Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018 | |
Document And Entity Information [Abstract] | |
Document Type | S-4 |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Trading Symbol | ARCT |
Entity Registrant Name | Arcturus Therapeutics Ltd. |
Entity Central Index Key | 0001566049 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 36,709,000 | $ 24,965,000 |
Restricted cash | 166,000 | |
Short-term investments | 23,608,000 | |
Accounts receivable, net | 4,481,000 | 480,000 |
Prepaid expenses and other current assets | 638,000 | 1,059,000 |
Intangible asset held for sale | 590,000 | |
Total current assets | 41,828,000 | 50,868,000 |
Property and equipment, net | 1,975,000 | 1,049,000 |
Equity method investment | 288,000 | |
Non-current restricted cash | 107,000 | 107,000 |
Total assets | 44,198,000 | 52,024,000 |
Current liabilities: | ||
Accounts payable | 2,398,000 | 1,790,000 |
Accrued liabilities | 3,907,000 | 2,793,000 |
Deferred revenue | 6,272,000 | 6,457,000 |
Total current liabilities | 12,577,000 | 11,040,000 |
Deferred revenue, net of current portion | 7,534,000 | 7,190,000 |
Long-term debt | 9,911,000 | |
Deferred rent | 534,000 | |
Total liabilities | 30,556,000 | 18,230,000 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Ordinary shares: 30,000 shares authorized, 10,762 issued, 10,719 outstanding and 43 held in treasury at December 31, 2018; NIS 0.07 par value; 30,000 shares authorized, 10,699 issued, 10,656 outstanding and 43 held in treasury at December 31, 2017; | 214,000 | 212,000 |
Additional paid-in capital | 58,302,000 | 56,674,000 |
Accumulated other comprehensive loss | (3,000) | |
Accumulated deficit | (44,874,000) | (23,089,000) |
Total shareholders’ equity | 13,642,000 | 33,794,000 |
Total liabilities and shareholders’ equity | $ 44,198,000 | $ 52,024,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | ₪ 0.07 | |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Treasury shares | 43,000 | 43,000 |
Common stock, shares issued | 10,762,000 | 10,699,000 |
Common stock, shares outstanding | 10,719,000 | 10,656,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Collaboration revenue | $ 15,753 | $ 12,998 |
Operating expenses: | ||
Research and development, net | 16,982 | 15,918 |
General and administrative | 20,582 | 7,572 |
Total operating expenses | 37,564 | 23,490 |
Net loss from operations | (21,811) | (10,492) |
Loss from equity method investment | (302) | |
Finance income (expense), net | 328 | (409) |
Net loss before taxes | (21,785) | (10,901) |
Income tax expense | (1) | |
Net loss | $ (21,785) | $ (10,902) |
Net loss per share, basic and diluted | $ (2.16) | $ (3.53) |
Weighted-average shares outstanding, basic and diluted | 10,069 | 3,087 |
Comprehensive loss: | ||
Net loss | $ (21,785) | $ (10,902) |
Unrealized gain (loss) on short-term investments | 3 | (3) |
Comprehensive loss | $ (21,782) | $ (10,905) |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Series Seed Preferred Stock [Member] | Series A Preferred Stock | Ordinary Shares [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2016 | $ 1,577 | $ 13,764 | $ (12,187) | ||||
Balance (in shares) at Dec. 31, 2016 | 1,284,000 | 1,481,000 | 2,801,000 | ||||
Net loss | (10,902) | (10,902) | |||||
Unrealized gain (loss) on short-term investments | (3) | $ (3) | |||||
Share-based compensation | 2,170 | 2,170 | |||||
Issuance of common shares upon exercise of share options | 675 | 675 | |||||
Issuance of common shares upon exercise of share options (in shares) | 348,000 | ||||||
Issuance of shares upon exercise of warrants | 160 | 160 | |||||
Issuance of shares upon exercise of warrants (in shares) | 189,000 | ||||||
Issuance of shares upon conversion of notes | 5,957 | 5,957 | |||||
Issuance of shares upon conversion of notes (in shares) | 617,000 | ||||||
Conversion of Preferred Shares to ordinary shares (in shares) | (1,284,000) | (1,481,000) | 2,765,000 | ||||
Beneficial conversion expense from notes | 348 | 348 | |||||
Issuance of shares in connection with merger, net | 33,812 | $ 212 | 33,600 | ||||
Issuance of shares in connection with merger, net (in shares) | 3,979,000 | ||||||
Balance at Dec. 31, 2017 | 33,794 | $ 212 | 56,674 | (3) | (23,089) | ||
Balance (in shares) at Dec. 31, 2017 | 10,699,000 | ||||||
Net loss | (21,785) | (21,785) | |||||
Unrealized gain (loss) on short-term investments | 3 | $ 3 | |||||
Share-based compensation | 1,259 | 1,259 | |||||
Issuance of common shares upon exercise of share options | $ 371 | $ 2 | 369 | ||||
Issuance of common shares upon exercise of share options (in shares) | 62,224 | 63,000 | |||||
Balance at Dec. 31, 2018 | $ 13,642 | $ 214 | $ 58,302 | $ (44,874) | |||
Balance (in shares) at Dec. 31, 2018 | 10,762,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (21,785) | $ (10,902) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 582 | 410 |
Share-based compensation expense | 1,259 | 2,170 |
Loss from equity method investment | 302 | |
Non cash interest expenses | 38 | 150 |
Debt conversion expense | 348 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,001) | 3,153 |
Prepaid expenses and other assets | 421 | (202) |
Accounts payable | 578 | (1,537) |
Accrued liabilities | 1,687 | (104) |
Deferred revenue | 159 | 6,054 |
Net cash used in operating activities | (20,760) | (460) |
INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (1,478) | (251) |
Purchases of short-term investments | (6,594) | |
Proceeds from sale of equipment | 29 | |
Proceeds from maturities of short-term investments | 30,206 | 10,577 |
Net cash provided by investing activities | 22,134 | 10,355 |
FINANCING ACTIVITIES: | ||
Proceeds from long-term debt, net of debt issuance costs | 9,872 | |
Proceeds from exercise of stock options | 332 | 711 |
Proceeds from issuance of convertible promissory notes | 5,650 | |
Proceeds from exercise of warrants | 160 | |
Net cash received in the issuance of shares for the net assets of Alcobra Ltd. | 477 | |
Net cash provided by financing activities | 10,204 | 6,998 |
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 11,578 | 16,893 |
Cash, cash equivalents and restricted cash at beginning of year | 25,238 | 8,345 |
Cash, cash equivalents and restricted cash at end of year | 36,816 | 25,238 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 146 | |
Cash paid for income taxes | 35 | |
Sale of intangible assets for equity method investment | 590 | |
Purchase of property and equipment in accounts payable | 30 | |
Release of repurchase liability for restricted shares | $ 39 | |
Conversion of notes to ordinary shares | 5,957 | |
Fair value of assets acquired, excluding cash, cash equivalents and restricted cash | 35,241 | |
Less: liabilities assumed | (1,906) | |
Net assets acquired, excluding cash, cash equivalents and restricted cash | $ 33,335 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Note 1. Description of Business Arcturus Therapeutics Ltd. and its subsidiaries (referred to as the “Company”) is a RNA medicines company focused on significant opportunities in rare, liver, and respiratory diseases. The Company’s key proprietary technology has the potential to address the major hurdles in RNA development, namely the effective and safe delivery of RNA therapeutics to disease-relevant target tissues. Reverse Merger On November 15, 2017, Alcobra Ltd. acquired Arcturus Therapeutics, Inc. pursuant to a merger between the companies (the “merger”). Prior to the merger, Alcobra Ltd.’s net assets consisted of cash, investments and nominal non-operating assets. Upon consummation of the merger, Alcobra Ltd. adopted the business plan of Arcturus Therapeutics, Inc. In connection with the merger, Alcobra Ltd. agreed to acquire all of the outstanding common stock of Arcturus Therapeutics, Inc. in exchange for the issuance of an aggregate 6,631,712 of Alcobra Ltd.’s Ordinary Shares, par value 0.07 NIS per share (the “Ordinary Shares”), after giving effect to a 1-for-7 reverse split effected immediately prior to the merger. As a result of the merger, Arcturus Therapeutics, Inc. became a wholly-owned subsidiary of Alcobra Ltd. While Alcobra Ltd. was the legal acquirer in the transaction, Arcturus Therapeutics, Inc. was deemed the accounting acquirer. Immediately after giving effect to the merger, on November 15, 2017, Alcobra Ltd. changed its name to Arcturus Therapeutics Ltd. (“Arcturus” or the “Company”). On November 16, 2017, the Company commenced trading under the symbol “ARCT.” The Company’s principal executive offices and location of all operations are in San Diego, California. In accordance with the authoritative literature, a transaction where a private company merges into a public company with no operations and nominal net assets should be accounted for as a capital transaction rather than a business combination. Consequently, the reverse merger was accounted for as an issuance of shares by the Company for the net assets of Alcobra Ltd., accompanied by a recapitalization. Excess of considerations paid over net assets acquired and other merger-related costs were recorded as a charge to additional paid-in capital as discussed in Note 6. While Alcobra Ltd. was the legal acquirer in the merger, Arcturus was deemed the accounting acquirer. As a result, the financial statements of the Company prior to the merger date are the historical financial statements of Arcturus whereas the financial statements of the Company after the merger date reflect the results of the operations of Arcturus and Alcobra Ltd. on a combined basis. All historical information presented herein has been retroactively restated to reflect the effect of the merger shares exchange ratio, reverse stock split and change to the authorized number of Ordinary Shares in accordance with Accounting Standards Codification Topic 260, “Earnings Per Share” Going Concern The Company’s activities since inception have consisted principally of performing research and development activities and raising capital. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding before the Company achieves sustainable revenues and profit from operations. The Company is a pre-clinical bioscience company that is dependent on obtaining external equity and debt financings to fund its operations. Historically, the Company’s primary source of financing has been through the sale of its securities, through issuance of debt and through collaboration agreements. The Company raised $10.0 million in gross proceeds from a long-term debt agreement executed in October 2018 (Note 9). In addition, in October 2018, the Company entered into a Sales Agreement (the “Sales Agreement”) with Leerink Partners LLC (“Leerink”), pursuant to which it may sell from time to time, at its option, up to an aggregate of $30.0 million of the Company’s ordinary shares through Leerink, as sales agent. Research and development activities have required significant capital investment since the Company’s inception. The Company expects its operations to continue to require cash investment to pursue the Company’s research and development activities, including preclinical studies, formulation development, clinical trials and related drug manufacturing. The Company has experienced net losses since its inception and as of December 31, 2018 has an accumulated deficit of $44.9 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of Arcturus Therapeutics Ltd. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These financial statements are prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), which requires management to make estimates and assumptions regarding the valuation of certain debt and equity instruments, the equity method investment, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, expense accruals, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment which is the research and development of medical applications for the Company’s nucleic acid-focused technology. Cash and Cash Equivalents Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date of purchase. Restricted cash Restricted cash represents cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord for the Company’s offices. Short-term Bank Deposits Short-term bank deposits (Note 4) are deposits with maturities of more than three months and up to one year when acquired. Short-term bank deposits are presented at their cost, including accrued interest and are included in the balance of short-term investments in the consolidated balance sheet. Short-term Investments The Company accounts for short-term investments (Note 4) in accordance with ASC No. 320, Investments- Debt and Equity Securities The Company has classified all of its debt securities and certificates of deposit as available-for-sale securities. Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in accumulated other comprehensive loss in shareholders’ equity. Realized gains and losses on sales of investments are included in interest income and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest and dividends on securities are included in interest income. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities below the amortized cost basis of such securities is judged to be other-than-temporarily impaired. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and if the entity has the intent to sell the security, or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. The Company did not recognize any other-than-temporary impairment charges on its marketable securities during the year ended December 31, 2017. The Company held no available-for-sale securities as of December 31, 2018. Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available (Note 5). Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available under the circumstances. The hierarchy consists of three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounts Receivable Accounts receivable are recorded at the net invoice value and are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company reserves specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. No Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash, cash equivalents and short-term investments. The Company limits its exposure to credit loss by placing its cash, cash equivalents, and investments with high credit quality financial institutions in instruments with short maturities. There was one customer that comprised 96% of the total accounts receivable balance at December 31, 2018 and one customer that comprised the total accounts receivable balance at December 31, 2017. For the year ended December 31, 2018, the Company’s top three customers collectively Intangible Assets Held for Sale and Equity Method Investment At the end of the second quarter of 2018, the Company completed the sale of its intangible assets related to the ADAIR technology, which was accounted for as an intangible asset held for sale as of December 31, 2017. Pursuant to the asset purchase agreement for ADAIR, the Company received a 30% ownership interest in the common stock of a privately held company in consideration for the sale of the ADAIR technology. As this ownership interest is greater than 20% and one executive of the Company holds a seat on the investee’s board of directors, the Company has the ability to exercise significant influence over the operating and financial policies of this investee; therefore, the Company accounts for this investment as an equity method investment. The Company has no requirement to invest further in this private company and the ownership percentage may be diluted in the future. The Company will account for this investment as an equity method investment until the investment no longer meets the definition of an equity method investment. The Company accounts for its share of the earnings or losses of the investee with a reporting lag of three months beginning the third quarter of 2018, as the financial statements of the investee are not completed on a basis that is sufficient for the Company to apply the equity method on a current basis. The Company has recorded $0.3 million of its share of losses of the investee as of December 31, 2018. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the respective useful lives of the assets, ranging from three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods, as well as the strategic significance of the assets to the Company’s business objectives. The Company did not recognize any impairment losses for the years ended December 31, 2018 or 2017. Comprehensive Income/Loss Comprehensive income/loss is defined as the change in shareholders’ equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss represents unrealized losses on the Company’s marketable securities. The income tax effect related to unrealized losses was immaterial for December 31, 2018 or 2017. Revenue Recognition The Company recognizes revenue when each of the following four criteria is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or as services are rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. Multiple-element arrangements may include (i) grants of licenses, or options to obtain licenses, to intellectual property, (ii) research and development services, (iii) participation on joint research or joint development committees, or (iv) manufacturing or supply services. Payments the Company may receive under these arrangements typically include one or more of the following: non-refundable upfront license fees, option exercise fees, funding of research or development efforts, amounts due upon the achievement of specified objectives, or royalties on future product sales. Multiple-element arrangements require the separability of deliverables included in an arrangement into different units of accounting and the allocation of arrangement consideration to the units of accounting. The evaluation of multiple-element arrangements requires management to make judgments about (i) the identification of deliverables, (ii) whether such deliverables are separable from the other aspects of the contractual relationship, (iii) the estimated selling price of each deliverable, and (iv) the expected period of performance for each deliverable. To determine the units of accounting under a multiple-element arrangement, management evaluates certain separation criteria, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances for each arrangement. Management then estimates the selling price for each unit of accounting and allocates the arrangement consideration to each unit using the relative selling price method. The allocated consideration for each unit of accounting is recognized based on the method most appropriate for that unit of account and in accordance with the revenue recognition criteria detailed above. If there are deliverables in an arrangement that are not separable from other aspects of the contractual relationship, they are treated as a combined unit of accounting, with the allocated revenue for the combined unit recognized in a manner consistent with the revenue recognition applicable to the final deliverable in the combined unit. Payments received prior to satisfying the relevant revenue recognition criteria are recorded as deferred revenue in the accompanying consolidated balance sheets and recognized as revenue when the related revenue recognition criteria are met. Most of the collaboration agreements provide for non-refundable milestone payments. The Company recognizes revenue that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. A milestone is considered substantive when the consideration payable to the Company for such milestone (i) is consistent with its performance necessary to achieve the milestone or the increase in value to the collaboration resulting from its performance, (ii) relates solely to its past performance and (iii) is reasonable relative to all of the other deliverables and payments within the arrangement. In making this assessment, management considers all facts and circumstances relevant to the arrangement, including factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the milestone, the level of effort and investment required to achieve the milestone and whether any portion of the milestone consideration is related to future performance or deliverables. Management periodically reviews the estimated performance periods under the collaboration agreements, which provide for non-refundable upfront payments and fees. Management adjusted the periods over which revenue was recognized when appropriate to reflect changes in assumptions relating to the estimated performance periods. In the first quarter of 2019, the Company will adopt new accounting guidance that will change future patterns of revenue recognition. The Company records revenues related to the reimbursement of costs incurred under the collaboration agreements where it acts as a principal, controls the research or development activities and bears credit risk. Under its collaboration agreements, the Company is reimbursed for associated out-of-pocket costs and for a certain amounts of full-time equivalent, or FTE, costs based on an agreed-upon FTE rate. The gross amount of these pass-through reimbursed costs is reported as revenue in the accompanying consolidated statements of operations and comprehensive loss, while the actual expenses for which the Company is reimbursed are reflected as research and development costs. Research and Development Costs, net Research and development costs are expensed as incurred. These expenses result from the Company’s independent research and development efforts as well as efforts associated with collaboration arrangements. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract research and manufacturing services, the costs of laboratory supplies, equipment and facilities and other external costs are shown net of any grants. Share-Based Compensation The Company recognizes share-based compensation for equity awards granted to employees, officers, and directors as an expense on the statements of operations. Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Share options have a ten-year life and generally vest 25% on the first anniversary of the grant and in 1/48th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. The fair value of share options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common shares, expected term of the option before exercise, expected volatility of the Company’s Ordinary Shares, expected dividend yield, and a risk-free interest rate. The Company has limited historical share option activity and therefore estimates the expected term of share options granted using the simplified method, which represents the average of the contractual term of the share option and its weighted-average vesting period. The expected volatility of share options is based upon the historical volatility of a peer group of publicly traded companies. The Company has not declared or paid any dividends and do not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the implied yield currently available in United States Treasury securities at maturity with a term equivalent to the expected term of the share options. The effect of forfeited awards is recorded when the forfeiture occurs. Share-based awards granted to non-employees are remeasured at each reporting date and compensation costs are recognized as services are rendered, generally on a straight-line basis. The Company believes that the fair value of these awards is more reliably measurable than the fair value of the services rendered. There were no share-based awards granted to non-employees during 2018 and 2017. Ordinary Shares Valuation Prior to the merger and due to the absence of an active market for the Company’s ordinary shares, the Company utilized third-party valuations which utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its Ordinary Shares. Statement of cash flows The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2018 2017 Cash and cash equivalents $ 36,709 $ 24,965 Restricted cash — 166 Non-current Restricted cash 107 107 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 36,816 $ 25,238 Income Tax Expense Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax credit carryforwards, the Company has determined that total deferred tax assets should be fully offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which it operates. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the consolidated financial statements of tax positions taken or expected to be taken in a tax return. The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017 resulting in significant modifications to existing law. The Company follows the guidance of Staff Accounting Bulletin (SAB) 118, which provides additional clarification regarding the application of ASC 740 in situations where the Company does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act for the reporting period in which the Act was enacted. SAB 118 provides for a measurement period beginning in the reporting period that includes the Act’s enactment and ending when the Company has obtained, prepared and analyzed the information needed in order to complete the accounting requirements, but in no circumstances should the measurement period extend beyond one year from the enactment date. The Company has completed its analysis of the Act’s income tax effects. In total, the Company recorded $2.4 million related to the remeasurement of deferred tax assets which was fully offset by a corresponding decrease in the valuation allowance. Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of ordinary shares outstanding for the period, without consideration for ordinary share equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of ordinary shares and dilutive ordinary share equivalents outstanding for the period determined using the treasury-stock method. Dilutive ordinary shares for the year ended December 31, 2018 are comprised of share options. For the year ended December 31, 2017, dilutive ordinary shares are comprised of options, convertible preferred stock, convertible notes, and warrants. No dividends were declared or paid during the reported periods. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) amended the existing Accounting Standards Update (ASU) for revenue recognition No. 2014-09, Revenue from Contracts with Customers The FASB subsequently issued amendments to ASU No. 2014-09 that have the same effective date and transition date. These new standards will become effective for the Company on January 1, 2019. The Company will implement the new guidance using the modified retrospective approach. The Company has performed a review of these new standards as compared to its current accounting policies for collaborative relationships. The Company is evaluating the impact of the new standard on historical revenue recorded for its collaboration agreements. This ongoing evaluation is dependent upon the resolution of certain questions relating to the application of the new revenue recognition guidance for collaboration agreements which will ultimately determine the impact, if any, the adoption of this standard may have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements The Company expects Topic 842 will have a material effect on its consolidated balance sheet. However, the Company does not expect Topic 842 will have a material effect on its consolidated statements of operations and comprehensive loss or consolidated statements of cash flows. While the Company continues to assess all of the effects of adoption, the most significant effects relate to (1) the recognition of right-of-use (ROU) assets and lease liabilities within a range of approximately approximately $5.5 million to $6.45 million using an assumed incremental borrowing rate of 8.4%, primarily resulting from leases of office and laboratory space; (2) the derecognition of deferred rent of approximately $0.5 million for certain lease incentives received; and (3) significant new disclosure requirements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Recently Adopted Accounting Pronouncements Effective January 1, 2017, the Company adopted ASU No. 2017-09 Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting In November 2016, the FASB issued ASU 2016-18, Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations “Clarifying the Definition of a Business |
Collaboration Revenue
Collaboration Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Collaboration Agreements [Abstract] | |
Collaboration Revenue | NOTE 3. Collaboration Revenue The Company has entered into license agreements and collaborative research and development arrangements with pharmaceutical and biotechnology companies. Under these arrangements, the Company is entitled to receive license fees, upfront payments, milestone payments if and when certain research and development milestones or technology transfer milestones are achieved, royalties on approved product sales and reimbursement for research and development activities. The Company’s costs of performing these services are included within research and development expenses. The Company’s milestone payments are typically defined by achievement of certain preclinical, clinical, and commercial success criteria. Preclinical milestones may include in vivo proof of concept in disease animal model(s), lead candidate identification, and completion of IND-enabling toxicology studies. Clinical milestones may, for example, include successful enrollment of the first patient in or completion of Phase I, II, and III clinical trials, and commercial revenue, milestone or royalty-based, is often tiered based on net or aggregate sale amounts. The Company cannot guarantee the achievement of these milestones and economics due to risks associated with preclinical and clinical activities required for development of nucleic acid medicine-based therapeutics. The following table summarizes the Company’s collaboration revenues for the periods indicated (in thousands). Approximately $5.0 million and $1.0 million of total collaboration revenue represents revenue derived from foreign countries for the years ended December 31, 2018 and 2017, respectively. Year Ended December 31, (Dollars in thousands) 2018 2017 Collaboration Partner – Janssen $ 1,232 $ 4,862 Collaboration Partner – Ultragenyx 6,794 5,639 Collaboration Partner – Takeda 1,137 1,403 Collaboration Partner – CureVac 4,427 — Other 2,163 1,094 $ 15,753 $ 12,998 The following paragraphs provide information on the nature and purpose of these collaboration arrangements. Collaboration Partner – Janssen Janssen 2015 Agreements In 2015 the Company entered into two agreements with Janssen. The primary focus of the collaboration is to develop nucleic acid therapeutics for Hepatitis B (HBV). The Company analyzed the form and substance of both of the agreements and concluded they should be evaluated as a single arrangement for accounting purposes. Upon execution of the agreements, the Company received an upfront payment of $2.0 million which was amortized over the estimated research and development period. Under the 2015 agreements, the Company recognized revenue of $4.9 million during the year ended December 31, 2017. The revenue recognized as of December 31, 2017 included labor and expense reimbursements of $4.4 million with the remaining revenue representing the amortized portion of the upfront fee and milestone payment. Janssen 2017 Agreement In late-2017, the Company and Janssen entered into a new agreement. The Company reviewed the timing and nature of the arrangement upon the signing of the new agreement and determined that it was not linked to the prior agreements and should be considered as a standalone agreement. The 2017 collaboration agreement allocated discovery, development, funding obligations, and ownership of related intellectual property among the Company and Janssen. The Company received an upfront payment of $7.7 million and may receive preclinical, development and sales milestone payments of $56.5 million, as well as royalty payments on any future licensed product sales. Janssen will reimburse the Company for research costs at a future defined period upon the achievement of the first research milestone. Janssen may also pay option exercise fees within the $1.0 million to $5.0 million range per target. Janssen will pay royalties on annual net sales of licensed products in the low to mid-single digits range, subject to reduction on a country-by-country and licensed-product-by-licensed-product basis and subject to certain events, such as expiration of program patents. In addition, the collaboration includes an exclusivity period. As the license component of the contract has no standalone value, the license and the research and development activities, exclusivity, and joint steering committee obligations under this agreement should be considered as a single unit of accounting in the arrangement. The upfront fee of $7.7 million is being deferred and recognized as revenue using the proportional performance method as the Company determined that the deliverables are fulfilled in a pattern other than straight-line due to the structure and nature of the collaborative arrangement. Total deferred revenue as of December 31, 2018 and December 31, 2017 for Janssen was $6.5 million and $7.6 million, respectively. The Company recognized revenue of $1.2 million and $0.1 million for the years ended December 31, 2018 and 2017, respectively. The revenue recognized included labor and expense reimbursements of a negligible amount with the remaining revenue representing the recognized portion of the upfront fee. Collaboration Partner – Ultragenyx In 2015 the Company entered into an agreement with Ultragenyx. During the initial phase of the collaboration, the Company will design and optimize therapeutics for certain rare disease targets. Ultragenyx has the option to add additional rare disease targets during the collaborative development period. Additionally, during the collaborative development period, the Company will participate with Ultragenyx in a joint steering committee. In addition, the collaboration includes an initial exclusivity period and an option to extend this period. For each program, Ultragenyx will reimburse the Company for all internal and external development costs incurred and if Ultragenyx achieves certain, clinical, regulatory and sales milestones, then the Company is eligible to receive additional payments. As part of the agreement, Ultragenyx paid an upfront fee and agreed to certain research and development funding obligations. The Company is also entitled to certain additional payments upon exercise of the Ultragenyx expansion option and/or exclusivity extension (if any), and for costs incurred by the Company in conducting the activities assigned under each collaboration development plan. In addition, on a development target-by-development target basis during the two-year period from the effective date of contract, Ultragenyx will pay the Company a one-time milestone payment after the first optimized lead designation for the first product with respect of such development target. For each development target for which Ultragenyx exercises its option, Ultragenyx will pay the Company a one-time option exercise fee within the $2.0 million to $5.0 million range per development target. In 2018, the Company signed an amendment with Ultragenyx, that may reduce milestone payments dependent on whether the Company does not incorporate a predefined chemistry methodology to increase mRNA half-life. The agreement included potential milestone payments for selected targets from Ultragenyx to the Company. The current potential milestone payment for the remaining target as of December 31, 2018 is $69.5 million. Ultragenyx will pay royalties as a percentage of net sales on a product-by-product and country-by-country basis during the applicable royalty term up to and including double digits. As of December 31, 2018, the Company has not yet reached the clinical phase of the contract. The Company concluded that the license, research and development activities, exclusivity, and joint steering committee obligations under this agreement should be considered a single unit of accounting in the arrangement, and the upfront fee of $10 million is being deferred and recognized as revenue over the same period as the estimated research activities. As of December 31, 2018, the amortization period is currently expected to end on March 31, 2019. During 2017, the Company entered into an amendment with Ultragenyx to add one year to the exclusivity period for the reserved targets, in consideration for a one-time payment of $2.0 million. The extension of the exclusivity period did not change the length of the research and development period. Further, the amendment allows Ultragenyx the opportunity to review and comment on its filings and prosecution efforts of pending Company patents that relate to Ultragenyx chemistry. Since the Company’s deliverables under the agreement are considered a single unit of accounting, the payment consideration was added to the unamortized portion of the upfront signing fee and is being recognized systematically, on a straight-line basis, over the remainder of the period that the research and development services are expected to occur. During the fourth quarter of 2018, Ultragenyx extended the exclusivity on a specified number of reserved targets for an additional year with an annual reserve target list maintenance fee. This extension fee was deferred and will be recognized on a straight-line basis over the one-year exclusivity period. Total deferred revenue as of December 31, 2018 and December 31, 2017 for Ultragenyx was $2.7 million and $5.8 million, respectively. The Company recognized revenue for Ultragenyx of $6.8 million and $5.6 million during the years ended December 31, 2018 and 2017, respectively. The revenue recognized included labor and expense reimbursements of $2.3 million and $3.7 million for the years ended December 31, 2018 and 2017, respectively, with the remaining revenue representing the amortized portion of the upfront fee on the arrangement. Collaboration Partner – Takeda In 2016 the Company entered into a contract with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) to perform certain discovery and development of RNA medicines for treatment of nonalcoholic fatty liver disease (NASH). The agreement provided a non-exclusive license of the Company’s technology to Takeda for the 18 month research program term. As part of the agreement, Takeda paid an upfront fee of $0.1 million upon contract execution and agreed to provide the Company with funding for the discovery and development costs. The Company concluded that the r n 2017, the Company and Takeda amended the agreement to extend the research program scope and term through December 20, 2018. The amended agreement provided for $3.7 million in regularly scheduled research funding payments through 2018. The scheduled fees paid are contractually refundable to Takeda if unearned by the Company. On March 8, 2019, the Company entered into a Research Collaboration Agreement with Takeda for the purpose of designing, or optimizing and manufacturing LUNAR-formulated mRNA Therapeutics. T Collaboration Partner – CureVac In January 2018, the Company entered into a Development and Option Agreement with CureVac, (the “Development and Option Agreement”). Under the terms of the Development and Option Agreement, the parties have agreed to conduct joint preclinical development programs once CureVac makes a payment to pull down a target on the basis of which CureVac is granted options for taking a license on pre-agreed license terms to develop and commercialize certain products incorporating the Company’s patents and know-how related to delivery systems based on or incorporating lipid-mediated delivery systems (including the LUNAR ® Concurrently with the Development and Option Agreement, the Company entered into a Co-Development and Co-Commercialization Agreement (the “Co-Development Agreement”). Under the terms of such agreement, the parties will collaborate to develop and commercialize mRNA-based products for treating ornithine transcarbamylase (“OTC”) deficiency, incorporating CureVac’s mRNA technology, the Company’s mRNA technology and the Arcturus LMD Technology. The overall collaboration with CureVac was managed by a joint steering committee. The parties also have the option to co-develop two mRNA programs for CureVac and one mRNA program for the Company that are not included on the target escrow list. All costs incurred from the Co-Development Agreement will be shared equally by the Company and CureVac, and any costs incurred by the Company in excess of CureVac will be divided evenly and recognized as revenue. The Company recognized $3.3 million of collaboration revenue related to the Co-Development Agreement as of December 31, 2018. The Company concluded that the contracts should be accounted for on a combined basis due to their being negotiated and signed concurrently as well as the interoperability between the two agreements, and that the research and development activities, exclusivity, license fees, governance and reserve target rights were to be accounted for as a single unit of accounting and the upfront license fees of $5.0 million were deferred and recognized as revenue over the eight-year research program period. Further, the Company concluded that the options granted to CureVac are substantive and are to be evaluated as a separate arrangement and not a deliverable of the original arrangement since the option is at the sole election of the customer and due to the fact that the exercise price for the option is reasonable in comparison to other payments in the arrangement. Total deferred revenue as of December 31, 2018 was $4.4 million under the Development and Option Agreement. The Company recognized revenue from CureVac under both agreements of $4.4 million for the year ended December 31, 2018. The revenue recognized included labor and expense reimbursements of On February 11, 2019, the Company announced the termination of the obligations of CureVac under the Co-Development Agreement, effective 180 days from February 5, 2019 and the re-assumption by the Company of the worldwide rights thereto. Arcturus will reassume 100% global rights for its flagship asset, clinical development candidate ARCT-810, a messenger RNA (mRNA) drug to treat OTC deficiency. ARCT-810 was previously subject to equal cost sharing between Arcturus and CureVac under the Co-Development Agreement. CureVac elected not to continue its obligations for the preclinical development of ARCT-810 under and pursuant to the terms of the agreement. Pursuant to the terms of the Co-Development Agreement, CureVac is obligated to continue to fund its share of the preclinical expenses for the OTC program until August of 2019. Other Collaboration Agreements The Company entered into several other smaller agreements and recorded revenue and deferred revenue consistently with the revenue recognition practices described in the significant accounting policies footnote. The total revenue of $2.2 million from other smaller agreements was primarily related to a Research and Exclusive License Agreement with Synthetic Genomics, Inc. (“SGI”) which the Company entered into during the fourth quarter of 2017. Under the agreement, the Company granted SGI an exclusive license for the Arcturus LMD Technology to research, develop and sell products for diseases excluding all respiratory disease viruses other than influenza. Revenue related to this agreement is made up of labor reimbursements and sublicense revenue. The sublicense revenue is calculated as a percentage of all cash payments received by SGI from any sublicense for a LUNAR product, in the mid 10% to 20% range, less payments made to third parties to obtain the right to practice intellectual property used to develop or necessary to make, use, or sell all or part of licensed LUNAR product. Under certain circumstances, the Company will be owed a percentage ranging from 5% to 10% of amounts received by SGI should they enter into agreements. Additionally, in order to maintain exclusive rights, SGI must achieve certain specified sublicense milestones or pay the Company annual exclusivity maintenance fees. The remaining revenue from smaller collaboration agreements primarily relates to the agreement with Providence Therapeutics, Inc. (“Providence”), a related party. Under this agreement, the Company recognized revenue of $0.6 million from amortization of an upfront payment, labor reimbursements, and out-of-pocket cost reimbursements. See Note 14 Related Party Transactions for further details of the Providence agreement. |
Short-term Investments
Short-term Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Short-term Investments | NOTE 4. Short-term Investments As of December 31, 2017, the Company’s short-term investments consisted of short-term bank deposits and marketable securities totaling There were no short-term investments as of December 31, 2018. The following is a summary of short-term investments at December 31, 2017: December 31, 2017 (Dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Certificates of deposit $ 1,462 $ — $ — $ 1,462 Corporate debt securities 7,149 — (3 ) 7,146 Total $ 8,611 $ — $ (3 ) $ 8,608 All short-term investments are held as available-for-sale and mature within twelve months of December 31, 2017. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 5. Fair Value Measurements The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy based on the inputs used to measure fair value. The three levels of the fair value hierarchy are as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. Level 3: Unobservable inputs in which little or no market data exists, and are therefore determined using estimates and assumptions developed by the Company, which reflect those that a market participant would use. The carrying value of cash, restricted cash, short-term bank deposits, accounts receivable, accounts payable, and accrued liabilities approximate their respective fair values due to their relative short maturities. As of December 31, 2018, all assets measured at fair value on a recurring basis consisted of cash equivalents which were classified within Level 1 of the fair value hierarchy. The following table presents the fair value hierarchy for assets measured at fair value on a recurring basis as of December 31, 2017 (in thousands): December 31, 2017 Fair value measurements using input type Level 1 Level 2 Level 3 Total Cash equivalents $ 2,024 $ — $ — $ 2,024 Certificates of deposit — 1,462 — 1,462 Corporate debt securities — 7,146 — 7,146 Total financial assets $ 2,024 $ 8,608 $ — $ 10,632 The fair value of certain financial instruments was measured and classified within Level 1 of the fair value hierarchy based on quoted prices. |
Reverse Merger with Alcobra Ltd
Reverse Merger with Alcobra Ltd. | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Reverse Merger with Alcobra Ltd. | NOTE 6. Reverse Merger with Alcobra Ltd. As described in Note 1 “Organization,” the reverse merger completed between Arcturus and Alcobra Ltd. was accounted for as an issuance of shares by the Company for the net assets of Alcobra Ltd., accompanied by a recapitalization. Arcturus was considered the acquirer for accounting and financial reporting purposes and acquired the assets and assumed the liabilities of Alcobra Ltd. Arcturus gained control of the combined company after the merger. The annual consolidated financial statements of the Company reflect the operations of the acquirer for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former stockholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer. The annual consolidated financial statements include the accounts of the Company since the effective date of the reverse capitalization and the accounts of Arcturus Therapeutics, Inc. since inception. The following summarizes the estimated fair value of the assets and liabilities acquired at November 15, 2017, the date of the merger: (in thousands) Cash and cash equivalents $ 2,032 Restricted cash 179 Short-term investments 34,188 Prepaid and other assets 434 Property, plant and equipment – held for sale 29 Intangible asset-held for sale 590 Total assets acquired 37,452 Accounts payable and accrued expenses (1,906 ) Net assets acquired $ 35,546 The estimated fair value of total considerations paid was $40,841,000 based on the shares and options of Alcobra Ltd. outstanding on the merger date as adjusted per the merger agreement of 3,997,000 multiplied by the closing price of $10.22 on the date of the merger. The excess of the fair value of the consideration paid over the fair value of the net assets acquired as detailed above was $5,295,000, which was recorded as a charge to additional paid-in capital in the equity section of the consolidated balance sheet. The Company also incurred merger-related costs totaling $1,734,000, which offset proceeds received from the transaction and were recorded as a reduction to additional paid-in capital on the consolidated balance sheet Assets acquired in the merger included an intangible asset consisting of in-process research and development for proprietary drug technology called ADAIR. At the closing date of the reverse merger, the Company entered into an agreement with Amiservice to which the Company agreed to transfer certain intellectual property related to ADAIR in exchange for a minority equity stake in a company to be formed by Amiservice for the purpose of acquiring the ADAIR assets. The Company determined that the asset met the classification criteria as held for sale in accordance with related accounting guidance when acquired and remained held for sale at December 31, 2017. To determine the fair value of the ADAIR asset, the Company utilized an independent valuation consultant who valued the asset using a market approach valuation method. In conjunction with this valuation, management judgment was required to forecast the occurrence of future events that would trigger the closing of the ADAIR sale agreement At the end of the second quarter of 2018, the Company completed the sale of its intangible assets related to the ADAIR technology (Note 2). |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | NOTE 7 . Balance sheet details Accrued liabilities consisted of the following as of December 31, 2018 and December 31, 2017. December 31, (in thousands) 2018 2017 Accrued compensation $ 974 $ 1,812 Refundable fees received 2,259 — Other accrued liabilities 674 981 Total $ 3,907 $ 2,793 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | NOTE 8 . Property and Equipment, Net Property and equipment, net consisted of the following: December 31, (in thousands) 2018 2017 Research equipment $ 2,711 $ 1,620 Computers and software 200 97 Office equipment and furniture 527 255 Leasehold improvements 34 44 Total 3,472 2,016 Less accumulated depreciation and amortization (1,497 ) (967 ) Property and equipment, net $ 1,975 $ 1,049 Depreciation and amortization expense was $582,000 and $410,000 for the years ended December 31, 2018 and December 31, 2017, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9. Debt Long-term debt with Western Alliance Bank On October 12, 2018, the Company entered into a Loan and Security Agreement with Western Alliance Bank whereby the Company received gross proceeds of $10.0 million under a long-term debt agreement (the “Loan”). The Loan has a maturity date of October 1, 2022 and carries interest at the U.S. prime rate plus 1.25%. The loan has an interest-only period of 19 months, which could be extended by an additional 6 months if certain conditions are met, followed by an amortization period of 30 months, or 24 months if the interest-only period is extended. As of December 31, 2018, the Company estimated that the interest-only period will be 19 months, followed by an amortization period of 30 month. The Company paid a loan origination fee of $128,000 which was recorded as a debt discount and is being accreted over the term of the Loan. In addition, the Company is required to pay a fee of $350,000 upon certain change of control events. Upon maturity or prepayment, the Company will be required to pay a 3% fee, or a 2% fee if the U.S. Food and Drug Administration accepts certain Investigational New Drug (“IND”) applications prior to maturity. Because acceptance of an IND is outside of the Company’s control, management estimated that the Company will be liable for a fee of 3% of the principal balance, or $300,000 upon repayment or maturity, and such fee is accreted to the debt balance using the effective interest method over the term of the Loan. The Loan is collateralized by all of the assets of the Company, excluding intellectual property, which is subject to a negative pledge. The Loan contains customary conditions of borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness and make distributions to holders of the Company’s capital stock. In addition, the Company is required to maintain at least 50% of its deposit and investment accounts, or $20 million, whichever is lower, with the Western Alliance Bank. The Loan also includes covenants which include the Company’s (1) nomination of a clinical candidate by December 31, 2018, which the Company is in compliance with, and (2) submission of a clinical candidate for Investigational New Drug application (“IND”), made to the U.S. Food and Drug Administration by December 31, 2019 and have it approved by January 31, 2020, provided that, if the Company has received net cash proceeds from sale, on or after October 12, 2018, of the Company’s equity securities in an amount of not less than $15,000,000, then the IND submission date shall be extended to May 31, 2020 and the approval date shall be extended to June 30, 2020. Should an event of default occur, including the occurrence of a material adverse effect, the Company could be liable for immediate repayment of all obligations under the Loan. As of December 31, 2018, the Company is in compliance with all covenants and conditions of the Loan. As of December 31, 2018, the outstanding long-term debt balance was $9.9 milllion, inclusive of $28,000 of accretion of the final payment and net of the unamortized debt discount of $117,000. Principal payments, including the final payment due at repayment, on the long-term debt are as follows as of December 31, 2018: Year Ending December 31, 2019 $ — 2020 2,666,667 2021 4,000,000 2021 3,633,333 Total 10,300,000 Convertible Promissory Notes On November 15, 2017 and in connection with the merger, holders of all of the Company’s convertible promissory notes that were issued in the second quarter of 2017 converted $5,795,000 of principal value and $162,000 of accrued interest into 616,824 Ordinary Shares at an average conversion rate of $10.19 per share. Additionally, the Company recognized additional expense of $348,000 as a result of the beneficial conversion feature received by the noteholders upon settlement per terms of the amended note agreements, which was charged to finance expense included in the consolidated statements of operations and comprehensive loss. The Company recognized interest expense related to its long-term debt of $186,000 and $150,000 during the years ended December 31, 2018 and 2017, respectively. |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Shareholders’ Equity | NOTE 10. Shareholders’ Equity ordinary shares Merger and reverse stock split The Company completed the merger with Alcobra Ltd. on November 15, 2017 as described in Note 6 to the consolidated financial statements. In connection with the merger, all outstanding shares of Arcturus Therapeutics, Inc. were exchanged for the Company’s ordinary shares at a rate of 0.293 ordinary shares of the Company’s stock for each share of Arcturus Therapeutics, Inc. common stock. Also on November 15, 2017 and prior to and in connection with the merger, Alcobra Ltd. effected a 1-for-7 reverse stock split of ordinary shares and changed ordinary shares authorized to 30,000,000 shares. All historical information presented herein has been retroactively restated to reflect the effect of the merger exchange ratio, reverse stock split and change to the authorized number of ordinary shares in accordance with Accounting Standards Codification Topic 260, “Earnings Per Share”. Restricted Ordinary Shares In March 2013, the founders of the Company purchased 2,783,686 ordinary shares of stock for $0.0068 per share. Of the shares purchased, 1,538,353 were subject to a repurchase option whereby the Company has an option for two months after date of termination of service to repurchase any or all of the unvested shares at the original purchase price per share. The repurchase option shall be deemed to be automatically exercised by the Company as of the end of the two-month period unless the Company notifies the purchaser that it does not intend to exercise its option. The shares will be vested (1) 25% after obtaining suitable siRNA license; (2) 25% after in vivo Warrants Warrants were issued in connection with the issuance of the Company’s preferred stock. In 2017 and in conjunction with the merger, all 192,647 of the outstanding warrants were exercised for 188,980 ordinary shares (after subtraction of shares for net exercise, when selected). The Company received proceeds of $160,000 in conjunction with the warrant exercises in 2017. Net Loss per Share Dilutive securities at December 31, 2018 that were not included in the calculation of diluted net loss per share for the year ended December 31, 2018 as they were anti-dilutive totaled 94,000. Dilutive securities that were not included in the calculation of diluted net loss per share because they were anti-dilutive totaled 3,057,000 potential shares at December 31, 2017. For the years ended December 31, 2018 and 2017, the calculation of the weighted-average number of shares outstanding excludes both unvested restricted ordinary shares of 622,667 and shares held in treasury of 43,000. In addition, for only the year ended December 31, 2017, the calculation of weighted-average number of shares outstanding excludes 79,000 shares which were issued upon the early exercise of share options and subject to future vesting. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | NOTE 11. Share-Based Compensation Arcturus Therapeutics, Inc. had one stock compensation plan prior to the merger, the 2013 Equity Incentive Plan (the “2013 Plan”) which provides for the granting of options, warrants, restricted stock awards, restricted stock units, and other equity-based compensation to the Company’s directors, employees and consultants. In connection with the merger and as required in the 2013 Plan, all outstanding options in the 2013 Plan converted into options to purchase Alcobra Ltd.’s Ordinary Shares, as renamed Arcturus Therapeutics Ltd., and the applicable share amounts and exercise prices were adjusted to reflect the exchange ratio. The 2013 Plan has been extinguished and no additional grants shall be made from the 2013 Plan. Options granted under the 2013 Plan generally expire ten years from the date of grant. There were 38,751 shares available for future issuance under the 2013 Plan at December 31, 2018. Prior to the merger, Alcobra Ltd. granted options to officers, directors, advisors, management and other key employees through the 2010 Incentive Option Plan (the “2010 Plan”). Substantially all options that were outstanding under the 2010 Plan became fully vested upon the closing of the merger. The value of these options was included as a component of the purchase price recorded in conjunction with the merger. The number of shares subject to and the exercise prices applicable to these outstanding options were adjusted in connection with the 1- for- 7 reverse share split. Options granted under the 2010 Plan generally expire ten years from the date of grant. Upon merger, the 2013 Plan was assumed by the 2010 Plan. The Company generally issues new shares upon option exercise. There were 94,001 shares available for future issuance under the 2010 Plan as of December 31, 2018; however, the Company does not intend to issue additional shares under the 2010 Plan. In August 2018, the Company adopted the 2018 Omnibus Equity Incentive Plan (“2018 Plan”). Under the 2018 Plan, the Company is authorized to issue up to a maximum of 1,100,000 ordinary shares pursuant to the exercise of incentive share options or other awards provided for therein. In August 2018, the Company issued a certain number of options to purchase ordinary shares to a group of employees as well as options to purchase a total of 220,000 Ordinary Shares to its executives. The Company also issued options to purchase a total of 130,000 Ordinary Shares to the non-executive members of the Company’s board of directors. As of December 31, 2018, there were 470,000 shares available for future issuance under the 2018 Plan. Share Options The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of share options granted: For the Year Ended December 31, 2018 2017 Expected life (in years) 6.07 7.3 Expected volatility 73.3 % 76.4 % Expected dividend yield — % — % Risk-free interest rate 2.77 % 1.87 % Grant date weighted average fair value $ 5.38 $ 7.94 The following table summarizes the Company’s share option activity for the year ended December 31, 2018: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding – December 31, 2017 344,055 $ 8.70 Granted 1,046,931 $ 8.13 Exercised (62,224 ) $ 5.34 $ 218 Forfeited/cancelled (139,329 ) $ 16.92 Outstanding – December 31, 2018 1,189,433 $ 7.41 9.11 $ 301 Exercisable – December 31, 2018 280,782 $ 5.77 7.53 $ 255 Exercisable and expected to vest – December 31, 2018 1,189,433 $ 7.41 9.11 $ 301 At December 31, 2018, the total unrecognized compensation cost of $4.4 million will be recognized over the weighted-average remaining service period of approximately 3.1 years. The fair value of the options vested during the years ended December 31, 2018 and 2017 was $972,000 and $669,000, respectively. Certain options granted were exercised prior to vesting, and are subject to repurchase by the Company at the lower of the original issue price or fair value and will vest according to the respective option agreement. As of December 31, 2017, Share-based compensation expenses included in the Company’s statements of operations and comprehensive loss for the years ended December 31, 2018 and 2017 were: For the Year Ended December 31, (in thousands) 2018 2017 Research and development $ 566 $ 38 General and administrative 693 2,132 Total $ 1,259 $ 2,170 Share-based compensation expense for the year ended December 31, 2017 includes $1,495,000 of expense related to a modification of a restricted Ordinary Shares agreement as discussed in Note 10. During 2017, the Company granted options for 58,600 shares to two board members at an exercise price below fair value at the grant date. The awards were subject to performance conditions based on closing the reverse merger with Alcobra Ltd. and execution of a facility lease. All of the options vested during 2017, and related expense of $568,000 is included in general and administrative expense for the year ended December 31, 2017 related to the awards. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 12. Income Taxes A reconciliation of loss before income taxes for domestic and foreign locations for the years ended December 31, 2018 and 2017 is as follows: For the Year Ended December 31, (In thousands) 2018 2017 United States $ (21,604 ) $ (10,820 ) Foreign (181 ) (81 ) Total loss before income taxes $ (21,785 ) $ (10,901 ) The Company accounts for income taxes in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes A reconciliation of income tax expense for the years ended December 31, 2018 and 2017 is as follows (in millions): December 31, 2018 2017 Beginning balance of unrecognized tax benefits $ 0.4 $ 0.4 Settlement of prior period tax positions — — Increase for prior period tax positions — — Increase for current period tax positions — — Ending balance of unrecognized tax benefits $ 0.4 $ 0.4 Included in the balance of unrecognized tax benefits at both December 31, 2018 and 2017 is $0.4 million that could impact the Company’s effective tax rate, if recognized, subject to a valuation allowance. The Company is subject to taxation and files income tax returns in the United States, California and Israel. Currently, no historical years are under examination. The Company’s tax years from 2013 to date are subject to examination by the Israeli, U.S. and state taxing authorities due to the carryforward of unutilized net operating losses and research and development credits. The Company’s policy is to recognize interest expense and penalties related to income tax matters as income tax expense. As of December 31, 2018, there are unrecognized tax benefits of $0.2 million and $0.2 million for the United States and California, respectively. There was no tax related interest or penalties recognized for the years ended December 31, 2018 and 2017. The Company does not anticipate any material changes to its unrecognized tax benefits within the next twelve months. The significant components of deferred income taxes at December 31, 2018 and 2017: December 31, (in thousands) 2018 2017 Deferred tax assets: Net operating loss $ 8,399 $ 25,101 Tax credits 35 35 Accrued liabilities 261 227 Deferred revenue 1,713 1,162 Depreciation and amortization 46 — Share-based compensation 85 90 Total gross deferred tax assets 10,539 26,615 Deferred tax liabilities: Depreciation and amortization — (96 ) Valuation allowance (10,539 ) (26,519 ) Net deferred tax asset $ — $ — The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. At December 31, 2018, the Company had federal and state net operating losses, or NOL, carryforwards of approximately $33.2 million and $30.2 million, respectively. The federal NOL carryforwards begin to expire in 2034, and the state NOL carryforwards begin to expire in 2034. The Company has foreign NOL carryforwards of approximately $89.0 million that do not expire and can be carried forward indefinitely. Due to the Company’s recent plan of the Redomiciliation, it is more likely than not that the foreign NOL will not be realized. As a result, the Company has removed the foreign NOL carryforwards from its deferred tax asset schedule and recorded a corresponding decrease to its valuation allowance beginning January 1, 2018. Excluded from the deferred tax assets for the net operating losses are pre-acquisition Alcobra Inc. and Alcobra Ltd. federal and foreign losses of $0.3 million and $20.4 million, respectively. The Company does not believe these losses will be available to use in the future due to limitations under IRC Section 382, lack of operations in Israel where the NOLs were generated and contemplated restructuring. At December 31, 2018, the Company had federal and state research and development credit carryforwards of approximately $0.2 million and $0.2 million, respectively. The federal credit carryforwards begin to expire in 2033, and the state credits carry forward indefinitely. The Company has also incurred research and development expenses of $17.0 million and $15.9 million for the years ended December 31, 2018 and 2017, respectively. The Company believes that a portion of these expenditures will yield additional federal and California tax credits; however, the potential credits under the tax laws have not yet been calculated. Pursuant to Internal Revenue Code of 1986, as amended (the Code) Sections 382 and 383, annual use of the Company’s federal and California net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has not completed a Code Section 382 analysis regarding the limitation of net operating loss carryforwards and other tax attributes. There is a risk that changes in ownership have occurred since Company’s formation. If a change in ownership were to have occurred, the NOL carryforwards and other tax attributes could be limited or restricted. If limited, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, related to the Company’s operations in the U.S. will not impact the Company’s effective tax rate. A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2018 2017 Federal statutory income tax rate 21.0 % 34.0 % State income taxes, net of federal benefit 5.3 % 4.4 % Foreign rate differential (1.3 %) 0.2 % Share-based compensation (0.2 %) — % Tax Cuts and JOBS Act — % (22.0 %) Change in tax rate — % (8.3 %) Change in valuation allowance (20.7 %) 1.8 % Other (3.0 %) (1.8 %) Permanent differences (1.1 %) (8.3 %) Provision for income taxes — % — % The Tax Cuts and Jobs Act (the Act) was enacted in the U.S. on December 22, 2017. The Act reduced the corporate tax rate to 21% from 35% rate, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign-sourced earnings. In 2017, the Company recorded provisional amounts for certain enactment-date effects of the Act by applying the guidance in SAB 118 because it had not yet completed its enactment-date accounting for these effects. SAB 118 measurement period The Company applied the guidance in SAB 118 when accounting for the enactment-date effects of the Act in 2017. At December 31, 2017, the Company had not completed its accounting for all of the enactment-date income tax effects of the Act under ASC 740, Income Taxes. At December 31, 2018, the Company completed its accounting for all of the enactment-date income tax effects of the Act. As further discussed below, during 2018, the Company did not recognize adjustments to the provisional amounts recorded at December 31, 2017. As of December 31, 2017, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future (which was generally 21%), by recording a provisional amount of $2.4 million, which was fully offset by a valuation allowance of the same amount. Upon further analysis of certain aspects of the Act and refinement of its calculations during the 12 months ended December 31, 2018, the Company found no other adjustments were necessary. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13. Commitments and Contingencies Cystic Fibrosis Foundation Therapeutics Funding agreement The Company has received royalty bearing grants sponsored by Cystic Fibrosis Foundation Therapeutics, Inc. (“CFFT”). Should the awards result in a successful product, the Company will pay CFFT a specified payment amount in installments following commercialization based on a formula that is six times the total award amount, plus a payment equal to the awarded payments, within sixty days after aggregate net sales of the product exceed certain thresholds. Further, in the event Operating Leases The Company leases office and lab space for its corporate headquarters in San Diego, California under a non-cancelable operating lease. The initial lease term ended February 2018 and had monthly rental payments with escalations during the term of the lease. In October 2017, the Company entered into a new lease for The commencement of the lease began in March 2018 and the lease extends for approximately 84 months from the commencement date. Monthly rental payments are due under the lease and there are escalating rent payments during the term of the lease. For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as rent expense on a straight-line basis over the lease term. Leasehold improvement incentives paid to the Company by the landlord are recorded as a deferred rent and amortized as a reduction of rent expense over the lease term. Rent expense totaled $1.1 million and $334,000 for the years ended December 31, 2018 and 2017, respectively. Future minimum payments under leases and lease commitments with initial terms greater than one year were as follows at (in thousands) 2019 $ 1,268 2020 1,277 2021 1,315 2022 1,350 2023 1,390 Thereafter 1,745 Total $ 8,345 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14. Related Party Transactions During 2016, the Company entered into a Research Collaboration and License Agreement with a related party, Providence, whose CEO and President is also a shareholder of the Company, to identify and optimize microRNA modulators and/or mimetics for the treatment of neoplastic diseases. In April 2017, the Providence Agreement was amended to include mRNA for the treatment of neoplastic disease. In July 2018, the Providence Agreement was amended and restated to cover brain neoplasms, breast neoplasms and ovarian neoplasms. Each party is responsible for their own research costs under the agreement, and Providence is responsible for all of the development costs through the completion of Phase 2 clinical trials. The Company is entitled to share in future product revenue of each product provided the Company shares in the product’s post Phase 2 costs. Separately, Providence has agreed to pay for FTEs at a specified rate. For the years ended December 31, 2018 and 2017, the Company has recognized $0.6 million and $1.0 million, respectively, in revenue related to the amortization of the upfront payment and revenue related to the payment for FTEs and expense reimbursements. During May 2018, the Company agreed to reimburse professional fees related to the proxy incurred by Joseph Payne, President & CEO, Board of Director, and Padmanabh Chivukula, COO & CSO, totaling $1.4 million. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2018 | |
Loss Contingency Information About Litigation Matters [Abstract] | |
Litigation | Note 15. Litigation Previously Disclosed Litigation in Israel and California and California Arbitration The Company, executive officers Joseph Payne (CEO) and Padmanabh Chivukula (COO and CSO) and certain former and current members of the Company’s board of directors were party to now terminated lawsuits filed in Israel and California and an arbitration in California. These lawsuits and the arbitration emanated from disputes among certain of these parties in connection with actions taken by former board members to terminate the employment of Mr. Payne and Dr. Chivukula and lawsuits filed by Mr. Payne in response to these terminations. Mr. Payne and Dr. Chivukula have been reappointed to their roles as CEO (Payne) and COO and CSO (Chivukula) with the Company and the Company entered into an Agreement and Release with its current officers and certain former directors and officers to terminate all of the then ongoing litigation in Israel and the Unites States and the arbitration that arose in connection with the terminations of Mr. Payne and Dr. Chivukula. Accordingly, all of the previously described lawsuits and the arbitration have been dismissed with prejudice. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16. Subsequent Events Effective January 1, 2019, the Company appointed Andrew Sassine as its Chief Financial Officer, whose employment terms are pending approval from the shareholders under the Israeli law. All compensation paid to Mr. Sassine from January 1, 2019 to the date of this filing is subject to refund to the Company should his appointment not be approved by shareholders. On February 11, 2019, the Company announced its intention to initiate a process to redomicile from an Israeli limited company to a U.S. corporation. The final form and timing of the redomiciliation has not yet been finalized and the redomiciliation is subject to the approval of the shareholders. On February 11, 2019, the Company filed an application with the Tel Aviv District Court to approve the convening of a general shareholders meeting of the Company for the approval of the redomiciliation pursuant to Sections 350 and 351 of the Companies Law. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of Arcturus Therapeutics Ltd. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These financial statements are prepared in conformity with accounting principles generally accepted in the United States (U.S. GAAP), which requires management to make estimates and assumptions regarding the valuation of certain debt and equity instruments, the equity method investment, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, expense accruals, and other matters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment which is the research and development of medical applications for the Company’s nucleic acid-focused technology. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date of purchase. |
Restricted Cash | Restricted cash Restricted cash represents cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord for the Company’s offices. Statement of cash flows The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2018 2017 Cash and cash equivalents $ 36,709 $ 24,965 Restricted cash — 166 Non-current Restricted cash 107 107 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 36,816 $ 25,238 |
Short-term Bank Deposits | Short-term Bank Deposits Short-term bank deposits (Note 4) are deposits with maturities of more than three months and up to one year when acquired. Short-term bank deposits are presented at their cost, including accrued interest and are included in the balance of short-term investments in the consolidated balance sheet. |
Short-term Investments | Short-term Investments The Company accounts for short-term investments (Note 4) in accordance with ASC No. 320, Investments- Debt and Equity Securities The Company has classified all of its debt securities and certificates of deposit as available-for-sale securities. Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in accumulated other comprehensive loss in shareholders’ equity. Realized gains and losses on sales of investments are included in interest income and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest and dividends on securities are included in interest income. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities below the amortized cost basis of such securities is judged to be other-than-temporarily impaired. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and if the entity has the intent to sell the security, or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. The Company did not recognize any other-than-temporary impairment charges on its marketable securities during the year ended December 31, 2017. The Company held no available-for-sale securities as of December 31, 2018. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available (Note 5). Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available under the circumstances. The hierarchy consists of three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the net invoice value and are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company reserves specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. No |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash, cash equivalents and short-term investments. The Company limits its exposure to credit loss by placing its cash, cash equivalents, and investments with high credit quality financial institutions in instruments with short maturities. There was one customer that comprised 96% of the total accounts receivable balance at December 31, 2018 and one customer that comprised the total accounts receivable balance at December 31, 2017. For the year ended December 31, 2018, the Company’s top three customers collectively |
Intangible Assets Held for Sale and Equity Method Investment | Intangible Assets Held for Sale and Equity Method Investment At the end of the second quarter of 2018, the Company completed the sale of its intangible assets related to the ADAIR technology, which was accounted for as an intangible asset held for sale as of December 31, 2017. Pursuant to the asset purchase agreement for ADAIR, the Company received a 30% ownership interest in the common stock of a privately held company in consideration for the sale of the ADAIR technology. As this ownership interest is greater than 20% and one executive of the Company holds a seat on the investee’s board of directors, the Company has the ability to exercise significant influence over the operating and financial policies of this investee; therefore, the Company accounts for this investment as an equity method investment. The Company has no requirement to invest further in this private company and the ownership percentage may be diluted in the future. The Company will account for this investment as an equity method investment until the investment no longer meets the definition of an equity method investment. The Company accounts for its share of the earnings or losses of the investee with a reporting lag of three months beginning the third quarter of 2018, as the financial statements of the investee are not completed on a basis that is sufficient for the Company to apply the equity method on a current basis. The Company has recorded $0.3 million of its share of losses of the investee as of December 31, 2018. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the respective useful lives of the assets, ranging from three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods, as well as the strategic significance of the assets to the Company’s business objectives. The Company did not recognize any impairment losses for the years ended December 31, 2018 or 2017. |
Comprehensive Income/Loss | Comprehensive Income/Loss Comprehensive income/loss is defined as the change in shareholders’ equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss represents unrealized losses on the Company’s marketable securities. The income tax effect related to unrealized losses was immaterial for December 31, 2018 or 2017. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when each of the following four criteria is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or as services are rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. Multiple-element arrangements may include (i) grants of licenses, or options to obtain licenses, to intellectual property, (ii) research and development services, (iii) participation on joint research or joint development committees, or (iv) manufacturing or supply services. Payments the Company may receive under these arrangements typically include one or more of the following: non-refundable upfront license fees, option exercise fees, funding of research or development efforts, amounts due upon the achievement of specified objectives, or royalties on future product sales. Multiple-element arrangements require the separability of deliverables included in an arrangement into different units of accounting and the allocation of arrangement consideration to the units of accounting. The evaluation of multiple-element arrangements requires management to make judgments about (i) the identification of deliverables, (ii) whether such deliverables are separable from the other aspects of the contractual relationship, (iii) the estimated selling price of each deliverable, and (iv) the expected period of performance for each deliverable. To determine the units of accounting under a multiple-element arrangement, management evaluates certain separation criteria, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances for each arrangement. Management then estimates the selling price for each unit of accounting and allocates the arrangement consideration to each unit using the relative selling price method. The allocated consideration for each unit of accounting is recognized based on the method most appropriate for that unit of account and in accordance with the revenue recognition criteria detailed above. If there are deliverables in an arrangement that are not separable from other aspects of the contractual relationship, they are treated as a combined unit of accounting, with the allocated revenue for the combined unit recognized in a manner consistent with the revenue recognition applicable to the final deliverable in the combined unit. Payments received prior to satisfying the relevant revenue recognition criteria are recorded as deferred revenue in the accompanying consolidated balance sheets and recognized as revenue when the related revenue recognition criteria are met. Most of the collaboration agreements provide for non-refundable milestone payments. The Company recognizes revenue that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. A milestone is considered substantive when the consideration payable to the Company for such milestone (i) is consistent with its performance necessary to achieve the milestone or the increase in value to the collaboration resulting from its performance, (ii) relates solely to its past performance and (iii) is reasonable relative to all of the other deliverables and payments within the arrangement. In making this assessment, management considers all facts and circumstances relevant to the arrangement, including factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the milestone, the level of effort and investment required to achieve the milestone and whether any portion of the milestone consideration is related to future performance or deliverables. Management periodically reviews the estimated performance periods under the collaboration agreements, which provide for non-refundable upfront payments and fees. Management adjusted the periods over which revenue was recognized when appropriate to reflect changes in assumptions relating to the estimated performance periods. In the first quarter of 2019, the Company will adopt new accounting guidance that will change future patterns of revenue recognition. The Company records revenues related to the reimbursement of costs incurred under the collaboration agreements where it acts as a principal, controls the research or development activities and bears credit risk. Under its collaboration agreements, the Company is reimbursed for associated out-of-pocket costs and for a certain amounts of full-time equivalent, or FTE, costs based on an agreed-upon FTE rate. The gross amount of these pass-through reimbursed costs is reported as revenue in the accompanying consolidated statements of operations and comprehensive loss, while the actual expenses for which the Company is reimbursed are reflected as research and development costs. |
Research and Development Costs, net | Research and Development Costs, net Research and development costs are expensed as incurred. These expenses result from the Company’s independent research and development efforts as well as efforts associated with collaboration arrangements. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract research and manufacturing services, the costs of laboratory supplies, equipment and facilities and other external costs are shown net of any grants. |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation for equity awards granted to employees, officers, and directors as an expense on the statements of operations. Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Share options have a ten-year life and generally vest 25% on the first anniversary of the grant and in 1/48th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. The fair value of share options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common shares, expected term of the option before exercise, expected volatility of the Company’s Ordinary Shares, expected dividend yield, and a risk-free interest rate. The Company has limited historical share option activity and therefore estimates the expected term of share options granted using the simplified method, which represents the average of the contractual term of the share option and its weighted-average vesting period. The expected volatility of share options is based upon the historical volatility of a peer group of publicly traded companies. The Company has not declared or paid any dividends and do not currently expect to do so in the foreseeable future. The risk-free interest rates used are based on the implied yield currently available in United States Treasury securities at maturity with a term equivalent to the expected term of the share options. The effect of forfeited awards is recorded when the forfeiture occurs. Share-based awards granted to non-employees are remeasured at each reporting date and compensation costs are recognized as services are rendered, generally on a straight-line basis. The Company believes that the fair value of these awards is more reliably measurable than the fair value of the services rendered. There were no share-based awards granted to non-employees during 2018 and 2017. |
Ordinary Shares Valuation | Ordinary Shares Valuation Prior to the merger and due to the absence of an active market for the Company’s ordinary shares, the Company utilized third-party valuations which utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its Ordinary Shares. |
Income Tax Expense | Income Tax Expense Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates, along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. Management has considered estimated taxable income and ongoing prudent and feasible tax planning strategies in assessing the amount of the valuation allowance. Based upon the weight of available evidence, which includes the Company’s historical operating performance and limited potential to utilize tax credit carryforwards, the Company has determined that total deferred tax assets should be fully offset by a valuation allowance. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. The Company is required to file federal and state income tax returns in the United States and various other state jurisdictions. The Company also files income tax returns in the foreign countries in which it operates. The preparation of these income tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by the Company. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement, and classification in the consolidated financial statements of tax positions taken or expected to be taken in a tax return. The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017 resulting in significant modifications to existing law. The Company follows the guidance of Staff Accounting Bulletin (SAB) 118, which provides additional clarification regarding the application of ASC 740 in situations where the Company does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act for the reporting period in which the Act was enacted. SAB 118 provides for a measurement period beginning in the reporting period that includes the Act’s enactment and ending when the Company has obtained, prepared and analyzed the information needed in order to complete the accounting requirements, but in no circumstances should the measurement period extend beyond one year from the enactment date. The Company has completed its analysis of the Act’s income tax effects. In total, the Company recorded $2.4 million related to the remeasurement of deferred tax assets which was fully offset by a corresponding decrease in the valuation allowance. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of ordinary shares outstanding for the period, without consideration for ordinary share equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of ordinary shares and dilutive ordinary share equivalents outstanding for the period determined using the treasury-stock method. Dilutive ordinary shares for the year ended December 31, 2018 are comprised of share options. For the year ended December 31, 2017, dilutive ordinary shares are comprised of options, convertible preferred stock, convertible notes, and warrants. No dividends were declared or paid during the reported periods. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) amended the existing Accounting Standards Update (ASU) for revenue recognition No. 2014-09, Revenue from Contracts with Customers The FASB subsequently issued amendments to ASU No. 2014-09 that have the same effective date and transition date. These new standards will become effective for the Company on January 1, 2019. The Company will implement the new guidance using the modified retrospective approach. The Company has performed a review of these new standards as compared to its current accounting policies for collaborative relationships. The Company is evaluating the impact of the new standard on historical revenue recorded for its collaboration agreements. This ongoing evaluation is dependent upon the resolution of certain questions relating to the application of the new revenue recognition guidance for collaboration agreements which will ultimately determine the impact, if any, the adoption of this standard may have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements The Company expects Topic 842 will have a material effect on its consolidated balance sheet. However, the Company does not expect Topic 842 will have a material effect on its consolidated statements of operations and comprehensive loss or consolidated statements of cash flows. While the Company continues to assess all of the effects of adoption, the most significant effects relate to (1) the recognition of right-of-use (ROU) assets and lease liabilities within a range of approximately approximately $5.5 million to $6.45 million using an assumed incremental borrowing rate of 8.4%, primarily resulting from leases of office and laboratory space; (2) the derecognition of deferred rent of approximately $0.5 million for certain lease incentives received; and (3) significant new disclosure requirements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Recently Adopted Accounting Pronouncements Effective January 1, 2017, the Company adopted ASU No. 2017-09 Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting In November 2016, the FASB issued ASU 2016-18, Restricted Cash In January 2017, the FASB issued ASU 2017-01, Business Combinations “Clarifying the Definition of a Business |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statement of cash flows: As of December 31, (in thousands) 2018 2017 Cash and cash equivalents $ 36,709 $ 24,965 Restricted cash — 166 Non-current Restricted cash 107 107 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 36,816 $ 25,238 |
Collaboration Revenue (Tables)
Collaboration Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Collaboration Agreements [Abstract] | |
Summary of Collaboration Revenue | The following table summarizes the Company’s collaboration revenues for the periods indicated (in thousands). Approximately $5.0 million and $1.0 million of total collaboration revenue represents revenue derived from foreign countries for the years ended December 31, 2018 and 2017, respectively. Year Ended December 31, (Dollars in thousands) 2018 2017 Collaboration Partner – Janssen $ 1,232 $ 4,862 Collaboration Partner – Ultragenyx 6,794 5,639 Collaboration Partner – Takeda 1,137 1,403 Collaboration Partner – CureVac 4,427 — Other 2,163 1,094 $ 15,753 $ 12,998 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Short-term Investments | There were no short-term investments as of December 31, 2018. The following is a summary of short-term investments at December 31, 2017 December 31, 2017 (Dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Certificates of deposit $ 1,462 $ — $ — $ 1,462 Corporate debt securities 7,149 — (3 ) 7,146 Total $ 8,611 $ — $ (3 ) $ 8,608 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | As of December 31, 2018, all assets measured at fair value on a recurring basis consisted of cash equivalents which were classified within Level 1 of the fair value hierarchy. The following table presents the fair value hierarchy for assets measured at fair value on a recurring basis as of December 31, 2017 (in thousands): December 31, 2017 Fair value measurements using input type Level 1 Level 2 Level 3 Total Cash equivalents $ 2,024 $ — $ — $ 2,024 Certificates of deposit — 1,462 — 1,462 Corporate debt securities — 7,146 — 7,146 Total financial assets $ 2,024 $ 8,608 $ — $ 10,632 |
Reverse Merger with Alcobra L_2
Reverse Merger with Alcobra Ltd. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Fair Value of Assets and Liabilities Acquired | The following summarizes the estimated fair value of the assets and liabilities acquired at November 15, 2017, the date of the merger: (in thousands) Cash and cash equivalents $ 2,032 Restricted cash 179 Short-term investments 34,188 Prepaid and other assets 434 Property, plant and equipment – held for sale 29 Intangible asset-held for sale 590 Total assets acquired 37,452 Accounts payable and accrued expenses (1,906 ) Net assets acquired $ 35,546 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of December 31, 2018 and December 31, 2017. December 31, (in thousands) 2018 2017 Accrued compensation $ 974 $ 1,812 Refundable fees received 2,259 — Other accrued liabilities 674 981 Total $ 3,907 $ 2,793 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Summary of Components of Property and Equipment | Property and equipment, net consisted of the following: December 31, (in thousands) 2018 2017 Research equipment $ 2,711 $ 1,620 Computers and software 200 97 Office equipment and furniture 527 255 Leasehold improvements 34 44 Total 3,472 2,016 Less accumulated depreciation and amortization (1,497 ) (967 ) Property and equipment, net $ 1,975 $ 1,049 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | Principal payments, including the final payment due at repayment, on the long-term debt are as follows as of December 31, 2018: Year Ending December 31, 2019 $ — 2020 2,666,667 2021 4,000,000 2021 3,633,333 Total 10,300,000 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Weighted Average Assumptions Used in Black -Scholes Valuation Model | The following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fair value of share options granted: For the Year Ended December 31, 2018 2017 Expected life (in years) 6.07 7.3 Expected volatility 73.3 % 76.4 % Expected dividend yield — % — % Risk-free interest rate 2.77 % 1.87 % Grant date weighted average fair value $ 5.38 $ 7.94 |
Summary of Share Option Activity | The following table summarizes the Company’s share option activity for the year ended December 31, 2018: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding – December 31, 2017 344,055 $ 8.70 Granted 1,046,931 $ 8.13 Exercised (62,224 ) $ 5.34 $ 218 Forfeited/cancelled (139,329 ) $ 16.92 Outstanding – December 31, 2018 1,189,433 $ 7.41 9.11 $ 301 Exercisable – December 31, 2018 280,782 $ 5.77 7.53 $ 255 Exercisable and expected to vest – December 31, 2018 1,189,433 $ 7.41 9.11 $ 301 |
Schedule of Share-based Compensation Expenses | Share-based compensation expenses included in the Company’s statements of operations and comprehensive loss for the years ended December 31, 2018 and 2017 were: For the Year Ended December 31, (in thousands) 2018 2017 Research and development $ 566 $ 38 General and administrative 693 2,132 Total $ 1,259 $ 2,170 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Reconciliation of Loss Before Income Taxes for Domestic and Foreign Locations | A reconciliation of loss before income taxes for domestic and foreign locations for the years ended December 31, 2018 and 2017 is as follows: For the Year Ended December 31, (In thousands) 2018 2017 United States $ (21,604 ) $ (10,820 ) Foreign (181 ) (81 ) Total loss before income taxes $ (21,785 ) $ (10,901 ) |
Summary of Reconciliation of Income Tax Expense | A reconciliation of income tax expense for the years ended December 31, 2018 and 2017 is as follows (in millions): December 31, 2018 2017 Beginning balance of unrecognized tax benefits $ 0.4 $ 0.4 Settlement of prior period tax positions — — Increase for prior period tax positions — — Increase for current period tax positions — — Ending balance of unrecognized tax benefits $ 0.4 $ 0.4 |
Significant Components of Deferred Income Taxes | The significant components of deferred income taxes at December 31, 2018 and 2017: December 31, (in thousands) 2018 2017 Deferred tax assets: Net operating loss $ 8,399 $ 25,101 Tax credits 35 35 Accrued liabilities 261 227 Deferred revenue 1,713 1,162 Depreciation and amortization 46 — Share-based compensation 85 90 Total gross deferred tax assets 10,539 26,615 Deferred tax liabilities: Depreciation and amortization — (96 ) Valuation allowance (10,539 ) (26,519 ) Net deferred tax asset $ — $ — |
Reconciliation of Federal Statutory Income Tax Rate to Company's Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2018 2017 Federal statutory income tax rate 21.0 % 34.0 % State income taxes, net of federal benefit 5.3 % 4.4 % Foreign rate differential (1.3 %) 0.2 % Share-based compensation (0.2 %) — % Tax Cuts and JOBS Act — % (22.0 %) Change in tax rate — % (8.3 %) Change in valuation allowance (20.7 %) 1.8 % Other (3.0 %) (1.8 %) Permanent differences (1.1 %) (8.3 %) Provision for income taxes — % — % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Under Leases and Lease Commitments | Future minimum payments under leases and lease commitments with initial terms greater than one year were as follows at (in thousands) 2019 $ 1,268 2020 1,277 2021 1,315 2022 1,350 2023 1,390 Thereafter 1,745 Total $ 8,345 |
Organization (Details Textual)
Organization (Details Textual) | Oct. 12, 2018USD ($) | Nov. 15, 2017₪ / sharesshares | Dec. 31, 2018USD ($) | Oct. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017₪ / shares |
Organization And Significant Accounting Policies [Line Items] | ||||||
Business merger date | Nov. 15, 2017 | |||||
Par value per share | ₪ / shares | ₪ 0.07 | |||||
Reverse split of ordinary shares | 1-for-7 | |||||
Reverse split of ordinary shares, ratio | 0.1429 | 0.1429 | ||||
Accumulated deficit | $ (44,874,000) | $ (23,089,000) | ||||
Loan and Security Agreement [Member] | Term Loan [Member] | ||||||
Organization And Significant Accounting Policies [Line Items] | ||||||
Gross proceeds from long-term debt agreement | $ 10,000,000 | |||||
Sales Agreement [Member] | Leerink Partners LLC [Member] | Maximum [Member] | ||||||
Organization And Significant Accounting Policies [Line Items] | ||||||
Aggregate amount of ordinary shares sold | $ 30,000,000 | |||||
Alocobra Limited [Member] | ||||||
Organization And Significant Accounting Policies [Line Items] | ||||||
Stock issued during period, shares, acquisitions | shares | 6,631,712 | |||||
Par value per share | ₪ / shares | ₪ 0.07 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |
Dec. 31, 2018USD ($)SegmentCustomershares | Dec. 31, 2017USD ($)Customershares | |
Summary Of Significant Accounting Policy [Line Items] | ||
Number of Operating Segments | Segment | 1 | |
Non-current restricted cash | $ 107,000 | $ 107,000 |
Lease expiration year | 2025 | |
Restricted cash, current | 166,000 | |
Available-for-sale securities | $ 0 | |
Allowance for Doubtful Accounts Receivable | $ 0 | 0 |
Equity method ownership percentage | 30.00% | |
Share of losses for investee | $ 302,000 | |
Impairment losses | $ 0 | 0 |
Share options expiration period | 10 years | |
Vesting period | 4 years | |
Vesting description | Share-based compensation is recognized over the requisite service period of the individual awards using the straight-line attribution method, which generally equals the vesting period. Share options have a ten-year life and generally vest 25% on the first anniversary of the grant and in 1/48th equal installments on each monthly anniversary thereafter, such that options are fully vested on the four-year anniversary of the date of grant. | |
Share-based awards granted | shares | 1,046,931 | |
Tax Cuts and Jobs Act, accounting complete, date | Dec. 22, 2017 | |
Accounting requirements | $ 0 | |
Tax cuts and jobs act of 2017, remeasurement of deferred tax assets | 2,400,000 | |
Dividends declared | 0 | 0 |
Dividends paid | $ 0 | $ 0 |
ASU 2016-02 [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Incremental borrowing rate | 8.40% | |
Derecognition of deferred rent | $ 500,000 | |
Non-employee [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Share-based awards granted | shares | 0 | 0 |
First Year Anniversary of the Grant [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Vesting percentage | 25.00% | |
Minimum [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Equity method ownership percentage | 20.00% | |
Property and equipment, useful lives | 3 years | |
Minimum [Member] | ASU 2016-02 [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Operating lease assets | $ 5,500,000 | |
Operating lease liabilities | $ 5,500,000 | |
Maximum [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Property and equipment, useful lives | 5 years | |
Maximum [Member] | ASU 2016-02 [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Operating lease assets | $ 6,500,000 | |
Operating lease liabilities | $ 6,500,000 | |
Credit Risk [Member] | Accounts Receivable [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Number of customers | Customer | 1 | 1 |
Concentration risk, percentage | 96.00% | |
Credit Risk [Member] | Revenue [Member] | ||
Summary Of Significant Accounting Policy [Line Items] | ||
Number of customers | Customer | 3 | 3 |
Concentration risk, percentage | 80.00% | 92.00% |
Schedule of Cash and Cash Equiv
Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 36,709,000 | $ 24,965,000 | |
Restricted cash | 166,000 | ||
Non-current Restricted cash | 107,000 | 107,000 | |
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 36,816,000 | $ 25,238,000 | $ 8,345,000 |
Collaboration Revenue (Details
Collaboration Revenue (Details Textual) | Feb. 11, 2019 | Oct. 24, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($)Agreement |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | $ 15,753,000 | $ 12,998,000 | ||||
Collaboration Partner – CureVac Entered into Co-Development Agreement [Member] | Subsequent Event [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration agreement termination date | Feb. 11, 2019 | |||||
Percentage of global rights reassumed | 100.00% | |||||
Percentage share of collaborative arrangement | 50.00% | |||||
Collaboration Partner – CureVac [Member] | Subsequent Event [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Percentage share of collaborative arrangement | 50.00% | |||||
Research Collaboration and Exclusive License Agreement [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 15,753,000 | 12,998,000 | ||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner Janssen 2015 Agreements [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 4,900,000 | |||||
Number of collaboration agreements | Agreement | 2 | |||||
Revenue earned and recognized upon amortization of the upfront payment | 2,000 | |||||
Labor and expense reimbursements revenue | 4,400,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner Janssen 2017 Agreements [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 1,200 | 100 | ||||
Upfront payment received | 7,700,000 | |||||
Revenue recognition potential milestone revenue recognized | 56,500 | |||||
Upfront fee received | 7,700,000 | |||||
Deferred revenue | 6,500,000 | 7,600,000 | ||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner Janssen 2017 Agreements [Member] | Minimum [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Option exercise revenue range per target | 1,000,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner Janssen 2017 Agreements [Member] | Maximum [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Option exercise revenue range per target | 5,000,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Ultragenyx [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 6,794,000 | 5,639,000 | ||||
Labor and expense reimbursements revenue | 2,300,000 | 3,700,000 | ||||
Revenue recognition potential milestone revenue recognized | 69,500,000 | |||||
Deferred revenue | $ 2,700,000 | 5,800,000 | ||||
Revenue recognition, milestone | Ultragenyx will pay the Company a one-time milestone payment after the first optimized lead designation for the first product with respect of such development target. | |||||
Royalty payment term description | Ultragenyx will pay royalties as a percentage of net sales on a product-by-product and country-by-country basis during the applicable royalty term up to and including double digits. | |||||
Amortization period expected termination date. | Mar. 31, 2019 | |||||
Revenue recognized as one time payment | 2,000,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Ultragenyx [Member] | Up-Front Fee [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Up-front fee deferred and recognized | $ 10,000,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Ultragenyx [Member] | Minimum [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Option exercise revenue range per target | $ 2,000,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Ultragenyx [Member] | Maximum [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Option exercise revenue range per target | $ 5,000,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Takeda [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 1,137,000 | 1,403,000 | ||||
Upfront fee received | $ 100,000 | |||||
Revenue recognition research activities period | 18 months | |||||
Regularly scheduled research funding payments | $ 3,700,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – CureVac [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 4,427,000 | |||||
Research Collaboration and Exclusive License Agreement [Member] | Foreign Countries [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 5,000,000 | 1,000,000 | ||||
mRNA Technology [Member] | Collaboration Partner – CureVac Entered into Co-Development Agreement [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 3,300,000 | |||||
mRNA Technology [Member] | Collaboration Partner – CureVac [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | 4,400,000 | |||||
Labor and expense reimbursements revenue | 3,800,000 | |||||
Deferred revenue | 4,400,000 | |||||
Upfront license fees | $ 5,000 | |||||
Development and option agreement date | Jan. 31, 2018 | |||||
Research and Exclusive License Agreement [Member] | Synthetic Genomics, Inc [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Collaboration revenue | $ 2,200,000 | |||||
Upfront fee received | $ 200,000 | |||||
Labor reimbursement and sublicense revenue recognized | $ 1,400,000 | |||||
Research and Exclusive License Agreement [Member] | Synthetic Genomics, Inc [Member] | Minimum [Member] | LUNAR Product [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Percentage of all cash payments received | 10.00% | |||||
Research and Exclusive License Agreement [Member] | Synthetic Genomics, Inc [Member] | Minimum [Member] | Non-LUNAR Product [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Percentage of consideration received | 5.00% | |||||
Research and Exclusive License Agreement [Member] | Synthetic Genomics, Inc [Member] | Maximum [Member] | LUNAR Product [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Percentage of all cash payments received | 20.00% | |||||
Research and Exclusive License Agreement [Member] | Synthetic Genomics, Inc [Member] | Maximum [Member] | Non-LUNAR Product [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Percentage of consideration received | 10.00% | |||||
Research Collaboration and License Agreement [Member] | Providence Therapeutics, Inc [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Revenue related to amortization of upfront payment | $ 600,000 | $ 600,000 | $ 1,000,000 |
Collaboration Revenue - Summary
Collaboration Revenue - Summary of Collaboration Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | $ 15,753 | $ 12,998 |
Research Collaboration and Exclusive License Agreement [Member] | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | 15,753 | 12,998 |
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Janssen [Member] | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | 1,232 | 4,862 |
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Ultragenyx [Member] | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | 6,794 | 5,639 |
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – Takeda [Member] | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | 1,137 | 1,403 |
Research Collaboration and Exclusive License Agreement [Member] | Collaboration Partner – CureVac [Member] | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | 4,427 | |
Research Collaboration and Exclusive License Agreement [Member] | Other Collaboration [Member] | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Collaboration revenue | $ 2,163 | $ 1,094 |
Short-term Investments (Details
Short-term Investments (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Total amount short-term investments | $ 23,608,000 | |
Short Term Deposit Weighted Average Interest Rate | 1.60% | |
Short-term investment | $ 0 | |
Bank Deposits [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Total amount short-term investments | $ 15,000,000 |
Summary of Short-term Investmen
Summary of Short-term Investments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized cost | $ 8,611 |
Gross unrealized losses | 3 |
Fair value | 8,608 |
Certificates of Deposit [Member] | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized cost | 1,462 |
Fair value | 1,462 |
Corporate Debt Securities [Member] | |
Schedule Of Available For Sale Securities [Line Items] | |
Amortized cost | 7,149 |
Gross unrealized losses | 3 |
Fair value | $ 7,146 |
Schedule of Financial Assets Me
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Assets Fair Value Disclosure [Abstract] | |
Cash equivalents | $ 2,024 |
Certificates of deposit | 1,462 |
Corporate debt securities | 7,146 |
Total financial assets | 10,632 |
Fair Value, Inputs, Level 1 [Member] | |
Assets Fair Value Disclosure [Abstract] | |
Cash equivalents | 2,024 |
Total financial assets | 2,024 |
Fair Value, Inputs, Level 2 [Member] | |
Assets Fair Value Disclosure [Abstract] | |
Certificates of deposit | 1,462 |
Corporate debt securities | 7,146 |
Total financial assets | $ 8,608 |
Reverse Merger with Alcobra L_3
Reverse Merger with Alcobra Ltd. (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Nov. 15, 2017 |
Business Acquisition [Line Items] | ||
Intangible asset held for sale | $ 590 | |
Alocobra Limited [Member] | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 2,032 | |
Restricted cash | 179 | |
Short-term investments | 34,188 | |
Prepaid and other assets | 434 | |
Property, plant and equipment – held for sale | 29 | |
Intangible asset held for sale | 590 | |
Total assets acquired | 37,452 | |
Accounts payable and accrued expenses | (1,906) | |
Net assets acquired | $ 35,546 |
Reverse Merger with Alcobra L_4
Reverse Merger with Alcobra Ltd. (Details Textual) | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Business Acquisition [Line Items] | |
Equity method ownership percentage | 30.00% |
Amiservice [Member] | |
Business Acquisition [Line Items] | |
Equity method investment, description | Assets acquired in the merger included an intangible asset consisting of in-process research and development for proprietary drug technology called ADAIR. At the closing date of the reverse merger, the Company entered into an agreement with Amiservice to which the Company agreed to transfer certain intellectual property related to ADAIR in exchange for a minority equity stake in a company to be formed by Amiservice for the purpose of acquiring the ADAIR assets. The Company determined that the asset met the classification criteria as held for sale in accordance with related accounting guidance when acquired and remained held for sale at December 31, 2017. To determine the fair value of the ADAIR asset, the Company utilized an independent valuation consultant who valued the asset using a market approach valuation method. In conjunction with this valuation, management judgment was required to forecast the occurrence of future events that would trigger the closing of the ADAIR sale agreement. |
Alocobra Limited [Member] | |
Business Acquisition [Line Items] | |
Total fair value of consideration paid | $ 40,841,000 |
Shares outstanding as on merger date | shares | 3,997,000 |
Closing price as on merger date | $ / shares | $ 10.22 |
Charge to additional paid-in capital | $ 5,295,000 |
Payments for merger related costs | $ 1,734,000 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Abstract] | ||
Accrued compensation | $ 974 | $ 1,812 |
Refundable fees received | 2,259 | |
Other accrued liabilities | 674 | 981 |
Total | $ 3,907 | $ 2,793 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,472 | $ 2,016 |
Less accumulated depreciation and amortization | (1,497) | (967) |
Property and equipment, net | 1,975 | 1,049 |
Research equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,711 | 1,620 |
Computer and software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 200 | 97 |
Office equipment and furniture [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 527 | 255 |
Leasehold improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 34 | $ 44 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization | $ 582 | $ 410 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | Oct. 12, 2018 | Nov. 15, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Outstanding long-term debt | $ 9,911,000 | |||
Conversion of notes to ordinary shares | $ 5,957,000 | |||
Interest expense related to long-term debt | $ 186,000 | $ 150,000 | ||
Convertible Promissory Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible promissory note, amount converted | $ 5,795,000 | |||
Accrued interest | 162,000 | |||
Conversion of notes to ordinary shares | $ 616,824 | |||
Common stock average conversion rate | $ 10.19 | |||
Recognized additional net expense for conversion | $ 348,000 | |||
Loan and Security Agreement [Member] | Western Alliance Bank [Member] | Long-term Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Gross proceeds from long-term debt agreement | $ 10,000,000 | |||
Loan maturity date | Oct. 1, 2022 | |||
Interest of the prime rate plus | 1.25% | |||
Loan interest payment terms | The loan has an interest-only period of 19 months, which could be extended by an additional 6 months if certain conditions are met, followed by an amortization period of 30 months, or 24 months if the interest-only period is extended. | |||
Loan interest-only payment period | 19 months | 19 months | ||
Loan interest-only payment period | 6 months | |||
Debt Instrument, amortization period | 30 months | 30 months | ||
Debt Instrument, amortization period | 24 months | |||
Loan orgination fee paid | $ 128,000 | |||
Warrant fee payable | $ 350,000 | |||
Prepayment fee percentage | 3.00% | |||
Prepayment fee percentage | 2.00% | |||
Percentage of fee liable on principal balance | 3.00% | |||
Fee payable upon repayment | $ 300,000 | |||
Debt instrument, collateral | The Loan is collateralized by all of the assets of the Company, excluding intellectual property, which is subject to a negative pledge. The Loan contains customary conditions of borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness and make distributions to holders of the Company’s capital stock. In addition, the Company is required to maintain at least 50% of its deposit and investment accounts, or $20 million, whichever is lower, with the Western Alliance Bank. | |||
Debt instrument, collateral amount | 20,000,000 | |||
Available sale of equity securities | $ 15,000,000 | |||
Outstanding long-term debt | $ 9,900,000 | |||
Accretion of final payment | 28,000 | |||
Unamortized debt discount | $ 117,000 | |||
Loan and Security Agreement [Member] | Western Alliance Bank [Member] | Long-term Debt [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Percentage required to be maintain in deposit and investment | 50.00% |
Debt - Summary of Final Payment
Debt - Summary of Final Payment Due at Repayment (Details) | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 2,666,667 |
2021 | 4,000,000 |
2021 | 3,633,333 |
Total | $ 10,300,000 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) | Nov. 15, 2017shares | Mar. 31, 2013$ / sharesshares | Dec. 31, 2018shares | Dec. 31, 2017USD ($)Milestoneshares | Dec. 31, 2016Milestoneshares | Dec. 31, 2014shares |
Class Of Stock [Line Items] | ||||||
Reverse split of ordinary shares | 1-for-7 | |||||
Reverse split of ordinary shares, ratio | 0.1429 | 0.1429 | ||||
Common stock, shares authorized | 30,000,000 | 30,000,000 | 30,000,000 | |||
Antidilutive securities excluded from computation of earnings per share | 94,000 | 3,057,000 | ||||
Treasury shares | 43,000 | 43,000 | ||||
Unvested Restricted Ordinary Shares [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share | 622,667 | 622,667 | ||||
Exercise of Share Options and Subject to Future Vesting [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Antidilutive securities excluded from computation of earnings per share | 79,000 | |||||
Restricted Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Stock issued during period | 2,783,686 | |||||
Share price of stock issued | $ / shares | $ 0.0068 | |||||
Shares subject to repurchase option | 1,538,353 | |||||
Share based compensation arrangement by share based payment award period from termination date of employee or consultant for repurchase of shares | 2 months | |||||
Number of milestones achieved | Milestone | 2 | 2 | ||||
Common shares, unvested | 622,667,000 | 622,667,000 | 769,176,000 | |||
Accelerated ordinary shares vested | 146,510,000 | |||||
Modification expense resulting from accelerated vesting of ordinary shares | $ | $ 1,495,000 | |||||
Vested After Obtaining Suitable siRNA License [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares vesting percentage | 25.00% | |||||
Vested After Obtaining Suitable siRNA License [Member] | Restricted Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares vesting percentage | 25.00% | |||||
Vested After in Vivo Proof-of-concept Achieved [Member] | Restricted Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares vesting percentage | 25.00% | |||||
Vested After IND Application Completed [Member] | Restricted Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares vesting percentage | 25.00% | |||||
Vested After in Human Efficacy Achieved [Member] | Restricted Common Stock [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Shares vesting percentage | 25.00% | |||||
Ordinary Shares [Member] | Arcturus Inc [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Stock conversion ratio | 0.293 | |||||
Warrant [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Warrant outstanding | 192,647 | |||||
Common shares issued upon warrant conversion | 188,980 | |||||
Proceeds from warrant exercised | $ | $ 160,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details Textual) | Nov. 15, 2017 | Aug. 31, 2018shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)BoardMembershares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share options expiration period | 10 years | |||
Reverse share split, description | 1-for-7 | |||
Reverse split of ordinary shares, ratio | 0.1429 | 0.1429 | ||
Compensation cost not yet recognized | $ | $ 4,400,000 | |||
Weighted-average remaining service period | 3 years 1 month 6 days | |||
Fair value of options vested | $ | $ 972,000 | $ 669,000 | ||
Exercisable and expected to vest options, subject to repuchase conditions | 0 | 35,595 | ||
Share based compensation expense | $ | $ 1,259,000 | $ 2,170,000 | ||
Number of Shares, Granted | 1,046,931 | |||
General and Administrative [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation expense | $ | $ 693,000 | $ 2,132,000 | ||
Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of board members | BoardMember | 2 | |||
Restricted Common Stock [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation expense | $ | $ 1,495,000 | |||
Performance Based Options | General and Administrative [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share based compensation expense | $ | $ 568,000 | |||
Performance Based Options | Board of Members [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of Shares, Granted | 58,600 | |||
2013 Equity Incentive Plan [Member] | Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized for grant | 0 | |||
Share options expiration period | 10 years | |||
Common stock reserved for future issuance | 38,751 | |||
2010 Equity Incentive Plan [Member] | Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share options expiration period | 10 years | |||
Common stock reserved for future issuance | 94,001 | |||
2018 Omnibus Equity Incentive Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares authorized for grant | 1,100,000 | |||
Common stock reserved for future issuance | 470,000 | |||
Shares issued in period | 220,000 | |||
2018 Omnibus Equity Incentive Plan [Member] | Non-Executive Officer [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares issued in period | 130,000 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Grant date weighted average fair value | $ 5.38 | $ 7.94 |
Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life (in years) | 6 years 25 days | 7 years 3 months 18 days |
Expected volatility | 73.30% | 76.40% |
Risk-free interest rate | 2.77% | 1.87% |
Share-Based Compensation (Det_3
Share-Based Compensation (Details 1) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Number of Shares, Outstanding | shares | 344,055 |
Number of Shares, Granted | shares | 1,046,931 |
Number of Shares, Exercised | shares | (62,224) |
Number of Shares, Forfeited/cancelled | shares | (139,329) |
Number of Shares, Outstanding | shares | 1,189,433 |
Number of Shares, Exercisable – December 31, 2018 | shares | 280,782 |
Number of Shares, Exercisable and expected to vest – December 31, 2018 | shares | 1,189,433 |
Weighted-Average Exercise Price, Outstanding | $ / shares | $ 8.70 |
Weighted-Average Exercise Price, Granted | $ / shares | 8.13 |
Weighted-Average Exercise Price, Exercised | $ / shares | 5.34 |
Weighted-Average Exercise Price, Forfeited/cancelled | $ / shares | 16.92 |
Weighted-Average Exercise Price, Outstanding – December 31, 2018 | $ / shares | 7.41 |
Weighted-Average Exercise Price, Exercisable – December 31, 2018 | $ / shares | 5.77 |
Weighted-Average Remaining Contractual Term (Years), Exercisable and expected to vest – December 31, 2018 | $ / shares | $ 7.41 |
Weighted-Average Remaining Contractual Term (Years), Outstanding – December 31, 2018 | 9 years 1 month 9 days |
Weighted-Average Remaining Contractual Term (Years), Exercisable – December 31, 2018 | 7 years 6 months 10 days |
Weighted-Average Remaining Contractual Term (Years), Exercisable and expected to vest – December 31, 2018 | 9 years 1 month 9 days |
Aggregate Intrinsic Value, Exercised | $ | $ 218 |
Aggregate Intrinsic Value, Outstanding – December 31, 2018 | $ | 301 |
Aggregate Intrinsic Value, Exercisable – December 31, 2018 | $ | 255 |
Aggregate Intrinsic Value, Exercisable and expected to vest – December 31, 2018 | $ | $ 301 |
Share-Based Compensation (Det_4
Share-Based Compensation (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expenses | $ 1,259 | $ 2,170 |
Research and Development [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expenses | 566 | 38 |
General and Administrative [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based compensation expenses | $ 693 | $ 2,132 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (21,604) | $ (10,820) |
Foreign | (181) | (81) |
Total loss before income taxes | $ (21,785) | $ (10,901) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes [Line Items] | ||||
Maximum percentage of likelihood of uncertain tax position recognized to be sustained | 50.00% | |||
Unrecognized Tax Benefits | $ 400,000 | $ 400,000 | $ 400,000 | |
Unrecognized tax benefits impacting effective tax rate | 0 | 0 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 0 | 0 | ||
Research and Development Expenses | $ 16,982,000 | $ 15,918,000 | ||
Net Operating Loss and Research and Development Credit Carryforwards Limitations On Cumulative Change In Ownership Minimum Percentage | 50.00% | |||
Net Operating Loss and Research and Development Credit Carryforwards Limitations on Cumulative Change In Ownership Period | 3 years | |||
Federal statutory income tax rate | 21.00% | 21.00% | 34.00% | |
Measurement period adjustment | $ 0 | |||
Provisional amount offsetted by valuation allowance | $ 2,400,000 | |||
Maximum [Member] | ||||
Income Taxes [Line Items] | ||||
Federal statutory income tax rate | 35.00% | |||
Federal [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 33,200,000 | |||
Operating Loss Carryforwards Expiration Year | 2034 | |||
Federal [Member] | Research Tax Credit Carryforward [Member] | ||||
Income Taxes [Line Items] | ||||
Credit Carryforward Amount | $ 200,000 | |||
Credit Carryforward Expiration Year | 2033 | |||
Federal [Member] | Alcobra Inc. and Alcobra Ltd. [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss amount excluded from deferred tax assets | $ 300,000 | |||
State [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 30,200,000 | |||
Operating Loss Carryforwards Expiration Year | 2034 | |||
State [Member] | Research Tax Credit Carryforward [Member] | ||||
Income Taxes [Line Items] | ||||
Credit Carryforward Amount | $ 200,000 | |||
Credit Carryforward Expiration Year | 2033 | |||
Foreign [Member] | ||||
Income Taxes [Line Items] | ||||
Operating Loss Carryforwards | $ 89,000,000 | |||
Foreign [Member] | Alcobra Inc. and Alcobra Ltd. [Member] | ||||
Income Taxes [Line Items] | ||||
Net operating loss amount excluded from deferred tax assets | 20,400,000 | |||
United States [Member] | ||||
Income Taxes [Line Items] | ||||
Unrecognized Tax Benefits | 200,000 | |||
California [Member] | ||||
Income Taxes [Line Items] | ||||
Unrecognized Tax Benefits | $ 200,000 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns Roll Forward | ||
Beginning balance of unrecognized tax benefits | $ 0.4 | $ 0.4 |
Ending balance of unrecognized tax benefits | $ 0.4 | $ 0.4 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss | $ 8,399 | $ 25,101 |
Tax credits | 35 | 35 |
Accrued liabilities | 261 | 227 |
Deferred revenue | 1,713 | 1,162 |
Depreciation and amortization | 46 | 0 |
Share-based compensation | 85 | 90 |
Total gross deferred tax assets | 10,539 | 26,615 |
Deferred tax liabilities: | ||
Depreciation and amortization | (96) | |
Valuation allowance | $ (10,539) | (26,519) |
Net deferred tax asset | $ 0 |
Income Taxes (Details 4)
Income Taxes (Details 4) | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 21.00% | 34.00% |
State income taxes, net of federal benefit | 5.30% | 4.40% | |
Foreign rate differential | (1.30%) | 0.20% | |
Share-based compensation | (0.20%) | ||
Tax Cuts and JOBS Act | (22.00%) | ||
Change in tax rate | (8.30%) | ||
Change in valuation allowance | (20.70%) | 1.80% | |
Other | (3.00%) | (1.80%) | |
Permanent differences | (1.10%) | (8.30%) |
Commitments and Contingencies_2
Commitments and Contingencies (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitment And Contingencies [Line Items] | |||
Operating lease rent expense | $ 1,100,000 | $ 334,000 | |
October 2017 Lease Amendment [Member] | |||
Commitment And Contingencies [Line Items] | |||
Operating lease extended additional term | 84 months | ||
Lessor, operating lease, term of contract | 4 months | ||
Tenant improvement allowance | $ 74,000 | ||
Lessor leasing arrangements operating leases extended lease | 15 years | ||
Security | $ 96,000 | ||
San Diego, California [Member] | |||
Commitment And Contingencies [Line Items] | |||
Operating lease expiration period year and month | 2018-02 | ||
Cystic Fibrosis Foundation Therapeutics Grants [Member] | |||
Commitment And Contingencies [Line Items] | |||
Grants received | $ 500,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2019 | $ 1,268 |
2020 | 1,277 |
2021 | 1,315 |
2022 | 1,350 |
2023 | 1,390 |
Thereafter | 1,745 |
Total | $ 8,345 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - USD ($) | Oct. 24, 2017 | May 31, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||||
Stock compensation expense recognized | $ 1,259,000 | $ 2,170,000 | |||
Professional fees | $ 1,400,000 | ||||
Providence Therapeutics, Inc [Member] | Research Collaboration and License Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue related to amortization of upfront payment | $ 600,000 | 600,000 | 1,000,000 | ||
Accounts receivable, outstanding | $ 0 | $ 0 | |||
Stock compensation expense recognized | $ 1,500,000 |