the Company acquired through the acquisition of Confluence and the intellectual property rights related to RHOFADE. Indefinite-lived intangible assets consist of an in-process research and development (“IPR&D”) drug candidate acquired through the acquisition of Confluence. IPR&D assets are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. The cost of IPR&D assets is either amortized over their estimated useful life beginning when the underlying drug candidate is approved and launched commercially, or expensed immediately if development of the drug candidate is abandoned. Finite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present. The Company recognizes impairment losses when and to the extent that the estimated fair value of an indefinite-lived intangible asset is less than its carrying value. Goodwill Goodwill is not amortized, but rather is subject to testing for impairment at least annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present. The Company considers each of its operating segments, dermatology therapeutics and contract research, to be a reporting unit since this is the lowest level for which discrete financial information is available. The Company attributed the full amount of the goodwill acquired with Confluence, or $18,504, to the dermatology therapeutics segment. The annual impairment test performed by the Company is a qualitative assessment based upon current facts and circumstances related to operations of the dermatology therapeutics segment. If the qualitative assessment indicates an impairment may be present, the Company would perform the required quantitative analysis and an impairment charge would be recognized to the extent that the estimated fair value of the reporting unit is less than its carrying amount. However, any loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. During the three months ended June 30, 2019, the Company performed an interim impairment analysis due to the decline in its stock price, which was considered a triggering event to evaluate goodwill for impairment. The Company’s impairment analysis, using a market approach, noted that its stock price, including a reasonable control premium, resulted in a fair value for the dermatology therapeutics reporting unit which was less than its carrying value. As a result, the Company recorded an impairment charge of $18,504, the full balance of goodwill, in the three months ended June 30, 2019. Leases Leases represent a company’s right to use an underlying asset and a corresponding obligation to make payments to a lessor for the right to use those assets. The Company evaluates leases at their inception to determine if they are an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows are substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. The Company recognizes assets and liabilities for leases at their inception based upon the present value of all payments due under the lease. The Company uses an implicit interest rate to determine the present value of finance leases, and its incremental borrowing rate to determine the present value of operating leases. The Company determines incremental borrowing rates by referencing collateralized borrowing rates for debt instruments with terms similar to the respective lease. The Company recognizes expense for operating and finance leases on a straight-line basis over the term of each lease, and interest expense related to finance leases is recognized over the lease term based on the effective interest method. The Company includes estimates for any residual value guarantee obligations under its leases in lease liabilities recorded on its condensed consolidated balance sheet. Right-of-use assets are included in other assets and property and equipment, net on the Company’s condensed consolidated balance sheet for operating and finance leases, respectively. Obligations for lease payments are included in current portion of lease liabilities and other liabilities on the Company’s condensed consolidated balance sheet for both operating and finance leases. Contingent Consideration The Company initially recorded the contingent consideration related to future potential payments based upon the achievement of certain development, regulatory and commercial milestones, resulting from the acquisition of Confluence, at its estimated fair value on the date of acquisition. Changes in fair value reflect new information about the likelihood of the payment of the contingent consideration and the passage of time. Future changes in the fair value of the contingent consideration, if any, will be recorded as income or expense in the Company’s condensed consolidated statement of operations. Concentration of Credit Risk and of Significant Customers and Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company holds all cash, cash equivalents and marketable securities balances at one accredited financial institution, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s top five customers represented 94% of aggregate gross revenues from product sales and contract research revenue for the six months ended June 30, 2019. The Company’s top five customers represented 87% of aggregate gross revenues from product sales and contract research revenue for the six months ended June 30, 2018. The Company currently relies on Allergan Sales, LLC (“Allergan”) to distribute RHOFADE on its behalf pursuant to the terms of a transition services agreement. Accounts receivable, net as of June 30, 2019 and December 31, 2018 included $18,532 and $4,298, respectively, related to amounts invoiced by Allergan for sales of RHOFADE pursuant to the terms of the transition services agreement. The Company is dependent on third-party manufacturers to supply products for commercial distribution, as well as for research and development activities, including preclinical and clinical testing. These activities could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and other components. Recently Issued Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of ASU 2018-18 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years, with early adoption permitted. The Company is evaluating the impact of ASU 2018-15 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The FASB developed the amendments to ASC 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. This update eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some of the existing disclosure requirements. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years, with early adoption permitted. The Company is evaluating the impact of ASU 2018-13 on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718). The amendments in this ASU expand the scope of Topic 718 to include stock-based compensation arrangements with nonemployees except for specific guidance on option pricing model inputs and cost attribution. ASU 2018-07 is effective for annual reporting periods beginning after December 31, 2018, including interim periods within that year. The Company adopted the provisions of this standard on January 1, 2019, the impact of which on its consolidated financial statements was not significant. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, and 2018-11, Targeted Improvements, which included a number of technical corrections and improvements, including additional options for transition. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. The amendments in ASU 2016-02 must be applied to all leases existing at the date a company initially applies the standard. The Company adopted the new standard on January 1, 2019, using the effective date as the date of its initial application, and used the modified retrospective approach. In addition, the Company elected the practical expedients permitted under the transition guidance within the new standard which, among other things, allowed the Company to carry forward the historical lease identification and classification. The Company also elected the practical expedient to not separate lease and non-lease components, as well as the short-term lease practical expedient which allowed the Company to not capitalize leases with terms less than 12 months that do not contain a reasonably certain purchase option. The Company’s consolidated financial statements have not been restated, and disclosures required by the new standard have not been provided, for periods before January 1, 2019. The adoption of ASU 2016-02 resulted in recording additional assets and liabilities of $2,132 and $2,317, respectively upon adoption on January 1, 2019. The adoption of ASU 2016-02 did not have a material impact on the Company’s consolidated statement of operations or cash flows. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value of Financial Assets and Liabilities | |
Fair Value of Financial Assets and Liabilities | 3. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values: June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 20,226 $ — $ — $ 20,226 Marketable securities — 83,863 — 83,863 Total assets $ 20,226 $ 83,863 $ — $ 104,089 Liabilities: Acquisition-related contingent consideration $ — $ — $ 1,668 $ 1,668 Total liabilities $ — $ — $ 1,668 $ 1,668 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 49,766 $ 4,992 $ — $ 54,758 Marketable securities — 110,953 — 110,953 Total assets $ 49,766 $ 115,945 $ — $ 165,711 Liabilities: Acquisition-related contingent consideration $ — $ — $ 934 $ 934 Total liabilities $ — $ — $ 934 $ 934 As of June 30, 2019 and December 31, 2018, the Company’s cash equivalents consisted of investments with maturities of less than three months and included a money market fund and commercial paper, which were valued based upon Level 1 inputs. The Company’s marketable securities consisted of investments with maturities of more than three months and included commercial paper, corporate debt and government obligations, which were valued based upon Level 2 inputs. In determining the fair value of its Level 2 investments the Company relied on quoted prices for identical securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third-party pricing service based on available trade, bid and other observable market data for identical securities. On a quarterly basis, the Company compares the quoted prices obtained from the third-party pricing service to other available independent pricing information to validate the reasonableness of those quoted prices. The Company evaluates whether adjustments to third-party pricing is necessary and, historically, the Company has not made adjustments to the quoted prices obtained from the third-party pricing service. During the six months ended June 30, 2019 and the year ended December 31, 2018, there were no transfers between Level 1, Level 2 and Level 3. The change in acquisition-related contingent consideration related to Confluence of $734 was the result of updates to the Company’s assumptions as a result of the filing of an Investigational New Drug Application (“IND”) for ATI-450 during the six months ended June 30, 2019. The following tables present the fair value of the Company’s available for sale marketable securities by type of security: June 30, 2019 Gross Gross Amortized Unrealized Unrealized Fair Cost Gain Loss Value Marketable securities: Corporate debt securities $ 16,872 $ 20 $ — $ 16,892 Commercial paper 25,834 — — 25,834 Asset-backed securities 18,646 9 — 18,655 U.S. government agency debt securities 22,472 10 — 22,482 Total marketable securities $ 83,824 $ 39 $ — $ 83,863 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gain Loss Value Marketable securities: Corporate debt securities $ 5,030 $ — $ (14) $ 5,016 Commercial paper 67,159 — — 67,159 Asset-backed securities 21,745 — (8) 21,737 U.S. government agency debt securities 17,044 — (3) 17,041 Total marketable securities $ 110,978 $ — $ (25) $ 110,953 |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net consisted of the following: June 30, December 31, 2019 2018 Computer equipment $ 1,360 $ 1,292 Fleet vehicles — 2,131 Finance lease right-of-use assets 2,557 — Manufacturing equipment 607 604 Lab equipment 994 1,068 Furniture and fixtures 852 524 Leasehold improvements 336 332 Property and equipment, gross 6,706 5,951 Accumulated depreciation (2,465) (1,671) Property and equipment, net $ 4,241 $ 4,280 Depreciation expense was $394 and $296 for the three months ended June 30, 2019 and 2018, respectively, and was $795 and $499 for the six months ended June 30, 2019 and 2018, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Intangible Assets | 5. Intangible Assets Intangible assets consisted of the following: Gross Cost Accumulated Amortization Remaining June 30, December 31, June 30, December 31, Life (years) 2019 2018 2019 2018 RHOFADE product rights 9.4 $ 66,415 $ 66,229 $ 3,871 $ 552 Other intangible assets 8.1 751 751 143 106 Total definite-lived intangible assets 67,166 66,980 4,014 658 IPR&D na 6,629 6,629 — — Total intangible assets, net $ 73,795 $ 73,609 $ 4,014 $ 658 Amortization expense was $1,679 and $0 for the three months ended June 30, 2019 and 2018, respectively, and was $3,356 and $0 for the six months ended June 30, 2019 and 2018, respectively. As of June 30, 2019, estimated future amortization expenses are as follows: Year Ending December 31, 2019 $ 3,360 2020 6,717 2021 6,718 2022 6,717 2023 6,718 Thereafter 32,922 Total $ 63,152 |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Expenses | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses consisted of the following: June 30, December 31, 2019 2018 Employee compensation expenses $ 3,660 $ 5,293 Sales discounts and allowances 18,415 2,650 Selling and marketing expenses 741 453 Research and development expenses 2,036 1,437 Professional fees 407 1,123 Other 2,338 1,030 Total accrued expenses $ 27,597 $ 11,986 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt | |
Debt | 7. Debt Loan and Security Agreement – Oxford Finance LLC In October 2018, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Oxford Finance LLC, a Delaware limited liability company (“Oxford”). The Loan Agreement provided for up to $65,000 in term loans (the “Term Loan Facility”). Of the $65,000, the Company borrowed $30,000 in October 2018, all of which was outstanding as of June 30, 2019, and did not draw the remaining $35,000 that was available until March 31, 2019 under the Loan Agreement. The Loan Agreement provides for interest only payments through November 2021, followed by 24 consecutive equal monthly payments of principal and interest in arrears starting on November 2021 and continuing through the maturity date of October 2023. All unpaid principal and accrued and unpaid interest will be due and payable on the maturity date. The Loan Agreement provides for an annual interest rate equal to the greater of (i) 8.35% and (ii) the 30-day U.S. LIBOR rate plus 6.25%. The Loan Agreement also provides for a final payment fee equal to 5.75% of the original principal amount of the term loans drawn under the Term Loan Facility, which final payment is due on October 1, 2023 or upon the prepayment of the facility or the acceleration of amounts due under the facility as a result of an event of default. The Company has the option to prepay the outstanding balance of the term loans in full, subject to a prepayment fee of (i) 3% of the original principal amount of the aggregate term loans drawn for any prepayment prior to the first anniversary of the date such term loan was funded, (ii) 2% of the original principal amount of the aggregate term loans drawn for any prepayment between the first and second anniversaries of the date such term loan was funded or (iii) 1% of the original principal amount of the aggregate term loans drawn for any prepayment after the second anniversary of the funding date but before October 1, 2023. The Company also has the option to prepay the term loans in part, once in a three-month period, of an amount of $2,000 or greater, subject to the same prepayment fees and other specified limitations. The Term Loan Facility is collateralized by substantially all of the Company’s assets, except that the collateral does not include the Company’s intellectual property, and the Company has agreed not to encumber any of its intellectual property. The Loan Agreement contains customary representations, warranties and covenants by the Company. The Loan Agreement also contains specified financial covenants related to minimum consolidated future revenues of the Company. The carrying value of the Loan Agreement approximates fair value because the interest is a floating rate based on the 30-day U.S. LIBOR rate, and is therefore reflective of market rates. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | 8. Stockholders’ Equity Preferred Stock As of June 30, 2019 and December 31, 2018, the Company’s amended and restated certificate of incorporation authorized the Company to issue 10,000,000 shares of undesignated preferred stock. No shares of preferred stock were outstanding as of June 30, 2019 or December 31, 2018. Common Stock As of June 30, 2019 and December 31, 2018, the Company’s amended and restated certificate of incorporation authorized the Company to issue 100,000,000 shares of $0.00001 par value common stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to any preferential dividend rights of any series of preferred stock that may be outstanding. The Company did not declare any dividends through June 30, 2019. |
Stock-Based Awards
Stock-Based Awards | 6 Months Ended |
Jun. 30, 2019 | |
Stock-Based Awards | |
Stock-Based Awards | 9. Stock‑Based Awards 2017 Inducement Plan In July 2017, the Company’s board of directors adopted the 2017 Inducement Plan (the “2017 Inducement Plan”). The 2017 Inducement Plan is a non-shareholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The only employees eligible to receive grants of awards under the 2017 Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq listing rules, generally including individuals who were not previously an employee or director of the Company. Under the terms of the 2017 Inducement Plan, up to 1,000,000 shares of common stock were available for issuance pursuant to nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, and other stock awards. All shares of common stock that were eligible for issuance under the 2017 Inducement Plan after October 1, 2018, including any shares underlying any awards that expire or are otherwise terminated, reacquired to satisfy tax withholding obligations, settled in cash or repurchased by the Company in the future that would have been eligible for re-issuance under the 2017 Inducement Plan, were retired. 2015 Equity Incentive Plan In September 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), and the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the Company’s initial public offering in October 2015. Beginning at the time the 2015 Plan became effective, no further grants may be made under the Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, performance stock awards, cash-based awards and other stock-based awards. The number of shares initially reserved for issuance under the 2015 Plan was 1,643,872 shares of common stock. The number of shares of common stock that may be issued under the 2015 Plan will automatically increase on January 1 of each year ending on January 1, 2025, in an amount equal to the lesser of (i) 4.0% of the shares of the Company’s common stock outstanding on December 31 of the preceding calendar year or (ii) an amount determined by the Company’s board of directors. The shares of common stock underlying any awards that expire, are otherwise terminated, settled in cash or repurchased by the Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance under the 2015 Plan. As of January 1, 2019, the number of shares of common stock that may be issued under the 2015 Plan was automatically increased by 1,648,429 shares. As of June 30, 2019, 1,975,820 shares remained available for grant under the 2015 Plan. 2012 Equity Compensation Plan Upon the 2015 Plan becoming effective, no further grants can be made under the 2012 Plan. The Company granted stock options to purchase a total of 1,140,524 shares under the 2012 Plan, of which 945,200 and 948,761 were outstanding as of June 30, 2019 and December 31, 2018, respectively. Stock options granted under the 2012 Plan vest over four years and expire after ten years. As required, the exercise price for the stock options granted under the 2012 Plan was not less than the fair value of the shares of common stock underlying the awards as determined by the Company as of the date of grant. Stock Option Valuation The weighted average assumptions the Company used to estimate the fair value of stock options granted were as follows: Six Months Ended June 30, 2019 2018 Risk-free interest rate 2.53 % 2.63 % Expected term (in years) 6.3 6.3 Expected volatility 101.70 % 95.78 % Expected dividend yield 0 % 0 % The Company recognizes compensation expense for awards over their vesting period. Compensation expense for awards includes the impact of forfeitures in the period when they occur. Stock Options The following table summarizes stock option activity from January 1, 2019 through June 30, 2019: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (in years) Outstanding as of December 31, 2018 4,282,081 $ 20.53 7.91 $ 2,404 Granted 28,500 7.66 Exercised (1,800) 1.52 Forfeited and cancelled (298,358) 24.08 Outstanding as of June 30, 2019 4,010,423 $ 20.18 7.23 $ 345 Options vested and expected to vest as of June 30, 2019 4,010,423 $ 20.18 7.23 $ 345 Options exercisable as of June 30, 2019 2,207,189 (1) $ 17.54 6.46 $ 345 (1) All options granted under the 2012 Plan are exercisable immediately, subject to a repurchase right in the Company’s favor that lapses as the options vest. This amount reflects the number of shares under options that were vested, as opposed to exercisable. The weighted average grant date fair value of stock options granted during the six months ended June 30, 2019 was $6.22 per share. The intrinsic value of a stock option is calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock, and cannot be less than zero. Restricted Stock Units The following table summarizes RSU activity from January 1, 2019 through June 30, 2019: Weighted Average Grant Date Number Fair Value of Shares Per Share Outstanding as of December 31, 2018 626,407 $ 20.30 Granted 1,517,042 6.27 Vested (96,252) 22.02 Forfeited and cancelled (87,610) 13.37 Outstanding as of June 30, 2019 1,959,587 $ 9.67 Stock‑Based Compensation The following table summarizes stock‑based compensation expense recorded by the Company: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of revenue $ 223 $ 190 $ 429 $ 366 Research and development 1,721 1,756 3,315 3,483 Sales and marketing 216 1,020 806 1,927 General and administrative 2,654 2,283 5,126 4,616 Total stock-based compensation expense $ 4,814 $ 5,249 $ 9,676 $ 10,392 As of June 30, 2019, the Company had unrecognized stock‑based compensation expense for stock options and RSUs of $24,719 and $15,151, respectively, which is expected to be recognized over weighted average periods of 2.15 years and 3.10 years, respectively. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2019 | |
Net Loss per Share | |
Net Loss per Share | 10. Net Loss per Share Basic and diluted net loss per share is summarized in the following table: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net loss $ (49,876) $ (31,218) $ (87,441) $ (61,447) Denominator: Weighted average shares of common stock outstanding 41,274,808 30,944,899 41,261,808 30,915,577 Net loss per share, basic and diluted $ (1.21) $ (1.01) $ (2.12) $ (1.99) The Company’s potentially dilutive securities, which included stock options and RSUs, have been excluded from the computation of diluted net loss per share since the effect would be to reduce the net loss per share. Therefore, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same. The following table presents potential shares of common stock excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2019 and 2018. All share amounts presented in the table below represent the total number outstanding as of June 30, 2019 and 2018. June 30, 2019 2018 Options to purchase common stock 4,010,423 4,315,942 Restricted stock unit awards 1,959,587 532,756 Total potential shares of common stock 5,970,010 4,848,698 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | 11. Leases The Company has operating leases for office space and laboratory facilities, and finance leases for fleet vehicles leased for its sales force and laboratory equipment. The components of lease expense were as follows: Six Months Ended June 30, 2019 Operating lease expense $ 302 Finance Leases: Amortization of right-to-use assets $ 313 Interest expense 67 Total finance lease expenses $ 380 During the three and six months ended June 30, 2018 the Company recorded $201 and $478, respectively, of rent expense which was recognized on a straight-line basis over the term of the lease. Operating Leases Agreements for Office Space In November 2017, the Company entered into a sublease agreement with Auxilium Pharmaceuticals, LLC (the “Sublandlord”) pursuant to which it subleases 33,019 square feet of office space for its headquarters in Wayne, Pennsylvania. Subject to the consent of Chesterbrook Partners, LP (“Landlord”) as set forth in the lease by and between them and Sublandlord, the sublease has a term that runs through October 2023. If for any reason the lease between the Landlord and Sublandlord is terminated or expires prior to October 2023, the Company’s sublease will automatically terminate. In February 2019, the Company entered into a sublease agreement with a third party for 21,056 square feet of office and laboratory space in St. Louis, Missouri with total future total rent payments of $3,538. The Company has also agreed to pay $1,472 of the total renovation and improvement costs incurred by the landlord, which is collateralized by a standby letter of credit held by the Company. The lease commenced in June 2019 and has a term that runs through June 2029. Supplemental balance sheet information related to operating leases is as follows: June 30, Operating Leases: 2019 Gross cost $ 5,207 Accumulated amortization (177) Operating lease right-of-use assets $ 5,030 Other current liabilities $ 488 Other liabilities 3,794 Total operating lease liabilities $ 4,282 Finance Leases Laboratory Equipment The Company leases laboratory equipment which is used in its laboratory space in St. Louis, Missouri under two lease financing arrangements which the Company entered into in August 2017 and October 2017, respectively. The leases have terms which end in October 2020 and December 2020, respectively. Fleet Vehicles The Company leases automobiles for its sales force and other field-based employees under the terms of a master lease agreement with a third party. The lease term for each automobile begins on the date the Company takes delivery and continues for a period of four years. Supplemental balance sheet information related to finance leases is as follows: June 30, Finance Leases: 2019 Property and equipment, gross $ 2,557 Accumulated depreciation (763) Property and equipment, net $ 1,794 Other current liabilities $ 503 Other liabilities 1,173 Total finance lease liabilities $ 1,676 Supplemental information related to operating and finance leases is as follows: Six Months Ended June 30, Supplemental Cash Flow Lease Information: 2019 Operating cash flows from operating leases $ 309 Operating cash flows from finance leases 61 Financing cash flows from finance leases 240 Leased assets obtained in exchange for new operating lease liabilities $ 3,060 Weighted-Average Remaining Lease Term (in years): Operating leases Finance leases Weighted-Average Discount Rate: Operating leases % Finance leases % Future maturities of lease liabilities under operating and finance leases as of June 30, 2019 are as follows: Operating Finance Year Ending December 31, Leases Leases 2019 $ 419 $ 295 2020 909 567 2021 934 448 2022 959 180 2023 877 — Thereafter 2,024 — Total undiscounted lease payments 6,122 1,490 Less: unrecognized interest Plus: residual value guarantees — Total lease liability $ 4,282 $ 1,676 The undiscounted lease payments presented in the table above are consistent with the future minimum lease payments disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 18, 2019 under the prior lease guidance. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions Sublease In August 2013, the Company entered into a sublease agreement with NeXeption, Inc. ("NeXeption"), which was subsequently assigned to NST Consulting, LLC, a wholly-owned subsidiary of NST, LLC. In November 2017, the Company terminated the sublease with NST Consulting, LLC effective March 31, 2018. The Company paid $590 to NST Consulting, LLC, which amount represented accelerated rent payments. Total payments made under the sublease during the six months ended June 30, 2019 and 2018 were $0 and $570, respectively. Mr. Stephen Tullman, the former chairman of the Company’s board of directors, was an executive officer of NeXeption and is also the manager of NST Consulting, LLC and NST, LLC, and three of the Company’s executive officers are and have been members of entities affiliated with NST, LLC. The Company had no amounts payable to NST Consulting, LLC as of June 30, 2019 and December 31, 2018. Asset Purchase Agreement with Allergan In November 2018, the Company closed the acquisition of RHOFADE, which includes an exclusive license to certain intellectual property for RHOFADE, as well as additional intellectual property, from Allergan pursuant to the terms of the Asset Purchase Agreement dated as of October 15, 2018 (as amended, the “Asset Purchase Agreement”). Pursuant to the Asset Purchase Agreement, the Company has agreed to assume the obligation to pay specified royalties and milestone payments under agreements with Aspect Pharmaceuticals, LLC and Vicept Therapeutics, Inc. Members of the Company’s management team, including Neal Walker, Frank Ruffo and Stuart Shanler, as well as Anand Mehra, a member of the Company’s board of directors, are former stockholders of Vicept Therapeutics, Inc., and Dr. Shanler is also a current member of Aspect Pharmaceuticals, LLC . In their capacities as current or former holders of equity interests in these entities, these individuals may be entitled to receive a portion of the potential future payments payable by the Company. For the six months ended June 30, 2019, the Company incurred an expense of $379 and $0 related to royalties and milestones earned by Aspect Pharmaceuticals, LLC and Vicept Therapeutics, Inc., respectively, under those agreements. |
Agreements Related to Intellect
Agreements Related to Intellectual Property | 6 Months Ended |
Jun. 30, 2019 | |
Agreements Related to Intellectual Property | |
Agreements Related to Intellectual Property | 13. Agreements Related to Intellectual Property Asset Purchase Agreement – Allergan Sales, LLC In November 2018, the Company closed the acquisition of RHOFADE from Allergan pursuant to the Asset Purchase Agreement (see Note 12). The Company is obligated to pay Allergan specified royalties, ranging from a mid-single digit percentage to a mid-teen percentage of net sales, subject to specified reductions, limitations and other adjustments, on a country-by-country basis until the date that the patent rights related to RHOFADE have expired or, if later, November 30, 2028. The Company incurred royalties earned by Allergan under the Asset Purchase Agreement of $ 471 and $0 during the three months ended June 30, 2019 and 2018, respectively, and $ 842 and $0 during the six months ended June 30, 2019 and 2018, respectively. The Company also agreed to pay Allergan a one-time payment of $5,000 upon the achievement of a specified development milestone related to the potential development of an additional dermatology product. License, Development and Commercialization Agreement – Cipher Pharmaceuticals Inc. In April 2018, the Company entered into an exclusive license agreement with Cipher Pharmaceuticals Inc. (“Cipher”) for the rights to obtain regulatory approval of and commercialize A-101 40% Topical Solution, which the Company markets under the brand name ESKATA in the United States, in Canada for the treatment of SK. Under the agreement, Cipher is responsible for obtaining marketing approval in Canada for A-101 40% Topical Solution. The Company will supply Cipher with finished product under a supply agreement, and, if regulatory approval is obtained, Cipher will be responsible for distribution and commercialization of A-101 40% Topical Solution in Canada. Additionally, Cipher is responsible for all expenses related to regulatory and commercial activities for A-101 40% Topical Solution in Canada. In April 2018, the Company received an upfront payment of $1,000 upon signing of the agreement and in October 2018, the Company received $500 upon the achievement of a specified regulatory milestone. The Company can earn a remaining payment of $500 upon the achievement of a specified regulatory milestone, and aggregate payments of $1,750 upon the achievement of specified commercial milestones under the terms of the agreement with Cipher. Cipher will also be required to pay the Company a low double-digit percentage royalty on net sales of A-101 40% Topical Solution in Canada. The term of the agreement expires on the later of the expiration of applicable patents in Canada or the 15 th anniversary of the first commercial sale of licensed product in Canada. Cipher submitted a New Drug Submission for A-101 40% Topical Solution for the treatment of raised SKs, which was accepted for review by Health Canada in December 2018. Assignment Agreement – Estate of Mickey Miller and Finder’s Services Agreement – KPT Consulting, LLC In August 2012, the Company entered into an assignment agreement with the Estate of Mickey Miller (the “Miller Estate”), under which the Company acquired some of the intellectual property rights covering ESKATA and A-101 45% Topical Solution. In connection with obtaining the assignment of the intellectual property from the Miller Estate, the Company also entered into a separate finder’s services agreement with KPT Consulting, LLC. Under the terms of the finder’s services agreement, the Company made a milestone payment of $1,000 upon the achievement of a specified regulatory milestone in April 2017 and a milestone payment of $1,500 upon the achievement of a specified commercial milestone in May 2018. The payments were recorded as general and administrative expenses in the Company’s condensed consolidated statement of operations. Under the finder’s services agreement, the Company is obligated to make an additional milestone payment of $3,000 upon the achievement of a specified commercial milestone. Under each of the assignment agreement and the finder’s services agreement, the Company is also obligated to pay royalties on sales of ESKATA and any related products, at low single-digit percentages of net sales, subject to reduction in specified circumstances. During the six months ended June 30, 2019 and 2018, the Company incurred an aggregate expense of $14 and $0, respectively, related to royalty payments under these agreements. Both agreements will terminate upon the expiration of the last pending, viable patent claim of the patents acquired under the assignment agreement, but no sooner than 15 years from the effective date of the agreements. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Income Taxes | 14. Income Taxes The Company did not record a federal or state income tax benefit for losses incurred during the six months ended June 30, 2019 and 2018 due to the Company’s conclusion that a valuation allowance was required for those periods. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Segment Information | 15. Segment Information The Company has two reportable segments, dermatology therapeutics and contract research. The dermatology therapeutics segment is focused on identifying, developing and commercializing innovative therapies to address significant unmet needs for immuno-inflammatory and dermatological diseases. The Company currently markets and sells RHOFADE, which is a topical treatment for persistent facial erythema, or redness, associated with rosacea in adults. The Company sells RHOFADE to a limited number of wholesalers in the United States. These wholesalers subsequently resell RHOFADE to pharmacies and health care providers. The Company sold and marketed ESKATA in the United States during the six months ended June 30, 2019 and 2018 and subsequently discontinued sales and marketing of ESKATA in August 2019. ESKATA is a proprietary formulation of high-concentration hydrogen peroxide topical solution that the Company was marketing as an office-based prescription treatment for raised SKs. The contract research segment earns revenue from the provision of laboratory services to clients through Confluence, the Company’s wholly-owned subsidiary. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis. Corporate and other includes general and administrative expenses as well as eliminations of intercompany transactions. The Company does not report balance sheet information by segment since it is not reviewed by the chief operating decision maker, and all of the Company’s tangible assets are held in the United States. The Company’s results of operations by segment for the three and six months ended June 30, 2019 and 2018 are summarized in the tables below: Dermatology Contract Corporate Total Three Months Ended June 30, 2019 Therapeutics Research and Other Company Revenue, net $ 4,979 $ 3,807 $ (2,921) $ 5,865 Cost of revenue (excludes amortization) 1,709 3,819 (2,825) 2,703 Research and development 17,718 — (96) 17,622 Sales and marketing 7,164 13 — 7,177 General and administrative — 600 7,390 7,990 Goodwill impairment 18,504 — — 18,504 Amortization of definite-lived intangible 1,660 — — 1,660 Loss from operations $ (41,776) $ (625) $ (7,390) $ (49,791) Dermatology Contract Corporate Total Three Months Ended June 30, 2018 Therapeutics Research and Other Company Revenue, net $ 2,533 $ 3,053 $ (1,910) $ 3,676 Cost of revenue 152 2,621 (1,592) 1,181 Research and development 13,984 — — 13,984 Sales and marketing 12,360 8 — 12,368 General and administrative — 521 7,600 8,121 Loss from operations $ (23,963) $ (97) $ (7,918) $ (31,978) Dermatology Contract Corporate Total Six Months Ended June 30, 2019 Therapeutics Research and Other Company Revenue, net $ 8,757 $ 8,995 $ (6,846) $ 10,906 Cost of revenue (excludes amortization) 3,279 8,856 (6,655) 5,480 Research and development 37,732 — (191) 37,541 Sales and marketing 16,976 32 — 17,008 General and administrative — 1,113 15,067 16,180 Goodwill impairment 18,504 — — 18,504 Amortization of definite-lived intangible 3,319 — — 3,319 Loss from operations $ (71,053) $ (1,006) $ (15,067) $ (87,126) Dermatology Contract Corporate Total Six Months Ended June 30, 2018 Therapeutics Research and Other Company Revenue, net $ 2,533 $ 5,554 $ (3,293) $ 4,794 Cost of revenue 152 4,740 (2,744) 2,148 Research and development 27,590 — — 27,590 Sales and marketing 23,581 20 — 23,601 General and administrative — 992 13,389 14,381 Loss from operations $ (48,790) $ (198) $ (13,938) $ (62,926) Intersegment Revenue Revenue for the contract research segment included $2,921 and $1,910 for services performed on behalf of the dermatology therapeutics segment for the three months ended June 30, 2019 and 2018, respectively, and $6,846 and $3,293 for the six months ended June 30, 2019 and 2018, respectively. All intersegment revenue has been eliminated in the Company’s condensed consolidated statement of operations. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events Linda Rosi v. Aclaris Therapeutics, Inc. et al . On July 30, 2019, plaintiff Linda Rosi (the “Plaintiff”) filed a purported class action complaint in the U.S. District Court for the Southern District of New York against the Company and certain of its executive officers (the “Defendants”), alleging violations by the Defendants of certain federal securities laws. Plaintiff alleges that the Defendants made misleading statements to investors about the Company’s business, operations and prospects and failed to disclose an alleged likelihood that regulators would scrutinize advertising materials related to ESKATA and find that the materials minimized the risks or overstated the efficacy of the product. Plaintiff is seeking unspecified compensatory damages on behalf of herself and all persons and entities that purchased or otherwise acquired the Company’s securities between May 8, 2018, and June 20, 2019. Defendants dispute the Plaintiff’s claims and intend to defend the matter vigorously. The Company is unable to determine any potential liability or financial exposure which may be associated with this matter at this time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements of the Company include the accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly-owned subsidiaries, ATIL, Confluence and Vixen. All significant intercompany transactions have been eliminated. Based upon the combination of revenue from product sales and contract research services, the Company believes that gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations. |
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 and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, variable consideration included in product sales, net, research and development expenses, contingent consideration and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of June 30, 2019, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018, the condensed consolidated statement of stockholders’ equity for the three and six months ended June 30, 2019 and 2018, and the condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 18, 2019 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2019, the results of its operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018, its changes in stockholders’ equity for the three and six months ended June 30, 2019 and 2018 and its cash flows for the six months ended June 30, 2019 and 2018. The condensed consolidated balance sheet data as of December 31, 2018 was derived from audited financial statements but does not include all disclosures required by GAAP. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2019 and 2018 are unaudited. The results for the three and six months ended June 30, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019, any other interim periods, or any future year or period. The unaudited interim financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 included in the Company’s annual report on Form 10-K filed with the SEC on March 18, 2019. |
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s annual report on Form 10-K filed with the SEC on March 18, 2019. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies other than those noted below. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition in accordance with ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) performance obligations are satisfied. At contract inception, the Company assesses the goods or services promised within a contract with a customer to identify the performance obligations, and to determine if they are distinct. The Company recognizes the revenue that is allocated to each distinct performance obligation when (or as) that performance obligation is satisfied. The Company only recognizes revenue when collection of the consideration it is entitled to under a contract with a customer is probable. Product Sales, net The Company sells RHOFADE, and during the three and six months ended June 30, 2019 and 2018 sold ESKATA, to a limited number of wholesalers in the United States (collectively, its “Customers”). These Customers subsequently resell the Company’s products to pharmacies and health care providers. In addition to distribution agreements with Customers, the Company has entered and may continue to enter into arrangements with health care providers, third-party payors, pharmacy benefit managers, and/or group purchasing organizations (“GPOs”) which provide for government mandated or privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s marketed product(s). The Company discontinued selling ESKATA in August 2019. The Company recognizes revenue from product sales at the point the Customer obtains control of the product, which generally occurs upon delivery, and includes estimates of variable consideration in the same period revenue is recognized. Components of variable consideration include trade discounts and allowances, product returns, government rebates, discounts and rebates, other incentives such as patient co-pay assistance, and other fee for service amounts. Variable consideration is recorded on the condensed consolidated balance sheet as either a reduction of accounts receivable, if payable to a Customer, or as a current liability, if payable to a third party other than a Customer. The Company considers all relevant information when estimating variable consideration such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of net revenue the Company can recognize is constrained by estimates of variable consideration which are included in the transaction price. Payment terms with Customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements. The Company expenses incremental costs of obtaining a contract with a Customer, including sales commissions, when incurred as the period of benefit is less than one year. Shipping and handling costs for product shipments to Customers are recorded as sales and marketing expenses in the condensed consolidated statement of operations. Trade Discounts and Allowances - The Company may provide Customers with trade discounts, rebates, allowances or other incentives. The Company records an estimate for these items as a reduction of revenue in the same period the revenue is recognized. Government and Payor Rebates - The Company has contracted and may continue to contract with certain third-party payors, primarily health insurance companies, pharmacy benefit managers and/or government programs, for the payment of rebates with respect to utilization of its marketed product(s). The Company also has agreements with GPOs that provide for administrative fees and discounted pricing in the form of volume-based rebates. The Company is also subject to discount obligations under state Medicaid programs and Medicare. The Company records an estimate for these rebates as a reduction of revenue in the same period the revenue is recognized. Other Incentives - Other incentives includes the Company’s co-pay assistance program which is intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors. The Company estimates and records an accrual for these incentives as a reduction of revenue in the period the revenue is recognized. The Company estimates amounts for co-pay assistance based upon the number of claims and the cost per claim that the Company expects to receive associated with product that has been sold to Customers but remains in the distribution channel at the end of each reporting period. Product Returns - Consistent with industry practice, the Company has a product returns policy that provides Customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The right of return lapses upon shipment of the goods to a patient. The Company records an estimate for the amount of its products which may be returned as a reduction of revenue in the period the related revenue is recognized. The Company’s estimates for product returns are based upon available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. There is no returns liability associated with sales of ESKATA as the Company has a no returns policy for this product. Product sales, net consisted of the following: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 ESKATA $ 272 $ 1,533 $ 344 $ 1,533 RHOFADE 4,707 — 8,413 — Total product sales, net $ 4,979 $ 1,533 $ 8,757 $ 1,533 Contract Research The Company earns contract research revenue from the provision of laboratory services to clients through Confluence, its wholly-owned subsidiary. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis and are generally billed on a monthly basis in arrears for services rendered. Revenue related to these contracts is generally recognized as the laboratory services are performed, based upon the rates specified in the contracts. Under ASC Topic 606, the Company elected to apply the “right to invoice” practical expedient when recognizing contract research revenue. The Company recognizes contract research revenue in the amount to which it has the right to invoice. The Company has also received revenue from grants under the Small Business Innovation Research program of the National Institutes of Health (“NIH”). During the six months ended June 30, 2018, the Company had two active grants from NIH which were related to early-stage research. There are no remaining funds available to the Company under the grants. The Company recognizes revenue related to grants as amounts become reimbursable under each grant, which is generally when research is performed, and the related costs are incurred. Other Revenue Licenses of Intellectual Property – The Company recognizes revenue received from non-refundable, upfront fees related to the licensing of intellectual property when the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the license has been transferred to the customer, and the customer is able to use and benefit from the license. Milestone Payments - At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the amount allocated to the license of intellectual property. Milestone payments that are not within the control of the Company or the customer, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. |
Inventory | Inventory Inventory includes the third-party cost of manufacturing and assembly of finished product, quality control and other overhead costs. Inventory is stated at the lower of cost or net realizable value. Inventory is adjusted for short-dated, unmarketable inventory equal to the difference between the cost of inventory and the estimated value based upon assumptions about future demand and market conditions. The Company had $185 and $791 of inventory as of June 30, 2019 and December 31, 2018, respectively, which was comprised primarily of finished goods. |
Intangible Assets | Intangible Assets Intangible assets include both finite-lived and indefinite-lived assets. Finite-lived intangible assets are amortized over their estimated useful life based on the pattern over which the intangible assets are consumed or otherwise used up. If that pattern cannot be reliably determined, the straight-line method of amortization is used. Finite-lived intangible assets consist of a research technology platform the Company acquired through the acquisition of Confluence and the intellectual property rights related to RHOFADE. Indefinite-lived intangible assets consist of an in-process research and development (“IPR&D”) drug candidate acquired through the acquisition of Confluence. IPR&D assets are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. The cost of IPR&D assets is either amortized over their estimated useful life beginning when the underlying drug candidate is approved and launched commercially, or expensed immediately if development of the drug candidate is abandoned. Finite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Indefinite-lived intangible assets are tested for impairment at least annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present. The Company recognizes impairment losses when and to the extent that the estimated fair value of an indefinite-lived intangible asset is less than its carrying value. |
Goodwill | Goodwill Goodwill is not amortized, but rather is subject to testing for impairment at least annually, which the Company performs during the fourth quarter, or when indicators of an impairment are present. The Company considers each of its operating segments, dermatology therapeutics and contract research, to be a reporting unit since this is the lowest level for which discrete financial information is available. The Company attributed the full amount of the goodwill acquired with Confluence, or $18,504, to the dermatology therapeutics segment. The annual impairment test performed by the Company is a qualitative assessment based upon current facts and circumstances related to operations of the dermatology therapeutics segment. If the qualitative assessment indicates an impairment may be present, the Company would perform the required quantitative analysis and an impairment charge would be recognized to the extent that the estimated fair value of the reporting unit is less than its carrying amount. However, any loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. During the three months ended June 30, 2019, the Company performed an interim impairment analysis due to the decline in its stock price, which was considered a triggering event to evaluate goodwill for impairment. The Company’s impairment analysis, using a market approach, noted that its stock price, including a reasonable control premium, resulted in a fair value for the dermatology therapeutics reporting unit which was less than its carrying value. As a result, the Company recorded an impairment charge of $18,504, the full balance of goodwill, in the three months ended June 30, 2019. |
Leases | Leases Leases represent a company’s right to use an underlying asset and a corresponding obligation to make payments to a lessor for the right to use those assets. The Company evaluates leases at their inception to determine if they are an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows are substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. The Company recognizes assets and liabilities for leases at their inception based upon the present value of all payments due under the lease. The Company uses an implicit interest rate to determine the present value of finance leases, and its incremental borrowing rate to determine the present value of operating leases. The Company determines incremental borrowing rates by referencing collateralized borrowing rates for debt instruments with terms similar to the respective lease. The Company recognizes expense for operating and finance leases on a straight-line basis over the term of each lease, and interest expense related to finance leases is recognized over the lease term based on the effective interest method. The Company includes estimates for any residual value guarantee obligations under its leases in lease liabilities recorded on its condensed consolidated balance sheet. Right-of-use assets are included in other assets and property and equipment, net on the Company’s condensed consolidated balance sheet for operating and finance leases, respectively. Obligations for lease payments are included in current portion of lease liabilities and other liabilities on the Company’s condensed consolidated balance sheet for both operating and finance leases. |
Contingent Consideration | Contingent Consideration The Company initially recorded the contingent consideration related to future potential payments based upon the achievement of certain development, regulatory and commercial milestones, resulting from the acquisition of Confluence, at its estimated fair value on the date of acquisition. Changes in fair value reflect new information about the likelihood of the payment of the contingent consideration and the passage of time. Future changes in the fair value of the contingent consideration, if any, will be recorded as income or expense in the Company’s condensed consolidated statement of operations. |
Concentration of Credit Risk and of Significant Suppliers | Concentration of Credit Risk and of Significant Customers and Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company holds all cash, cash equivalents and marketable securities balances at one accredited financial institution, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s top five customers represented 94% of aggregate gross revenues from product sales and contract research revenue for the six months ended June 30, 2019. The Company’s top five customers represented 87% of aggregate gross revenues from product sales and contract research revenue for the six months ended June 30, 2018. The Company currently relies on Allergan Sales, LLC (“Allergan”) to distribute RHOFADE on its behalf pursuant to the terms of a transition services agreement. Accounts receivable, net as of June 30, 2019 and December 31, 2018 included $18,532 and $4,298, respectively, related to amounts invoiced by Allergan for sales of RHOFADE pursuant to the terms of the transition services agreement. The Company is dependent on third-party manufacturers to supply products for commercial distribution, as well as for research and development activities, including preclinical and clinical testing. These activities could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and other components. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of ASU 2018-18 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years, with early adoption permitted. The Company is evaluating the impact of ASU 2018-15 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The FASB developed the amendments to ASC 820 as part of its broader disclosure framework project, which aims to improve the effectiveness of disclosures in the notes to financial statements by focusing on requirements that clearly communicate the most important information to users of the financial statements. This update eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some of the existing disclosure requirements. The standard will be effective for fiscal years beginning after December 15, 2019, including interim periods within such fiscal years, with early adoption permitted. The Company is evaluating the impact of ASU 2018-13 on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718). The amendments in this ASU expand the scope of Topic 718 to include stock-based compensation arrangements with nonemployees except for specific guidance on option pricing model inputs and cost attribution. ASU 2018-07 is effective for annual reporting periods beginning after December 31, 2018, including interim periods within that year. The Company adopted the provisions of this standard on January 1, 2019, the impact of which on its consolidated financial statements was not significant. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, and 2018-11, Targeted Improvements, which included a number of technical corrections and improvements, including additional options for transition. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. The amendments in ASU 2016-02 must be applied to all leases existing at the date a company initially applies the standard. The Company adopted the new standard on January 1, 2019, using the effective date as the date of its initial application, and used the modified retrospective approach. In addition, the Company elected the practical expedients permitted under the transition guidance within the new standard which, among other things, allowed the Company to carry forward the historical lease identification and classification. The Company also elected the practical expedient to not separate lease and non-lease components, as well as the short-term lease practical expedient which allowed the Company to not capitalize leases with terms less than 12 months that do not contain a reasonably certain purchase option. The Company’s consolidated financial statements have not been restated, and disclosures required by the new standard have not been provided, for periods before January 1, 2019. The adoption of ASU 2016-02 resulted in recording additional assets and liabilities of $2,132 and $2,317, respectively upon adoption on January 1, 2019. The adoption of ASU 2016-02 did not have a material impact on the Company’s consolidated statement of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of product sales, net | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 ESKATA $ 272 $ 1,533 $ 344 $ 1,533 RHOFADE 4,707 — 8,413 — Total product sales, net $ 4,979 $ 1,533 $ 8,757 $ 1,533 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value of Financial Assets and Liabilities | |
Schedule of assets and liabilities measured at fair value on a recurring basis | June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 20,226 $ — $ — $ 20,226 Marketable securities — 83,863 — 83,863 Total assets $ 20,226 $ 83,863 $ — $ 104,089 Liabilities: Acquisition-related contingent consideration $ — $ — $ 1,668 $ 1,668 Total liabilities $ — $ — $ 1,668 $ 1,668 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 49,766 $ 4,992 $ — $ 54,758 Marketable securities — 110,953 — 110,953 Total assets $ 49,766 $ 115,945 $ — $ 165,711 Liabilities: Acquisition-related contingent consideration $ — $ — $ 934 $ 934 Total liabilities $ — $ — $ 934 $ 934 |
Schedule of the fair value of available for sale marketable securities | June 30, 2019 Gross Gross Amortized Unrealized Unrealized Fair Cost Gain Loss Value Marketable securities: Corporate debt securities $ 16,872 $ 20 $ — $ 16,892 Commercial paper 25,834 — — 25,834 Asset-backed securities 18,646 9 — 18,655 U.S. government agency debt securities 22,472 10 — 22,482 Total marketable securities $ 83,824 $ 39 $ — $ 83,863 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gain Loss Value Marketable securities: Corporate debt securities $ 5,030 $ — $ (14) $ 5,016 Commercial paper 67,159 — — 67,159 Asset-backed securities 21,745 — (8) 21,737 U.S. government agency debt securities 17,044 — (3) 17,041 Total marketable securities $ 110,978 $ — $ (25) $ 110,953 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | June 30, December 31, 2019 2018 Computer equipment $ 1,360 $ 1,292 Fleet vehicles — 2,131 Finance lease right-of-use assets 2,557 — Manufacturing equipment 607 604 Lab equipment 994 1,068 Furniture and fixtures 852 524 Leasehold improvements 336 332 Property and equipment, gross 6,706 5,951 Accumulated depreciation (2,465) (1,671) Property and equipment, net $ 4,241 $ 4,280 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Schedule of intangible assets | Gross Cost Accumulated Amortization Remaining June 30, December 31, June 30, December 31, Life (years) 2019 2018 2019 2018 RHOFADE product rights 9.4 $ 66,415 $ 66,229 $ 3,871 $ 552 Other intangible assets 8.1 751 751 143 106 Total definite-lived intangible assets 67,166 66,980 4,014 658 IPR&D na 6,629 6,629 — — Total intangible assets, net $ 73,795 $ 73,609 $ 4,014 $ 658 |
Schedule of estimated future amortization expenses | Year Ending December 31, 2019 $ 3,360 2020 6,717 2021 6,718 2022 6,717 2023 6,718 Thereafter 32,922 Total $ 63,152 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Expenses | |
Schedule of accrued expenses | June 30, December 31, 2019 2018 Employee compensation expenses $ 3,660 $ 5,293 Sales discounts and allowances 18,415 2,650 Selling and marketing expenses 741 453 Research and development expenses 2,036 1,437 Professional fees 407 1,123 Other 2,338 1,030 Total accrued expenses $ 27,597 $ 11,986 |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock-Based Awards | |
Assumptions used to determine fair value of stock options granted | Six Months Ended June 30, 2019 2018 Risk-free interest rate 2.53 % 2.63 % Expected term (in years) 6.3 6.3 Expected volatility 101.70 % 95.78 % Expected dividend yield 0 % 0 % |
Summary of stock option activity | Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (in years) Outstanding as of December 31, 2018 4,282,081 $ 20.53 7.91 $ 2,404 Granted 28,500 7.66 Exercised (1,800) 1.52 Forfeited and cancelled (298,358) 24.08 Outstanding as of June 30, 2019 4,010,423 $ 20.18 7.23 $ 345 Options vested and expected to vest as of June 30, 2019 4,010,423 $ 20.18 7.23 $ 345 Options exercisable as of June 30, 2019 2,207,189 (1) $ 17.54 6.46 $ 345 (1) All options granted under the 2012 Plan are exercisable immediately, subject to a repurchase right in the Company’s favor that lapses as the options vest. This amount reflects the number of shares under options that were vested, as opposed to exercisable. |
Summary of restricted stock units activity | Weighted Average Grant Date Number Fair Value of Shares Per Share Outstanding as of December 31, 2018 626,407 $ 20.30 Granted 1,517,042 6.27 Vested (96,252) 22.02 Forfeited and cancelled (87,610) 13.37 Outstanding as of June 30, 2019 1,959,587 $ 9.67 |
Stock-based compensation expense | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Cost of revenue $ 223 $ 190 $ 429 $ 366 Research and development 1,721 1,756 3,315 3,483 Sales and marketing 216 1,020 806 1,927 General and administrative 2,654 2,283 5,126 4,616 Total stock-based compensation expense $ 4,814 $ 5,249 $ 9,676 $ 10,392 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Net Loss per Share | |
Basic and diluted net loss per share | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net loss $ (49,876) $ (31,218) $ (87,441) $ (61,447) Denominator: Weighted average shares of common stock outstanding 41,274,808 30,944,899 41,261,808 30,915,577 Net loss per share, basic and diluted $ (1.21) $ (1.01) $ (2.12) $ (1.99) |
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders | June 30, 2019 2018 Options to purchase common stock 4,010,423 4,315,942 Restricted stock unit awards 1,959,587 532,756 Total potential shares of common stock 5,970,010 4,848,698 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Schedule of lease expense | Six Months Ended June 30, 2019 Operating lease expense $ 302 Finance Leases: Amortization of right-to-use assets $ 313 Interest expense 67 Total finance lease expenses $ 380 |
Schedule of supplemental balance sheet information related to operating leases | June 30, Operating Leases: 2019 Gross cost $ 5,207 Accumulated amortization (177) Operating lease right-of-use assets $ 5,030 Other current liabilities $ 488 Other liabilities 3,794 Total operating lease liabilities $ 4,282 |
Schedule of supplemental balance sheet information related to finance leases | June 30, Finance Leases: 2019 Property and equipment, gross $ 2,557 Accumulated depreciation (763) Property and equipment, net $ 1,794 Other current liabilities $ 503 Other liabilities 1,173 Total finance lease liabilities $ 1,676 |
Schedule of supplemental information related to operating and finance leases | Six Months Ended June 30, Supplemental Cash Flow Lease Information: 2019 Operating cash flows from operating leases $ 309 Operating cash flows from finance leases 61 Financing cash flows from finance leases 240 Leased assets obtained in exchange for new operating lease liabilities $ 3,060 Weighted-Average Remaining Lease Term (in years): Operating leases Finance leases Weighted-Average Discount Rate: Operating leases % Finance leases % |
Schedule of future maturities lease liabilities under operating leases | Future maturities of lease liabilities under operating and finance leases as of June 30, 2019 are as follows: Operating Finance Year Ending December 31, Leases Leases 2019 $ 419 $ 295 2020 909 567 2021 934 448 2022 959 180 2023 877 — Thereafter 2,024 — Total undiscounted lease payments 6,122 1,490 Less: unrecognized interest Plus: residual value guarantees — Total lease liability $ 4,282 $ 1,676 |
Schedule of future maturities lease liabilities under finance leases | Operating Finance Year Ending December 31, Leases Leases 2019 $ 419 $ 295 2020 909 567 2021 934 448 2022 959 180 2023 877 — Thereafter 2,024 — Total undiscounted lease payments 6,122 1,490 Less: unrecognized interest Plus: residual value guarantees — Total lease liability $ 4,282 $ 1,676 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Summary of results of operations by segment | Dermatology Contract Corporate Total Three Months Ended June 30, 2019 Therapeutics Research and Other Company Revenue, net $ 4,979 $ 3,807 $ (2,921) $ 5,865 Cost of revenue (excludes amortization) 1,709 3,819 (2,825) 2,703 Research and development 17,718 — (96) 17,622 Sales and marketing 7,164 13 — 7,177 General and administrative — 600 7,390 7,990 Goodwill impairment 18,504 — — 18,504 Amortization of definite-lived intangible 1,660 — — 1,660 Loss from operations $ (41,776) $ (625) $ (7,390) $ (49,791) Dermatology Contract Corporate Total Three Months Ended June 30, 2018 Therapeutics Research and Other Company Revenue, net $ 2,533 $ 3,053 $ (1,910) $ 3,676 Cost of revenue 152 2,621 (1,592) 1,181 Research and development 13,984 — — 13,984 Sales and marketing 12,360 8 — 12,368 General and administrative — 521 7,600 8,121 Loss from operations $ (23,963) $ (97) $ (7,918) $ (31,978) Dermatology Contract Corporate Total Six Months Ended June 30, 2019 Therapeutics Research and Other Company Revenue, net $ 8,757 $ 8,995 $ (6,846) $ 10,906 Cost of revenue (excludes amortization) 3,279 8,856 (6,655) 5,480 Research and development 37,732 — (191) 37,541 Sales and marketing 16,976 32 — 17,008 General and administrative — 1,113 15,067 16,180 Goodwill impairment 18,504 — — 18,504 Amortization of definite-lived intangible 3,319 — — 3,319 Loss from operations $ (71,053) $ (1,006) $ (15,067) $ (87,126) Dermatology Contract Corporate Total Six Months Ended June 30, 2018 Therapeutics Research and Other Company Revenue, net $ 2,533 $ 5,554 $ (3,293) $ 4,794 Cost of revenue 152 4,740 (2,744) 2,148 Research and development 27,590 — — 27,590 Sales and marketing 23,581 20 — 23,601 General and administrative — 992 13,389 14,381 Loss from operations $ (48,790) $ (198) $ (13,938) $ (62,926) |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) $ in Thousands | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Aug. 31, 2017product |
Organization and Nature of Business | |||
Number of commercial products | product | 2 | ||
Cash, cash equivalents and marketable securities | $ 115,517 | ||
Accumulated deficit | $ 379,614 | $ 292,173 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018item | Dec. 31, 2018USD ($) | |
Revenue Recognition | |||
Revenue, Practical Expedient, Financing Component [true false] | true | ||
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | ||
Number of active research grants | item | 2 | ||
Remaining funds available to the Company under grants | $ 0 | ||
Inventory | |||
Inventory | $ 185,000 | $ 791,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Product Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | $ 5,865 | $ 3,676 | $ 10,906 | $ 4,794 |
Product sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 4,979 | 1,533 | 8,757 | 1,533 |
ESKATA | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | 272 | $ 1,533 | 344 | $ 1,533 |
RHOFADE | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, net | $ 4,707 | $ 8,413 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2017 | |
Summary Of Accounting Policies [Line Items] | ||||
Goodwill | $ 18,504 | |||
Goodwill impairment charge | $ 18,504 | $ 18,504 | ||
Confluence | ||||
Summary Of Accounting Policies [Line Items] | ||||
Goodwill | $ 18,504 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Risk (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019USD ($)customeritem | Jun. 30, 2018customer | Dec. 31, 2018USD ($) | |
Concentration Risk [Line Items] | |||
Number of financial institutions holding entity funds | item | 1 | ||
Accounts receivable, net | $ 19,370 | $ 4,861 | |
RHOFADE | |||
Concentration Risk [Line Items] | |||
Accounts receivable, net | $ 18,532 | $ 4,298 | |
Laboratory Servicer Revenues [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Number of customers comprising risk percentage | customer | 5 | 5 | |
Concentration of risk (as a percent) | 94.00% | 87.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recent Pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Lease liability | $ 4,282 | |
Adjustment | ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
ROU assets | $ 2,132 | |
Lease liability | $ 2,317 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Assets: | |||
Marketable securities | $ 83,863 | $ 110,953 | |
Liabilities: | |||
Transfers from Level 1 to Level 2 | 0 | 0 | |
Transfers from Level 2 to Level 1 | 0 | 0 | |
Transfers into or out of Level 3 | 0 | 0 | |
Change in fair value of contingent consideration | 734 | $ 866 | |
Confluence | |||
Liabilities: | |||
Change in fair value of contingent consideration | 734 | ||
Recurring | |||
Assets: | |||
Cash equivalents | 20,226 | 54,758 | |
Marketable securities | 83,863 | 110,953 | |
Total assets measured at fair value | 104,089 | 165,711 | |
Liabilities: | |||
Acquisition-related contingent consideration | 1,668 | 934 | |
Total liabilities measured at fair value | 1,668 | 934 | |
Recurring | Level 1 | |||
Assets: | |||
Cash equivalents | 20,226 | 49,766 | |
Total assets measured at fair value | 20,226 | 49,766 | |
Recurring | Level 2 | |||
Assets: | |||
Cash equivalents | 4,992 | ||
Marketable securities | 83,863 | 110,953 | |
Total assets measured at fair value | 83,863 | 115,945 | |
Recurring | Level 3 | |||
Liabilities: | |||
Acquisition-related contingent consideration | 1,668 | 934 | |
Total liabilities measured at fair value | $ 1,668 | $ 934 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - By Type (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Marketable securities: | ||
Amortized Cost | $ 83,824 | $ 110,978 |
Gross Unrealized Gain | 39 | |
Gross Unrealized Loss | (25) | |
Fair Value | 83,863 | 110,953 |
Corporate debt securities | ||
Marketable securities: | ||
Amortized Cost | 16,872 | 5,030 |
Gross Unrealized Gain | 20 | |
Gross Unrealized Loss | (14) | |
Fair Value | 16,892 | 5,016 |
Commercial paper | ||
Marketable securities: | ||
Amortized Cost | 25,834 | 67,159 |
Fair Value | 25,834 | 67,159 |
Asset-backed securities | ||
Marketable securities: | ||
Amortized Cost | 18,646 | 21,745 |
Gross Unrealized Gain | 9 | |
Gross Unrealized Loss | (8) | |
Fair Value | 18,655 | 21,737 |
U.S. government agency debt securities | ||
Marketable securities: | ||
Amortized Cost | 22,472 | 17,044 |
Gross Unrealized Gain | 10 | |
Gross Unrealized Loss | (3) | |
Fair Value | $ 22,482 | $ 17,041 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment, Net | |||||
Finance lease right-of-use assets | $ 2,557 | $ 2,557 | |||
Property and equipment, gross | 6,706 | 6,706 | $ 5,951 | ||
Accumulated depreciation | (2,465) | (2,465) | (1,671) | ||
Operating lease right-of-use assets | 4,241 | 4,241 | 4,280 | ||
Depreciation | 394 | $ 296 | 795 | $ 499 | |
Computer equipment | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 1,360 | 1,360 | 1,292 | ||
Fleet vehicles | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 2,131 | ||||
Manufacturing equipment | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 607 | 607 | 604 | ||
Lab equipment | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 994 | 994 | 1,068 | ||
Furniture and fixtures | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 852 | 852 | 524 | ||
Leasehold improvements | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | $ 336 | $ 336 | $ 332 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Definite-lived intangible assets | ||
Gross Cost | $ 67,166 | $ 66,980 |
Accumulated Amortization | 4,014 | 658 |
Intangible assets, net | ||
Gross cost | 73,795 | 73,609 |
IPR&D | ||
Definite-lived intangible assets | ||
Gross Cost | $ 6,629 | 6,629 |
RHOFADE product rights | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Remaining life | 9 years 4 months 24 days | |
Definite-lived intangible assets | ||
Gross Cost | $ 66,415 | 66,229 |
Accumulated Amortization | $ 3,871 | 552 |
Other intangible assets | ||
Finite Lived And Indefinite Lived Intangible Assets By Major Class [Line Items] | ||
Remaining life | 8 years 1 month 6 days | |
Definite-lived intangible assets | ||
Gross Cost | $ 751 | 751 |
Accumulated Amortization | $ 143 | $ 106 |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Amortization of definite-lived intangible | $ 1,660 | $ 3,319 | ||
Future amortization expenses | ||||
2019 | 3,360 | 3,360 | ||
2020 | 6,717 | 6,717 | ||
2021 | 6,718 | 6,718 | ||
2022 | 6,717 | 6,717 | ||
2023 | 6,718 | 6,718 | ||
Thereafter | 32,922 | 32,922 | ||
Total | 63,152 | 63,152 | ||
Other intangible assets | ||||
Amortization of definite-lived intangible | $ 1,679 | $ 0 | $ 3,356 | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accrued Expenses | ||
Employee compensation expenses | $ 3,660 | $ 5,293 |
Sales discounts and allowances | 18,415 | 2,650 |
Selling and marketing expenses | 741 | 453 |
Research and development expenses | 2,036 | 1,437 |
Professional fees | 407 | 1,123 |
Other | 2,338 | 1,030 |
Total accrued expenses | $ 27,597 | $ 11,986 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Oct. 15, 2018 | Oct. 31, 2018 |
Debt Instrument [Line Items] | |||
Loan, maximum borrowing capacity | $ 65,000 | ||
Proceeds from secured debt | $ 35,000 | $ 30,000 | |
Number of consecutive monthly payments | 24 months | ||
Final payment fee percentage | 5.75% | ||
Part prepayment period | 3 months | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Annual interest rate | 8.35% | ||
Part prepayment amount | $ 2,000 | ||
Prepayment prior to the first anniversary of the Funding Date | |||
Debt Instrument [Line Items] | |||
Prepayment fee percentage | 3.00% | ||
Prepayment between the first and second anniversaries of the Funding Date | |||
Debt Instrument [Line Items] | |||
Prepayment fee percentage | 2.00% | ||
Prepayment after the second anniversary of the Funding Date but before October 1, 2023 | |||
Debt Instrument [Line Items] | |||
Prepayment fee percentage | 1.00% | ||
London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread over LIBOR | 6.25% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 6 Months Ended | |
Jun. 30, 2019USD ($)Vote$ / sharesshares | Dec. 31, 2018$ / sharesshares | |
Stockholders' Equity | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 |
Number of votes per share | Vote | 1 | |
Dividends declared | $ | $ 0 |
Stock-Based Awards (Details)
Stock-Based Awards (Details) - shares | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 14, 2015 | Dec. 31, 2018 | Jul. 31, 2017 | Sep. 30, 2015 |
Stock-based awards | |||||||
Options granted (in shares) | 28,500 | ||||||
Options outstanding | 4,010,423 | 4,282,081 | |||||
Stock Option Valuation | |||||||
Risk-free interest rate (as a percent) | 2.53% | 2.63% | |||||
Expected term (in years) | 6 years 3 months 18 days | 6 years 3 months 18 days | |||||
Expected volatility (as a percent) | 101.70% | 95.78% | |||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||||
2017 Inducement Plan | |||||||
Stock-based awards | |||||||
Number of shares authorized | 1,000,000 | ||||||
2015 Equity Incentive Plan | |||||||
Stock-based awards | |||||||
Number of shares authorized | 1,643,872 | ||||||
Number of shares available for grant | 1,975,820 | ||||||
Percentage increase to shares available for grant from common outstanding as of preceding December 31 (as a percent) | 4.00% | ||||||
Additional shares available | 1,648,429 | ||||||
2012 Equity Compensation Plan | |||||||
Stock-based awards | |||||||
Number of shares available for grant | 0 | ||||||
Options granted (in shares) | 1,140,524 | ||||||
Options outstanding | 945,200 | 948,761 | |||||
Vesting period (in years) | 4 years | ||||||
Term of award (in years) | 10 years |
Stock-Based Awards - Option Act
Stock-Based Awards - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Options, Number of Shares | ||
Number of Shares, beginning balance | 4,282,081 | |
Number of Shares, Granted | 28,500 | |
Number of Shares, Exercised | (1,800) | |
Number of Shares, Forfeited and cancelled | (298,358) | |
Number of Shares, ending balance | 4,010,423 | 4,282,081 |
Number of Shares, Options vested and expected to vest | 4,010,423 | |
Number of Shares, Options exercisable | 2,207,189 | |
Options, Weighted Average Exercise Price | ||
Weighted Average Exercise Price, beginning balance (in dollars per share) | $ 20.53 | |
Weighted Average Exercise Price, Granted (in dollars per share) | 7.66 | |
Weighted Average Exercise Price, Exercised (in dollars per share) | 1.52 | |
Weighted Average Exercise Price, Forfeited and cancelled (in dollars per share) | 24.08 | |
Weighted Average Exercise Price, ending balance (in dollars per share) | 20.18 | $ 20.53 |
Weighted Average Exercise Price, Options vested and expected to vest (in dollars per share) | 20.18 | |
Weighted Average Exercise Price, Options exercisable (in dollars per share) | $ 17.54 | |
Options, Weighted Average Remaining Contractual Term | ||
Weighted Average Remaining Contractual Term (in years) | 7 years 2 months 23 days | 7 years 10 months 28 days |
Weighted Average Remaining Contractual Term, Options vested and expected to vest (in years) | 7 years 2 months 23 days | |
Weighted Average Remaining Contractual Term, Options exercisable (in years) | 6 years 5 months 16 days | |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value | $ 345 | $ 2,404 |
Aggregate Intrinsic Value, Options vested and expected to vest | 345 | |
Aggregate Intrinsic Value, Options exercisable | $ 345 | |
Weighted average grant-date fair value of stock options granted (in dollars per share) | $ 6.22 |
Stock-Based Awards - RSUs (Deta
Stock-Based Awards - RSUs (Details) - Restricted stock unit awards | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
RSU, Number of Units | |
Units outstanding, beginning of period | shares | 626,407 |
Granted | shares | 1,517,042 |
Vested | shares | (96,252) |
Forfeited and cancelled | shares | (87,610) |
Units outstanding, end of period | shares | 1,959,587 |
RSU, Weighted Average Grant Date Fair Value Per Unit | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 20.30 |
Granted, estimated grant-date fair value (in dollars per share) | $ / shares | 6.27 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 22.02 |
Forfeited and cancelled, estimated grant date fair value (in dollars per share) | $ / shares | 13.37 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 9.67 |
Stock-Based Awards - Compensati
Stock-Based Awards - Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock-based compensation expense | ||||
Stock-based compensation expense | $ 4,814 | $ 5,249 | $ 9,676 | $ 10,392 |
Unrecognized stock-based compensation cost, options | 24,719 | 24,719 | ||
Unrecognized compensation, RSUs | 15,151 | 15,151 | ||
Cost of revenue. | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense | 223 | 190 | 429 | 366 |
Research and development | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense | 1,721 | 1,756 | 3,315 | 3,483 |
Sales and marketing | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense | 216 | 1,020 | 806 | 1,927 |
General and administrative | ||||
Stock-based compensation expense | ||||
Stock-based compensation expense | $ 2,654 | $ 2,283 | $ 5,126 | $ 4,616 |
Options to purchase common stock | ||||
Stock-based compensation expense | ||||
Weighted average recognition period unrecognized stock-based compensation cost (in years) | 2 years 1 month 24 days | |||
Restricted stock unit awards | ||||
Stock-based compensation expense | ||||
Weighted average recognition period unrecognized stock-based compensation cost (in years) | 3 years 1 month 6 days |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||||
Net loss | $ (49,876) | $ (37,565) | $ (31,218) | $ (30,229) | $ (87,441) | $ (61,447) |
Denominator: | ||||||
Weighted average shares of common stock outstanding (in shares) | 41,274,808 | 30,944,899 | 41,261,808 | 30,915,577 | ||
Net loss per share, basic and diluted | $ (1.21) | $ (1.01) | $ (2.12) | $ (1.99) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilution (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 5,970,010 | 4,848,698 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 4,010,423 | 4,315,942 |
Restricted stock unit awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential common shares excluded from the calculation of diluted net loss per share attributable to common stockholders | 1,959,587 | 532,756 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended |
Feb. 28, 2019 | Jun. 30, 2019 | |
Lease Cost | ||
Operating lease expense | $ 1,472 | $ 302 |
Finance Leases: | ||
Amortization of right-to-use assets | 313 | |
Interest expense | 67 | |
Total finance lease expenses | $ 380 |
Leases (Details)
Leases (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Feb. 28, 2019USD ($)ft² | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Nov. 30, 2017ft² | |
Lessee, Lease, Description [Line Items] | ||||||
Rent expense | $ 201 | $ 478 | ||||
Area leased, sublease agreement | ft² | 21,056 | 33,019 | ||||
Total renovation and improvement costs | $ 1,472 | $ 302 | ||||
Number of lease financing arrangements | item | 2 | |||||
Finance lease term | 4 years | |||||
Operating Leases: | ||||||
Gross cost | $ 6,706 | $ 5,951 | ||||
Accumulated depreciation | (2,465) | (1,671) | ||||
Operating lease right-of-use assets | 4,241 | $ 4,280 | ||||
Other current liabilities | 488 | |||||
Other liabilities | 3,794 | |||||
Total operating lease liabilities | 4,282 | |||||
Operating Leases | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Total future total rent payments | $ 3,538 | |||||
Operating Leases: | ||||||
Gross cost | 5,207 | |||||
Accumulated depreciation | (177) | |||||
Operating lease right-of-use assets | $ 5,030 | |||||
Financial position | us-gaap:OtherLiabilitiesCurrent | |||||
Financial position | us-gaap:OtherLiabilitiesNoncurrent |
Leases - Finance Leases (Detail
Leases - Finance Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finance Leases: | ||
Gross cost | $ 6,706 | $ 5,951 |
Accumulated depreciation | (2,465) | (1,671) |
Operating lease right-of-use assets | 4,241 | $ 4,280 |
Other current liabilities | 503 | |
Other liabilities | 1,173 | |
Total finance lease liabilities | 1,676 | |
Finance Leases | ||
Finance Leases: | ||
Gross cost | 2,557 | |
Accumulated depreciation | (763) | |
Operating lease right-of-use assets | $ 1,794 | |
Financial position | us-gaap:OtherLiabilitiesCurrent | |
Financial position | us-gaap:OtherLiabilitiesNoncurrent |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Operating and Finance Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Leases | ||
Operating cash flows from operating leases | $ 309 | |
Operating cash flows from finance leases | 61 | |
Financing cash flows from finance leases | 240 | $ 335 |
Leased assets obtained in exchange for new operating lease liabilities | $ 3,060 | |
Weighted-Average Remaining Lease Term (in years): | ||
Operating leases | 7 years 2 months 9 days | |
Finance leases | 2 years 8 months 27 days | |
Weighted-Average Discount Rate: | ||
Operating leases | 10.10% | |
Finance leases | 6.94% |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 419 |
2020 | 909 |
2021 | 934 |
2022 | 959 |
2023 | 877 |
Thereafter | 2,024 |
Total undiscounted lease payments | 6,122 |
Less: unrecognized interest | (1,840) |
Total lease liability | 4,282 |
Finance Leases | |
2019 | 295 |
2020 | 567 |
2021 | 448 |
2022 | 180 |
Total undiscounted lease payments | 1,490 |
Less: unrecognized interest | (187) |
Plus: residual value guarantees | 373 |
Total lease liability | $ 1,676 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Nov. 30, 2017USD ($) | Jun. 30, 2019USD ($)item | Dec. 31, 2018USD ($) | |
NST, LLC | |||
Related Party Transactions | |||
Number of executive officers affiliated with counterparty | item | 3 | ||
Aspect Pharmaceuticals, LLC and Vicept Therapeutics, Inc [Member] | |||
Related Party Transactions | |||
Royalty expense | $ 379 | ||
Milestone payments | 0 | ||
Board of Directors Chairman [Member] | Direct sublease agreement | |||
Related Party Transactions | |||
Lease termination charge | $ (590) | ||
Expenses incurred under related party transactions | 0 | $ 570 | |
Board of Directors Chairman [Member] | Services agreement | |||
Related Party Transactions | |||
Amount due to related party | $ 0 | $ 0 |
Agreements Related to Intelle_2
Agreements Related to Intellectual Property (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Nov. 30, 2018 | Oct. 31, 2018 | May 31, 2018 | Apr. 30, 2018 | Apr. 30, 2017 | Aug. 31, 2012 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Achievement Of Development Milestones | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Milestone payment | $ 5,000 | |||||||||
Assignment Agreement and Finder's Services Agreement | A-101 45% Topical Solution | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Term of agreement, minimum | 15 years | |||||||||
Finder's Services Agreement | Achievement Of Specified Commercial Milestones | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Aggregate royalty payments | $ 14 | $ 0 | ||||||||
Finder's Services Agreement | Achievement Of Specified Commercial Milestones | A-101 45% Topical Solution | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Milestone payment | $ 1,500 | $ 1,000 | ||||||||
Potential future milestone payments | 3,000 | |||||||||
License and Collaboration Agreement | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Upfront payment revenue | $ 1,000 | |||||||||
Term of agreement, minimum | 15 years | |||||||||
License and Collaboration Agreement | Achievement Of Specified Commercial Milestones | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Potential milestones receivable | $ 1,750 | |||||||||
License and Collaboration Agreement | Achievement Of Development Milestones | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Milestone payment revenue | $ 500 | |||||||||
Potential milestones receivable | $ 500 | 500 | ||||||||
APA | ||||||||||
Agreements Related to Intellectual Property | ||||||||||
Aggregate royalty payments | $ 471 | $ 0 | $ 842 | $ 0 |
Income Taxes - Rate Reconciliat
Income Taxes - Rate Reconciliation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes | ||
Federal income tax benefit | $ 0 | $ 0 |
State income tax benefit | $ 0 | $ 0 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | item | 2 | |||
Revenue, net | $ 5,865 | $ 3,676 | $ 10,906 | $ 4,794 |
Cost of revenue | 1,181 | 2,148 | ||
Cost of revenue (excludes amortization) | 2,703 | 1,181 | 5,480 | 2,148 |
Research and development | 17,622 | 13,984 | 37,541 | 27,590 |
Sales and marketing | 7,177 | 12,368 | 17,008 | 23,601 |
General and administrative | 7,990 | 8,121 | 16,180 | 14,381 |
Goodwill impairment | 18,504 | 18,504 | ||
Amortization of definite-lived intangible | 1,660 | 3,319 | ||
Loss from operations | (49,791) | (31,978) | (87,126) | (62,926) |
Dermatology Therapeutics Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 4,979 | 2,533 | 8,757 | 2,533 |
Cost of revenue | 152 | 152 | ||
Cost of revenue (excludes amortization) | 1,709 | 3,279 | ||
Research and development | 17,718 | 13,984 | 37,732 | 27,590 |
Sales and marketing | 7,164 | 12,360 | 16,976 | 23,581 |
Goodwill impairment | 18,504 | 18,504 | ||
Amortization of definite-lived intangible | 1,660 | 3,319 | ||
Loss from operations | (41,776) | (23,963) | (71,053) | (48,790) |
Contract Research Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 3,807 | 3,053 | 8,995 | 5,554 |
Cost of revenue | 2,621 | 4,740 | ||
Cost of revenue (excludes amortization) | 3,819 | 8,856 | ||
Sales and marketing | 13 | 8 | 32 | 20 |
General and administrative | 600 | 521 | 1,113 | 992 |
Loss from operations | (625) | (97) | (1,006) | (198) |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | (2,921) | (1,910) | (6,846) | (3,293) |
Cost of revenue | (1,592) | (2,744) | ||
Cost of revenue (excludes amortization) | (2,825) | (6,655) | ||
Research and development | (96) | (191) | ||
General and administrative | 7,390 | 7,600 | 15,067 | 13,389 |
Loss from operations | (7,390) | (7,918) | (15,067) | (13,938) |
Intersegment Eliminations | Contract Research Segment | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | $ (2,921) | $ (1,910) | $ 6,846 | $ 3,293 |