Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 28, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Loxo Oncology, Inc. | ||
Entity Central Index Key | 1,581,720 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 311.6 | ||
Entity Common Stock, Shares Outstanding | 26,146,756 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 30,376 | $ 68,177 |
Short-term investments | 108,935 | 85,715 |
Prepaid expenses with related party | 922 | |
Other prepaid expenses and current assets | 2,483 | 1,830 |
Total current assets | 141,794 | 156,644 |
Long-term investments | 2,499 | 0 |
Property and equipment, net | 248 | 88 |
Other assets | 771 | 726 |
Total assets | 145,312 | 157,458 |
Current liabilities: | ||
Accounts payable | 1,061 | 269 |
Accrued expenses and other current liabilities | 14,083 | 2,584 |
Total liabilities | 15,144 | 2,853 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 125,000,000 shares authorized; 21,681,236 and 19,577,707 shares issued and outstanding at December 31, 2016 and 2015, respectively | 2 | 2 |
Additional paid-in capital | 269,423 | 221,457 |
Accumulated deficit | (139,236) | (66,838) |
Accumulated other comprehensive loss | (21) | (16) |
Total stockholders' equity | 130,168 | 154,605 |
Total liabilities and stockholders' equity | $ 145,312 | $ 157,458 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 21,681,236 | 19,577,707 |
Common stock, shares outstanding | 21,681,236 | 19,577,707 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating expenses: | |||
Research and development with related party | $ 11,611 | $ 7,568 | |
Research and development | $ 58,275 | 13,956 | 6,947 |
General and administrative | 14,903 | 10,508 | 6,175 |
Total operating expenses and loss from operations | (73,178) | (36,075) | (20,690) |
Interest income, net | 780 | 199 | 18 |
Net loss | (72,398) | (35,876) | (20,672) |
Accretion of redeemable convertible preferred stock | (34) | ||
Net loss attributable to common stockholders | $ (72,398) | $ (35,876) | $ (20,706) |
Per share information: | |||
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (3.46) | $ (2.12) | $ (3.06) |
Weighted-average shares outstanding-basic and diluted (in shares) | 20,905,448 | 16,894,549 | 6,773,673 |
Statements of Comprehensive Los
Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Comprehensive Loss | |||
Net loss | $ (72,398) | $ (35,876) | $ (20,672) |
Other comprehensive income (loss) | |||
Unrealized gain (loss) on available-for-sale securities | (5) | 12 | (28) |
Comprehensive loss | $ (72,403) | $ (35,864) | $ (20,700) |
Statements of Redeemable Conver
Statements of Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity - USD ($) $ in Thousands | Redeemable convertible Series A preferred stockPreferred Stock | Redeemable convertible Series A-1 preferred stockPreferred Stock | Redeemable convertible Series B preferred stockPreferred Stock | Preferred Stock | Common stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2013 | $ 17,799 | $ 7,044 | $ 24,843 | $ 59 | $ (10,290) | $ (10,231) | |||
Balance (in shares) at Dec. 31, 2013 | 2,812,497 | 500,704 | 452,896 | ||||||
Changes in Stockholders' Equity | |||||||||
Stock-based compensation expense | 3,049 | 3,049 | |||||||
Stock options exercises | 167 | 167 | |||||||
Stock option exercises (in shares) | 114,818 | ||||||||
Issuance of redeemable convertible preferred stock | $ 15,000 | $ 28,178 | |||||||
Issuance of redeemable convertible preferred stock (in Shares) | 2,343,753 | 3,166,233 | |||||||
Accretion of redeemable convertible preferred stock to redemption value | $ 26 | $ 8 | 34 | ||||||
Accretion of redeemable convertible preferred stock to redemption value | (34) | (34) | |||||||
Conversion of redeemable preferred stock into shares of common stock | $ (32,825) | $ (7,044) | $ (28,186) | $ (68,055) | $ 1 | 68,054 | 68,055 | ||
Conversion of redeemable preferred stock into shares of common stock (in shares) | (5,156,250) | (500,704) | (3,166,233) | 9,932,042 | |||||
Issuance of common stock, net of offering costs | $ 1 | 72,365 | 72,366 | ||||||
Issuance of common stock, net of offering costs (in shares) | 6,134,307 | ||||||||
Other comprehensive income (loss) | $ (28) | (28) | |||||||
Net loss | (20,672) | (20,672) | |||||||
Balance at Dec. 31, 2014 | $ 2 | 143,660 | (30,962) | (28) | 112,672 | ||||
Balance (in shares) at Dec. 31, 2014 | 16,634,063 | ||||||||
Changes in Stockholders' Equity | |||||||||
Stock-based compensation expense | 6,154 | 6,154 | |||||||
Stock options exercises | 307 | 307 | |||||||
Stock option exercises (in shares) | 58,488 | ||||||||
Reclassification of shares issued and previously subject to repurchase | 37 | 37 | |||||||
Reclassification of shares issued and previously subject to repurchase (in shares) | 10,156 | ||||||||
Issuance of common stock, net of offering costs | 71,299 | 71,299 | |||||||
Issuance of common stock, net of offering costs (in shares) | 2,875,000 | ||||||||
Other comprehensive income (loss) | 12 | 12 | |||||||
Net loss | (35,876) | (35,876) | |||||||
Balance at Dec. 31, 2015 | $ 2 | 221,457 | (66,838) | (16) | 154,605 | ||||
Balance (in shares) at Dec. 31, 2015 | 19,577,707 | ||||||||
Changes in Stockholders' Equity | |||||||||
Stock-based compensation expense | 7,960 | 7,960 | |||||||
Stock options exercises | 1,273 | 1,273 | |||||||
Stock option exercises (in shares) | 177,279 | ||||||||
Issuance of common stock, net of offering costs | 38,733 | 38,733 | |||||||
Issuance of common stock, net of offering costs (in shares) | 1,926,250 | ||||||||
Other comprehensive income (loss) | (5) | (5) | |||||||
Net loss | (72,398) | (72,398) | |||||||
Balance at Dec. 31, 2016 | $ 2 | $ 269,423 | $ (139,236) | $ (21) | $ 130,168 | ||||
Balance (in shares) at Dec. 31, 2016 | 21,681,236 |
Statements of Redeemable Conve7
Statements of Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity (Parenthetical) - Preferred Stock - $ / shares | Jun. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2014 |
Redeemable convertible Series A preferred stock | |||
Issuance of redeemable convertible preferred stock, issue price (in dollars per share) | $ 6.40 | ||
Redeemable convertible Series B preferred stock | |||
Issuance of redeemable convertible preferred stock, issue price (in dollars per share) | $ 8.9661 | $ 8.9661 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net loss | $ (72,398) | $ (35,876) | $ (20,672) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization of premium and discounts on investments | 528 | 391 | 29 |
Depreciation of property and equipment | 77 | 17 | 1 |
Stock-based compensation | 7,960 | 6,154 | 3,049 |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | 224 | (1,971) | (1,256) |
Accounts payable | 792 | 30 | 18 |
Accrued expenses and other current liabilities | 11,499 | 1,073 | 1,136 |
Net cash used in operating activities | (51,318) | (30,182) | (17,695) |
Investing activities: | |||
Purchases of available-for-sale securities | (163,290) | (133,730) | (74,566) |
Proceeds from maturing available-for-sale securities | 137,038 | 116,646 | 5,500 |
Purchase of property and equipment | (237) | (93) | (14) |
Net cash used in investing activities | (26,489) | (17,177) | (69,080) |
Financing activities: | |||
Proceeds from issuance of redeemable convertible preferred stock, net | 43,178 | ||
Proceeds from issuance of common stock, net | 38,733 | 71,299 | 74,164 |
Proceeds from the exercise of stock options | 1,273 | 307 | 167 |
Payment of deferred financing fees | (1,798) | ||
Net cash provided by financing activities | 40,006 | 71,606 | 115,711 |
Net (decrease) increase in cash and cash equivalents | (37,801) | 24,247 | 28,936 |
Cash and cash equivalents-beginning of year | 68,177 | 43,930 | 14,994 |
Cash and cash equivalents-end of year | $ 30,376 | 68,177 | 43,930 |
Supplemental schedule of noncash financing activities: | |||
Conversion of redeemable convertible preferred stock into common stock | $ 68,055 | ||
Reclassification of share repurchase obligation | $ 37 |
Organization and Description of
Organization and Description of the Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization and Description of the Business | |
Organization and Description of the Business | 1 . Organization and Description of the Business Loxo Oncology, Inc. (the “Company”) was incorporated on May 9, 2013 in the State of Delaware. The Company is a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers. Its pipeline focuses on cancers that are uniquely dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer with dramatic effect. The Company operates in one segment and has its principal office in Stamford, Connecticut. Stock Offerings Initial Public Offering In July 2014, the Company’s registration statements on Form S-1 (File Nos. 333-197123 and 333-197779) relating to its initial public offering of its common stock were declared effective by the Securities and Exchange Commission (“SEC”). The shares began trading on The NASDAQ Global Select Market on August 1, 2014. The initial public offering closed on August 6, 2014, and 5,261,538 shares of common stock were sold at an initial public offering price of $13.00 per share, for aggregate gross proceeds to the Company of $68.4 million. Concurrent with the close of the offering, New Enterprise Associates 14, L.P.(“NEA”), an existing stockholder, purchased 230,769 shares of common stock at the initial public offering price in a private placement and the Company received gross proceeds of $3.0 million. In addition, upon the closing of the initial public offering, all of the Company’s outstanding convertible preferred stock was converted into an aggregate total of 9,932,042 shares of common stock. In August 2014, the underwriters of the Company’s initial public offering gave notification that they would partially exercise the over-allotment option granted to them and on September 4, 2014, 642,000 additional shares of common stock were sold on the Company’s behalf at the initial public offering price of $13.00 per share, for aggregate gross proceeds of approximately $8.3 million. The Company paid to the underwriters underwriting discounts and commissions of approximately $5.6 million in connection with the offering, including the private placement and over-allotment. In addition, the Company incurred expenses of approximately $1.7 million in connection with the offering. Thus, the net offering proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $72.4 million. Follow-on Stock Offerings In November 2015, the Company issued 2,875,000 shares of common stock at a public offering price of $26.50 per share, which included the exercise in full by the underwriters of their option to purchase 375,000 additional shares of common stock to cover over-allotments. Gross proceeds to the Company were approximately $76.2 million. The Company paid to the underwriters underwriting discounts and commissions of approximately $4.6 million in connection with the offering, including the over-allotment. In addition, the Company incurred expenses of approximately $0.3 million in connection with the offering. Thus, the net offering proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $71.3 million. In May 2016, the Company issued 1,926,250 shares of common stock at a public offering price of $21.50 per share, which included the exercise in full by the underwriters of their option to purchase 251,250 additional shares of common stock to cover over-allotments. Gross proceeds to the Company were approximately $41.4 million. The Company paid to the underwriters underwriting discounts and commissions of approximately $2.5 million in connection with the offering, including the over-allotment. In addition, the Company incurred expenses of approximately $0.2 million in connection with the offering. Thus, the net offering proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $38.7 million. In January 2017, the Company sold 4,450,500 shares of common stock at a public offering price of $31.00 per share. Net proceeds from this offering, after deducting underwriting discounts and commissions and offering expenses, were approximately $129.4 million. Liquidity At December 31, 2016, the Company had working capital of $126.7 million, an accumulated deficit of $139.2 million and cash, cash equivalents and investments of $141.8 million. The Company has not generated any product revenues and has not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing, and commercialization of the Company’s products will require significant additional financing. The Company believes that its existing cash, cash equivalents and investments, will be sufficient to enable the Company to continue as a going concern through at least March 7, 2018. However, the Company will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of its planned research and development activities. If the Company is unable to obtain additional financing or generate license or product revenue, the lack of liquidity could have a material adverse effect on the Company’s future prospects. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Significant Accounting Policies The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). 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 determination of the fair value of stock-based awards, the accounting for research and development costs, and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Prior to its initial public offering in August 2014, the Company utilized significant estimates and assumptions in determining the fair value of its common stock and convertible preferred stock. The Board of Directors (the “Board”) determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry and the prices at which the Company sold shares of convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event, such as the sale of the Company. Cash and Cash Equivalents The Company considers all highly-liquid investments that have maturities of three months or less when acquired to be cash equivalents. As of December 31, 2016, the Company’s cash and cash equivalents consisted of $8.2 million deposited in a business checking account, a $20,000 certificate of deposit, $10.0 million in repurchase agreements, $12.1 million in a money market account, $109.0 million in government sponsored enterprise debt securities that had maturities of three months or less when acquired and $2.5 million in government sponsored enterprise debt securities that had maturities greater than three months when acquired. As of December 31, 2015, the Company’s cash and cash equivalents consisted of $7.9 million deposited in a business checking account, a $20,000 certificate of deposit, $16.8 million in repurchase agreements, $10.3 million in a money market account and $33.2 million in government sponsored enterprise debt securities that had maturities of three months or less when acquired. Cash equivalents are valued at cost, which approximates their fair market value. Restricted Cash The Company had restricted cash of $0.3 million as of December 31, 2016 and 2015, respectively, which consisted of cash held to collateralize an outstanding letter of credit associated with the lease of its corporate office space in Connecticut. Restricted cash is included in other assets. Investments At the time of purchase, the Company classifies investments in marketable securities as either available-for-sale securities, held to maturity securities, or trading securities, depending on its intent at that time. Investments available-for-sale are carried at fair value with unrealized holding gains and losses recorded within other comprehensive income (loss). Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit default risk or underlying security and overall capital market liquidity. The Company reviews unrealized losses associated with available-for-sale investments to determine the classification as a “temporary” or “other-than-temporary” impairment. A temporary impairment results in an unrealized loss being recorded in other comprehensive income (loss). An impairment that is viewed as other-than-temporary is recognized in the statement of operations. The Company considers various factors in determining the classification, including the length of time and extent to which the fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer or investee, and the Company’s ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. As of December 31, 2016 and 2015, the Company held $109.0 million and $85.7 million, respectively in short-term investments. As of December 31, 2016 and 2015, the Company held $2.5 million and $0, respectively in long-term investments. C oncentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and available-for-sale securities. At December 31, 2016 and 2015, the Company’s cash and cash equivalents were held by two financial institutions and the amounts on deposit were in excess of Federal Deposit Insurance Company insurance limits. The Company mitigates this risk by depositing its uninsured cash in major well capitalized financial institutions, and by investing excess operating cash in overnight repurchase agreements which are 100% collateralized by U.S. government backed securities with the Company’s bank. The Company has not recognized any losses on its cash and cash equivalents. At December 31, 2016, the available-for-sale securities are invested in U.S. government sponsored enterprise debt securities and U.S. Government debt securities. As noted in Note 4 to the Financial Statements, the fair value of these securities was $111.4 million, $21,000 less than their original par value purchase price. Property and Equipment Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally three to seven years. Maintenance and repairs are expensed as incurred. Upon disposal, retirement, or sale, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Research and Development Expenses with a Related Party Research and development expenses with a related party consist of $11.6 million and $7.6 million in expenses incurred in relation to the conduct of the discovery and preclinical development programs by Array BioPharma, Inc. (“Array”) for the years ended December 31, 2015 and 2014, respectively, as part of the collaboration agreement (see Note 8). As of December 31, 2015 Array indicated that it was no longer a holder of more than 5% of the Company’s capital stock, therefore the Company will not report expenses with Array as a related party in future reporting periods, as applicable. Research and Development Expenses Research and development costs are charged to expense as incurred. These costs include, but are not limited to, employee-related expenses, including salaries, benefits, stock-based compensation and travel as well as expenses related to third-party collaborations and contract research agreements; expenses incurred under agreements with contract research organizations and investigative sites that conduct preclinical and clinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and costs associated with preclinical and clinical activities and regulatory operations. Costs for certain development activities, such as preclinical and clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, preclinical activity, or information provided to the Company by its vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss is comprised of net losses and unrealized gains or losses on investments. Income Taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2016 and 2015, the Company did not have any uncertain tax positions. Accretion of Redeemable Convertible Preferred Stock Prior to its redemption in 2014, the Company accounted for the discount due to issuance costs on its Series A redeemable convertible preferred stock using the straight-line method, which approximates the effective interest method, accreting such amounts to preferred stock from the date of issuance to the date of redemption. Stock-Based Compensation The Company’s stock-based compensation plans are more fully described in Note 7 to the Financial Statements. The Company accounts for stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation (“ASC 718”), which requires the recognition of expense related to the fair value of stock-based compensation awards in the Statement of Operations. For stock options issued to employees and members of the Board for their services on the Board, the Company estimates the grant date fair value of each option using the Black-Scholes option-pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense using the straight-line recognition method when it is probable that the performance condition will be achieved. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Share-based payments issued to non-employees are recorded at fair value, and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period. See Note 7 for a discussion of the assumptions used by the Company in determining the grant date fair value of options granted under the Black-Scholes option pricing model, as well as a summary of the stock option activity under the Company’s stock-based compensation plan for the years ended December 31, 2016, 2015 and 2014. Basic and Diluted Net Loss Per Share of Common Stock Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of convertible preferred stock, unvested restricted stock and stock options. Diluted net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of convertible preferred stock, unvested restricted stock and stock options outstanding during the period calculated in accordance with the treasury stock method, although these shares and options are excluded if their effect is anti-dilutive. Because 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 years ended December 31, 2016, 2015 and 2014. Recent Accounting Pronouncements In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which amended the existing accounting standards for the statement of cash flows by requiring restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. The Company is currently in the process of assessing the impact of ASU 2016-18 on the Company’s financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amended the existing accounting standards for the statement of cash flows by providing guidance on eight classification issues related to the statement of cash flows. ASU 2016-15 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company is currently in the process of assessing the impact of ASU 2016-15 on the Company’s financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which provides for simplification of certain aspects of employee share-based payment accounting including income taxes, classification of awards as either equity or liabilities, accounting for forfeitures and classification on the statement of cash flows. ASU 2016-09 will be effective for the Company in the first quarter of 2017 and will be applied either prospectively, retrospectively or using a modified retrospective transition approach depending on the area covered in this update. The Company is currently in the process of assessing the impact of ASU 2016-09 on the Company’s financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) , which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact the standard may have on the Company’s financial statements and related 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 (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the impact that the standard will have on the Company’s financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material impact on its financial statements. In August 2014, the FASB issued ASU No. 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 , which provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity, and consistency of related disclosures and improve convergence with International Financial Reporting Standards (“IFRS”) (which emphasize management’s responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. This guidance is effective for annual reporting periods ending after December 15, 2016, and for annual periods and interim periods thereafter, with early adoption permitted. The Company adopted the ASU for the year ended December 31, 2016. The adoption of the ASU did not have a material impact on the financial statements. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one operating segment. All long-lived assets of the Company reside in the United States (“U.S”). |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 3. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except share and per share data): Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Basic and diluted net loss per common share calculation: Net loss $ ) $ ) $ ) Accretion of redeemable convertible preferred stock — — ) Net loss attributable to common stockholders $ ) $ ) $ ) Weighted-average shares outstanding—basic and diluted Net loss per share of common stock—basic and diluted $ ) $ ) $ ) The following outstanding securities at December 31, 2016, 2015 and 2014 have been excluded from the computation of diluted weighted-average shares outstanding, as they would have been anti-dilutive: Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Unvested restricted stock Stock options |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements Financial Instruments The financial instruments recorded in the Company’s balance sheets include cash and cash equivalents, investments, and accounts payable. Included in cash and cash equivalents are money market funds representing a type of mutual fund required by law to invest in low-risk securities (for example, U.S. government bonds, U.S. treasury bills and commercial paper) and overnight repurchase agreements. Money market funds are structured to maintain the fund’s net asset value at $1.00 per unit, which assists in providing adequate liquidity upon demand by the holder. Money market funds pay dividends that generally reflect short-term interest rates. Thus, only the dividend yield fluctuates. Also included in cash and cash equivalents are U.S. government sponsored enterprise debt securities that have a maturity of three months or less from their original acquisition date. Due to their short-term maturity, the carrying amounts of cash and cash equivalents (including money market funds), and accounts payable approximate their fair values. The Company classifies its remaining investments as available-for-sale. Gains or losses on securities sold are based on the specific identification method. For investments classified as available-for-sale, the Company records unrealized gains or losses resulting from changes in fair value between measurement dates as a component of other comprehensive income (loss). (amounts in thousands) Amortized Gross Gross Fair Value December 31, 2016 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Total included in cash and cash equivalents — — U.S. Government debt securities — Government enterprise debt securities — ) Short-term available-for-sale securities ) U.S. Government debt securities — ) Long-term available-for-sale securities — ) Total fair value financial instruments $ $ $ ) $ December 31, 2015 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Government enterprise debt securities ) Total included in cash and cash equivalents ) Government enterprise debt securities ) U.S. Government debt securities — ) Short-term available-for-sale securities ) Total fair value financial instruments $ $ $ ) $ Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial assets measured at fair value on a recurring basis at December 31, 2016 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Unobservable Total as of Assets: Government enterprise debt securities $ — $ $ — $ Overnight repurchase agreements — — Money market funds — — U.S. Government debt securities — — Totals $ $ $ — $ The Company’s financial assets measured at fair value on a recurring basis at December 31, 2015 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Unobservable Total as of Assets: Government enterprise debt securities $ — $ $ — $ Overnight repurchase agreements — — Money market funds — — U.S. Government debt securities — — Totals $ $ $ — $ There were no items that were accounted for at fair value on a non-recurring basis for the years ended December 31, 2016 and 2015. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2016 December 31, 2015 Research and development expenses $ $ General and administrative expenses $ $ Included in the above research and development expenses is a $6.0 million accrued milestone payment to Array. Also included in the above amounts is $1.5 million and $1.1 million of accrued bonuses at December 31, 2016 and 2015, respectively. |
Capital Stock, Redeemable Conve
Capital Stock, Redeemable Convertible Preferred Stock and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Capital Stock, Redeemable Convertible Preferred Stock and Stockholders' Equity | |
Capital Stock, Redeemable Convertible Preferred Stock and Stockholders' Equity | 6. Capital Stock, Redeemable Convertible Preferred Stock and Stockholders’ Equity Capitalization On February 28, 2014, the Company filed with the United States Food and Drug Administration an Investigational New Drug Application for a tyrosine kinase inhibitor targeted to the TRK family of receptors. As a result, and in accordance with the provisions of the stock purchase agreement entered into on July 3, 2013, the Company issued 2,343,753 shares of Preferred Series A at a price of $6.40 per share and received net proceeds of $15.0 million on March 18, 2014. On April 24, 2014 and June 24, 2014, the Company entered into stock purchase agreements pursuant to which the Company agreed to sell 2,664,343 and 501,890 shares, respectively, of Preferred Series B, $0.0001 par value, at a purchase price of $8.9661 per share. Upon completing the April and June offerings, the Company received gross proceeds of approximately $28.4 million. As previously discussed in Note 1 to the Financial Statements, the Company completed its initial public offering in August 2014. As part of that offering, all of the Company’s outstanding convertible preferred stock was converted into an aggregate total of 9,932,042 shares of common stock. Upon the completion of the initial public offering, the Company’s authorized capital stock consisted of 125,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000 shares of undesignated preferred stock, $0.0001 par value per share. In November 2015, the Company sold 2,875,000 shares of common stock at a public offering price of $26.50 per share. Net proceeds from this offering, after deducting underwriting discounts and commissions and offering expenses, were approximately $71.3 million. In May 2016, the Company sold 1,926,250 shares of common stock at a public offering price of $21.50 per share. Net proceeds from this offering, after deducting underwriting discounts and commissions and offering expenses, were approximately $38.7 million. In January 2017, the Company sold 4,450,500 shares of common stock at a public offering price of $31.00 per share. Net proceeds from this offering, after deducting underwriting discounts and commissions and offering expenses, were approximately $129.4 million. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 7. Stock-Based Compensation Equity Incentive Plan (the “Plan”) Effective July 2013, the Company adopted the 2013 Equity Incentive Plan, which was amended in November 2013 (the “2013 Plan”). The 2013 Plan provided for the granting of incentive stock options, non-statutory stock options and the issuance of restricted stock awards. As of December 31, 2016, the Company reserved 1,544,615 shares of common stock authorized for issuance in connection with the 2013 Plan. Certain options are eligible for exercise prior to vesting. Exercised but unvested shares are subject to repurchase by the Company at the initial exercise price. In connection with the Company’s initial public offering, no further grants will be made under this plan and all remaining shares available for grant were transferred to the 2014 Equity Incentive Plan. The Company adopted the 2014 Equity Incentive Plan (the “2014 Plan”) that became effective on July 30, 2014 and serves as the successor to the 2013 Plan. The 2014 Plan provides for the grant of awards to employees, directors, consultants, independent contractors and advisors, provided the consultants, independent contractors, directors and advisors are natural persons that render services other than in connection with the offer and sale of securities in a capital-raising transaction. The exercise price of stock options must be at least equal to the fair market value of the Company’s common stock on the date of grant. The Company has reserved 2,178,437 shares of its common stock to be issued under the 2014 Plan of which 536,442 shares were available for future issuance as of December 31, 2016. Shares authorized will increase automatically on January 1 of each of 2015 through 2024 by the number of shares equal to 3.0% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding December 31. The Company’s Board may reduce the amount of the increase in any particular year. The 2014 Plan authorizes the award of stock options, restricted stock awards (“RSAs”), stock appreciation rights (“SARs”), restricted stock units (“RSUs”), performance awards and stock bonuses. The following table summarizes stock option activity under the Plan for the years ended December 31, 2016, 2015 and 2014: Average Weighted- Remaining Aggregate Number Average Contractual Intrinsic Value of Shares Exercise Price Term (in years) (in thousands) Outstanding at December 31, 2013 $ Granted Exercised ) Forfeited and expired ) Outstanding at December 31, 2014 $ Granted Exercised ) Forfeited and expired ) Outstanding at December 31, 2015 $ Granted Exercised ) Forfeited and expired ) Outstanding at December 31, 2016 $ $ Vested and expected to vest at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ As of December 31, 2016, there was $16.4 million of total unrecognized compensation expense related to options granted but not yet vested of which $2.7 million is attributable to non-employee awards and subject to re-measurement until vested. The total unrecognized compensation expense of $16.4 million will be recognized as expense over a weighted-average period of 3.0 years. The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was $17.61, $16.83 and $9.23 per share, respectively. The total fair value of stock options vested during the years ended December 31, 2016, 2015 and 2014 was $7.6 million, $6.1 million and $2.3 million, respectively. The Company uses the Black-Scholes option pricing model to estimate the fair value of option awards with the following weighted-average assumptions, certain of which are based on industry comparative information, for the period indicated: Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Risk-free interest rate % % % Expected dividend yield — % — % — % Expected stock price volatility % % % Expected term of options (in years) Expected forfeiture rate % % % The weighted-average valuation assumptions were determined as follows: · Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. · Expected annual dividends: The estimate for annual dividends is 0%, because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend. · Expected stock price volatility: The expected volatility used is based on historical volatilities of similar entities within the Company’s industry which were commensurate with the Company’s expected term assumption. · Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The expected term of the options granted to employees is derived from the “simplified” method as described in Staff Accounting Bulletin 107 relating to stock-based compensation. The expected term for options granted to non-employees is equal to the contractual term of the awards. · Expected forfeiture rate: The Company’s estimated annual forfeiture rate is based on historical forfeiture experience of its various employee groups. · Estimated fair value of the Company’s stock-based awards: The estimated fair value of the Company’s stock-based awards is amortized on a straight-line basis over the awards’ service period for those awards with graded vesting and which contain only a service condition. For awards with graded vesting and a performance and service condition, when achievement of the performance condition is deemed probable, the Company recognizes compensation cost using the accelerated recognition method over the awards’ service period. Share-based compensation expense recognized was as follows (in thousands): Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Research and development $ $ $ General and administrative $ $ $ Restricted Stock The stock-based compensation expense for restricted stock is determined based on the estimated fair value of the Company’s common stock on the grant date of the awards applied to the total number of awards that are anticipated to vest. During 2013, the Company granted 264,189 restricted stock awards and as of December 31, 2015 there were 104,574 shares expected to vest over the next 3 years. During the year ended December 31, 2016, 66,048 restricted shares vested and the remaining 38,526 shares are expected to vest over the next year. Stock-based compensation for restricted stock was de minimis at their original grant date. 2014 Employee Stock Purchase Plan The Company adopted a 2014 Employee Stock Purchase Plan (“ESPP”) that became effective on July 31, 2014, which was the effective date of the Company’s registration statement. The ESPP provides employees of the Company, including any parent or subsidiary companies that the Board designates from time to time as a corporation that shall participate in the plan, with a means of acquiring an equity interest in the Company and to provide an incentive for continued employment. As of December 31, 2016, no commencement date for the first offering period has been approved by the Board or compensation committee and no shares have been issued under the ESPP. As of December 31, 2016, there were 149,600 shares of common stock reserved for future issuances under the ESPP. Any employee regularly employed by the Company for six months or more on a full-time or part-time basis (20 hours or more per week on a regular schedule) will be eligible to participate in the plan. The ESPP will operate in successive six month offering periods. Each eligible employee who has elected to participate may purchase up to 1,000 shares or $25,000 during each offering period. The purchase price will be the lower of (i) 85% of the fair market value of a share of common stock on the first trading day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last trading day of the offering period. The ESPP will continue for a period of ten years from the first purchase date under the plan unless otherwise terminated by the Board. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Operating Leases The Company leases office space under operating leases for its locations in South San Francisco, California and in Stamford, Connecticut. The Company’s lease agreements contain escalation clauses, accordingly, the Company straight-lines the rent expense over the lease term. In July 2016, the Company subleased its original office space in Stamford, Connecticut that it had vacated during December 2015. The sublease ends in May 2018, which is the end of the Company’s lease term for that space. As of December 31, 2016, the Company expects to receive $55,667 in sublease income over the lease term that will be recorded as an offset to rent expense. Rent expense under operating leases for the years ended December 31, 2016, 2015 and 2014 was $689,035, $147,668 and $55,614, respectively. Future minimum lease payments as of December 31, 2016 are as follows (in thousands): Operating 2017 $ 2018 2019 2020 2021 Thereafter $ The Company has the option to extend the term of its existing Stamford, Connecticut lease for one additional five-year period, and it has an option to terminate the lease after 5.5 years subject to payment of an early termination fee both of which are excluded from the table above. See Note 12 for subsequent events. Array Collaboration On July 3, 2013, the Company signed a multi-year strategic collaboration agreement with Array, and this agreement was subsequently amended on November 26, 2013, April 10, 2014, October 13, 2014, March 31, 2015 and February 18, 2016. Under the terms of the collaboration agreement, the Company obtained certain rights to Array’s tropomyosin receptor kinase (TRK) inhibitor program (larotrectinib), as well as additional novel oncology targets, including LOXO-195, LOXO-292 and fibroblast growth factor receptor (FGFR). The Company has worldwide commercial rights to each product candidate from the collaboration and Array participates in any potential successes through milestones and royalties. With respect to the discovery and preclinical program, the collaboration agreement, as amended, runs through September 30, 2017, and the Company has the option to extend the term for up to one additional one-year renewal period by providing written notice to Array at least three months before the end of the initial discovery and preclinical development programs term. Before the February 2016 amendment, in addition to larotrectinib, the parties designated 12 discovery targets, of which seven were selected for additional study in January 2015, which was to be reduced to four on or before January 2016. The Company had the option to maintain the total target number at five for an additional payment, and we exercised this option to maintain five discovery programs in January 2016. In the February 2016 amendment, the parties designated a total of six discovery targets. An additional payment was due at contract signing, satisfying a prior obligation of the April 2014 amendment. As part of the agreement the Company agreed to pay Array a fixed amount per month, based on Array’s commitment to provide full-time equivalents and other support relating to the conduct of the discovery and preclinical development programs. See Note 10 for amounts the Company recorded in related party research and development expenses. Milestones With respect to product candidates directed to TRK, including larotrectinib and its back-up compounds, the Company could be required to pay Array up to $223 million in milestone payments for each compound, the substantial majority of which are due upon the achievement of commercial milestones. The Company has made or accrued $7.0 and $0.3 million in larotrectinib and LOXO-195 milestone payments, respectively, from inception through December 31, 2016. With respect to product candidates directed to targets other than TRK, the Company could be required to pay Array up to $213 million in milestone payments, the substantial majority of which are due upon the achievement of commercial milestones. The Company has made or accrued $0.3 million in LOXO-292 milestone payments from inception through December 31, 2016. Royalties The Company is required to pay Array mid-single digit royalties on worldwide net sales of products. With respect to the royalty on products directed to targets other than TRK, the Company has the right to credit certain milestone payments against royalties on sales of products directed to such target. Research and Development Arrangements In the course of normal business operations, the Company enters into agreements with contract research organizations (“CROs”), to assist in the performance of research and development and preclinical activities. Expenditures to CROs may represent a significant cost in preclinical and clinical development for the Company in future periods. The Company can elect to discontinue the work under these agreements at any time. The Company could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and even long-term commitments of cash. Legal Proceedings The Company is not involved in any legal proceeding that it expects to have a material effect on its business, financial condition, results of operations and cash flows. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The Company provides for income taxes under ASC 740. Under ASC 740, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company has not recorded a current or deferred income tax expense or benefit since its inception. The Company’s loss before income taxes was $72.4 million, $35.9 million and $20.7 million for the years ended December 31, 2016, 2015 and 2014, respectively, and was generated entirely in the U.S. Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets are comprised of the following (in thousands): Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Net operating losses $ $ $ Accrued expenses Research and development expenses Research and development tax credits Stock options Other temporary differences Gross deferred tax assets Deferred tax valuation allowance ) ) ) $ — $ — $ — The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of operating losses since inception, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2016 and 2015. The valuation allowance increased by $29.4 million, $15.4 and $8.2 million for the years ended December 31, 2016, 2015 and 2014, respectively, due primarily to the generation of net operating losses during the periods. A reconciliation of income tax benefit computed at the statutory federal income tax rate to income taxes as reflected in the financial statements is as follows: Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 U.S. statutory income tax rate % % % State income taxes, net of federal benefit Permanent differences ) ) ) Provision to return true-up ) ) ) R&D credit carryforwards Valuation allowance ) ) ) Effective tax rate — % — % — % As of December 31, 2016 and 2015, the Company had U.S. federal net operating loss carryforwards of $116.7 million and $52.1 million, respectively, which may be available to offset future income tax liabilities and will begin to expire at various dates starting in 2033. As of December 31, 2016 and 2015, the Company also had U.S. state net operating loss carryforwards of $105.4 million and $40.2 million, respectively, which may be available to offset future income tax liabilities and will begin to expire at various dates starting in 2033. As of December 31, 2016 and 2015, the Company had federal research and development tax credit carryforwards of $3.9 million and $1.9 million, respectively, available to reduce future tax liabilities which will begin to expire at various dates starting in 2033. Under the provisions of the Internal Revenue Code, the NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed several financings since its inception which may have resulted in a change in control as defined by Sections 382 and 383 of the Internal Revenue Code, or could result in a change in control in the future. The Company files income tax returns in the U.S., and various state jurisdictions. The federal and state income tax returns are generally subject to tax examinations for the years ended December 31, 2016, 2015 and 2014. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions As of December 31, 2015, Array indicated that it was no longer a holder of more than 5% of the Company’s common stock; therefore, the Company is not reporting expenses with Array as related party research and development expense for the year ended December 31, 2016. The Company recorded related party research and development expenses for services provided by Array under a collaboration agreement of $11.6 million and $7.6 million for the years ended December 31, 2015 and 2014, respectively. Dr. Lori Kunkel, a board member, had a consulting agreement with the Company to assist in the Company’s drug development process which was modified effective as of October 31, 2015, to provide that she receives only the standard director compensation for her services. Dr. Kunkel also received stock option grants in 2013 and 2014 as compensation for her consulting services which continue to vest. Both cash compensation that was expensed as incurred and stock compensation are recorded as a component of research and development expenses. During the years ended December 31, 2016, 2015 and 2014, the Company recognized cash compensation expense of $0, $0.2 million and $0.1 million and stock compensation expense of $1.1 million, $0, and $0.8 million in accordance with the terms of the consulting agreement. Dr. Keith Flaherty, a board member, has an agreement with the Company to serve as Scientific Advisor Board (SAB) Chair for which he receives cash compensation. Dr. Flaherty also received stock option grants in 2013 and 2014 as compensation for his SAB services which continue to vest. Both cash compensation that was expensed as incurred and stock compensation are recorded as a component of research and development expenses. During the years ended December 31, 2016, 2015 and 2014, the Company recognized cash compensation expense of $0.1 million, $0.7 million and $0 and stock compensation expense of $0.8 million, $1.6 million, and $0.6 million in accordance with the terms of the SAB agreement. |
Unaudited Quarterly Data
Unaudited Quarterly Data | 12 Months Ended |
Dec. 31, 2016 | |
Unaudited Quarterly Data | |
Unaudited Quarterly Data | 11. Unaudited Quarterly Data The following table summarizes certain supplemental unaudited quarterly financial data for each of the quarters in the years ended December 31, 2016 and 2015, respectively. The operating results for any quarter are not indicative of results that may be expected for a full year or any future periods. First Second Third Fourth 2016 Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Net loss per share of common stock—basic and diluted $ ) $ ) $ ) $ ) 2015 Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Net loss per share of common stock—basic and diluted $ ) $ ) $ ) $ ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events In January 2017, the Company entered into an office lease agreement for additional space in South San Francisco, CA. The Company’s existing lease expires June 30, 2017. The new lease provides for a term of 51 months, commencing when the landlord delivers the premise to the Company on or after May 1, 2017 and, unless otherwise terminated, continuing until July 31, 2021. The Company has the option to extend the term of the lease for one additional five-year period. The Company expects to incur approximately $240,000 of annual rent expense associated with the lease. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
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 determination of the fair value of stock-based awards, the accounting for research and development costs, and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Prior to its initial public offering in August 2014, the Company utilized significant estimates and assumptions in determining the fair value of its common stock and convertible preferred stock. The Board of Directors (the “Board”) determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry and the prices at which the Company sold shares of convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event, such as the sale of the Company. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly-liquid investments that have maturities of three months or less when acquired to be cash equivalents. As of December 31, 2016, the Company’s cash and cash equivalents consisted of $8.2 million deposited in a business checking account, a $20,000 certificate of deposit, $10.0 million in repurchase agreements, $12.1 million in a money market account, $109.0 million in government sponsored enterprise debt securities that had maturities of three months or less when acquired and $2.5 million in government sponsored enterprise debt securities that had maturities greater than three months when acquired. As of December 31, 2015, the Company’s cash and cash equivalents consisted of $7.9 million deposited in a business checking account, a $20,000 certificate of deposit, $16.8 million in repurchase agreements, $10.3 million in a money market account and $33.2 million in government sponsored enterprise debt securities that had maturities of three months or less when acquired. Cash equivalents are valued at cost, which approximates their fair market value. |
Restricted Cash | Restricted Cash The Company had restricted cash of $0.3 million as of December 31, 2016 and 2015, respectively, which consisted of cash held to collateralize an outstanding letter of credit associated with the lease of its corporate office space in Connecticut. Restricted cash is included in other assets. |
Investments | Investments At the time of purchase, the Company classifies investments in marketable securities as either available-for-sale securities, held to maturity securities, or trading securities, depending on its intent at that time. Investments available-for-sale are carried at fair value with unrealized holding gains and losses recorded within other comprehensive income (loss). Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit default risk or underlying security and overall capital market liquidity. The Company reviews unrealized losses associated with available-for-sale investments to determine the classification as a “temporary” or “other-than-temporary” impairment. A temporary impairment results in an unrealized loss being recorded in other comprehensive income (loss). An impairment that is viewed as other-than-temporary is recognized in the statement of operations. The Company considers various factors in determining the classification, including the length of time and extent to which the fair value has been less than the Company’s cost basis, the financial condition and near-term prospects of the issuer or investee, and the Company’s ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. As of December 31, 2016 and 2015, the Company held $109.0 million and $85.7 million, respectively in short-term investments. As of December 31, 2016 and 2015, the Company held $2.5 million and $0, respectively in long-term investments. |
Concentration of Credit Risk | C oncentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents and available-for-sale securities. At December 31, 2016 and 2015, the Company’s cash and cash equivalents were held by two financial institutions and the amounts on deposit were in excess of Federal Deposit Insurance Company insurance limits. The Company mitigates this risk by depositing its uninsured cash in major well capitalized financial institutions, and by investing excess operating cash in overnight repurchase agreements which are 100% collateralized by U.S. government backed securities with the Company’s bank. The Company has not recognized any losses on its cash and cash equivalents. At December 31, 2016, the available-for-sale securities are invested in U.S. government sponsored enterprise debt securities and U.S. Government debt securities. As noted in Note 4 to the Financial Statements, the fair value of these securities was $111.4 million, $21,000 less than their original par value purchase price. |
Property and Equipment | Property and Equipment Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally three to seven years. Maintenance and repairs are expensed as incurred. Upon disposal, retirement, or sale, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. |
Research and Development Expenses with a Related Party | Research and Development Expenses with a Related Party Research and development expenses with a related party consist of $11.6 million and $7.6 million in expenses incurred in relation to the conduct of the discovery and preclinical development programs by Array BioPharma, Inc. (“Array”) for the years ended December 31, 2015 and 2014, respectively, as part of the collaboration agreement (see Note 8). As of December 31, 2015 Array indicated that it was no longer a holder of more than 5% of the Company’s capital stock, therefore the Company will not report expenses with Array as a related party in future reporting periods, as applicable. |
Research and Development Expenses | Research and Development Expenses Research and development costs are charged to expense as incurred. These costs include, but are not limited to, employee-related expenses, including salaries, benefits, stock-based compensation and travel as well as expenses related to third-party collaborations and contract research agreements; expenses incurred under agreements with contract research organizations and investigative sites that conduct preclinical and clinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and costs associated with preclinical and clinical activities and regulatory operations. Costs for certain development activities, such as preclinical and clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, preclinical activity, or information provided to the Company by its vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss is comprised of net losses and unrealized gains or losses on investments. |
Income Taxes | Income Taxes Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2016 and 2015, the Company did not have any uncertain tax positions. |
Accretion of Redeemable Convertible Preferred Stock | Accretion of Redeemable Convertible Preferred Stock Prior to its redemption in 2014, the Company accounted for the discount due to issuance costs on its Series A redeemable convertible preferred stock using the straight-line method, which approximates the effective interest method, accreting such amounts to preferred stock from the date of issuance to the date of redemption. |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation plans are more fully described in Note 7 to the Financial Statements. The Company accounts for stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation (“ASC 718”), which requires the recognition of expense related to the fair value of stock-based compensation awards in the Statement of Operations. For stock options issued to employees and members of the Board for their services on the Board, the Company estimates the grant date fair value of each option using the Black-Scholes option-pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected term of the option, risk-free interest rates, the value of the common stock and expected dividend yield of the common stock. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense using the straight-line recognition method when it is probable that the performance condition will be achieved. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Share-based payments issued to non-employees are recorded at fair value, and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period. See Note 7 for a discussion of the assumptions used by the Company in determining the grant date fair value of options granted under the Black-Scholes option pricing model, as well as a summary of the stock option activity under the Company’s stock-based compensation plan for the years ended December 31, 2016, 2015 and 2014. |
Basic and Diluted Net Loss Per Share of Common Stock | Basic and Diluted Net Loss Per Share of Common Stock Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of convertible preferred stock, unvested restricted stock and stock options. Diluted net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of convertible preferred stock, unvested restricted stock and stock options outstanding during the period calculated in accordance with the treasury stock method, although these shares and options are excluded if their effect is anti-dilutive. Because 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 years ended December 31, 2016, 2015 and 2014. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which amended the existing accounting standards for the statement of cash flows by requiring restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. The Company is currently in the process of assessing the impact of ASU 2016-18 on the Company’s financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amended the existing accounting standards for the statement of cash flows by providing guidance on eight classification issues related to the statement of cash flows. ASU 2016-15 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company is currently in the process of assessing the impact of ASU 2016-15 on the Company’s financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which provides for simplification of certain aspects of employee share-based payment accounting including income taxes, classification of awards as either equity or liabilities, accounting for forfeitures and classification on the statement of cash flows. ASU 2016-09 will be effective for the Company in the first quarter of 2017 and will be applied either prospectively, retrospectively or using a modified retrospective transition approach depending on the area covered in this update. The Company is currently in the process of assessing the impact of ASU 2016-09 on the Company’s financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) , which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact the standard may have on the Company’s financial statements and related 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 (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the impact that the standard will have on the Company’s financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material impact on its financial statements. In August 2014, the FASB issued ASU No. 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 , which provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements (or within one year after the date on which the financial statements are available to be issued, when applicable). Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity, and consistency of related disclosures and improve convergence with International Financial Reporting Standards (“IFRS”) (which emphasize management’s responsibility for performing the going concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. This guidance is effective for annual reporting periods ending after December 15, 2016, and for annual periods and interim periods thereafter, with early adoption permitted. The Company adopted the ASU for the year ended December 31, 2016. The adoption of the ASU did not have a material impact on the financial statements. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one operating segment. All long-lived assets of the Company reside in the United States (“U.S”). |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Net Loss Per Common Share | |
Schedule of computation of basic and diluted net loss per common share | The following table sets forth the computation of basic and diluted net loss per share for the periods indicated (in thousands, except share and per share data): Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Basic and diluted net loss per common share calculation: Net loss $ ) $ ) $ ) Accretion of redeemable convertible preferred stock — — ) Net loss attributable to common stockholders $ ) $ ) $ ) Weighted-average shares outstanding—basic and diluted Net loss per share of common stock—basic and diluted $ ) $ ) $ ) |
Schedule of outstanding securities excluded from the computation of diluted weighted-average shares outstanding, as they would have been anti-dilutive | Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Unvested restricted stock Stock options |
Fair Value Measurements (Table)
Fair Value Measurements (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Schedule of available-for-sale securities unrealized gains or losses from changes in fair value | (amounts in thousands) Amortized Gross Gross Fair Value December 31, 2016 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Total included in cash and cash equivalents — — U.S. Government debt securities — Government enterprise debt securities — ) Short-term available-for-sale securities ) U.S. Government debt securities — ) Long-term available-for-sale securities — ) Total fair value financial instruments $ $ $ ) $ December 31, 2015 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Government enterprise debt securities ) Total included in cash and cash equivalents ) Government enterprise debt securities ) U.S. Government debt securities — ) Short-term available-for-sale securities ) Total fair value financial instruments $ $ $ ) $ |
Schedule of financial assets measured at fair value on a recurring basis | The Company’s financial assets measured at fair value on a recurring basis at December 31, 2016 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Unobservable Total as of Assets: Government enterprise debt securities $ — $ $ — $ Overnight repurchase agreements — — Money market funds — — U.S. Government debt securities — — Totals $ $ $ — $ The Company’s financial assets measured at fair value on a recurring basis at December 31, 2015 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Unobservable Total as of Assets: Government enterprise debt securities $ — $ $ — $ Overnight repurchase agreements — — Money market funds — — U.S. Government debt securities — — Totals $ $ $ — $ |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2016 December 31, 2015 Research and development expenses $ $ General and administrative expenses $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Summary of stock option activity under the 2013 and 2014 Plans | Average Weighted- Remaining Aggregate Number Average Contractual Intrinsic Value of Shares Exercise Price Term (in years) (in thousands) Outstanding at December 31, 2013 $ Granted Exercised ) Forfeited and expired ) Outstanding at December 31, 2014 $ Granted Exercised ) Forfeited and expired ) Outstanding at December 31, 2015 $ Granted Exercised ) Forfeited and expired ) Outstanding at December 31, 2016 $ $ Vested and expected to vest at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ |
Schedule of weighted-average assumptions under the Black-Scholes option pricing model estimate the fair value of option awards | Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Risk-free interest rate % % % Expected dividend yield — % — % — % Expected stock price volatility % % % Expected term of options (in years) Expected forfeiture rate % % % |
Schedule of Share-based compensation expense recognized | Share-based compensation expense recognized was as follows (in thousands): Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Research and development $ $ $ General and administrative $ $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments | Future minimum lease payments as of December 31, 2016 are as follows (in thousands): Operating 2017 $ 2018 2019 2020 2021 Thereafter $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of significant components of deferred tax assets | The significant components of the Company’s deferred tax assets are comprised of the following (in thousands): Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Net operating losses $ $ $ Accrued expenses Research and development expenses Research and development tax credits Stock options Other temporary differences Gross deferred tax assets Deferred tax valuation allowance ) ) ) $ — $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | Year Ended Year Ended Year Ended December 31, 2016 December 31, 2015 December 31, 2014 U.S. statutory income tax rate % % % State income taxes, net of federal benefit Permanent differences ) ) ) Provision to return true-up ) ) ) R&D credit carryforwards Valuation allowance ) ) ) Effective tax rate — % — % — % |
Unaudited Quarterly Data (Table
Unaudited Quarterly Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Unaudited Quarterly Data | |
Summary of certain supplemental unaudited quarterly financial data | First Second Third Fourth 2016 Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Net loss per share of common stock—basic and diluted $ ) $ ) $ ) $ ) 2015 Net loss attributable to common stockholders $ ) $ ) $ ) $ ) Net loss per share of common stock—basic and diluted $ ) $ ) $ ) $ ) |
Organization and Description 29
Organization and Description of the Business (Details) $ / shares in Units, $ in Thousands | Sep. 04, 2014USD ($)$ / sharesshares | Aug. 06, 2014USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / sharesshares | May 31, 2016USD ($)$ / sharesshares | Nov. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Organization and Description of the Business | ||||||||
Number of operating segments | item | 1 | |||||||
Proceeds from issuance of common stock, net | $ 38,733 | $ 71,299 | $ 74,164 | |||||
Issuance of common stock, net of offering costs | 38,733 | 71,299 | $ 72,366 | |||||
Working capital | 126,700 | |||||||
Accumulated deficit | 139,236 | $ 66,838 | ||||||
Cash, cash equivalents and investments | $ 141,800 | |||||||
Minimum number of future funding sources sought to continue as a going concern | 1 | |||||||
Initial public offering | ||||||||
Organization and Description of the Business | ||||||||
Shares of common stock issued (in shares) | shares | 5,261,538 | |||||||
Public offering price (in dollars per share) | $ / shares | $ 13 | |||||||
Aggregate gross proceeds from shares sold | $ 68,400 | |||||||
Underwriters underwriting discounts and commissions paid | $ 5,600 | |||||||
Offering expense | 1,700 | |||||||
Net offering proceeds | $ 72,400 | |||||||
Over-allotment option | ||||||||
Organization and Description of the Business | ||||||||
Shares of common stock issued (in shares) | shares | 642,000 | |||||||
Public offering price (in dollars per share) | $ / shares | $ 13 | |||||||
Aggregate gross proceeds from shares sold | $ 8,300 | |||||||
Public Offering | ||||||||
Organization and Description of the Business | ||||||||
Shares of common stock issued (in shares) | shares | 4,450,500 | 1,926,250 | 2,875,000 | |||||
Share price (in dollars per share) | $ / shares | $ 31 | $ 21.50 | $ 26.50 | |||||
Shares issued upon underwriter's exercise of options (in shares) | shares | 251,250 | 375,000 | ||||||
Proceeds from issuance of common stock, net | $ 41,400 | $ 76,200 | ||||||
Underwriters underwriting discounts and commissions paid | 2,500 | 4,600 | ||||||
Offering expense | 200 | 300 | ||||||
Issuance of common stock, net of offering costs | $ 129,400 | $ 38,700 | $ 71,300 | |||||
Convertible Preferred Stock | ||||||||
Organization and Description of the Business | ||||||||
Aggregate shares of common stock issued upon conversion of all outstanding convertible preferred stock | shares | 9,932,042 | |||||||
NEA | Initial public offering | ||||||||
Organization and Description of the Business | ||||||||
Shares of common stock issued (in shares) | shares | 230,769 | |||||||
Aggregate gross proceeds from shares sold | $ 3,000 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 30,376,000 | $ 68,177,000 | $ 43,930,000 | $ 14,994,000 |
Restricted Cash | ||||
Restricted cash | 300,000 | |||
Investments | ||||
Short-term investments | 108,935,000 | 85,715,000 | ||
Long-term investments | $ 2,499,000 | $ 0 | ||
Concentration of Credit Risk | ||||
Financial institutions holding the Company's cash and cash equivalents (in financial institutions) | item | 2 | 2 | ||
Research and Development Expenses with a Related Party | ||||
Research and development expenses with a related party | $ 58,275,000 | $ 13,956,000 | 6,947,000 | |
Segment Information | ||||
Number of operating segments | item | 1 | |||
Minimum | ||||
Property and equipment | ||||
Estimated useful lives of the assets | 3 years | |||
Maximum | ||||
Property and equipment | ||||
Estimated useful lives of the assets | 7 years | |||
Maturities greater than three months when acquired | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 2,500,000 | |||
Business checking account | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 8,200,000 | 7,900,000 | ||
Certificate of deposit | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 20,000 | 20,000 | ||
Repurchase agreements | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 10,000,000 | 16,800,000 | ||
Money market account | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 12,100,000 | 10,300,000 | ||
Government sponsored enterprise debt securities | ||||
Investments | ||||
Investments | 111,400,000 | |||
Concentration of Credit Risk | ||||
Fair value of available-for-sale securities | 111,400,000 | |||
Amount less than original par value | 21,000 | |||
Government sponsored enterprise debt securities | Maturities of three months or less when acquired | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 109,000,000 | 33,200,000 | ||
Array | ||||
Research and Development Expenses with a Related Party | ||||
Ownership percentage required for expenses to be recorded as related party expenses | 5.00% | |||
Array | Research and development | ||||
Research and Development Expenses with a Related Party | ||||
Research and development expenses with a related party | $ 11,600,000 | $ 7,600,000 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of diluted weighted-average shares outstanding | |||||||||||
Total (in shares) | 2,864,377 | 2,345,529 | 2,181,627 | ||||||||
Basic and diluted net loss per common share calculation: | |||||||||||
Net loss | $ (27,194) | $ (17,691) | $ (15,916) | $ (11,597) | $ (12,867) | $ (8,771) | $ (8,056) | $ (6,182) | $ (72,398) | $ (35,876) | $ (20,672) |
Accretion of redeemable convertible preferred stock | (34) | ||||||||||
Net loss attributable to common stockholders | $ (72,398) | $ (35,876) | $ (20,706) | ||||||||
Weighted-average shares outstanding-basic and diluted (in shares) | 20,905,448 | 16,894,549 | 6,773,673 | ||||||||
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (1.26) | $ (0.82) | $ (0.77) | $ (0.59) | $ (0.72) | $ (0.53) | $ (0.49) | $ (0.38) | $ (3.46) | $ (2.12) | $ (3.06) |
Unvested restricted stock | |||||||||||
Antidilutive Securities Excluded from Computation of diluted weighted-average shares outstanding | |||||||||||
Total (in shares) | 38,526 | 104,574 | 170,622 | ||||||||
Stock options | |||||||||||
Antidilutive Securities Excluded from Computation of diluted weighted-average shares outstanding | |||||||||||
Total (in shares) | 2,825,851 | 2,240,955 | 2,011,005 |
Fair Value Measurements - Amort
Fair Value Measurements - Amortized Costs and Fair Values (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Overnight repurchase agreements | ||
Fair value measurements | ||
Amortized Cost | $ 10,000 | $ 16,750 |
Fair Value | 10,000 | 16,750 |
Money market account | ||
Fair value measurements | ||
Amortized Cost | 12,146 | 10,270 |
Fair Value | $ 12,146 | 10,270 |
Net asset value for money market funds (in dollars per unit) | $ 1 | |
Government sponsored enterprise debt securities | ||
Fair value measurements | ||
Amortized Cost | 33,207 | |
Gross Unrealized Gains | 1 | |
Gross Unrealized (Losses) | (2) | |
Fair Value | 33,206 | |
Cash and cash equivalents | ||
Fair value measurements | ||
Amortized Cost | $ 22,146 | 60,227 |
Gross Unrealized Gains | 1 | |
Gross Unrealized (Losses) | (2) | |
Fair Value | 22,146 | 60,226 |
Government enterprise Short-term available-for-sale securities | ||
Fair value measurements | ||
Amortized Cost | 108,953 | 85,730 |
Gross Unrealized Gains | 995 | 10 |
Gross Unrealized (Losses) | (1,013) | (25) |
Fair Value | 108,935 | 85,715 |
Government enterprise Long-term available-for-sale securities | ||
Fair value measurements | ||
Amortized Cost | 2,502 | |
Gross Unrealized (Losses) | (3) | |
Fair Value | 2,499 | |
Government enterprise AFS securities | ||
Fair value measurements | ||
Amortized Cost | 96,184 | 73,193 |
Gross Unrealized Gains | 10 | |
Gross Unrealized (Losses) | (1,013) | (20) |
Fair Value | 95,171 | 73,183 |
US Government Short-term available for sale securities | ||
Fair value measurements | ||
Amortized Cost | 12,769 | 12,537 |
Gross Unrealized Gains | 995 | |
Gross Unrealized (Losses) | (5) | |
Fair Value | 13,764 | 12,532 |
US Government Long-term available for sale securities | ||
Fair value measurements | ||
Amortized Cost | 2,502 | |
Gross Unrealized (Losses) | (3) | |
Fair Value | 2,499 | |
Available-for-sale securities | ||
Fair value measurements | ||
Amortized Cost | 133,601 | 145,957 |
Gross Unrealized Gains | 995 | 11 |
Gross Unrealized (Losses) | (1,016) | (27) |
Fair Value | $ 133,580 | $ 145,941 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis of Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | $ 133,580 | $ 145,941 |
Non-recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 0 | 0 |
Fair Value, Inputs, Level 1 | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 38,409 | 39,552 |
Fair Value, Inputs, Level 2 | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 95,171 | 106,389 |
Government sponsored enterprise debt securities | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 95,171 | 106,389 |
Government sponsored enterprise debt securities | Fair Value, Inputs, Level 2 | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 95,171 | 106,389 |
Overnight repurchase agreements | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 10,000 | 16,750 |
Overnight repurchase agreements | Fair Value, Inputs, Level 1 | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 10,000 | 16,750 |
Money market account | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 12,146 | 10,270 |
Money market account | Fair Value, Inputs, Level 1 | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 12,146 | 10,270 |
U.S. Government Debt Securities | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | 16,263 | 12,532 |
U.S. Government Debt Securities | Fair Value, Inputs, Level 1 | Recurring | ||
Financial assets measured at fair value on a recurring and non-recurring basis | ||
Available-for-sale | $ 16,263 | $ 12,532 |
Accrued Expenses and Other Cu34
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses and Other Current Liabilities | ||
Accrued expenses | $ 14,083 | $ 2,584 |
Accrued milestone payments | 6,000 | |
Accrued bonuses | 1,500 | 1,100 |
Research and development | ||
Accrued Expenses and Other Current Liabilities | ||
Accrued expenses | 12,120 | 1,512 |
General and administrative | ||
Accrued Expenses and Other Current Liabilities | ||
Accrued expenses | $ 1,963 | $ 1,072 |
Capital Stock, Redeemable Con35
Capital Stock, Redeemable Convertible Preferred Stock and Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 06, 2014 | Mar. 18, 2014 | Jan. 31, 2017 | May 31, 2016 | Nov. 30, 2015 | Aug. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 24, 2014 | Apr. 24, 2014 |
Capitalization | ||||||||||||
Common stock, shares authorized | 125,000,000 | 125,000,000 | 125,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, shares authorized | 5,000,000 | |||||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | |||||||||||
Issuance of common stock, net of offering costs | $ 38,733 | $ 71,299 | $ 72,366 | |||||||||
Initial public offering | ||||||||||||
Capitalization | ||||||||||||
Issuance of common stock, net of offering costs (in shares) | 5,261,538 | |||||||||||
Number of shares of common stock into which outstanding convertible preferred stock are converted | 9,932,042 | |||||||||||
Public Offering | ||||||||||||
Capitalization | ||||||||||||
Issuance of common stock, net of offering costs (in shares) | 4,450,500 | 1,926,250 | 2,875,000 | |||||||||
Share price (in dollars per share) | $ 31 | $ 21.50 | $ 26.50 | |||||||||
Issuance of common stock, net of offering costs | $ 129,400 | $ 38,700 | $ 71,300 | |||||||||
Redeemable convertible Series A preferred stock | Investors | Stock purchase agreement | ||||||||||||
Capitalization | ||||||||||||
Issuance of common stock, net of offering costs (in shares) | 2,343,753 | |||||||||||
Net proceeds | $ 15,000 | |||||||||||
Share price (in dollars per share) | $ 6.40 | |||||||||||
Redeemable convertible Series B preferred stock | Stock purchase agreement | ||||||||||||
Capitalization | ||||||||||||
Net proceeds | $ 28,400 | |||||||||||
Shares issued | 501,890 | 2,664,343 | ||||||||||
Share price (in dollars per share) | $ 8.9661 | $ 8.9661 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Stock-Based Compensation - Ince
Stock-Based Compensation - Incentive Plans (Details) | 12 Months Ended |
Dec. 31, 2016shares | |
2013 Plan | |
2013 and 2014 Equity Incentive Plan | |
Shares authorized for issuance | 1,544,615 |
2014 Plan | |
2013 and 2014 Equity Incentive Plan | |
Shares authorized for issuance | 2,178,437 |
Shares available for future issuance (in shares) | 536,442 |
Increase in common stock reserved for issuance as percentage of the aggregate number of outstanding shares of common stock (as a percent) | 3.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
2013 and 2014 Equity Incentive Plans | ||||
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model | ||||
Unrecognized compensation expense | $ 16,400 | |||
Weighted-average period for recognition | 3 years | |||
2013 and 2014 Equity Incentive Plans | Stock option | ||||
Number of Shares | ||||
Outstanding at the beginning of the period (in shares) | 2,240,955 | 2,011,005 | 681,056 | |
Granted (in shares) | 826,476 | 536,534 | 1,579,970 | |
Exercised (in shares) | (177,279) | (68,644) | (114,818) | |
Forfeited and expired (in shares) | (64,301) | (237,940) | (135,203) | |
Outstanding at the end of the period (in shares) | 2,825,851 | 2,240,955 | 2,011,005 | 681,056 |
Vested and expected to vest at the end of the period (in shares) | 2,668,899 | |||
Exercisable at the end of the period (in shares) | 1,226,282 | |||
Weighted-Average Exercise Price | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 11.05 | $ 6.75 | $ 1.18 | |
Granted (in dollars per share) | 25.37 | 25.62 | 8.50 | |
Exercised (in dollars per share) | 7.34 | 5 | 1.45 | |
Forfeited and expired (in dollars per share) | 16.23 | 9.33 | 3.65 | |
Outstanding at the end of the period (in dollars per share) | 15.35 | $ 11.05 | $ 6.75 | $ 1.18 |
Vested and expected to vest at the end of the period (in dollars per share) | 14.91 | |||
Exercisable at the end of the period (in dollars per share) | $ 8.66 | |||
Average Remaining Contractual Term (in years) | ||||
Outstanding at the beginning of the period (in years) | 8 years 4 months 2 days | 8 years 5 months 23 days | 9 years 5 months 19 days | 9 years 11 months 1 day |
Outstanding at the end of the period (in years) | 8 years 4 months 2 days | 8 years 5 months 23 days | 9 years 5 months 19 days | 9 years 11 months 1 day |
Vested and expected to vest at the end of the period (in years) | 8 years 3 months 15 days | |||
Exercisable at the end of the period (in years) | 7 years 7 months 6 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at the end of the period | $ 47,364 | |||
Vested and expected to vest at the end of the period | 45,913 | |||
Exercisable at the end of the period | 26,779 | |||
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model | ||||
Unrecognized compensation expense | $ 16,400 | |||
Weighted average grant date fair value of options granted (in dollars per share) | $ 17.61 | $ 16.83 | $ 9.23 | |
Fair value of vested options | $ 7,600 | $ 6,100 | $ 2,300 | |
2013 Plan | Stock option | ||||
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model | ||||
Risk-free interest rate (as a percent) | 1.77% | 1.78% | 1.90% | |
Expected stock price volatility (as a percent) | 79.69% | 74.76% | 86.22% | |
Expected term of options (in years) | 6 years 2 months 12 days | 6 years | 6 years 6 months | |
Expected forfeiture rate (as a percent) | 12.05% | 13.33% | 5.98% | |
Non-employees | 2013 and 2014 Equity Incentive Plans | Stock option | ||||
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model | ||||
Unrecognized compensation expense | $ 2,700 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Information (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
2014 Employee Stock Purchase Plan | |||||
Employee Stock Ownership Plan (ESOP) | |||||
Right to purchase common stock (in shares) | 149,600 | 149,600 | |||
Maximum value of shares which may be purchased by eligible employee | $ 25,000 | ||||
Maximum shares which may be purchased by eligible employee | 1,000 | ||||
Award term | P10Y | ||||
Shares issued under the plan | 0 | ||||
2014 Employee Stock Purchase Plan | First day of trading | |||||
Employee Stock Ownership Plan (ESOP) | |||||
Purchase price as percentage of fair market value of a share of common stock | 85.00% | ||||
2014 Employee Stock Purchase Plan | Last day of trading in offering period | |||||
Employee Stock Ownership Plan (ESOP) | |||||
Purchase price as percentage of fair market value of a share of common stock | 85.00% | ||||
2014 Employee Stock Purchase Plan | Minimum | |||||
Employee Stock Ownership Plan (ESOP) | |||||
Employment period required to participate in the plan | 6 months | ||||
Period per week on a regular schedule required to participate in the plan | P20H | ||||
2013 Plan | |||||
Stock based compensation expense | |||||
Share-based compensation expense | $ 7,960,000 | $ 6,154,000 | $ 3,049,000 | ||
2013 Plan | Research and development | |||||
Stock based compensation expense | |||||
Share-based compensation expense | 3,471,000 | 3,310,000 | 2,002,000 | ||
2013 Plan | General and administrative | |||||
Stock based compensation expense | |||||
Share-based compensation expense | $ 4,489,000 | $ 2,844,000 | $ 1,047,000 | ||
Restricted Stock | |||||
Restricted Stock | |||||
Granted (in shares) | 264,189 | ||||
Vested (in shares) | 66,048 | ||||
Expected to vest (in shares) | 38,526 | 38,526 | 104,574 | ||
Vesting period | 1 year | 3 years |
Commitments and Contingencies39
Commitments and Contingencies (Details) | 1 Months Ended | 12 Months Ended | |||
Feb. 29, 2016item | Jan. 31, 2016item | Dec. 31, 2016USD ($)perioditem | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies | |||||
Expected sublease income | $ 55,667 | ||||
Rent expense under operating leases | 689,035 | $ 147,668 | $ 55,614 | ||
2,017 | 675,000 | ||||
2,018 | 683,000 | ||||
2,019 | 670,000 | ||||
2,020 | 684,000 | ||||
2,021 | 697,000 | ||||
Thereafter | 683,000 | ||||
Total | $ 4,092,000 | ||||
Number of additional renewal periods options available to the entity to extend agreement term (in periods) | period | 1 | ||||
Term of additional renewal periods options available to the entity to extend agreement term (in options) | 5 years | ||||
Minimum term before lease termination option can be exercised | 5 years 6 months | ||||
Array | Larotrectinib | |||||
Commitments and Contingencies | |||||
Milestone payments made or accrued from inception through December 31, 2016 | $ 7,000,000 | ||||
Array | LOXO-195 | |||||
Commitments and Contingencies | |||||
Milestone payments made or accrued from inception through December 31, 2016 | 300,000 | ||||
Array | LOXO- 292 | |||||
Commitments and Contingencies | |||||
Milestone payments made or accrued from inception through December 31, 2016 | $ 300,000 | ||||
Array | Collaboration agreement | |||||
Commitments and Contingencies | |||||
Number of additional renewal periods options available to the entity to extend agreement term (in periods) | item | 1 | ||||
Term of additional renewal periods options available to the entity to extend agreement term (in options) | 1 year | ||||
Number of discovery targets designated by the parties (in targets) | item | 6 | 5 | 12 | ||
Number of discovery targets which are to be selected for additional study on or before January 2015 (in targets) | item | 7 | ||||
Number of discovery targets which are to be selected for additional study on or before January 2016 | item | 4 | ||||
Maximum number of candidates which can be selected by the entity for modest additional payment (in candidates) | item | 5 | ||||
Array | Collaboration agreement | Product candidates directed to TRK | |||||
Commitments and Contingencies | |||||
Maximum milestone payments which the entity could be required to pay | $ 223,000,000 | ||||
Array | Collaboration agreement | Product candidates directed to targets other than TRK | |||||
Commitments and Contingencies | |||||
Maximum milestone payments which the entity could be required to pay | $ 213,000,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
Loss before income taxes | $ 72,400 | $ 35,900 | $ 20,700 |
Increase in valuation allowance | 29,400 | 15,400 | 8,200 |
Components of deferred tax assets | |||
Net operating losses | 44,927 | 20,086 | 7,526 |
Accrued expenses | 687 | 53 | 194 |
Research and development expenses | 2,103 | 2,344 | 2,348 |
Research and development credits | 3,929 | 1,899 | 688 |
Stock options | 5,186 | 3,065 | 967 |
Other temporary differences | 12 | 2 | 283 |
Gross deferred tax assets | 56,844 | 27,449 | 12,006 |
Deferred tax asset valuation allowance | $ (56,844) | $ (27,449) | $ (12,006) |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
U.S. federal net operating loss carryforwards | $ 116,700 | $ 52,100 | |
U. S. state net operating loss carryforwards | 105,400 | 40,200 | |
Research and development tax credit carryforwards | $ 3,929 | $ 1,899 | $ 688 |
Effective Income Tax Rate Reconciliation | |||
U. S. statutory income tax rate (as a percent) | 34.00% | 34.00% | 34.00% |
State income taxes, net of federal benefit (as a percent) | 4.20% | 6.50% | 3.00% |
Permanent differences (as a percent) | (0.40%) | (0.70%) | (0.70%) |
Provision to return true-up (as a percent) | (0.30%) | (0.10%) | (0.10%) |
R&D credit carryforwards (as a percent) | 3.10% | 3.30% | 3.30% |
Valuation allowance (as a percent) | (40.60%) | (43.00%) | (39.50%) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transactions | |||
Related party research and development expenses | $ 11,611 | $ 7,568 | |
Stock compensation expense | $ 7,960 | 6,154 | 3,049 |
Collaboration agreement | Array | |||
Related Party Transactions | |||
Related party research and development expenses | 11,600 | 7,600 | |
Consulting Letter Agreement | Dr. Lori Kunkel | Research and development | |||
Related Party Transactions | |||
Cash compensation expenses | 0 | 200 | 100 |
Stock compensation expense | 1,100 | 0 | 800 |
SAB Agreement | Dr. Keith Flaherty | Research and development | |||
Related Party Transactions | |||
Cash compensation expenses | 100 | 700 | 0 |
Stock compensation expense | $ 800 | $ 1,600 | $ 600 |
Unaudited Quarterly Data (Detai
Unaudited Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Unaudited Quarterly Data | |||||||||||
Net loss attributable to common stockholders | $ (27,194) | $ (17,691) | $ (15,916) | $ (11,597) | $ (12,867) | $ (8,771) | $ (8,056) | $ (6,182) | $ (72,398) | $ (35,876) | $ (20,672) |
Net loss per share of common stock-basic and diluted (in dollars per share) | $ (1.26) | $ (0.82) | $ (0.77) | $ (0.59) | $ (0.72) | $ (0.53) | $ (0.49) | $ (0.38) | $ (3.46) | $ (2.12) | $ (3.06) |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017USD ($)item | Dec. 31, 2016USD ($)period | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
New lease agreement | ||||
Number of additional renewal periods options available to the entity to extend agreement term (in periods) | period | 1 | |||
Term of additional renewal periods options available to the entity to extend agreement term (in options) | 5 years | |||
Rent expense under operating leases | $ 689,035 | $ 147,668 | $ 55,614 | |
Subsequent event | ||||
New lease agreement | ||||
Lease term | 51 months | |||
Number of additional renewal periods options available to the entity to extend agreement term (in periods) | item | 1 | |||
Term of additional renewal periods options available to the entity to extend agreement term (in options) | 5 years | |||
Subsequent event | Forecast | ||||
New lease agreement | ||||
Rent expense under operating leases | $ 240,000 |