Axsome Therapeutics (AXSM) 10-Q 8 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 03, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Axsome Therapeutics, Inc.
Entity Central Index Key	1,579,428
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		23,671,301
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash	$ 31,673,383	$ 36,618,497
Prepaid and other current assets	746,094	1,380,560
Total current assets	32,419,477	37,999,057
Equipment, net	79,344	100,730
Other assets	119,291	112,821
Total assets	32,618,112	38,212,608
Current liabilities:
Accounts payable	2,942,999	4,081,173
Accrued Liabilities, Current	2,743,575	2,820,377
Loan payable, current portion	2,717,042	269,162
Total current liabilities	8,403,616	7,170,712
Loan payable, long-term	7,375,439	9,470,445
Total liabilities	15,779,055	16,641,157
Stockholders’ equity:
Preferred stock, $0.0001 par value per share (10,000,000 shares authorized, none issued and outstanding at September 30, 2017 and December 31, 2016, respectively)
Common stock, $0.0001 par value per share (150,000,000 shares authorized, 23,665,532 and 19,158,417 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively)	2,367	1,916
Additional paid-in capital	85,991,032	69,210,986
Accumulated deficit	(69,154,342)	(47,641,451)
Total stockholders’ equity	16,839,057	21,571,451
Total liabilities and stockholders’ equity	$ 32,618,112	$ 38,212,608

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	23,665,532	19,158,417
Common stock, shares outstanding	23,665,532	19,158,417

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Operating expenses:
Research and development	$ 4,471,126	$ 5,568,777	$ 15,463,706	$ 15,393,089
General and administrative	1,826,290	1,639,026	5,256,481	4,524,859
Total operating expenses	6,297,416	7,207,803	20,720,187	19,917,948
Loss from operations	(6,297,416)	(7,207,803)	(20,720,187)	(19,917,948)
Interest and amortization of debt discount/premium (expense) income	(343,234)	13,219	(999,818)	45,233
Tax credit	207,114		207,114
Net loss	$ (6,433,536)	$ (7,194,584)	$ (21,512,891)	$ (19,872,715)
Net loss per common share, basic and diluted	$ (0.27)	$ (0.38)	$ (0.97)	$ (1.04)
Weighted average common shares outstanding, basic and diluted	23,634,040	19,149,906	22,270,885	19,149,579

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities
Net loss	$ (21,512,891)	$ (19,872,715)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	1,535,291	1,596,693
Amortization of debt (premium) discount	352,874
Depreciation	31,283	10,733
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	634,466	129,519
Other assets	(6,470)	(32,500)
Accounts payable	(1,138,174)	1,975,221
Accrued expenses	(76,801)	2,128,420
Net cash used in operating activities	(20,180,422)	(14,064,629)
Cash flows from investing activities
Purchases of equipment	(9,897)	(98,506)
Net cash used in investing activities	(9,897)	(98,506)
Cash flows from financing activities
Procceds from issuance of common stock, net	14,781,092
Proceeds from exercise of options	309,219	14,679
Proceeds from exercise of warrants	154,894
Net cash provided by financing activities	15,245,205	14,679
Net increase in cash	(4,945,114)	(14,148,456)
Cash at beginning of period	36,618,497	48,036,260
Cash at end of period	$ 31,673,383	$ 33,887,804

Nature of Business and Basis of

Nature of Business and Basis of Presentation	9 Months Ended
	Sep. 30, 2017
Nature of Business and Basis of Presentation
Nature of Business and Basis of Presentation	Axsome Therapeutics, Inc. Notes to Consolidated Financial Statements (Unaudited) Note 1. Nature of Business and Basis of Presentation Axsome Therapeutics, Inc. (“Axsome” or the “Company”) is a clinical-stage biopharmaceutical company developing novel therapies for central nervous system, or CNS, disorders for which there are limited treatment options. By focusing on this therapeutic area, the Company is addressing significant and growing markets where current treatment options are limited or inadequate. The Company’s product candidate portfolio includes three clinical‑stage candidates, AXS‑05, AXS‑02, and AXS-06, which are being developed for multiple indications. The Company aims to become a fully integrated biopharmaceutical company that develops and commercializes differentiated therapies that expand the treatment options available to caregivers and improve the lives of patients living with CNS disorders. The Company was incorporated on January 12, 2012 in the State of Delaware. The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 7, 2017. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, which are normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods. The results of operations for the nine months ended September 30, 2017 are not necessarily indicative of the operating results for the full fiscal year or any future period. Liquidity and Capital Resources The Company has incurred operating losses since its inception, and expects to continue to incur operating losses for the foreseeable future and may never become profitable. As of September 30, 2017, the Company had an accumulated deficit of $69.2 million. The Company’s primary sources of cash have been proceeds from the issuance and sale of its common stock in public offerings. The Company has not yet commercialized any of its product candidates and cannot be sure if it will ever be able to do so. Even if the Company commercializes one or more of its product candidates, it may not become profitable. The Company’s ability to achieve profitability depends on a number of factors, including its ability to obtain regulatory approval for its product candidates, successfully complete any post-approval regulatory obligations and successfully commercialize its product candidates alone or in partnership. The Company may continue to incur substantial operating losses even if it begins to generate revenues from its product candidates. As of September 30, 2017, the Company had $31.7 million in cash. The Company currently anticipates its cash to be sufficient to fund its anticipated operating cash requirements into the first quarter of 2019. The actual amount of cash that the Company will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of clinical trials for its product candidates. The Company is dependent upon significant future financing to provide the cash necessary to execute its current operations, including the commercialization of any of its product candidates. The Company’s common stock is listed on the NASDAQ Global Market and trades under the symbol “AXSM”.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 2. Summary of Significant Accounting Policies Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products, if approved; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products, if approved; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, if approved; and the Company’s ability to raise additional financing. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve and maintain profitability. Use of Estimates Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. In preparing these financial statements, management used significant estimates in the following areas, among others: stock‑based compensation expense; the accounting for research and development costs; and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Foreign Currency Translation Expenses denominated in foreign currency are translated into U.S. dollars at the exchange rate on the date the expense is incurred. Assets and liabilities of foreign operations are translated at period-end exchange rates. The effect of exchange rate fluctuations on translating foreign currency into U.S. dollars is included in the Statements of Operations and is not material to the Company’s financial statements. Research and Development Costs Research and development expenses primarily consist of costs incurred in performing research and development activities, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits, stock‑based compensation expense, contract services, including external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”), facilities costs, overhead costs, depreciation, and other related costs. Generally, research and development costs are expensed as incurred. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. The Company makes estimates of costs incurred in relation to external CROs and clinical site costs. The Company analyzes the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. The Company reviews and accrues CRO expenses and clinical trial study expenses based on work performed and relies upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract. Basic and Diluted Net Loss per Common Share Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as warrants and stock options, which would result in the issuance of incremental shares of common stock. As the impact of these items is anti‑dilutive during periods of net loss, there was no difference between basic and diluted net loss per share of common stock for the nine months ended September 30, 2017 and 2016. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) , which supersedes FASB Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similarly to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the potential impact of the new guidance. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements To Employee Share-Based Payment Accounting , which allows for the simplification of several aspects of the accounting for share-based payment transactions. The standard is effective for interim and annual periods beginning after December 15, 2016. The Company adopted this guidance effective March 31, 2017. The adoption of the guidance did not have a material impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments, which is guidance to address diversity in practice with respect to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The updated guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity that occurs in practice. The guidance is effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the potential impact of the new guidance. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting . ASU 2017-09 provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. The Company is currently evaluating the potential impact of the new guidance .

Accrued Expenses

Accrued Expenses	9 Months Ended
	Sep. 30, 2017
Accrued Expenses
Accrued Expenses	Note 3. Accrued Expenses and Other Current Liabilities At September 30, 2017 and December 31, 2016 accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2017 2016 Research and development $ 1,733,995 $ 1,693,748 Accrued compensation 537,037 539,290 Other 472,543 587,339 Total $ 2,743,575 $ 2,820,377

Loan and Security Agreement

Loan and Security Agreement	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Loan and Security Agreement	Note 4. Loan and Security Agreement In November 2016, the Company entered into a $20.0 million Term Loan Agreement (“Term Loan”) with Silicon Valley Bank (“SVB”). The three-tranche Term Loan consists of an initial $10.0 million tranche triggered upon closing, with the remaining $10.0 million available to be drawn in two $5.0 million tranches, at the Company’s option, subject to the achievement of certain clinical and financial milestones. The loan bears interest at an annual rate equal to 4.50% plus the prime rate, which is the greater of 3.50% or the Wall Street Journal prime rate, and is payable monthly. It matures in November 2020 and has an interest-only payment period until December 1, 2017, which may be extended to May 2018 upon the drawing of the second tranche. Following the interest-only payment period, the Company will begin making monthly payments of principal and interest until the maturity date. Principal payments coming due within twelve months have been classified as current liabilities in the accompanying balance sheet. In addition, the Company is required to pay a final payment fee of 8.5% of the principal amount extended on the date of repayment of the Term Loan, which is being accreted and amortized into interest expense using the effective interest rate method over the term of the loan. The Company may prepay all, but not less than all, of the Term Loan, subject to a prepayment premium of 3.0% of the outstanding principal if prepaid within two years of the effective date of the loan, 2.0% of the outstanding principal if prepaid during the third year of the loan, and 1.0% of the outstanding principal if prepaid after the third year. The Term Loan is collateralized by a security interest in all of the Company’s assets except intellectual property. The Company’s intellectual property is subject to a negative pledge. Interest expense was $646,944 and amortization of the final payment was $261,350 for the nine months ended September 30, 2017. Long-term debt and unamortized debt discount balances are as follows: September 30, 2017 Long-term debt $ 10,000,000 Less debt discount, net of current portion 153,217 Long-term debt, net of debt discount 10,153,217 Less current portion of long-term debt $ (2,777,778) Loan payable, long-term $ Current portion of long-term debt Current portion of debt discount Loan payable, current portion $ In connection with the Term Loan, SVB and Life Science Loans, LLC (the “Lenders”) received warrants to purchase an aggregate 65,228 shares of the Company’s common stock at an exercise price of $7.41 per share, which are exercisable until November 8, 2023. The Lenders will receive additional warrants in connection with the second and third term tranches, if and when advanced by the Lenders. The proceeds of $10.0 million were allocated based on the relative fair values of the debt instrument and the warrant instrument. The fair value of the warrants and the closing costs were recorded as debt discounts and are being amortized using the effective interest rate method over the term of the loan. Amortization of the debt discount was $91,524 for the nine months ended September 30, 2017. Scheduled principal payments on outstanding debt, as of September 30, 2017, are as follows: 2017 $ 277,778 2018 3,333,333 2019 3,333,333 2020 3,055,556 Total $ 10,000,000

Net Loss per Common Share

Net Loss per Common Share	9 Months Ended
	Sep. 30, 2017
Net Loss per Common Share
Net Loss per Common Share	Note 5. Net Loss per Common Share The following table sets forth the computation of basic and diluted net loss per common share: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Basic and diluted net loss per common share: Net loss $ (6,433,536) $ (7,194,584) $ (21,512,891) $ (19,872,715) Weighted average common shares outstanding—basic and diluted 23,634,040 19,149,906 22,270,885 19,149,579 Net loss per common share—basic and diluted $ (0.27) $ (0.38) $ (0.97) $ (1.04) The following potentially dilutive securities outstanding at September 30, 2017 and 2016 have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti‑dilutive: September 30, 2017 2016 Stock options 2,341,995 1,776,856 Warrants 218,547 272,468 Total 2,560,542 2,049,324

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2017
Stockholders’ Equity
Stockholders’ Equity	Note 6. Stockholders’ Equity Capital Structure On December 1, 2016, the Company filed a shelf registration statement with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities and units up to an aggregate amount of $150.0 million, which the Company refers to as the 2016 Shelf Registration Statement. On December 16, 2016, the 2016 Shelf Registration Statement was declared effective by the SEC. The Company completed an offering of common stock in March 2017 and entered into an agreement to sell up to $30 million in shares of its common stock from time to time utilizing the 2016 Shelf Registration Statement (see below). In the future, the Company may also periodically offer one or more of these securities in amounts, prices and terms to be announced when and if the securities are offered. At the time any of the securities covered by the 2016 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of any such offering. In March 2017, the Company completed an underwritten public offering, whereby it sold 4,304,813 shares of common stock at a public offering price of $3.74 per share. The Company received gross proceeds of approximately $16.1 million and net proceeds of approximately $14.8 million, net of underwriting discounts and offering expenses. In October 2017, the Company entered into a sales agreement (the “Sales Agreement”) with Leerink Partners LLC ("Leerink"), pursuant to which the Company may sell up to $30 million in shares of its common stock from time to time through Leerink, acting as its sales agent, in one or more at-the-market offerings utilizing the 2016 Shelf Registration Statement. Leerink is entitled to receive a commission of 3.0% of the gross proceeds for any shares sold under the Sales Agreement. No sales were made under the Sales Agreement as of November 8, 2017. The holders of shares of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. The holders of shares of common stock are entitled to receive dividends, if and when declared by the board of directors. Equity Incentive Plans Shares available for the issuance of stock options or other stock-based awards under the Company’s 2015 Omnibus Incentive Compensation Plan were 2,831,963 at September 30, 2017. Stock Options The following table sets forth the stock option activity for the nine months ended September 30, 2017: Weighted Weighted average Aggregate Number average contractual intrinsic of shares exercise price term value Outstanding at December 31, 2016 1,772,050 $ 5.74 Granted 768,573 5.05 Exercised (83,153) 3.72 Forfeited (99,407) 6.67 Expired (16,068) 8.35 Outstanding at September 30, 2017 2,341,995 $ 5.52 8.4 $ 2,346,070 Vested and expected to vest at September 30, 2017 2,335,826 $ 5.54 8.4 $ 2,319,852 Exercisable at September 30, 2017 1,176,892 $ 4.62 7.6 $ 2,011,795 The fair value of each stock option grant is estimated on the date of grant using the Black‑Scholes option pricing model. The Company periodically remeasures the fair value of stock‑based awards issued to non‑employees and records the expense over the requisite service period. The expected term of the Company’s stock options has been determined utilizing the “simplified” method as described in the SEC’s Staff Accounting Bulletin No. 107 relating to stock‑based compensation. The simplified method was chosen because the Company has limited historical option exercise experience due to its short operating history. The risk‑free interest rate is based on the U.S. Treasury yield in effect at the time of grant for a period approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Expected volatility is based on historical volatilities of similar entities within the Company’s industry. The weighted average valuation date fair value of options granted was $3.21 and $5.14 per option for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was $4.5 million of total unrecognized compensation cost related to non‑vested stock options which is expected to be recognized over a weighted average period of 2.9 years. These amounts do not include 6,169 options outstanding as of September 30, 2017, which are performance‑based and vest upon the achievement of certain corporate milestones. Stock‑based compensation will be measured and recorded if and when it is probable that the milestone will occur. Stock‑based compensation expense recognized for the three and nine months ended September 30, 2017 and 2016 was allocated as follows: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Research and development $ 127,322 $ 174,287 $ 408,077 $ 942,228 General and administrative 260,723 284,181 1,127,214 654,465 Total $ 388,045 $ 458,468 $ 1,535,291 $ 1,596,693 Performance‑Based Awards The Company issued no performance-based awards during the nine months ended September 30, 2017 and 2016. For awards granted to employees with performance conditions, no expense will be recognized, and no measurement date can occur, until the occurrence of the event is probable. For awards granted to non‑employees, the Company will recognize the lowest aggregate amount within the range of potential values as expense until the measurement date is established. For the nine months ended September 30, 2017 and 2016, the Company recognized $23,694 and $573,708, respectively, as expense related to performance‑based awards. Warrants The following table summarizes warrant activity for the nine months ended September 30, 2017: Weighted average Warrants exercise price Outstanding at December 31, 2016 337,696 $ 3.06 Exercised (119,149) 1.30 Outstanding at September 30, 2017 218,547 $ 4.02

Summary of Significant Accoun12

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2017
Summary of Significant Accounting Policies
Significant Risks and Uncertainties	Significant Risks and Uncertainties The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products, if approved; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products, if approved; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, if approved; and the Company’s ability to raise additional financing. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve and maintain profitability.
Use of Estimates	Use of Estimates Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. In preparing these financial statements, management used significant estimates in the following areas, among others: stock‑based compensation expense; the accounting for research and development costs; and the recoverability of the Company’s net deferred tax assets and related valuation allowance.
Foreign Currency Translation	Foreign Currency Translation Expenses denominated in foreign currency are translated into U.S. dollars at the exchange rate on the date the expense is incurred. Assets and liabilities of foreign operations are translated at period-end exchange rates. The effect of exchange rate fluctuations on translating foreign currency into U.S. dollars is included in the Statements of Operations and is not material to the Company’s financial statements.
Research and Development Costs	Research and Development Costs Research and development expenses primarily consist of costs incurred in performing research and development activities, including preclinical studies, clinical trials, manufacturing costs, employee salaries and benefits, stock‑based compensation expense, contract services, including external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”), facilities costs, overhead costs, depreciation, and other related costs. Generally, research and development costs are expensed as incurred. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered or the related services are performed, subject to an assessment of recoverability. The Company makes estimates of costs incurred in relation to external CROs and clinical site costs. The Company analyzes the progress of clinical trials, including levels of patient enrollment, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Significant judgments and estimates must be made and used in determining the accrued balance and expense in any accounting period. The Company reviews and accrues CRO expenses and clinical trial study expenses based on work performed and relies upon estimates of those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract. Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified in the specific clinical study or trial contract.
Basic and Diluted Net Loss per Common Share	Basic and Diluted Net Loss per Common Share Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as warrants and stock options, which would result in the issuance of incremental shares of common stock. As the impact of these items is anti‑dilutive during periods of net loss, there was no difference between basic and diluted net loss per share of common stock for the nine months ended September 30, 2017 and 2016.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) , which supersedes FASB Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similarly to existing guidance for operating leases. The standard will be effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is currently evaluating the potential impact of the new guidance. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements To Employee Share-Based Payment Accounting , which allows for the simplification of several aspects of the accounting for share-based payment transactions. The standard is effective for interim and annual periods beginning after December 15, 2016. The Company adopted this guidance effective March 31, 2017. The adoption of the guidance did not have a material impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments, which is guidance to address diversity in practice with respect to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The updated guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity that occurs in practice. The guidance is effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the potential impact of the new guidance.

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2017
Accrued Expenses
Schedule of accrued expenses	September 30, December 31, 2017 2016 Research and development $ 1,733,995 $ 1,693,748 Accrued compensation 537,037 539,290 Other 472,543 587,339 Total $ 2,743,575 $ 2,820,377

Loan and Security Agreement (Ta

Loan and Security Agreement (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of long-term debt and unamortized debt discount balances	September 30, 2017 Long-term debt $ 10,000,000 Less debt discount, net of current portion 153,217 Long-term debt, net of debt discount 10,153,217 Less current portion of long-term debt $ (2,777,778) Loan payable, long-term $ Current portion of long-term debt Current portion of debt discount Loan payable, current portion $
Schedule of principal payments	Scheduled principal payments on outstanding debt, as of September 30, 2017, are as follows: 2017 $ 277,778 2018 3,333,333 2019 3,333,333 2020 3,055,556 Total $ 10,000,000

Net Loss per Common Share (Tabl

Net Loss per Common Share (Tables)	9 Months Ended
	Sep. 30, 2017
Net Loss per Common Share
Computation of basic and diluted net loss per common share	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Basic and diluted net loss per common share: Net loss $ (6,433,536) $ (7,194,584) $ (21,512,891) $ (19,872,715) Weighted average common shares outstanding—basic and diluted 23,634,040 19,149,906 22,270,885 19,149,579 Net loss per common share—basic and diluted $ (0.27) $ (0.38) $ (0.97) $ (1.04)
Schedule of potentially dilutive securities	September 30, 2017 2016 Stock options 2,341,995 1,776,856 Warrants 218,547 272,468 Total 2,560,542 2,049,324

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2017
Stockholders’ Equity
Schedule of stock option activity	Weighted Weighted average Aggregate Number average contractual intrinsic of shares exercise price term value Outstanding at December 31, 2016 1,772,050 $ 5.74 Granted 768,573 5.05 Exercised (83,153) 3.72 Forfeited (99,407) 6.67 Expired (16,068) 8.35 Outstanding at September 30, 2017 2,341,995 $ 5.52 8.4 $ 2,346,070 Vested and expected to vest at September 30, 2017 2,335,826 $ 5.54 8.4 $ 2,319,852 Exercisable at September 30, 2017 1,176,892 $ 4.62 7.6 $ 2,011,795
Schedule of stock-based compensation expense	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Research and development $ 127,322 $ 174,287 $ 408,077 $ 942,228 General and administrative 260,723 284,181 1,127,214 654,465 Total $ 388,045 $ 458,468 $ 1,535,291 $ 1,596,693
Schedule of warrant activity	Weighted average Warrants exercise price Outstanding at December 31, 2016 337,696 $ 3.06 Exercised (119,149) 1.30 Outstanding at September 30, 2017 218,547 $ 4.02

Nature of Business and Basis 17

Nature of Business and Basis of Presentation - Liquidity and Capital Resources (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Nature of Business and Basis of Presentation
Accumulated deficit	$ 69,154,342	$ 47,641,451
Cash	$ 31,673,383	$ 36,618,497	$ 33,887,804	$ 48,036,260

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Accrued Expenses
Research and development	$ 1,733,995	$ 1,693,748
Accrued compensation	537,037	539,290
Other	472,543	587,339
Accrued expenses	$ 2,743,575	$ 2,820,377

Loan and Security Agreement - A

Loan and Security Agreement - Additional Information (Details)	1 Months Ended	9 Months Ended
	Nov. 30, 2016USD ($)tranche	Sep. 30, 2017USD ($)
Term Loan
Maximum loan amount	$ 20,000,000
Number of loan tranches | tranche	3
Base interest rate	4.50%
Interest rate spread	3.50%
Final payment fee, percent of principal	8.50%
Prepayment premium, percent of principal, if prepaid within two years	3.00%
Prepayment premium, condition one, term	2 years
Prepayment premium, percent of principal, if prepaid during the third year	2.00%
Prepayment premium, percent of principal, if prepaid after the third year	1.00%
Interest expense		$ 646,944
Amortization of debt issuance costs		$ 261,350
Term Loan, Tranche One, triggered upon closing
Loan amount	$ 10,000,000
Term Loan, Tranches Two and Three
Maximum loan amount	$ 10,000,000
Number of loan tranches | tranche	2
Term Loan, Tranche Two
Maximum loan amount	$ 5,000,000
Term Loan, Tranche Three
Maximum loan amount	$ 5,000,000

Loan and Security Agreement - L

Loan and Security Agreement - Long-term Debt and Unamortized Debt Discount (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Long-term debt	$ 10,000,000
Less debt discount, net of current portion	153,217
Long-term debt, net of debt discount	10,153,217
Less current portion of long-term debt	(2,777,778)
Loan payable, long-term	7,375,439	$ 9,470,445
Current portion of long-term debt	2,777,778
Current portion of debt discount	(60,736)
Loan payable, current portion	$ 2,717,042	$ 269,162

Loan and Security Agreement - W

Loan and Security Agreement - Warrants Issued (Details) - USD ($)	1 Months Ended	9 Months Ended
	Nov. 30, 2016	Sep. 30, 2017	Dec. 31, 2016
Exercise price of warrants (in dollars per share)		$ 4.02	$ 3.06
Amortization of debt (premium) discount		$ 352,874
Term Loan
Common stock to be issued if warrants are exercised (in shares)	65,228
Exercise price of warrants (in dollars per share)	$ 7.41
Proceeds from Issuance of Long-term Debt	$ 10,000,000
Amortization of debt (premium) discount		$ 91,524

Loan and Security Agreement - S

Loan and Security Agreement - Schedule of Principal Payments (Details)	Sep. 30, 2017USD ($)
Debt Disclosure [Abstract]
2,017	$ 277,778
2,018	3,333,333
2,019	3,333,333
2,020	3,055,556
Total	$ 10,000,000

Net Loss per Common Share - Com

Net Loss per Common Share - Computation of Basic and Diluted Net Loss per Common Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Basic and diluted net loss per common share:
Net loss	$ (6,433,536)	$ (7,194,584)	$ (21,512,891)	$ (19,872,715)
Weighted average common shares outstanding, basic and diluted	23,634,040	19,149,906	22,270,885	19,149,579
Net loss per common share, basic and diluted	$ (0.27)	$ (0.38)	$ (0.97)	$ (1.04)

Net Loss per Common Share - Pot

Net Loss per Common Share - Potentially Dilutive Securities Outstanding (Details) - shares	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	2,560,542	2,049,324
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	2,341,995	1,776,856
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	218,547	272,468

Stockholders' Equity - Capital

Stockholders' Equity - Capital Structure (Details)	Nov. 08, 2017USD ($)	Mar. 31, 2017USD ($)$ / sharesshares	Sep. 30, 2017USD ($)Vote / shares	Oct. 31, 2017USD ($)	Dec. 01, 2016USD ($)
Subsidiary, Sale of Stock [Line Items]
Shelf Registration Statement, maximum aggregate amount issuable					$ 150,000,000
Shares issued | shares		4,304,813
Share Price | $ / shares		$ 3.74
Proceeds from issuance of common stock, gross		$ 16,100,000
Procceds from issuance of common stock, net		$ 14,800,000	$ 14,781,092
Common stock, voting right per share | Vote / shares			1
Subsequent Event
Subsidiary, Sale of Stock [Line Items]
Authorized amount under the Sales Agreement				$ 30,000,000
Commission (as a percent)				3.00%
Proceeds from the Sales Agreement	$ 0

Stockholders' Equity - Equity I

Stockholders' Equity - Equity Incentive Plans (Details)	Sep. 30, 2017shares
2015 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grant	2,831,963

Stockholders' Equity - Stock Op

Stockholders' Equity - Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2017USD ($)$ / sharesshares
Number of shares
Beginning balance outstanding (in shares) | shares	1,772,050
Granted (in shares) | shares	768,573
Exercised (in shares) | shares	(83,153)
Forfeited (in shares) | shares	(99,407)
Expired (in shares) | shares	(16,068)
Ending balance outstanding (in shares) | shares	2,341,995
Vested and expected to vest (in shares) | shares	2,335,826
Exercisable (in shares) | shares	1,176,892
Weighted average exercise price
Beginning balance outstanding (in dollars per share) | $ / shares	$ 5.74
Granted (in dollars per share) | $ / shares	5.05
Exercised (in dollars per share) | $ / shares	3.72
Forfeited (in dollars per share) | $ / shares	6.67
Expired (in dollars per share) | $ / shares	8.35
Ending balance outstanding (in dollars per share) | $ / shares	5.52
Vested and expected to vest (in dollars per share) | $ / shares	5.54
Exercisable (in dollars per share) | $ / shares	$ 4.62
Weighted average contractual term
Outstanding (in years)	8 years 4 months 24 days
Vested and expected to vest (in years)	8 years 4 months 24 days
Exercisable (in years)	7 years 7 months 6 days
Aggregate intrinsic value
Outstanding (in dollars) | $	$ 2,346,070
Vested and expected to vest (in dollars) | $	2,319,852
Exercisable (in dollars) | $	$ 2,011,795

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	768,573
Non-vested options outstanding	6,169
Weighted average
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value (in dollars per share)	$ 3.21	$ 5.14
Unrecognized compensation cost related to non-vested stock options expected to be recognized	$ 4.5
Expected vesting period for non-vested share-based compensation	2 years 10 months 24 days

Stockholders' Equity - Stock-ba

Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 388,045	$ 458,468	$ 1,535,291	$ 1,596,693
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	127,322	174,287	408,077	942,228
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 260,723	$ 284,181	$ 1,127,214	$ 654,465

Stockholders' Equity - Performa

Stockholders' Equity - Performance-Based Awards Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 388,045	$ 458,468	$ 1,535,291	$ 1,596,693
Performance-based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based awards issued			0	0
Stock-based compensation expense			$ 23,694	$ 573,708

Stockholders' Equity - Warrants

Stockholders' Equity - Warrants (Details)	9 Months Ended
	Sep. 30, 2017$ / sharesshares
Warrants
Beginning balance | shares	337,696
Exercised | shares	(119,149)
Ending balance | shares	218,547
Weighted average exercise price
Beginning balance (in dollars per share) | $ / shares	$ 3.06
Exercised (in dollars per share) | $ / shares	1.30
Ending balance (in dollars per share) | $ / shares	$ 4.02