Mirati Therapeutics (MRTX) 10-Q 4 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 01, 2017
Document and Entity Information
Entity Registrant Name	Mirati Therapeutics, Inc.
Entity Central Index Key	1,576,263
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		24,939,797
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 29,757	$ 22,383
Short-term investments	75,703	34,351
Other current assets	2,465	2,821
Total current assets	107,925	59,555
Property and equipment, net	638	629
Other long-term assets	2,202	3,260
Total assets	110,765	63,444
Current liabilities
Accounts payable and accrued liabilities	11,282	15,002
Total current liabilities	11,282	15,002
Other liability	367	133
Total liabilities	11,649	15,135
Stockholders’ equity
Preferred stock, $0.001 par value, 10,000,000 shares authorized; none issued and outstanding at both March 31, 2017 and December 31, 2016	0	0
Common stock, $0.001 par value; 100,000,000 shares authorized; 24,939,797 and 19,937,095 issued and outstanding at March 31, 2017 and December 31, 2016, respectively	25	20
Additional paid-in capital	497,531	428,507
Accumulated other comprehensive income	9,604	9,533
Accumulated deficit	(408,044)	(389,751)
Total stockholders’ equity	99,116	48,309
Total liabilities and stockholders’ equity	$ 110,765	$ 63,444

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	24,939,797	19,937,095
Common stock, shares outstanding (in shares)	24,939,797	19,937,095

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Expenses
Research and development	$ 14,397	$ 17,988
General and administrative	3,693	4,130
Total operating expenses	18,090	22,118
Loss from operations	(18,090)	(22,118)
Other income, net	244	204
Net loss	(17,846)	(21,914)
Unrealized gain on available-for-sale investments	71	27
Comprehensive loss	$ (17,775)	$ (21,887)
Basic and diluted net loss per share	$ (0.73)	$ (1.13)
Weighted average number of shares used in computing net loss per share, basic and diluted	24,383,941	19,380,840

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities:
Net loss	$ (17,846)	$ (21,914)
Non-cash adjustments reconciling net loss to operating cash flows:
Depreciation	45	58
Amortization of premium on investments	(71)	14
Share-based compensation expense	1,766	3,038
Changes in operating assets and liabilities:
Other current assets	704	843
Other long-term assets	(710)	0
Accounts payable, accrued liabilities and other long-term liabilities	(3,540)	1,009
Cash flows used for operating activities	(18,232)	(16,952)
Investing activities:
Purchases of short-term investments	(63,310)	(21,797)
Disposal and maturities of short-term investments	22,100	21,530
Purchases of property and equipment	0	(45)
Cash flows used in investing activities	(41,210)	(312)
Financing activities:
Proceeds from sale of common stock, net	66,816	0
Proceeds from exercise of common stock options and warrants	0	2,326
Cash flows provided by financing activities	66,816	2,326
Increase (decrease) in cash and cash equivalents	7,374	(14,938)
Cash and cash equivalents, beginning of period	22,383	49,493
Cash and cash equivalents, end of period	29,757	34,555
Supplemental disclosures of non-cash investing activities:
Fixed asset additions included within accounts payable	$ 54	$ 0

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Mirati Therapeutics, Inc. ("Mirati" or the "Company") is a clinical-stage biopharmaceutical company focused on developing a pipeline of targeted oncology products. The Company focuses its development programs on product candidates intended to treat specific genetically defined and selected subsets of cancer patients with unmet needs. The Company's common stock has been listed on the NASDAQ Capital Market since July 15, 2013 under the ticker symbol "MRTX." The Company has a wholly owned subsidiary in Canada, MethylGene, Inc.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been omitted. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 . Use of Estimates The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and assumptions 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 expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Cash, Cash Equivalents and Short-term Investments Cash and cash equivalents consist of cash and highly liquid securities with original maturities at the date of acquisition of ninety days or less. Investments with an original maturity of more than ninety days are considered short-term investments and have been classified by management as available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from sales of these securities to fund its operations, as necessary. Such investments are carried at fair value, and the unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. Concentration of Credit Risk The Company invests its excess cash in accordance with its investment policy. The Company's investments are comprised primarily of commercial paper and debt instruments of financial institutions, corporations, U.S. government-sponsored agencies and the U.S. Treasury. The Company mitigates credit risk by maintaining a diversified portfolio and limiting the amount of investment exposure as to institution, maturity and investment type. Financial instruments that potentially subject the Company to significant credit risk consist principally of cash equivalents and short-term investments. Segment Reporting Operating segments are components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker for purposes of making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and managed its business as one segment operating primarily in the United States. Net loss per share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of shares that may be issued under the Company’s stock option and warrant agreements. The following table presents the weighted average number of common share equivalents not included in the calculation of diluted net loss per share due to the anti-dilutive effect of the securities: Three Months Ended March 31, 2017 2016 Common stock options — 438,457 Common stock warrants 6,450,612 888,331 Total 6,450,612 1,326,788

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recently Issued and Recently Adopted Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the specified effective date. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued Accounting Standard Update ("ASU") 2016-09, Compensation-Stock Compensation (Topic 718). The new guidance changes the accounting and simplifies various aspects of the accounting for share-based payments to employees. The guidance allows for a policy election to account for forfeitures as they occur or based on an estimated number of awards that are expected to vest. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, with early adoption permitted. Effective January 1, 2017, the Company adopted the provisions of ASU 2016-09. The impact of this adoption was limited to the accounting for forfeitures of certain stock based awards, which is adopted on a modified retrospective basis. Upon adoption, the Company will no longer estimate forfeitures and will instead account for forfeitures as they occur. This policy election was made to allow simplification of the accounting for share based awards. The cumulative effect of adoption was an increase to both additional paid-in capital and accumulated deficit of $0.4 million . In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under the new guidance, management is required to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The provisions of this ASU are effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter; early adoption is permitted. We adopted this guidance as of December 31, 2016 and the adoption did not require any additional disclosures in our consolidated financial statements for the year ended December 31, 2016. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a proposal to defer the effective date of the guidance until annual and interim reporting periods beginning after December 15, 2017. Although we currently do not have any revenue contracts, we early adopted this standard effective January 1, 2017 using the full retrospective method of adoption so that, in the event we enter into any revenue contracts, the contracts will be accounted for under the new guidance from inception of the contract. Recently Issued Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued financial statements. The Company does not expect the adoption to have any significant impact on its consolidated financial statements, and is in the process of determining whether to early adopt the new guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new guidance, lessees are required to recognize most lease assets and lease liabilities on their balance sheets and record expenses on their income statements in a manner similar to current accounting. The new guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The primary impact of this new accounting guidance will be related to our facilities lease and the Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and related financial statement disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The update to the standard is effective for public companies for interim and annual periods beginning after December 15, 2017. The Company does not believe the adoption of this standard will have a material impact on its financial position, results of operations or related financial statement disclosures.

Investments

Investments	3 Months Ended
	Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Investments	Investments The following tables summarize our short-term investments (dollars in thousands): As of March 31, 2017 Maturity Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities 1 year or less $ 36,350 $ 1 $ (5 ) $ 36,346 Commercial paper 1 year or less 39,268 89 — 39,357 $ 75,618 $ 90 $ (5 ) $ 75,703 As of December 31, 2016 Maturity Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities 1 year or less $ 20,622 $ — $ (3 ) $ 20,619 Commercial paper 1 year or less 13,717 15 — 13,732 $ 34,339 $ 15 $ (3 ) $ 34,351 Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. At March 31, 2017 , the Company did not have any securities in material unrealized loss positions. The Company reviews its investments to identify and evaluate investments that have an indication of possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and the Company’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. The Company does not intend to sell any investments prior to recovery of their amortized cost basis for any investments in an unrealized loss position.

Fair value measurements

Fair value measurements	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair value measurements	Fair value measurements The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1 or 2 within the fair value hierarchy as described in the accounting standards for fair value measurements. The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy: • Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2- Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and • Level 3- Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. The following tables summarize the assets and liabilities measured at fair value on a recurring basis (in thousands): March 31, 2017 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Cash $ 3,165 $ 3,165 $ — $ — Money market funds 20,364 20,364 — — Corporate debt securities 6,228 — 6,228 — Total cash and cash equivalents 29,757 23,529 6,228 — Short-term investments: Corporate debt securities 36,346 — 36,346 — Commercial paper 39,357 — 39,357 — Total short-term investments 75,703 — 75,703 — Total $ 105,460 $ 23,529 $ 81,931 $ — December 31, 2016 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Cash $ 2,728 $ 2,728 $ — $ — Money market funds 19,655 19,655 — — Total cash and cash equivalents 22,383 22,383 — — Short-term investments: Corporate debt securities 20,619 — 20,619 — Commercial paper 13,732 — 13,732 — Total short-term investments 34,351 — 34,351 — Total $ 56,734 $ 22,383 $ 34,351 $ — The Company’s investments in Level 1 assets are valued based on publicly available quoted market prices for identical securities as of March 31, 2017 and December 31, 2016 . The Company determines the fair value of Level 2 related securities with the aid of valuations provided by third parties using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids and/or offers. There were no transfers between fair value measurement levels during the three months ended March 31, 2017 or the year ended December 31, 2016 .

Other current assets and other

Other current assets and other long-term assets	3 Months Ended
	Mar. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Other current assets and other long-term assets	Other current assets and other long-term assets Other current assets consisted of the following (in thousands): March 31, December 31, 2017 2016 Prepaid expenses $ 1,575 $ 1,879 Deposits and other receivables 733 759 Interest receivable 157 183 $ 2,465 $ 2,821 The other long-term assets balance consisted of $2.2 million and $3.3 million in deposits paid in conjunction with the Company's research and development activities as of March 31, 2017 and December 31, 2016 , respectively.

Property and equipment, net

Property and equipment, net	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Property and equipment, net	Property and equipment, net Property and equipment consisted of the following (in thousands): March 31, December 31, 2017 2016 Computer equipment $ 329 $ 329 Office and other equipment 301 301 Laboratory equipment 617 563 Leasehold improvements 63 63 Gross property and equipment 1,310 1,256 Less: Accumulated depreciation (672 ) (627 ) Property and equipment, net $ 638 $ 629 The Company incurred immaterial depreciation expense for both the three months ended March 31, 2017 and 2016 .

Accounts payable and accrued li

Accounts payable and accrued liabilities	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities Accounts payable and accrued liabilities consisted of the following (in thousands): March 31, December 31, 2017 2016 Accounts payable $ 3,450 $ 6,296 Accrued clinical, development and other expenses 5,788 5,743 Accrued compensation and benefits 2,028 2,923 Other current liabilities 16 40 $ 11,282 $ 15,002

Warrants

Warrants	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Warrants	Warrants As of March 31, 2017 the following warrants for common stock were issued and outstanding: Issue date Expiration date Exercise price Number of warrants outstanding January 11, 2017 None $ 0.001 7,258,263 November 21, 2012 November 21, 2017 $ 7.86 695,383 Refer to footnote 11 for further detail of the new warrants issued during the first quarter of 2017. During the three months ended March 31, 2017 , no warrants were exercised. During the three months ended March 31, 2016, warrants for 419,244 shares of the Company's common stock were exercised via cashless exercises and 313,756 shares were exercised for cash generating proceeds of $2.1 million . The Company issued a total of 603,545 shares of common stock for the same period. Stockholders' Equity Sale of Common Stock In January 2017, the Company sold 5,002,702 million shares of its common stock at a public offering price of $5.60 per share and sold warrants to purchase up to 7,258,263 shares of its common stock at a public offering price of $5.599 per warrant share. The public offering price for the warrants was equal to the public offering price of the common stock, less the $0.001 per share exercise price of each warrant. After deducting underwriter discounts and offering expenses, the Company received net proceeds from the transaction of $66.8 million . These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. Per their terms, the outstanding warrants to purchase shares of common stock may not be exercised if the holder’s ownership of the Company’s common stock would exceed 19.99 percent following such exercise. Pursuant to the terms of the financing, the Company has an effective resale registration statement on file with the SEC covering shares of common stock sold and shares of common stock issuable upon the exercise of the warrants. Share-based Compensation Total share-based compensation expense by operating statement classification is presented below (in thousands): Three Months Ended March 31, 2017 2016 Research and development expense $ 982 $ 1,458 General and administrative expense 784 1,580 $ 1,766 $ 3,038 During the three months ended March 31, 2017 , no shares were issued pursuant to stock option exercises. During the three months ended March 31, 2016 , 20,296 shares were issued pursuant to stock option exercises, generating net proceeds of $0.2 million .

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Leases [Abstract]
Commitments and Contingencies	Commitments and Contingencies On June 24, 2014, the Company entered into a lease agreement for 18,000 square feet of completed office and laboratory space located in San Diego, California. The office space under the lease is the Company's corporate headquarters. The lease commenced in phases, 2,300 square feet of space which commenced on July 1, 2014 at an initial monthly rent of $5,900 per month and 15,600 square feet of space which commenced on March 27, 2015 at an initial monthly rent of $18,200 per month. The leased property is subject to a 3% annual rent increase following availability. In addition to such base monthly rent, the Company is obligated to pay certain customary amounts for its share of operating expenses and facility amenities. The lease will expire on January 31, 2018. On March 23, 2017, the Company entered into a First Amendment to Lease Agreement (the “Amendment”) to amend the original lease agreement. The Amendment extends the term of the original lease for one year through January 31, 2019. All other terms and covenants from the original lease agreement remain unchanged. Future minimum payments required under the lease are summarized as follows (in thousands): Year Ending December 31: 2017 $ 229 2018 314 2019 26 Total minimum lease payments $ 569

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stockholders' Equity	Warrants As of March 31, 2017 the following warrants for common stock were issued and outstanding: Issue date Expiration date Exercise price Number of warrants outstanding January 11, 2017 None $ 0.001 7,258,263 November 21, 2012 November 21, 2017 $ 7.86 695,383 Refer to footnote 11 for further detail of the new warrants issued during the first quarter of 2017. During the three months ended March 31, 2017 , no warrants were exercised. During the three months ended March 31, 2016, warrants for 419,244 shares of the Company's common stock were exercised via cashless exercises and 313,756 shares were exercised for cash generating proceeds of $2.1 million . The Company issued a total of 603,545 shares of common stock for the same period. Stockholders' Equity Sale of Common Stock In January 2017, the Company sold 5,002,702 million shares of its common stock at a public offering price of $5.60 per share and sold warrants to purchase up to 7,258,263 shares of its common stock at a public offering price of $5.599 per warrant share. The public offering price for the warrants was equal to the public offering price of the common stock, less the $0.001 per share exercise price of each warrant. After deducting underwriter discounts and offering expenses, the Company received net proceeds from the transaction of $66.8 million . These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. Per their terms, the outstanding warrants to purchase shares of common stock may not be exercised if the holder’s ownership of the Company’s common stock would exceed 19.99 percent following such exercise. Pursuant to the terms of the financing, the Company has an effective resale registration statement on file with the SEC covering shares of common stock sold and shares of common stock issuable upon the exercise of the warrants. Share-based Compensation Total share-based compensation expense by operating statement classification is presented below (in thousands): Three Months Ended March 31, 2017 2016 Research and development expense $ 982 $ 1,458 General and administrative expense 784 1,580 $ 1,766 $ 3,038 During the three months ended March 31, 2017 , no shares were issued pursuant to stock option exercises. During the three months ended March 31, 2016 , 20,296 shares were issued pursuant to stock option exercises, generating net proceeds of $0.2 million .

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been omitted. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date, but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 .
Use of Estimates	Use of Estimates The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and assumptions 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 expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed quarterly. Any revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Cash and Cash Equivalents	Cash, Cash Equivalents and Short-term Investments Cash and cash equivalents consist of cash and highly liquid securities with original maturities at the date of acquisition of ninety days or less.
Short-term Investments	Investments with an original maturity of more than ninety days are considered short-term investments and have been classified by management as available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date, which reflects management’s intention to use the proceeds from sales of these securities to fund its operations, as necessary.
Concentration of Credit Risk	Concentration of Credit Risk The Company invests its excess cash in accordance with its investment policy. The Company's investments are comprised primarily of commercial paper and debt instruments of financial institutions, corporations, U.S. government-sponsored agencies and the U.S. Treasury. The Company mitigates credit risk by maintaining a diversified portfolio and limiting the amount of investment exposure as to institution, maturity and investment type. Financial instruments that potentially subject the Company to significant credit risk consist principally of cash equivalents and short-term investments.
Segment Reporting	Segment Reporting Operating segments are components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker for purposes of making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and managed its business as one segment operating primarily in the United States.
New accounting pronouncements	Recently Adopted Accounting Pronouncements In March 2016, the FASB issued Accounting Standard Update ("ASU") 2016-09, Compensation-Stock Compensation (Topic 718). The new guidance changes the accounting and simplifies various aspects of the accounting for share-based payments to employees. The guidance allows for a policy election to account for forfeitures as they occur or based on an estimated number of awards that are expected to vest. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, with early adoption permitted. Effective January 1, 2017, the Company adopted the provisions of ASU 2016-09. The impact of this adoption was limited to the accounting for forfeitures of certain stock based awards, which is adopted on a modified retrospective basis. Upon adoption, the Company will no longer estimate forfeitures and will instead account for forfeitures as they occur. This policy election was made to allow simplification of the accounting for share based awards. The cumulative effect of adoption was an increase to both additional paid-in capital and accumulated deficit of $0.4 million . In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under the new guidance, management is required to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The provisions of this ASU are effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter; early adoption is permitted. We adopted this guidance as of December 31, 2016 and the adoption did not require any additional disclosures in our consolidated financial statements for the year ended December 31, 2016. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB approved a proposal to defer the effective date of the guidance until annual and interim reporting periods beginning after December 15, 2017. Although we currently do not have any revenue contracts, we early adopted this standard effective January 1, 2017 using the full retrospective method of adoption so that, in the event we enter into any revenue contracts, the contracts will be accounted for under the new guidance from inception of the contract. Recently Issued Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued financial statements. The Company does not expect the adoption to have any significant impact on its consolidated financial statements, and is in the process of determining whether to early adopt the new guidance. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under the new guidance, lessees are required to recognize most lease assets and lease liabilities on their balance sheets and record expenses on their income statements in a manner similar to current accounting. The new guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The primary impact of this new accounting guidance will be related to our facilities lease and the Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and related financial statement disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The update to the standard is effective for public companies for interim and annual periods beginning after December 15, 2017. The Company does not believe the adoption of this standard will have a material impact on its financial position, results of operations or related financial statement disclosures.
Net loss per share	Net loss per share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of shares that may be issued under the Company’s stock option and warrant agreements.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Schedule of potentially dilutive securities not included in the calculation of diluted net loss per share because to do so would be anti-dilutive	The following table presents the weighted average number of common share equivalents not included in the calculation of diluted net loss per share due to the anti-dilutive effect of the securities: Three Months Ended March 31, 2017 2016 Common stock options — 438,457 Common stock warrants 6,450,612 888,331 Total 6,450,612 1,326,788

Investments (Tables)

Investments (Tables)	3 Months Ended
	Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-sale Securities Reconciliation	The following tables summarize our short-term investments (dollars in thousands): As of March 31, 2017 Maturity Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities 1 year or less $ 36,350 $ 1 $ (5 ) $ 36,346 Commercial paper 1 year or less 39,268 89 — 39,357 $ 75,618 $ 90 $ (5 ) $ 75,703 As of December 31, 2016 Maturity Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Corporate debt securities 1 year or less $ 20,622 $ — $ (3 ) $ 20,619 Commercial paper 1 year or less 13,717 15 — 13,732 $ 34,339 $ 15 $ (3 ) $ 34,351

Fair value measurements (Tables

Fair value measurements (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Schedule of assets and liabilities that are measured at fair value on a recurring basis	The following tables summarize the assets and liabilities measured at fair value on a recurring basis (in thousands): March 31, 2017 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Cash $ 3,165 $ 3,165 $ — $ — Money market funds 20,364 20,364 — — Corporate debt securities 6,228 — 6,228 — Total cash and cash equivalents 29,757 23,529 6,228 — Short-term investments: Corporate debt securities 36,346 — 36,346 — Commercial paper 39,357 — 39,357 — Total short-term investments 75,703 — 75,703 — Total $ 105,460 $ 23,529 $ 81,931 $ — December 31, 2016 Total Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Cash $ 2,728 $ 2,728 $ — $ — Money market funds 19,655 19,655 — — Total cash and cash equivalents 22,383 22,383 — — Short-term investments: Corporate debt securities 20,619 — 20,619 — Commercial paper 13,732 — 13,732 — Total short-term investments 34,351 — 34,351 — Total $ 56,734 $ 22,383 $ 34,351 $ —

Other current assets (Tables)

Other current assets (Tables)	3 Months Ended
	Mar. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Schedule of other current assets	Other current assets consisted of the following (in thousands): March 31, December 31, 2017 2016 Prepaid expenses $ 1,575 $ 1,879 Deposits and other receivables 733 759 Interest receivable 157 183 $ 2,465 $ 2,821

Property and Equipment, net (Ta

Property and Equipment, net (Tables)	3 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Property and equipment consisted of the following (in thousands): March 31, December 31, 2017 2016 Computer equipment $ 329 $ 329 Office and other equipment 301 301 Laboratory equipment 617 563 Leasehold improvements 63 63 Gross property and equipment 1,310 1,256 Less: Accumulated depreciation (672 ) (627 ) Property and equipment, net $ 638 $ 629

Accounts payable and accrued 23

Accounts payable and accrued liabilities (Tables)	3 Months Ended
	Mar. 31, 2017
Payables and Accruals [Abstract]
Schedule of accounts payable and accrued liabilities	Accounts payable and accrued liabilities consisted of the following (in thousands): March 31, December 31, 2017 2016 Accounts payable $ 3,450 $ 6,296 Accrued clinical, development and other expenses 5,788 5,743 Accrued compensation and benefits 2,028 2,923 Other current liabilities 16 40 $ 11,282 $ 15,002

Warrants (Tables)

Warrants (Tables)	3 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Schedule of Warrants Issued and Outstanding	As of March 31, 2017 the following warrants for common stock were issued and outstanding: Issue date Expiration date Exercise price Number of warrants outstanding January 11, 2017 None $ 0.001 7,258,263 November 21, 2012 November 21, 2017 $ 7.86 695,383

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2017
Leases [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases	Future minimum payments required under the lease are summarized as follows (in thousands): Year Ending December 31: 2017 $ 229 2018 314 2019 26 Total minimum lease payments $ 569

Stock-based compensation (Table

Stock-based compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Employee Service Share-based Compensation Allocation	Total share-based compensation expense by operating statement classification is presented below (in thousands): Three Months Ended March 31, 2017 2016 Research and development expense $ 982 $ 1,458 General and administrative expense 784 1,580 $ 1,766 $ 3,038

Summary of Significant Accoun27

Summary of Significant Accounting Policies - Narrative (Details)	3 Months Ended
	Mar. 31, 2017segment
Marketable Securities
Minimum original maturity period of marketable securities	90 days
Number of operating segments	1

Summary of Significant Accoun28

Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	6,450,612	1,326,788
Common stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	0	438,457
Common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	6,450,612	888,331

Recent Accounting Pronounceme29

Recent Accounting Pronouncements (Details) - Accounting Standards Update 2016-09 [Member] $ in Millions	Jan. 01, 2017USD ($)
Retained Earnings [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ (0.4)
Additional Paid-in Capital [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 0.4

Investments (Details)

Investments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized cost	$ 75,618	$ 34,339
Available-for-sale, Gross unrealized gains	90	15
Available-for-sale, Gross unrealized losses	(5)	(3)
Available-for-sale, Estimated fair value	$ 75,703	$ 34,351
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, maximum maturity period	1 year	1 year
Available-for-sale, Amortized cost	$ 36,350	$ 20,622
Available-for-sale, Gross unrealized gains	1	0
Available-for-sale, Gross unrealized losses	(5)	(3)
Available-for-sale, Estimated fair value	$ 36,346	$ 20,619
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, maximum maturity period	1 year	1 year
Available-for-sale, Amortized cost	$ 39,268	$ 13,717
Available-for-sale, Gross unrealized gains	89	15
Available-for-sale, Gross unrealized losses	0	0
Available-for-sale, Estimated fair value	$ 39,357	$ 13,732

Fair value measurements (Detail

Fair value measurements (Details) - Recurring basis - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 29,757	$ 22,383
Short-term investments	75,703	34,351
Total	105,460	56,734
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	36,346	20,619
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	39,357	13,732
Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	3,165	2,728
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	20,364	19,655
Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	6,228
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	23,529	22,383
Short-term investments	0	0
Total	23,529	22,383
Level 1 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 1 | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	3,165	2,728
Level 1 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	20,364	19,655
Level 1 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	6,228	0
Short-term investments	75,703	34,351
Total	81,931	34,351
Level 2 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	36,346	20,619
Level 2 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	39,357	13,732
Level 2 | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Level 2 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Level 2 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	6,228
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Short-term investments	0	0
Total	0	0
Level 3 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Level 3 | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Level 3 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	$ 0
Level 3 | Corporate debt securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 0

Other current assets (Details)

Other current assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 1,575	$ 1,879
Security deposits and other receivables	733	759
Interest receivable	157	183
Other current assets	2,465	2,821
Deposits paid for research and development	$ 2,200	$ 3,300

Property and Equipment, net (De

Property and Equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	$ 1,310		$ 1,256
Less: Accumulated depreciation	(672)		(627)
Property and equipment, net	638		629
Depreciation	45	$ 58
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	329		329
Office and other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	301		301
Laboratory equipment
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	617		563
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, Gross	$ 63		$ 63

Accounts payable and accrued 34

Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accounts payable	$ 3,450	$ 6,296
Accrued expenses	5,788	5,743
Accrued compensation and benefits	2,028	2,923
Other current liabilities	16	40
Total accounts payable and accrued liabilities	$ 11,282	$ 15,002

Warrants (Details)

Warrants (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Jan. 31, 2017
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)			$ 0.001
Warrants exercised via cashless exercises	0	419,244
Warrants exercised for cash		313,756
Cash proceeds generated from exercise of warrants		$ 2.1
Shares of common stock issued from exercise of warrants		603,545
Class of Warrants Issued April 4, 2011
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 0.001
Number of warrants outstanding	7,258,263
November 21, 2012 Warrants
Class of Warrant or Right [Line Items]
Exercise price of warrants (in dollars per share)	$ 7.86
Number of warrants outstanding	695,383

Commitments and Contingencies N

Commitments and Contingencies Narrative (Details) - Building	3 Months Ended
	Mar. 31, 2017USD ($)ft²	Jun. 24, 2014ft²
Operating Leased Assets [Line Items]
Square feet of space		18,000
Annual rent increase (Percentage)	3.00%
Lease Agreement Phase One
Operating Leased Assets [Line Items]
Square feet of space	2,300
Minimum monthly rental expense | $	$ 5,900
Lease Agreement Phase Two
Operating Leased Assets [Line Items]
Square feet of space	15,600
Minimum monthly rental expense | $	$ 18,200

Commitments and Contingencies F

Commitments and Contingencies Future Minimum Payments (Details) $ in Thousands	Mar. 31, 2017USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2,016	$ 229
2,017	314
2,018	26
Total minimum lease payments	$ 569

Stockholders' Equity Sale of Co

Stockholders' Equity Sale of Common Stock (Details) $ / shares in Units, $ in Millions	1 Months Ended
	Jan. 31, 2017USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price (in dollars per share)	$ 5.599
Number of securities called by warrants or rights | shares	7,258,263
Exercise price of warrants (in dollars per share)	$ 0.001
Sale of stock, consideration received on transaction | $	$ 66.8
Warrants and rights outstanding | $	$ 40.6
Risk free interest rate	2.04%
Weighted average volatility rate	98.60%
Expected term	6 years 1 month 6 days
Expected dividend rate	0.00%
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued during period, shares, new issues | shares	5,002,702
Share price (in dollars per share)	$ 5.60
Sale of stock, percentage of ownership after transaction	19.99%

Stock-based compensation (Detai

Stock-based compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense	$ 1,766	$ 3,038
Shares issued	0	20,296
Cash received from exercise of options		$ 200
Research and development expense
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense	$ 982	1,458
General and administrative expense
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share-based compensation expense	$ 784	$ 1,580