Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 04, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'Intra-Cellular Therapies, Inc. | ' |
Entity Central Index Key | '0001567514 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 22,134,647 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $44,072,012 | $15,645,528 |
Certificates of deposit | 2,000,000 | 3,500,000 |
Accounts receivable | 251,291 | 300,429 |
Prepaid expenses and other current assets | 806,288 | 188,702 |
Total current assets | 47,129,591 | 19,634,659 |
Property and equipment, net | 75,700 | 58,266 |
Other assets | 130,755 | 130,755 |
Total assets | 47,336,046 | 19,823,680 |
Current liabilities: | ' | ' |
Accounts payable | 4,027,097 | 41,608 |
Accrued and other current liabilities | 2,571,126 | 404,656 |
Accrued employee benefits | 759,757 | 726,657 |
Deferred revenue | 416,682 | 1,666,674 |
Total current liabilities | 7,774,662 | 2,839,595 |
Stockholders' equity (deficit): | ' | ' |
Common stock, $.0001 par value: 100,000,000 shares authorized; 22,134,647 and 14,599,612 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 2,213 | 1,460 |
Additional paid-in capital | 89,082,858 | 47,678,924 |
Accumulated deficit | -49,523,687 | -30,696,299 |
Total stockholders' equity | 39,561,384 | 16,984,085 |
Total liabilities and stockholders' equity | $47,336,046 | $19,823,680 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 22,134,647 | 22,134,647 |
Common stock, shares outstanding | 14,599,612 | 14,599,612 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenues | $667,955 | $377,911 | $1,909,471 | $2,449,055 |
Costs and expenses: | ' | ' | ' | ' |
Research and development | 4,157,742 | 1,797,429 | 16,897,903 | 14,969,710 |
General and administrative | 1,295,571 | 802,053 | 3,245,585 | 2,916,139 |
Total costs and expenses | 5,453,313 | 2,599,482 | 20,143,488 | 17,885,849 |
Loss from operations | -4,785,358 | -2,221,571 | -18,234,017 | -15,436,794 |
Interest expense | -131,888 | ' | -604,960 | ' |
Interest income | 5,626 | 6,656 | 11,589 | 29,730 |
Income taxes | ' | -8,230 | ' | -24,690 |
Net loss | ($4,911,620) | ($2,223,145) | ($18,827,388) | ($15,431,754) |
Net loss per common share: | ' | ' | ' | ' |
Basic | ($0.42) | ($0.40) | ($2.43) | ($2.75) |
Dilutive | ($0.42) | ($0.40) | ($2.43) | ($2.75) |
Weighted average number of common shares: | ' | ' | ' | ' |
Basic & Dilutive | 11,779,745 | 5,607,022 | 7,737,250 | 5,603,575 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows provided by (used in) operating activities | ' | ' |
Net loss | ($18,827,388) | ($15,431,754) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation | 15,821 | 39,413 |
Share-based compensation expense | 282,450 | 282,629 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 49,138 | 241,534 |
Prepaid expenses and other assets | -617,586 | 2,099 |
Accounts payable | 3,985,489 | 2,078,182 |
Accrued and other current liabilities and employee benefits | 2,398,611 | -738,321 |
Deferred revenue | -1,249,992 | -1,249,995 |
Net cash used in operating activities | -13,963,457 | -14,776,213 |
Cash flows provided by (used in) investing activities | ' | ' |
Purchases of investments | ' | -1,000,000 |
Maturities of investments | 1,500,000 | 5,950,123 |
Purchase of property and equipment | -33,255 | -38,957 |
Net cash provided by investing activities | 1,466,745 | 4,911,166 |
Cash flows provided by (used in) financing activities | ' | ' |
Proceeds from stock option exercises | 316,827 | 7,022 |
Proceeds from stock subscription | 109,834 | ' |
Gross proceeds of public offering | 43,941,850 | ' |
Payment of costs of public offering | -3,445,315 | ' |
Net cash provided by financing activities | 40,923,196 | 7,022 |
Net increase (decrease) in cash and cash equivalents | 28,426,484 | -9,858,025 |
Cash and cash equivalents at beginning of period | 15,645,528 | 13,693,215 |
Cash and cash equivalents at end of period | 44,072,012 | 3,835,190 |
Cash paid for interest | 3,317 | ' |
Cash paid for taxes | $13,437 | $13,857 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Organization | ' |
1. Organization | |
Intra-Cellular Therapies, Inc. (the Company), through its wholly-owned operating subsidiary, ITI, Inc. (ITI), is a biopharmaceutical company focused on the discovery and clinical development of innovative, small molecule drugs that address underserved medical needs in neuropsychiatric and neurological disorders by targeting intracellular signaling mechanisms within the central nervous system (CNS). The Company’s lead product candidate, ITI-007, is in Phase 2 clinical trials as a first-in-class treatment for schizophrenia. | |
ITI was incorporated in the State of Delaware on May 22, 2001 under the name “Intra-Cellular Therapies, Inc.” and commenced operations in June 2002. ITI was founded to discover and develop drugs for the treatment of neurological and psychiatric disorders. | |
On August 29, 2013, ITI completed a reverse merger (the Merger) with a public shell company named Oneida Resources Corp. (Oneida). Oneida was formed in August 2012 as a vehicle to investigate and, if such investigation warranted, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. In the Merger, each outstanding share of capital stock of ITI was exchanged for 0.5 shares of common stock of Oneida, and each outstanding option and outstanding warrant of ITI was assumed by Oneida and became exercisable for 0.5 shares of Oneida common stock. As a result of the Merger and related transactions, ITI survived as a wholly-owned subsidiary of Oneida, Oneida changed its fiscal year end from March 31 to December 31, and Oneida changed its name to Intra-Cellular Therapies, Inc. (the Company). In addition, the Company began operating ITI and its business, and therefore ceased being a shell company. Following the Merger and the redemption of all then outstanding shares of Oneida at the closing of the Merger, the former shareholders of ITI owned 100% of the shares of the Company’s outstanding capital stock. | |
Immediately prior to the Merger, on August 29, 2013, ITI sold to accredited investors approximately $60.0 million of its shares of common stock, or 18,889,307 shares at a price of $3.1764 per share (the Private Placement), which included $15.3 million in principal and $0.8 million in accrued interest from the conversion of ITI’s then outstanding convertible promissory notes (the Notes). | |
In accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) Topic 805, Business Combinations, ITI is considered the acquirer for accounting purposes, and will account for the transaction as a capital transaction, because ITI’s former stockholders received 100% of the voting rights in the combined entity and ITI’s senior management represents all of the senior management of the combined entity. Consequently, the assets and liabilities and the historical operations that will be reflected in our consolidated financial statements will be those of ITI and will be recorded at the historical cost basis of the Company. All share and per share amounts in the consolidated financial statements and related notes have been retrospectively adjusted to reflect the one for 0.5 shares common stock exchange as well as the conversion of the Notes and Redeemable Preferred Series A, B, and C convertible preferred stock. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
2. Summary of Significant Accounting Policies | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although actual results could differ from those estimates, management does not believe that such differences would be material. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of money market investments and certificates of deposit with commercial banks and financial institutions. Certificates of deposit with a maturity date of more than three months are classified separately on the balance sheet. Their carrying values approximate the fair market value. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company applies the fair value method under ASC Topic 820, Fair Value Measurements and Disclosures. ASC Topic 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value and requires expanded disclosures about fair value measurements. The ASC Topic 820 hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following categories based on the lowest level input used that is significant to a particular fair value measurement: | |||||||||||||||||
• | Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. | ||||||||||||||||
• | Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. | ||||||||||||||||
• | Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. | ||||||||||||||||
The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the ASC Topic 820 hierarchy. | |||||||||||||||||
The Company has no assets or liabilities that were measured using quoted prices for similar assets and liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of September 30, 2013 and December 31, 2012. The carrying value of cash held in money market funds of approximately $21.2 million as of September 30, 2013 and approximately $1.2 million as of December 31, 2012, is included in cash and cash equivalents and approximates market value based on quoted market price or Level 1 inputs. | |||||||||||||||||
Financial Instruments | |||||||||||||||||
The Company considers the recorded costs of its financial assets and liabilities, which consist of cash equivalents, accounts receivable, accounts payable and accrued liabilities, to approximate their fair value because of their relatively short maturities at September 30, 2013 and December 31, 2012. Management believes that the risks associated with its financial instruments are minimal as the counterparties are financial institutions of high credit standing. | |||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Cash equivalents are held with major financial institutions in the United States. Certificates of deposit held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. | |||||||||||||||||
Accounts Receivable | |||||||||||||||||
Accounts receivable that management has the intent and ability to collect are reported in the balance sheets at outstanding amounts, less an allowance for doubtful accounts. The Company writes off uncollectible receivables when the likelihood of collection is remote. | |||||||||||||||||
The Company evaluates the collectability of accounts receivable on a regular basis. The allowance, if any, is based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts and economic factors or events expected to affect future collections experience. No allowance was recorded as of September 30, 2013 and December 31, 2012, as the Company has a history of collecting on all accounts including, but not limited to, collaborations funding its research. | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Property and equipment is stated at cost and depreciated on a straight-line basis over estimated useful lives 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 assets or the term of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred. | |||||||||||||||||
When indicators of possible impairment are identified, the Company evaluates the recoverability of the carrying value of its long-lived assets based on the criteria established in ASC Topic 360, Property, Plant and Equipment. The Company considers historical performance and anticipated future results in its evaluation of potential impairment. The Company evaluates the carrying value of those assets in relation to the operating performance of the business and undiscounted cash flows expected to result from the use of those assets. Impairment losses are recognized when carrying value exceeds the undiscounted cash flows then management must determine the fair value of the underlying asset. No such impairment losses have been recognized to date. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company earns its license and collaboration revenue from its significant partnership with Takeda Pharmaceutical Company Limited (Takeda). In order to further its research projects and support its collaborations, the Company will require additional financing until such time that revenue streams are sufficient to generate consistent positive cash flow from operations. Possible sources of funds include strategic alliances, additional equity offerings, grants and contracts, and research and development funding from third parties. | |||||||||||||||||
Revenue is recognized when all terms and conditions of the agreements have been met, including persuasive evidence of an arrangement, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company is reimbursed for certain costs incurred on specified research projects under the terms and conditions of grants, collaboration agreements, and awards. The Company records the amount of reimbursement as revenues on a gross basis in accordance with ASC Topic 605-45, Revenue Recognition/Principal Agent Considerations. The Company is the primary obligor with respect to purchasing goods and services from third-party suppliers, is obligated to compensate the service provider for the work performed, and has discretion in selecting the supplier. Provisions for estimated losses on research grant projects and any other contracts are made in the period such losses are determined. | |||||||||||||||||
The Company engages in transactions with delivery of more than one element. Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting. For the Company, this determination is generally based on whether the deliverable has “stand-alone value” to the customer. The Company adopted accounts for all Multiple-Deliverable Revenue Arrangements (MDRAs) in accordance with ASC Topic 605-25, Revenue Recognition—Multiple Element Arrangements. | |||||||||||||||||
The Company accounts for milestone revenue in accordance with ASC Topic 605-28, Milestone Method. Under this guidance, the Company recognizes revenue contingent upon the achievement of a substantive milestone in its entirety in the period the milestone is achieved. Substantive milestone payments are recognized upon achievement of the milestone only if all of the following conditions are met: | |||||||||||||||||
• | The milestone payments are non-refundable; | ||||||||||||||||
• | Achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement; | ||||||||||||||||
• | Substantive effort on our part is involved in achieving the milestone; | ||||||||||||||||
• | The amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with achievement of the milestone; and | ||||||||||||||||
• | A reasonable amount of time passes between the up-front license payment and the first milestone payment, as well as between each subsequent milestone payment. | ||||||||||||||||
Determination as to whether a payment meets the aforementioned conditions involves management’s judgment. If any of these conditions are not met, the resulting payment would not be considered a substantive milestone, and therefore, the resulting payment would be considered part of the consideration for the single unit of accounting and be recognized as revenue in accordance with the revenue models described above. In addition, the determination that one such payment was not a substantive milestone could prevent us from concluding that subsequent milestone payments were substantive milestones and, as a result, any additional milestone payments could also be considered part of the consideration for the single unit of accounting and would be recognized as revenue as such performance obligations are performed under either the proportional performance or straight-line methods, as applicable. | |||||||||||||||||
Deferred Revenue | |||||||||||||||||
Cash received as prepayment on future services is deferred and recognized as revenue as the services are performed. The Company must remit interest on any deferred revenue related to a governmental agency. As of September 30, 2013 and December 31, 2012, no interest was due as the Company did not have any deferred revenue from a government agency. | |||||||||||||||||
Research and Development | |||||||||||||||||
Except for payments made in advance of services, the Company expenses its research and development costs as incurred. For payments made in advance, the Company recognizes research and development expense as the services are rendered. Research and development costs primarily consist of salaries and related expenses for personnel and resources and the costs of clinical trials. Other research and development expenses include preclinical analytical testing, outside services, providers, materials and consulting fees. | |||||||||||||||||
Income Taxes | |||||||||||||||||
Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and its respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. | |||||||||||||||||
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce net deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable for the period and the change during the period in deferred tax assets and liabilities. | |||||||||||||||||
The Company accounts for uncertain tax positions pursuant to ASC Topic 740 (previously included in FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes–an Interpretation of FASB Statement No. 109). Financial statement recognition of a tax position taken or expected to be taken in a tax return is determined based on a more-likely-than-not threshold of that position being sustained. If the tax position meets this threshold, the benefit to be recognized is measured as the tax benefit having the highest likelihood of being realized upon ultimate settlement with the taxing authority. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes. | |||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
ASC Topic 220-10, Reporting Comprehensive Income, requires the presentation of the comprehensive income or loss and its components as part of the financial statements if comprehensive income (loss) differs from net income (loss). For the three- and nine-months ended September 30, 2013 and the year ended December 31, 2012, the Company’s net loss equals comprehensive loss. | |||||||||||||||||
Share-Based Compensation | |||||||||||||||||
Share-based payments are accounted for in accordance with the provisions of ASC Topic 718, Compensation—Stock Compensation. The fair value of share-based payments is estimated, on the date of grant, using the Black-Scholes-Merton option-pricing model (the Black-Scholes model). The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the option. | |||||||||||||||||
For all time vesting awards granted, expense is amortized using the straight-line attribution method. For awards that contain a performance condition, expense is amortized using the accelerated attribution method. As share-based compensation expense recognized in the statements of operations for the three- and nine-months ended September 30, 2013 and 2012 and the year ended December 31, 2012, is based on share-based awards ultimately expected to vest, it has been reduced for estimated forfeitures. | |||||||||||||||||
ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Pre-vesting forfeitures are based on the Company’s historical experience for the three- and nine-months ended September 30, 2013 and 2012 and the year ended December 31, 2012, and have not been material. | |||||||||||||||||
The Company utilizes the Black-Scholes model for estimating fair value of its stock options granted. Option valuation models, including the Black-Scholes model, require the input of subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility and the expected life of the award. | |||||||||||||||||
Expected volatility rates are based on historical volatility of the common stock of comparable publicly traded entities and other factors due to the lack of historic information of the Company’s common stock. The expected life of stock-based options is the period of time for which the stock-based options are expected to be outstanding. Given the lack of historic exercise data, the expected life is determined using the “simplified method” which is defined as the midpoint between the vesting date and the end of the contractual term. | |||||||||||||||||
The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not paid dividends to its stockholders since its inception and does not plan to pay cash dividends in the foreseeable future. Therefore, the Company has assumed an expected dividend rate of zero. | |||||||||||||||||
Given the absence of an active market for the Company’s common stock, the exercise price of the stock options on the date of grant was determined and approved by the board of directors using several factors, including progress and milestones achieved in the Company’s business development and performance, the price per share of its convertible preferred stock offerings and general industry and economic trends. In establishing the estimated fair value of the common stock, the Company considered the guidance set forth in American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. | |||||||||||||||||
Under ASC Topic 718, the cumulative amount of compensation cost recognized for instruments classified as equity that ordinarily would result in a future tax deduction under existing tax law shall be considered to be a deductible difference in applying ASC Topic 740, Income Taxes. The deductible temporary difference is based on the compensation cost recognized for financial reporting purposes; however, these provisions currently do not impact the Company, as all the deferred tax assets have a full valuation allowance. | |||||||||||||||||
Since the Company had net operating loss carryforwards as of September 30, 2013 and December 31, 2012, no excess tax benefits for the tax deductions related to share-based awards were recognized in the statements of operations. | |||||||||||||||||
Equity instruments issued to non-employees are accounted for under the provisions of ASC Topic 718 and ASC Topic 505-50, Equity/Equity-Based Payments to Non-Employees. Accordingly, the estimated fair value of the equity instrument is recorded on the earlier of the performance commitment date or the date the services required are completed and are marked to market during the service period. | |||||||||||||||||
Loss Per Share | |||||||||||||||||
Loss per share is calculated under the two-class method under which all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. | |||||||||||||||||
Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing the net loss allocable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants. | |||||||||||||||||
The following common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive as applied to the loss from operations as of the three- and nine- months ended September 30, 2013 and 2012: | |||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
September 30 | September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock options | 712.525 | 901,210 | 710,819 | 901,210 | |||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In April 2013, FASB issued Accounting Standards Update (ASU) 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amended interim and annual reporting requirements about accumulated other comprehensive income (AOCI). In interim periods, companies are required to report information about reclassifications out of AOCI and changes in AOCI balances. The provision of ASU 2013-02 became effective for the first quarter of 2013. The adoption of ASU 2103-02 did not have a material effect on the Company’s consolidated results of operations, financial position or liquidity. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
3. Property and Equipment | |||||||||
Property and equipment consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Computer equipment | $ | 93,915 | $ | 92,318 | |||||
Furniture and fixtures | 46,523 | 42,736 | |||||||
Scientific equipment | 2,851,947 | 2,824,076 | |||||||
Leasehold improvements | 319,553 | 319,553 | |||||||
3,311,938 | 3,278,683 | ||||||||
Less accumulated depreciation | (3,236,238 | ) | (3,220,417 | ) | |||||
$ | 75,700 | $ | 58,266 | ||||||
Depreciation expense for the three- and nine-months ended September 30, 2013 was $4,729, and $15,821 respectively. |
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||
4. Share-Based Compensation | |||||||||||||||||
At the Effective Time of the Merger, the Company assumed all stock options then outstanding under ITI’s 2003 Equity Incentive Plan (the 2003 Plan). The 2003 Plan provided for the granting of stock awards, such as stock options, restricted common stock and stock appreciation rights to employees, directors and other individuals as determined by the Board of Directors. The 2003 Plan expired by its terms in July 2013 and no new awards may be granted. As of September 30, 2013, the only outstanding awards under the 2003 Plan were options to purchase 1,462,380 shares of common stock. | |||||||||||||||||
Stock options granted under the 2003 Plan may be either incentive stock options (ISOs) as defined by the Internal Revenue Code of 1986, as amended (the Code), or non-qualified stock options. The Board of Directors determined who received options as well as the vesting periods (which are generally two to three years) and exercise prices of options. Options have a maximum term of ten years. The exercise price of ISOs granted under the 2003 Plan must be at least equal to the fair market value of the common stock on the date of grant. | |||||||||||||||||
In addition, in August 2013, the Board of Directors approved the 2013 Equity Incentive Plan (the 2013 Plan). The Company expects the 2013 Plan will be effective on November 7, 2013 upon the effectiveness of stockholder approval of the plan by the Company’s sole stockholder prior to the Merger. The maximum number of shares of common stock that may be delivered in satisfaction of awards under the 2013 Plan is 799,934 shares, plus up to an additional maximum of 1,462,380 shares which may be issued solely after the cancellation or expiration of any unexercised stock options under the 2003 Plan that the Company assumed in the Merger. In addition, the 2013 Plan contains an “evergreen” provision, which allows for an annual increase in the number of shares of common stock available for issuance under the 2013 Plan on January 1 of each year commencing on January 1, 2014 and ending upon expiration of the 2013 Plan. The annual increase in the number of shares shall be equal to the lesser of: 800,000 shares of common stock; 4% of the number of shares of common stock outstanding as of such date; and such lesser number of shares as determined by the Board of Directors prior to the applicable January 1st date. | |||||||||||||||||
These numbers are subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. Unless sooner terminated by the Board of Directors or stockholders, the 2013 Plan will expire 10 years from its date of effectiveness. Under the 2013 Plan, the Company may grant ISOs, nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights and other stock awards to its employees, directors and consultants. As of September 30, 2013, no awards have been made under the 2013 Plan. | |||||||||||||||||
Total stock-based compensation expense, related to all of the Company’s share-based awards to employees, directors and consultants recognized during three- and nine-months ended September 30, 2013 and 2012, was comprised of the following: | |||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
September 30 | September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 38,856 | $ | 32,200 | $ | 96,943 | $ | 86,845 | |||||||||
General and administrative | 80,361 | 65,261 | 185,507 | 195,784 | |||||||||||||
Total share-based compensation expense | $ | 119,217 | $ | 97,461 | $ | 282,450 | $ | 282,629 | |||||||||
The following table describes the weighted-average assumptions used for calculating the value of options granted during the nine-months ended September 30, 2013: | |||||||||||||||||
2013 | |||||||||||||||||
Dividend yield | 0% | ||||||||||||||||
Expected volatility | 80% | ||||||||||||||||
Weighted-average risk-free interest rate | 1.40% - 1.80% | ||||||||||||||||
Expected term | 6.2 years | ||||||||||||||||
Information regarding the stock options activity including employees, directors and consultants as of September 30, 2013, and changes during the period then ended, are summarized as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | |||||||||||||||
Shares | Average | Average | |||||||||||||||
Exercise | Contractual | ||||||||||||||||
Price | Life | ||||||||||||||||
Outstanding at December 31, 2012 (audited) | 1,707,114 | $ | 1.3802 | 4.4 years | |||||||||||||
Options granted (unaudited) | 247,600 | $ | 3.26 | 6.2 years | |||||||||||||
Options exercised (unaudited) | (489,667 | ) | $ | 0.647 | 1.3 years | ||||||||||||
Options canceled or expired (unaudited) | (2,667 | ) | $ | 2.9725 | 8.7 years | ||||||||||||
Outstanding at September 30, 2013 (unaudited) | 1,462,380 | $ | 1.941 | 5.5 years | |||||||||||||
Vested or expected to vest at September 30, 2013 (unaudited) | 1,462,380 | $ | 1.941 | 5.5 years | |||||||||||||
Exercisable at September 30, 2013 (unaudited) | 1,118,156 | $ | 1.5801 | 6.9 years |
Collaborations_and_License_Agr
Collaborations and License Agreements | 9 Months Ended |
Sep. 30, 2013 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' |
Collaborations and License Agreements | ' |
5. Collaborations and License Agreements | |
The Bristol-Myers Squibb License Agreement | |
On May 31, 2005 the Company (through its wholly owned operating subsidiary, ITI) entered into a world-wide, exclusive License Agreement with Bristol-Myers Squibb Company (BMS), pursuant to which the Company holds a license to certain patents and know-how of BMS relating to ITI-007 and other specified compounds. The agreement was amended on November 3, 2010. The licensed rights are exclusive, except BMS retains rights in specified compounds in the fields of obesity, diabetes, metabolic syndrome and cardiovascular disease. However, BMS has no right to use, develop or commercialize ITI-007 and other specified compounds in any field of use. The Company has the right to grant sublicenses of the rights conveyed by BMS. The Company is obliged under the license to use commercially reasonable efforts to develop and commercialize the licensed technology. The Company is also prohibited from engaging in the clinical development or commercialization of specified competitive compounds. | |
Under the agreement, the Company made an upfront payment of $1.0 million to BMS, and may be obliged to make milestone payments for each licensed product of up to an aggregate of approximately $14.8 million. The Company is also obliged to make tiered single digit percentage royalty payments on sales of licensed products. The Company is obliged to pay to BMS a percentage of non-royalty payments made in consideration of any sublicense. | |
The agreement extends, and royalties are payable, on a country-by-country and product-by-product basis, through the later of ten years after first commercial sale of a licensed product in such country, expiration of the last licensed patent covering a licensed product, its method of manufacture or use, or the expiration of other government grants providing market exclusivity, subject to certain rights of the parties to terminate the agreement on the occurrence of certain events. On termination of the agreement, the Company may be obliged to convey to BMS rights in developments relating to a licensed compound or licensed product, including regulatory filings, research results and other intellectual property rights. | |
The Takeda License and Collaboration Agreement | |
On February 25, 2011, the Company (through its wholly owned operating subsidiary, ITI) entered into a license and collaboration agreement with Takeda Pharmaceutical Company Limited (Takeda) under which the Company agreed to collaborate to research, develop and commercialize its proprietary compound ITI-214 and other selected compounds that selectively inhibit PDE1 for use in the prevention and treatment of human diseases. As part of the agreement, the Company assigned to Takeda certain patents owned by the Company that claim ITI-214 and granted Takeda an exclusive license to develop and commercialize compounds identified in the conduct of the research program that satisfy specified criteria. However, the Company has retained rights to all compounds that do not meet the specified criteria and the Company continues to develop PDE1 inhibitors outside the scope of the agreement. | |
Under the terms of the agreement, the Company is conducting a research program with an initial term of three years to identify and characterize compounds that meet certain specified criteria sufficient for further development by Takeda. The Company is responsible for the Company’s expenses incurred in the conduct of certain research activities specified in the research plan. Takeda has agreed to reimburse the Company for expenses the Company incurs in conducting additional research activities. | |
Takeda is obliged to use commercially reasonable efforts to develop and commercialize licensed compounds at its expense, and has agreed to reimburse the Company for the costs and expenses of development activities the Company may perform. The Company has formed a joint steering committee with Takeda to coordinate and oversee activities on which the Company and Takeda collaborate under the agreement. The Company has the option to co-promote any licensed product in the United States by assuming responsibility for a certain percentage of the detailing activity with respect to that product. | |
The Company is responsible for supplying Takeda with ITI-214 for nonclinical activities and Phase 1 clinical trials at the Company’s expense. Takeda is responsible, at its expense, for the manufacture and supply of compounds that it develops and commercializes under the agreement for all other activities. | |
Upon execution of the agreement, Takeda made a nonrefundable payment to the Company. The Company is eligible to receive payments of approximately $500 million in the aggregate upon achievement of certain development milestones and up to an additional $250 million in the aggregate upon achievement of certain sales-based milestones, along with tiered royalty payments ranging from the high single digits to the low teens in percent based on net sales by Takeda. | |
The agreement extends, on a country-by-country and product-by-product basis, through the later of expiration of the last licensed patent covering a licensed product, its method of manufacture or use, the expiration of other government grants providing market exclusivity or ten years after first commercial sale of a licensed product in such country, subject to rights of the parties to sooner terminate the agreement on certain events and the right of Takeda to unilaterally terminate the agreement upon a specified number of days’ prior notice. Upon the termination of the agreement, Takeda is obliged to assign to the Company the patents covering ITI-214 assigned to Takeda upon the execution of the agreement, to grant the Company a license to develop and commercialize licensed compounds developed by Takeda and to transfer to the Company certain materials, information and regulatory materials reasonably necessary for us to continue the development and commercialization of those compounds. | |
The Company evaluates all deliverables within an arrangement to determine whether or not they provide value on a stand-alone basis. Based on this evaluation, the deliverables were separated into units of accounting. The arrangement consideration that is fixed or determinable at the inception of the arrangement was allocated to the separate units of accounting based on their relative selling prices. The Company may exercise significant judgment in determining whether a deliverable is a separate unit of accounting, as well as in estimating the selling prices of such unit of accounting. | |
To determine the selling price of a separate deliverable, the Company uses the hierarchy as prescribed in ASC Topic 605-25 Revenue Recognition based on vendor-specific objective evidence (VSOE), third-party evidence (TPE) or best estimate of selling price (BESP). VSOE is based on the price charged when the element is sold separately and is the price actually charged for that deliverable. TPE is determined based on third-party evidence for a similar deliverable when sold separately and BESP is the price at which the Company would transact a sale if the elements of collaboration and license arrangements were sold on a stand-alone basis. The Company was not able to establish VSOE or TPE for the deliverables within collaboration and license arrangements, as the Company does not have a history of entering into such arrangements or selling the individual deliverables within such arrangements separately. In addition, there may be significant differentiation in these arrangements, which indicates that comparable third-party pricing may not be available. The Company determined that the selling price for the deliverables within collaboration and license arrangements should be determined using BESP. The process for determining BESP involved significant judgment on our part and included consideration of multiple factors such as estimated direct expenses and other costs, and available data. | |
During the three- and nine-months ended September 30, 2013, the Company recognized revenue of $0.7 million, and $1.9 million under this agreement, respectively. At September 30, 2013 and December 31, 2012, $0.4 million and $1.7 million of revenue, respectively, was deferred under this agreement. | |
Other License Agreement | |
In May 2002, the Company entered into a license agreement (the License) and research agreement with a university. Under the provisions of the License, the Company is entitled to use this organization’s patented technology and other intellectual property relating to diagnosis and treatment of central nervous system disorders. | |
The License expires upon expiration of the patent rights or 15 years subsequent to the first sale of products developed through this License. The Company is required to make future milestone payments for initiation of clinical trials and approval of a New Drug Application (NDA). Should the Company commercialize the technology related to this License, the Company would be required to make royalty payments, and would also be required to pay fees under any sublicense agreements with third parties. | |
In connection with the License, the Company issued 400,000 shares of common stock to the organization. Upon issuance of the shares, the Company recorded the estimated fair value of the shares issued, approximately $120,000, as research and development expense. | |
In addition, the Company is required to use at least $1.0 million annually of its resources for the development and commercialization of the technology until the Company submits an NDA. The Company met its spending requirements in 2012. There were no other payments made or required for the three- and nine-months ended September 30, 2013 and 2012 and the year ended December 31, 2012. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although actual results could differ from those estimates, management does not believe that such differences would be material. | |||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of money market investments and certificates of deposit with commercial banks and financial institutions. Certificates of deposit with a maturity date of more than three months are classified separately on the balance sheet. Their carrying values approximate the fair market value. | |||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company applies the fair value method under ASC Topic 820, Fair Value Measurements and Disclosures. ASC Topic 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value and requires expanded disclosures about fair value measurements. The ASC Topic 820 hierarchy ranks the quality and reliability of inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following categories based on the lowest level input used that is significant to a particular fair value measurement: | |||||||||||||||||
• | Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. | ||||||||||||||||
• | Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. | ||||||||||||||||
• | Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. | ||||||||||||||||
The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the ASC Topic 820 hierarchy. | |||||||||||||||||
The Company has no assets or liabilities that were measured using quoted prices for similar assets and liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of September 30, 2013 and December 31, 2012. The carrying value of cash held in money market funds of approximately $21.2 million as of September 30, 2013 and approximately $1.2 million as of December 31, 2012, is included in cash and cash equivalents and approximates market value based on quoted market price or Level 1 inputs. | |||||||||||||||||
Financial Instruments | ' | ||||||||||||||||
Financial Instruments | |||||||||||||||||
The Company considers the recorded costs of its financial assets and liabilities, which consist of cash equivalents, accounts receivable, accounts payable and accrued liabilities, to approximate their fair value because of their relatively short maturities at September 30, 2013 and December 31, 2012. Management believes that the risks associated with its financial instruments are minimal as the counterparties are financial institutions of high credit standing. | |||||||||||||||||
Concentration of Credit Risk | ' | ||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Cash equivalents are held with major financial institutions in the United States. Certificates of deposit held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. | |||||||||||||||||
Accounts Receivable | ' | ||||||||||||||||
Accounts Receivable | |||||||||||||||||
Accounts receivable that management has the intent and ability to collect are reported in the balance sheets at outstanding amounts, less an allowance for doubtful accounts. The Company writes off uncollectible receivables when the likelihood of collection is remote. | |||||||||||||||||
The Company evaluates the collectability of accounts receivable on a regular basis. The allowance, if any, is based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts and economic factors or events expected to affect future collections experience. No allowance was recorded as of September 30, 2013 and December 31, 2012, as the Company has a history of collecting on all accounts including, but not limited to, collaborations funding its research. | |||||||||||||||||
Property and Equipment | ' | ||||||||||||||||
Property and Equipment | |||||||||||||||||
Property and equipment is stated at cost and depreciated on a straight-line basis over estimated useful lives 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 assets or the term of the related lease. Expenditures for maintenance and repairs are charged to operations as incurred. | |||||||||||||||||
When indicators of possible impairment are identified, the Company evaluates the recoverability of the carrying value of its long-lived assets based on the criteria established in ASC Topic 360, Property, Plant and Equipment. The Company considers historical performance and anticipated future results in its evaluation of potential impairment. The Company evaluates the carrying value of those assets in relation to the operating performance of the business and undiscounted cash flows expected to result from the use of those assets. Impairment losses are recognized when carrying value exceeds the undiscounted cash flows then management must determine the fair value of the underlying asset. No such impairment losses have been recognized to date. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company earns its license and collaboration revenue from its significant partnership with Takeda Pharmaceutical Company Limited (Takeda). In order to further its research projects and support its collaborations, the Company will require additional financing until such time that revenue streams are sufficient to generate consistent positive cash flow from operations. Possible sources of funds include strategic alliances, additional equity offerings, grants and contracts, and research and development funding from third parties. | |||||||||||||||||
Revenue is recognized when all terms and conditions of the agreements have been met, including persuasive evidence of an arrangement, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company is reimbursed for certain costs incurred on specified research projects under the terms and conditions of grants, collaboration agreements, and awards. The Company records the amount of reimbursement as revenues on a gross basis in accordance with ASC Topic 605-45, Revenue Recognition/Principal Agent Considerations. The Company is the primary obligor with respect to purchasing goods and services from third-party suppliers, is obligated to compensate the service provider for the work performed, and has discretion in selecting the supplier. Provisions for estimated losses on research grant projects and any other contracts are made in the period such losses are determined. | |||||||||||||||||
The Company engages in transactions with delivery of more than one element. Each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting. For the Company, this determination is generally based on whether the deliverable has “stand-alone value” to the customer. The Company adopted accounts for all Multiple-Deliverable Revenue Arrangements (MDRAs) in accordance with ASC Topic 605-25, Revenue Recognition—Multiple Element Arrangements. | |||||||||||||||||
The Company accounts for milestone revenue in accordance with ASC Topic 605-28, Milestone Method. Under this guidance, the Company recognizes revenue contingent upon the achievement of a substantive milestone in its entirety in the period the milestone is achieved. Substantive milestone payments are recognized upon achievement of the milestone only if all of the following conditions are met: | |||||||||||||||||
• | The milestone payments are non-refundable; | ||||||||||||||||
• | Achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement; | ||||||||||||||||
• | Substantive effort on our part is involved in achieving the milestone; | ||||||||||||||||
• | The amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with achievement of the milestone; and | ||||||||||||||||
• | A reasonable amount of time passes between the up-front license payment and the first milestone payment, as well as between each subsequent milestone payment. | ||||||||||||||||
Determination as to whether a payment meets the aforementioned conditions involves management’s judgment. If any of these conditions are not met, the resulting payment would not be considered a substantive milestone, and therefore, the resulting payment would be considered part of the consideration for the single unit of accounting and be recognized as revenue in accordance with the revenue models described above. In addition, the determination that one such payment was not a substantive milestone could prevent us from concluding that subsequent milestone payments were substantive milestones and, as a result, any additional milestone payments could also be considered part of the consideration for the single unit of accounting and would be recognized as revenue as such performance obligations are performed under either the proportional performance or straight-line methods, as applicable. | |||||||||||||||||
Deferred Revenue | ' | ||||||||||||||||
Deferred Revenue | |||||||||||||||||
Cash received as prepayment on future services is deferred and recognized as revenue as the services are performed. The Company must remit interest on any deferred revenue related to a governmental agency. As of September 30, 2013 and December 31, 2012, no interest was due as the Company did not have any deferred revenue from a government agency. | |||||||||||||||||
Research and Development | ' | ||||||||||||||||
Research and Development | |||||||||||||||||
Except for payments made in advance of services, the Company expenses its research and development costs as incurred. For payments made in advance, the Company recognizes research and development expense as the services are rendered. Research and development costs primarily consist of salaries and related expenses for personnel and resources and the costs of clinical trials. Other research and development expenses include preclinical analytical testing, outside services, providers, materials and consulting fees. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
Income Taxes | |||||||||||||||||
Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and its respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. | |||||||||||||||||
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce net deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable for the period and the change during the period in deferred tax assets and liabilities. | |||||||||||||||||
The Company accounts for uncertain tax positions pursuant to ASC Topic 740 (previously included in FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes–an Interpretation of FASB Statement No. 109). Financial statement recognition of a tax position taken or expected to be taken in a tax return is determined based on a more-likely-than-not threshold of that position being sustained. If the tax position meets this threshold, the benefit to be recognized is measured as the tax benefit having the highest likelihood of being realized upon ultimate settlement with the taxing authority. The Company recognizes interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes. | |||||||||||||||||
Comprehensive Income (Loss) | ' | ||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
ASC Topic 220-10, Reporting Comprehensive Income, requires the presentation of the comprehensive income or loss and its components as part of the financial statements if comprehensive income (loss) differs from net income (loss). For the three- and nine-months ended September 30, 2013 and the year ended December 31, 2012, the Company’s net loss equals comprehensive loss. | |||||||||||||||||
Share-Based Compensation | ' | ||||||||||||||||
Share-Based Compensation | |||||||||||||||||
Share-based payments are accounted for in accordance with the provisions of ASC Topic 718, Compensation—Stock Compensation. The fair value of share-based payments is estimated, on the date of grant, using the Black-Scholes-Merton option-pricing model (the Black-Scholes model). The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the option. | |||||||||||||||||
For all time vesting awards granted, expense is amortized using the straight-line attribution method. For awards that contain a performance condition, expense is amortized using the accelerated attribution method. As share-based compensation expense recognized in the statements of operations for the three- and nine-months ended September 30, 2013 and 2012 and the year ended December 31, 2012, is based on share-based awards ultimately expected to vest, it has been reduced for estimated forfeitures. | |||||||||||||||||
ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Pre-vesting forfeitures are based on the Company’s historical experience for the three- and nine-months ended September 30, 2013 and 2012 and the year ended December 31, 2012, and have not been material. | |||||||||||||||||
The Company utilizes the Black-Scholes model for estimating fair value of its stock options granted. Option valuation models, including the Black-Scholes model, require the input of subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility and the expected life of the award. | |||||||||||||||||
Expected volatility rates are based on historical volatility of the common stock of comparable publicly traded entities and other factors due to the lack of historic information of the Company’s common stock. The expected life of stock-based options is the period of time for which the stock-based options are expected to be outstanding. Given the lack of historic exercise data, the expected life is determined using the “simplified method” which is defined as the midpoint between the vesting date and the end of the contractual term. | |||||||||||||||||
The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not paid dividends to its stockholders since its inception and does not plan to pay cash dividends in the foreseeable future. Therefore, the Company has assumed an expected dividend rate of zero. | |||||||||||||||||
Given the absence of an active market for the Company’s common stock, the exercise price of the stock options on the date of grant was determined and approved by the board of directors using several factors, including progress and milestones achieved in the Company’s business development and performance, the price per share of its convertible preferred stock offerings and general industry and economic trends. In establishing the estimated fair value of the common stock, the Company considered the guidance set forth in American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. | |||||||||||||||||
Under ASC Topic 718, the cumulative amount of compensation cost recognized for instruments classified as equity that ordinarily would result in a future tax deduction under existing tax law shall be considered to be a deductible difference in applying ASC Topic 740, Income Taxes. The deductible temporary difference is based on the compensation cost recognized for financial reporting purposes; however, these provisions currently do not impact the Company, as all the deferred tax assets have a full valuation allowance. | |||||||||||||||||
Since the Company had net operating loss carryforwards as of September 30, 2013 and December 31, 2012, no excess tax benefits for the tax deductions related to share-based awards were recognized in the statements of operations. | |||||||||||||||||
Equity instruments issued to non-employees are accounted for under the provisions of ASC Topic 718 and ASC Topic 505-50, Equity/Equity-Based Payments to Non-Employees. Accordingly, the estimated fair value of the equity instrument is recorded on the earlier of the performance commitment date or the date the services required are completed and are marked to market during the service period. | |||||||||||||||||
Loss Per Share | ' | ||||||||||||||||
Loss Per Share | |||||||||||||||||
Loss per share is calculated under the two-class method under which all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. | |||||||||||||||||
Basic net loss per common share is determined by dividing the net loss allocable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing the net loss allocable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants. | |||||||||||||||||
The following common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive as applied to the loss from operations as of the three- and nine- months ended September 30, 2013 and 2012: | |||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
September 30 | September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock options | 712.525 | 901,210 | 710,819 | 901,210 | |||||||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In April 2013, FASB issued Accounting Standards Update (ASU) 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amended interim and annual reporting requirements about accumulated other comprehensive income (AOCI). In interim periods, companies are required to report information about reclassifications out of AOCI and changes in AOCI balances. The provision of ASU 2013-02 became effective for the first quarter of 2013. The adoption of ASU 2103-02 did not have a material effect on the Company’s consolidated results of operations, financial position or liquidity. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Common Stock Equivalents Excluded in Calculation of Diluted Loss Per Share | ' | ||||||||||||||||
The following common stock equivalents were excluded in the calculation of diluted loss per share because their effect would be anti-dilutive as applied to the loss from operations as of the three- and nine- months ended September 30, 2013 and 2012: | |||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
September 30 | September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock options | 712.525 | 901,210 | 710,819 | 901,210 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
Property and equipment consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Computer equipment | $ | 93,915 | $ | 92,318 | |||||
Furniture and fixtures | 46,523 | 42,736 | |||||||
Scientific equipment | 2,851,947 | 2,824,076 | |||||||
Leasehold improvements | 319,553 | 319,553 | |||||||
3,311,938 | 3,278,683 | ||||||||
Less accumulated depreciation | (3,236,238 | ) | (3,220,417 | ) | |||||
$ | 75,700 | $ | 58,266 |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Total Stock-Based Compensation Expense | ' | ||||||||||||||||
Total stock-based compensation expense, related to all of the Company’s share-based awards to employees, directors and consultants recognized during three- and nine-months ended September 30, 2013 and 2012, was comprised of the following: | |||||||||||||||||
Three-Months Ended | Nine-Months Ended | ||||||||||||||||
September 30 | September 30 | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development | $ | 38,856 | $ | 32,200 | $ | 96,943 | $ | 86,845 | |||||||||
General and administrative | 80,361 | 65,261 | 185,507 | 195,784 | |||||||||||||
Total share-based compensation expense | $ | 119,217 | $ | 97,461 | $ | 282,450 | $ | 282,629 | |||||||||
Weighted-Average Assumptions Used for Calculating Value of Options Granted | ' | ||||||||||||||||
The following table describes the weighted-average assumptions used for calculating the value of options granted during the nine-months ended September 30, 2013: | |||||||||||||||||
2013 | |||||||||||||||||
Dividend yield | 0% | ||||||||||||||||
Expected volatility | 80% | ||||||||||||||||
Weighted-average risk-free interest rate | 1.40% - 1.80% | ||||||||||||||||
Expected term | 6.2 years | ||||||||||||||||
Stock Option Activity | ' | ||||||||||||||||
Information regarding the stock options activity including employees, directors and consultants as of September 30, 2013, and changes during the period then ended, are summarized as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | |||||||||||||||
Shares | Average | Average | |||||||||||||||
Exercise | Contractual | ||||||||||||||||
Price | Life | ||||||||||||||||
Outstanding at December 31, 2012 (audited) | 1,707,114 | $ | 1.3802 | 4.4 years | |||||||||||||
Options granted (unaudited) | 247,600 | $ | 3.26 | 6.2 years | |||||||||||||
Options exercised (unaudited) | (489,667 | ) | $ | 0.647 | 1.3 years | ||||||||||||
Options canceled or expired (unaudited) | (2,667 | ) | $ | 2.9725 | 8.7 years | ||||||||||||
Outstanding at September 30, 2013 (unaudited) | 1,462,380 | $ | 1.941 | 5.5 years | |||||||||||||
Vested or expected to vest at September 30, 2013 (unaudited) | 1,462,380 | $ | 1.941 | 5.5 years | |||||||||||||
Exercisable at September 30, 2013 (unaudited) | 1,118,156 | $ | 1.5801 | 6.9 years |
Organization_Additional_Inform
Organization - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Aug. 29, 2013 |
Private Placement [Member] | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ' | ' |
Outstanding share of capital stock was exchanged | 0.5 | ' |
Company's outstanding capital stock, percentage | 100.00% | ' |
Outstanding option and outstanding share of capital stock was exchanged | 0.5 | ' |
Shares of common stock sold, value | ' | $60 |
Shares of common stock sold, shares | ' | 18,889,307 |
Shares of common stock sold, value per share | ' | $3.18 |
Principal amount of convertible promissory notes converted in to common stock | ' | $15.30 |
Accrued interest | ' | 800,000 |
Voting right percentage | 100.00% | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Significant Accounting Policies [Line Items] | ' | ' |
Maturity of highly liquid investments | 'Three months or less | ' |
Maturity of certificate | 'More than three months | ' |
Carrying value of cash held in money market funds | $21,200,000 | $1,200,000 |
Allowance recorded | 0 | 0 |
Deferred revenue interest | 0 | 0 |
Assumed expected dividend rate | 0.00% | ' |
Excess tax benefits for tax deductions | $0 | $0 |
Minimum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Property and equipment, estimated useful life | '3 years | ' |
Maximum [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Property and equipment, estimated useful life | ' | '5 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Common Stock Equivalents Excluded in Calculation of Diluted Loss Per Share (Detail) (Stock Options [Member]) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock Options [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Number of anti-dilutive securities excluded from computation of earnings per share | 712.525 | 901,210 | 710,819 | 901,210 |
Property_and_Equipment_Propert
Property and Equipment - Property and Equipment (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | $3,311,938 | $3,278,683 |
Less accumulated depreciation and amortization | -3,236,238 | -3,220,417 |
Property Plant and Equipment Net | 75,700 | 58,266 |
Computer Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 93,915 | 92,318 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 46,523 | 42,736 |
Scientific Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | 2,851,947 | 2,824,076 |
Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property plant and equipment, gross | $319,553 | $319,553 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
Property Plant And Equipment Useful Life And Values [Abstract] | ' | ' | ' |
Depreciation expense | $4,729 | $15,821 | $39,413 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Purchase of common stock | 1,462,380 | 1,707,114 |
Options, maximum term | '10 years | ' |
Two Thousand Thirteen Equity Incentive Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Options, maximum term | '10 years | ' |
Maximum number of shares of common stock | 799,934 | ' |
Maximum number of additional shares of common stock | 1,462,380 | ' |
Maximum annual increase in number of shares of common stock | 800,000 | ' |
Percentage of number of shares of common stock | 4.00% | ' |
Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Incentive stock options (ISOs), Vesting Period | '2 years | ' |
Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Incentive stock options (ISOs), Vesting Period | '3 years | ' |
ShareBased_Compensation_Total_
Share-Based Compensation - Total Stock-Based Compensation Expense (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total share-based compensation expense | $119,217 | $97,461 | $282,450 | $282,629 |
Research and Development Expense [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total share-based compensation expense | 38,856 | 32,200 | 96,943 | 86,845 |
General and Administrative Expense [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total share-based compensation expense | $80,361 | $65,261 | $185,507 | $195,784 |
ShareBased_Compensation_Weight
Share-Based Compensation - Weighted-Average Assumptions Used for Calculating Value of Options Granted (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Dividend yield | 0.00% |
Expected volatility | 80.00% |
Expected term | '6 years 2 months 12 days |
Minimum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Weighted-average risk-free interest rate | 1.40% |
Maximum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Weighted-average risk-free interest rate | 1.80% |
ShareBased_Compensation_Stock_
Share-Based Compensation - Stock Options Activity (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Number of Shares | ' | ' |
Outstanding at beginning of period | 1,707,114 | ' |
Options granted | 247,600 | ' |
Options exercised | -489,667 | ' |
Options canceled or expired | -2,667 | ' |
Outstanding at end of period | 1,462,380 | 1,707,114 |
Vested or expected to vest at end of period | 1,462,380 | ' |
Exercisable at end of period | 1,118,156 | ' |
Weighted average exercise price | ' | ' |
Outstanding at beginning of period | $1.38 | ' |
Options granted | $3.26 | ' |
Options exercised | $0.65 | ' |
Options canceled or expired | $2.97 | ' |
Outstanding at end of period | $1.94 | $1.38 |
Vested or expected to vest at end of period | $1.94 | ' |
Exercisable at end of period | $1.58 | ' |
Weighted average contractual life | ' | ' |
Options granted | '6 years 2 months 12 days | ' |
Options exercised | '1 year 3 months 18 days | ' |
Options canceled or expired | '8 years 8 months 12 days | ' |
Outstanding at end of period | '5 years 6 months | '4 years 4 months 24 days |
Vested or expected to vest | '5 years 6 months | ' |
Exercisable at end of period | '6 years 10 months 24 days | ' |
Collaborations_and_License_Agr1
Collaborations and License Agreements - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
License expiration period | ' | ' | 'The later of expiration of the last licensed patent covering a licensed product, its method of manufacture or use, the expiration of other government grants providing market exclusivity or ten years after first commercial sale of a licensed product in such country, subject to rights of the parties to sooner terminate the agreement on certain events and the right of Takeda to unilaterally terminate the agreement upon a specified number of days' prior notice. | ' | ' |
Estimated fair value of shares issued, recorded as research and development expense | $4,157,742 | $1,797,429 | $16,897,903 | $14,969,710 | ' |
Bristol Myers Squibb Company [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
Company made an upfront payment | ' | ' | 1,000,000 | ' | ' |
Obliged to make milestone payments | 14,800,000 | ' | 14,800,000 | ' | ' |
License expiration period | ' | ' | 'Through the later of ten years after first commercial sale of a licensed product in such country, expiration of the last licensed patent covering a licensed product. | ' | ' |
Takeda Pharmaceutical Company Limited [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
Term of conducting a research program | ' | ' | '3 years | ' | ' |
Takeda Pharmaceutical Company Limited [Member] | Development Milestones [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
Aggregate payment upon achievement of certain milestones | 500,000,000 | ' | 500,000,000 | ' | ' |
Takeda Pharmaceutical Company Limited [Member] | Sales-Based Milestones [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
Aggregate payment upon achievement of certain milestones | 250,000,000 | ' | 250,000,000 | ' | ' |
Takeda Pharmaceutical Company Limited [Member] | Collaborative Arrangement [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
Recognized revenue | 700,000 | ' | 1,900,000 | ' | ' |
Deferred revenue | 400,000 | ' | 400,000 | ' | 1,700,000 |
University [Member] | Licensing Agreements [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
License expiration period | ' | ' | 'Upon expiration of the patent rights or 15 years subsequent to the first sale of products developed through this License. | ' | ' |
Number of common stock issued | ' | ' | 400,000 | ' | ' |
Estimated fair value of shares issued, recorded as research and development expense | ' | ' | 120,000 | ' | ' |
Other payment | 0 | 0 | 0 | 0 | 0 |
University [Member] | Licensing Agreements [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ' | ' | ' | ' | ' |
Annual spending requirements for development and commercialization of technology expense | ' | ' | $1,000,000 | ' | ' |