Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Mar. 31, 2014 | 7-May-14 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Corium International, Inc. | ' |
Entity Central Index Key | '0001594337 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 17,617,615 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $5,333 | $13,581 |
Accounts receivable, net | 4,257 | 3,129 |
Unbilled accounts receivable | 2,343 | 1,495 |
Inventories, net | 3,040 | 4,508 |
Prepaid expenses and other current assets | 2,415 | 1,038 |
Total current assets | 17,388 | 23,751 |
Property and equipment, net | 12,104 | 12,622 |
Debt financing costs, net | 731 | 902 |
Intangible assets, net | 6,694 | 6,647 |
Notes receivable - related parties | ' | 100 |
TOTAL ASSETS | 36,917 | 44,022 |
Current liabilities: | ' | ' |
Accounts payable | 1,791 | 2,748 |
Accrued expenses and other current liabilities | 4,072 | 3,374 |
Bank lines of credit | 2,658 | 3,873 |
Long-term debt, current portion | 38 | 457 |
Capital lease obligations, current portion | 895 | 1,029 |
Preferred stock warrant liability | 834 | 560 |
Recall liability, current portion | 774 | 1,004 |
Deferred contract revenues, current portion | 2,324 | 2,112 |
Total current liabilities | 13,386 | 15,157 |
Long-term interest payable | 12,413 | 11,590 |
Long-term debt, net of current portion | 37,584 | 36,956 |
Convertible notes | 9,475 | 9,399 |
Subordinated note | 16,199 | 13,000 |
Subordinated note embedded derivative liability | ' | 7,367 |
Capital lease obligations, net of current portion | 1,274 | 1,652 |
Recall liability, net of current portion | 3,431 | 3,828 |
Deferred contract revenues, net of current portion | 3,562 | 3,688 |
Total liabilities | 97,324 | 102,637 |
Stockholders' deficit: | ' | ' |
Common stock | 2 | 2 |
Additional paid-in capital | -29,907 | -26,679 |
Accumulated deficit | -90,987 | -92,423 |
Total stockholders' deficit | -120,892 | -119,100 |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' DEFICIT | 36,917 | 44,022 |
Convertible Preferred Stock | ' | ' |
Current liabilities: | ' | ' |
Convertible or Redeemable stock | 57,261 | 57,261 |
Redeemable Common Stock | ' | ' |
Current liabilities: | ' | ' |
Convertible or Redeemable stock | $3,224 | $3,224 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(LOSS) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' | ' | ' |
Product revenues | $7,240 | $10,218 | $15,340 | $20,190 |
Contract research and development revenues | 3,173 | 2,174 | 5,237 | 4,762 |
Other revenues | 304 | 144 | 608 | 208 |
Total revenues | 10,717 | 12,536 | 21,185 | 25,160 |
Costs and operating expenses: | ' | ' | ' | ' |
Cost of product revenues | 4,998 | 6,583 | 10,227 | 12,816 |
Cost of contract research and development revenues | 3,911 | 2,820 | 7,448 | 5,942 |
Research and development expenses | 1,267 | 1,520 | 2,128 | 2,572 |
General and administrative expenses | 1,236 | 1,606 | 3,046 | 3,398 |
Amortization of intangible assets | 131 | 133 | 261 | 264 |
Gain on disposal and sale and leaseback of equipment | -32 | -48 | -69 | -91 |
Total costs and operating expenses | 11,511 | 12,614 | 23,041 | 24,901 |
Income (loss) from operations | -794 | -78 | -1,856 | 259 |
Interest income | 1 | 2 | 3 | 5 |
Interest expense | -1,780 | -1,923 | -3,804 | -3,696 |
Change in fair value of preferred stock warrant liability | -231 | ' | -274 | ' |
Change in fair value of subordinated note embedded derivative liability | 6,338 | ' | 7,367 | ' |
Income (loss) before income taxes | 3,534 | -1,999 | 1,436 | -3,432 |
Net Income (loss) and comprehensive income (loss) | $3,534 | ($1,999) | $1,436 | ($3,432) |
Net Income (loss) per share attributable to common stockholders, basic (in dollars per share) | $0.50 | ($0.90) | $0.03 | ($1.55) |
Net Income (loss) per share attributable to common stockholders, diluted (in dollars per share) | $0.33 | ($0.90) | $0.02 | ($1.55) |
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic (in shares) | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 |
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, diluted (in shares) | 5,930,309 | 2,225,742 | 3,482,956 | 2,218,801 |
CONDENSED_STATEMENTS_OF_CONVER
CONDENSED STATEMENTS OF CONVERTIBLE PREFERRED STOCK, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' DEFICIT (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Convertible Preferred Stock | Redeemable Common Stock |
In Thousands, except Share data, unless otherwise specified | ||||||
Balance at Sep. 30, 2013 | ($119,100) | $2 | ($26,679) | ($92,423) | ' | ' |
Balance at Sep. 30, 2013 | ' | ' | ' | ' | 57,261 | 3,224 |
Balance (in shares) at Sep. 30, 2013 | ' | 1,881,177 | ' | ' | ' | ' |
Balance (in shares) at Sep. 30, 2013 | ' | ' | ' | ' | 36,034,900 | 347,945 |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Decrease in equity associated with modification of subordinated debt | -3,485 | ' | -3,485 | ' | ' | ' |
Issuance of common stock upon exercise of stock options | 7 | ' | 7 | ' | ' | ' |
Issuance of common stock upon exercise of stock options (in shares) | ' | 3,211 | ' | ' | ' | ' |
Stock-based compensation expense | 250 | ' | 250 | ' | ' | ' |
Aggregate fractional shares cancelled in connection with reverse stock split | ' | -26 | ' | ' | ' | ' |
Net income and comprehensive income | 1,436 | ' | ' | 1,436 | ' | ' |
Balance at Mar. 31, 2014 | -120,892 | 2 | -29,907 | -90,987 | ' | ' |
Balance at Mar. 31, 2014 | ' | ' | ' | ' | $57,261 | $3,224 |
Balance (in shares) at Mar. 31, 2014 | ' | 1,884,362 | ' | ' | ' | ' |
Balance (in shares) at Mar. 31, 2014 | ' | ' | ' | ' | 36,034,900 | 347,945 |
CONDENSED_STATEMENTS_CASH_FLOW
CONDENSED STATEMENTS CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) and comprehensive income (loss) | $1,436 | ($3,432) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ' | ' |
Depreciation and amortization of property and equipment | 1,054 | 998 |
Gain on disposal and sale and leaseback of equipment | -69 | -91 |
Amortization of premium on modification of subordinated note | -286 | ' |
Change in fair value of preferred stock warrant liability | 274 | ' |
Change in fair value of subordinated debt embedded derivative liability | -7,367 | ' |
Amortization of intangible assets | 261 | 264 |
Noncash amortized debt issue costs on long-term debt | 171 | 164 |
Noncash amortized debt discount | 104 | 91 |
Stock compensation expense | 250 | 213 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | -1,128 | -1,367 |
Unbilled accounts receivable | -848 | -981 |
Inventories, net | 1,469 | -639 |
Prepaid expenses and other current assets | 454 | 326 |
Accounts payable | 144 | -170 |
Accrued expenses and other liabilities | 1,412 | -137 |
Deferred contract revenues | 86 | 886 |
Recall liability | -627 | ' |
Long-term interest payable | 823 | 822 |
Net cash used by operating activities | -2,387 | -3,053 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -1,648 | -5,788 |
Proceeds from sale of equipment | 12 | 2 |
Proceeds from repayment of notes receivable - related parties | 100 | ' |
Payments for patents and licensing rights | -308 | -353 |
Net cash used by investing activities | -1,844 | -6,139 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of long-term debt | ' | 6,600 |
Payment of transaction costs associated with issuance of common stock and long-term debt | -1,832 | -65 |
Principal payments on long-term debt | -452 | -574 |
Principal payments on capital lease obligations | -525 | -304 |
Borrowings on bank lines of credit | 1,298 | 1,500 |
Payments on bank lines of credit | -2,513 | -1,572 |
Proceeds from exercise of stock options | 7 | 7 |
Net cash provided (used) by financing activities | -4,017 | 5,592 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | -8,248 | -3,600 |
CASH AND CASH EQUIVALENTS - Beginning of period | 13,581 | 12,245 |
CASH AND CASH EQUIVALENTS - End of period | 5,333 | 8,645 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ' | ' |
Cash paid for interest | 2,996 | 3,112 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Issuance of common stock warrants in connection with debt financing and equipment lease financing | ' | 23 |
Property and equipment purchases included in accounts payable and accrued liabilities | 38 | 265 |
Issuance of payment-in-kind notes in lieu of cash interest payments | 647 | 589 |
Transaction costs associated with the initial public offering included in accrued liabilities | $1,161 | ' |
Organization_Description_of_Bu
Organization, Description of Business, and Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2014 | |
Organization, Description of Business, and Summary of Significant Accounting Policies | ' |
Organization, Description of Business, and Summary of Significant Accounting Policies | ' |
1. Organization, Description of Business, and Summary of Significant Accounting Policies | |
Organization | |
Corium International, Inc., a Delaware corporation (the “Company”), is a commercial stage biopharmaceutical company focused on the development, manufacture and commercialization of specialty pharmaceutical products that leverage its broad experience in transdermal and transmucosal delivery systems. | |
In the normal course of business, the Company enters into collaborative agreements with partners to develop and manufacture products based on the Company’s drug delivery technologies. Revenues consist of net sales of products manufactured, royalties and profit-sharing payments based on sales of such products by partners, and product development fees for research and development activities under collaborative agreements with strategic partners. The Company is also engaged in the research and development of its own proprietary transdermal drug delivery products using its proprietary technologies. | |
Basis of Presentation | |
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and six months ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending September 30, 2014 or for any future period. The balance sheet as of September 30, 2013 has been derived from the audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. | |
The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended September 30, 2013 included in the Company’s Prospectus filed pursuant to Rule 424(b)(4) on April 3, 2014 with the SEC (the “Prospectus”). | |
There have been no material changes to the significant accounting policies previously disclosed in the Prospectus. | |
Reverse Stock Split | |
On March 20, 2014, the Company effected a 1-for-10.1 reverse stock split of the Company’s outstanding common stock resulting in a reduction of the Company’s total common stock issued and outstanding from 19,032,056 shares to 1,884,362 shares. The reverse stock split affected all stockholders of the Company’s common stock uniformly, and did not materially affect any stockholder’s percentage of ownership interest. The par value of the Company’s common stock remained unchanged at $0.001 per share and the number of authorized shares of common stock remained the same after the reverse stock split. | |
As the par value per share of the Company’s common stock remained unchanged at $0.001 per share, a total of $17,148 was reclassified from common stock to additional paid-in capital. In connection with this reverse stock split, the number of shares of common stock reserved for issuance under the Company’s equity incentive, stock option and employee stock purchase plans (see Note 4) as well as the shares of common stock underlying outstanding stock options, restricted stock units and warrants were also proportionately reduced while the exercise prices of such stock options and warrants were proportionately increased. All references to shares of common stock and per share data for all periods presented in the accompanying financial statements and notes thereto have been adjusted to reflect the reverse stock split on a retroactive basis. | |
Initial Public Offering | |
On April 2, 2014, the Company’s registration statements on Form S-1 (File No. 333-195002 and File No. 333-195002) relating to the Initial Public Offering (the “IPO”) of its common stock were declared effective by the SEC. The IPO closed on April 8, 2014 at which time the Company sold 6,500,000 shares of its common stock at a price of $8.00 per share. Corium also granted the underwriters a 30-day option to purchase up to 975,000 additional shares of common stock at the IPO price. The underwriters exercised this option to purchase 374,997 shares on May 2, 2014. The Company received cash proceeds of $48.5 million from the IPO, including proceeds from the partial exercise of the underwriters’ option, net of underwriting discounts and commissions and estimated expenses paid by the Company. | |
On April 8, 2014, immediately prior to the closing of the IPO, all outstanding shares of convertible preferred stock converted into 3,567,807 shares of common stock, and the related carrying value of $57.3 million was reclassified to common stock and additional paid-in capital. In addition, certain warrants to purchase convertible preferred stock and common stock were also converted and net exercised into 971,440 shares of common stock. Upon the consummation of the IPO, Corium also repurchased 1,077,809 shares of common stock for an aggregate purchase price of $5.2 million from its founders. | |
Following the filing of the Restated Certificate of Incorporation of the Company on April 8, 2014, the number of shares of capital stock the Company is authorized to issue is 155,000,000 shares, of which 150,000,000 shares may be common stock and 5,000,000 shares may be preferred stock. Both the common stock and preferred stock have a par value of $0.001 per share. | |
Use of Estimates | |
Estimates and assumptions are required to be used by management in the preparation of financial statements in conformity with U.S. GAAP that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of operating revenues and operating expenses during the reporting period. Those estimates and assumptions affect revenue recognition and deferred revenues, impairment of long-lived assets, determination of fair value of stock-based awards and other debt and equity related instruments, and accounting for income taxes. As future events and their effects cannot be determined with precision, actual results could differ from those estimates. | |
Concentration of Credit Risk | |
Four partners accounted for 92% and 94% of the Company’s revenues for the three and six months ended March 31, 2014, compared to 99% and 99% for the corresponding periods in 2013. These same partners accounted for 98% and 100% of accounts receivable as of March 31, 2014 and September 30, 2013. | |
Revenue Recognition | |
The Company generates revenues from agreements for the development and commercialization of its products. The terms of the agreements may include nonrefundable upfront payments, partial or complete reimbursement of research and development costs, milestone payments, product sales and royalties and profit sharing on product sales derived from partner agreements. The Company recognizes revenues when the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred; the price is fixed or determinable; and collectability is reasonably assured. | |
Revenue related to multiple element arrangements are analyzed to determine whether the deliverables can be separated or whether they must be accounted for as a single unit of accounting. This determination is generally based on whether any deliverable has stand-alone value to the partner. This analysis also establishes a selling price hierarchy for determining how to allocate arrangement consideration to identified units of accounting. The selling price used for each unit of accounting is based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific nor third-party evidence is available. Typically, the Company has not granted licenses to partners at the beginning of its arrangements and thus there are no delivered items separate from the research and development services provided. As such, upfront payments are recorded as deferred revenues in the balance sheet and are recognized as contract research and development revenues over the estimated period of performance that is consistent with the terms of the research and development obligations contained in the agreement. The Company periodically reviews the estimated period of performance based on the progress made under each arrangement. | |
Amounts related to research and development funding are generally recognized as the related services or activities are performed, in accordance with the contract terms. To the extent that agreements specify services are to be performed on a cost-plus basis, revenues are recognized as services are rendered. Such work is generally billed on a monthly basis for time incurred at specified rates in the agreements. To the extent that agreements specify services to be performed on a fixed-price basis, revenues are recognized consistent with the pattern of the work performed. Generally, all of the agreements provide for reimbursement of third-party expenses, and such reimbursable expenses are billed as revenues as incurred. | |
The arrangements may include contractual milestones, which relate to the achievement of pre-specified research, development, regulatory and commercialization events. The milestone events contained in the Company’s arrangements coincide with the progression of the Company’s product candidates from research and development, to regulatory approval and through to commercialization. The process of successfully developing a new product, having it approved from a regulatory perspective and ultimately sold for a profit is highly uncertain. As such, the milestone payments that the Company may earn from its partners involve a significant degree of risk to achieve. Research and development milestones in the Company’s collaboration agreements may include the following types of events: completion of pre-clinical research and development work, completion of certain development events and initiation or completion of clinical trials. Regulatory milestones may include the following types of events: filing of regulatory applications with the Food and Drug Administration and approval of the regulatory applications by the Food and Drug Administration. Commercialization milestones may include product launch. The Company recognizes each milestone payment in its entirety in the period in which the milestone is achieved. | |
Upon commercialization, revenues are generated from product sales, royalties and profit sharing. Product sales are generally recognized as products are shipped and title and risk of loss pass to the partner. Royalties and profit sharing are generally recognized when the Company’s partners sell the product to their customers and are based on a percentage of the Company’s partners’ gross sales or net profits for products subject to the Company’s agreements with its partners. Royalties and profit sharing totaled $1.1 million and $3.0 million for the three and six months ended March 31, 2014, compared to $2.3 million and $4.3 million for the corresponding periods in 2013. | |
Other revenues consist primarily of income derived from the Company’s arrangements with its partners, whereby a portion of the revenues received under these agreements relates to rental income from embedded leases associated with these relationships, as well as revenues associated with licenses granted to a third party for intellectual property related to thin film dressings. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
2. Fair Value Measurements | ||||||||||||||
Except as noted below, the carrying values of the Company’s financial instruments, including cash equivalents, accounts receivable, and accounts payable, approximated their fair values due to the short period of time to maturity or repayment. | ||||||||||||||
The Company’s financial instruments that are measured at fair value on a recurring basis as of September 30, 2013 and as of March 31, 2014, by level within the fair value hierarchy, are as follows (in thousands): | ||||||||||||||
As of March 31, 2014 | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 834 | $ | 834 | ||||||
Total financial liabilities | $ | — | $ | — | $ | 834 | $ | 834 | ||||||
As of September 30, 2013 | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 560 | $ | 560 | ||||||
Subordinated note embedded derivative liability | — | — | 7,367 | 7,367 | ||||||||||
Total financial liabilities | $ | — | $ | — | $ | 7,927 | $ | 7,927 | ||||||
The Company’s Level III liabilities consist of a preferred stock warrant liability (see Note 6) and subordinated note embedded derivative liability (Note 4). The following table sets forth a summary of the changes in the fair value of the Company’s Level III financial liabilities, which are measured on a recurring basis (in thousands): | ||||||||||||||
Balance as of September 30, 2013 | $ | 7,927 | ||||||||||||
Change in fair value of preferred stock warrants | 274 | |||||||||||||
Change in fair value of subordinated note embedded derivative liability | (7,367 | ) | ||||||||||||
Balance as of March 31, 2014 | $ | 834 | ||||||||||||
The following financial instruments have carrying values which differ from their fair value as estimated by the Company based on market quotes for instruments with similar terms and remaining maturities (Level III valuation technique) (in thousands): | ||||||||||||||
As of March 31, 2014 | ||||||||||||||
Carrying | Fair | Difference | ||||||||||||
Value | Value | |||||||||||||
Long-term debt | $ | 37,622 | $ | 37,622 | $ | — | ||||||||
Convertible notes | 9,475 | 15,047 | 5,572 | |||||||||||
Subordinated note | 16,199 | 16,445 | 246 | |||||||||||
Total | $ | 63,296 | $ | 69,114 | $ | 5,818 | ||||||||
As of September 30, 2013 | ||||||||||||||
Carrying | Fair | Difference | ||||||||||||
Value | Value | |||||||||||||
Long-term debt | $ | 37,413 | $ | 37,413 | $ | — | ||||||||
Convertible notes | 9,399 | 14,316 | 4,917 | |||||||||||
Subordinated note | 13,000 | 9,508 | (3,492 | ) | ||||||||||
Total | $ | 59,812 | $ | 61,237 | $ | 1,425 |
Inventories
Inventories | 6 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
3. Inventories | ||||||||
Inventories consist of the following (in thousands): | ||||||||
As of March | As of | |||||||
31, 2014 | September | |||||||
30, 2013 | ||||||||
Raw materials | $ | 1,698 | $ | 2,410 | ||||
Work in process | 761 | 1,546 | ||||||
Finished goods | 789 | 667 | ||||||
Total inventories, cost | 3,248 | 4,623 | ||||||
Less inventory reserves | (208 | ) | (115 | ) | ||||
Total inventories, net | $ | 3,040 | $ | 4,508 |
Debt
Debt | 6 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt | ' | |||||||
Debt | ' | |||||||
4. Debt | ||||||||
The Company’s outstanding debt as of September 30, 2013 and March 31, 2014 consist of a bank line of credit, amounts outstanding under a term loan agreement classified as long-term debt, convertible notes and a subordinated note as follows (in thousands): | ||||||||
As of March | As of | |||||||
31, 2014 | September | |||||||
30, 2013 | ||||||||
Bank line of credit | $ | 2,658 | $ | 3,873 | ||||
Long-term debt | 37,622 | 37,413 | ||||||
Convertible notes | 9,475 | 9,399 | ||||||
Subordinated note | 16,199 | 13,000 | ||||||
Total | 65,954 | 63,685 | ||||||
Less current portion, consisting of bank line of credit and long-term debt | 2,696 | 4,330 | ||||||
Long-term portion | $ | 63,258 | $ | 59,355 | ||||
Bank Line of Credit | ||||||||
The Company entered into a line of credit on August 31, 2012 which provides for borrowings up to $6.0 million, expires on August 31, 2014, and is collateralized by a first security interest in cash, accounts receivable, and inventory, as well as a secondary interest in all other assets of the Company. Advances under the line of credit are based on 80% of eligible accounts receivable. The line of credit bears interest at 0.25%, plus the bank’s prime rate (an effective rate of 4.25% as of September 30, 2013 and March 31, 2014), and provides for a minimum monthly interest charge of $5,000. In addition, the line of credit required a $60,000 facility fee which was paid in August 2013. The line of credit contains a minimum monthly liquidity covenant of $2.0 million of net cash on deposit with the commercial bank. The Company was in compliance with such covenant as of September 30, 2013 and March 31, 2014. | ||||||||
Long-term Debt | ||||||||
Long-term debt was as follows (in thousands): | ||||||||
As of March | As of | |||||||
31, 2014 | September | |||||||
30, 2013 | ||||||||
Term loan agreement expiring June 30, 2017. See terms of the agreement below. Less discount of $103 and $89 as of September 30, 2013 and March 31, 2014 | $ | 36,953 | $ | 36,293 | ||||
Notes payable to lessor for tenant improvements. The note calls for monthly payments of principal and interest of $3 at an interest rate of 7% and is due April 2015 | 111 | 124 | ||||||
Notes payable to lessor for tenant improvements. The note calls for monthly payments of principal and interest of $6 at an interest rate of 7% and is due November 2024 | 558 | 575 | ||||||
Notes payable to finance Company insurance premiums. The note calls for monthly payments of principal and interest of $71 at an interest rate of 2.192% and is due March 2014 | — | 421 | ||||||
Total | 37,622 | 37,413 | ||||||
Less current portion | 38 | 457 | ||||||
Long-term portion | $ | 37,584 | $ | 36,956 | ||||
On July 13, 2012, the Company completed a $35.0 million term loan agreement with a financial investment fund. In August 2012 and December 2012, the Company drew down $29.0 million and $6.0 million under this agreement. The agreement requires interest to be paid quarterly at a simple annual rate of 15%, and that all outstanding principal be repaid in four equal quarterly payments beginning September 30, 2016. The facility also contains a provision whereby the Company can choose to defer cash payment of 3.5% interest on the original outstanding principal from the first 11 quarterly interest payments by converting that portion of the interest otherwise due into additional notes under the agreement. As of September 30, 2013 and March 31, 2014, the Company has converted $1.4 million and $2.0 million, respectively, of interest into additional notes (payment-in-kind notes). Amounts outstanding under the term loan agreement are collateralized by all of the Company’s assets and the agreement contains a 1% fee on all draws and provides for a prepayment penalty on the outstanding principal if the Company chooses to repay principal prior to maturity, or upon other specified events, including a change of control. The term loan agreement provides for financial covenants for minimum revenues and minimum liquidity, with which the Company was in compliance as of September 30, 2013 and March 31, 2014. | ||||||||
Convertible Notes | ||||||||
In 2008 and 2009, the Company issued convertible bridge notes (the “Convertible Notes”) and warrant purchase agreements to several of the existing Series C preferred stock investors, whereby the Company raised a total of $20.0 million. As originally issued, the Convertible Notes accrued interest at 10% per year and mature on the earliest of July 31, 2009, the consummation of a significant sale of assets of the Company outside the normal course of business, or upon an uncured event of default. Subsequently, the maturities of the Convertible Notes were initially extended to October 31, 2009, after which they became due. In connection with the closing of the $35.0 million term loan agreement in July 2012, the Company further extended the maturity date of the Convertible Notes to July 1, 2017. Interest has not been paid on the Convertible Notes since inception, and is therefore presented as long-term accrued interest. | ||||||||
The Convertible Notes are convertible into preferred stock of the Company. Upon completion of the Company’s next preferred stock equity financing, the Convertible Notes will convert automatically into the series of preferred stock issued in that financing, at a conversion price equal to the price per share for such financing. The Convertible Notes are secured by all assets of the Company, with such security interest being subordinated to the security interest granted by the Company to its commercial bank and the $35.0 million term loan agreement. Pursuant to an intercreditor agreement the Company entered into in July 2012, the Company is not permitted to pay interest on these notes until maturity. | ||||||||
The Convertible Notes also provide for an amendment of the voting agreement between the Company and the majority of its stockholders, pursuant to which the major investor has the right to increase the maximum size of the board of directors to 11 and the major investor also has the right to appoint up to 6 of the directors. As of March 31, 2014 the major investor had not exercised either of these rights. | ||||||||
In connection with the Convertible Notes, the Company also issued common stock warrants exercisable for a number of shares equal to 60% of the principal amount of the Convertible Notes, divided by the conversion price of the Convertible Notes, which is, initially, the original issue price of the Series C preferred stock. The warrants are only exercisable following conversion of the Convertible Notes into preferred stock and will be exercisable for shares of common stock of the Company. | ||||||||
Subordinated Note | ||||||||
In 2009, the Company issued a subordinated note (the “Subordinated Note”) to one of the existing Series C preferred stock investors raising a total of $13.0 million. The Subordinated Note accrues simple interest at 5% per year and had an original maturity of the earliest of March 31, 2010, the consummation of a significant sale of assets of the Company outside the normal course of business, or upon an uncured event of default. In connection with the closing of the term loan agreement during the year ended September 30, 2012, the maturity of the Subordinated Note was extended to July 1, 2017, and, as a result, the Subordinated Note is classified as a long-term obligation as of September 30, 2013 and March 31, 2014. Interest has not been paid on the Subordinated Note since inception and is therefore, presented as long-term accrued interest. | ||||||||
The Subordinated Note is secured by all assets of the Company, with such security interest subordinated to the security interest granted by the Company to both its commercial bank and the term loan agreement. Pursuant to an intercreditor agreement the Company entered into in July 2012, the Company is not permitted to pay interest on these notes until maturity. | ||||||||
If the Company consummates a merger of the Company or a sale of all or substantially all of the Company’s assets, or a significant asset sale prior to the full repayment of the Subordinated Note, then, at the written election of the subordinated note holder, the holder of the Subordinated Note will be entitled to be repaid the entire outstanding balance under the Subordinated Note plus an additional amount equal to the outstanding principal under the Subordinated Note, plus all accrued interest. The Company has determined that this feature is an embedded derivative requiring bifurcation and separate accounting. The fair value of this embedded derivative liability was $7.4 million as of September 30, 2013, but as of March 31, 2014 the Company has determined that, due to the proximity of the Company’s IPO as of that date (see Note 1), the probability of scenarios that would trigger the payment of the additional amount was negligible and, as a result, the embedded derivative has no value. The change in fair value was recorded to change in fair value of Subordinated Note embedded derivative liability. | ||||||||
Recapitalization | ||||||||
In December 2013, the Company entered into an amendment and conversion agreement with Essex Woodlands pursuant to which the Company and Essex Woodlands (i) amended the Convertible Notes held by Essex Woodlands and other investors to provide that they will automatically convert either into 2,036,555 shares of the Company’s common stock immediately prior to the closing of an initial public offering of the Company’s common stock or into 2,036,555 shares of the Company’s Series C preferred stock immediately prior to the first closing of a qualified equity financing that occurs prior to the closing of an initial public offering of the Company’s common stock, and the Convertible Notes will be terminated; (ii) amended the terms of the Subordinated Note to provide that it will automatically convert either into 3,387,146 shares of the Company’s common stock immediately prior to the closing of an initial public offering of the Company’s common stock or into 3,387,146 shares of a new series of the Company’s preferred stock (with identical rights, preferences and privileges as the Company’s Series C preferred stock, but with a liquidation preference of one times its original issue price) immediately prior to the first closing of a qualified equity financing that occurs prior to the closing of an initial public offering of the Company’s common stock, and the Subordinated Note will be terminated; and (iii) requires Essex Woodlands to effect the automatic conversion of all outstanding shares of the Company’s preferred stock in connection with the completion of an initial public offering of the Company’s common stock. | ||||||||
Simultaneously, the Company also entered into a repurchase agreement pursuant to which the Company agreed to repurchase 1,077,809 shares of the Company’s common stock for an aggregate repurchase price of $5.2 million from two of the Company’s founders. These repurchases will occur immediately prior to the earlier of the consummation of an initial public offering of the Company’s common stock and the first closing of a qualified equity financing, and these repurchases will satisfy in full all of the Company’s remaining obligations under the repurchase agreements which are discussed in Note 7. | ||||||||
On April 8, 2014, in connection with the closing of the IPO, the Convertible Notes and Subordinated Note were converted and terminated, and the Company repurchased 1,077,809 shares of common stock from the founders as described above. |
Collaboration_and_Partner_Arra
Collaboration and Partner Arrangements | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Collaboration and Partner Arrangements | ' | |||||||||||||
Collaboration and Partner Arrangements | ' | |||||||||||||
5. Collaboration and Partner Arrangements | ||||||||||||||
The Company has recognized the following revenues from its collaboration and partner agreements during the three and six months ended March 31, 2013 and 2014 (in thousands): | ||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
P&G | $ | 2,811 | $ | 2,533 | $ | 5,762 | $ | 5,262 | ||||||
Teva | 2,784 | 3,973 | 6,487 | 8,394 | ||||||||||
Actavis/Par | 3,405 | 4,667 | 6,528 | 8,563 | ||||||||||
Agile | 851 | 1,287 | 1,217 | 2,603 | ||||||||||
Other | 866 | 76 | 1,191 | 338 | ||||||||||
Total revenues | $ | 10,717 | $ | 12,536 | $ | 21,185 | $ | 25,160 |
Warrants
Warrants | 6 Months Ended | |||||
Mar. 31, 2014 | ||||||
Warrants | ' | |||||
Warrants | ' | |||||
6. Warrants | ||||||
The Company issued warrants to purchase shares of the Company’s stock as part of several transactions from 2008 through 2013. The warrants have been recorded as either equity instruments or liability instruments based on the terms of the warrants. | ||||||
Preferred Stock Warrants | ||||||
The Company issued warrants to purchase Series C preferred stock, which comprise the only warrants to purchase preferred stock issued by the Company as of March 31, 2014. | ||||||
All of the Series C preferred stock warrants are exercisable for a period of five years from issuance except certain warrants to purchase 163,522 shares of Series C preferred stock that expire upon the earlier of five years and the closing of an IPO. The warrants are exercisable in cash or through a cashless exercise provision. Under the cashless exercise provision, the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of the Series C preferred stock at the time of exercise of the warrant after deducting the aggregate exercise price. In the event that all outstanding shares of the Series C convertible preferred stock are converted into common stock, the warrants will be exercisable for the same number of shares of common stock. | ||||||
As of September 30, 2013 and March 31, 2014, warrants to purchase 1,739,992 and 1,380,241 shares of Series C preferred stock were outstanding with a weighted average exercise price of $0.90 per share. Of this amount, warrants to purchase 1,380,241 shares of Series C preferred stock contain antidilution protection. Therefore, the Company evaluated these warrants as derivative instruments, and accordingly recorded the warrants as liabilities at fair value at the time of issuance, with the fair value then adjusted at each subsequent balance sheet date. The Company will continue to adjust the preferred stock warrant liabilities for changes in the fair value of the warrants until the earlier of (i) the exercise of the warrants, (ii) the conversion of the underlying preferred stock into common stock, at which time, the liability will be reclassified to stockholders’ equity, and (iii) the expiration of the warrants. | ||||||
The fair value of the outstanding convertible preferred stock warrants containing antidilution protection was remeasured as of September 30, 2013 and March 31, 2014 using the Probability-Weighted Expected Return Model. The Company uses a number of assumptions to estimate the fair value including the likelihood of various scenarios, the expected volatility and the fair value of the underlying stock under each scenario. These assumptions are: | ||||||
As of March 31, | As of | |||||
2014 | September 30, | |||||
2013 | ||||||
Remaining contractual term (in years) | 4.80 – 7.70 | 5.07 - 8.24 | ||||
Risk-free interest rate | 1.73 – 2.30% | 1.39 - 2.02% | ||||
Expected volatility | 70 - 75% | 68 - 77% | ||||
Expected dividend rate | 0% | 0% | ||||
The fair value of these warrants totaled $0.6 million and $0.8 million as of September 30, 2013 and March 31, 2014. | ||||||
On April 8, 2014, in connection with the closing of the IPO, certain warrants to purchase Series C convertible preferred stock were converted and net exercised into 971,440 shares of common stock, and the remainder of the outstanding warrants to purchase Series C convertible preferred stock were all converted into warrants to purchase common stock. | ||||||
Common Stock Warrants | ||||||
As of September 30, 2013 and March 31, 2014, warrants to purchase 1,294,613 shares of common stock were outstanding with a weighted average exercise price of $1.95 per share. All of the common stock warrants are exercisable at the earlier of a period of five years from issuance and the closing of an initial public offering of common stock. The fair value of these warrants was recorded in stockholders’ deficit upon issuance. | ||||||
On April 8, 2014, in connection with the closing of the IPO, warrants to purchase 1,286,495 shares of common stock, along with warrants to purchase 163,522 shares of Series C convertible preferred stock, were net exercised into 971,440 shares of common stock. |
Convertible_Preferred_Stock_Re
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit | 6 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit | ' | |||||||||||
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit | ' | |||||||||||
7. Convertible Preferred Stock, Redeemable Common Stock and Stockholders’ Deficit | ||||||||||||
Convertible Preferred Stock | ||||||||||||
Convertible preferred stock as of September 30, 2013 and March 31, 2014, on an unconverted basis, consists of the following (in thousands, except for share and per share data): | ||||||||||||
Shares | Original | Shares Issued | Aggregate | |||||||||
Authorized | Issue | and | Liquidation | |||||||||
Price | Outstanding | Amount | ||||||||||
Series A | 1,114,100 | $ | 0.22 | 1,114,066 | $ | 490 | ||||||
Series B | 7,602,200 | 0.875 | 7,602,132 | 6,652 | ||||||||
Series C | 57,000,000 | 0.917 | 27,318,702 | 50,119 | ||||||||
Balance as of September 30, 2013 and March 31, 2014 | 65,716,300 | 36,034,900 | $ | 57,261 | ||||||||
Common Stock | ||||||||||||
The Company was authorized to issue up to 115,000,000 shares of common stock as of September 30, 2013 and March 31, 2014 at par value of $0.001 per share. The Company had reserved shares of common stock, on an as-if converted basis, for issuance as follows: | ||||||||||||
As of March | As of | |||||||||||
31, 2014 | September | |||||||||||
30, 2013 | ||||||||||||
Issuances under stock option plans | 2,050,019 | 1,781,846 | ||||||||||
Conversion of convertible preferred stock | 3,567,807 | 3,567,811 | ||||||||||
Issuances upon exercise of convertible preferred stock warrants | 136,653 | 172,276 | ||||||||||
Issuances upon exercise of common stock warrants | 1,294,613 | 1,294,618 | ||||||||||
7,049,092 | 6,816,551 | |||||||||||
Repurchases of Common Stock from Founders — In connection with the Series C financing, the Company, in accordance with specific stock repurchase agreements approved by the board of directors, the Company purchased from the two founders an aggregate of 215,872 shares of common stock at a purchase price of $9.26 per share. The stock repurchase agreements also provided for the Company to repurchase an additional total of 215,872 shares of common stock held by each of the two founders at a price of $9.26 per share. These agreements were amended in March 2008 to suspend the Company’s obligation to repurchase these shares if, in the discretion of the Company’s board of directors, any such repurchase would result in a material adverse effect on the Company’s financial condition. As these shares are conditionally redeemable, they are classified outside of stockholders’ deficit. As of September 30, 2013 and March 31, 2014, the remaining agreement to repurchase such shares is contingent on approval by the board of directors. As discussed in Note 4, in December 2013, the Company entered into another agreement which would include the satisfaction in full of all of the Company’s remaining obligations under these repurchase agreements upon the earlier of the closing of an initial public offering of the Company’s common stock and the first closing of a qualified equity financing. | ||||||||||||
The Company completed the repurchase of 1,077,809 shares of common stock from the founders on April 8, 2014, thereby satisfying all of the Company’s obligations under the repurchase agreements. |
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ' | |||||||||||||
8. Stock-Based Compensation | ||||||||||||||
Equity Incentive Plans | ||||||||||||||
As of September 30, 2013 and March 31, 2014, the Company has three equity incentive plans, two sponsored by the Company, and a separate stock option plan of StrataGent, Inc. StrataGent, Inc. was acquired by the Company on September 20, 2007. The unexpired, unexercised options outstanding for those employees of StrataGent who remained Company employees after the merger was effected were assumed by the Company. Each StrataGent option became exercisable into whole shares of Corium stock based on an agreed exchange ratio and per share exercise price such that the total value of the option grant did not change. The Company elected to make no further grants under the StrataGent Plan; however its terms continue to govern all options issued under that plan. No additional shares available for grant were assumed by the Company, and any options that were returned to the pool subsequent to the merger were canceled and were not made available for future grants. This wholly owned subsidiary was dissolved during 2008. | ||||||||||||||
The Corium plans consist of the 2002 stock option plan that expired in 2012 and the 2012 equity incentive plan which was adopted in November 2012. The exercise price of each option issued under the Corium Plan is no less than the fair value of the Company’s stock, as determined by the board of directors on the date of the grant.The maximum term of the options is ten years and the maximum vesting period is four years. | ||||||||||||||
A summary of activity under the Corium Plan during the six months ended March 31, 2014 is as follows: | ||||||||||||||
Shares | Stock | Weighted | Weighted | Aggregate | ||||||||||
Available | Options | Average | Average | Intrinsic | ||||||||||
for Grant | Outstanding | Exercise | Remaining | Value | ||||||||||
Price | Contractual Life | |||||||||||||
(Years) | ||||||||||||||
(In | ||||||||||||||
thousands) | ||||||||||||||
Balance — September 30, 2013 | 248,410 | 1,528,876 | $ | 2.22 | 7.22 | $ | 1,287 | |||||||
Additional shares authorized | 272,277 | — | ||||||||||||
Granted | (467,089 | ) | 467,089 | $ | 4.14 | |||||||||
Exercised | — | (3,211 | ) | $ | 2.22 | |||||||||
Forfeited | 124 | (124 | ) | $ | 2.22 | |||||||||
Cancelled | 2,246 | (2,243 | ) | $ | 2.22 | |||||||||
Balance — March 31, 2014 | 55,968 | 1,990,387 | $ | 2.65 | 7.34 | $ | 10,649 | |||||||
Employee stock-based compensation expense for the three and six months ended March 31, 2013 and 2014 is classified in the statements of operations as follows (in thousands): | ||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of product revenues | $ | 5 | $ | 4 | $ | 11 | $ | 22 | ||||||
Cost of contract research and development revenues | 5 | 2 | 9 | 13 | ||||||||||
Research and development | 16 | 4 | 23 | 24 | ||||||||||
General and administrative | 168 | 31 | 207 | 154 | ||||||||||
Total stock-based compensation | $ | 194 | $ | 41 | $ | 250 | $ | 213 | ||||||
As of March 31, 2014, there was a total of $3.6 million of unrecognized employee compensation cost, net of estimated forfeitures, related to non-vested stock option awards, which is expected to be recognized on a straight-line basis over a weighted-average period of approximately 2.7 years. | ||||||||||||||
On March 20, 2014, the Company approved the following new plans, which became effective in connection with the IPO: | ||||||||||||||
· 2014 Equity Incentive Plan. Under the plan, the Company has reserved a total of 1.0 million shares plus the remaining unissued shares under the 2012 equity incentive plan of common stock for issuance to employees. On January 1 of each year for the ten year term of the plan, the number of shares issuable under the plan can be increased by an amount equal to up to 4% of the number of shares of common stock outstanding as of the preceding December 31, as agreed to by the board of directors. No shares under the plan have been issued as of March 31, 2014. | ||||||||||||||
· 2014 Employee Stock Purchase Plan. Under the plan, the Company has reserved a total of 310,000 shares of common stock for issuance to employees. On January 1 of each year for the ten year term of the plan, the number of shares issuable by the plan can be increased by an amount equal up to 1% of the number of shares of common stock outstanding as of the preceding December 31, as agreed to by the board of directors, however, no more than 3.0 million shares may be issued over the ten year term of the plan. No shares under the plan have been issued as of March 31, 2014. |
Product_Recall_Liability
Product Recall Liability | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
Product Recall Liability | ' | ||||
Product Recall Liability | ' | ||||
9. Product Recall Liability | |||||
In fiscal 2008 and fiscal 2010, Actavis issued two voluntary recalls of certain lots and strengths of Fentanyl TDS manufactured by the Company and sold and distributed by Actavis in the United States. The Company and Actavis negotiated financial settlements for these two recalls, and the Company accrued amounts related to these settlements in fiscal 2009 and 2011. Such recall liabilities were subsequently reduced through various mechanisms per the terms of the settlement agreements. | |||||
In October 2012, the Company reached a revised settlement related to these recalls which provides for a total and combined remaining liability of $5.0 million. The revised liability will be repaid through quarterly payments in arrears based on a percentage of the average of the total net revenues recorded by the Company related to Fentanyl TDS. These payments to Actavis started July 1, 2013 and continue through April 1, 2017. To the extent that the revised settlement liability is not repaid as of April 1, 2017, the remaining liability, if any, will be converted into the most recent form of capital stock issued by the Company in connection with a financing, at the price per share of that financing. The revised liability does not accrue interest. | |||||
The following table summarizes the changes to the product recall liability (in thousands): | |||||
Balance at September 30, 2013 | $ | 4,832 | |||
Payment of settlement liability | (627 | ) | |||
Balance at March 31, 2014 | $ | 4,205 |
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Net Income (Loss) Per Common Share | ' | |||||||||||||
Net Income (Loss) Per Common Share | ' | |||||||||||||
10. Net Income (Loss) Per Common Share | ||||||||||||||
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to common stockholders during the three and six months ended March 31, 2013 and 2014 (in thousands, except share and per share data): | ||||||||||||||
Three Months Ended | Six Months Ended March | |||||||||||||
March 31, | 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Basic Net income (loss) per share | ||||||||||||||
Net Income (loss) attributable to common stockholders, basic and diluted | $ | 3,534 | $ | (1,999 | ) | $ | 1,436 | $ | (3,432 | ) | ||||
Less: undistributed earnings attributable to participating securities | (2,420 | ) | — | (1,375 | ) | — | ||||||||
Net Income (loss) attributable to common stockholders, basic | $ | 1,114 | $ | (1,999 | ) | $ | 61 | $ | (3,432 | ) | ||||
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 | ||||||||||
Net Income (loss) attributable to common stockholders, basic | $ | 0.5 | $ | (0.90 | ) | $ | 0.03 | $ | (1.55 | ) | ||||
Three Months Ended | Six Months Ended March | |||||||||||||
March 31, | 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Fully Diluted Net income (loss) per share | ||||||||||||||
Net Income (loss) attributable to common stockholders, basic | $ | 3,534 | $ | (1,999 | ) | $ | 1,436 | $ | (3,432 | ) | ||||
Less: undistributed earnings attributable to participating securities | (1,573 | ) | — | (1,358 | ) | — | ||||||||
Net Income (loss) attributable to common stockholders, diluted | $ | 1,961 | $ | (1,999 | ) | $ | 78 | $ | (3,432 | ) | ||||
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 | ||||||||||
Effect of potentially dilutive securities | ||||||||||||||
Dilutive options | 756,300 | — | 518,655 | — | ||||||||||
Assumed conversion of convertible notes | 2,063,989 | — | — | — | ||||||||||
Common stock warrants | 877,720 | — | 733,252 | — | ||||||||||
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, diluted | 5,930,309 | 2,225,742 | 3,482,956 | 2,218,801 | ||||||||||
Net income (loss) attributable to common stockholders, diluted | $ | 0.33 | $ | (0.90 | ) | $ | 0.02 | $ | (1.55 | ) | ||||
The following outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because including them would have been antidilutive: | ||||||||||||||
Three months ended March | Six months ended March | |||||||||||||
31, | 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Convertible preferred stock | 3,567,807 | 3,567,811 | 3,537,807 | 3,567,811 | ||||||||||
Stock options to purchase common stock | — | 1,489,238 | 37,902 | 1,489,238 | ||||||||||
Common stock warrants | — | 1,286,499 | — | 1,286,499 | ||||||||||
Preferred stock warrants | 170,962 | 172,276 | 136,658 | 172,276 | ||||||||||
Convertible notes | — | 1,982,667 | 2,090,604 | 1,982,667 |
Income_Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
11. Income Taxes | |
The Company did not record a provision for income taxes for the three and six months ended March 31, 2014, because it expected to generate a net operating loss for the year ending September 31, 2014. The Company’s deferred tax assets continue to be fully offset by a valuation allowance. |
Segment_and_Enterprisewide_Inf
Segment and Enterprise-wide Information | 6 Months Ended |
Mar. 31, 2014 | |
Segment and Enterprise-wide Information | ' |
Segment and Enterprise-wide Information | ' |
12. Segment and Enterprise-wide Information | |
The Company’s chief operating decision maker is its chief executive officer. The chief executive officer reviews its operating results on an aggregate basis for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, or operating results for levels or components. Accordingly, the Company has a single reporting segment and operating unit structure. | |
All of the Company’s revenues are derived from partners located in the United States and all long-lived assets are located in the United States. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
13. Subsequent Events | |
Initial Public Offering | |
In connection with the IPO discussed in Note 1, the Company also completed the following related transactions: | |
· Warrants to purchase 163,522 shares of convertible preferred stock and warrants to purchase 1,286,495 shares of common stock, were all automatically exercised for 971,440 shares of common stock using the net exercise provisions in the warrants. See Note 1. | |
· 2,036,655 shares of common stock were issued to the holders of the Convertible Notes under the conversion rights granted to the note holders as part of the recapitalization. See Note 4. | |
· 3,387,146 shares of common stock were issued to the holders of the Subordinated Note under the conversion rights granted to the note holders as part of the recapitalization. See Note 4. | |
· 1,077,809 shares of redeemable common stock were repurchased from the founders for a total of $5.2 million as part of the recapitalization. See Note 4. | |
· The 2014 equity incentive plan and the 2014 employee stock purchase plans, described in Note 8, became effective. | |
· Conversion of preferred warrants that did not net exercise and remain outstanding. | |
· Termination of the 2012 equity incentive plan and rollover of unissued shares into the 2014 equity plan. | |
· Filing of the Restated Certificate of Incorporation on April 8, 2014, increasing the authorized common stock and authorizing the preferred stock. | |
Performance-Based Stock Option Grants- During the year ended September 30, 2013, the Company granted options to purchase 146,024 shares of common stock to certain executive officers and directors, which contain performance-based vesting criteria. These shares vest upon completion of certain milestone events which are specific to the Company’s corporate goals. Stock-based compensation expense associated with these performance-based stock options is recognized if the performance condition is considered probable of achievement using management’s best estimates. Since the closing of the IPO in April 2014, the Compensation Committee of the Company’s board of directors has determined that the performance-based criteria have been met for options related to 137,510 shares of common stock and, accordingly, the Company will be recording stock-based compensation expense of $0.3 million for the three months ending June 30, 2014 related to these performance-based stock options. |
Organization_Description_of_Bu1
Organization, Description of Business, and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2014 | |
Organization, Description of Business, and Summary of Significant Accounting Policies | ' |
Organization | ' |
Organization | |
Corium International, Inc., a Delaware corporation (the “Company”), is a commercial stage biopharmaceutical company focused on the development, manufacture and commercialization of specialty pharmaceutical products that leverage its broad experience in transdermal and transmucosal delivery systems. | |
In the normal course of business, the Company enters into collaborative agreements with partners to develop and manufacture products based on the Company’s drug delivery technologies. Revenues consist of net sales of products manufactured, royalties and profit-sharing payments based on sales of such products by partners, and product development fees for research and development activities under collaborative agreements with strategic partners. The Company is also engaged in the research and development of its own proprietary transdermal drug delivery products using its proprietary technologies. | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and six months ended March 31, 2014 are not necessarily indicative of the results to be expected for the year ending September 30, 2014 or for any future period. The balance sheet as of September 30, 2013 has been derived from the audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. | |
The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended September 30, 2013 included in the Company’s Prospectus filed pursuant to Rule 424(b)(4) on April 3, 2014 with the SEC (the “Prospectus”). | |
There have been no material changes to the significant accounting policies previously disclosed in the Prospectus. | |
Reverse Stock Split | ' |
Reverse Stock Split | |
On March 20, 2014, the Company effected a 1-for-10.1 reverse stock split of the Company’s outstanding common stock resulting in a reduction of the Company’s total common stock issued and outstanding from 19,032,056 shares to 1,884,362 shares. The reverse stock split affected all stockholders of the Company’s common stock uniformly, and did not materially affect any stockholder’s percentage of ownership interest. The par value of the Company’s common stock remained unchanged at $0.001 per share and the number of authorized shares of common stock remained the same after the reverse stock split. | |
As the par value per share of the Company’s common stock remained unchanged at $0.001 per share, a total of $17,148 was reclassified from common stock to additional paid-in capital. In connection with this reverse stock split, the number of shares of common stock reserved for issuance under the Company’s equity incentive, stock option and employee stock purchase plans (see Note 4) as well as the shares of common stock underlying outstanding stock options, restricted stock units and warrants were also proportionately reduced while the exercise prices of such stock options and warrants were proportionately increased. All references to shares of common stock and per share data for all periods presented in the accompanying financial statements and notes thereto have been adjusted to reflect the reverse stock split on a retroactive basis. | |
Initial Public Offering | ' |
Initial Public Offering | |
On April 2, 2014, the Company’s registration statements on Form S-1 (File No. 333-195002 and File No. 333-195002) relating to the Initial Public Offering (the “IPO”) of its common stock were declared effective by the SEC. The IPO closed on April 8, 2014 at which time the Company sold 6,500,000 shares of its common stock at a price of $8.00 per share. Corium also granted the underwriters a 30-day option to purchase up to 975,000 additional shares of common stock at the IPO price. The underwriters exercised this option to purchase 374,997 shares on May 2, 2014. The Company received net cash proceeds of $48.5 million from the IPO, including proceeds from the partial exercise of the underwriters’ option, after underwriting discounts and commissions and estimated expenses paid by the Company. | |
On April 8, 2014, immediately prior to the closing of the IPO, all outstanding shares of convertible preferred stock converted into 3,567,807 shares of common stock, and the related carrying value of $57.3 million was reclassified to common stock and additional paid-in capital. In addition, certain warrants to purchase convertible preferred stock and common stock were also converted and net exercised into 971,440 shares of common stock. Upon the consummation of the IPO, Corium also repurchased 1,077,809 shares of common stock for an aggregate purchase price of $5.2 million from its founders. | |
Following the filing of the Restated Certificate of Incorporation of the Company on April 8, 2014, the number of shares of capital stock the Company is authorized to issue is 155,000,000 shares, of which 150,000,000 shares may be common stock and 5,000,000 shares may be preferred stock. Both the common stock and preferred stock have a par value of $0.001 per share. | |
Use of Estimates | ' |
Use of Estimates | |
Estimates and assumptions are required to be used by management in the preparation of financial statements in conformity with U.S. GAAP that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of operating revenues and operating expenses during the reporting period. Those estimates and assumptions affect revenue recognition and deferred revenues, impairment of long-lived assets, determination of fair value of stock-based awards and other debt and equity related instruments, and accounting for income taxes. As future events and their effects cannot be determined with precision, actual results could differ from those estimates. | |
Concentration of Credit Risk | ' |
Concentration of Credit Risk | |
Four partners accounted for 92% and 94% of the Company’s revenues for the three and six months ended March 31, 2014, compared to 99% and 99% for the corresponding periods in 2013. These same partners accounted for 98% and 100% of accounts receivable as of March 31, 2014 and September 30, 2013. | |
Revenue Recognition | ' |
Revenue Recognition | |
The Company generates revenues from agreements for the development and commercialization of its products. The terms of the agreements may include nonrefundable upfront payments, partial or complete reimbursement of research and development costs, milestone payments, product sales and royalties and profit sharing on product sales derived from partner agreements. The Company recognizes revenues when the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred; the price is fixed or determinable; and collectability is reasonably assured. | |
Revenue related to multiple element arrangements are analyzed to determine whether the deliverables can be separated or whether they must be accounted for as a single unit of accounting. This determination is generally based on whether any deliverable has stand-alone value to the partner. This analysis also establishes a selling price hierarchy for determining how to allocate arrangement consideration to identified units of accounting. The selling price used for each unit of accounting is based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific nor third-party evidence is available. Typically, the Company has not granted licenses to partners at the beginning of its arrangements and thus there are no delivered items separate from the research and development services provided. As such, upfront payments are recorded as deferred revenues in the balance sheet and are recognized as contract research and development revenues over the estimated period of performance that is consistent with the terms of the research and development obligations contained in the agreement. The Company periodically reviews the estimated period of performance based on the progress made under each arrangement. | |
Amounts related to research and development funding are generally recognized as the related services or activities are performed, in accordance with the contract terms. To the extent that agreements specify services are to be performed on a cost-plus basis, revenues are recognized as services are rendered. Such work is generally billed on a monthly basis for time incurred at specified rates in the agreements. To the extent that agreements specify services to be performed on a fixed-price basis, revenues are recognized consistent with the pattern of the work performed. Generally, all of the agreements provide for reimbursement of third-party expenses, and such reimbursable expenses are billed as revenues as incurred. | |
The arrangements may include contractual milestones, which relate to the achievement of pre-specified research, development, regulatory and commercialization events. The milestone events contained in the Company’s arrangements coincide with the progression of the Company’s product candidates from research and development, to regulatory approval and through to commercialization. The process of successfully developing a new product, having it approved from a regulatory perspective and ultimately sold for a profit is highly uncertain. As such, the milestone payments that the Company may earn from its partners involve a significant degree of risk to achieve. Research and development milestones in the Company’s collaboration agreements may include the following types of events: completion of pre-clinical research and development work, completion of certain development events and initiation or completion of clinical trials. Regulatory milestones may include the following types of events: filing of regulatory applications with the Food and Drug Administration and approval of the regulatory applications by the Food and Drug Administration. Commercialization milestones may include product launch. The Company recognizes each milestone payment in its entirety in the period in which the milestone is achieved. | |
Upon commercialization, revenues are generated from product sales, royalties and profit sharing. Product sales are generally recognized as products are shipped and title and risk of loss pass to the partner. Royalties and profit sharing are generally recognized when the Company’s partners sell the product to their customers and are based on a percentage of the Company’s partners’ gross sales or net profits for products subject to the Company’s agreements with its partners. Royalties and profit sharing totaled $1.1 million and $3.0 million for the three and six months ended March 31, 2014, compared to $2.3 million and $4.3 million for the corresponding periods in 2013. | |
Other revenues consist primarily of income derived from the Company’s arrangements with its partners, whereby a portion of the revenues received under these agreements relates to rental income from embedded leases associated with these relationships, as well as revenues associated with licenses granted to a third party for intellectual property related to thin film dressings. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Schedule of the Company's financial instruments that are measured at fair value on a recurring basis by level within the fair value hierarchy | ' | |||||||||||||
The Company’s financial instruments that are measured at fair value on a recurring basis as of September 30, 2013 and as of March 31, 2014, by level within the fair value hierarchy, are as follows (in thousands): | ||||||||||||||
As of March 31, 2014 | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 834 | $ | 834 | ||||||
Total financial liabilities | $ | — | $ | — | $ | 834 | $ | 834 | ||||||
As of September 30, 2013 | ||||||||||||||
Level I | Level II | Level III | Total | |||||||||||
Preferred stock warrant liability | $ | — | $ | — | $ | 560 | $ | 560 | ||||||
Subordinated note embedded derivative liability | — | — | 7,367 | 7,367 | ||||||||||
Total financial liabilities | $ | — | $ | — | $ | 7,927 | $ | 7,927 | ||||||
Summary of the changes in the fair value of the Company's Level III financial liabilities, which are measured on a recurring basis | ' | |||||||||||||
The following table sets forth a summary of the changes in the fair value of the Company’s Level III financial liabilities, which are measured on a recurring basis (in thousands): | ||||||||||||||
Balance as of September 30, 2013 | $ | 7,927 | ||||||||||||
Change in fair value of preferred stock warrants | 274 | |||||||||||||
Change in fair value of subordinated note embedded derivative liability | (7,367 | ) | ||||||||||||
Balance as of March 31, 2014 | $ | 834 | ||||||||||||
Schedule of differences between carrying values and estimated fair value of financial instruments | ' | |||||||||||||
The following financial instruments have carrying values which differ from their fair value as estimated by the Company based on market quotes for instruments with similar terms and remaining maturities (Level III valuation technique) (in thousands): | ||||||||||||||
As of March 31, 2014 | ||||||||||||||
Carrying | Fair | Difference | ||||||||||||
Value | Value | |||||||||||||
Long-term debt | $ | 37,622 | $ | 37,622 | $ | — | ||||||||
Convertible notes | 9,475 | 15,047 | 5,572 | |||||||||||
Subordinated note | 16,199 | 16,445 | 246 | |||||||||||
Total | $ | 63,296 | $ | 69,114 | $ | 5,818 | ||||||||
As of September 30, 2013 | ||||||||||||||
Carrying | Fair | Difference | ||||||||||||
Value | Value | |||||||||||||
Long-term debt | $ | 37,413 | $ | 37,413 | $ | — | ||||||||
Convertible notes | 9,399 | 14,316 | 4,917 | |||||||||||
Subordinated note | 13,000 | 9,508 | (3,492 | ) | ||||||||||
Total | $ | 59,812 | $ | 61,237 | $ | 1,425 |
Inventories_Tables
Inventories (Tables) | 6 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Inventories | ' | |||||||
Schedule of Inventories | ' | |||||||
Inventories consist of the following (in thousands): | ||||||||
As of March | As of | |||||||
31, 2014 | September | |||||||
30, 2013 | ||||||||
Raw materials | $ | 1,698 | $ | 2,410 | ||||
Work in process | 761 | 1,546 | ||||||
Finished goods | 789 | 667 | ||||||
Total inventories, cost | 3,248 | 4,623 | ||||||
Less inventory reserves | (208 | ) | (115 | ) | ||||
Total inventories, net | $ | 3,040 | $ | 4,508 |
Debt_Tables
Debt (Tables) | 6 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt | ' | |||||||
Schedule of the entity's outstanding debt | ' | |||||||
The Company’s outstanding debt as of September 30, 2013 and March 31, 2014 consist of a bank line of credit, amounts outstanding under a term loan agreement classified as long-term debt, convertible notes and a subordinated note as follows (in thousands): | ||||||||
As of March | As of | |||||||
31, 2014 | September | |||||||
30, 2013 | ||||||||
Bank line of credit | $ | 2,658 | $ | 3,873 | ||||
Long-term debt | 37,622 | 37,413 | ||||||
Convertible notes | 9,475 | 9,399 | ||||||
Subordinated note | 16,199 | 13,000 | ||||||
Total | 65,954 | 63,685 | ||||||
Less current portion, consisting of bank line of credit and long-term debt | 2,696 | 4,330 | ||||||
Long-term portion | $ | 63,258 | $ | 59,355 | ||||
Schedule of long-term debt | ' | |||||||
Long-term debt was as follows (in thousands): | ||||||||
As of March | As of | |||||||
31, 2014 | September | |||||||
30, 2013 | ||||||||
Term loan agreement expiring June 30, 2017. See terms of the agreement below. Less discount of $103 and $89 as of September 30, 2013 and March 31, 2014 | $ | 36,953 | $ | 36,293 | ||||
Notes payable to lessor for tenant improvements. The note calls for monthly payments of principal and interest of $3 at an interest rate of 7% and is due April 2015 | 111 | 124 | ||||||
Notes payable to lessor for tenant improvements. The note calls for monthly payments of principal and interest of $6 at an interest rate of 7% and is due November 2024 | 558 | 575 | ||||||
Notes payable to finance Company insurance premiums. The note calls for monthly payments of principal and interest of $71 at an interest rate of 2.192% and is due March 2014 | — | 421 | ||||||
Total | 37,622 | 37,413 | ||||||
Less current portion | 38 | 457 | ||||||
Long-term portion | $ | 37,584 | $ | 36,956 |
Collaboration_and_Partner_Arra1
Collaboration and Partner Arrangements (Tables) | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Collaboration and Partner Arrangements | ' | |||||||||||||
Schedule of revenues from the entity's collaboration and partner agreements | ' | |||||||||||||
The Company has recognized the following revenues from its collaboration and partner agreements during the three and six months ended March 31, 2013 and 2014 (in thousands): | ||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
P&G | $ | 2,811 | $ | 2,533 | $ | 5,762 | $ | 5,262 | ||||||
Teva | 2,784 | 3,973 | 6,487 | 8,394 | ||||||||||
Actavis/Par | 3,405 | 4,667 | 6,528 | 8,563 | ||||||||||
Agile | 851 | 1,287 | 1,217 | 2,603 | ||||||||||
Other | 866 | 76 | 1,191 | 338 | ||||||||||
Total revenues | $ | 10,717 | $ | 12,536 | $ | 21,185 | $ | 25,160 |
Warrants_Tables
Warrants (Tables) | 6 Months Ended | |||||
Mar. 31, 2014 | ||||||
Warrants | ' | |||||
Schedule of assumptions used to estimate the fair value of outstanding warrants | ' | |||||
As of March 31, | As of | |||||
2014 | September 30, | |||||
2013 | ||||||
Remaining contractual term (in years) | 4.80 – 7.70 | 5.07 - 8.24 | ||||
Risk-free interest rate | 1.73 – 2.30% | 1.39 - 2.02% | ||||
Expected volatility | 70 - 75% | 68 - 77% | ||||
Expected dividend rate | 0% | 0% |
Convertible_Preferred_Stock_Re1
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit (Tables) | 6 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit | ' | |||||||||||
Schedule of convertible preferred stock on an unconverted basis | ' | |||||||||||
Convertible preferred stock as of September 30, 2013 and March 31, 2014, on an unconverted basis, consists of the following (in thousands, except for share and per share data): | ||||||||||||
Shares | Original | Shares Issued | Aggregate | |||||||||
Authorized | Issue | and | Liquidation | |||||||||
Price | Outstanding | Amount | ||||||||||
Series A | 1,114,100 | $ | 0.22 | 1,114,066 | $ | 490 | ||||||
Series B | 7,602,200 | 0.875 | 7,602,132 | 6,652 | ||||||||
Series C | 57,000,000 | 0.917 | 27,318,702 | 50,119 | ||||||||
Balance as of September 30, 2013 and March 31, 2014 | 65,716,300 | 36,034,900 | $ | 57,261 | ||||||||
Schedule of reserved shares of common stock, on an as-if converted basis, for issuance | ' | |||||||||||
As of March | As of | |||||||||||
31, 2014 | September | |||||||||||
30, 2013 | ||||||||||||
Issuances under stock option plans | 2,050,019 | 1,781,846 | ||||||||||
Conversion of convertible preferred stock | 3,567,807 | 3,567,811 | ||||||||||
Issuances upon exercise of convertible preferred stock warrants | 136,653 | 172,276 | ||||||||||
Issuances upon exercise of common stock warrants | 1,294,613 | 1,294,618 | ||||||||||
7,049,092 | 6,816,551 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Summary of activity under the Corium Plan | ' | |||||||||||||
Shares | Stock | Weighted | Weighted | Aggregate | ||||||||||
Available | Options | Average | Average | Intrinsic | ||||||||||
for Grant | Outstanding | Exercise | Remaining | Value | ||||||||||
Price | Contractual Life | |||||||||||||
(Years) | ||||||||||||||
(In | ||||||||||||||
thousands) | ||||||||||||||
Balance — September 30, 2013 | 248,410 | 1,528,876 | $ | 2.22 | 7.22 | $ | 1,287 | |||||||
Additional shares authorized | 272,277 | — | ||||||||||||
Granted | (467,089 | ) | 467,089 | $ | 4.14 | |||||||||
Exercised | — | (3,211 | ) | $ | 2.22 | |||||||||
Forfeited | 124 | (124 | ) | $ | 2.22 | |||||||||
Cancelled | 2,246 | (2,243 | ) | $ | 2.22 | |||||||||
Balance — March 31, 2014 | 55,968 | 1,990,387 | $ | 2.65 | 7.34 | $ | 10,649 | |||||||
Schedule of employee stock-based compensation expense classified in the statements of operations | ' | |||||||||||||
Employee stock-based compensation expense for the three and six months ended March 31, 2013 and 2014 is classified in the statements of operations as follows (in thousands): | ||||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Cost of product revenues | $ | 5 | $ | 4 | $ | 11 | $ | 22 | ||||||
Cost of contract research and development revenues | 5 | 2 | 9 | 13 | ||||||||||
Research and development | 16 | 4 | 23 | 24 | ||||||||||
General and administrative | 168 | 31 | 207 | 154 | ||||||||||
Total stock-based compensation | $ | 194 | $ | 41 | $ | 250 | $ | 213 |
Product_Recall_Liability_Table
Product Recall Liability (Tables) | 6 Months Ended | ||||
Mar. 31, 2014 | |||||
Product Recall Liability | ' | ||||
Summary of changes to the product recall liability | ' | ||||
The following table summarizes the changes to the product recall liability (in thousands): | |||||
Balance at September 30, 2013 | $ | 4,832 | |||
Payment of settlement liability | (627 | ) | |||
Balance at March 31, 2014 | $ | 4,205 |
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 6 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Net Income (Loss) Per Common Share | ' | |||||||||||||
Schedule of computation of the Company's basic and diluted net income (loss) per share attributable to common stockholders | ' | |||||||||||||
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share attributable to common stockholders during the three and six months ended March 31, 2013 and 2014 (in thousands, except share and per share data): | ||||||||||||||
Three Months Ended | Six Months Ended March | |||||||||||||
March 31, | 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Basic Net income (loss) per share | ||||||||||||||
Net Income (loss) attributable to common stockholders, basic and diluted | $ | 3,534 | $ | (1,999 | ) | $ | 1,436 | $ | (3,432 | ) | ||||
Less: undistributed earnings attributable to participating securities | (2,420 | ) | — | (1,375 | ) | — | ||||||||
Net Income (loss) attributable to common stockholders, basic | $ | 1,114 | $ | (1,999 | ) | $ | 61 | $ | (3,432 | ) | ||||
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 | ||||||||||
Net Income (loss) attributable to common stockholders, basic | $ | 0.5 | $ | (0.90 | ) | $ | 0.03 | $ | (1.55 | ) | ||||
Three Months Ended | Six Months Ended March | |||||||||||||
March 31, | 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Fully Diluted Net income (loss) per share | ||||||||||||||
Net Income (loss) attributable to common stockholders, basic | $ | 3,534 | $ | (1,999 | ) | $ | 1,436 | $ | (3,432 | ) | ||||
Less: undistributed earnings attributable to participating securities | (1,573 | ) | — | (1,358 | ) | — | ||||||||
Net Income (loss) attributable to common stockholders, diluted | $ | 1,961 | $ | (1,999 | ) | $ | 78 | $ | (3,432 | ) | ||||
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 | ||||||||||
Effect of potentially dilutive securities | ||||||||||||||
Dilutive options | 756,300 | — | 518,655 | — | ||||||||||
Assumed conversion of convertible notes | 2,063,989 | — | — | — | ||||||||||
Common stock warrants | 877,720 | — | 733,252 | — | ||||||||||
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, diluted | 5,930,309 | 2,225,742 | 3,482,956 | 2,218,801 | ||||||||||
Net income (loss) attributable to common stockholders, diluted | $ | 0.33 | $ | (0.90 | ) | $ | 0.02 | $ | (1.55 | ) | ||||
Schedule of anti-dilutive securities excluded from calculation of diluted net income (loss) per share attributable to common stockholders | ' | |||||||||||||
Three months ended March | Six months ended March | |||||||||||||
31, | 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Convertible preferred stock | 3,567,807 | 3,567,811 | 3,537,807 | 3,567,811 | ||||||||||
Stock options to purchase common stock | — | 1,489,238 | 37,902 | 1,489,238 | ||||||||||
Common stock warrants | — | 1,286,499 | — | 1,286,499 | ||||||||||
Preferred stock warrants | 170,962 | 172,276 | 136,658 | 172,276 | ||||||||||
Convertible notes | — | 1,982,667 | 2,090,604 | 1,982,667 |
Organization_Description_of_Bu2
Organization, Description of Business, and Summary of Significant Accounting Policies (Details) (USD $) | Apr. 08, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | 2-May-14 | Apr. 08, 2014 |
Subsequent event | Subsequent event | ||||
Initial public offering | ' | ' | ' | ' | ' |
Shares of common stock sold in IPO | ' | ' | ' | ' | 6,500,000 |
Price at which shares of common stock were sold in IPO (in dollars per share) | ' | ' | ' | ' | $8 |
Period during which underwriters have an option to purchase additional shares of common stock | ' | ' | ' | ' | '30 days |
Maximum number of additional shares of common stock for which underwriters have an option to purchase at initial public offering price | ' | ' | ' | ' | 975,000 |
Net cash proceeds from the IPO, including proceeds from the partial exercise of the underwriters' option, after underwriting discounts and commissions and estimated expenses | ' | ' | ' | ' | $48,500,000 |
Shares of common stock issued upon conversion of all outstanding shares of convertible preferred stock | ' | ' | ' | ' | 3,567,807 |
Carrying value of outstanding shares of convertible preferred stock reclassified to common stock and additional paid-in capital | ' | ' | ' | ' | 57,300,000 |
Shares of common stock issued upon conversion of convertible preferred stock and common stock | ' | ' | ' | ' | 971,440 |
Number of shares purchased by underwriters | ' | ' | ' | 374,997 | ' |
Aggregate repurchase price | ' | ' | ' | ' | $5,200,000 |
Authorized shares | 155,000,000 | ' | ' | ' | ' |
Authorized common stock (in shares) | 150,000,000 | 115,000,000 | 115,000,000 | ' | ' |
Authorized preferred stock (in shares) | 5,000,000 | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | $0.00 | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | ' | ' | ' | ' |
Organization_Description_of_Bu3
Organization, Description of Business, and Summary of Significant Accounting Policies (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Mar. 20, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Apr. 08, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | |
Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Accounts receivable | Accounts receivable | ||||||||
Customer concentration | Customer concentration | Customer concentration | Customer concentration | Customer concentration | Customer concentration | Customer concentration | Customer concentration | Credit concentration | Credit concentration | ||||||||
partner | partner | partner | partner | Four partners | Four partners | Four partners | Four partners | Four partners | Four partners | ||||||||
Reverse Stock Split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock split ratio | 0.099 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock outstanding before reverse stock split (in shares) | 19,032,056 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock outstanding | 1,884,362 | 1,884,362 | ' | 1,884,362 | ' | ' | 18,843,444 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | $0.00 | ' | $0.00 | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassification of common stock to additional paid-in capital | $17,148 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration of credit risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of partners | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | 4 | 4 | ' | ' | ' | ' | ' | ' |
Concentration risk percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 92.00% | 99.00% | 94.00% | 99.00% | 98.00% | 100.00% |
Revenue Recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalties and profit sharing | ' | $1,100,000 | $2,300,000 | $3,000,000 | $4,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Fair value measurements | ' | ' |
Preferred stock warrant liability | $834 | $560 |
Recurring basis | Level III | ' | ' |
Fair value measurements | ' | ' |
Preferred stock warrant liability | 834 | 560 |
Subordinated note embedded derivative liability | ' | 7,367 |
Total financial liabilities | 834 | 7,927 |
Recurring basis | Total | ' | ' |
Fair value measurements | ' | ' |
Preferred stock warrant liability | 834 | 560 |
Subordinated note embedded derivative liability | ' | 7,367 |
Total financial liabilities | $834 | $7,927 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | Preferred stock warrants | Subordinated note embedded derivative liability | ||
Changes in the fair value of the Level III financial liabilities | ' | ' | ' | ' |
Balance at the beginning of the period | $834 | $7,927 | ' | ' |
Change in fair value | ' | ' | 274 | -7,367 |
Balance at the end of the period | $834 | $7,927 | ' | ' |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details 3) (Level III valuation technique, USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Carrying Value | ' | ' |
Fair value measurements | ' | ' |
Long-term debt | $37,622 | $37,413 |
Convertible notes | 9,475 | 9,399 |
Subordinated note | 16,199 | 13,000 |
Total | 63,296 | 59,812 |
Fair Value | ' | ' |
Fair value measurements | ' | ' |
Long-term debt | 37,622 | 37,413 |
Convertible notes | 15,047 | 14,316 |
Subordinated note | 16,445 | 9,508 |
Total | 69,114 | 61,237 |
Difference | ' | ' |
Fair value measurements | ' | ' |
Convertible notes | 5,572 | 4,917 |
Subordinated note | 246 | -3,492 |
Total | $5,818 | $1,425 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials | $1,698 | $2,410 |
Work in process | 761 | 1,546 |
Finished goods | 789 | 667 |
Total inventories, cost | 3,248 | 4,623 |
Less inventory reserves | -208 | -115 |
Total inventories, net | $3,040 | $4,508 |
Debt_Details
Debt (Details) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 | Aug. 31, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Aug. 31, 2012 | Mar. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 |
Bank line of credit | Bank line of credit | Bank line of credit | Bank line of credit | Bank line of credit | Bank line of credit | Bank line of credit | Long-term debt | Long-term debt | Convertible notes | Convertible notes | Subordinated note | Subordinated note | |||
Minimum | Prime rate | Prime rate | |||||||||||||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt | $65,954,000 | $63,685,000 | ' | $2,658,000 | $3,873,000 | ' | ' | ' | ' | $37,622,000 | $37,413,000 | $9,475,000 | $9,399,000 | $16,199,000 | $13,000,000 |
Less current portion, consisting of bank line of credit and long-term debt | 2,696,000 | 4,330,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term portion | 63,258,000 | 59,355,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of eligible accounts receivable considered as base for advances under line of credit facility | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 0.25% | 0.25% | ' | ' | ' | ' | ' | ' |
Variable rate basis | ' | ' | ' | ' | ' | ' | ' | 'prime rate | 'prime rate | ' | ' | ' | ' | ' | ' |
Effective interest rate (as a percent) | ' | ' | ' | 4.25% | 4.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly interest charge | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Facility fee under line of credit facility | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly liquidity covenant of net cash on deposit with the commercial bank under the facility | ' | ' | ' | ' | ' | ' | $2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt_Details_2
Debt (Details 2) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Mar. 31, 2014 | Sep. 30, 2013 | Jul. 13, 2012 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Sep. 30, 2013 |
Term loan agreement expiring on June 30, 2017 | Term loan agreement expiring on June 30, 2017 | Term loan agreement expiring on June 30, 2017 | Term loan agreement expiring on June 30, 2017 | Term loan agreement expiring on June 30, 2017 | Notes payable due in April 2015 | Notes payable due in April 2015 | Notes payable due in November 2024 | Notes payable due in November 2024 | Notes payable due in March 2014 | |||
payment | ||||||||||||
installment | ||||||||||||
Long-term Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total long-term debt | $37,622,000 | $37,413,000 | ' | ' | $36,953,000 | $36,293,000 | ' | $111,000 | $124,000 | $558,000 | $575,000 | $421,000 |
Less current portion | 38,000 | 457,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term portion | 37,584,000 | 36,956,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized discount | ' | ' | ' | ' | 89,000 | 103,000 | ' | ' | ' | ' | ' | ' |
Monthly payments of principal and interest | ' | ' | ' | ' | ' | ' | ' | 3,000 | 3,000 | 6,000 | 6,000 | 71,000 |
Interest rate (as a percent) | ' | ' | ' | ' | 15.00% | ' | ' | 7.00% | 7.00% | 7.00% | 7.00% | 2.19% |
Debt issued | ' | ' | ' | ' | 35,000,000 | ' | 35,000,000 | ' | ' | ' | ' | ' |
Amount drawn | ' | ' | 6,000,000 | 29,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of quarterly installments for repayment of outstanding principal | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' |
Percentage of cash payment the entity can defer by converting interest due into additional notes | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' | ' | ' | ' |
Number of quarterly interest payments of which a portion of the interest due can be converted into additional notes under deferral of cash payment | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' |
Portion of interest due converted into additional notes | ' | ' | ' | ' | $2,000,000 | $1,400,000 | ' | ' | ' | ' | ' | ' |
Percentage of fee on amount drawn under the facility | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' |
Debt_Details_3
Debt (Details 3) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 6 Months Ended | 0 Months Ended | 24 Months Ended | 6 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||
Mar. 31, 2014 | Apr. 08, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Apr. 08, 2014 | Sep. 30, 2009 | Mar. 31, 2014 | Sep. 30, 2009 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Jul. 13, 2012 | Sep. 30, 2009 | Mar. 31, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Subsequent event | Redeemable Common Stock | Redeemable Common Stock | Redeemable Common Stock | Convertible notes and warrant purchase agreements | Convertible notes | Convertible notes | Convertible notes | Convertible notes | Term loan agreement | Term loan agreement | Subordinated note | Subordinated note | Subordinated note | Subordinated note | Subordinated note | ||
founder | founder | Subsequent event | director | Common stock | Series C preferred stock | Common stock | New series preferred stock | ||||||||||
Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of debt and warrants | ' | ' | ' | ' | ' | $20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | ' | ' | 15.00% | ' | ' | 5.00% | ' | ' | ' |
Debt issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000,000 | 35,000,000 | ' | ' | ' | ' | ' |
Size of the board of directors up to which the major investor can increase | ' | ' | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of directors up to which the major investor can appoint | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of note principal to be issued in the form of common stock warrants | ' | ' | ' | ' | ' | ' | 60.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from debt issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,000,000 | ' | ' | ' | ' |
Fair value of embedded derivative liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 7,400,000 | ' | ' |
Conversion of debt securities (in shares) | 2,063,989 | ' | ' | ' | ' | ' | ' | ' | 2,036,555 | 2,036,555 | ' | ' | ' | ' | ' | 3,387,146 | 3,387,146 |
Repurchase of common stock from founders (in shares) | ' | ' | 1,077,809 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate repurchase price | ' | $5,200,000 | $5,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of founders | ' | ' | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased from the founders | ' | ' | ' | 215,872 | 1,077,809 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaboration_and_Partner_Arra2
Collaboration and Partner Arrangements (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | $10,717 | $12,536 | $21,185 | $25,160 |
Collaboration and partner arrangements | ' | ' | ' | ' |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | 10,717 | 12,536 | 21,185 | 25,160 |
Collaboration and partner arrangements | P&G | ' | ' | ' | ' |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | 2,811 | 2,533 | 5,762 | 5,262 |
Collaboration and partner arrangements | Teva | ' | ' | ' | ' |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | 2,784 | 3,973 | 6,487 | 8,394 |
Collaboration and partner arrangements | Actavis/Par | ' | ' | ' | ' |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | 3,405 | 4,667 | 6,528 | 8,563 |
Collaboration and partner arrangements | Agile | ' | ' | ' | ' |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | 851 | 1,287 | 1,217 | 2,603 |
Collaboration and partner arrangements | Other | ' | ' | ' | ' |
Collaboration and partner arrangements | ' | ' | ' | ' |
Total revenues | $866 | $76 | $1,191 | $338 |
Warrants_Details
Warrants (Details) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 0 Months Ended | |
In Millions, except Share data, unless otherwise specified | Apr. 08, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Apr. 08, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Apr. 08, 2014 |
Subsequent event | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Preferred stock warrants | Common stock warrants | Common stock warrants | Common stock warrants | |
Subsequent event | Minimum | Minimum | Maximum | Maximum | Subsequent event | ||||||
Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant term | ' | '5 years | ' | ' | ' | ' | ' | ' | '5 years | ' | ' |
Number of warrants that expire upon the earlier of five years and the closing of an IPO (in shares) | ' | 163,522 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants outstanding (in shares) | ' | 1,380,241 | 1,739,992 | ' | ' | ' | ' | ' | 1,294,613 | 1,294,613 | ' |
Weighted average exercise price (in dollars per shares) | ' | $0.90 | $0.90 | ' | ' | ' | ' | ' | $1.95 | $1.95 | ' |
Number of warrants with antidilution protection (in shares) | ' | 1,380,241 | 1,380,241 | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions to estimate the fair value of warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining contractual term | ' | ' | ' | ' | '4 years 9 months 18 days | '5 years 25 days | '7 years 8 months 12 days | '8 years 2 months 26 days | ' | ' | ' |
Risk-free interest rate (as a percent) | ' | ' | ' | ' | 1.73% | 1.39% | 2.30% | 2.02% | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | ' | ' | 70.00% | 68.00% | 75.00% | 77.00% | ' | ' | ' |
Expected dividend rate (as a percent) | ' | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | ' | $0.80 | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock automatically exercised into shares of common stock using the net exercise provisions in the warrants (in shares) | ' | ' | ' | 163,522 | ' | ' | ' | ' | ' | ' | 1,286,495 |
Shares of common stock issued upon conversion of Series C convertible preferred stock | 971,440 | ' | ' | 971,440 | ' | ' | ' | ' | ' | ' | ' |
Convertible_Preferred_Stock_Re2
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit (Details) (USD $) | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2013 | Apr. 08, 2014 |
In Thousands, except Share data, unless otherwise specified | Convertible Preferred Stock | Convertible Preferred Stock | Series A | Series A | Series B | Series B | Series C | Series C | Common Stock | Common Stock | Common Stock |
Subsequent event | |||||||||||
Convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares Authorized | 65,716,300 | 65,716,300 | 1,114,100 | 1,114,100 | 7,602,200 | 7,602,200 | 57,000,000 | 57,000,000 | ' | ' | ' |
Original Issue Price (in dollars per shares) | ' | ' | $0.22 | $0.22 | $0.88 | $0.88 | $0.92 | $0.92 | ' | ' | ' |
Shares Issued | 36,034,900 | 36,034,900 | 1,114,066 | 1,114,066 | 7,602,132 | 7,602,132 | 27,318,702 | 27,318,702 | 347,945 | 347,945 | ' |
Shares Outstanding | 36,034,900 | 36,034,900 | 1,114,066 | 1,114,066 | 7,602,132 | 7,602,132 | 27,318,702 | 27,318,702 | ' | ' | ' |
Aggregate Liquidation Amount | $57,261 | $57,261 | $490 | $490 | $6,652 | $6,652 | $50,119 | $50,119 | ' | ' | ' |
Number of shares repurchased | ' | ' | ' | ' | ' | ' | ' | ' | 215,872 | ' | 1,077,809 |
Convertible_Preferred_Stock_Re3
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit (Details 2) (USD $) | Apr. 08, 2014 | Mar. 31, 2014 | Sep. 30, 2013 |
Common stock | ' | ' | ' |
Common shares authorized | 150,000,000 | 115,000,000 | 115,000,000 |
Common shares par value (in dollars per share) | $0.00 | $0.00 | $0.00 |
Common Stock reserved | ' | ' | ' |
Issuances under stock option plans (in shares) | ' | 2,050,019 | 1,781,846 |
Conversion of convertible preferred stock (in shares) | ' | 3,567,807 | 3,567,811 |
Total shares of common stock reserved | ' | 7,049,092 | 6,816,551 |
Preferred stock warrants | ' | ' | ' |
Common Stock reserved | ' | ' | ' |
Issuances upon exercise of warrants (in shares) | ' | 136,653 | 172,276 |
Common stock warrants | ' | ' | ' |
Common Stock reserved | ' | ' | ' |
Issuances upon exercise of warrants (in shares) | ' | 1,294,613 | 1,294,618 |
Convertible_Preferred_Stock_Re4
Convertible Preferred Stock, Redeemable Common Stock and Stockholders' Deficit (Details 3) (Common Stock, USD $) | 1 Months Ended | 6 Months Ended |
Dec. 31, 2013 | Mar. 31, 2014 | |
founder | founder | |
Common Stock | ' | ' |
Repurchases of Common Stock from Founders | ' | ' |
Number of founders | 2 | 2 |
Number of shares repurchased | ' | 215,872 |
Purchase price under the stock repurchase program (in dollars per share) | ' | $9.26 |
Number of additional shares authorized to repurchase | ' | 215,872 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Sep. 30, 2013 |
plan | plan | |
Stock-based compensation | ' | ' |
Number of plans | 3 | 3 |
StrataGent Plan | Stock option | StrataGent, Inc. | ' | ' |
Shares Available for Grant | ' | ' |
Balance at the end of the period (in shares) | 0 | 0 |
Corium Plan | Stock option | ' | ' |
Shares Available for Grant | ' | ' |
Balance at the beginning of the period (in shares) | 248,410 | ' |
Additional shares authorized | 272,277 | ' |
Granted (in shares) | -467,089 | ' |
Forfeited (in shares) | 124 | ' |
Cancelled (in shares) | 2,246 | ' |
Balance at the end of the period (in shares) | 55,968 | 248,410 |
Stock Options Outstanding | ' | ' |
Balance at the beginning of the period (in shares) | 1,528,876 | ' |
Granted (in shares) | 467,089 | ' |
Exercised (in shares) | -3,211 | ' |
Forfeited (in shares) | -124 | ' |
Cancelled (in shares) | -2,243 | ' |
Balance at the end of the period (in shares) | 1,990,387 | 1,528,876 |
Weighted Average Exercise Price | ' | ' |
Balance at the beginning of the period (in dollars per share) | 2.22 | ' |
Granted (in dollars per share) | 4.14 | ' |
Exercised (in dollars per share) | 2.22 | ' |
Forfeited (in dollars per share) | 2.22 | ' |
Cancelled (in dollars per share) | 2.22 | ' |
Balance at the end of the period (in dollars per share) | 2.65 | 2.22 |
Weighted Average Remaining Contractual Life | ' | ' |
Balance at the end of the period | '7 years 4 months 2 days | '7 years 2 months 19 days |
Aggregate Intrinsic Value | ' | ' |
Balance at the end of the period | 10,649 | 1,287 |
Corium Plan | Stock option | Maximum | ' | ' |
Stock-based compensation | ' | ' |
Expiration period | '10 years | ' |
Vesting period | '4 years | ' |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Employee stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation | $194,000 | $41,000 | $250,000 | $213,000 |
Additional Disclosure | ' | ' | ' | ' |
Unrecognized employee compensation cost, net of estimated forfeitures | 3,600,000 | ' | 3,600,000 | ' |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | ' | ' | '2 years 8 months 12 days | ' |
Cost of product revenues | ' | ' | ' | ' |
Employee stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation | 5,000 | 4,000 | 11,000 | 22,000 |
Cost of contract research and development revenues | ' | ' | ' | ' |
Employee stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation | 5,000 | 2,000 | 9,000 | 13,000 |
Research and development | ' | ' | ' | ' |
Employee stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation | 16,000 | 4,000 | 23,000 | 24,000 |
General and administrative | ' | ' | ' | ' |
Employee stock-based compensation expense | ' | ' | ' | ' |
Stock-based compensation | $168,000 | $31,000 | $207,000 | $154,000 |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 3) | 0 Months Ended | 6 Months Ended |
Mar. 20, 2014 | Mar. 31, 2014 | |
2014 Equity Incentive Plan | ' | ' |
Stock-Based Compensation | ' | ' |
Number of shares of common stock reserved under plan for issuance to employees | 1,000,000 | ' |
Term of the plan | '10 years | ' |
Maximum annual increase in number of shares issuable by the plan, as a percentage of shares outstanding as of the preceding December 31 | 4.00% | ' |
Shares issued under the plan | ' | 0 |
2014 Employee Stock Purchase Plan | ' | ' |
Stock-Based Compensation | ' | ' |
Number of shares of common stock reserved under plan for issuance to employees | 310,000 | ' |
Term of the plan | '10 years | ' |
Maximum annual increase in number of shares issuable by the plan, as a percentage of shares outstanding as of the preceding December 31 | 1.00% | ' |
Maximum number of shares to be issued over the term of the plan | 3,000,000 | ' |
Shares issued under the plan | ' | 0 |
Product_Recall_Liability_Detai
Product Recall Liability (Details) (USD $) | 6 Months Ended | 24 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Oct. 31, 2012 | Sep. 30, 2010 |
Actavis | |||
recall | |||
Product recall liability | ' | ' | ' |
Number of voluntary recalls of certain lots and strengths of Fentanyl TDS | ' | ' | 2 |
Revised combined remaining liability | $4,205 | $5,000 | ' |
Changes to the product recall liability | ' | ' | ' |
Balance at the beginning of the period | 4,832 | 5,000 | ' |
Payment of recall liability | -627 | ' | ' |
Balance at the end of the period | $4,205 | $5,000 | ' |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Basic Net income (loss) per share | ' | ' | ' | ' |
Net Income (loss) attributable to common stockholders, basic (in dollars) | $3,534 | ($1,999) | $1,436 | ($3,432) |
Less: undistributed earnings attributable to participating securities | -2,420 | ' | -1,375 | ' |
Net Income (loss) attributable to common stockholders, basic | 1,114 | -1,999 | 61 | -3,432 |
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 |
Net Income (loss) attributable to common stockholders, basic (in dollars per share) | $0.50 | ($0.90) | $0.03 | ($1.55) |
Fully Diluted Net income (loss) per share | ' | ' | ' | ' |
Net Income (loss) attributable to common stockholders, basic (in dollars) | 3,534 | -1,999 | 1,436 | -3,432 |
Less: undistributed earnings attributable to participating securities | -1,573 | ' | -1,358 | ' |
Net Income (loss) attributable to common stockholders, diluted | $1,961 | ($1,999) | $78 | ($3,432) |
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic | 2,232,300 | 2,225,742 | 2,231,049 | 2,218,801 |
Effect of potentially dilutive securities | ' | ' | ' | ' |
Dilutive options (in shares) | 756,300 | ' | 518,655 | ' |
Assumed conversion of convertible notes (in shares) | 2,063,989 | ' | ' | ' |
Common stock warrants (in shares) | 877,720 | ' | 733,252 | ' |
Weighted average shares used in computing net income (loss) per share attributable to common stockholders, diluted | 5,930,309 | 2,225,742 | 3,482,956 | 2,218,801 |
Net income (loss) attributable to common stockholders, diluted (in dollars per share) | $0.33 | ($0.90) | $0.02 | ($1.55) |
Convertible preferred stock | ' | ' | ' | ' |
Anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | ' | ' | ' |
Number of anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | 3,567,807 | 3,567,811 | 3,537,807 | 3,567,811 |
Stock options to purchase common stock | ' | ' | ' | ' |
Anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | ' | ' | ' |
Number of anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | 1,489,238 | 37,902 | 1,489,238 |
Common stock warrants | ' | ' | ' | ' |
Anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | ' | ' | ' |
Number of anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | 1,286,499 | ' | 1,286,499 |
Preferred stock warrants | ' | ' | ' | ' |
Anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | ' | ' | ' |
Number of anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | 170,962 | 172,276 | 136,658 | 172,276 |
Convertible notes | ' | ' | ' | ' |
Anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | ' | ' | ' |
Number of anti-dilutive securities excluded from calculation of diluted net loss per share attributable to common stockholders | ' | 1,982,667 | 2,090,904 | 1,982,667 |
Segment_and_Enterprisewide_Inf1
Segment and Enterprise-wide Information (Details) | 6 Months Ended |
Mar. 31, 2014 | |
manager | |
activity | |
Segment and Enterprise-wide Information | ' |
Number of business activities | 1 |
Number of segment managers held accountable for operations, or operating results for levels or components | 0 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | ||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2013 | Apr. 08, 2014 | Apr. 30, 2014 | Jun. 30, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | Apr. 08, 2014 | |
Options | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |||||
Performance-based vesting | Options | Options | Convertible Notes | Subordinated Note | Common stock warrants | Preferred stock warrants | Convertible preferred stock | ||||||
Performance-based vesting | Performance-based vesting | ||||||||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock automatically exercised into shares of common stock using the net exercise provisions in the warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,286,495 | 163,522 | 163,522 |
Shares of common stock issued upon conversion of convertible preferred stock and common stock warrants | ' | ' | ' | ' | ' | 971,440 | ' | ' | ' | ' | ' | 971,440 | ' |
Common stock issued to the holders of notes | ' | ' | ' | ' | ' | ' | ' | ' | 2,036,655 | 3,387,146 | ' | ' | ' |
Value of redeemable common stock was repurchased from the founders | ' | ' | ' | ' | ' | $5,200,000 | ' | ' | ' | ' | ' | ' | ' |
Options granted (in shares) | ' | ' | ' | ' | 146,024 | ' | ' | ' | ' | ' | ' | ' | ' |
Awards whose performance-based criteria have been met (in shares) | ' | ' | ' | ' | ' | ' | 137,510 | ' | ' | ' | ' | ' | ' |
Stock-based compensation expense | $194,000 | $41,000 | $250,000 | $213,000 | ' | ' | ' | $300,000 | ' | ' | ' | ' | ' |