Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 29, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Dermira, Inc. | |
Entity Central Index Key | 1,557,883 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,018,641 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 92,371 | $ 107,242 |
Short-term investments | 96,932 | 107,451 |
Prepaid expenses and other current assets | 3,893 | 2,540 |
Total current assets | 193,196 | 217,233 |
Property and equipment, net | 460 | 386 |
Long-term investments | 1,019 | |
Intangible assets | 1,126 | 1,126 |
Goodwill | 771 | 771 |
Other assets | 1,249 | 1,397 |
Total assets | 196,802 | 221,932 |
Current liabilities: | ||
Accounts payable | 12,540 | 9,230 |
Accrued liabilities | 14,101 | 16,666 |
Total current liabilities | 26,641 | 25,896 |
Long-term liabilities: | ||
Deferred revenue | 10,000 | 10,000 |
Deferred tax liability | 194 | 194 |
Other long-term liabilities | 101 | 367 |
Total liabilities | $ 36,936 | $ 36,457 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock | ||
Common stock | $ 30 | $ 30 |
Additional paid-in capital | 349,272 | 346,590 |
Accumulated other comprehensive gain (loss) | 48 | (97) |
Accumulated deficit | (189,484) | (161,048) |
Total stockholders' equity | 159,866 | 185,475 |
Total liabilities and stockholders' equity | $ 196,802 | $ 221,932 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating expenses: | ||
Research and development | $ 22,854 | $ 10,088 |
General and administrative | 5,901 | 4,146 |
Total operating expenses | 28,755 | 14,234 |
Loss from operations | (28,755) | (14,234) |
Interest and other income, net | 319 | 237 |
Interest expense | (38) | |
Net loss | $ (28,436) | $ (14,035) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.95) | $ (0.57) |
Weighted-average common shares used to compute net loss per share, basic and diluted (in shares) | 29,980,283 | 24,655,011 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net loss | $ (28,436) | $ (14,035) |
Other comprehensive loss: | ||
Unrealized gain on available-for-sale securities | 145 | 179 |
Total comprehensive loss | $ (28,291) | $ (13,856) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (28,436) | $ (14,035) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 22 | 19 |
Stock-based compensation | 2,594 | 1,094 |
Amortization of premiums on available-for-sale securities | 412 | 455 |
Changes in assets and liabilities: | ||
Collaboration receivable from a related party | 7,300 | |
Prepaid expenses and other current assets | (1,242) | (863) |
Other assets | 148 | 807 |
Accounts payable | 3,310 | 1,220 |
Accrued liabilities | (2,565) | (1,114) |
Other long-term liabilities | (266) | |
Net cash used in operating activities | (26,023) | (5,117) |
Cash flows from investing activities | ||
Purchases of available-for-sale securities | (31,681) | (23,139) |
Maturities of available-for-sale securities | 42,841 | 25,000 |
Purchase of property and equipment | (96) | |
Net cash provided by investing activities | 11,064 | 1,861 |
Cash flows from financing activities | ||
Net proceeds from issuances of common stock | 88 | 42 |
Net cash provided by financing activities | 88 | 42 |
Net decrease in cash and cash equivalents | (14,871) | (3,214) |
Cash and cash equivalents at beginning of period | 107,242 | 55,358 |
Cash and cash equivalents at end of period | $ 92,371 | $ 52,144 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2016 | |
Organization | |
Organization | 1. Organization We were incorporated in the State of Delaware in August 2010 under the name Skintelligence, Inc. We changed our name to Dermira, Inc. in September 2011. In August 2011, we acquired Valocor Therapeutics, Inc., which was subsequently renamed Dermira (Canada), Inc. (“Dermira Canada”) and is our wholly owned subsidiary. We are a biopharmaceutical company dedicated to identifying, developing and commercializing innovative, differentiated therapies to improve the lives of patients with dermatologic diseases. Our portfolio includes three late-stage product candidates that target significant unmet needs and market opportunities: Cimzia (certolizumab pegol), in Phase 3 development in collaboration with UCB Pharma S.A. for the treatment of moderate-to-severe chronic plaque psoriasis; DRM04, in Phase 3 development for the treatment of primary axillary hyperhidrosis, or excessive underarm sweating; and DRM01, in Phase 2b development for the treatment of acne vulgaris, or acne. Our corporate headquarters are located in Menlo Park, California. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Significant accounting policies followed in the preparation of these condensed consolidated financial statements are as follows: Basis of Presentation Our condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. 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 our annual consolidated financial statements and, in the opinion of our management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of our financial information. The results of operations for the three-month period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016 or any other future period. The condensed consolidated balance sheet as of December 31, 2015 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. The accompanying condensed consolidated financial statements include the accounts of our wholly owned subsidiary, Dermira Canada. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with our audited consolidated financial statements and the related notes thereto for the year ended December 31, 2015 included in our Annual Report on Form 10-K, filed with the SEC on March 3, 2016. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us 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 condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, investments, accrued research and development expenses, goodwill, intangible assets, other long-lived assets, stock-based compensation and the valuation of deferred tax assets. We base our estimates on our historical experience and also on assumptions that we believe are reasonable; however, actual results could significantly differ from those estimates. Risks and Uncertainties Our product candidates 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 our current and future product candidates will receive the necessary approvals. If we are denied approval or approval is delayed, it may have a material adverse impact on our business and our financial condition. We are subject to risks common to early-stage companies in the pharmaceutical industry, including dependence on the clinical and commercial success of our product candidates, ability to obtain regulatory approval of our product candidates, compliance with regulatory requirements, the need for substantial additional financing to achieve our goals, uncertainty of broad adoption of our approved products, if any, by physicians and patients, significant competition and ability to manage third party manufacturers, suppliers and contract research organizations (“CROs”). Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash and cash equivalents and investments. We invest our excess cash in money market funds, repurchase agreements and corporate debt. Bank deposits are held by a single financial institution and these deposits may exceed insured limits. We are exposed to credit risk in the event of a default by the financial institution holding our cash and cash equivalents and issuers of investments to the extent recorded on the condensed consolidated balance sheets. Our investment policy limits investments to money market funds, certain types of debt securities issued by the U.S. government and its agencies, repurchase agreements, commercial paper, municipal bonds and corporate debt and places restrictions on the credit ratings, 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. We primarily apply the market approach for recurring fair value measurements. We measure 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 our cash and cash equivalents, investments, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short maturities. Our non-financial assets, such as intangible assets and property, plant and equipment, are only recorded at fair value if an impairment charge is recognized. Research and Development Expenses We expense research and development costs as they are incurred. Our research and development expenses consist primarily of costs incurred for the development of our 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 We record accruals for estimated costs of research, preclinical, non-clinical and clinical studies, and manufacturing development, which are a significant component of research and development expenses. A substantial portion of our ongoing research and development activities is conducted by third-party service providers, including CROs. Our 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 us under such contracts. We accrue the costs incurred under agreements with these third parties based on actual work completed in accordance with the respective agreements. In certain cases, we can be financially responsible for unused drug supplies at the conclusion of a trial. We accrue for the potential amounts due if they are both probable and estimable. In the event we make advance payments, the payments are recorded as a prepaid expense and recognized as the services are performed. We determine 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. Our CRO for the Cimzia Phase 3 program (“Cimzia CRO”) can earn bonuses or incur penalties based on the Cimzia CRO’s achievement of certain milestones specified in the agreement. If, in any period, it becomes probable that the Cimzia CRO would earn a bonus and the amount is estimable, we would recognize the full amount of such bonus in that same period as an expense, even if the bonus would not be earned by and paid to the Cimzia CRO until the milestone is achieved. If the Cimzia CRO incurs a penalty, it has the right to recoup such penalty if it achieves a subsequent milestone. In this case, we would continue to maintain the full amount owed to the Cimzia CRO until the right of recoupment has expired. We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals. Although we do not expect our estimates to be materially different from amounts actually incurred, the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. Our 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 between our accrued estimated expenses and 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 our estimates, resulting in adjustments to clinical trial expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our condensed consolidated financial condition and results of operations. 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. 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: Outstanding as of March 31, 2016 2015 Options to purchase common stock Restricted stock units — Estimated shares issuable under the employee stock purchase plan Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which amends Accounting Standards Codification Topic 718, Compensation — Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that the adoption of ASU 2016-09 will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (“ASU 2016-02”) . ASU 2016-02 is aimed at making leasing activities more transparent and comparable, and requires lessees to recognize substantially all leases on their balance sheet as a right-of-use asset and a corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-02 is effective for interim and annual reporting periods during the year ending December 31, 2019 and all interim and annual reporting periods thereafter. Early adoption is permitted. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures. 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 was initially effective for the fiscal years and interim reporting periods beginning after December 15, 2016; however, in July 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017 (including interim periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim periods within those periods). ASU 2014-09 will be effective for the first fiscal quarter of 2018, using one of two retrospective application methods. We have not selected a transition method and are currently assessing the future impact of ASU 2014-09 on our consolidated financial statements and related disclosures. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
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 our 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 our financial instruments that were measured on a recurring basis (in thousands): As of March 31, 2016 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt — — Total financial assets $ $ $ — $ As of December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt — — Total financial assets $ $ $ — $ Where quoted prices are available in an active market, securities are classified as Level 1. We classify money market funds as Level 1. When quoted market prices are not available for the specific security, then we estimate 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 and broker/dealer quotes. We classify repurchase agreements and corporate debt as Level 2. There were no transfers between Level 1 and Level 2 during the periods presented. See Note 4 for further details on the financial instruments that were measured at fair value. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2016 | |
Investments | |
Investments | 4. Investments Investments include available-for-sale securities and investment securities classified as cash equivalents. Investment securities consisted of the following (in thousands): As of March 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt ) Total investments $ $ $ ) $ As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt ) Total investments $ $ $ ) $ As of March 31, 2016, we did not hold any investments with a maturity exceeding one year. Unrealized losses related to investments in a continuous loss position for 12 months or more were insignificant. We do not intend to sell the securities and it is more likely than not that the investments will be held until recovery of the amortized cost bases. There were no realized gains or losses on the available-for-sale securities during the three months ended March 31, 2016 and 2015. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Liabilities | |
Accrued Liabilities | 5. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2016 2015 Accrued outside research and development services $ $ Accrued compensation Accrued professional and consulting services Other $ $ |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies Facility Lease We lease our corporate headquarters in Menlo Park, California under a non-cancelable operating lease agreement initially entered into in July 2014 and amended in September 2014 (“Initial Lease”). Pursuant to the Initial Lease, we leased approximately 18,651 square feet of space in a multi-suite building. Rent payments under the Initial Lease included base rent of approximately $97,918 per month during the first year of the lease with an annual increase of three percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance, which were approximately $22,381 per month during the first year of the lease. The Initial Lease was amended in December 2015 to provide for our lease of an additional 26,541 square feet of space in the building, commencing December 1, 2016 (“Amended Lease”). Rent payments for the additional space included base rent of approximately $135,426 per month during the first year of the lease period with an annual increase of three percent, and additional monthly fees to cover our share of certain facility expenses, including utilities, property taxes, insurance and maintenance, which are estimated to be approximately $30,954 per month during the first year of the lease period. In April 2016, the Amended Lease was further amended to accelerate our lease commencement date for the additional space, subject to certain conditions, from December 1, 2016 to on or about May 2, 2016 with respect to approximately 2,882 square feet of the additional space, and on or about September 14, 2016 for approximately 23,659 square feet of the additional space (as further amended, “Lease”). The Lease will expire on December 31, 2021, subject to our option to renew the lease for an additional five-year term. We may terminate the Lease with respect to approximately 8,022 square feet of space effective November 30, 2016 if on or prior to September 30, 2016 (1) the results from certain of our clinical trials are negative and, as a consequence thereof, we determine not to proceed to the next phase of development for either trial, and (2) we provide the lessor with written notice of the same and our intent to terminate the lease with respect to the two suites in the expansion space. If we exercise our termination option, we must pay a termination fee equal to six months’ rent, payable on a monthly basis commencing December 1, 2016. The termination fee is subject to reduction if the landlord leases the space during such six-month period. Pursuant to the terms of the Lease, we provided the lessor with a $500,000 letter of credit in August 2014, which is collateralized by a money market account. The letter of credit may be used by or drawn upon by the lessor in the event of our default of certain terms of the lease agreement. If no such event of default has occurred or then exists, the letter of credit may be reduced to $350,000 after May 1, 2019. The collateralized money market account is restricted cash and recorded in our condensed consolidated balance sheet in other assets. Rent expense for each of the three months ended March 31, 2016 and 2015 was $0.3 million. The terms of the Lease provide for rental payments on a monthly basis on a graduated scale. We recognize rent expense on a straight-line basis over the lease period and have accrued for rent expense incurred but not paid. CRO Agreement Per the terms of our agreement with our CRO for the Cimzia Phase 3 program, the Cimzia CRO can earn bonus payments or incur penalties (which are adjusted from the total amount payable pursuant to the agreement) based on the achievement of milestones specified in the agreement. The Cimzia CRO can earn a maximum aggregate bonus of $3.6 million and incur a maximum aggregate penalty of $3.2 million. If, in any period, it becomes probable that the Cimzia CRO would earn a bonus and the amount is estimable, we would recognize the full amount of such bonus in that same period as an expense, even if the bonus would not be earned by and paid to the Cimzia CRO until the milestone is achieved. If the Cimzia CRO incurs a penalty, it has the right to recoup the applicable amount if it achieves a subsequent milestone, and the Cimzia CRO would adjust subsequent billings as necessary to reflect such penalty and any recouped amount. If the Cimzia CRO incurs a penalty prior to the expiration of the right of recoupment, we would maintain the full amount owed to the Cimzia CRO in either accrued liabilities or other long-term liabilities, as appropriate, in our condensed consolidated balance sheet until (1) the right of recoupment has expired, at which time we would reflect the amount as a reduction in operating expenses and eliminate the liability, or (2) the Cimzia CRO has recouped the penalty, at which time we would increase the payment to the Cimzia CRO by the recouped amount and eliminate the liability. As of March 31, 2016, we have not recognized an increase in expense for a bonus earned, or a decrease in expense for a penalty incurred, under the agreement in our condensed consolidated statements of operations. Contingencies Pursuant to the UCB agreement, we are responsible for paying all development costs specified under the UCB agreement and incurred in connection with the development plan up to a specified amount that is greater than $75.0 million and less than $95.0 million, plus our internal development costs. Development costs include the costs of Cimzia, etanercept and placebo clinical trial materials used in the Phase 3 clinical program. UCB is responsible for providing these clinical trial materials and we reimburse UCB for such costs. In addition to clinical trial materials used in the study, we are financially responsible for unused clinical drug supplies at the conclusion of the study. We cannot determine the exact amounts of unused clinical drug supplies until all patients have completed treatment. Based on currently available data, we estimate that the additional loss contingency related to unused clinical drug supplies over the next nine months ranges from $1.1 million to $1.8 million. As a result, we recorded a charge of $1.1 million to research and development expense for the three months ended March 31, 2016. There were no contingency losses related to unused clinical drug supplies recorded in the three months ended March 31, 2015. From time to time, we may have certain contingent liabilities that arise in the ordinary course of business activities. We would accrue a liability for such matters when it is probable that future expenditures would be made and such expenditures could be reasonably estimated. We are not subject to any current pending legal matters or claims. Indemnification We enter into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, we indemnify, hold harmless and agree 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 our technology. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The maximum potential amount of future payments we could be required to make under these agreements is not determinable because it involves claims that may be made against us in the future, but have not yet been made. We have not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. We have entered into indemnification agreements with our directors and officers that may require us to indemnify our 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 and Financing Agreem
Technology and Financing Agreements | 3 Months Ended |
Mar. 31, 2016 | |
Technology and Financing Agreements | |
Technology and Financing Agreements | 7. Technology and Financing Agreements Maruho Agreement In March 2013, we entered into a Right of First Negotiation Agreement with Maruho Co., Ltd. Under the terms of the agreement, we provided Maruho with certain information and the right to negotiate an exclusive license to develop and commercialize certain of our product candidates in specified territories. In connection with the entry into this agreement, Maruho paid us a non-refundable upfront payment of $10.0 million, which will be credited against certain payments payable by Maruho to us if we and Maruho enter into an exclusive license for any of our products. If we do not enter into such an arrangement with Maruho, we will be entitled to keep the funds without further obligation. As of March 31, 2016 and December 31, 2015, we recorded the $10.0 million as deferred revenue in our condensed consolidated balance sheets. 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. Rose U Agreement In April 2013, we entered into an exclusive license agreement with Rose U, LLC to license certain patents, patent applications and know-how related to our DRM04 program. This agreement includes a sublicense and assignment of certain know-how licensed and assigned to Rose U by Stiefel Laboratories, Inc., a GSK company (“Stiefel”), the prior licensee of such patents. In connection with this agreement, we also entered into a letter agreement with Stiefel. As of March 31, 2016, we have paid license and other fees of $0.5 million to Rose U and are required to pay additional amounts totaling up to $4.4 million upon the achievement of specified development, commercialization and other milestones under these agreements to Rose U and Stiefel. In addition, we are 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 we are obligated to pay Rose U directly upon the events or sales triggering such payments. UCB (a Related Party) Agreement In March 2014, we entered into a development and commercialization agreement with UCB (“UCB agreement”), a related party, which provides that we will develop Cimzia for the treatment of psoriasis in order for UCB to seek regulatory approval from the FDA, European Medicines Agency (“EMA”) and the Canadian federal department for health (“Health Canada”), and upon the grant of regulatory approval in the United States and Canada, for us 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. We have 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. We are responsible for development costs under the development plan up to a specified cap that is greater than $75.0 million and less than $95.0 million, plus our internal development costs. Development costs under the development plan include the costs of clinical trial materials, which are supplied by UCB and paid by us. Any development costs in excess of the specified 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. We incurred expenses related to clinical materials supplied by UCB totaling $2.9 million and $0.1 million for the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, we recorded $1.6 million and $6.2 million in prepaid expense and other current assets and accounts payable, respectively, related to UCB. As of December 31, 2015, we recorded $0.9 million and $2.4 million in accounts payable and accrued liabilities, respectively, due to UCB. UCB is obligated to pay us 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. In December 2014, we earned the first development milestone of $7.3 million for dosing of the first patient in the Phase 3 clinical program for Cimzia and recorded the amount as collaboration revenue from a related party in the consolidated statements of operations for the year ended December 31, 2014. In September 2015, we earned the second development milestone of $7.3 million for the completion of patient enrollment in a Phase 3 clinical trial for Cimzia and recorded the amount as collaboration revenue from a related party in the consolidated statements of operations for the year ended December 31, 2015. As a result of achieving these milestones, there is $21.4 million in remaining development milestone payments that we are eligible to receive. No collaboration revenue was recognized for the three months ended March 31, 2016 or 2015. Under the terms of the UCB agreement, we 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 us 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 us 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 us receiving the balance, of such annual gross profits. In addition, UCB is obligated to pay us 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. As of March 31, 2016, UCB beneficially owned 1,841,234 shares of our outstanding common stock. One of the members of our board of directors is an Executive Vice President and the Chief Operating Officer of UCB S.A. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 8. Stock-Based Compensation In 2010, we adopted the 2010 Equity Incentive Plan (“2010 Plan”), which provided for the granting of stock options to our employees, directors and consultants. In September 2014, our board of directors approved the 2014 Equity Incentive Plan, (“2014 EIP”), which became effective on October 1, 2014. As of the effective date of the 2014 EIP, the 2010 Plan was terminated and no further stock awards will be granted pursuant to the 2010 Plan. Outstanding stock options granted under the 2010 Plan will continue to be governed by the provisions of the 2010 Plan until the earlier of the stock option’s expiration or exercise. In September 2014, our board of directors approved the 2014 Employee Stock Purchase Plan (“2014 ESPP”), which became effective on October 2, 2014. As of March 31, 2016, we had 1,455,211 and 790,920 shares available for issuance under the 2014 EIP and 2014 ESPP, respectively. The following table reflects a summary of stock option activity and related information for the period from December 31, 2015 through March 31, 2016: Outstanding Options Weighted- Average Exercise Price Per Share Options outstanding at December 31, 2015 $ Options granted Options exercised ) Options forfeited ) Options outstanding at March 31, 2016 During the three months ended March 31, 2016, we granted certain employees 136,985 restricted stock units (“RSUs”). The fair value of RSUs is determined based on the value of the underlying common stock on the date of grant. The expenses relating to these RSUs will be recognized over their respective vesting periods. The following table reflects a summary of RSU activity under our 2014 EIP and related information for the period from December 31, 2015 through March 31, 2016: Outstanding RSUs Weighted- Average Grant Date Fair Value per Share RSUs outstanding at December 31, 2015 — — RSUs granted $ RSUs outstanding at March 31, 2016 Total stock-based compensation expense related to the 2010 Plan, the 2014 EIP and the 2014 ESPP was allocated as follows (in thousands): Three Months Ended March 31, 2016 2015 Research and development $ $ General and administrative Total stock-based compensation expense $ $ There were no capitalized stock-based compensation costs or recognized stock-based compensation tax benefits during the three months ended March 31, 2016 and 2015. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation Our condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the U.S. 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 our annual consolidated financial statements and, in the opinion of our management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of our financial information. The results of operations for the three-month period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016 or any other future period. The condensed consolidated balance sheet as of December 31, 2015 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. The accompanying condensed consolidated financial statements include the accounts of our wholly owned subsidiary, Dermira Canada. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with our audited consolidated financial statements and the related notes thereto for the year ended December 31, 2015 included in our Annual Report on Form 10-K, filed with the SEC on March 3, 2016. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us 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 condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, investments, accrued research and development expenses, goodwill, intangible assets, other long-lived assets, stock-based compensation and the valuation of deferred tax assets. We base our estimates on our historical experience and also on assumptions that we believe are reasonable; however, actual results could significantly differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties Our product candidates 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 our current and future product candidates will receive the necessary approvals. If we are denied approval or approval is delayed, it may have a material adverse impact on our business and our financial condition. We are subject to risks common to early-stage companies in the pharmaceutical industry, including dependence on the clinical and commercial success of our product candidates, ability to obtain regulatory approval of our product candidates, compliance with regulatory requirements, the need for substantial additional financing to achieve our goals, uncertainty of broad adoption of our approved products, if any, by physicians and patients, significant competition and ability to manage third party manufacturers, suppliers and contract research organizations (“CROs”). |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist primarily of cash and cash equivalents and investments. We invest our excess cash in money market funds, repurchase agreements and corporate debt. Bank deposits are held by a single financial institution and these deposits may exceed insured limits. We are exposed to credit risk in the event of a default by the financial institution holding our cash and cash equivalents and issuers of investments to the extent recorded on the condensed consolidated balance sheets. Our investment policy limits investments to money market funds, certain types of debt securities issued by the U.S. government and its agencies, repurchase agreements, commercial paper, municipal bonds and corporate debt and places restrictions on the credit ratings, 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. We primarily apply the market approach for recurring fair value measurements. We measure 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 our cash and cash equivalents, investments, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short maturities. Our non-financial assets, such as intangible assets and property, plant and equipment, are only recorded at fair value if an impairment charge is recognized. |
Research and Development Expenses | Research and Development Expenses We expense research and development costs as they are incurred. Our research and development expenses consist primarily of costs incurred for the development of our 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 We record accruals for estimated costs of research, preclinical, non-clinical and clinical studies, and manufacturing development, which are a significant component of research and development expenses. A substantial portion of our ongoing research and development activities is conducted by third-party service providers, including CROs. Our 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 us under such contracts. We accrue the costs incurred under agreements with these third parties based on actual work completed in accordance with the respective agreements. In certain cases, we can be financially responsible for unused drug supplies at the conclusion of a trial. We accrue for the potential amounts due if they are both probable and estimable. In the event we make advance payments, the payments are recorded as a prepaid expense and recognized as the services are performed. We determine 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. Our CRO for the Cimzia Phase 3 program (“Cimzia CRO”) can earn bonuses or incur penalties based on the Cimzia CRO’s achievement of certain milestones specified in the agreement. If, in any period, it becomes probable that the Cimzia CRO would earn a bonus and the amount is estimable, we would recognize the full amount of such bonus in that same period as an expense, even if the bonus would not be earned by and paid to the Cimzia CRO until the milestone is achieved. If the Cimzia CRO incurs a penalty, it has the right to recoup such penalty if it achieves a subsequent milestone. In this case, we would continue to maintain the full amount owed to the Cimzia CRO until the right of recoupment has expired. We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals. Although we do not expect our estimates to be materially different from amounts actually incurred, the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. Our 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 between our accrued estimated expenses and 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 our estimates, resulting in adjustments to clinical trial expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our condensed consolidated financial condition and results of operations. |
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. 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: Outstanding as of March 31, 2016 2015 Options to purchase common stock Restricted stock units — Estimated shares issuable under the employee stock purchase plan |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which amends Accounting Standards Codification Topic 718, Compensation — Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that the adoption of ASU 2016-09 will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (“ASU 2016-02”) . ASU 2016-02 is aimed at making leasing activities more transparent and comparable, and requires lessees to recognize substantially all leases on their balance sheet as a right-of-use asset and a corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-02 is effective for interim and annual reporting periods during the year ending December 31, 2019 and all interim and annual reporting periods thereafter. Early adoption is permitted. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures. 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 was initially effective for the fiscal years and interim reporting periods beginning after December 15, 2016; however, in July 2015, the FASB deferred the effective date to annual reporting periods beginning after December 15, 2017 (including interim periods within those periods). Early adoption is permitted to the original effective date of December 15, 2016 (including interim periods within those periods). ASU 2014-09 will be effective for the first fiscal quarter of 2018, using one of two retrospective application methods. We have not selected a transition method and are currently assessing the future impact of ASU 2014-09 on our consolidated financial statements and related disclosures. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of outstanding dilutive potential shares of common stock excluded from the computations of diluted net loss per share | Outstanding as of March 31, 2016 2015 Options to purchase common stock Restricted stock units — Estimated shares issuable under the employee stock purchase plan |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Measurements | |
Schedule of fair value of the Company's financial instruments that were measured on a recurring basis | The following tables set forth the fair value of our financial instruments that were measured on a recurring basis (in thousands): As of March 31, 2016 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt — — Total financial assets $ $ $ — $ As of December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt — — Total financial assets $ $ $ — $ |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments | |
Schedule of investment securities | Investments include available-for-sale securities and investment securities classified as cash equivalents. Investment securities consisted of the following (in thousands): As of March 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt ) Total investments $ $ $ ) $ As of December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Financial assets: Money market funds $ $ — $ — $ Repurchase agreements — — Corporate debt ) Total investments $ $ $ ) $ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Liabilities | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2016 2015 Accrued outside research and development services $ $ Accrued compensation Accrued professional and consulting services Other $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stock-Based Compensation | |
Summary of stock option activity and related information | Outstanding Options Weighted- Average Exercise Price Per Share Options outstanding at December 31, 2015 $ Options granted Options exercised ) Options forfeited ) Options outstanding at March 31, 2016 |
Summary of RSU activity under 2014 EIP | Outstanding RSUs Weighted- Average Grant Date Fair Value per Share RSUs outstanding at December 31, 2015 — — RSUs granted $ RSUs outstanding at March 31, 2016 |
Schedule of stock-based compensation expense | Total stock-based compensation expense related to the 2010 Plan, the 2014 EIP and the 2014 ESPP was allocated as follows (in thousands): Three Months Ended March 31, 2016 2015 Research and development $ $ General and administrative Total stock-based compensation expense $ $ |
Organization (Details)
Organization (Details) | Mar. 31, 2016product |
Organization | |
Number of late-stage product candidates | 3 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Anti dilutive securities excluded in calculation of EPS | ||
Shares excluded from computation of diluted net loss per share | 4,789,885 | 3,557,028 |
Options to purchase common stock | ||
Anti dilutive securities excluded in calculation of EPS | ||
Shares excluded from computation of diluted net loss per share | 4,544,319 | 3,446,904 |
Restricted stock units | ||
Anti dilutive securities excluded in calculation of EPS | ||
Shares excluded from computation of diluted net loss per share | 136,985 | |
Employee Stock Purchase Plan | ||
Anti dilutive securities excluded in calculation of EPS | ||
Shares excluded from computation of diluted net loss per share | 108,581 | 110,124 |
Fair Value Measurements - Tabul
Fair Value Measurements - Tabular Disclosure (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Financial assets: | ||
Available-for-sale securities | $ 188,767 | $ 215,308 |
Recurring | ||
Financial assets: | ||
Available-for-sale securities | 188,767 | 215,308 |
Level 1 | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 35 | 203 |
Level 2 | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 188,732 | 215,105 |
Money market funds | ||
Financial assets: | ||
Available-for-sale securities | 35 | 203 |
Money market funds | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 35 | 203 |
Money market funds | Level 1 | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 35 | 203 |
Repurchase agreements | ||
Financial assets: | ||
Available-for-sale securities | 91,800 | 106,635 |
Repurchase agreements | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 91,800 | 106,635 |
Repurchase agreements | Level 2 | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 91,800 | 106,635 |
Corporate debt | ||
Financial assets: | ||
Available-for-sale securities | 96,932 | 108,470 |
Corporate debt | Recurring | ||
Financial assets: | ||
Available-for-sale securities | 96,932 | 108,470 |
Corporate debt | Level 2 | Recurring | ||
Financial assets: | ||
Available-for-sale securities | $ 96,932 | $ 108,470 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
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 |
Investments - Investment Securi
Investments - Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Financial assets | ||
Amortized Cost | $ 188,719 | $ 215,405 |
Gross Unrealized Gains | 66 | 17 |
Gross Unrealized Losses | (18) | (114) |
Fair Value | 188,767 | 215,308 |
Money market funds | ||
Financial assets | ||
Amortized Cost | 35 | 203 |
Fair Value | 35 | 203 |
Repurchase agreements | ||
Financial assets | ||
Amortized Cost | 91,800 | 106,635 |
Fair Value | 91,800 | 106,635 |
Corporate debt | ||
Financial assets | ||
Amortized Cost | 96,884 | 108,567 |
Gross Unrealized Gains | 66 | 17 |
Gross Unrealized Losses | (18) | (114) |
Fair Value | $ 96,932 | $ 108,470 |
Investments - Realized Gains or
Investments - Realized Gains or Losses on Available-for-sale Securities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Realized gains or losses on the available-for-sale securities | ||
Realized gains or losses on the available-for-sale securities | $ 0 | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities | ||
Accrued outside research and development services | $ 11,607 | $ 12,373 |
Accrued compensation | 2,026 | 3,848 |
Accrued professional and consulting services | 408 | 297 |
Other | 60 | 148 |
Accrued liabilities current | $ 14,101 | $ 16,666 |
Commitments and Contingencies -
Commitments and Contingencies - Facility Lease (Details) | 1 Months Ended | 3 Months Ended | ||||
Dec. 31, 2015USD ($)ft² | Jul. 31, 2014USD ($)ft² | Mar. 31, 2016USD ($)ft²Office | Mar. 31, 2015USD ($) | May. 01, 2019USD ($) | Apr. 30, 2016ft² | |
Menlo Park, California facility lease (Lease) | ||||||
Facility Lease | ||||||
Area of office, commencement date on or about May 2, 2016 (in square feet) | ft² | 2,882 | |||||
Area of office, commencement date on or about September 14, 2016 (in square feet) | ft² | 23,659 | |||||
Renewal lease term (in years) | 5 years | |||||
Area of office, may be terminated effective November 30, 2016 (in square feet) | ft² | 8,022 | |||||
Number of suites in which the leases may be terminated | Office | 2 | |||||
Termination fee period (in months) | 6 months | |||||
Rent expense | $ 300,000 | $ 300,000 | ||||
Menlo Park, California facility lease (Lease) | Letter of Credit | ||||||
Facility Lease | ||||||
Letter of credit | $ 500,000 | |||||
Menlo Park, California facility lease (Lease) | Letter of Credit | Forecast | ||||||
Facility Lease | ||||||
Letter of credit | $ 350,000 | |||||
Menlo Park, California facility lease (Initial Lease) | ||||||
Facility Lease | ||||||
Area of office (in square feet) | ft² | 18,651 | |||||
Base rent expense per month | $ 97,918 | |||||
Annual increase in base rent (as a percent) | 3.00% | |||||
Estimated additional fees per month | $ 22,381 | |||||
Menlo Park, California facility lease (Amended Lease) | ||||||
Facility Lease | ||||||
Area of office (in square feet) | ft² | 26,541 | |||||
Base rent expense per month | $ 135,426 | |||||
Annual increase in base rent (as a percent) | 3.00% | |||||
Estimated additional fees per month | $ 30,954 |
Commitments and Contingencies28
Commitments and Contingencies - CRO Agreement (Details) $ in Millions | Mar. 31, 2016USD ($) |
CRO Agreement | |
CRO aggregate bonus, maximum | $ 3.6 |
CRO aggregate penalty, maximum | 3.2 |
CRO aggregate bonus | 0 |
CRO aggregate penalty | $ 0 |
Commitments and Contingencies29
Commitments and Contingencies - Contingencies (Details) - Beneficial Owner - Development and Commercialization Agreement - UCB - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Contingencies | ||
Development costs - company responsibility, minimum | $ 75 | |
Development costs - company responsibility, maximum | $ 95 | |
Maximum estimable loss contingency related to unused clinical drug supplies, period (in months) | 9 months | |
Minimum estimable loss contingency related to unused clinical drug supplies | $ 1.1 | |
Maximum estimable loss contingency related to unused clinical drug supplies | 1.8 | |
Charge for the contingency loss related to unused clinical drug supplies | $ 0 | |
Research and development | ||
Contingencies | ||
Charge for the contingency loss related to unused clinical drug supplies | $ 1.1 |
Commitments and Contingencies30
Commitments and Contingencies - Indemnification (Details) | Mar. 31, 2016USD ($) |
Indemnification | |
Commitments and Contingencies | |
Loss contingency amount | $ 0 |
Technology and Financing Agre31
Technology and Financing Agreements - Maruho Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Mar. 31, 2013 | Mar. 31, 2016 | Dec. 31, 2015 | |
Technology and Financing Agreements | |||
Deferred revenue | $ 10,000 | $ 10,000 | |
Right of First Negotiation Agreement | Maruho Co. Ltd. | |||
Technology and Financing Agreements | |||
Nonrefundable upfront payment received | $ 10,000 | ||
Deferred revenue | $ 10,000 | $ 10,000 |
Technology and Financing Agre32
Technology and Financing Agreements - Rose U Agreement (Details) - Exclusive License Agreement - Rose U $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Technology and Financing Agreements | |
Payment for execution of agreements | $ 0.5 |
Additional payment upon the achievement of specified development, commercialization and other milestones | $ 4.4 |
Technology and Financing Agre33
Technology and Financing Agreements - UCB (a Related Party) Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Sep. 30, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Technology and Financing Agreements | ||||||
Accounts payable | $ 12,540 | $ 9,230 | ||||
Prepaid expenses and other current assets | 3,893 | 2,540 | ||||
Accrued liabilities | $ 14,101 | 16,666 | ||||
Beneficial Owner | Development and Commercialization Agreement | UCB | ||||||
Technology and Financing Agreements | ||||||
Agreement term (in years) | 12 years 6 months | |||||
Development costs - company responsibility, minimum | $ 75,000 | |||||
Development costs - company responsibility, maximum | 95,000 | |||||
Expenses related to clinical materials | 2,900 | $ 100 | ||||
Accounts payable | 6,200 | 900 | ||||
Prepaid expenses and other current assets | 1,600 | |||||
Accrued liabilities | $ 2,400 | |||||
Potential proceeds from development milestones | $ 36,000 | 21,400 | ||||
Additional proceeds received upon the grant of regulatory approval | $ 13,500 | |||||
Collaboration revenue from a related party | $ 7,300 | $ 7,300 | $ 0 | $ 0 | ||
Minimum royalty percentage up to base annual net sales | 10.00% | |||||
Base annual net sales for retaining | $ 150,000 | |||||
Royalty percentage above base annual net sales | 50.00% | |||||
Proceeds received from achievement of tiered milestones based on annual net sales | $ 40,000 | |||||
Common stock outstanding | 1,841,234 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Shares Available for Grant | |
Options granted (in shares) | (773,430) |
Options forfeited (in shares) | 11,818 |
Shares Subject to Outstanding Options | |
Options outstanding (in shares) | 3,814,342 |
Options granted (in shares) | 773,430 |
Options exercised (in shares) | (31,635) |
Options forfeited (in shares) | (11,818) |
Options outstanding (in shares) | 4,544,319 |
Weighted-Average Exercise Price Per Share | |
Options outstanding (in dollars per share) | $ / shares | $ 9.19 |
Options granted (in dollars per share) | $ / shares | 25.77 |
Options exercised (in dollars per share) | $ / shares | 2.78 |
Options forfeited (in dollars per share) | $ / shares | 1.22 |
Options outstanding (in dollars per share) | $ / shares | $ 12.08 |
Restricted stock units | |
Number of shares | |
Granted (in shares) | 136,985 |
Outstanding at the end of the period (in shares) | 136,985 |
Weighted average grant date fair value | |
Granted (in dollars per share) | $ / shares | $ 26.37 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 26.37 |
2014 EIP | |
Shares Available for Grant | |
Shares available for future stock option grants | 1,455,211 |
2014 ESPP | |
Shares Available for Grant | |
Shares available for future stock option grants | 790,920 |
Stock-Based Compensation - Tota
Stock-Based Compensation - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Total stock-based compensation expense | ||
Total stock-based compensation expense | $ 2,594 | $ 1,094 |
Research and development | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | 954 | 455 |
General and administrative | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | $ 1,640 | $ 639 |
Stock-Based Compensation - Capi
Stock-Based Compensation - Capitalized Stock-based Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock-Based Compensation | ||
Capitalized stock-based compensation costs | $ 0 | $ 0 |