Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Kindred Biosciences, Inc. | |
Entity Central Index Key | 0001561743 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 39,005,082 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 68,598 | $ 56,302 |
Short-term investments | 27,390 | 17,630 |
Accounts receivable | 275 | 903 |
Inventories | 4,525 | 3,570 |
Prepaid expenses and other | 1,924 | 1,664 |
Total current assets | 102,712 | 80,069 |
Property and equipment, net | 28,136 | 26,343 |
Operating lease right-of-use assets | 1,763 | |
Other assets | 70 | 70 |
Total assets | 132,681 | 106,482 |
Current liabilities: | ||
Accounts payable | 1,236 | 3,576 |
Accrued compensation | 2,276 | 3,436 |
Accrued liabilities | 7,071 | 8,169 |
Current portion of operating lease liabilities | 708 | |
Total current liabilities | 11,291 | 15,181 |
Long-term operating lease liabilities | 1,096 | |
Long-term deferred rent | 94 | |
Total liabilities | 12,387 | 15,275 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 38,927,955 and 33,948,254 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 4 | 3 |
Additional paid-in capital | 298,028 | 252,885 |
Accumulated other comprehensive loss | (13) | (11) |
Accumulated deficit | (177,725) | (161,670) |
Total stockholders' equity | 120,294 | 91,207 |
Total liabilities and stockholders' equity | $ 132,681 | $ 106,482 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 38,927,955 | 33,948,254 |
Common stock, shares outstanding (in shares) | 38,927,955 | 33,948,254 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net product revenues | $ 515 | $ 0 |
Operating costs and expenses: | ||
Cost of product revenues | 92 | 0 |
Research and development | 7,152 | 5,346 |
Selling, general and administrative | 9,901 | 4,902 |
Total operating costs and expenses | 17,145 | 10,248 |
Loss from operations | (16,630) | (10,248) |
Interest and other income, net | 575 | 277 |
Net loss | (16,055) | (9,971) |
Change in unrealized gains on available for sale securities | (2) | (11) |
Comprehensive loss | $ (16,057) | $ (9,982) |
Net loss per share, basic and diluted (USD per share) | $ (0.42) | $ (0.36) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 37,786 | 27,986 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (16,055) | $ (9,971) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 1,860 | 1,524 |
Depreciation and amortization expense | 500 | 144 |
Loss on disposal of property and equipment | 1 | 0 |
Amortization of discount on marketable securities | (81) | (29) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 628 | 0 |
Inventories | (955) | 0 |
Prepaid expenses and other | (260) | (573) |
Accounts payable | (1,575) | (1,227) |
Accrued liabilities and accrued compensation | (2,717) | (1,090) |
Net cash used in operating activities | (18,654) | (11,222) |
Cash Flows from Investing Activities | ||
Purchases of investments | (20,281) | (5,279) |
Sales of investments | 0 | 800 |
Maturities of investments | 10,600 | 25,875 |
Purchases of property and equipment | (2,656) | (409) |
Proceeds from sale of property and equipment | 3 | 0 |
Net cash (used in) provided by investing activities | (12,334) | 20,987 |
Cash Flows from Financing Activities | ||
Exercises of stock options | 652 | 165 |
Payment of restricted stock awards and units tax liability on net settlement | (493) | (247) |
Net proceeds from sale of common stock | 43,125 | 0 |
Net cash provided by (used in) financing activities | 43,284 | (82) |
Net change in cash and cash equivalents | 12,296 | 9,683 |
Cash and cash equivalents at beginning of period | 56,302 | 34,813 |
Cash and cash equivalents at end of period | 68,598 | 44,496 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchase of property and equipment included in accounts payable and accrued liabilities | $ 1,600 | $ 337 |
Description of Business, Basis
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
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. ("KindredBio", "we", "us" or "our") was incorporated on September 25, 2012 (inception) in the State of Delaware. On April 25, 2016, we filed a Certificate of Incorporation with the State of Delaware for a wholly owned subsidiary, KindredBio Equine, Inc. ("Subsidiary"). The Subsidiary has one class of capital stock which is designated common stock, $0.0001 par value per share. The authorized number of shares of common stock for the Subsidiary is 1,000 . We are a commercial-stage 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 located 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 consolidated financial statements (“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 of America (“U.S. GAAP”) for complete financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included in our annual report on Form 10-K as filed with the SEC on March 6, 2019. 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 financial statements. The accompanying financial statements include the accounts of the Company and its wholly owned Subsidiary. All inter-company accounts and transactions have been eliminated in consolidation. Stock Offerings In January 2018, we filed a shelf registration statement on Form S-3 to offer and sell, from time to time, equity and debt securities in one or more offerings up to a total dollar amount of $150.0 million. In May 2018, we entered into an At Market Issuance Sales Agreement, or the Sales Agreement, relating to the sale of up to $50,000,000 of our common stock from time to time. We terminated the Sales Agreement in June 2018 after having sold 188,100 shares, representing gross proceeds of approximately $1,903,000 . Net proceeds, after deducting commission, fees and offering costs, were approximately $1,758,000 . On June 22, 2018 we completed a public offering of 5,326,314 shares of common stock, which included the underwriters' option to purchase additional shares, at a public offering price of $9.50 per share for total gross proceeds of approximately $50,600,000 . Net proceeds, after deducting underwriting discounts and commissions and offering expense, were approximately $47,422,000 . In January 2019, we completed a public offering of 4,847,250 shares of common stock, which includes the exercise in full pf the underwriters' option to purchase 632,250 additional shares of our common stock, at a public offering price of $9.50 per share for total gross proceeds of approximately $46,049,000 . Net proceeds, after deducting underwriting discounts and commissions and offering expense, were approximately $43,125,000 . Liquidity We have incurred losses and negative cash flows from operations and had an accumulated deficit of $177,725,000 as of March 31, 2019 . 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 commercialize any approved products. To date, we have been funded primarily through sales of our former convertible preferred stock and the sale of our common stock. We might require additional capital until such time as we can generate operating revenues in excess operating expenses. We believe that our cash, cash equivalents and short-term investments totaling $95,988,000 as of March 31, 2019 , are sufficient to fund our planned operations for approximately 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. Revenue Recognition We adopted FASB Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers in the first quarter of our fiscal year that began on January 1, 2018. Our revenues consist of product revenues resulting from the sale of Mirataz™ (mirtazapine transdermal ointment) for the management of weight loss in cats . We account for a contract with a customer when there is a legally enforceable contract between us and our customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Our customers could either be distributors who subsequently resell our products to third parties such as veterinarians, clinics or animals hospitals or the third parties themselves. In accordance with ASC 606, we applied the following steps to recognize revenue for the sale of Mirataz that reflects the consideration to which we expect to be entitled to receive in exchange for the promised goods: 1. Identify the contract with a customer A contract with a customer exists when we enter into an enforceable contract with a customer. These contracts define each party's rights, payment terms and other contractual terms and conditions of the sale. We apply judgment in determining the customer’s ability and intention to pay, which is based on published credit and financial information pertaining to the customer. 2. Identify the performance obligations in the contract Our product in a given purchase order is delivered at the same time and we do not separate an individual order into separate performance obligations. We have concluded the sale of finished goods and related shipping and handling are accounted for as a single performance obligation as there are no other promises to deliver goods beyond what is specified in each accepted customer order. 3. Determine the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer, typically a fixed consideration in our contractual agreements. 4. Allocate the transaction price to the performance obligations The transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. The nature of the promises/obligations under our contracts is to transfer a distinct good. Accordingly, because a single performance obligation exists, no allocation of the transaction price is necessary. 5. Determine the satisfaction of performance obligation Revenue is recognized when control of the finished goods is transferred to the customer, net of applicable reserves for variable consideration. Control of the finished goods is transferred at a point in time, upon delivery to the customer. Reserves for Variable Consideration Revenues from product sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established. Components of variable consideration include product returns, allowances and discounts. These estimates take into consideration a range of possible outcomes for the expected value (probability-weighted estimate) or relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized where the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. Product Returns Consistent with the industry practice, we generally offer customers a limited right of return of damaged or expired product that has been purchased directly from us. Our return policy generally allows customers to receive credit for expired products within 90 days after the product’s expiration date. We estimate the amount of our product revenues that may be returned by our customers and record these estimates as a reduction of product revenues in the period the related product revenues are recognized, as well as within accrued liabilities, in the consolidated balance sheets. We currently estimate product return liabilities using probability-weighted available industry data and data provided by the our distributors such as the inventories remaining in the distribution channel. To-date, we have no returns and believe that returns of our product in future periods will be minimal. We do not record a return asset associated with the returned damaged or expired goods due to such asset is deemed to be fully impaired at the time of product return. Sales Discounts and Allowances We compensate our distributors for sales order management, data and distribution and other services through sales discounts and allowances. However, such services are not distinct from our sale of products to distributors and, therefore, these discounts and allowances are recorded as a reduction of product revenues in the consolidated statements of operations and comprehensive loss, as well as a reduction to accounts receivable in the consolidated balance sheets. Sales Commissions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. Cost of Product Revenues Cost of product revenues c onsists primarily of the cost of direct materials, direct labor and overhead costs associated with manufacturing, inbound shipping and other third-party logistics costs. Inventories We value inventory at the lower of cost or net realizable value. We determine the cost of inventory using the standard-cost method, which approximates actual cost based on a first-in, first-out method. We analyze our inventory levels quarterly and write down inventory subject to expire in excess of expected requirements, or that has a cost basis in excess of its expected net realizable value. These inventory related costs are recognized as cost of product revenues on the accompanying consolidated statements of operations and comprehensive loss. Currently our inventory consists of finished goods only. Property, Plant and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software, and fifteen to thirty-nine years for land improvements and real property. Land and assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for their intended use. Expenditures for repairs and maintenance of assets are charged to expense as incurred. We amortize leasehold improvements using the straight-line method over the estimated useful lives of the respective assets or the lease term, whichever is shorter. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts and any resulting gain or loss is included in other income/expense. 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. Estimates are based historical experiences or on forecasts, including information received from third parties and other assumptions that the Company believes are reasonable under the circumstances. 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 consolidated balance sheets as accumulated other comprehensive income (loss). Recently Issued Accounting Pronouncements In February 2016, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)", requiring organizations that lease assets—referred to as “lessees”—to recognize on the consolidated balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. The ASU on leases took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We adopted this new standard on January 1, 2019, using the alternative modified transition method, that means using a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. Upon adoption, on January 1, 2019, we recorded a $1,941,000 increase in operating lease right-of-use assets, a $69,000 decrease in other current assets, a $115,000 decrease in other liabilities and a $1,985,000 increase in operating lease obligations. There was no cumulative-effect adjustment needed on January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the following "package of practical expedients" when assessing the transition impact as the lessee as of January 1, 2019: (1) not to reassess whether any expired or existing contracts, contain leases; (2) not to reassess the lease classification for any expired or existing leases; and (3) not to reassess initial direct costs for any existing leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet as we recognize lease expense for these leases on a straight-line basis over the lease term. The major impact for KindredBio was the balance sheet recognition of right-of-use ("ROU") assets and lease liabilities for operating leases as a lessee. We determine if an agreement contains a lease at inception. For agreements where we are the lessee, operating lease are included in operating lease right-of-use assets, current portion of operating lease liabilities and long-term portion operating lease liabilities on the condensed consolidated balance sheet as of March 31, 2019. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentive received. We use our own incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as our leases generally do not provide an implicit rate. Lease terms don't include options to extend or terminate when we are reasonably certain that the option will not be exercised. Lease expense is recognized on a straight-line basis over the lease term. In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases", which affects narrow aspects of the guidance issued in ASU No. 2016-02. The amendments in this ASU related to transition do not include amendments from proposed ASU, Leases (Topic 842): Targeted Improvements, specific to a new and optional transition method to adopt the new lease requirements in Update 2016-02. The effective date and transition requirements are the same as the effective date and transition requirements in Topic 842. The adoption of this standard did not have material impact on our financial statements. In July 2018, the FASB issued ASU No. 2018-11, "Targeted Improvements to Topic 842, Leases". The Standard provide another transition method in addition to the existing transition method by allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The effective date and transition requirements are the same as the effective date and transition requirements in Topic 842. Our adoption of this standard did not require an adjustment to our opening balance of retained earnings and did not have material impact on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820)", changes to disclosure requirements for fair value measurement. The amendments of this update modify the disclosure requirements on fair value measurements about Topic 820. It applies to all reporting entities within the scope of the affected accounting guidance. It will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the new guidance and have not determined the impact this standard may have on our 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. |
Revenue and Cost of Product Rev
Revenue and Cost of Product Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Cost of Product Revenues | Revenues and Cost of Product Revenues Our revenues consist of product revenues resulting from the sale of Mirataz for the management of weight loss in cats . We account for a contract with a customer when there is a legally enforceable contract between us and our customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Our revenues are measured based on the consideration specified in the contract with each customer, net of product returns, discounts and allowances. The following table presents revenues and cost of product revenues for the quarter ended March 31, 2019 and 2018 (in thousands): Three months ended March 31, 2019 2018 Gross product revenues $ 531 $ — Less allowance for product returns (16 ) — Net product revenues 515 — Cost of product revenues (92 ) — Gross profit $ 423 $ — Concentrations of credit risk Our revenue was generated entirely from sales within the United States. Approximately 87% of our gross product revenues sold were to two distributors. Product returns Our return policy generally allows customers to receive credit for expired products within 90 days after the product’s expiration date. We currently estimate product return liabilities of 3% of gross revenue using probability-weighted available industry data and data provided by our distributors such as the inventories remaining in the distribution channel. Adjustments will be made in the future if actual results vary from our estimates. Accounts receivable and allowance for doubtful accounts Accounts receivable are stated at their carrying values, net of any allowances for doubtful accounts. Accounts receivable consist primarily of amounts due from distributors, for which collection is probable based on the customer's intent and ability to pay. Receivables are evaluated for collection probability on a regular basis and an allowance for doubtful accounts is recorded, if necessary. We have no allowance for doubtful accounts as of March 31, 2019 as our analysis did not uncover any collection risks. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 920 $ 920 $ — $ — US Treasury bills 800 800 — — Commercial paper 65,622 — 65,622 — Short-term investments: U.S. treasury bills 502 502 — — U.S. government agency notes 2,493 — 2,493 — Commercial paper 12,680 — 12,680 — Corporate notes 11,715 — 11,715 — $ 94,732 $ 2,222 $ 92,510 $ — Fair Value Measurements as of December 31, 2018 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 1,276 $ 1,276 $ — $ — Commercial paper 45,332 — 45,332 — U.S. treasury bills 500 500 — — U.S. treasury bonds and notes 7,949 — 7,949 — Short-term investments: Commercial paper 5,353 — 5,353 — Corporate notes 12,277 — 12,277 — $ 72,687 $ 1,776 $ 70,911 $ — During the three months ended March 31, 2019 , there were no transfers of assets between Level 1, Level 2 or Level 3 of the fair value hierarchy. At March 31, 2019 and December 31, 2018 , we did not have any financial liabilities which were measured at fair value on a recurring basis. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 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 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 investments by type of security at March 31, 2019 was as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: Commercial paper $ 12,682 $ 1 $ (3 ) $ 12,680 U.S. treasury bills 502 — — 502 U.S. government agency notes 2,493 — — 2,493 Corporate notes 11,713 3 (1 ) 11,715 Total available-for-sale investments $ 27,390 $ 4 $ (4 ) $ 27,390 The fair value of available-for-sale investments by type of security at December 31, 2018 was as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: Commercial paper $ 5,353 $ — $ — $ 5,353 Corporate notes 12,288 — (11 ) 12,277 Total available-for-sale investments $ 17,641 $ — $ (11 ) $ 17,630 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following (in thousands): March 31, 2019 December 31, 2018 Accrued consulting $ 755 $ 627 Accrued research and development costs 2,039 2,509 Other expenses 4,277 5,012 Deferred rent — 115 7,071 8,263 Less current portion (7,071 ) (8,169 ) Long-term liability (deferred rent) $ — $ 94 |
Common Stock and Stock-Based Aw
Common Stock and Stock-Based Awards | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock and Stock-Based Awards | Common Stock and Stock-Based Awards Common Stock During the three months ended March 31, 2019 , we sold 4,847,250 shares of common stock in a follow-on public offering (see Note 1). In addition, we issued 102,801 shares of common stock in connection with the exercise of stock options for gross proceeds of $652,000 , vested 141,250 restricted stock awards and restricted stock units, withheld 21,562 shares of restricted common stock and 27,538 shares related to restricted stock units to satisfy employee tax withholding obligations arising in conjunction with the vesting of restricted stock and restricted stock units (see below). Stock-Based Awards 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 March 31, 2019 2018 Shares underlying options granted 1,029,000 1,090,200 Weighted-average exercise price $9.93 $8.77 Weighted average risk- free interest rate 2.54 % 2.50 % Weighted average expected term (years) 5.9 5.9 Weighted average expected volatility 57% 60% Expected dividend yield — — Weighted-average grant date fair value per share $5.43 $4.97 In June 2018, we adopted the 2018 Equity Incentive Plan (the “2018 Plan”), and reserved 3,000,000 shares of our common stock for issuance under the 2018 Plan. The 2018 Plan is the successor to our 2016 Equity Incentive Plan (the “2016 Plan”), which was retired on June 21, 2018 upon stockholders’ approval of our 2018 Plan. The 2016 Plan was the successor to our 2012 Equity Incentive Plan (the "2012 Plan"), which was retired on May 23, 2016 upon stockholders' approval of our 2016 Plan. All awards made under the 2016 and 2012 Plans shall remain subject to the terms of these plans. Options granted under the 2018 Plan may be either incentive stock options or nonstatutory stock options. The 2018 Plan also provides for the grant of stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards. The exercise price of a stock option may not be less than 100% of the closing price of our common stock on the date of the grant. If, at any time we grant an incentive stock option, and the optionee directly or by attribution owns stock possessing more than 10% of the total combined voting power of all classes of KindredBio stock, the option price shall be at least 110% of the fair value and shall not be exercisable more than five years after the date of grant. Options generally vest over a period of one or four years from the date of grant. Options granted under the 2018 Plan expire no later than 10 years from the date of grant. As of March 31, 2019 , there were 1,427,493 option shares outstanding, and 1,271,732 shares available for future grants under the 2018 Plan. Our Employee Stock Purchase Plan (the "Stock Purchase Plan" or "ESPP"), 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. At the Annual Meeting of Stockholders of Kindred Biosciences, Inc. held on June 22, 2018, our stockholders approved an amendment to increase the number of shares that may be issued under the ESPP from 200,000 shares to 500,000 shares. 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 March 31, 2019 2018 Weighted average risk-free interest rate 2.52% 1.45% Weighted average expected term (years) 0.5 0.5 Weighted average expected volatility 48.2% 41.4% Expected dividend yield — — Weighted-average grant date fair value per share $3.66 $1.91 We did not issue any common stock under the Stock Purchase Plan during the three months ended March 31, 2019 . At March 31, 2019 and December 31, 2018, we had an outstanding liability of $210,000 and $47,000 , respectively, which is included in accrued compensation on the condensed consolidated balance sheets, 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 March 31, 2019 2018 Research and development $436 $501 General and administrative 1,424 1,023 $1,860 $1,524 We had an aggregate of approximately $12,902,000 of unrecognized stock-based compensation expense for options outstanding and the Stock Purchase Plan as of March 31, 2019 which is expected to be recognized over a weighted-average period of 2.9 years. Restricted Stock Award and Restricted Stock Units On January 23, 2017, we granted 250,000 shares of restricted stock awards to four employees. Shares will vest 25% on each one year anniversary of the grant date provided that the employee is in the employment of the Company on such vesting date. On January 22, 2018, we granted 315,000 shares of restricted stock units to four employees. Shares will vest 25% on each one year anniversary of the grant date provided that the employee is in the employment of the Company on such vesting date. In Q1 2019, we granted 300,775 shares of restricted stock units to most of our current employees. Shares will vest 25% on each one year anniversary of the grant date provided that the employee is in the employment of the Company on such vesting date. The total stock-based compensation expense related to all awards and units is $7,512,000 . As of March 31, 2019 , we have an aggregate of approximately $5,712,000 unrecognized stock-based compensation expense for restricted stock awards and units outstanding which is expected to be recognized over a weighted-average period of 3.3 years . Restricted stock award and restricted stock units activity for the period ended March 31, 2019 was as follows: Restricted Stock Award / Restricted Stock Units Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2018 502,500 $7.87 Granted 300,775 10.49 Vested (141,250) 7.71 Forfeited — — Unvested balance at March 31, 2019 662,025 $9.10 |
Stockholders' equity
Stockholders' equity | 3 Months Ended |
Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) | Stockholders' Equity Stockholders' Equity The following tables present the changes in stockholders' equity (in thousands): Three Months Ended March 31, 2019 Common stock Additional Paid in Capital Accumulated Other Comprehensive Income Accumulated Deficit Stockholders' Equity Shares Amount Balance at December 31, 2018 33,948 $ 3 $ 252,885 $ (11 ) $ (161,670 ) $ 91,207 Comprehensive loss Net loss — — — — (16,055 ) (16,055 ) Change in unrealized gains on available for sale securities — — — (2 ) — (2 ) Total comprehensive loss (16,057 ) Stock-based compensation — — 1,860 — — 1,860 RSU issuance of shares when vested, net of shares withheld 51 — (279 ) — — (279 ) Shares withheld related to net share settlement of restricted stock awards (21 ) — (214 ) — — (214 ) Exercise of common stock options 103 — 652 — — 652 Public offering of common stock, net of $2,924 of offering costs 4,847 1 43,124 — — 43,125 Balance at March 31, 2019 38,928 $ 4 $ 298,028 $ (13 ) $ (177,725 ) $ 120,294 Three Months Ended March 31, 2018 Common stock Additional Paid in Capital Accumulated Other Comprehensive Income Accumulated Deficit Stockholders' Equity Shares Amount Balance at December 31, 2017 28,183 $ 3 $ 196,688 $ (31 ) $ (111,980 ) $ 84,680 Comprehensive loss Net loss — — — — (9,971 ) (9,971 ) Change in unrealized gains on available for sale securities — — — (11 ) — (11 ) Total comprehensive loss (9,982 ) Stock-based compensation — — 1,524 — — 1,524 Shares withheld related to net share settlement of restricted stock awards (27 ) — (247 ) — — (247 ) Exercise of common stock options 41 — 182 — — 182 Balance at March 31, 2018 28,197 $ 3 $ 198,147 $ (42 ) $ (121,951 ) $ 76,157 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We have non-cancelable operating leases for laboratory space in Burlingame, California with several amendments to expand the facility. Commencing on June 1, 2017, the non-cancelable operating lease for the entire existing laboratory space of a total 10,755 square feet was extended for another 5 years through May 2022. In February 2017, we further amended the operating lease for laboratory space with an additional 721 square feet through May 2022. In April 2017, we renewed our headquarters office lease for 6,900 square feet of office space in Burlingame, California through November 30, 2020 and in June 2017, we amended the lease with an additional 1,190 square feet of office space through November 30, 2020. In addition, we have a non-cancelable operating lease for 3,126 square feet of office space in San Diego, California through September 2019 and five equipment leases expiring through 2023. In October 2018, we signed a short-term lease in Burlingame ("October 2018 lease"), consisting of 5,613 square feet of space. The October 2018 lease will continue on a month-to-month basis until December 31, 2019. Operating lease expense was $229,000 for the three months ended March 31, 2019 , which includes $26,000 of short-term lease expense. The following tables below do not include the October 2018 lease. We also have various equipment operating lease agreements. Supplemental cash flow information, as of March 31, 2019 , related to operating leases as follows (in thousands): Cash paid within operating cash flows $ 208 Amortization of operating lease right-of-use assets $ 178 Supplemental balance sheet information, as of March 31, 2019 , related to operating leases was as follows (in thousands, except lease term and discount rate): Reported as: Operating lease right-of-use assets $ 1,763 Current portion of operating lease liabilities $ 708 Long-term operating lease liabilities 1,096 Total lease liabilities $ 1,804 Weighted average remaining lease term (years) 2.7 years Weighted average discount rate 5.50% As of March 31, 2019 , we are obligated to make minimum lease payments under non-cancelable operating leases, as follows (in thousands): Year ending December 31, Lease Payments 2019 (remaining of year) $ 539 2020 732 2021 469 2022 202 2023 and after 4 Total lease payments 1,946 Less: imputed interest (142 ) Total lease liabilities $ 1,804 As of December 31, 2018, we are obligated to make minimum lease payments under all of our operating leases as follows (in thousands): Year ending December 31, Lease Payments 2019 $ 835 2020 726 2021 459 2022 194 Thereafter — Total $ 2,214 Purchase Commitments In March 2018, we entered into a standard form of agreement with CRB Builders, LLC (“CRB”) in connection with the renovation of the Plant. Pursuant to the agreement, CRB will provide pre-construction and construction services in connection with constructing and renovating the Plant to provide approximately 16,500 square feet of new production space, and supporting Fill and Finish and Bio Production processes (the “Project”). The date for substantial completion of CRB’s work on the Project is anticipated to be in the mid-2019, which is subject to adjustment in accordance with the terms of the agreement as the renovation progresses, or as agreed and requested by KindredBio. The agreement is subject to customary undertakings, covenants, obligations, rights and conditions. In June 2018, we entered into a Strategic Supply Agreement (the “Agreement”), with Pall Corporation (“Pall”) for purchase of equipment and consumables to be used in support of our manufacturing requirements, including, but not limited to the Plant. Pursuant to the agreement, we will purchase certain pharmaceutical manufacturing equipment and related services in the aggregate amount of $3.8 million with a seven year consumable purchase obligation in the aggregate amount of approximately $16.5 million . The agreement is subject to customary undertakings, covenants, obligations, rights and conditions. We have incurred $3,286,000 in equipment purchase costs and $707,000 in other purchase costs as of March 31, 2019 . |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Basic and diluted net loss per share: Numerator: Net loss $ (16,055 ) $ (9,971 ) Denominator: Weighted-average number of common shares outstanding, basic and diluted 37,786 27,986 Net loss per share, basic and diluted $ (0.42 ) $ (0.36 ) 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 6,692,139 shares of common stock, 125,000 shares unvested restricted stock awards and 236,250 restricted stock units as of March 31, 2019 , were excluded from the computation of diluted net loss per share attributable to common stockholders for the three months ended March 31, 2019 , because their effect was anti-dilutive. Stock options to purchase 5,553,560 shares of common stock and 187,500 shares unvested restricted stock awards and 315,000 restricted stock units were excluded from the computation of diluted net loss per share attributable to common stockholders for the three months ended March 31, 2018 , because their effect was anti-dilutive. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In April 2019, we signed a short-term sublease agreement in Burlingame with Color Genomics, Inc., consisting of 1,979 square feet of space which is part of a larger office project owned by the landlord. The lease will continue through April 30, 2020. |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Kindred Biosciences, Inc. ("KindredBio", "we", "us" or "our") was incorporated on September 25, 2012 (inception) in the State of Delaware. On April 25, 2016, we filed a Certificate of Incorporation with the State of Delaware for a wholly owned subsidiary, KindredBio Equine, Inc. ("Subsidiary"). The Subsidiary has one class of capital stock which is designated common stock, $0.0001 par value per share. The authorized number of shares of common stock for the Subsidiary is 1,000 . We are a commercial-stage 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 located 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 consolidated financial statements (“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 of America (“U.S. GAAP”) for complete financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 included in our annual report on Form 10-K as filed with the SEC on March 6, 2019. 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 financial statements. The accompanying financial statements include the accounts of the Company and its wholly owned Subsidiary. All inter-company accounts and transactions have been eliminated in consolidation. |
Liquidity | Liquidity We have incurred losses and negative cash flows from operations and had an accumulated deficit of $177,725,000 as of March 31, 2019 . 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 commercialize any approved products. To date, we have been funded primarily through sales of our former convertible preferred stock and the sale of our common stock. We might require additional capital until such time as we can generate operating revenues in excess operating expenses. We believe that our cash, cash equivalents and short-term investments totaling $95,988,000 as of March 31, 2019 , are sufficient to fund our planned operations for approximately 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 |
Revenue Recognition and Cost of Product Revenues | Revenue Recognition We adopted FASB Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers in the first quarter of our fiscal year that began on January 1, 2018. Our revenues consist of product revenues resulting from the sale of Mirataz™ (mirtazapine transdermal ointment) for the management of weight loss in cats . We account for a contract with a customer when there is a legally enforceable contract between us and our customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Our customers could either be distributors who subsequently resell our products to third parties such as veterinarians, clinics or animals hospitals or the third parties themselves. In accordance with ASC 606, we applied the following steps to recognize revenue for the sale of Mirataz that reflects the consideration to which we expect to be entitled to receive in exchange for the promised goods: 1. Identify the contract with a customer A contract with a customer exists when we enter into an enforceable contract with a customer. These contracts define each party's rights, payment terms and other contractual terms and conditions of the sale. We apply judgment in determining the customer’s ability and intention to pay, which is based on published credit and financial information pertaining to the customer. 2. Identify the performance obligations in the contract Our product in a given purchase order is delivered at the same time and we do not separate an individual order into separate performance obligations. We have concluded the sale of finished goods and related shipping and handling are accounted for as a single performance obligation as there are no other promises to deliver goods beyond what is specified in each accepted customer order. 3. Determine the transaction price The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer, typically a fixed consideration in our contractual agreements. 4. Allocate the transaction price to the performance obligations The transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. The nature of the promises/obligations under our contracts is to transfer a distinct good. Accordingly, because a single performance obligation exists, no allocation of the transaction price is necessary. 5. Determine the satisfaction of performance obligation Revenue is recognized when control of the finished goods is transferred to the customer, net of applicable reserves for variable consideration. Control of the finished goods is transferred at a point in time, upon delivery to the customer. Reserves for Variable Consideration Revenues from product sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established. Components of variable consideration include product returns, allowances and discounts. These estimates take into consideration a range of possible outcomes for the expected value (probability-weighted estimate) or relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized where the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. Product Returns Consistent with the industry practice, we generally offer customers a limited right of return of damaged or expired product that has been purchased directly from us. Our return policy generally allows customers to receive credit for expired products within 90 days after the product’s expiration date. We estimate the amount of our product revenues that may be returned by our customers and record these estimates as a reduction of product revenues in the period the related product revenues are recognized, as well as within accrued liabilities, in the consolidated balance sheets. We currently estimate product return liabilities using probability-weighted available industry data and data provided by the our distributors such as the inventories remaining in the distribution channel. To-date, we have no returns and believe that returns of our product in future periods will be minimal. We do not record a return asset associated with the returned damaged or expired goods due to such asset is deemed to be fully impaired at the time of product return. Sales Discounts and Allowances We compensate our distributors for sales order management, data and distribution and other services through sales discounts and allowances. However, such services are not distinct from our sale of products to distributors and, therefore, these discounts and allowances are recorded as a reduction of product revenues in the consolidated statements of operations and comprehensive loss, as well as a reduction to accounts receivable in the consolidated balance sheets. Sales Commissions We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. Cost of Product Revenues Cost of product revenues c onsists primarily of the cost of direct materials, direct labor and overhead costs associated with manufacturing, inbound shipping and other third-party logistics costs. |
Inventories | Inventories We value inventory at the lower of cost or net realizable value. We determine the cost of inventory using the standard-cost method, which approximates actual cost based on a first-in, first-out method. We analyze our inventory levels quarterly and write down inventory subject to expire in excess of expected requirements, or that has a cost basis in excess of its expected net realizable value. These inventory related costs are recognized as cost of product revenues on the accompanying consolidated statements of operations and comprehensive loss. Currently our inventory consists of finished goods only. |
Property, Plant and Equipment | Property and equipment are stated at cost less accumulated depreciation and amortization. We calculate depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software, and fifteen to thirty-nine years for land improvements and real property. Land and assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for their intended use. Expenditures for repairs and maintenance of assets are charged to expense as incurred. We amortize leasehold improvements using the straight-line method over the estimated useful lives of the respective assets or the lease term, whichever is shorter. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts and any resulting gain or loss is included in other income/expense. |
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. Estimates are based historical experiences or on forecasts, including information received from third parties and other assumptions that the Company believes are reasonable under the circumstances. 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 consolidated balance sheets as accumulated other comprehensive income (loss). |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)", requiring organizations that lease assets—referred to as “lessees”—to recognize on the consolidated balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. The ASU on leases took effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We adopted this new standard on January 1, 2019, using the alternative modified transition method, that means using a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. Upon adoption, on January 1, 2019, we recorded a $1,941,000 increase in operating lease right-of-use assets, a $69,000 decrease in other current assets, a $115,000 decrease in other liabilities and a $1,985,000 increase in operating lease obligations. There was no cumulative-effect adjustment needed on January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the following "package of practical expedients" when assessing the transition impact as the lessee as of January 1, 2019: (1) not to reassess whether any expired or existing contracts, contain leases; (2) not to reassess the lease classification for any expired or existing leases; and (3) not to reassess initial direct costs for any existing leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet as we recognize lease expense for these leases on a straight-line basis over the lease term. The major impact for KindredBio was the balance sheet recognition of right-of-use ("ROU") assets and lease liabilities for operating leases as a lessee. We determine if an agreement contains a lease at inception. For agreements where we are the lessee, operating lease are included in operating lease right-of-use assets, current portion of operating lease liabilities and long-term portion operating lease liabilities on the condensed consolidated balance sheet as of March 31, 2019. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentive received. We use our own incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as our leases generally do not provide an implicit rate. Lease terms don't include options to extend or terminate when we are reasonably certain that the option will not be exercised. Lease expense is recognized on a straight-line basis over the lease term. In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases", which affects narrow aspects of the guidance issued in ASU No. 2016-02. The amendments in this ASU related to transition do not include amendments from proposed ASU, Leases (Topic 842): Targeted Improvements, specific to a new and optional transition method to adopt the new lease requirements in Update 2016-02. The effective date and transition requirements are the same as the effective date and transition requirements in Topic 842. The adoption of this standard did not have material impact on our financial statements. In July 2018, the FASB issued ASU No. 2018-11, "Targeted Improvements to Topic 842, Leases". The Standard provide another transition method in addition to the existing transition method by allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The effective date and transition requirements are the same as the effective date and transition requirements in Topic 842. Our adoption of this standard did not require an adjustment to our opening balance of retained earnings and did not have material impact on our financial statements. In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820)", changes to disclosure requirements for fair value measurement. The amendments of this update modify the disclosure requirements on fair value measurements about Topic 820. It applies to all reporting entities within the scope of the affected accounting guidance. It will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the new guidance and have not determined the impact this standard may have on our 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 | 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. |
Revenue and Cost of Product R_2
Revenue and Cost of Product Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue and Cost of Product Revenues | The following table presents revenues and cost of product revenues for the quarter ended March 31, 2019 and 2018 (in thousands): Three months ended March 31, 2019 2018 Gross product revenues $ 531 $ — Less allowance for product returns (16 ) — Net product revenues 515 — Cost of product revenues (92 ) — Gross profit $ 423 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 920 $ 920 $ — $ — US Treasury bills 800 800 — — Commercial paper 65,622 — 65,622 — Short-term investments: U.S. treasury bills 502 502 — — U.S. government agency notes 2,493 — 2,493 — Commercial paper 12,680 — 12,680 — Corporate notes 11,715 — 11,715 — $ 94,732 $ 2,222 $ 92,510 $ — Fair Value Measurements as of December 31, 2018 Description Total Quoted Prices in Significant Other Unobservable Inputs Cash equivalents: Money market funds $ 1,276 $ 1,276 $ — $ — Commercial paper 45,332 — 45,332 — U.S. treasury bills 500 500 — — U.S. treasury bonds and notes 7,949 — 7,949 — Short-term investments: Commercial paper 5,353 — 5,353 — Corporate notes 12,277 — 12,277 — $ 72,687 $ 1,776 $ 70,911 $ — |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Fair Value of Available-for-Sale Short Term Investments | The fair value of available-for-sale investments by type of security at March 31, 2019 was as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: Commercial paper $ 12,682 $ 1 $ (3 ) $ 12,680 U.S. treasury bills 502 — — 502 U.S. government agency notes 2,493 — — 2,493 Corporate notes 11,713 3 (1 ) 11,715 Total available-for-sale investments $ 27,390 $ 4 $ (4 ) $ 27,390 The fair value of available-for-sale investments by type of security at December 31, 2018 was as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: Commercial paper $ 5,353 $ — $ — $ 5,353 Corporate notes 12,288 — (11 ) 12,277 Total available-for-sale investments $ 17,641 $ — $ (11 ) $ 17,630 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): March 31, 2019 December 31, 2018 Accrued consulting $ 755 $ 627 Accrued research and development costs 2,039 2,509 Other expenses 4,277 5,012 Deferred rent — 115 7,071 8,263 Less current portion (7,071 ) (8,169 ) Long-term liability (deferred rent) $ — $ 94 |
Common Stock and Stock-Based _2
Common Stock and Stock-Based Awards (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Shares underlying options granted 1,029,000 1,090,200 Weighted-average exercise price $9.93 $8.77 Weighted average risk- free interest rate 2.54 % 2.50 % Weighted average expected term (years) 5.9 5.9 Weighted average expected volatility 57% 60% Expected dividend yield — — Weighted-average grant date fair value per share $5.43 $4.97 |
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 March 31, 2019 2018 Weighted average risk-free interest rate 2.52% 1.45% Weighted average expected term (years) 0.5 0.5 Weighted average expected volatility 48.2% 41.4% Expected dividend yield — — Weighted-average grant date fair value per share $3.66 $1.91 |
Schedule of Stock-Based Compensation Expense | We recorded stock-based compensation expense as follows (in thousands): Three months ended March 31, 2019 2018 Research and development $436 $501 General and administrative 1,424 1,023 $1,860 $1,524 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Restricted stock award and restricted stock units activity for the period ended March 31, 2019 was as follows: Restricted Stock Award / Restricted Stock Units Shares Weighted Average Grant Date Fair Value Unvested balance at December 31, 2018 502,500 $7.87 Granted 300,775 10.49 Vested (141,250) 7.71 Forfeited — — Unvested balance at March 31, 2019 662,025 $9.10 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |
Changes in Stockholder's Equity | The following tables present the changes in stockholders' equity (in thousands): Three Months Ended March 31, 2019 Common stock Additional Paid in Capital Accumulated Other Comprehensive Income Accumulated Deficit Stockholders' Equity Shares Amount Balance at December 31, 2018 33,948 $ 3 $ 252,885 $ (11 ) $ (161,670 ) $ 91,207 Comprehensive loss Net loss — — — — (16,055 ) (16,055 ) Change in unrealized gains on available for sale securities — — — (2 ) — (2 ) Total comprehensive loss (16,057 ) Stock-based compensation — — 1,860 — — 1,860 RSU issuance of shares when vested, net of shares withheld 51 — (279 ) — — (279 ) Shares withheld related to net share settlement of restricted stock awards (21 ) — (214 ) — — (214 ) Exercise of common stock options 103 — 652 — — 652 Public offering of common stock, net of $2,924 of offering costs 4,847 1 43,124 — — 43,125 Balance at March 31, 2019 38,928 $ 4 $ 298,028 $ (13 ) $ (177,725 ) $ 120,294 Three Months Ended March 31, 2018 Common stock Additional Paid in Capital Accumulated Other Comprehensive Income Accumulated Deficit Stockholders' Equity Shares Amount Balance at December 31, 2017 28,183 $ 3 $ 196,688 $ (31 ) $ (111,980 ) $ 84,680 Comprehensive loss Net loss — — — — (9,971 ) (9,971 ) Change in unrealized gains on available for sale securities — — — (11 ) — (11 ) Total comprehensive loss (9,982 ) Stock-based compensation — — 1,524 — — 1,524 Shares withheld related to net share settlement of restricted stock awards (27 ) — (247 ) — — (247 ) Exercise of common stock options 41 — 182 — — 182 Balance at March 31, 2018 28,197 $ 3 $ 198,147 $ (42 ) $ (121,951 ) $ 76,157 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supplemental cash flow information | Supplemental cash flow information, as of March 31, 2019 , related to operating leases as follows (in thousands): Cash paid within operating cash flows $ 208 Amortization of operating lease right-of-use assets $ 178 |
Supplemental balance sheet information | Supplemental balance sheet information, as of March 31, 2019 , related to operating leases was as follows (in thousands, except lease term and discount rate): Reported as: Operating lease right-of-use assets $ 1,763 Current portion of operating lease liabilities $ 708 Long-term operating lease liabilities 1,096 Total lease liabilities $ 1,804 Weighted average remaining lease term (years) 2.7 years Weighted average discount rate 5.50% |
Schedule of future minimum rental payments | As of March 31, 2019 , we are obligated to make minimum lease payments under non-cancelable operating leases, as follows (in thousands): Year ending December 31, Lease Payments 2019 (remaining of year) $ 539 2020 732 2021 469 2022 202 2023 and after 4 Total lease payments 1,946 Less: imputed interest (142 ) Total lease liabilities $ 1,804 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 2018 Basic and diluted net loss per share: Numerator: Net loss $ (16,055 ) $ (9,971 ) Denominator: Weighted-average number of common shares outstanding, basic and diluted 37,786 27,986 Net loss per share, basic and diluted $ (0.42 ) $ (0.36 ) |
Description of Business, Basi_3
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Stock Offerings and Liquidity (Details) | Jun. 22, 2018USD ($)$ / sharesshares | Apr. 25, 2016class_of_stock$ / sharesshares | Jan. 31, 2019USD ($) | Jan. 23, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)shares | May 31, 2018USD ($) | Jan. 31, 2018USD ($) | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)$ / sharesshares |
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, shares authorized (in shares) | shares | 100,000,000 | 100,000,000 | ||||||||
Number of shares issued in transaction (in shares) | shares | 5,326,314 | 188,100 | ||||||||
Net proceeds received in sale of stock | $ 47,422,000 | $ 43,125,000 | $ 1,758,000 | |||||||
Shares issued (USD per share) | $ / shares | $ 9.50 | |||||||||
Public offering of common stock, net of $2,924 of offering costs | $ 50,600,000 | $ 1,903,000 | $ 43,125,000 | |||||||
Maximum dollar amount of equity and debt securities offered | $ 150,000,000 | |||||||||
Maximum aggregate offering price of common stock sold under agreement | $ 50,000,000 | |||||||||
Net proceeds from sale of common stock | 43,125,000 | $ 0 | ||||||||
Accumulated deficit | 177,725,000 | $ 161,670,000 | ||||||||
Cash, cash equivalents, and short-term investments | $ 95,988,000 | |||||||||
Over-allotment option | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 632,250 | |||||||||
Public stock offering | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 4,847,250 | 4,847,250 | ||||||||
Shares issued (USD per share) | $ / shares | $ 9.50 | |||||||||
Net proceeds from sale of common stock | $ 46,049,000 | |||||||||
KindredBio Equine, Inc | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Number of classes of stock | class_of_stock | 1 | |||||||||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | |||||||||
Common stock, shares authorized (in shares) | shares | 1,000 |
Description of Business, Basi_4
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Product return period after expiration | 90 days |
Amortization period (one year or less) | 1 year |
Description of Business, Basi_5
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Payment to acquire plant | $ 2,656 | $ 409 |
Computer Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 2 years | |
Computer Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 2 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | |
Land improvements and real property | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 15 years | |
Land improvements and real property | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 39 years | |
Software and Software Development Costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 2 years | |
Software and Software Development Costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years |
Description of Business, Basi_6
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies Description of Business, Basis of Presentation and Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 1,763 | |
Operating lease liability | $ 1,804 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 1,941 | |
Decrease in other current assets | 69 | |
Decrease in other liabilities | 115 | |
Operating lease liability | $ 1,985 |
Revenue and Cost of Product R_3
Revenue and Cost of Product Revenues - Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Gross product revenues | $ 531 | $ 0 |
Less allowance for product returns | (16) | 0 |
Net product revenues | 515 | 0 |
Cost of product revenues | (92) | 0 |
Gross profit | $ 423 | $ 0 |
Revenue and Cost of Product R_4
Revenue and Cost of Product Revenues - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Concentration Risk [Line Items] | |
Product return period after expiration | 90 days |
Product return liability percentage | 3.00% |
Allowance for doubtful accounts | $ 0 |
Customer Concentration Risk | Revenue | Four distributors | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 87.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 27,390,000 | $ 17,630,000 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 94,732,000 | 72,687,000 |
Financial liabilities | 0 | 0 |
Recurring basis | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 2,222,000 | 1,776,000 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 92,510,000 | 70,911,000 |
Recurring basis | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Recurring basis | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 920,000 | 1,276,000 |
Recurring basis | 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 | 920,000 | 1,276,000 |
Recurring basis | 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 |
Recurring basis | Money market funds | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Recurring basis | US Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 800,000 | 500,000 |
Short-term investments | 502,000 | |
Recurring basis | US Treasury bills | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 800,000 | 500,000 |
Short-term investments | 502,000 | |
Recurring basis | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 65,622,000 | 45,332,000 |
Short-term investments | 12,680,000 | 5,353,000 |
Recurring basis | Commercial paper | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | |
Recurring basis | Commercial paper | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 65,622,000 | 45,332,000 |
Short-term investments | 12,680,000 | 5,353,000 |
Recurring basis | Commercial paper | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Short-term investments | 0 | |
Recurring basis | U.S. treasury bonds and notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 7,949,000 | |
Recurring basis | 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] | ||
Cash equivalents | 0 | |
Recurring basis | 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] | ||
Cash equivalents | 7,949,000 | |
Recurring basis | U.S. government agency notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 2,493,000 | |
Recurring basis | U.S. government 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 | |
Recurring basis | U.S. government agency notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 2,493,000 | |
Recurring basis | U.S. government agency notes | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Recurring basis | Corporate notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 11,715,000 | 12,277,000 |
Recurring basis | Corporate 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 | |
Recurring basis | Corporate notes | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 11,715,000 | 12,277,000 |
Recurring basis | Corporate notes | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Gain (Loss) on Securities [Line Items] | ||
Amortized Cost | $ 27,390 | $ 17,641 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | (4) | (11) |
Fair Value | 27,390 | 17,630 |
Commercial paper | ||
Gain (Loss) on Securities [Line Items] | ||
Amortized Cost | 12,682 | 5,353 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | (3) | 0 |
Fair Value | 12,680 | 5,353 |
US Treasury bills | ||
Gain (Loss) on Securities [Line Items] | ||
Amortized Cost | 502 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 502 | |
U.S. government agency notes | ||
Gain (Loss) on Securities [Line Items] | ||
Amortized Cost | 2,493 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 2,493 | |
Corporate notes | ||
Gain (Loss) on Securities [Line Items] | ||
Amortized Cost | 11,713 | 12,288 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (1) | (11) |
Fair Value | $ 11,715 | $ 12,277 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued consulting | $ 755 | $ 627 |
Accrued research and development costs | 2,039 | 2,509 |
Other expenses | 4,277 | 5,012 |
Deferred rent | 115 | |
Accrued liabilities | 7,071 | 8,263 |
Less current portion, including current operating lease portion | (7,071) | |
Less current portion | (7,071) | (8,169) |
Long-term operating lease liabilities | $ 1,096 | |
Long-term liability (deferred rent) | $ 94 |
Common Stock and Stock-Based _3
Common Stock and Stock-Based Awards - Narrative (Details) | Jun. 22, 2018shares | Jan. 22, 2018employeeshares | Jan. 23, 2017employeeshares | Jan. 01, 2015 | Jan. 23, 2019shares | Jun. 30, 2018shares | Dec. 31, 2014USD ($)shares | Mar. 31, 2019USD ($)shares | Mar. 31, 2018USD ($) | Jan. 22, 2018USD ($)employee | Dec. 31, 2018USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares issued in transaction (in shares) | 5,326,314 | 188,100 | |||||||||
Stock issued in connection with the exercise of common stock (in shares) | 102,801 | ||||||||||
Exercise of common stock options | $ | $ 652,000 | $ 182,000 | |||||||||
Outstanding liability included in accrued compensation | $ | 210,000 | $ 47,000 | |||||||||
Stock-based compensation expense | $ | $ 1,860,000 | $ 1,524,000 | |||||||||
Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted common stock withheld for tax obligations (in shares) | 27,538 | ||||||||||
Employee Stock Purchase Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Unrecognized stock-based compensation | $ | $ 12,902,000 | ||||||||||
Weighted-average period for recognition (in years) | 2 years 11 months 1 day | ||||||||||
Restricted Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted stock awards and restricted stock units, vested | 141,250 | ||||||||||
Restricted common stock withheld for tax obligations (in shares) | 21,562 | ||||||||||
Vesting period | 1 year | ||||||||||
Number of awards issued in the period (in shares) | 250,000 | 300,775 | |||||||||
Number of employees granted stock options | employee | 4 | ||||||||||
Vesting rights percentage | 25.00% | ||||||||||
Restricted Stock Units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 1 year | ||||||||||
Number of awards issued in the period (in shares) | 315,000 | 300,775 | |||||||||
Number of employees granted stock options | employee | 4 | 4 | |||||||||
Vesting rights percentage | 25.00% | ||||||||||
Restricted Stock Awards and Units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted stock awards and restricted stock units, vested | 141,250 | ||||||||||
Unrecognized stock-based compensation | $ | $ 5,712,000 | ||||||||||
Weighted-average period for recognition (in years) | 3 years 3 months | ||||||||||
Stock-based compensation expense | $ | $ 7,512,000 | ||||||||||
2018 Equity Incentive Plan | Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares reserved for future issuance (in shares) | 3,000,000 | ||||||||||
Purchase price of common stock, percent of fair market value | 100.00% | ||||||||||
Ownership percentage | 10.00% | ||||||||||
Purchase price of common stock if ownership threshold is reached, percent | 110.00% | ||||||||||
Expected term | 10 years | ||||||||||
Option shares outstanding (in shares) | 1,427,493 | ||||||||||
Number of shares available for grant (in shares) | 1,271,732 | ||||||||||
Stock Purchase Plan | Employee Stock Purchase Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares reserved for future issuance (in shares) | 500,000 | 200,000 | |||||||||
Purchase price of common stock, percent of fair market value | 85.00% | ||||||||||
Initial offering period | 6 months | ||||||||||
Consecutive offering period | 5 months | ||||||||||
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 | ||||||||||
Minimum | 2018 Equity Incentive Plan | Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 1 year | ||||||||||
Maximum | 2018 Equity Incentive Plan | Stock Option Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Exercise period | 5 years | ||||||||||
Vesting period | 4 years | ||||||||||
Public stock offering | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares issued in transaction (in shares) | 4,847,250 | 4,847,250 | |||||||||
Common stock offering under sales agreement | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares issued in transaction (in shares) |
Common Stock and Stock-Based _4
Common Stock and Stock-Based Awards - Stock Option Plan (Details) - Stock Option Plan - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares underlying options granted (in shares) | 1,029,000 | 1,090,200 |
Weighted-average exercise price (USD per share) | $ 9.93 | $ 8.77 |
Weighted average risk- free interest rate | 2.54% | 2.50% |
Weighted average expected term (years) | 5 years 10 months 24 days | 5 years 10 months 24 days |
Weighted average expected volatility | 57.00% | 60.00% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value per share (USD per share) | $ 5.43 | $ 4.97 |
Common Stock and Stock-Based _5
Common Stock and Stock-Based Awards - Stock Purchase Plan (Details) - Stock Purchase Plan - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average risk- free interest rate | 2.52% | 1.45% |
Weighted average expected term (years) | 6 months | 6 months |
Weighted average expected volatility | 48.20% | 41.40% |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value per share (USD per share) | $ 3.66 | $ 1.91 |
Common Stock and Stock-Based _6
Common Stock and Stock-Based Awards - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,860 | $ 1,524 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 436 | 501 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,424 | $ 1,023 |
Common Stock and Stock-Based _7
Common Stock and Stock-Based Awards - Restricted Stock and Restricted Stock Units (Details) - Restricted Stock Award / Restricted Stock Units - $ / shares | Jan. 23, 2017 | Mar. 31, 2019 |
Shares | ||
Unvested balance, beginning (in shares) | 502,500 | |
Granted (in shares) | 250,000 | 300,775 |
Vested (in shares) | (141,250) | |
Forfeited (in shares) | 0 | |
Unvested balance, ending (in shares) | 662,025 | |
Weighted Average Grant Date Fair Value | ||
Unvested balance, beginning (USD per share) | $ 7.87 | |
Granted (USD per share) | 10.49 | |
Vested (USD per share) | 7.71 | |
Forfeited (USD per share) | 0 | |
Unvested balance, ending (USD per share) | $ 9.10 |
Stockholders' equity (Details)
Stockholders' equity (Details) - USD ($) $ in Thousands | Jun. 22, 2018 | Jun. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 33,948,254 | |||
Beginning balance | $ 91,207 | $ 84,680 | ||
Net loss | (16,055) | (9,971) | ||
Change in unrealized gains on available for sale securities | (2) | (11) | ||
Total comprehensive loss | (16,057) | (9,982) | ||
Stock-based compensation | 1,860 | 1,524 | ||
RSU issuance of shares when vested, net of shares withheld | (279) | |||
Shares withheld related to net share settlement of restricted stock awards | $ (214) | (247) | ||
Stock issued in connection with the exercise of common stock (in shares) | 102,801 | |||
Exercise of common stock options | $ 652 | $ 182 | ||
Public offering of common stock, net of $2,924 of offering costs | $ 50,600 | $ 1,903 | $ 43,125 | |
Ending balance (in shares) | 38,927,955 | 76,157,000 | ||
Ending balance | $ 120,294 | |||
Public offering cost | $ 2,924 | |||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance (in shares) | 33,948,000 | 28,183,000 | ||
Beginning balance | $ 3 | $ 3 | ||
RSU issuance of shares when vested (in shares) | 51,000 | |||
Shares withheld related to net shares settlement of RSA awards (in shares) | (21,000) | (27,000) | ||
Stock issued in connection with the exercise of common stock (in shares) | 103,000 | 41,000 | ||
Public offering of common stock, net of $2,924 of offering costs (in shares) | 4,847,000 | |||
Public offering of common stock, net of $2,924 of offering costs | $ 1 | |||
Ending balance (in shares) | 38,928,000 | 28,197,000 | ||
Ending balance | $ 4 | $ 3 | ||
Additional Paid-in Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 252,885 | 196,688 | ||
Stock-based compensation | 1,860 | 1,524 | ||
RSU issuance of shares when vested, net of shares withheld | (279) | |||
Shares withheld related to net share settlement of restricted stock awards | (214) | (247) | ||
Exercise of common stock options | 652 | 182 | ||
Public offering of common stock, net of $2,924 of offering costs | 43,124 | |||
Ending balance | 298,028 | 198,147 | ||
AOCI Attributable to Parent | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (11) | (31) | ||
Change in unrealized gains on available for sale securities | (2) | (11) | ||
Ending balance | (13) | (42) | ||
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | (161,670) | (111,980) | ||
Net loss | (16,055) | (9,971) | ||
Ending balance | $ (177,725) | $ (121,951) |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Jun. 01, 2017ft² | Jun. 30, 2018USD ($) | Mar. 31, 2019USD ($)ft²equipment_lease | Oct. 31, 2018ft² | Mar. 31, 2018ft² | Jun. 30, 2017ft² | Apr. 30, 2017ft² | Feb. 28, 2017ft² |
Property, Plant and Equipment [Line Items] | ||||||||
Short-term operating lease expense | $ 229,000 | |||||||
Short-term Lease, Cost | 26,000 | |||||||
Purchase commitment, amount | $ 3,800,000 | |||||||
Purchase commitment, period | 7 years | |||||||
Purchase obligation | $ 16,500,000 | |||||||
Equipment purchase costs | 3,286,000 | |||||||
Equipment expenses | $ 707,000 | |||||||
Laboratory space | Operating lease | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Area of real estate property (in sqft) | ft² | 10,755 | |||||||
Operating leases, extension term | 5 years | |||||||
Additional area of real estate property (in sqft) | ft² | 721 | |||||||
Office space | Operating lease | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Area of real estate property (in sqft) | ft² | 3,126 | 5,613 | 6,900 | |||||
Additional area of real estate property (in sqft) | ft² | 1,190 | |||||||
Equipment | Operating lease | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Number of equipment leases (in equipment leases) | equipment_lease | 5 | |||||||
New production space | Operating lease | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Area of real estate property (in sqft) | ft² | 16,500 |
Commitments and Continigencies
Commitments and Continigencies - Supplemental Cash Flow Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Cash paid within operating cash flows | $ 208 |
Right-of-use assets recognized in exchange for new lease obligations | $ 178 |
Commitments and Contingencies_2
Commitments and Contingencies - Supplemental Balance Sheet (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Lease, Assets And Liabilities, Lessee | |
Operating lease right-of-use assets | $ 1,763 |
Current portion of operating lease liabilities | 708 |
Long-term operating lease liabilities | 1,096 |
Operating lease liability | $ 1,804 |
Weighted Average Remaining Lease Term | |
Weighted average remaining lease term (years) | 2 years 8 months |
Leases, Weighted Average Discount Rate | |
Weighted average discount rate | 5.50% |
Commitments and Contingencies_3
Commitments and Contingencies - Minimum Future Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases After Adoption of 842 | ||
2019 (remaining of year) | $ 539 | |
2020 | 732 | |
2021 | 469 | |
2022 | 202 | |
2023 and after | 4 | |
Total payments due | 1,946 | |
Less: imputed interest | (142) | |
Total lease liabilities | $ 1,804 | |
Operating Leases before Adoption of 842 | ||
2019 | $ 835 | |
2020 | 726 | |
2021 | 459 | |
2022 | 194 | |
Thereafter | 0 | |
Total | $ 2,214 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss | $ (16,055) | $ (9,971) |
Denominator: | ||
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 37,786,000 | 27,986,000 |
Net loss per share, basic and diluted (USD per share) | $ (0.42) | $ (0.36) |
Stock Option Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from EPS computation (in shares) | 6,692,139 | 5,553,560 |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from EPS computation (in shares) | 125,000 | 187,500 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from EPS computation (in shares) | 236,250 | 315,000 |
Subsequent Event (Details)
Subsequent Event (Details) - Operating lease - Office space - ft² | Apr. 30, 2019 | Mar. 31, 2019 | Oct. 31, 2018 | Apr. 30, 2017 |
Subsequent Event [Line Items] | ||||
Area of real estate property (in sqft) | 3,126 | 5,613 | 6,900 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Area of real estate property (in sqft) | 1,979 |