Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Nov. 01, 2014 |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Dermira, Inc. | ' |
Entity Central Index Key | '0001557883 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'No | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 24.6 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $50,845 | $22,144 |
Prepaid expenses and other current assets | 569 | 344 |
Total current assets | 51,414 | 22,488 |
Property and equipment, net | 79 | 61 |
Intangible assets | 3,520 | 3,520 |
Goodwill | 771 | 771 |
Restricted cash | 500 | ' |
Other assets | 3,332 | 31 |
Total assets | 59,616 | 26,871 |
Current liabilities: | ' | ' |
Accounts payable | 3,165 | 2,322 |
Accrued liabilities | 4,486 | 1,999 |
Convertible preferred stock warrant liability | 139 | 61 |
Bank term loan, current portion | ' | 133 |
Total current liabilities | 7,790 | 4,515 |
Long-term liabilities: | ' | ' |
Deferred revenue | 10,000 | 10,000 |
Bank term loan, net of current portion | 1,937 | 1,786 |
Deferred tax liability | 785 | 785 |
Total liabilities | 20,512 | 17,086 |
Commitments and contingencies | ' | ' |
Convertible preferred stock, $0.001 par value per share; 40,874,365 shares authorized as of September 30, 2014; 15,430,706 shares issued and outstanding as of September 30, 2014; 10,107,111 shares authorized as of December 31, 2013; 9,540,158 shares issued and outstanding as of December 31, 2013 | 113,414 | 59,588 |
Stockholders' deficit: | ' | ' |
Common stock: $0.001 par value per share; 126,000,000 shares authorized as of September 30, 2014; 907,514 shares issued and outstanding as of September 30, 2014; 23,275,862 shares authorized as of December 31, 2013; 901,308 shares issued and outstanding as of December 31, 2013 | 1 | 1 |
Additional paid-in capital | 1,611 | 970 |
Accumulated deficit | -75,922 | -50,774 |
Total stockholders' deficit | -74,310 | -49,803 |
Total liabilities, convertible preferred stock and stockholders' deficit | $59,616 | $26,871 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Convertible preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 40,874,365 | 10,107,111 |
Convertible preferred stock, shares issued | 15,430,706 | 9,540,158 |
Convertible preferred stock, shares outstanding | 15,430,706 | 9,540,158 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 126,000,000 | 23,275,862 |
Aggregate shares of common stock issued | 907,514 | 901,308 |
Common stock, shares outstanding | 907,514 | 901,308 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Operating expenses: | ' | ' | ' | ' |
Research and development | $6,028 | $3,619 | $19,676 | $12,397 |
General and administrative | 1,688 | 1,009 | 5,240 | 3,214 |
Total operating expenses | 7,716 | 4,628 | 24,916 | 15,611 |
Loss from operations | -7,716 | -4,628 | -24,916 | -15,611 |
Interest and other income (expense), net | -84 | -37 | -118 | -25 |
Interest expense | -47 | ' | -114 | ' |
Net loss | -7,847 | -4,665 | -25,148 | -15,636 |
Comprehensive loss | ($7,847) | ($4,665) | ($25,148) | ($15,636) |
Net loss per share, basic and diluted (in dollars per share) | ($8.66) | ($5.57) | ($27.93) | ($19.40) |
Weighted-average common shares used to compute net loss per share, basic and diluted (in shares) | 906,239 | 836,876 | 900,350 | 806,137 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net loss | ($25,148) | ($15,636) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 29 | 16 |
Stock-based compensation | 634 | 205 |
Loss on disposal of property and equipment | ' | 1 |
Amortization of bank term loan issuance costs | 18 | ' |
Revaluation of convertible preferred stock warrant liability | 78 | ' |
Changes in assets and liabilities: | ' | ' |
Prepaid expenses and other current assets | -225 | -317 |
Other assets | -1,709 | 124 |
Restricted cash | -500 | ' |
Accounts payable | -44 | -460 |
Accrued liabilities | 1,782 | -671 |
Deferred revenue | ' | 10,000 |
Net cash used in operating activities | -25,085 | -6,738 |
Cash flows from investing activities | ' | ' |
Purchase of property and equipment | -47 | -30 |
Net cash used in investing activities | -47 | -30 |
Cash flows from financing activities | ' | ' |
Net proceeds from issuance of convertible preferred stock | 53,826 | 24,499 |
Proceeds from common stock option exercises | 7 | ' |
Net cash provided by financing activities | 53,833 | 24,499 |
Net increase in cash and cash equivalents | 28,701 | 17,731 |
Cash and cash equivalents at beginning of period | 22,144 | 7,872 |
Cash and cash equivalents at end of period | $50,845 | $25,603 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2014 | |
Organization | ' |
Organization | ' |
1. Organization | |
Dermira, Inc. (the “Company”) was incorporated in the State of Delaware in August 2010 under the name Skintelligence, Inc. The Company changed its name to Dermira, Inc. in September 2011. In August 2010, the Company acquired Valocor Therapeutics, Inc., which was subsequently renamed Dermira (Canada), Inc. (“Dermira Canada”) and is the Company’s wholly owned subsidiary. The Company is a biopharmaceutical company focused on bringing medical dermatology products to dermatologists and their patients. The Company’s portfolio of five product candidates includes three late-stage product candidates, Cimzia (certolizumab pegol), which the Company is developing in collaboration with UCB Pharma S.A. for the treatment of moderate-to-severe plaque psoriasis, DRM04, which the Company is developing for the treatment of hyperhidrosis, or excessive sweating, and DRM01, which the Company is developing for the treatment of acne. The Company also has two early-stage programs in preclinical development for the treatment of inflammatory skin diseases and acne. The Company’s corporate headquarters are located in Redwood City, California, where it occupies facilities totaling approximately 14,700 square feet. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
2. Summary of Significant Accounting Policies | ||||||||||||||
Basis of Presentation | ||||||||||||||
The condensed consolidated financial statements include the accounts of the Company and Dermira Canada and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. The results of operations for the nine-month period ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014 or any other future period. The balance sheet as of December 31, 2013 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated during consolidation. | ||||||||||||||
The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2013 included in the Company’s Prospectus dated October 2, 2014 filed pursuant to Rule 424(b)(4) with the SEC on October 3, 2014 in connection with the Registration Statement on Form S-1 (No. 333-1984410). | ||||||||||||||
Reverse Stock Split | ||||||||||||||
The Company effected a 5.8-to-1 reverse stock split of each share of the Company’s outstanding capital stock on September 18, 2014, the date that the Certificate of Amendment to the Restated Certificate of Incorporation was filed with the Delaware Secretary of State. The reverse stock split did not result in an adjustment to par value. All references to shares of common stock outstanding, average number of shares outstanding and per share amounts in these condensed consolidated financial statements and notes to the condensed consolidated financial statements reflect the reverse stock split. | ||||||||||||||
Use of Estimates | ||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting periods. On an ongoing basis, management evaluates its estimates, including those related to accrued research and development expenses, goodwill, intangible assets, other long-lived assets, fair value of common stock, convertible preferred stock and related warrants, stock-based compensation, and the valuation of deferred tax assets. The Company bases its estimates on its historical experience and also on assumptions that it believes are reasonable; however, actual results could significantly differ from those estimates. | ||||||||||||||
Risks and Uncertainties | ||||||||||||||
The product candidates developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies prior to commercial sales in the United States or foreign jurisdictions, respectively. There can be no assurance that the Company’s current and future product candidates will receive the necessary approvals. If the Company is denied approval or approval is delayed, it may have a material adverse impact on the Company’s business and its financial condition. | ||||||||||||||
The Company is subject to risks common to early-stage companies in the pharmaceutical industry, including dependence on the clinical and commercial success of its product candidates, ability to obtain regulatory approval of its product candidates, compliance with regulatory requirements, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients, significant competition and ability to manage third party manufacturers, suppliers and contract research organizations (“CROs”). | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposits, money market accounts, repurchase agreements and obligations of U.S. government agencies. | ||||||||||||||
Concentration of Credit Risk | ||||||||||||||
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company invests its excess cash in money market funds, repurchase agreements and obligations of U.S. government agencies. Bank deposits are held by a single financial institution with a strong credit rating and these deposits may at times be in excess of insured limits. The Company is exposed to credit risk in the event of a default by the financial institution holding its cash and cash equivalents and issuers of investments to the extent recorded on the balance sheets. The Company’s investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies and places restrictions on maturities and concentration by type and issuer. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company primarily applies the market approach for recurring fair value measurements. | ||||||||||||||
The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The carrying amount of the Company’s cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short maturities. | ||||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||
The Company assesses changes in the performance of its product candidates in relation to its expectations, and industry, economic and regulatory conditions and makes assumptions regarding estimated future cash flows in evaluating the value of its property and equipment, goodwill and in-process research and development (“IPR&D”). | ||||||||||||||
The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets is compared to the carrying value to determine whether impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, the Company will estimate fair value using a discounted value of estimated future cash flows approach. | ||||||||||||||
Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired in connection with the acquisition of Valocor. The Company tests goodwill for impairment on at least an annual basis, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the goodwill is less than its carrying amount. Some of the factors considered by the Company in its assessment include general macro-economic conditions, conditions specific to the industry and market, and the successful development of its product candidates. If the Company concludes it is more likely than not that the fair value of the goodwill is less than its carrying amount, a quantitative fair value test is performed. | ||||||||||||||
IPR&D represents the fair value assigned to incomplete research projects that the Company acquired through the acquisition of Valocor which, at the time of acquisition, had not reached technological feasibility. The amount was capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the project. The Company tests IPR&D for impairment at least annually, or more frequently, if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D intangible asset is less than its carrying amount. If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value is performed. | ||||||||||||||
Deferred Offering Costs | ||||||||||||||
Deferred offering costs, consisting of legal, accounting, filing and other fees related to the Company’s initial public offering (the “IPO”), are capitalized. The deferred offering costs will be offset against proceeds from the IPO for periods subsequent to the IPO. As of September 30, 2014, $3.3 million of deferred offering costs were capitalized, which are included in other assets in the condensed consolidated balance sheet. No amounts were deferred as of December 31, 2013. | ||||||||||||||
Research and Development Expenses | ||||||||||||||
The Company expenses both internal and external research and development expenses to operations as they are incurred. The Company’s research and development expenses consist primarily of costs incurred for the development of its product candidates and include: (1) expenses incurred under agreements with CROs, investigative sites and consultants to conduct clinical trials and preclinical and non-clinical studies; (2) costs to acquire, develop and manufacture supplies for clinical trials and other studies, including fees paid to contract manufacturing organizations (“CMOs”); (3) salaries and related costs, including stock-based compensation and travel expenses, for personnel in research and development functions; (4) costs related to compliance with drug development regulatory requirements; (5) depreciation and other allocated facility-related and overhead expenses; and (6) licensing fees and milestone payments incurred under product license agreements. | ||||||||||||||
Accrued Research and Development Expenses | ||||||||||||||
The Company records accruals for estimated costs of research, preclinical and clinical studies, and manufacturing development, which are a significant component of research and development expenses. A substantial portion of the Company’s ongoing research and development activities is conducted by third-party service providers, including CROs. The Company’s contracts with CROs generally include pass-through fees such as regulatory expenses, investigator fees, travel costs and other miscellaneous costs, including shipping and printing fees. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company accrues the costs incurred under agreements with these third parties based on actual work completed in accordance with the respective agreements. In the event the Company makes advance payments, the payments are recorded as a prepaid asset and recognized as the services are performed. The Company determines the estimated costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fees to be paid for such services. | ||||||||||||||
The Company makes significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, the Company adjusts its accruals. Although the Company does not expect its estimates to be materially different from amounts actually incurred, the Company understands the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in the Company reporting amounts that are too high or too low in any particular period. The Company’s accrual is dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. To date, there have been no material differences from the Company’s accrued estimated expenses to the actual clinical trial expenses. However, variations in the assumptions used to estimate accruals, including, but not limited to the number of patients enrolled, the rate of patient enrollment, and the actual services performed may vary from the Company’s estimates, resulting in adjustments to clinical trial expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect its financial condition and results of operations. | ||||||||||||||
Income Taxes | ||||||||||||||
The Company uses the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Financial statement effects of uncertain tax positions are recognized when it is more-likely-than-not, based on the technical merits of the position, that it will be sustained upon examination. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax. The Company has not been subject to any interest and penalties through December 31, 2013. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company maintains an equity incentive plan under which incentive stock options may be granted to employees and nonqualified stock options, restricted stock awards, restricted stock units and stock appreciation rights may be granted to employees, officers, directors, consultants and advisors. | ||||||||||||||
For stock options granted to employees and directors, the Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values, net of an estimated forfeiture rate. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option-pricing model. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and the experience of other companies in the same industry, and will continue to evaluate the adequacy of the forfeiture rate assumption based on actual forfeitures, analysis of employee turnover, and other related factors. | ||||||||||||||
Stock-based compensation expense related to stock options granted to nonemployees is recognized based on the fair value of the stock options, determined using the Black-Scholes option-pricing model, as they are earned. The awards vest over the time period during which the nonemployee provides services to the Company. | ||||||||||||||
Convertible Preferred Stock Warrant Liability | ||||||||||||||
The freestanding warrant for shares that are puttable is classified as a liability on the balance sheet and is carried at estimated fair value. At the end of each reporting period, changes in the estimated fair value during the period are recorded in interest and other income (expense), net, in the condensed consolidated statement of operations. The Company will continue to adjust the carrying value of the warrant until the earlier of the exercise of the warrant or the completion of a liquidation event, including the completion of an IPO, at which time the liability will be reclassified to additional paid-in capital in the condensed consolidated statement of stockholders’ (deficit) equity. | ||||||||||||||
Comprehensive Loss | ||||||||||||||
Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the three and nine months ended September 30, 2014 and 2013, comprehensive loss was equal to net loss. | ||||||||||||||
Net Loss Per Share | ||||||||||||||
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for dilutive potential shares of common stock. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive for all periods presented. | ||||||||||||||
A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share follows (in thousands, except share and per share amounts): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net loss per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | (7,847 | ) | $ | (4,665 | ) | $ | (25,148 | ) | $ | (15,636 | ) | ||
Denominator: | ||||||||||||||
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share | 907,514 | 901,308 | 905,074 | 901,308 | ||||||||||
Less: Weighted-average shares subject to repurchase | (1,275 | ) | (64,432 | ) | (4,724 | ) | (95,171 | ) | ||||||
Denominator for basic and diluted net loss per share | 906,239 | 836,876 | 900,350 | 806,137 | ||||||||||
Net loss per share, basic and diluted | $ | (8.66 | ) | $ | (5.57 | ) | $ | (27.93 | ) | $ | (19.40 | ) | ||
The following outstanding dilutive potential shares of common stock were excluded from the computations of diluted net loss per share for the periods presented as the effect of including such securities would be antidilutive: | ||||||||||||||
As of September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Convertible preferred stock, as converted to common stock | 15,430,706 | 9,540,158 | ||||||||||||
Warrant to purchase convertible preferred stock, as converted to a common stock warrant | 11,276 | — | ||||||||||||
Options to purchase common stock | 2,249,871 | 1,714,106 | ||||||||||||
Common stock subject to repurchase | — | 24,064 | ||||||||||||
17,691,853 | 11,278,328 | |||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which is an amendment to the accounting guidance related to the evaluation of an entity’s ability to continue as a going concern. ASU 2014-15 establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. The update also gives guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. This guidance is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company will evaluate the guidance under ASU No. 2014-15 and present the required disclosures in its consolidated financial statements at the time of adoption. | ||||||||||||||
In June 2014, the FASB issued Accounting Standards Update 2014-10, Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation (“ASU 2014-10”), which eliminates the definition of a development stage entity, eliminates the development stage presentation and disclosure requirements under Accounting Standards Codification (“ASC”) 915, Development Stage Entities (“ASC 915”), and amends provisions of existing variable interest entity guidance under ASC 810, Consolidation. As a result of the changes, entities which meet the former definition of a development stage entity will no longer be required to: (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. Furthermore, ASU 2014-10 clarifies disclosures about risks and uncertainties under ASC Topic 275, Risks and Uncertainties, that apply to companies that have not commenced planned principal operations. Finally, variable interest entity rules no longer contain an exception for development stage entities and, as a result, development stage entities will have to be evaluated for consolidation in the same manner as non-development stage entities. | ||||||||||||||
Under ASU 2014-10, entities are no longer required to apply the presentation and disclosure provisions of ASC 915 during annual periods beginning after December 15, 2014. In addition, the revisions to the consolidation standards are effective for annual periods beginning after December 15, 2015 for public entities and are effective for annual periods beginning after December 15, 2016 for nonpublic entities. Early adoption is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). | ||||||||||||||
The Company has adopted ASU 2014-10 effective as of its issuance date. Adoption of this standard had no impact on the Company’s financial position, results of operations, or cash flows; however, the presentation of the consolidated financial statements has been changed to eliminate the disclosures that are no longer required. | ||||||||||||||
In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which converges the FASB and the International Accounting Standards Board standards on revenue recognition. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. This guidance is effective for the fiscal years and interim reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements and related disclosures. | ||||||||||||||
The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business or no material effect is expected on the consolidated financial statements as a result of future adoption. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
3. Fair Value Measurements | ||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance for fair value establishes a three-level hierarchy for disclosure of fair value measurements, as follows: | ||||||||||||||
Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | ||||||||||||||
Level 2—Inputs (other than quoted market prices included in Level 1) that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life. | ||||||||||||||
Level 3—Unobservable inputs that are supported by little or no market activity and reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. | ||||||||||||||
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. | ||||||||||||||
The following tables set forth the fair value of the Company’s financial instruments that were measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (in thousands): | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial assets: | ||||||||||||||
Repurchase agreements | $ | 46,000 | $ | — | $ | — | $ | 46,000 | ||||||
U.S. government agencies | — | 4,430 | — | 4,430 | ||||||||||
Total financial assets | $ | 46,000 | $ | 4,430 | $ | — | $ | 50,430 | ||||||
Financial liabilities: | ||||||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 139 | $ | 139 | ||||||
As of December 31, 2013 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial assets: | ||||||||||||||
Money market funds | $ | 19,441 | $ | — | $ | — | $ | 19,441 | ||||||
Financial liabilities: | ||||||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 61 | $ | 61 | ||||||
Level 3 liabilities are entirely comprised of the convertible preferred stock warrant liability (see Note 10). The following table sets forth a summary of the changes in the estimated fair value of the Company’s convertible preferred stock warrant, which were measured at fair value on a recurring basis (in thousands): | ||||||||||||||
Balance as of December 31, 2013 | $ | 61 | ||||||||||||
Increase in fair value included in other income (expense), net | 78 | |||||||||||||
Balance as of September 30, 2014 | $ | 139 | ||||||||||||
Where quoted prices are available in an active market, securities are classified as Level 1. The Company classifies money market funds and repurchase agreements as Level 1. When quoted market prices are not available for the specific security, then the Company estimates fair value by using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to benchmark yields, reported trades, broker/dealer quotes. The Company classifies obligations of U.S. government agencies as Level 2. In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3. Level 3 liabilities that are measured at fair value on a recurring basis consist of convertible preferred stock warrant liability. | ||||||||||||||
There were no transfers between Level 1 and Level 2 during the periods presented. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and Equipment | ' | |||||||
Property and Equipment | ' | |||||||
4. Property and Equipment | ||||||||
The following table is a summary of property and equipment (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Computer equipment | $ | 94 | $ | 55 | ||||
Office furniture | 49 | 41 | ||||||
Total property and equipment | 143 | 96 | ||||||
Less accumulated depreciation and amortization | (64 | ) | (35 | ) | ||||
Property and equipment, net | $ | 79 | $ | 61 | ||||
Property and equipment depreciation and amortization expense for the three months ended September 30, 2014 and 2013 was $11,000 and $6,000, respectively, and for the nine months ended September 30, 2014 and 2013 was $29,000 and $16,000, respectively. |
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accrued Liabilities | ' | |||||||
Accrued Liabilities | ' | |||||||
5. Accrued Liabilities | ||||||||
Accrued liabilities consisted of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued compensation | $ | 1,668 | $ | 949 | ||||
Accrued outside research and development services | 1,880 | 596 | ||||||
Accrued professional and consulting services | 849 | 400 | ||||||
Other | 89 | 54 | ||||||
$ | 4,486 | $ | 1,999 |
Intangible_Assets
Intangible Assets | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Intangible Assets | ' | ||||
Intangible Assets | ' | ||||
6. Intangible Assets | |||||
In-Process Research and Development | |||||
In connection with the acquisition of Valocor in 2011, the Company acquired intangible assets that were associated with IPR&D projects relating to preclinical product candidates. The acquisition-date fair value of these intangible assets was $3.5 million. As of all periods presented, these assets are considered to be indefinite-lived and will not be amortized, but will be tested for impairment on an annual basis, as well as between annual tests if changes in circumstances indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. If and when development is complete, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives. | |||||
Goodwill | |||||
The Company recorded the goodwill resulting from the Valocor acquisition separately on its consolidated balance sheet as of the acquisition date. Goodwill is tested for impairment on an annual basis, as well as between annual tests if there are changes in circumstances that would indicate a reduction in the fair value of the goodwill below its carrying amount. | |||||
The net book value of intangible assets and goodwill as of September 30, 2014 and December 31, 2013 was as follows (in thousands): | |||||
Net Book | |||||
Value | |||||
Intangible assets—IPR&D | $ | 3,520 | |||
Goodwill | 771 | ||||
Total intangible assets with indefinite lives | $ | 4,291 | |||
Loan_Agreement
Loan Agreement | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Loan Agreement | ' | ||||
Loan Agreement | ' | ||||
7. Loan Agreement | |||||
In December 2013, the Company entered into a loan and security agreement (the “Loan Agreement”) with Square 1 Bank (the “Bank”) that provides for two term loans available to the Company of $2.0 million and $5.5 million, respectively. In September 2014, the Company entered into an amendment to the Loan Agreement to (1) extend the interest only end date and maturity date for the Company’s outstanding term loan and potential borrowings under the second term loan, (2) extend the date through which the second term loan is available to the Company and (3) increase the fee the Company will pay the Bank upon the final repayment of the amounts borrowed under one of the term loans. Borrowings under the term loans bear interest at the greater of: (1) 5.10% above the treasury rate in effect on the date that a term loan is funded or (2) 5.50%, which rate will be fixed on the date of funding of the term loan. The Company may prepay borrowings without paying a penalty or premium. | |||||
On the closing date of the Loan Agreement, the Company borrowed $2.0 million under the first term loan (“Term Loan A”). The amount borrowed under Term Loan A matures December 19, 2018 and is secured by all assets of the Company other than the Company’s intellectual property, subject to certain limited exceptions, and bears interest at a rate of 5.77% per annum. The amount borrowed under Term Loan A is to be repaid over a period of 60 months as follows: (1) commencing on January 11, 2014, 30 monthly payments of interest only; and (2) commencing on June 19, 2016, 30 equal monthly payments of $66,666.67, plus interest. Upon final repayment of Term Loan A, the Company is required to pay the Bank a fee of $120,000. The Company is accruing this fee monthly over the loan term on a straight-line basis and is recording it as interest expense in the condensed consolidated statement of operations. | |||||
The second term loan (“Term Loan B”) of $5.5 million is available to the Company any time between the date the Company achieves certain positive top-line Phase 2 clinical trial results and September 30, 2015. In August 2014, the Company’s Board of Directors determined the Company achieved positive top-line Phase 2 clinical trial results from two of its Phase 2 programs, which satisfied the condition to the Company’s ability to borrow funds under Term Loan B. As a result, the Company is now entitled to borrow funds under Term Loan B. Borrowings, if any, under Term Loan B would be repaid over a period of months as follows: (1) commencing on the 11th day following the date of Term Loan B, monthly payments of interest only to the earlier of (a) June 19, 2016 or (b) six months following the date of Term Loan B; and (2) commencing on the last day of the month immediately following the interest only end date, equal monthly payments of principal, plus interest, to the maturity date of December 19, 2018. Upon final repayment of Term Loan B, the Company would be required to pay the Bank a fee equal to 2.75% of the original principal amount borrowed under Term Loan B. | |||||
The Loan Agreement is subject to certain representations and warranties, certain affirmative and negative covenants, certain conditions and events of default that are customarily required for similar financings. The affirmative covenants include, among other things, that the Company delivers timely financial statements and reports to the Bank, timely files taxes, maintains certain operating accounts subject to control agreements in favor of the Bank, maintains liability and other insurance, maintains at least two active and ongoing drug development programs and pledges security interests in any ownership interest of a future subsidiary. The negative covenants preclude, among other things, disposing of certain assets, engaging in certain mergers or acquisitions, incurring additional indebtedness, encumbering any collateral, paying dividends or making prohibited investments, in each case, without the prior consent of the Bank. As of September 30, 2014 and December 31, 2013, the Company was in compliance with all of the covenants. | |||||
In connection with the Loan Agreement, the Company agreed to issue the Bank a warrant to purchase up to 17,805 shares of the Company’s Series B convertible preferred stock, with an exercise price of $8.4245 per share. The number of shares issuable pursuant to the warrant at any date is 8,902 shares plus 1% of the amount of borrowings under the Loan Agreement as of such date divided by 8.4245. Following the entry into the Loan Agreement and the concurrent funding of Term Loan A, and as of September 30, 2014 and December 31, 2013, the warrant was exercisable for 11,276 shares of Series B convertible preferred stock, consisting of the 8,902 initial shares related to the Loan Agreement and an additional 2,374 shares related to Term Loan A. The fair value of the warrant of approximately $61,000 was recorded as a debt discount and amortized to interest expense using the straight-line method over the loan term. The Company recognized interest expense of $5,000 and $14,000 from the amortization of the warrant-related debt discount for the three and nine months ended September 30, 2014, respectively. The unamortized debt discount balance was $47,000 and $61,000 as of September 30, 2014 and December 31, 2013, respectively. | |||||
As of September 30, 2014, future principal and interest payments under Term Loan A are as follows (in thousands): | |||||
Year Ending December 31, | |||||
2014 | $ | 29 | |||
2015 | 117 | ||||
2016 | 519 | ||||
2017 | 872 | ||||
2018 | 945 | ||||
Total payments | 2,482 | ||||
Less: | |||||
Cash interest payments and balloon payment accretion | (482 | ) | |||
Unamortized bank fees and warrant value issued | (63 | ) | |||
Total representing principal payments | 1,937 | ||||
Less: current portion | — | ||||
Long-term portion of bank term loan | $ | 1,937 | |||
The Company incurred interest expense in connection with Term Loan A totaling $47,000 and $114,000 during the three and nine months ended September 30, 2014, respectively. No interest expense was incurred for the same periods during 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
8. Commitments and Contingencies | |||||
Facility Lease | |||||
The Company leases its corporate headquarters facility in Redwood City, California under a noncancelable operating lease agreement. The lease agreement was entered into in September 2011, and amended in November 2011 for additional space in the same facility. The lease terminates in November 2014. In March 2014 and May 2014, the Company entered into sublease agreements for additional office space in the same facility. The subleases commenced in May 2014 and terminate in November 2014. As of September 30, 2014, the future minimum lease payments for all space in this facility totaled approximately $100,000. | |||||
In July 2014, the Company entered into a lease agreement and an amendment on September 2014 for a separate facility totaling approximately 18,651 square feet in Menlo Park, California and intends to relocate its corporate headquarters to this facility in the fourth quarter of 2014. The term of the lease is five years, commencing in December 2014 and terminating in November 2019, with an option to renew for an additional three-year term. The base rent is approximately $97,918 per month during the first year of the lease and increases by three percent annually. Rent expenses include the base rent plus additional fees to cover the Company’s share of certain facility expenses, including utilities, property taxes, insurance and maintenance. The estimated amount of these additional fees is approximately $22,381 per month during the first year of the lease. | |||||
In addition, the Company is required to issue the lessor of the building either a security deposit or a letter of credit of $500,000 that may be used by or drawn upon by the lessor in the event of default of certain terms under the lease agreement. If there is no event of default under the agreement after the 30th month of the lease term, the letter of credit may be reduced to $250,000. In August 2014, the Company provided a letter of credit to the lessor in the amount of $500,000, which is collateralized by a certificate of deposit. The collateralized certificate of deposit is restricted cash and recorded in the Company’s condensed consolidated balance sheet as a non-current asset. | |||||
Rent expense for the three months ended September 30, 2014 and 2013 was $168,000 and $72,000, respectively, and for the nine months ended September 30, 2014 and 2013 was $393,000 and $184,000, respectively. The terms of the facility leases provide for rental payments on a monthly basis on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period and has accrued for rent expense incurred but not paid. | |||||
As of September 30, 2014, the aggregate total future minimum lease payments under the Menlo Park non-cancelable operating lease were as follows (in thousands): | |||||
Year Ending December 31, | |||||
2014 | $ | 98 | |||
2015 | 1,178 | ||||
2016 | 1,213 | ||||
2017 | 1,250 | ||||
2018 and thereafter | 2,499 | ||||
Total payments | $ | 6,238 | |||
The table above excludes approximately $1.4 million of additional rent due over the period of the operating lease to cover the Company’s share of facility expenses, including utilities, property taxes, insurance and maintenance. | |||||
Contingencies | |||||
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. The Company is not subject to any current pending legal matters or claims. | |||||
Indemnification | |||||
The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. | |||||
The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. | |||||
No amounts associated with such indemnifications have been recorded to date. |
Technology_Agreements
Technology Agreements | 9 Months Ended |
Sep. 30, 2014 | |
Technology Agreements | ' |
Technology Agreements | ' |
9. Technology Agreements | |
Maruho Agreement | |
In March 2013, the Company entered into a Right of First Negotiation Agreement with Maruho Co., Ltd. Under the terms of the agreement, the Company provided Maruho with certain information and the right to negotiate an exclusive license to develop and commercialize certain of the Company’s product candidates in specified territories. In connection with the entry into this agreement, Maruho paid the Company a nonrefundable upfront payment of $10.0 million, which will be credited against certain payments payable by Maruho to the Company if the two parties enter into an exclusive license for any of the Company’s products. If the parties do not enter into such an arrangement, the Company will be entitled to keep the funds without further obligation. As of September 30, 2014 and December 31, 2013, the Company recorded the $10.0 million as deferred revenue on its consolidated balance sheet. The revenue will be recognized in connection with and pursuant to a future license arrangement, if any, or at the time the parties decide not to enter into such a license, at which point the entire amount would be recognized as revenue. | |
In connection with the execution of the Right of First Negotiation Agreement, Maruho purchased 1,187,014 shares of the Company’s Series B convertible preferred stock for an aggregate purchase price of $10.0 million. | |
Rose U Agreement | |
In April 2013, the Company entered into an exclusive license agreement with Rose U, LLC to license certain patents, patent applications and know-how. This agreement includes a sublicense and assignment of certain know-how licensed and assigned to Rose U by Stiefel Laboratories, Inc., a GSK Company, the prior licensee of such patents. In connection with this agreement, the Company also entered into a letter agreement with Stiefel. The Company paid fees of $0.3 million to Rose U in connection with execution of these agreements and is required to pay additional amounts totaling up to $4.6 million upon the achievement of specified development, commercialization and other milestones under these agreements. In addition, the Company is also obligated to pay Rose U low-to-mid single-digit royalties on net product sales and low double-digit royalties on sublicense fees and certain milestone, royalty and other contingent payments received from sublicensees, to the extent such amounts are in excess of the milestone and royalty payments the Company is obligated to pay Rose U directly upon the events or sales triggering such payments. The initial fee of $0.2 million was recorded to research and development expense in the statement of operations for the year ended December 31, 2013. | |
UCB Agreement | |
In March 2014, the Company entered into a development and commercialization agreement with UCB (the “UCB agreement”), for the Company to develop Cimzia in order for UCB to seek regulatory approval from the FDA, European Medicines Agency (“EMA”) and the Canadian federal department for health (“Health Canada”) for the treatment of psoriasis, and upon the grant of regulatory approval in the United States and Canada, for the Company to promote sales of Cimzia to dermatologists and conduct related medical affairs activities in the United States and Canada. Unless earlier terminated, the term of the UCB agreement is 12.5 years following the first commercial launch following regulatory approval of Cimzia for the treatment of psoriasis in the United States or Canada. | |
The Company has agreed with UCB on a development plan to obtain regulatory approval from the FDA, the EMA and Health Canada, which may be amended as necessary to meet the requirements of these regulatory authorities for approval. The Company is responsible for development costs under the development plan up to a specified cap greater than $75.0 million and less than $95.0 million, plus its internal development costs. Any development costs in excess of this cap or for any required clinical trials in pediatric patients will be shared equally. Development costs for any EMA-specific post-approval studies will be borne solely by UCB. UCB is obligated to pay the Company up to an aggregate of $36.0 million if certain development milestones are met, and up to an additional aggregate of $13.5 million upon the grant of regulatory approval, including pricing and reimbursement approval, in certain European countries. | |
Under the terms of the UCB agreement, the Company will have the exclusive rights upon regulatory approval of the psoriasis indication to promote Cimzia to dermatologists in the United States and Canada. Following such regulatory approval, UCB will book sales and is obligated to pay the Company royalties representing a percentage of the annual gross profits (after subtracting the costs of certain commercialization support services to be provided by UCB) from Cimzia sales attributed to dermatologists in all indications in the United States and Canada. In each year, the royalties payable to the Company are tiered based upon increasing levels of annual net sales attributed to dermatologists in such year, with UCB retaining between 10% and, above $150.0 million of such annual net sales in such year, 50%, and the Company receiving the balance, of such annual gross profits. In addition, UCB is obligated to pay the Company up to an aggregate of $40.0 million upon the achievement of tiered milestones based on annual net sales of Cimzia attributed to dermatologists in the United States and Canada. | |
In connection with the UCB agreement, UCB purchased $5.0 million of the Company’s Series B preferred stock at $8.4245 per share in April 2014. Concurrently with the IPO, entities affiliated with UCB agreed to purchase from the Company in a private placement shares of the Company’s common stock with an aggregate purchase price of $7.5 million, at a price per share equal to the initial public offering price. The sale of these shares to entities affiliated with UCB will not be registered in the IPO. |
Series_B_Convertible_Preferred
Series B Convertible Preferred Stock Warrant | 9 Months Ended | |||||
Sep. 30, 2014 | ||||||
Series B Convertible Preferred Stock Warrant | ' | |||||
Series B Convertible Preferred Stock Warrant | ' | |||||
10. Series B Convertible Preferred Stock Warrant | ||||||
On December 11, 2013, in connection with the Square 1 Bank Term Loan A (see Note 7), the Company issued the Bank a warrant to purchase up to 17,805 shares of the Company’s Series B convertible preferred stock with an exercise price of $8.4245 per share and a contractual term of seven years from issuance. The number of shares issuable pursuant to the warrant at any date is 8,902 shares plus 1% of the amount drawn through that date under the Loan Agreement divided by 8.4245. Following the entry into the Loan Agreement and the concurrent funding of Term Loan A, the warrant was exercisable for 11,276 shares of Series B convertible preferred stock. The fair value of the warrant of approximately $61,000 was recorded as debt discount and warrant liability upon issuance. The fair value of the warrant on the date of issue was determined using the Black-Scholes option-pricing model with the following weighted-average assumptions: (1) seven-year contractual term; (2) 66.0% expected volatility; (3) 1.6% risk-free interest rate; and (4) no expected dividend. | ||||||
The fair value of the outstanding convertible preferred stock warrant was remeasured as of September 30, 2014 and December 31, 2013 using a Black-Scholes option-pricing model with the following assumptions: | ||||||
September 30, | December 31, | |||||
2014 | 2013 | |||||
Expected term (in years) | 6.2 | 7 | ||||
Expected volatility | 75.7 | % | 66 | % | ||
Risk-free interest rate | 2 | % | 1.6 | % | ||
Expected dividend rate | 0 | % | 0 | % | ||
The fair value of the warrant as of September 30, 2014 and December 31, 2013 was $139,000 and $61,000, respectively. The change in fair value for the nine months ended September 30, 2014 was an increase of $78,000, which was reflected in interest and other income (expense), net. |
Common_Stock
Common Stock | 9 Months Ended | |||||
Sep. 30, 2014 | ||||||
Common Stock | ' | |||||
Common Stock | ' | |||||
11. Common Stock | ||||||
As of September 30, 2014, the Company was authorized to issue up to 126,000,000 shares of common stock, par value $0.001 per share. | ||||||
The Company had reserved shares of common stock, on an as converted basis, for issuance as follows: | ||||||
As of | As of | |||||
September 30, | December 31, | |||||
2014 | 2013 | |||||
Share-based payments outstanding under stock incentive plans | 2,249,871 | 1,743,590 | ||||
Conversion of convertible preferred stock | 15,430,706 | 9,540,158 | ||||
Issuances upon exercise of convertible preferred stock warrant | 11,276 | 11,276 | ||||
Shares available for future stock option grants | 200,712 | 142,506 | ||||
17,892,565 | 11,437,530 | |||||
From August 2010 to October 2010, the Company issued 400,857 shares of restricted common stock at $0.001 per share to service providers of the Company under common stock purchase agreements. The shares purchased under the stock purchase agreements vest over time. The unvested shares of common stock are subject to a right of repurchase by the Company in the event of cessation of services. Included in common stock outstanding as of December 31, 2013 were 9,788 shares, which were subject to the Company’s right to repurchase relating to these common stock purchase agreements. There were no shares of common stock subject to the Company’s right of repurchase as of September 30, 2014. |
Convertible_Preferred_Stock
Convertible Preferred Stock | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Convertible Preferred Stock | ' | ||||||||||||||
Convertible Preferred Stock | ' | ||||||||||||||
12. Convertible Preferred Stock | |||||||||||||||
As of September 30, 2014 and December 31, 2013, the Company was authorized to issue up to 40,874,365 shares and 10,107,111 shares, respectively, of preferred stock, par value $0.001 per share. In August 2014, the Company issued 5,297,041 shares of Series C convertible preferred stock at a purchase price of $9.628 per share for net proceeds of $48.8 million. | |||||||||||||||
As of September 30, 2014, outstanding convertible preferred stock was comprised of the following (in thousands, except share and per share amounts): | |||||||||||||||
Shares | Shares | Carrying | Liquidation | Liquidation | |||||||||||
Authorized | Issued and | Value | Value per | Value | |||||||||||
Outstanding | Share | ||||||||||||||
Series A | 6,572,629 | 6,572,625 | $ | 35,089 | $ | 5.365 | $ | 35,262 | |||||||
Series B | 3,578,847 | 3,561,040 | 29,499 | 8.4245 | 30,000 | ||||||||||
Series C | 30,722,889 | 5,297,041 | 48,826 | 9.628 | 51,000 | ||||||||||
40,874,365 | 15,430,706 | $ | 113,414 | $ | 116,262 | ||||||||||
As of December 31, 2013, outstanding convertible preferred stock was comprised of the following (in thousands, except share and per share amounts): | |||||||||||||||
Shares | Shares | Carrying | Liquidation | Liquidation | |||||||||||
Authorized | Issued and | Value | Value per | Value | |||||||||||
Outstanding | Share | ||||||||||||||
Series A | 6,572,629 | 6,572,625 | $ | 35,089 | $ | 5.365 | $ | 35,262 | |||||||
Series B | 3,534,482 | 2,967,533 | 24,499 | 8.4245 | 25,000 | ||||||||||
10,107,111 | 9,540,158 | $ | 59,588 | $ | 60,262 | ||||||||||
The Company recorded the convertible preferred stock at fair value, net of issuance costs, on the dates of issuance. The Company classifies the convertible preferred stock outside of stockholders’ deficit because the shares contain liquidation features that are not solely within the Company’s control. For the nine months ended September 30, 2014, the Company did not adjust the carrying values of the convertible preferred stock to the deemed redemption values of such shares since a liquidation event was not probable. Subsequent adjustments to the carrying values to the ultimate redemption values will be made only if and when it becomes probable that such a liquidation event will occur. | |||||||||||||||
The rights, preferences and privileges of the convertible preferred stock are as follows: | |||||||||||||||
Conversion | |||||||||||||||
Each share of Series A, Series B and Series C convertible preferred stock is convertible into shares of common stock at an initial conversion price of $5.365 per share, $8.4245 per share and $9.628, respectively. Each share of convertible preferred stock is convertible, at the option of the holder, at any time into fully paid and nonassessable shares of common stock. Conversion of all shares of convertible preferred stock is automatic upon: (1) affirmative election of the holders of a majority of the shares of convertible preferred stock outstanding; or (2) the closing of a firm commitment underwritten public offering of common stock with a price per share of not less than the conversion price of the Series C convertible preferred stock then in effect and gross cash proceeds to the Company of at least $50.0 million (before deduction of underwriters’ commissions and expenses). | |||||||||||||||
The number of shares of common stock to which a convertible preferred stockholder is entitled upon conversion of such stockholder’s convertible preferred stock is the product obtained by multiplying the convertible preferred stock conversion rate by the number of shares of convertible preferred stock being converted, subject to adjustments as provided in the Company’s Restated Certificate of Incorporation. As of December 31, 2013 and September 30, 2014, all shares of Series A, Series B and Series C convertible preferred stock were convertible into common stock on a one-for-one basis. | |||||||||||||||
The Series A, Series B and Series C convertible preferred stock conversion prices are subject to adjustment upon any future stock splits or stock combinations, reclassifications or exchanges of similar shares, or upon a reorganization, merger or consolidation of the Company. In addition, the conversion prices are subject to adjustment upon any issuance of stock below the stated conversion prices for each series of convertible preferred stock, subject to certain exceptions. | |||||||||||||||
Special Mandatory Conversion | |||||||||||||||
At any time prior to the automatic conversion of the convertible preferred stock or conversion of the convertible preferred stock pursuant to a liquidation, dissolution or winding up of the Company or a deemed liquidation event, if certain investors do not participate in a qualified financing by purchasing their pro rata amount (based upon designated commitment percentages) up to a threshold amount, on the terms generally applicable to other investors in the qualified financing, then each share of convertible preferred stock held by those investors will be automatically converted into the number of shares of common stock equal to 50% of the shares of common stock that such investors would be entitled to receive upon an optional conversion at the applicable conversion price for the series of preferred stock in question that is in effect immediately prior to the consummation of such qualified financing. Once each such investor has purchased preferred stock in an amount equal to the threshold amount, such automatic special mandatory conversion provision is no longer applicable as to such investor. | |||||||||||||||
Voting | |||||||||||||||
Stockholders of the Series A, Series B and Series C convertible preferred stock are entitled to the number of votes equal to the number of shares of common stock into which such shares of convertible preferred stock are convertible on the record date for the determination of stockholders entitled to vote on such matters or, if no such record date is established, the date such vote is taken or written consent is solicited. Holders of convertible preferred stock vote together as one class with the common stock, and have voting rights and powers that differ from the common stock as specified in the Company’s Amended and Restated Certificate of Incorporation. For so long as at least 25% of the shares of convertible preferred stock remain outstanding, the approval of convertible preferred stockholders is required for a number of significant changes to the Company, including the creation of a new class or series of shares of capital stock and amendments to the Company’s Amended and Restated Certificate of Incorporation and Bylaws. | |||||||||||||||
So long as at least 25% of the shares of Series A convertible preferred stock remain outstanding, the holders of Series A convertible preferred stock, voting as a separate series, will be allowed to elect three directors of the Company, the holders of the common stock, voting as a separate class, are allowed to elect two directors of the Company. | |||||||||||||||
Liquidation | |||||||||||||||
In the event of a liquidation, dissolution, or winding up of the Company, whether voluntarily or involuntarily, and upon certain other defined events, the holders of the Series A, Series B and Series C convertible preferred stock are also entitled to receive liquidation preferences in amounts per share equal to the original issue price of $5.3650, $8.4245 and $9.628, respectively, plus the amount of any declared and unpaid dividends on such shares of convertible preferred stock. Liquidation payments are made in preference to any payments to the holders of common stock. If the funds or assets from the liquidation event are insufficient to permit the payment of Series A, Series B and Series C convertible preferred stock holders their full liquidation preferences, then all the funds or assets will be distributed among the holders Series A, Series B and Series C convertible preferred stock pro rata, on a pari passu basis, according to their respective liquidation preferences. If there are any funds remaining after the payment of the liquidation preference of $5.3650 per share, $8.4245 per share and $9.628 per share to the holders of the Series A, Series B and Series C convertible preferred stock, respectively, then all remaining funds shall be distributed among the holders of the shares of Series A, Series B and Series C convertible preferred stock and common stock, pro rata based on the number of shares held by each such holder (on an as-converted to common stock basis), provided, however, that if the aggregate amount the holders of Series A and Series B preferred stock are entitled to receive exceeds $16.0950 per share, $25.2735 per share and $28.884, respectively, then each holder of Series A, Series B and Series C convertible preferred stock shall only be entitled to receive the greater of (1) $16.0950 per share, $25.2735 per share and $28.884, respectively, or (2) the amount such holder would have received if all shares of Series A, Series B and Series C convertible preferred stock had been converted into common stock immediately prior to a liquidation, dissolution or winding up of the Company. | |||||||||||||||
Dividends | |||||||||||||||
Holders of Series A, Series B and Series C convertible preferred stock are entitled to receive dividends out of any assets legally available only when, as, and if declared by the Board of Directors, prior to and in preference to any declaration or payment of any dividend on the common stock. Such dividends shall be noncumulative. The dividend rate for the Series A, Series B and Series C convertible preferred stock per share per annum is $0.4292, $0.67396 and $0.754, respectively. To date, the Board of Directors has not declared any dividends. | |||||||||||||||
Redemption | |||||||||||||||
The convertible preferred stock is not redeemable as it does not have a set redemption date or a date after which the shares may be redeemed by the holders. | |||||||||||||||
Equity_Incentive_Plans
Equity Incentive Plans | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Equity Incentive Plans | ' | |||||||||||||
Equity Incentive Plans | ' | |||||||||||||
13. Equity Incentive Plans | ||||||||||||||
As of September 30, 2014 and December 31, 2013, the Company had reserved 2,456,785and 1,886,095 shares of common stock for issuance under the 2010 Equity Incentive Plan, respectively. | ||||||||||||||
The following summary of stock option activity for the periods presented is as follows (in thousands, except share and per share amounts): | ||||||||||||||
Shares | Shares | Weighted- | Weighted- | Aggregate | ||||||||||
Available | Subject to | Average | Average | Intrinsic | ||||||||||
for Grant | Outstanding | Exercise | Remaining | Value | ||||||||||
Options | Price Per | Contractual | ||||||||||||
Share | Term (in years) | |||||||||||||
Options outstanding at December 31, 2013 | 142,506 | 1,743,590 | $ | 1.18 | ||||||||||
Additional shares reserved under plan | 570,693 | — | — | |||||||||||
Options granted | (533,955 | ) | 533,955 | 5.28 | ||||||||||
Options exercised | — | (6,206 | ) | 1.1 | ||||||||||
Options forfeited | 21,468 | (21,468 | ) | 1.37 | ||||||||||
Options outstanding at September 30, 2014 | 200,712 | 2,249,871 | $ | 2.15 | 7.5 | $ | 31,153 | |||||||
Vested and expected to vest as of September 30, 2014 | 2,079,367 | $ | 2.11 | 8.2 | $ | 28,879 | ||||||||
Exercisable as of September 30, 2014 | 990,193 | 1.11 | 7.5 | 14,748 | ||||||||||
The following table summarizes information with respect to stock options outstanding and currently exercisable as of September 30, 2014: | ||||||||||||||
Options Outstanding | ||||||||||||||
Exercise Price | Number of | Weighted- | Options | |||||||||||
Options | Average | Exercisable | ||||||||||||
Remaining | ||||||||||||||
Contractual Life | ||||||||||||||
(in years) | ||||||||||||||
$ | 0.0058 | 25,169 | 6.1 | 24,644 | ||||||||||
$ | 0.986 | 879,375 | 7.1 | 652,006 | ||||||||||
$ | 1.218 | 508,060 | 8.3 | 211,686 | ||||||||||
$ | 1.74 | 332,621 | 8.9 | 97,404 | ||||||||||
$ | 5.51 | 504,646 | 9.7 | 4,453 | ||||||||||
2,249,871 | 990,193 | |||||||||||||
Stock Options Granted to Employees | ||||||||||||||
During the nine months ended September 30, 2014, the Company granted stock options to employees and nonemployee directors to purchase shares of common stock with a weighted-average grant date fair value of $3.58 per share and a weighted-average exercise price of $5.34 per share, respectively. As of September 30, 2014, there was total unrecognized compensation expense of $2.0 million to be recognized over a period of approximately 2.2 years. | ||||||||||||||
Stock Options Granted to Nonemployees | ||||||||||||||
Stock-based compensation expense related to stock options granted to nonemployees is recognized as the stock options are earned. During the three and nine months ended September 30, 2014 and 2013, the Company did not grant any options to purchase shares of common stock to nonemployees. | ||||||||||||||
Compensation expense related to these options during the three months ended September 30, 2014 and 2013 was approximately $108,000 and $12,000, respectively, and during the nine months ended September 30, 2014 and 2013 was approximately $215,000 and $25,000, respectively. | ||||||||||||||
Total Stock-Based Compensation | ||||||||||||||
Total stock-based compensation expense related to options granted to employees and nonemployees was allocated as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Research and development: | $ | 210 | $ | 59 | $ | 436 | $ | 138 | ||||||
Sales, general and administrative: | 114 | 26 | 198 | 67 | ||||||||||
Total stock-based compensation expense | $ | 324 | $ | 85 | $ | 634 | $ | 205 | ||||||
There were no capitalized stock-based compensation costs or recognized stock-based compensation tax benefits during the three and nine months ended September 30, 2014 and 2013, respectively. |
Subsequent_Events
Subsequent Events | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Subsequent Events | ' | |||||||
Subsequent Events | ' | |||||||
14. Subsequent Events | ||||||||
Initial Public Offering and Concurrent Private Placement | ||||||||
On October 8, 2014, the Company closed its IPO of 7,812,500 shares of its common stock, all of which were sold by the Company. The public offering price of the shares sold in the IPO was $16.00 per share. The net proceeds from the IPO to the Company were approximately $112.8 million, after deducting the underwriting discounts and commissions of $8.75 million and the payment of offering expenses of approximately $3.45 million. As of September 30, 2014, approximately $1.6 million of IPO costs remained unpaid, which costs are expected to be paid in the Company’s fourth fiscal quarter. | ||||||||
Concurrently with the IPO, the Company issued and sold in a private placement 468,750 shares of common stock at the public offering price of $16.00 per share, which resulted in net proceeds of $7.5 million, pursuant to a Common Stock Purchase Agreement by and between the Company and UCB, S.A., the parent company of UCB Pharma S.A., dated September 19, 2014. | ||||||||
The table below shows, on a pro forma basis, the impact of the IPO and the concurrent private placement on certain condensed balance sheet items. The as adjusted condensed balance sheet data below gives effect to the sale of 8,281,250 shares of common stock from the IPO and the concurrent private placement, at the initial public offering price of $16.00 per share, after deducting the underwriting discounts and commissions and estimated offering related transaction expenses. | ||||||||
September 30, 2014 | ||||||||
Actual | Pro Forma | |||||||
As Adjusted | ||||||||
(in thousands) | ||||||||
Condensed Consolidated Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 50,845 | $ | 171,145 | ||||
Working capital | 43,624 | 164,063 | ||||||
Total assets | 59,616 | 179,916 | ||||||
Convertible preferred stock warrant liability | 139 | — | ||||||
Bank term loan, current and non-current | 1,937 | 1,937 | ||||||
Convertible preferred stock | 113,414 | — | ||||||
Additional paid-in capital | 1,611 | 235,439 | ||||||
Accumulated deficit | (75,922 | ) | (75,922 | ) | ||||
Total stockholders’ (deficit) equity | (74,310 | ) | 159,543 | |||||
Approval of Restated Certificate of Incorporation | ||||||||
On September 9, 2014, the Company’s Board of Directors approved a Restated Certificate of Incorporation that became effective upon its filing with the Secretary of State of the State of Delaware on October 8, 2014, immediately prior to the closing of the IPO. The Restated Certificate of Incorporation increased the authorized share capital to 500,000,000 shares of common stock, $0.001 par value per share, and reduced the authorized share capital to 10,000,000 shares of undesignated preferred stock, $0.001 par value per share. | ||||||||
Option Grants | ||||||||
On September 9, 2014, the Company’s Board of Directors approved the grant of options to purchase 244,835 shares of the Company’s common stock at an exercise price per share equal to the initial public offering price, all of which were granted on October 2, 2014, the day that the Company’s Registration Statement on Form S-1 (the “S-1”) was declared effective. | ||||||||
2014 Equity Incentive Plan | ||||||||
On September 9, 2014, the Company’s Board of Directors adopted and approved the 2014 Equity Incentive Plan (the “2014 EIP”), which became effective on October 1, 2014, the day prior to the day that the S-1 was declared effective. The 2014 EIP authorizes the reservation of 1,896,551 shares of the Company’s common stock, plus any shares reserved or remaining for issuance, or that become available upon forfeiture or repurchase by the Company, under the 2010 Plan. On January 1 of each of the first ten years commencing after the effective date of the IPO, the number of shares of the Company’s common stock reserved for issuance under the 2014 EIP will increase automatically by an amount equal to 4% of the number of shares of the Company’s common stock outstanding on the preceding December 31, unless the Company’s Board of Directors elects to authorize a lesser number of shares. | ||||||||
2014 Employee Stock Purchase Plan | ||||||||
On September 9, 2014, the Company’s Board of Directors adopted and approved the 2014 Employee Stock Purchase Plan (the “2014 ESPP”), which became effective on October 2, 2014, the day of that the S-1 was declared effective. The 2014 ESPP authorizes the reservation of 301,724 shares of the Company’s common stock. On January 1 of each of the first ten years commencing after the effective date of the IPO, the number of shares of the Company’s common stock reserved for issuance under the 2014 ESPP will increase automatically by an amount equal to 1% of the number of shares of the Company’s common stock outstanding on the preceding December 31, unless the Company’s Board of Directors elects to authorize a lesser number of shares. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Basis of Presentation | ' | |||||||||||||
Basis of Presentation | ||||||||||||||
The condensed consolidated financial statements include the accounts of the Company and Dermira Canada and have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. The results of operations for the nine-month period ended September 30, 2014 are not necessarily indicative of the results to be expected for the full year ending December 31, 2014 or any other future period. The balance sheet as of December 31, 2013 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. All significant intercompany transactions and balances have been eliminated during consolidation. | ||||||||||||||
The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2013 included in the Company’s Prospectus dated October 2, 2014 filed pursuant to Rule 424(b)(4) with the SEC on October 3, 2014 in connection with the Registration Statement on Form S-1 (No. 333-1984410). | ||||||||||||||
Reverse Stock Split | ' | |||||||||||||
Reverse Stock Split | ||||||||||||||
The Company effected a 5.8-to-1 reverse stock split of each share of the Company’s outstanding capital stock on September 18, 2014, the date that the Certificate of Amendment to the Restated Certificate of Incorporation was filed with the Delaware Secretary of State. The reverse stock split did not result in an adjustment to par value. All references to shares of common stock outstanding, average number of shares outstanding and per share amounts in these condensed consolidated financial statements and notes to the condensed consolidated financial statements reflect the reverse stock split. | ||||||||||||||
Use of Estimates | ' | |||||||||||||
Use of Estimates | ||||||||||||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting periods. On an ongoing basis, management evaluates its estimates, including those related to accrued research and development expenses, goodwill, intangible assets, other long-lived assets, fair value of common stock, convertible preferred stock and related warrants, stock-based compensation, and the valuation of deferred tax assets. The Company bases its estimates on its historical experience and also on assumptions that it believes are reasonable; however, actual results could significantly differ from those estimates. | ||||||||||||||
Risks and Uncertainties | ' | |||||||||||||
Risks and Uncertainties | ||||||||||||||
The product candidates developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies prior to commercial sales in the United States or foreign jurisdictions, respectively. There can be no assurance that the Company’s current and future product candidates will receive the necessary approvals. If the Company is denied approval or approval is delayed, it may have a material adverse impact on the Company’s business and its financial condition. | ||||||||||||||
The Company is subject to risks common to early-stage companies in the pharmaceutical industry, including dependence on the clinical and commercial success of its product candidates, ability to obtain regulatory approval of its product candidates, compliance with regulatory requirements, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients, significant competition and ability to manage third party manufacturers, suppliers and contract research organizations (“CROs”). | ||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposits, money market accounts, repurchase agreements and obligations of U.S. government agencies. | ||||||||||||||
Concentration of Credit Risk | ' | |||||||||||||
Concentration of Credit Risk | ||||||||||||||
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company invests its excess cash in money market funds, repurchase agreements and obligations of U.S. government agencies. Bank deposits are held by a single financial institution with a strong credit rating and these deposits may at times be in excess of insured limits. The Company is exposed to credit risk in the event of a default by the financial institution holding its cash and cash equivalents and issuers of investments to the extent recorded on the balance sheets. The Company’s investment policy limits investments to certain types of debt securities issued by the U.S. government and its agencies and places restrictions on maturities and concentration by type and issuer. | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company primarily applies the market approach for recurring fair value measurements. | ||||||||||||||
The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The carrying amount of the Company’s cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short maturities. | ||||||||||||||
Impairment of Long-Lived Assets | ' | |||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||
The Company assesses changes in the performance of its product candidates in relation to its expectations, and industry, economic and regulatory conditions and makes assumptions regarding estimated future cash flows in evaluating the value of its property and equipment, goodwill and in-process research and development (“IPR&D”). | ||||||||||||||
The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its long-lived assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets is compared to the carrying value to determine whether impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, the Company will estimate fair value using a discounted value of estimated future cash flows approach. | ||||||||||||||
Goodwill represents the excess of the consideration transferred over the fair value of the net assets acquired in connection with the acquisition of Valocor. The Company tests goodwill for impairment on at least an annual basis, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the goodwill is less than its carrying amount. Some of the factors considered by the Company in its assessment include general macro-economic conditions, conditions specific to the industry and market, and the successful development of its product candidates. If the Company concludes it is more likely than not that the fair value of the goodwill is less than its carrying amount, a quantitative fair value test is performed. | ||||||||||||||
IPR&D represents the fair value assigned to incomplete research projects that the Company acquired through the acquisition of Valocor which, at the time of acquisition, had not reached technological feasibility. The amount was capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the project. The Company tests IPR&D for impairment at least annually, or more frequently, if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D intangible asset is less than its carrying amount. If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value is performed. | ||||||||||||||
Deferred Offering Costs | ' | |||||||||||||
Deferred Offering Costs | ||||||||||||||
Deferred offering costs, consisting of legal, accounting, filing and other fees related to the Company’s initial public offering (the “IPO”), are capitalized. The deferred offering costs will be offset against proceeds from the IPO for periods subsequent to the IPO. As of September 30, 2014, $3.3 million of deferred offering costs were capitalized, which are included in other assets in the condensed consolidated balance sheet. No amounts were deferred as of December 31, 2013. | ||||||||||||||
Research and Development Expenses | ' | |||||||||||||
Research and Development Expenses | ||||||||||||||
The Company expenses both internal and external research and development expenses to operations as they are incurred. The Company’s research and development expenses consist primarily of costs incurred for the development of its product candidates and include: (1) expenses incurred under agreements with CROs, investigative sites and consultants to conduct clinical trials and preclinical and non-clinical studies; (2) costs to acquire, develop and manufacture supplies for clinical trials and other studies, including fees paid to contract manufacturing organizations (“CMOs”); (3) salaries and related costs, including stock-based compensation and travel expenses, for personnel in research and development functions; (4) costs related to compliance with drug development regulatory requirements; (5) depreciation and other allocated facility-related and overhead expenses; and (6) licensing fees and milestone payments incurred under product license agreements. | ||||||||||||||
Accrued Research and Development Expenses | ' | |||||||||||||
Accrued Research and Development Expenses | ||||||||||||||
The Company records accruals for estimated costs of research, preclinical and clinical studies, and manufacturing development, which are a significant component of research and development expenses. A substantial portion of the Company’s ongoing research and development activities is conducted by third-party service providers, including CROs. The Company’s contracts with CROs generally include pass-through fees such as regulatory expenses, investigator fees, travel costs and other miscellaneous costs, including shipping and printing fees. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company accrues the costs incurred under agreements with these third parties based on actual work completed in accordance with the respective agreements. In the event the Company makes advance payments, the payments are recorded as a prepaid asset and recognized as the services are performed. The Company determines the estimated costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fees to be paid for such services. | ||||||||||||||
The Company makes significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, the Company adjusts its accruals. Although the Company does not expect its estimates to be materially different from amounts actually incurred, the Company understands the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in the Company reporting amounts that are too high or too low in any particular period. The Company’s accrual is dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. To date, there have been no material differences from the Company’s accrued estimated expenses to the actual clinical trial expenses. However, variations in the assumptions used to estimate accruals, including, but not limited to the number of patients enrolled, the rate of patient enrollment, and the actual services performed may vary from the Company’s estimates, resulting in adjustments to clinical trial expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect its financial condition and results of operations. | ||||||||||||||
Income Taxes | ' | |||||||||||||
Income Taxes | ||||||||||||||
The Company uses the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Financial statement effects of uncertain tax positions are recognized when it is more-likely-than-not, based on the technical merits of the position, that it will be sustained upon examination. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax. The Company has not been subject to any interest and penalties through December 31, 2013. | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company maintains an equity incentive plan under which incentive stock options may be granted to employees and nonqualified stock options, restricted stock awards, restricted stock units and stock appreciation rights may be granted to employees, officers, directors, consultants and advisors. | ||||||||||||||
For stock options granted to employees and directors, the Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values, net of an estimated forfeiture rate. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option-pricing model. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures and the experience of other companies in the same industry, and will continue to evaluate the adequacy of the forfeiture rate assumption based on actual forfeitures, analysis of employee turnover, and other related factors. | ||||||||||||||
Stock-based compensation expense related to stock options granted to nonemployees is recognized based on the fair value of the stock options, determined using the Black-Scholes option-pricing model, as they are earned. The awards vest over the time period during which the nonemployee provides services to the Company. | ||||||||||||||
Convertible Preferred Stock Warrant Liability | ' | |||||||||||||
Convertible Preferred Stock Warrant Liability | ||||||||||||||
The freestanding warrant for shares that are puttable is classified as a liability on the balance sheet and is carried at estimated fair value. At the end of each reporting period, changes in the estimated fair value during the period are recorded in interest and other income (expense), net, in the condensed consolidated statement of operations. The Company will continue to adjust the carrying value of the warrant until the earlier of the exercise of the warrant or the completion of a liquidation event, including the completion of an IPO, at which time the liability will be reclassified to additional paid-in capital in the condensed consolidated statement of stockholders’ (deficit) equity. | ||||||||||||||
Comprehensive Loss | ' | |||||||||||||
Comprehensive Loss | ||||||||||||||
Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the three and nine months ended September 30, 2014 and 2013, comprehensive loss was equal to net loss. | ||||||||||||||
Net Loss Per Share | ' | |||||||||||||
Net Loss Per Share | ||||||||||||||
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for dilutive potential shares of common stock. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive for all periods presented. | ||||||||||||||
A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share follows (in thousands, except share and per share amounts): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net loss per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | (7,847 | ) | $ | (4,665 | ) | $ | (25,148 | ) | $ | (15,636 | ) | ||
Denominator: | ||||||||||||||
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share | 907,514 | 901,308 | 905,074 | 901,308 | ||||||||||
Less: Weighted-average shares subject to repurchase | (1,275 | ) | (64,432 | ) | (4,724 | ) | (95,171 | ) | ||||||
Denominator for basic and diluted net loss per share | 906,239 | 836,876 | 900,350 | 806,137 | ||||||||||
Net loss per share, basic and diluted | $ | (8.66 | ) | $ | (5.57 | ) | $ | (27.93 | ) | $ | (19.40 | ) | ||
The following outstanding dilutive potential shares of common stock were excluded from the computations of diluted net loss per share for the periods presented as the effect of including such securities would be antidilutive: | ||||||||||||||
As of September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Convertible preferred stock, as converted to common stock | 15,430,706 | 9,540,158 | ||||||||||||
Warrant to purchase convertible preferred stock, as converted to a common stock warrant | 11,276 | — | ||||||||||||
Options to purchase common stock | 2,249,871 | 1,714,106 | ||||||||||||
Common stock subject to repurchase | — | 24,064 | ||||||||||||
17,691,853 | 11,278,328 | |||||||||||||
Recent Accounting Pronouncements | ' | |||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which is an amendment to the accounting guidance related to the evaluation of an entity’s ability to continue as a going concern. ASU 2014-15 establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. The update also gives guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. This guidance is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company will evaluate the guidance under ASU No. 2014-15 and present the required disclosures in its consolidated financial statements at the time of adoption. | ||||||||||||||
In June 2014, the FASB issued Accounting Standards Update 2014-10, Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation (“ASU 2014-10”), which eliminates the definition of a development stage entity, eliminates the development stage presentation and disclosure requirements under Accounting Standards Codification (“ASC”) 915, Development Stage Entities (“ASC 915”), and amends provisions of existing variable interest entity guidance under ASC 810, Consolidation. As a result of the changes, entities which meet the former definition of a development stage entity will no longer be required to: (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged; and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. Furthermore, ASU 2014-10 clarifies disclosures about risks and uncertainties under ASC Topic 275, Risks and Uncertainties, that apply to companies that have not commenced planned principal operations. Finally, variable interest entity rules no longer contain an exception for development stage entities and, as a result, development stage entities will have to be evaluated for consolidation in the same manner as non-development stage entities. | ||||||||||||||
Under ASU 2014-10, entities are no longer required to apply the presentation and disclosure provisions of ASC 915 during annual periods beginning after December 15, 2014. In addition, the revisions to the consolidation standards are effective for annual periods beginning after December 15, 2015 for public entities and are effective for annual periods beginning after December 15, 2016 for nonpublic entities. Early adoption is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). | ||||||||||||||
The Company has adopted ASU 2014-10 effective as of its issuance date. Adoption of this standard had no impact on the Company’s financial position, results of operations, or cash flows; however, the presentation of the consolidated financial statements has been changed to eliminate the disclosures that are no longer required. | ||||||||||||||
In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which converges the FASB and the International Accounting Standards Board standards on revenue recognition. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. This guidance is effective for the fiscal years and interim reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements and related disclosures. | ||||||||||||||
The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business or no material effect is expected on the consolidated financial statements as a result of future adoption. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share | ' | |||||||||||||
A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share follows (in thousands, except share and per share amounts): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net loss per share: | ||||||||||||||
Numerator: | ||||||||||||||
Net loss | $ | (7,847 | ) | $ | (4,665 | ) | $ | (25,148 | ) | $ | (15,636 | ) | ||
Denominator: | ||||||||||||||
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share | 907,514 | 901,308 | 905,074 | 901,308 | ||||||||||
Less: Weighted-average shares subject to repurchase | (1,275 | ) | (64,432 | ) | (4,724 | ) | (95,171 | ) | ||||||
Denominator for basic and diluted net loss per share | 906,239 | 836,876 | 900,350 | 806,137 | ||||||||||
Net loss per share, basic and diluted | $ | (8.66 | ) | $ | (5.57 | ) | $ | (27.93 | ) | $ | (19.40 | ) | ||
Schedule of outstanding dilutive potential shares of common stock excluded from the computations of diluted net loss per share | ' | |||||||||||||
As of September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Convertible preferred stock, as converted to common stock | 15,430,706 | 9,540,158 | ||||||||||||
Warrant to purchase convertible preferred stock, as converted to a common stock warrant | 11,276 | — | ||||||||||||
Options to purchase common stock | 2,249,871 | 1,714,106 | ||||||||||||
Common stock subject to repurchase | — | 24,064 | ||||||||||||
17,691,853 | 11,278,328 | |||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Schedule of fair value of the Company's financial instruments that were measured at fair value on a recurring basis | ' | |||||||||||||
The following tables set forth the fair value of the Company’s financial instruments that were measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 (in thousands): | ||||||||||||||
As of September 30, 2014 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial assets: | ||||||||||||||
Repurchase agreements | $ | 46,000 | $ | — | $ | — | $ | 46,000 | ||||||
U.S. government agencies | — | 4,430 | — | 4,430 | ||||||||||
Total financial assets | $ | 46,000 | $ | 4,430 | $ | — | $ | 50,430 | ||||||
Financial liabilities: | ||||||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 139 | $ | 139 | ||||||
As of December 31, 2013 | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial assets: | ||||||||||||||
Money market funds | $ | 19,441 | $ | — | $ | — | $ | 19,441 | ||||||
Financial liabilities: | ||||||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 61 | $ | 61 | ||||||
Summary of the changes in the fair value of the Company's Level 3 financial liabilities, which are measured on a recurring basis | ' | |||||||||||||
The following table sets forth a summary of the changes in the estimated fair value of the Company’s convertible preferred stock warrant, which were measured at fair value on a recurring basis (in thousands): | ||||||||||||||
Balance as of December 31, 2013 | $ | 61 | ||||||||||||
Increase in fair value included in other income (expense), net | 78 | |||||||||||||
Balance as of September 30, 2014 | $ | 139 | ||||||||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Property and Equipment | ' | |||||||
Summary of property and equipment | ' | |||||||
The following table is a summary of property and equipment (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Computer equipment | $ | 94 | $ | 55 | ||||
Office furniture | 49 | 41 | ||||||
Total property and equipment | 143 | 96 | ||||||
Less accumulated depreciation and amortization | (64 | ) | (35 | ) | ||||
Property and equipment, net | $ | 79 | $ | 61 |
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accrued Liabilities | ' | |||||||
Schedule of accrued liabilities | ' | |||||||
Accrued liabilities consisted of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued compensation | $ | 1,668 | $ | 949 | ||||
Accrued outside research and development services | 1,880 | 596 | ||||||
Accrued professional and consulting services | 849 | 400 | ||||||
Other | 89 | 54 | ||||||
$ | 4,486 | $ | 1,999 |
Intangible_Assets_Tables
Intangible Assets (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Intangible Assets | ' | ||||
Schedule of net book value of intangible assets and goodwill | ' | ||||
The net book value of intangible assets and goodwill as of September 30, 2014 and December 31, 2013 was as follows (in thousands): | |||||
Net Book | |||||
Value | |||||
Intangible assets—IPR&D | $ | 3,520 | |||
Goodwill | 771 | ||||
Total intangible assets with indefinite lives | $ | 4,291 | |||
Loan_Agreement_Tables
Loan Agreement (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Loan Agreement | ' | ||||
Schedule of future principal and interest payments | ' | ||||
As of September 30, 2014, future principal and interest payments under Term Loan A are as follows (in thousands): | |||||
Year Ending December 31, | |||||
2014 | $ | 29 | |||
2015 | 117 | ||||
2016 | 519 | ||||
2017 | 872 | ||||
2018 | 945 | ||||
Total payments | 2,482 | ||||
Less: | |||||
Cash interest payments and balloon payment accretion | (482 | ) | |||
Unamortized bank fees and warrant value issued | (63 | ) | |||
Total representing principal payments | 1,937 | ||||
Less: current portion | — | ||||
Long-term portion of bank term loan | $ | 1,937 | |||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments and Contingencies | ' | ||||
Schedule of aggregate total future minimum lease payments under operating lease | ' | ||||
As of September 30, 2014, the aggregate total future minimum lease payments under the Menlo Park non-cancelable operating lease were as follows (in thousands): | |||||
Year Ending December 31, | |||||
2014 | $ | 98 | |||
2015 | 1,178 | ||||
2016 | 1,213 | ||||
2017 | 1,250 | ||||
2018 and thereafter | 2,499 | ||||
Total payments | $ | 6,238 | |||
Series_B_Convertible_Preferred1
Series B Convertible Preferred Stock Warrant (Tables) | 9 Months Ended | |||||
Sep. 30, 2014 | ||||||
Series B Convertible Preferred Stock Warrant | ' | |||||
Schedule of assumptions used to determine fair value of the outstanding convertible preferred stock warrant using a Black-Scholes option-pricing model | ' | |||||
September 30, | December 31, | |||||
2014 | 2013 | |||||
Expected term (in years) | 6.2 | 7 | ||||
Expected volatility | 75.7 | % | 66 | % | ||
Risk-free interest rate | 2 | % | 1.6 | % | ||
Expected dividend rate | 0 | % | 0 | % |
Common_Stock_Tables
Common Stock (Tables) | 9 Months Ended | |||||
Sep. 30, 2014 | ||||||
Common Stock | ' | |||||
Schedule of reserved shares of common stock for issuance | ' | |||||
As of | As of | |||||
September 30, | December 31, | |||||
2014 | 2013 | |||||
Share-based payments outstanding under stock incentive plans | 2,249,871 | 1,743,590 | ||||
Conversion of convertible preferred stock | 15,430,706 | 9,540,158 | ||||
Issuances upon exercise of convertible preferred stock warrant | 11,276 | 11,276 | ||||
Shares available for future stock option grants | 200,712 | 142,506 | ||||
17,892,565 | 11,437,530 |
Convertible_Preferred_Stock_Ta
Convertible Preferred Stock (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Convertible Preferred Stock | ' | ||||||||||||||
Schedule of outstanding convertible preferred stock | ' | ||||||||||||||
As of September 30, 2014, outstanding convertible preferred stock was comprised of the following (in thousands, except share and per share amounts): | |||||||||||||||
Shares | Shares | Carrying | Liquidation | Liquidation | |||||||||||
Authorized | Issued and | Value | Value per | Value | |||||||||||
Outstanding | Share | ||||||||||||||
Series A | 6,572,629 | 6,572,625 | $ | 35,089 | $ | 5.365 | $ | 35,262 | |||||||
Series B | 3,578,847 | 3,561,040 | 29,499 | 8.4245 | 30,000 | ||||||||||
Series C | 30,722,889 | 5,297,041 | 48,826 | 9.628 | 51,000 | ||||||||||
40,874,365 | 15,430,706 | $ | 113,414 | $ | 116,262 | ||||||||||
As of December 31, 2013, outstanding convertible preferred stock was comprised of the following (in thousands, except share and per share amounts): | |||||||||||||||
Shares | Shares | Carrying | Liquidation | Liquidation | |||||||||||
Authorized | Issued and | Value | Value per | Value | |||||||||||
Outstanding | Share | ||||||||||||||
Series A | 6,572,629 | 6,572,625 | $ | 35,089 | $ | 5.365 | $ | 35,262 | |||||||
Series B | 3,534,482 | 2,967,533 | 24,499 | 8.4245 | 25,000 | ||||||||||
10,107,111 | 9,540,158 | $ | 59,588 | $ | 60,262 | ||||||||||
Equity_Incentive_Plans_Tables
Equity Incentive Plans (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-based payment awards | ' | |||||||||||||
Summary of stock option activity | ' | |||||||||||||
The following summary of stock option activity for the periods presented is as follows (in thousands, except share and per share amounts): | ||||||||||||||
Shares | Shares | Weighted- | Weighted- | Aggregate | ||||||||||
Available | Subject to | Average | Average | Intrinsic | ||||||||||
for Grant | Outstanding | Exercise | Remaining | Value | ||||||||||
Options | Price Per | Contractual | ||||||||||||
Share | Term (in years) | |||||||||||||
Options outstanding at December 31, 2013 | 142,506 | 1,743,590 | $ | 1.18 | ||||||||||
Additional shares reserved under plan | 570,693 | — | — | |||||||||||
Options granted | (533,955 | ) | 533,955 | 5.28 | ||||||||||
Options exercised | — | (6,206 | ) | 1.1 | ||||||||||
Options forfeited | 21,468 | (21,468 | ) | 1.37 | ||||||||||
Options outstanding at September 30, 2014 | 200,712 | 2,249,871 | $ | 2.15 | 7.5 | $ | 31,153 | |||||||
Vested and expected to vest as of September 30, 2014 | 2,079,367 | $ | 2.11 | 8.2 | $ | 28,879 | ||||||||
Exercisable as of September 30, 2014 | 990,193 | 1.11 | 7.5 | 14,748 | ||||||||||
Summary of stock options outstanding and currently exercisable | ' | |||||||||||||
Options Outstanding | ||||||||||||||
Exercise Price | Number of | Weighted- | Options | |||||||||||
Options | Average | Exercisable | ||||||||||||
Remaining | ||||||||||||||
Contractual Life | ||||||||||||||
(in years) | ||||||||||||||
$ | 0.0058 | 25,169 | 6.1 | 24,644 | ||||||||||
$ | 0.986 | 879,375 | 7.1 | 652,006 | ||||||||||
$ | 1.218 | 508,060 | 8.3 | 211,686 | ||||||||||
$ | 1.74 | 332,621 | 8.9 | 97,404 | ||||||||||
$ | 5.51 | 504,646 | 9.7 | 4,453 | ||||||||||
2,249,871 | 990,193 | |||||||||||||
Schedule of stock-based compensation expense | ' | |||||||||||||
Total stock-based compensation expense related to options granted to employees and nonemployees was allocated as follows (in thousands): | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Research and development: | $ | 210 | $ | 59 | $ | 436 | $ | 138 | ||||||
Sales, general and administrative: | 114 | 26 | 198 | 67 | ||||||||||
Total stock-based compensation expense | $ | 324 | $ | 85 | $ | 634 | $ | 205 | ||||||
Subsequent_Events_Tables
Subsequent Events (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Subsequent Events | ' | |||||||
Schedule of condensed balance sheet items | ' | |||||||
September 30, 2014 | ||||||||
Actual | Pro Forma | |||||||
As Adjusted | ||||||||
(in thousands) | ||||||||
Condensed Consolidated Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 50,845 | $ | 171,145 | ||||
Working capital | 43,624 | 164,063 | ||||||
Total assets | 59,616 | 179,916 | ||||||
Convertible preferred stock warrant liability | 139 | — | ||||||
Bank term loan, current and non-current | 1,937 | 1,937 | ||||||
Convertible preferred stock | 113,414 | — | ||||||
Additional paid-in capital | 1,611 | 235,439 | ||||||
Accumulated deficit | (75,922 | ) | (75,922 | ) | ||||
Total stockholders’ (deficit) equity | (74,310 | ) | 159,543 | |||||
Organization_Details
Organization (Details) | Sep. 30, 2014 |
sqft | |
item | |
Organization | ' |
Number of product candidates | 5 |
Number of late-stage product candidates | 3 |
Number of earlier-stage programs in development | 2 |
Area of office | 14,700 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Summary of Significant Accounting Policies | ' | ' | ' | ' | ' |
Reverse Stock Split ratio (in shares) | ' | ' | 0.172414 | ' | ' |
Deferred Offering Costs (unaudited) | ' | ' | ' | ' | ' |
Deferred offering costs | $3,300,000 | ' | $3,300,000 | ' | $0 |
Numerator: | ' | ' | ' | ' | ' |
Net loss | ($7,847,000) | ($4,665,000) | ($25,148,000) | ($15,636,000) | ' |
Denominator: | ' | ' | ' | ' | ' |
Weighted-average shares of common stock outstanding used in the calculation of basic and diluted net loss per share | 907,514 | 901,308 | 905,074 | 901,308 | ' |
Less: Weighted-average shares subject to repurchase | -1,275 | -64,432 | -4,724 | -95,171 | ' |
Denominator for basic and diluted net loss per share | 906,239 | 836,876 | 900,350 | 806,137 | ' |
Net loss per share, basic and diluted | ($8.66) | ($5.57) | ($27.93) | ($19.40) | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Anti Dilutive Securities Excluded In Calculation EPS | ' | ' |
Anti dilutive securities excluded in calculation EPS | 17,691,853 | 11,278,328 |
Convertible preferred stock, as converted to common stock | ' | ' |
Anti Dilutive Securities Excluded In Calculation EPS | ' | ' |
Anti dilutive securities excluded in calculation EPS | 15,430,706 | 9,540,158 |
Warrant to purchase convertible preferred stock, as converted to a common stock warrant | ' | ' |
Anti Dilutive Securities Excluded In Calculation EPS | ' | ' |
Anti dilutive securities excluded in calculation EPS | 11,276 | ' |
Options to purchase common stock | ' | ' |
Anti Dilutive Securities Excluded In Calculation EPS | ' | ' |
Anti dilutive securities excluded in calculation EPS | 2,249,871 | 1,714,106 |
Common stock subject to repurchase | ' | ' |
Anti Dilutive Securities Excluded In Calculation EPS | ' | ' |
Anti dilutive securities excluded in calculation EPS | ' | 24,064 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Recurring, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Total | ' | ' |
Financial assets: | ' | ' |
Total financial assets | $50,430 | ' |
Total | Preferred stock warrant liability | ' | ' |
Financial liabilities: | ' | ' |
Total financial liabilities | 139 | 61 |
Total | U.S. government agencies | ' | ' |
Financial assets: | ' | ' |
Total financial assets | 4,430 | ' |
Total | Money market funds | ' | ' |
Financial assets: | ' | ' |
Total financial assets | ' | 19,441 |
Total | Repurchase agreements | ' | ' |
Financial assets: | ' | ' |
Total financial assets | 46,000 | ' |
Level 1 | ' | ' |
Financial assets: | ' | ' |
Total financial assets | 46,000 | ' |
Level 1 | Money market funds | ' | ' |
Financial assets: | ' | ' |
Total financial assets | ' | 19,441 |
Level 1 | Repurchase agreements | ' | ' |
Financial assets: | ' | ' |
Total financial assets | 46,000 | ' |
Level 2 | ' | ' |
Financial assets: | ' | ' |
Total financial assets | 4,430 | ' |
Level 2 | U.S. government agencies | ' | ' |
Financial assets: | ' | ' |
Total financial assets | 4,430 | ' |
Level 3 | Preferred stock warrant liability | ' | ' |
Financial liabilities: | ' | ' |
Total financial liabilities | $139 | $61 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Preferred stock warrant liability | ||
Changes in the fair value of the Company's Level 3 financial liabilities | ' | ' | ' |
Beginning balance | ' | ' | $61 |
Increase in fair value included in other income (expense), net | ' | ' | 78 |
Ending balance | ' | ' | 139 |
Fair value transfers between level 1 and 2 | ' | ' | ' |
Transfer from level 1 to level 2 | 0 | 0 | ' |
Transfer from level 2 to level 1 | $0 | $0 | ' |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Property and Equipment | ' | ' | ' | ' | ' |
Total property and equipment | $143 | ' | $143 | ' | $96 |
Less accumulated depreciation and amortization | -64 | ' | -64 | ' | -35 |
Property and equipment, net | 79 | ' | 79 | ' | 61 |
Depreciation and amortization expense | 11 | 6 | 29 | 16 | ' |
Computer equipment | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' |
Total property and equipment | 94 | ' | 94 | ' | 55 |
Office furniture | ' | ' | ' | ' | ' |
Property and Equipment | ' | ' | ' | ' | ' |
Total property and equipment | $49 | ' | $49 | ' | $41 |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities | ' | ' |
Accrued compensation | $1,668 | $949 |
Accrued outside research and development services | 1,880 | 596 |
Accrued professional and consulting services | 849 | 400 |
Other | 89 | 54 |
Accrued liabilities current | $4,486 | $1,999 |
Intangible_Assets_Details
Intangible Assets (Details) (In-Process Research and Development, Valocor, USD $) | Dec. 31, 2011 |
In Millions, unless otherwise specified | |
In-Process Research and Development | Valocor | ' |
Indefinite lived intangible assets | ' |
Fair value of acquired intangible assets | $3.50 |
Intangible_Assets_Details_2
Intangible Assets (Details 2) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Intangible assets net including goodwill | ' | ' |
Indefinite lived intangible assets net including goodwill | $3,520 | $3,520 |
Goodwill | 771 | 771 |
Indefinite lived intangible assets | $4,291 | $4,291 |
Loan_Agreement_Details
Loan Agreement (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | |||||
Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 11, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 11, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
item | Warrant | Warrant | Warrant | Treasury Rate | Term Loan A | Term Loan A | Term Loan A | Term Loan A | Term Loan B | Term Loan B | |||
Series B convertible preferred stock | Series B convertible preferred stock | Series B convertible preferred stock | item | Warrant | |||||||||
Series B convertible preferred stock | |||||||||||||
Loan Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of term loans | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount of term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | $5,500,000 |
Basis spread on reference rate (as a percent) | ' | ' | ' | ' | ' | ' | 5.10% | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | 5.50% | 5.50% | ' | ' | ' | ' | ' | ' | 5.77% | ' | ' | ' |
Period of term loan | ' | ' | ' | ' | ' | ' | ' | ' | '60 months | ' | ' | ' | ' |
Number of monthly payments of interest | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' | ' |
Number of monthly payments | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' | ' | ' |
Principal amount to be repaid monthly | ' | ' | ' | ' | ' | ' | ' | ' | 66,666.67 | ' | ' | ' | ' |
Repayment fee | ' | ' | ' | ' | ' | ' | ' | ' | 120,000 | ' | ' | ' | ' |
Threshold period to repay interest monthly | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' | ' | ' |
Repayment fee (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.75% | ' |
Number of shares to be purchased in exchange of warrant | ' | ' | ' | ' | ' | 17,805 | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | $8.42 | ' | ' | ' | ' | ' | ' | ' |
Number of shares that can be issuable pursuant to the warrant at any date | ' | ' | ' | ' | ' | 8,902 | ' | ' | ' | ' | ' | ' | ' |
Number of shares issuable pursuant to warrants | ' | ' | ' | ' | ' | 11,276 | ' | ' | ' | ' | ' | ' | ' |
Percentage of the amount drawn under Loan Agreement used to calculate number of shares issuable pursuant to the warrant | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' |
Divisor used to calculate number of shares issuable pursuant to the warrant | ' | ' | ' | ' | ' | 8.4245 | ' | ' | ' | ' | ' | ' | ' |
Number of additional shares the warrant is exercisable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,374 | ' | ' |
Fair value of warrant recorded as debt discount | ' | ' | ' | 47,000 | 61,000 | 61,000 | ' | ' | ' | ' | ' | ' | ' |
Interest expense recognized | ' | 5,000 | 14,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of warrant-related debt discount | ' | 5,000 | 14,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future principal and interest payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | ' | ' | ' | ' | ' | ' | 29,000 | 29,000 | ' | ' | ' | ' |
2015 | ' | ' | ' | ' | ' | ' | ' | 117,000 | 117,000 | ' | ' | ' | ' |
2016 | ' | ' | ' | ' | ' | ' | ' | 519,000 | 519,000 | ' | ' | ' | ' |
2017 | ' | ' | ' | ' | ' | ' | ' | 872,000 | 872,000 | ' | ' | ' | ' |
2018 | ' | ' | ' | ' | ' | ' | ' | 945,000 | 945,000 | ' | ' | ' | ' |
Total payments | ' | ' | ' | ' | ' | ' | ' | 2,482,000 | 2,482,000 | ' | ' | ' | ' |
Less: Cash interest payments and balloon payment accretion | ' | ' | ' | ' | ' | ' | ' | -482,000 | -482,000 | ' | ' | ' | ' |
Less: Unamortized bank fees and warrant value issued | ' | ' | ' | ' | ' | ' | ' | -63,000 | -63,000 | ' | ' | ' | ' |
Total representing principal payments | ' | ' | ' | ' | ' | ' | ' | 1,937,000 | 1,937,000 | ' | ' | ' | ' |
Long-term portion of bank term loan | 1,786,000 | 1,937,000 | 1,937,000 | ' | ' | ' | ' | 1,937,000 | 1,937,000 | ' | ' | ' | ' |
Interest expense in connection with Term Loan | ' | ' | ' | ' | ' | ' | ' | $47,000 | $114,000 | $0 | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jul. 31, 2014 | Sep. 30, 2014 | Aug. 31, 2014 | |
Redwood City, California facility lease | Menlo Park, California facility lease | Menlo Park, California facility lease | Menlo Park, California facility lease | |||||
sqft | Letter of credit | |||||||
Certificate of deposit | ||||||||
Facility Lease | ' | ' | ' | ' | ' | ' | ' | ' |
Future minimum lease payments | ' | ' | ' | ' | $100,000 | ' | $6,238,000 | ' |
Area leased (in square feet) | ' | ' | ' | ' | ' | 18,651 | ' | ' |
Lease term | ' | ' | ' | ' | ' | '5 years | ' | ' |
Renewal lease term | ' | ' | ' | ' | ' | '3 years | ' | ' |
Base rent expense per month | ' | ' | ' | ' | ' | 97,918 | ' | ' |
Annual increase in base rent (as a percent) | ' | ' | ' | ' | ' | 3.00% | ' | ' |
Estimated additional fees per month | ' | ' | ' | ' | ' | 22,381 | ' | ' |
Value of security/ debt obligation required to be issued to lessor | ' | ' | ' | ' | ' | 500,000 | ' | ' |
Reduced value of security/ debt obligation required to be issued to lessor on no defaults made | ' | ' | ' | ' | ' | 250,000 | ' | ' |
Face amount | ' | ' | ' | ' | ' | ' | ' | 500,000 |
Rent expense | 168,000 | 72,000 | 393,000 | 184,000 | ' | ' | ' | ' |
Future minimum lease payments | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | ' | ' | ' | ' | ' | 98,000 | ' |
2015 | ' | ' | ' | ' | ' | ' | 1,178,000 | ' |
2016 | ' | ' | ' | ' | ' | ' | 1,213,000 | ' |
2017 | ' | ' | ' | ' | ' | ' | 1,250,000 | ' |
2018 and thereafter | ' | ' | ' | ' | ' | ' | 2,499,000 | ' |
Total payments | ' | ' | ' | ' | 100,000 | ' | 6,238,000 | ' |
Additional rent expense | ' | ' | ' | ' | ' | ' | $1,400,000 | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Indemnification, USD $) | Sep. 30, 2014 |
Indemnification | ' |
Commitments and contingencies | ' |
Loss contingency amount | $0 |
Technology_Agreements_Details
Technology Agreements (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2013 | Apr. 30, 2013 | Apr. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Apr. 30, 2014 |
Right of First Negotiation Agreement | Right of First Negotiation Agreement | Right of First Negotiation Agreement | Right of First Negotiation Agreement | Exclusive License Agreement | Exclusive License Agreement | Exclusive License Agreement | Development and Commercialization Agreement | Development and Commercialization Agreement | Development and Commercialization Agreement | Development and Commercialization Agreement | Development and Commercialization Agreement | Development and Commercialization Agreement | |||
Maruho Co. Ltd. | Maruho Co. Ltd. | Maruho Co. Ltd. | Maruho Co. Ltd. | Rose U | Rose U | Rose U | UCB | UCB | UCB | UCB | UCB | UCB | |||
item | Series B convertible preferred stock | Maximum | Maximum | Minimum | Series B convertible preferred stock | ||||||||||
Technology agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Nonrefundable upfront payment received | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of parties, which enter into an exclusive license for entities products | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | 10,000,000 | 10,000,000 | ' | 10,000,000 | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of convertible preferred stock (in shares) | ' | ' | ' | ' | ' | 1,187,014 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price of convertible preferred stock | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 |
Payment for execution of agreements | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional payment upon the achievement of specified development | ' | ' | ' | ' | ' | ' | ' | ' | 4,600,000 | ' | ' | ' | ' | ' | ' |
Initial fee | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' |
Agreement term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '12 years 6 months | ' | ' | ' |
Development costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,000,000 | 75,000,000 | ' |
Proceeds from development milestones | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,000,000 | ' | ' |
Additional proceeds received upon the grant of regulatory approval | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,500,000 | ' | ' |
Retaining percentage of above $150 annual net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Base annual net sales for retaining | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000,000 | ' | ' | ' | ' |
Receiving percentage of annual gross profits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Proceeds received from achievement of tiered milestones based on annual net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' |
Share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $8.42 |
Value of shares issued under private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,500,000 | ' | ' | ' | ' | ' |
Series_B_Convertible_Preferred2
Series B Convertible Preferred Stock Warrant (Details) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 11, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Assumptions used to determine fair value of the outstanding convertible preferred stock warrant | ' | ' | ' |
Fair value of warrant | ' | $139,000 | $61,000 |
Revaluation of convertible preferred stock warrant liability | ' | 78,000 | ' |
Warrant | Series B convertible preferred stock | ' | ' | ' |
Series B Convertible Preferred Stock Warrant | ' | ' | ' |
Number of shares that can be purchased by a warrant | 17,805 | ' | ' |
Exercise price (in dollars per share) | $8.42 | ' | ' |
Contractual term | '7 years | ' | ' |
Number of shares that can be issuable pursuant to the warrant at any date | 8,902 | ' | ' |
Percentage of the amount drawn under Loan Agreement used to calculate number of shares issuable pursuant to the warrant | 1.00% | ' | ' |
Divisor used to calculate number of shares issuable pursuant to the warrant | 8.4245 | ' | ' |
Number of shares that can be purchased by warrant | 11,276 | ' | ' |
Fair value of the warrants | $61,000 | $47,000 | $61,000 |
Assumptions used to determine fair value of the outstanding convertible preferred stock warrant | ' | ' | ' |
Expected term | '7 years | '6 years 2 months 12 days | '7 years |
Expected volatility (as a percent) | 66.00% | 75.70% | 66.00% |
Risk-free interest rate (as a percent) | 1.60% | 2.00% | 1.60% |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% |
Common_Stock_Details
Common Stock (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Common Stock | ' | ' |
Common stock, shares authorized | 126,000,000 | 23,275,862 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Share-based payments outstanding under stock incentive plans | 2,249,871 | 1,743,590 |
Conversion of convertible preferred stock | 15,430,706 | 9,540,158 |
Issuances upon exercise of convertible preferred stock warrant | 11,276 | 11,276 |
Shares available for future stock option grants | 200,712 | 142,506 |
Common stock reserved for issuance (in shares) | 17,892,565 | 11,437,530 |
Common_Stock_Details_2
Common Stock (Details 2) (USD $) | 3 Months Ended | ||
Oct. 31, 2010 | Sep. 30, 2014 | Dec. 31, 2013 | |
Common stock purchase | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | 0.001 | 0.001 |
Common stock, shares outstanding | ' | 907,514 | 901,308 |
Restricted common stock | Common stock purchase agreements | ' | ' | ' |
Common stock purchase | ' | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | ' | ' |
Common stock, shares issued during the period | 400,857 | ' | ' |
Common stock, shares outstanding | ' | 0 | 9,788 |
Convertible_Preferred_Stock_De
Convertible Preferred Stock (Details) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Aug. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
item | Minimum | Series A convertible preferred stock | Series A convertible preferred stock | Series A convertible preferred stock | Series B convertible preferred stock | Series B convertible preferred stock | Series C convertible preferred stock | Series C convertible preferred stock | Series C convertible preferred stock | Series C convertible preferred stock | |||
item | Minimum | Minimum | |||||||||||
Convertible Preferred Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Par value (in dollars per share) | $0.00 | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of convertible preferred stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,297,041 | ' | ' | ' |
Share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.63 | ' | ' | ' |
Net proceeds from issuance of convertible preferred stock | $53,826,000 | $24,499,000 | ' | ' | ' | ' | ' | ' | ' | $48,800,000 | ' | ' | ' |
Convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares Authorized | 40,874,365 | ' | 10,107,111 | ' | 6,572,629 | 6,572,629 | ' | 3,578,847 | 3,534,482 | ' | 30,722,889 | ' | ' |
Shares Issued | 15,430,706 | ' | 9,540,158 | ' | 6,572,625 | 6,572,625 | ' | 3,561,040 | 2,967,533 | ' | 5,297,041 | ' | ' |
Shares Outstanding | 15,430,706 | ' | 9,540,158 | ' | 6,572,625 | 6,572,625 | ' | 3,561,040 | 2,967,533 | ' | 5,297,041 | ' | ' |
Carrying Value | 113,414,000 | ' | 59,588,000 | ' | 35,089,000 | 35,089,000 | ' | 29,499,000 | 24,499,000 | ' | 48,826,000 | ' | ' |
Liquidation Value per Share | ' | ' | ' | ' | $5.37 | $5.37 | ' | $8.42 | $8.42 | ' | $9.63 | ' | ' |
Convertible preferred stock, aggregate liquidation value (in dollars) | 116,262,000 | ' | 60,262,000 | ' | 35,262,000 | 35,262,000 | ' | 30,000,000 | 25,000,000 | ' | 51,000,000 | ' | ' |
Conversion price (in dollars per share) | ' | ' | ' | ' | $5.37 | ' | ' | $8.42 | ' | ' | $9.63 | ' | ' |
Threshold gross cash proceeds from public offering of common stock for automatic conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 |
Preferred stock conversion basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | ' |
Percentage of shares of common stock that investor would be entitled to receive that will be automatically converted | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of classes of stockholder voting rights, in the aggregate, for preferred stockholders, on an as-if converted basis, together with common stockholders | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of shares of convertible preferred stock outstanding resulting approval of convertible preferred stockholders required for significant changes to the entity | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of shares of convertible preferred stock outstanding resulting preferred stock shareholders allowed to elect directors of the entity | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' |
Members of the Company's Board of Directors that can be elected by preferred stockholders | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' |
Members of the Company's Board of Directors that can be elected by common stockholders | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount per share that can be preferred stockholders are entitled to receive from remaining funds | ' | ' | ' | ' | $16.09 | ' | ' | $25.27 | ' | ' | $28.88 | ' | ' |
Specific amount per share used to calculate amount that can be preferred stockholders are entitled to receive from remaining funds | ' | ' | ' | ' | $16.09 | ' | ' | $25.27 | ' | ' | $28.88 | ' | ' |
Dividend rate (in dollars per share) | ' | ' | ' | ' | $0.43 | ' | ' | $0.67 | ' | ' | $0.75 | ' | ' |
Equity_Incentive_Plans_Details
Equity Incentive Plans (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | Stock options | 2010 Plan | 2010 Plan | ||
Stock options | Stock options | ||||
Share-based payment awards | ' | ' | ' | ' | ' |
Common stock reserved for issuance (in shares) | 17,892,565 | 11,437,530 | ' | 2,456,785 | 1,886,095 |
Shares Available for Grant | ' | ' | ' | ' | ' |
Options outstanding at beginning (in shares) | ' | ' | 142,506 | ' | ' |
Additional shares reserved under plan (in shares) | ' | ' | 570,693 | ' | ' |
Options granted (in shares) | ' | ' | -533,955 | ' | ' |
Options forfeited (in shares) | ' | ' | 21,468 | ' | ' |
Options outstanding at ending (in shares) | ' | ' | 200,712 | ' | ' |
Shares Subject to Outstanding Options | ' | ' | ' | ' | ' |
Options outstanding at beginning (in shares) | ' | ' | 1,743,590 | ' | ' |
Options granted (in shares) | ' | ' | 533,955 | ' | ' |
Options exercised (in shares) | ' | ' | -6,206 | ' | ' |
Options forfeited (in shares) | ' | ' | -21,468 | ' | ' |
Options outstanding at end (in shares) | ' | ' | 2,249,871 | ' | ' |
Vested and expected to vest (in shares) | ' | ' | 2,079,367 | ' | ' |
Exercisable (in shares) | ' | ' | 990,193 | ' | ' |
Weighted-Average Exercise Price Per Share | ' | ' | ' | ' | ' |
Options outstanding at beginning (in dollars per share) | ' | ' | $1.18 | ' | ' |
Options granted (in dollars per share) | ' | ' | $5.28 | ' | ' |
Options exercised (in dollars per share) | ' | ' | $1.10 | ' | ' |
Options forfeited (in dollars per share) | ' | ' | $1.37 | ' | ' |
Options outstanding at end (in dollars per share) | ' | ' | $2.15 | ' | ' |
Vested and expected to vest (in dollars per share) | ' | ' | $2.11 | ' | ' |
Exercisable (in dollars per share) | ' | ' | $1.11 | ' | ' |
Weighted-Average Remaining Contractual Term (in years) | ' | ' | ' | ' | ' |
Options outstanding at end | ' | ' | '7 years 6 months | ' | ' |
Vested and expected to vest | ' | ' | '8 years 2 months 12 days | ' | ' |
Exercisable | ' | ' | '7 years 6 months | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' | ' |
Options outstanding at end | ' | ' | $31,153 | ' | ' |
Vested and expected to vest | ' | ' | 28,879 | ' | ' |
Exercisable | ' | ' | $14,748 | ' | ' |
Equity_Incentive_Plans_Details1
Equity Incentive Plans (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Equity Incentive Plans | ' | ' | ' | ' |
Compensation expense | $324,000 | $85,000 | $634,000 | $205,000 |
Stock options | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Number of options (in shares) | 2,249,871 | ' | 2,249,871 | ' |
Options Exercisable (in shares) | 990,193 | ' | 990,193 | ' |
Weighted-average exercise price (in dollars per share) | ' | ' | $5.28 | ' |
Employee stock option | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Weighted average fair value of options granted (in dollars per share) | ' | ' | $3.58 | ' |
Weighted-average exercise price (in dollars per share) | ' | ' | $5.34 | ' |
Total unrecognized compensation expense | 2,000,000 | ' | 2,000,000 | ' |
Period over which unrecognized compensation is expected to be recognized | ' | ' | '2 years 2 months 12 days | ' |
NonEmployee stock option | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Compensation expense | $108,000 | $12,000 | $215,000 | $25,000 |
$0.0058 | Stock options | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Exercise Price (in dollars per share) | $0.01 | ' | $0.01 | ' |
Number of options (in shares) | 25,169 | ' | 25,169 | ' |
Weighted-Average Remaining Contractual Life (in years) | ' | ' | '6 years 1 month 6 days | ' |
Options Exercisable (in shares) | 24,644 | ' | 24,644 | ' |
$0.986 | Stock options | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Exercise Price (in dollars per share) | $0.99 | ' | $0.99 | ' |
Number of options (in shares) | 879,375 | ' | 879,375 | ' |
Weighted-Average Remaining Contractual Life (in years) | ' | ' | '7 years 1 month 6 days | ' |
Options Exercisable (in shares) | 652,006 | ' | 652,006 | ' |
$1.218 | Stock options | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Exercise Price (in dollars per share) | $1.22 | ' | $1.22 | ' |
Number of options (in shares) | 508,060 | ' | 508,060 | ' |
Weighted-Average Remaining Contractual Life (in years) | ' | ' | '8 years 3 months 18 days | ' |
Options Exercisable (in shares) | 211,686 | ' | 211,686 | ' |
$1.74 | Stock options | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Exercise Price (in dollars per share) | $1.74 | ' | $1.74 | ' |
Number of options (in shares) | 332,621 | ' | 332,621 | ' |
Weighted-Average Remaining Contractual Life (in years) | ' | ' | '8 years 10 months 24 days | ' |
Options Exercisable (in shares) | 97,404 | ' | 97,404 | ' |
$5.51 | Stock options | ' | ' | ' | ' |
Equity Incentive Plans | ' | ' | ' | ' |
Exercise Price (in dollars per share) | $5.51 | ' | $5.51 | ' |
Number of options (in shares) | 504,646 | ' | 504,646 | ' |
Weighted-Average Remaining Contractual Life (in years) | ' | ' | '9 years 8 months 12 days | ' |
Options Exercisable (in shares) | 4,453 | ' | 4,453 | ' |
Equity_Incentive_Plans_Details2
Equity Incentive Plans (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Total stock-based compensation | ' | ' | ' | ' |
Total stock-based compensation expense | $324,000 | $85,000 | $634,000 | $205,000 |
Capitalized stock-based compensation costs | 0 | 0 | 0 | 0 |
Recognized stock-based compensation tax benefits | 0 | 0 | 0 | 0 |
Research and development: | ' | ' | ' | ' |
Total stock-based compensation | ' | ' | ' | ' |
Total stock-based compensation expense | 210,000 | 59,000 | 436,000 | 138,000 |
Sales, general and administrative: | ' | ' | ' | ' |
Total stock-based compensation | ' | ' | ' | ' |
Total stock-based compensation expense | $114,000 | $26,000 | $198,000 | $67,000 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 09, 2014 | Oct. 08, 2014 | Oct. 08, 2014 | Oct. 08, 2014 | Oct. 08, 2014 | Oct. 08, 2014 | Oct. 08, 2014 | Oct. 08, 2014 | Oct. 01, 2014 | Oct. 02, 2014 | Oct. 02, 2014 |
Pro Forma As Adjusted | IPO | Options | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||||
IPO | IPO | Private placement | Private placement | IPO and concurrent private placement | IPO and concurrent private placement | 2014 EIP | 2014 EIP | 2014 ESPP | |||||||||
UCB | UCB | ||||||||||||||||
Subsequent Events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued during the period | ' | ' | ' | ' | ' | ' | ' | ' | 7,812,500 | ' | 468,750 | ' | 8,281,250 | ' | ' | ' | ' |
Share price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $16 | ' | $16 | ' | $16 | ' | ' | ' |
Proceeds from IPO, net of underwriting discounts and commissions and expenses | ' | ' | ' | ' | ' | ' | ' | ' | $112,800,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Underwriting discounts and commissions | ' | ' | ' | ' | ' | ' | ' | ' | 8,750,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of offering expenses | ' | ' | ' | ' | ' | ' | ' | ' | 3,450,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Unpaid deferred offering costs | ' | ' | ' | ' | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | ' | ' | ' | ' |
Condensed Consolidated Balance Sheet Data: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 50,845,000 | 22,144,000 | 25,603,000 | 7,872,000 | 171,145,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working capital | 43,624,000 | ' | ' | ' | 164,063,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets | 59,616,000 | 26,871,000 | ' | ' | 179,916,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock warrant liability | 139,000 | 61,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bank term loan, current and non-current | 1,937,000 | ' | ' | ' | 1,937,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock | 113,414,000 | 59,588,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional paid-in capital | 1,611,000 | 970,000 | ' | ' | 235,439,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated deficit | -75,922,000 | -50,774,000 | ' | ' | -75,922,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total stockholders' (deficit) equity | ($74,310,000) | ($49,803,000) | ' | ' | $159,543,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 126,000,000 | 23,275,862 | ' | ' | ' | ' | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Undesignated preferred stock, shares authorized | 40,874,365 | 10,107,111 | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Undesignated preferred stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issuable on exercise of options | ' | ' | ' | ' | ' | ' | 244,835 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock reserved for issuance (in shares) | 17,892,565 | 11,437,530 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,896,551 | 301,724 |
Number of years for which common stock reserved for issuance will increase automatically | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | '10 years |
Percentage of common stock outstanding on the preceding December 31 resulting in automatic increase in common stock reserved for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.00% | 1.00% |