Kindred Biosciences (KIN) 10-Q 10 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Entity [Abstract]
Entity Registrant Name	Kindred Biosciences, Inc.
Entity Central Index Key	1,561,743
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		19,792,337

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 14,822	$ 12,969
Short-term investments	74,914	88,058
Prepaid expenses and other	443	477
Total current assets	90,179	101,504
Property and equipment, net	397	394
Other assets	30	22
Total assets	90,606	101,920
Current liabilities:
Accounts payable	1,101	420
Accrued compensation	948	1,457
Accrued liabilities	782	975
Total current liabilities	2,831	2,852
Long-term liability	37	44
Total liabilities	$ 2,868	$ 2,896
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock, $0.0001 par value; 100,000,000 shares authorized; 19,792,337 and 19,724,482 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively	$ 2	$ 2
Additional paid-in capital	132,824	130,521
Accumulated other comprehensive loss	(1)	(27)
Accumulated deficit	(45,087)	(31,472)
Total stockholders' equity	87,738	99,024
Total liabilities and stockholders' equity	$ 90,606	$ 101,920

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value, in dollar per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	19,792,337	19,724,482
Common stock, shares outstanding	19,792,337	19,724,482

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Operating expenses:
Research and development	$ 4,991	$ 5,639	$ 9,800	$ 10,137
General and administrative	1,921	2,504	3,874	4,183
Total operating expenses	6,912	8,143	13,674	14,320
Loss from operations	(6,912)	(8,143)	(13,674)	(14,320)
Interest income	29	33	59	42
Net loss	(6,883)	(8,110)	(13,615)	(14,278)
Change in unrealized gains or losses on available-for-sale securities	9	(14)	26	(14)
Comprehensive loss	$ (6,874)	$ (8,124)	$ (13,589)	$ (14,292)
Net loss per share, basic and diluted, in dollars per share	$ (0.35)	$ (0.42)	$ (0.69)	$ (0.80)
Weighted-average number of common shares outstanding, basic and diluted, in shares	19,756	19,426	19,741	17,833

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities
Net loss	$ (13,615)	$ (14,278)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	2,097	2,253
Depreciation and amortization expense	72	13
Amortization of premium on marketable securities	52	0
Changes in operating assets and liabilities:
Prepaid expenses and other	34	(373)
Other assets	(8)	0
Accounts payable	681	1,022
Accrued liabilities and accrued compensation	(709)	460
Net cash used in operating activities	(11,396)	(10,903)
Cash Flows from Investing Activities
Purchase of short-term investments	(35,882)	(106,125)
Sale of short-term investments	3,000	0
Maturities of short-term investments	46,000	3,000
Purchase of property and equipment	(75)	(110)
Net cash provided by (used in) investing activities	13,043	(103,235)
Cash Flows from Financing Activities
Exercise of stock options and purchase of ESPP shares	206	82
Net proceeds from sale of common stock	0	58,065
Net cash provided by financing activities	206	58,147
Net change in cash and cash equivalents	1,853	(55,991)
Cash and cash equivalents at beginning of period	12,969	65,329
Cash and cash equivalents at end of period	14,822	9,338
Common Stock
Supplemental disclosure of non-cash financing activities:
Issuance of common stock and stock options for accrued consulting expenses	$ 0	$ 303

Description of Business, Basis

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies	Description of Business, Basis of Presentation and Summary of Significant Accounting Policies Kindred Biosciences, Inc. ("we", "us" or "our") was incorporated on September 25, 2012 (inception) in the State of Delaware. We are a biopharmaceutical company focused on saving and improving the lives of pets. Our activities since inception have consisted principally of raising capital, establishing facilities, recruiting management and technical staff and performing research and development and advancing our product candidates seeking regulatory approval. Our headquarters are in Burlingame, California. We are subject to risks common to companies in the biotechnology and pharmaceutical industries. There can be no assurance that our research and development will be successfully completed, that adequate patent or other intellectual property protection for our technology will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. We operate in an environment of substantial competition from other animal health companies. In addition, we are dependent upon the services of our employees and consultants, as well as third-party contract research organizations and manufacturers. The accompanying unaudited interim condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2014 included in our annual report on Form 10-K as filed with the SEC on March 13, 2015. In the opinion of management, all adjustments, consisting of a normal and recurring nature, considered necessary for a fair presentation, have been included in these unaudited interim condensed financial statements. Liquidity We have incurred losses and negative cash flows from operations and have not generated any revenue since our inception. We expect to continue to incur losses and negative cash flows, which will increase significantly from historical levels as we expand our product development activities, seek regulatory approvals for our product candidates, establish a biologics manufacturing capability, and begin to commercialize any approved products. To date, we have been funded primarily through sales of our former convertible preferred stock, the sale of our common stock in our initial public offering in December 2013 and the sale of our common stock in our April 2014 follow-on public offering. We believe that our cash, cash equivalents and short-term investments totaling $89,736,000 as of June 30, 2015 , are sufficient to fund our planned operations for at least the next 24 months. If we require additional funding for operations, we may seek such funding through public or private equity or debt financings or other sources, such as corporate collaborations and licensing arrangements. We may not be able to obtain financing on acceptable terms, or at all, and we may not be able to enter into corporate collaborations or licensing arrangements. The terms of any financing may result in dilution or otherwise adversely affect the holdings or the rights of our stockholders. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the valuation of stock-based awards, the realization of deferred tax assets and the accrual of research and development expenses. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from those estimates. Comprehensive Loss Our comprehensive loss includes the change in unrealized gains or losses on available-for-sale securities. The cumulative amount of gains or losses are reflected as a separate component of stockholders' equity in the condensed balance sheets as accumulated other comprehensive loss. Reclassification Certain prior period amounts have been reclassified to conform to the classifications used to prepare the condensed financial statements for the period ended June 30, 2015. The reclassification had no material impact on the Company’s financial position, results of operations or cash flows as previously reported. Recently Issued Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which provides guidance regarding management’s responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the company’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We are currently evaluating the new guidance and have not determined the impact this standard may have on our condensed financial statements. We do not believe there are any other recently issued standards not yet effective that will have a material impact on our financial statements when the standards become effective.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements Certain assets and liabilities are carried at fair value. 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 must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, is used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying amount of financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities approximate fair value due to the short maturities of these financial instruments. Financial assets, which consist of money market funds and available-for-sale securities, are measured at fair value on a recurring basis. Financial assets, which consist of money market funds and available-for-sale securities, are measured at fair value on a recurring basis and are summarized as follows (in thousands): Fair Value Measurements as of June 30, 2015 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 14,586 $ 14,586 $ — $ — Short-term investments: U.S. treasury bills 29,145 — 29,145 — U.S. federal agency notes 6,754 — 6,754 — U.S. treasury bonds and notes 39,015 — 39,015 — $ 89,500 $ 14,586 $ 74,914 $ — Fair Value Measurements as of December 31, 2014 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 834 $ 834 $ — $ — Short-term investments: U.S. treasury bills 5,998 — 5,998 — U.S. treasury bonds and notes 82,060 — 82,060 — $ 88,892 $ 834 $ 88,058 $ — There were no transfers of assets between Level 1, Level 2 or Level 3 of the fair value hierarchy at June 30, 2015 or December 31, 2014 . At June 30, 2015 and December 31, 2014 , we did not have any financial liabilities which were measured at fair value on a recurring basis.

Short-Term Investments

Short-Term Investments	6 Months Ended
	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Short-Term Investments	Short-Term Investments We classify all highly-liquid investments with stated maturities of greater than three months from the date of purchase and remaining maturities of less than one year as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such investments are viewed as being available to support current operations. We classify and account for short-term investments as available-for-sale and reflect realized gains and losses using the specific identification method. Changes in market value if any, excluding other-than-temporary impairments, are reflected in other comprehensive income (loss). The fair value of available-for-sale short-term investments by type of security at June 30, 2015 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury bills $ 29,132 $ 16 $ (3 ) $ 29,145 U.S. federal agency notes 6,755 — (1 ) 6,754 U.S. treasury bonds and notes 39,028 28 (41 ) 39,015 $ 74,915 $ 44 $ (45 ) $ 74,914 The fair value of available-for-sale short-term investments by type of security at December 31, 2014 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury bills $ 5,994 $ 4 $ — $ 5,998 U.S. treasury bonds and notes 82,091 — (31 ) 82,060 $ 88,085 $ 4 $ (31 ) $ 88,058

Accrued Liabilities

Accrued Liabilities	6 Months Ended
	Jun. 30, 2015
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities Accrued liabilities consisted of the following (in thousands): June 30, 2015 December 31, 2014 Research and development costs $ 581 $ 715 Other expenses 185 247 Deferred rent 53 57 819 1,019 Less current portion (782 ) (975 ) Long-term liability (deferred rent) $ 37 $ 44

Stock-Based Awards and Common S

Stock-Based Awards and Common Stock	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Awards and Common Stock	Stock-Based Awards and Common Stock The table below shows the number of shares of common stock underlying options granted to employees, directors and consultants, the assumptions used in the Black-Scholes option pricing model used to value those options and the resulting weighted-average grant date fair value per share: Stock Option Plan Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Shares underlying options granted 165,900 182,750 812,233 946,963 Weighted-average exercise price $6.31 $19.64 $6.68 $16.64 Weighted average risk- free interest rate 1.68 % 2.02 % 1.49% 1.60% Weighted average expected term (years) 6.3 6.1 6.1 6.1 Weighted average expected volatility 92% 90% 96% 90% Expected dividend yield — — — — Weighted-average grant date fair value per share $4.81 $14.71 $5.16 $12.36 Our Employee Stock Purchase Plan (the "Stock Purchase Plan"), adopted in December 2014, permits eligible employees to purchase common stock at a discount through payroll deductions during defined six -month consecutive offering periods beginning December 1 with the exception of our first offering period which commenced on January 1, 2015 for a five month duration. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock on the first day of the offering or 85% of the fair market value of our common stock on the purchase date. A total of 200,000 shares of common stock are authorized for issuance under the Stock Purchase Plan. A participant may purchase a maximum of 2,000 shares of common stock during each offering period, not to exceed $25,000 worth of common stock on the offering date during each calendar year. We use the Black-Scholes option pricing model, in combination with the discounted employee price, in determining the value of the Stock Purchase Plan expense to be recognized during each offering period. The following assumptions were used in the Black-Scholes option pricing model to calculate employee stock-based compensation: Stock Purchase Plan Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Weighted average risk-free interest rate 0.07% — 0.07% — Weighted average expected term (years) 0.5 — 0.5 — Weighted average expected volatility 88% — 73% — Expected dividend yield — — — — Weighted-average grant date fair value per share $2.23 — $2.14 — Under the Stock Purchase Plan, employees purchased 26,772 shares of common stock for $147,000 during the six months ended June 30, 2015. At June 30, 2015, we had an outstanding liability of $24,000 , which is included in accrued compensation on the condensed balance sheet, for employee contributions to the Stock Purchase Plan for shares pending issuance at the end of the next offering period. We recorded stock-based compensation expense as follows (in thousands): Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Research and development $ 468 $ 361 $ 932 $ 689 General and administrative 551 815 1,165 1,564 $ 1,019 $ 1,176 $ 2,097 $ 2,253 We had an aggregate of approximately $10,359,000 of unrecognized stock-based compensation expense for options outstanding and the Stock Purchase Plan as of June 30, 2015 which is expected to be recognized over a weighted-average period of 2.9 years.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies In March 2014, we entered into a license agreement under which we made an up-front payment and were obligated to make annual payments and, subject to certain terms and conditions, milestone payments upon achievement of development milestones and a royalty based on sales of products developed under the agreement. We terminated this agreement in January 2015. In April 2014, we entered into new noncancelable operating leases for laboratory space and office space through November 2017. In January 2015, we amended a lease to expand the laboratory space for an additional 2,431 square feet and in July 2015, we expanded the laboratory space by an additional 131 square feet. In June 2015, we entered into a new noncancelable operating lease for 3,126 square feet of office space in San Diego, California. In addition, we have two equipment leases, one expiring in July 2017 and the other expiring in July 2019. As of June 30, 2015 , we are obligated to make minimum lease payments under noncancelable operating leases as follows (in thousands): Year ending December 31, Lease Payments 2015 (remaining of year) $ 193 2016 414 2017 336 2018 98 2019 75 Total $ 1,116

Net Loss Per Share

Net Loss Per Share	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share Basic and diluted net loss per share was calculated as follows (in thousands, except per share amounts): Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Basic and diluted net loss per share: Numerator: Net loss $ (6,883 ) $ (8,110 ) $ (13,615 ) $ (14,278 ) Denominator: Weighted-average number of common shares outstanding, basic and diluted 19,756 19,426 19,741 17,833 Net loss per share, basic and diluted $ (0.35 ) $ (0.42 ) $ (0.69 ) $ (0.80 ) There was no difference between the Company’s net loss and the net loss attributable to common stockholders for all periods presented. Stock options to purchase 3,060,669 shares of common stock as of June 30, 2015 , were excluded from the computation of diluted net loss per share attributable to common stockholders for the three and six months ended June 30, 2015 , because their effect was anti-dilutive. Stock options and unvested restricted stock awards to purchase 2,287,590 shares of common stock were excluded from the computation of diluted net loss per share attributable to common stockholders for the three and six months ended June 30, 2014 , because their effect was anti-dilutive.

Description of Business, Basi13

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Liquidity	Liquidity We have incurred losses and negative cash flows from operations and have not generated any revenue since our inception. We expect to continue to incur losses and negative cash flows, which will increase significantly from historical levels as we expand our product development activities, seek regulatory approvals for our product candidates, establish a biologics manufacturing capability, and begin to commercialize any approved products. To date, we have been funded primarily through sales of our former convertible preferred stock, the sale of our common stock in our initial public offering in December 2013 and the sale of our common stock in our April 2014 follow-on public offering. We believe that our cash, cash equivalents and short-term investments totaling $89,736,000 as of June 30, 2015 , are sufficient to fund our planned operations for at least the next 24 months. If we require additional funding for operations, we may seek such funding through public or private equity or debt financings or other sources, such as corporate collaborations and licensing arrangements. We may not be able to obtain financing on acceptable terms, or at all, and we may not be able to enter into corporate collaborations or licensing arrangements. The terms of any financing may result in dilution or otherwise adversely affect the holdings or the rights of our stockholders.
Use of Estimates	Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed financial statements include, but are not limited to, the valuation of stock-based awards, the realization of deferred tax assets and the accrual of research and development expenses. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from those estimates.
Comprehensive Loss	Comprehensive Loss Our comprehensive loss includes the change in unrealized gains or losses on available-for-sale securities. The cumulative amount of gains or losses are reflected as a separate component of stockholders' equity in the condensed balance sheets as accumulated other comprehensive loss.
Reclassification	Reclassification Certain prior period amounts have been reclassified to conform to the classifications used to prepare the condensed financial statements for the period ended June 30, 2015. The reclassification had no material impact on the Company’s financial position, results of operations or cash flows as previously reported.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which provides guidance regarding management’s responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the company’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We are currently evaluating the new guidance and have not determined the impact this standard may have on our condensed financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Schedule of financial assets measured at fair value on a recurring basis	Financial assets, which consist of money market funds and available-for-sale securities, are measured at fair value on a recurring basis and are summarized as follows (in thousands): Fair Value Measurements as of June 30, 2015 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 14,586 $ 14,586 $ — $ — Short-term investments: U.S. treasury bills 29,145 — 29,145 — U.S. federal agency notes 6,754 — 6,754 — U.S. treasury bonds and notes 39,015 — 39,015 — $ 89,500 $ 14,586 $ 74,914 $ — Fair Value Measurements as of December 31, 2014 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 834 $ 834 $ — $ — Short-term investments: U.S. treasury bills 5,998 — 5,998 — U.S. treasury bonds and notes 82,060 — 82,060 — $ 88,892 $ 834 $ 88,058 $ —

Short-Term Investments (Tables)

Short-Term Investments (Tables)	6 Months Ended
	Jun. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Schedule of fair value of available-for-sale short term investments	The fair value of available-for-sale short-term investments by type of security at June 30, 2015 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury bills $ 29,132 $ 16 $ (3 ) $ 29,145 U.S. federal agency notes 6,755 — (1 ) 6,754 U.S. treasury bonds and notes 39,028 28 (41 ) 39,015 $ 74,915 $ 44 $ (45 ) $ 74,914 The fair value of available-for-sale short-term investments by type of security at December 31, 2014 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury bills $ 5,994 $ 4 $ — $ 5,998 U.S. treasury bonds and notes 82,091 — (31 ) 82,060 $ 88,085 $ 4 $ (31 ) $ 88,058

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2015
Payables and Accruals [Abstract]
Schedule of accrued liabilities	Accrued liabilities consisted of the following (in thousands): June 30, 2015 December 31, 2014 Research and development costs $ 581 $ 715 Other expenses 185 247 Deferred rent 53 57 819 1,019 Less current portion (782 ) (975 ) Long-term liability (deferred rent) $ 37 $ 44

Stock-Based Awards and Common17

Stock-Based Awards and Common Stock (Tables)	6 Months Ended
	Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Stock Option Plan valuation assumptions	The table below shows the number of shares of common stock underlying options granted to employees, directors and consultants, the assumptions used in the Black-Scholes option pricing model used to value those options and the resulting weighted-average grant date fair value per share: Stock Option Plan Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Shares underlying options granted 165,900 182,750 812,233 946,963 Weighted-average exercise price $6.31 $19.64 $6.68 $16.64 Weighted average risk- free interest rate 1.68 % 2.02 % 1.49% 1.60% Weighted average expected term (years) 6.3 6.1 6.1 6.1 Weighted average expected volatility 92% 90% 96% 90% Expected dividend yield — — — — Weighted-average grant date fair value per share $4.81 $14.71 $5.16 $12.36
Schedule of Stock Purchase Plan valuation assumptions	The following assumptions were used in the Black-Scholes option pricing model to calculate employee stock-based compensation: Stock Purchase Plan Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Weighted average risk-free interest rate 0.07% — 0.07% — Weighted average expected term (years) 0.5 — 0.5 — Weighted average expected volatility 88% — 73% — Expected dividend yield — — — — Weighted-average grant date fair value per share $2.23 — $2.14 —
Schedule of stock-based compensation expense	We recorded stock-based compensation expense as follows (in thousands): Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Research and development $ 468 $ 361 $ 932 $ 689 General and administrative 551 815 1,165 1,564 $ 1,019 $ 1,176 $ 2,097 $ 2,253

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum lease payments under noncancelable operating leases	As of June 30, 2015 , we are obligated to make minimum lease payments under noncancelable operating leases as follows (in thousands): Year ending December 31, Lease Payments 2015 (remaining of year) $ 193 2016 414 2017 336 2018 98 2019 75 Total $ 1,116

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share [Abstract]
Calculation of basic and diluted net loss per share	Basic and diluted net loss per share was calculated as follows (in thousands, except per share amounts): Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Basic and diluted net loss per share: Numerator: Net loss $ (6,883 ) $ (8,110 ) $ (13,615 ) $ (14,278 ) Denominator: Weighted-average number of common shares outstanding, basic and diluted 19,756 19,426 19,741 17,833 Net loss per share, basic and diluted $ (0.35 ) $ (0.42 ) $ (0.69 ) $ (0.80 )

Description of Business, Basi20

Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Thousands	Jun. 30, 2015USD ($)
Accounting Policies [Abstract]
Cash, cash equivalents, and short-term investments	$ 89,736

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	$ 89,500	$ 88,892
Quoted Prices in Active Markets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	14,586	834
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	74,914	88,058
Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	0	0
U.S. treasury bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	29,145	5,998
U.S. treasury bills | Quoted Prices in Active Markets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
U.S. treasury bills | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	29,145	5,998
U.S. treasury bills | Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
U.S. federal agency notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	6,754
U.S. federal agency notes | Quoted Prices in Active Markets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
U.S. federal agency notes | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	6,754
U.S. federal agency notes | Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
U.S. treasury bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	39,015	82,060
U.S. treasury bonds and notes | Quoted Prices in Active Markets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
U.S. treasury bonds and notes | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	39,015	82,060
U.S. treasury bonds and notes | Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	14,586	834
Money market funds | Quoted Prices in Active Markets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	14,586	834
Money market funds | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Money market funds | Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0

Short-Term Investments (Details

Short-Term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Gain (Loss) on Investments [Line Items]
Amortized Cost	$ 74,915	$ 88,085
Gross Unrealized Gains	44	4
Gross Unrealized Losses	(45)	(31)
Fair Value	74,914	88,058
U.S. treasury bills
Gain (Loss) on Investments [Line Items]
Amortized Cost	29,132	5,994
Gross Unrealized Gains	16	4
Gross Unrealized Losses	(3)	0
Fair Value	29,145	5,998
U.S. federal agency notes
Gain (Loss) on Investments [Line Items]
Amortized Cost	6,755
Gross Unrealized Gains	0
Gross Unrealized Losses	(1)
Fair Value	6,754
U.S. treasury bonds and notes
Gain (Loss) on Investments [Line Items]
Amortized Cost	39,028	82,091
Gross Unrealized Gains	28	0
Gross Unrealized Losses	(41)	(31)
Fair Value	$ 39,015	$ 82,060

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Research and development costs	$ 581	$ 715
Other expenses	185	247
Deferred rent	53	57
Accrued liabilities	819	1,019
Less current portion	(782)	(975)
Long-term liability (deferred rent)	$ 37	$ 44

Stock-Based Awards and Common24

Stock-Based Awards and Common Stock - Stock Option Plan (Details) - Stock Option Plan - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares underlying options granted, in shares	165,900	182,750	812,233	946,963
Weighted-average exercise price, in dollars per share	$ 6.31	$ 19.64	$ 6.68	$ 16.64
Weighted average risk-free interest rate	1.68%	2.02%	1.49%	1.60%
Weighted average expected term	6 years 3 months 18 days	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days
Weighted average expected volatility, as a percent	92.00%	90.00%	96.00%	90.00%
Expected dividend yield, as a percent	0.00%	0.00%	0.00%	0.00%
Weighted-average grant date fair value per share, in dollars per share	$ 4.81	$ 14.71	$ 5.16	$ 12.36

Stock-Based Awards and Common25

Stock-Based Awards and Common Stock - Narrative (Details) - Jun. 30, 2015 - USD ($)	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding liability included in accrued compensation	$ 24,000
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock purchased (in shares)	26,772
Net proceeds from sale of common stock	$ 147,000
Unrecognized stock-based compensation	$ 10,359,000
Weighted- average period for recognition (years)	2 years 10 months 17 days
Employee Stock Purchase Plan | Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Initial offering period (in months)	6 months
Consecutive offering period (in months)	5 months
Purchase price of common stock, percent of fair market value	85.00%
Shares reserved for future issuance (in shares)	200,000
Maximum number of shares participant may purchase during each offering period (in shares)	2,000
Maximum value of shares participant may purchase during each offering period	$ 25,000

Stock-Based Awards and Common26

Stock-Based Awards and Common Stock - Stock Purchase Plan (Details) - Employee Stock Purchase Plan - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average risk-free interest rate	0.07%	0.00%	0.07%	0.00%
Weighted average expected term	6 months		6 months
Weighted average expected volatility, as a percent	88.00%	0.00%	73.00%	0.00%
Expected dividend yield, as a percent	0.00%	0.00%	0.00%	0.00%
Weighted-average grant date fair value per share, in dollars per share	$ 2.23	$ 0	$ 2.14	$ 0

Stock-Based Awards and Common27

Stock-Based Awards and Common Stock - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,019	$ 1,176	$ 2,097	$ 2,253
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	468	361	932	689
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 551	$ 815	$ 1,165	$ 1,564

Commitments and Contingencies28

Commitments and Contingencies (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2015USD ($)ft²equipment_lease	Jul. 31, 2015ft²	Jan. 31, 2015ft²
Property, Plant and Equipment [Line Items]
Number of equipment leases | equipment_lease	2
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2015 (remaining of year)	$ 193
2,016	414
2,017	336
2,018	98
2,019	75
Total	$ 1,116
Laboratory space | Operating Lease
Property, Plant and Equipment [Line Items]
Square footage of laboratory space | ft²			2,431
Square footage of office space | ft²	3,126
Laboratory space | Operating Lease | Subsequent Event
Property, Plant and Equipment [Line Items]
Square footage of laboratory space | ft²		131

Net Loss Per Share (Details)

Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net loss	$ (6,883)	$ (8,110)	$ (13,615)	$ (14,278)
Denominator:
Weighted-average number of common shares outstanding, basic and diluted, in shares	19,756,000	19,426,000	19,741,000	17,833,000
Net loss per share, basic and diluted, in dollars per share	$ (0.35)	$ (0.42)	$ (0.69)	$ (0.80)
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from EPS computation (in shares)	3,060,669	2,287,590	3,060,669	2,287,590