Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 09, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Corbus Pharmaceuticals Holdings, Inc. | ||
Entity Central Index Key | 0001595097 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 390,133,740 | ||
Entity Common Stock, Shares Outstanding | 72,490,449 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 31,748,686 | $ 41,748,468 |
Prepaid expenses and other current assets | 3,724,932 | 2,491,844 |
Contract asset | 2,681,065 | |
Total current assets | 38,154,683 | 44,240,312 |
Property and equipment, net | 5,083,865 | 2,705,206 |
Operating lease right of use assets | 5,818,983 | |
Other assets | 84,968 | 43,823 |
Total assets | 49,142,499 | 46,989,341 |
Current liabilities: | ||
Notes payable | 752,659 | 394,305 |
Accounts payable | 11,091,363 | 6,345,335 |
Accrued expenses | 22,447,939 | 9,851,191 |
Deferred revenue, current | 1,462,503 | |
Operating lease liabilities, current | 595,745 | |
Deferred rent, current | 35,996 | |
Total current liabilities | 34,887,706 | 18,089,330 |
Operating lease liabilities, noncurrent | 8,097,228 | |
Deferred rent, noncurrent | 1,375,891 | |
Total liabilities | 42,984,934 | 19,465,221 |
Commitments and Contingencies | ||
Stockholders' equity | ||
Preferred Stock $0.0001 par value:10,000,000 shares authorized, no shares issued and outstanding at December 31, 2019 and 2018 | ||
Common stock, $0.0001 par value; 150,000,000 shares authorized at December 31, 2019 and 2018, 64,672,893 and 57,247,496 shares issued and outstanding at December 31, 2019 and 2018, respectively | 6,467 | 5,725 |
Additional paid-in capital | 198,975,056 | 148,888,635 |
Accumulated deficit | (192,823,958) | (121,370,240) |
Total stockholders' equity | 6,157,565 | 27,524,120 |
Total liabilities and stockholders' equity | $ 49,142,499 | $ 46,989,341 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 64,672,893 | 57,247,496 |
Common stock, shares outstanding | 64,672,893 | 57,247,496 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue from awards and licenses | $ 36,143,568 | $ 4,822,272 |
Operating expenses: | ||
Research and development | 89,604,790 | 48,613,957 |
General and administrative | 23,643,357 | 12,956,022 |
Total operating expenses | 113,248,147 | 61,569,979 |
Operating loss | (77,104,579) | (56,747,707) |
Other income (expense), net: | ||
Other income | 4,581,838 | |
Interest income, net | 1,227,643 | 982,777 |
Foreign currency exchange gain (loss) | (158,620) | 92,791 |
Other income, net | 5,650,861 | 1,075,568 |
Net loss | $ (71,453,718) | $ (55,672,139) |
Net loss per share, basic and diluted | $ (1.12) | $ (0.98) |
Weighted average number of common shares outstanding, basic and diluted | 63,899,184 | 56,999,741 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 5,560 | $ 123,476,102 | $ (65,698,101) | $ 57,783,561 |
Balance, shares at Dec. 31, 2017 | 55,603,427 | |||
Stock-based compensation expense | 7,609,508 | 7,609,508 | ||
Issuance of common stock, net of issuance costs | $ 150 | 11,235,170 | 11,235,320 | |
Issuance of common stock, net of issuance costs, shares | 1,500,000 | |||
Issuance of common stock upon exercise of stock options | $ 14 | 347,631 | $ 347,645 | |
Issuance of common stock upon exercise of stock options, shares | 139,069 | 139,069 | ||
Issuance of common stock upon exercise of warrants | $ 1 | 4,999 | $ 5,000 | |
Issuance of common stock upon exercise of warrants, shares | 5,000 | |||
Fair value of warrant issued in connection with Investment Agreement | 6,215,225 | 6,215,225 | ||
Net loss | (55,672,139) | (55,672,139) | ||
Balance at Dec. 31, 2018 | $ 5,725 | 148,888,635 | (121,370,240) | 27,524,120 |
Balance, shares at Dec. 31, 2018 | 57,247,496 | |||
Stock-based compensation expense | 11,981,655 | 11,981,655 | ||
Issuance of common stock, net of issuance costs | $ 620 | 37,718,078 | 37,718,698 | |
Issuance of common stock, net of issuance costs, shares | 6,198,500 | |||
Issuance of common stock upon exercise of stock options | $ 10 | 386,800 | $ 386,810 | |
Issuance of common stock upon exercise of stock options, shares | 107,029 | 107,029 | ||
Issuance of common stock upon exercise of warrants | $ 112 | (112) | ||
Issuance of common stock upon exercise of warrants, shares | 1,119,868 | |||
Net loss | (71,453,718) | (71,453,718) | ||
Balance at Dec. 31, 2019 | $ 6,467 | $ 198,975,056 | $ (192,823,958) | $ 6,157,565 |
Balance, shares at Dec. 31, 2019 | 64,672,893 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Stock issuance cost | $ 2,571,552 | $ 464,680 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (71,453,718) | $ (55,672,139) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 11,981,655 | 7,609,508 |
Depreciation and amortization | 739,378 | 493,938 |
Loss on foreign exchange | 45,833 | 70,448 |
Operating lease right of use asset amortization | 490,406 | |
Deferred rent | 422,337 | |
Changes in operating assets and liabilities: | ||
Decrease in customer receivable | 5,000,000 | 12,500,000 |
Decrease (increase) in prepaid expenses and other current assets | (1,233,088) | 281,625 |
Increase in contract asset | (2,681,065) | |
Increase in other assets | (41,145) | (3,047) |
Increase in accounts payable | 4,366,439 | 3,904,021 |
Increase in accrued expenses | 12,555,384 | 5,113,551 |
Decrease in deferred revenue | (6,462,503) | (4,787,497) |
Increase in operating lease liabilities | 971,696 | |
Net cash used in operating activities | (45,720,728) | (30,067,255) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,742,541) | (2,300,416) |
Net cash used in investing activities | (2,742,541) | (2,300,416) |
Cash flows from financing activities: | ||
Proceeds from issuance of notes payable | 963,514 | 491,629 |
Principal payments on notes payable | (605,160) | (430,184) |
Proceeds from issuance of common stock | 40,677,060 | 12,052,645 |
Issuance costs paid for common stock financings | (2,571,552) | (690,181) |
Principal payments under capital lease obligations | (375) | (4,256) |
Net cash provided by financing activities | 38,463,487 | 11,419,653 |
Net decrease in cash and cash equivalents | (9,999,782) | (20,948,018) |
Cash and cash equivalents at beginning of the year | 41,748,468 | 62,696,486 |
Cash and cash equivalents, at end of the year | 31,748,686 | 41,748,468 |
Supplemental disclosure of cash flow information and non cash transactions: | ||
Cash paid during the period for interest | 29,448 | 10,437 |
Fair value of warrant issued in connection with Investment Agreement | 6,215,225 | |
Purchases of property and equipment included in accounts payable or accrued expenses | 376,664 | 1,168 |
Right of use assets obtained in exchange for lease obligation upon adoption of ASU 2016-02, net of deferred rent | 2,399,524 | |
Right of use assets obtained in exchange for lease obligation upon entry into lease agreements | 3,909,865 | |
Write off of fully amortized leasehold improvements | $ 191,244 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. NATURE OF OPERATIONS Business Corbus Pharmaceuticals Holdings, Inc. (“the Company”) is a clinical stage pharmaceutical company, focused on the development and commercialization of novel therapeutics to treat rare, chronic, and serious inflammatory and fibrotic diseases. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company’s business is subject to significant risks and uncertainties and the Company will be dependent on raising substantial additional capital before it becomes profitable and it may never achieve profitability. |
Liquidity and Going Concern
Liquidity and Going Concern | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Liquidity and Going Concern | 2. LIQUIDITY AND GOING CONCERN The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses since inception and as of December 31, 2019, had an accumulated deficit of $192,823,958. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research funding, development of its product candidates and its preclinical and clinical programs, strategic alliances and the development of its administrative organization. The Company expects the cash and cash equivalents of $31,748,686 at December 31, 2019 may not be sufficient to meet its operating and capital requirements at least 12 months from the filing of this 10-K. Should the Company be unable to raise sufficient additional capital, the Company may be required to undertake cost-cutting measures including delaying or discontinuing certain clinical activities. The Company will need to raise significant additional capital to continue to fund the clinical trials for lenabasum and CRB-4001 (see Note 4). The Company may seek to sell common or preferred equity or convertible debt securities, enter into a credit facility or another form of third-party funding, or seek other debt financing. The sale of equity and convertible debt securities may result in dilution to the Company’s stockholders and certain of those securities may have rights senior to those of the Company’s common shares. If the Company raises additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that would restrict the Company’s operations. Any other third-party funding arrangement could require the Company to relinquish valuable rights. The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of the Company’s clinical development programs. Funding may not be available when needed, at all, or on terms acceptable to the Company. Lack of necessary funds may require the Company, among other things, to delay, scale back or eliminate some or all of the Company’s planned clinical trials. These factors among others cause management to conclude there is a substantial doubt about the Company’s ability to continue as a going concern. There have been no adjustments made to these consolidated financial statements as a result of these uncertainties. On February 11, 2020, the Company consummated an underwritten public offering of shares of its common stock (“February2020 Offering”) (See Note 14). |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 3. SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies followed by the Company in the preparation of the financial statements is as follows: Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. Use of Estimates The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and changes in estimates may occur. The most significant estimates are related to stock-based compensation expense, the accrual of research, product development and clinical obligations, the recognition of revenue under the Investment Agreement (see Note 9) and the valuation of the CFF Warrant discussed in Note 13). Cash and Cash Equivalents The Company considers only those investments which are highly liquid, readily convertible to cash, and that mature within three months from date of purchase to be cash equivalents. Marketable investments are those with original maturities in excess of three months. At December 31, 2019 and 2018, cash equivalents were comprised of money market funds. The Company had no marketable investments at December 31, 2019 and 2018. Cash and cash equivalents consists of the following: December 31, 2019 2018 Cash $ 884,115 $ 808,943 Money market fund 30,864,571 40,939,525 Total cash and cash equivalents $ 31,748,686 $ 41,748,468 As of December 31, 2019, all of the Company’s cash and cash equivalents was held in the United States, except for approximately $466,000 of cash which was held principally in our subsidiary in the United Kingdom. As of December 31, 2018, all of the Company’s cash was held in the United States, except for approximately $702,000 of cash which was held primarily in our subsidiary in the United Kingdom. Financial Instruments The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, receivables, accounts payable and accrued expenses approximate their fair value based on the short-term nature of these instruments. The carrying values of the notes payable approximate their fair value due to the fact that they are at market terms. Property and Equipment The estimated life for the Company’s property and equipment is as follows: three years for computer hardware and software and three to five years for office furniture and equipment. The Company’s leasehold improvements and assets under capital lease are amortized over the shorter of their useful lives or the respective leases. See Note 5 for details of property and equipment and Note 6 for operating and capital lease commitments. Research and Development Expenses Costs incurred for research and development are expensed as incurred. Nonrefundable advance payments for goods or services that have the characteristics that will be used or rendered for future research and development activities pursuant to executory contractual arrangements with third party research organizations are deferred and recognized as an expense as the related goods are delivered or the related services are performed. Accruals for Research and Development Expenses and Clinical Trials As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment terms that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the timing of various aspects of the expenses. The Company determines the accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in it reporting amounts that are too high or too low for any particular period. For the years ended December 31, 2019 and 2018, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Concentrations of Credit Risk The Company has no significant off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other hedging arrangements. The Company may from time to time have cash in banks in excess of Federal Deposit Insurance Corporation insurance limits. However, the Company believes the risk of loss is minimal as these banks are large financial institutions. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as principally one operating segment, which is developing and commercializing therapeutics to treat rare life-threatening inflammatory and fibrotic diseases. As of December 31, 2019, all of the Company’s assets were located in the United States, except for approximately $466,000 of cash, $1,606,000 of prepaid expenses and other current assets, $23,000 of other assets, and $52,000 of property and equipment, net which were held outside of the United States, principally in our subsidiary in the United Kingdom. As of December 31, 2018, all of the Company’s assets were located in the United States, except for approximately $702,000 of cash, $1,183,000 of prepaid expenses and other current assets, $28,000 of other assets, and $54,000 of property and equipment, net which were held in our subsidiary in the United Kingdom. Income Taxes For federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse. A valuation allowance is recorded to reduce a net deferred tax benefit when it is not more likely than not that the tax benefit from the deferred tax assets will be realized. Accordingly, given the cumulative losses since inception, the Company has provided a valuation allowance equal to 100% of the deferred tax assets in order to eliminate the deferred tax assets amounts. Tax positions taken or expected to be taken in the course of preparing the Company’s tax returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold, as well as accrued interest and penalties, if any, would be recorded as a tax expense in the current year. There were no uncertain tax positions that require accrual or disclosure to the financial statements as of December 31, 2019 or 2018. Impairment of Long-lived Assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of long-lived assets may not be recoverable. An impairment loss is recognized when expected undiscounted cash flows of an asset are less than an asset’s carrying value. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of such assets in relation to the operating performance and future undiscounted cash flows of the underlying assets. An impairment loss equal to the excess of the fair value of the asset over its carrying amount, is recorded when it is determined that the carrying value of the asset may not be recoverable. No impairment charges were recorded for the years ended December 31, 2019 and 2018. Stock-based Payments The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the statement of operations over the service period based on a measurement of fair value for each stock-based award. The fair value of each option grant to employees is estimated as of the date of grant using the Black-Scholes option-pricing model, net of estimated forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Prior to the Company’s adoption of ASU 2018-07, (see Recent Accounting Pronouncements Net Loss Per Common Share Basic and diluted net loss per share of the Company’s common stock has been computed by dividing net loss by the weighted average number of shares outstanding during the period. For years in which there is a net loss, options and warrants are anti-dilutive and therefore excluded from diluted loss per share calculations. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019 and 2018: Years Ended December 31, 2019 2018 Basic and diluted net loss per share of common stock: Net loss $ (71,453,718 ) $ (55,672,139 ) Weighted average shares of common stock outstanding 63,899,184 56,999,741 Net loss per share of common stock-basic and diluted $ (1.12 ) $ (0.98 ) The impact of the following potentially dilutive securities outstanding as of December 31, 2019 and 2018 have been excluded from the computation of dilutive weighted average shares outstanding as the inclusion would be antidilutive. December 31, 2019 2018 Warrants 1,000,000 2,283,500 Stock options 13,245,366 9,593,990 14,245,366 11,877,490 Recent Accounting Pronouncements The Company considers applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s balance sheets or statements of operations. Accounting for Leases In February 2016, the FASB issued ASU No . Leases (Topic 842), . Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting Collaborative Arrangements In November 2018, the FASB issued ASU 2018-08, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 . ASU 2018-08 clarifies the interaction between the accounting guidance for collaborative arrangements and revenue from contracts with customers. . Early adoption, including adoption in any interim period, is permitted. The Company is currently . Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
License Agreement
License Agreement | 12 Months Ended |
Dec. 31, 2019 | |
License Agreement | |
License Agreement | 4. LICENSE AGREEMENT The Company entered into a License Agreement (the “Jenrin Agreement”) with Jenrin Discovery, LLC, a privately-held Delaware limited liability company (“Jenrin”), effective September 20, 2018. Pursuant to the Jenrin Agreement, Jenrin granted the Company exclusive worldwide rights to develop and commercialize the Licensed Products (as defined in the Jenrin Agreement) which includes the Jenrin library of over 600 compounds and multiple issued and pending patent filings. The compounds are designed to treat inflammatory and fibrotic diseases by targeting the endocannabinoid system. The lead product candidate is CRB-4001, a peripherally-restricted CB-1 inverse agonist targeting fibrotic liver, lung, heart and kidney diseases. In consideration of the license and other rights granted by Jenrin, the Company paid Jenrin a $250,000 upfront cash payment and is obligated to pay potential milestone payments to Jenrin totaling up to $18.4 million for each compound it elects to develop based upon the achievement of specified development and regulatory milestones. In addition, Corbus is obligated to pay Jenrin royalties in the mid, single digits based on net sales of any Licensed Products, subject to specified reductions. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. PROPERTY AND EQUIPMENT Property and Equipment consisted of the following: December 31, 2019 2018 Computer hardware and software $ 711,442 $ 431,637 Office furniture and equipment 1,627,896 914,742 Leasehold improvements 4,150,488 2,025,410 Property and equipment, gross 6,489,826 3,371,789 Less: accumulated depreciation (1,405,961 ) (666,583 ) Property and equipment, net $ 5,083,865 $ 2,705,206 Depreciation expense was approximately $739,000 and $494,000 for the years ended December 31, 2019 and 2018, respectively. In the first quarter of 2018, the Company wrote off $191,244 of fully amortized leasehold improvements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES Operating Lease Commitment On August 21, 2017, the Company entered into a lease agreement (“August 2017 Lease Agreement”) for commercial lease of office space, pursuant to which the Company agreed to lease 32,733 square feet of office space (“Leased Premises”). The initial term of the August 2017 Lease Agreement was for a period of seven years which began with the Company’s occupancy of the Leased Premises in February 2018. The base rent for the Leased Premises ranged from approximately $470,000 for the first year to approximately $908,000 for the seventh year. Per the terms of the August 2017 Lease Agreement, the landlord agreed to reimburse the Company for $1,080,189 of leasehold improvements. The reimbursements had been deferred and were to be recognized as a reduction of rent expense over the term of the lease. Additionally, the August 2017 Lease Agreement required a standby irrevocable letter of credit of $400,000, which was to be reduced, if the Company is not in default under the August 2017 Lease Agreement, to $300,000 and $200,000 on the third and fourth anniversary of the commencement date, respectively, The Company entered into an unsecured letter of credit for $400,000 in connection with the August 2017 Lease Agreement for which it incurred interest expense of $19,025 and $7,431 for the year ended December 31, 2019 and 2018. The Company adopted ASU 2016-02 using the effective date method as of January 1, 2019 and recorded a lease liability of approximately $3.8 million, and a right-of-use asset of approximately $2.4 million, with no operations adjustment to the accumulated deficit related to the Leased Premises. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, noncurrent in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the date of adoption based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments, which was 9%. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. On February 26, 2019, the Company amended its lease (“February 2019 Lease Agreement”) pursuant to which an additional 30,023 square feet of office space (“New Premises”) will be leased by the Company in the same building for an aggregate total of 62,756 square feet of leased office space (“Total Premises”). Per ASC 842, the February 2019 Lease Agreement constitutes a modification as it extends the original lease term and increases the scope of the lease (additional space provided under the amendment), which requires evaluation of the remeasurement of the lease liability and corresponding ROU asset. Accordingly, the Company reassessed the classification of the Leased Premises and remeasured the lease liability on the basis of the extended lease term using the 20 additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 9%. The remeasurement for the modification resulted in an increase to the lease liability and the ROU asset of approximately $855,000. The Company determined that the New Premises will be treated as a new standalone operating lease under ASC 842 and recorded a lease liability and a right-of-use asset of approximately $2.7 million for this lease. Per the terms of the February 2019 Lease Agreement, the landlord agreed to reimburse the Company for $990,759 of leasehold improvements. The reimbursements are being recognized as a reduction of rent expense over the term of the lease. Additionally, the February 2019 Lease Agreement required a standby irrevocable letter of credit of $369,900, which may be reduced, if the Company is not in default under the February 2019 Lease Agreement, to $277,425 and $184,950 on the third and fourth anniversary of the commencement date, respectively. On October 25, 2019, the Company amended its lease (“October 2019 Lease Amendment”) pursuant to which the term of the lease was extended through November 30, 2026 and the existing office space under lease was expanded by 500 square feet for an aggregate total of 63,256 square feet of leased office space (“Amended Total Premises”). Per ASC 842, the October 2019 Lease Amendment constitutes a modification as it extends the original lease term and increases the scope of the lease (additional space provided under the amendment), which requires evaluation of the remeasurement of the lease liability and corresponding ROU asset. The additional space did not result in a separate contract as the rent increase was determined not to be commensurate with the standalone price for the additional right of use. Accordingly, the Company reassessed the classification of the Amended Total Premises, which resulted in operating classification, and remeasured the lease liability on the basis of the extended lease term using the additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 8%. The remeasurement for the modification resulted in an increase to the lease liability and the ROU asset of approximately $381,000 that was recorded in the fourth quarter of 2019. The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the year ended December 31, 2019: Lease cost Operating lease cost $ 1,025,899 Total lease cost $ 1,025,899 Other information Operating cash flows received for operating leases $ 338,435 Weighted average remaining lease term 6.9 years Weighted average discount rate 8.00 % Total rent expense for the years ended December 31, 2019 and 2018 was $1,025,899 and $587,963, respectively. Pursuant to the terms of the Company’s non-cancelable lease agreements in effect at December 31, 2019, the following table summarizes the Company’s maturities of operating lease liabilities as of December 31, 2019: Year ending December 31, 2019: 2020 $ 1,265,760 2021 1,605,121 2022 1,652,563 2023 1,700,005 2024 1,747,447 Thereafter 3,483,034 Total lease payments $ 11,453,929 Less: imputed interest (2,760,957 ) Total $ 8,692,973 The following disclosures as of December 31, 2018 continue to be in accordance with ASC 840. Future minimum lease payments for operating leases as of December 31, 2018 were as follows: 2019 $ 623,958 2020 784,243 2021 830,600 2022 855,150 2023 879,699 Thereafter 1,055,639 Total $ 5,029,289 Capital Lease Commitment The lease payments under the capital lease agreement for the copier machine commenced when the machine was placed in service in January 2016. The lease was for a three-year term that concluded in January 2019 and included a bargain purchase option at the end of the term. The following disclosures as of December 31, 2018 continue to be in accordance with ASC 840. Future minimum lease payments for capital leases as of December 31, 2018 was as follows: Total future minimum lease payments – end in 2019 $ 378 Less: interest (3 ) Future capital lease obligations 375 Less: current portion (375 ) Long-term portion $ — For commitments under the Company’s development award agreements- see Note 9. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 7. NOTES PAYABLE In November 2017, the Company entered into a loan agreement with a financing company for $415,265 to finance one of the Company’s insurance policies. The terms of the loan stipulated equal monthly payments of principal and interest payments of $41,975 over a ten-month period. Interest accrued on this loan at an annual rate of 2.35%. This loan was fully repaid in August 2018. In November 2018, the Company entered into a loan agreement with a financing company for $491,629 to finance one of the Company’s insurance policies. The terms of the loan stipulated equal monthly payments of principal and interest payments of $49,857 over a ten-month period. Interest accrued on this loan at an annual rate of 3.07%. This loan was fully repaid in August 2019. In November 2019, the Company entered into a loan agreement with a financing company for $963,514 to finance one of the Company’s insurance policies. The terms of the loan stipulate equal monthly payments of principal and interest payments of $109,413 over a nine-month period. Interest accrues on this loan at an annual rate of 5.25%. Prepaid expenses as of December 31, 2019 and December 31, 2018, included $923,292 and $441,875, respectively, related to this insurance policy. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 8. ACCRUED EXPENSES Accrued expenses consisted of the following: December 31, 2019 2018 Accrued clinical operations and trials costs $ 14,242,669 $ 4,914,881 Accrued product development costs 3,573,231 2,222,093 Accrued compensation 3,673,111 2,253,621 Accrued other 958,928 460,596 Total $ 22,447,939 $ 9,851,191 |
Development Awards and Deferred
Development Awards and Deferred Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Development Awards and Deferred Revenue | 9. DEVELOPMENT AWARDS AND DEFERRED REVENUE Collaboration with Kaken On January 3, 2019, Corbus Pharmaceuticals Holdings, Inc. the Company entered into a Collaboration and License Agreement (the “Agreement”) with Kaken Pharmaceutical Co., Ltd., a company organized under the laws of Japan (“Kaken”). Pursuant to the Agreement, Corbus granted Kaken an exclusive license to commercialize pharmaceutical preparations containing lenabasum (the “Licensed Products”) for the prevention or treatment of dermatomyositis and systemic sclerosis (together, the “Initial Indications”) in Japan (the “Territory”). Pursuant to the terms of the Agreement, Corbus will bear the cost of, and be responsible for, among other things, conducting the clinical studies and other developmental activities for the Licensed Products in the Initial Indications in the Territory, and Kaken will bear the cost of, and be responsible for, among other things, preparing and filing applications for regulatory approval in the Territory and for commercializing Licensed Products in the Territory, and will use commercially reasonable efforts to commercialize Licensed Products and obtain pricing approval for Licensed Products in the Territory. In consideration of the license and other rights granted by Corbus, Kaken paid to Corbus in March 2019 a $27,000,000 upfront cash payment and is obligated to pay potential milestone payments to Corbus totaling up to approximately $173,000,000 for the achievement of certain development, sales and regulatory milestones, with part of the milestone payments being calculated in Japanese Yen, and therefore subject to change based on the conversion rate to U.S. Dollars in effect at the time of payment. In addition, during the Royalty Term (as defined below), Kaken is obligated to pay Corbus royalties on sales of Licensed Products in the Territory, under certain conditions, in the double digits, which royalty shall be reduced in certain circumstances. In particular, for so long as Corbus supplies Licensed Products to Kaken pursuant to a supply agreement to be entered into by the parties, royalty payments shall be payable for each unit of Licensed Product that Corbus supplies as a percentage of the Japanese National Health Insurance price of the Licensed Product. During any time in which a supply agreement is not in effect, royalty payments shall be changed to a rate to be agreed upon by the parties in good faith. The Agreement will remain in effect on a Licensed Product-by-Licensed product basis and will expire upon the expiration of the Royalty Term for the final Licensed Product. The “Royalty Term” means the period beginning on the date of the first commercial sale of the Licensed Product in Japan and ends on the latest of (i) the expiration of the last valid claim of the royalty patents covering such Licensed Product in Japan, (ii) the expiration of regulatory exclusivity for such Licensed Product for such Initial Indication in Japan, or (iii) ten (10) years after the first commercial sale of such Licensed Product for such Initial Indication in Japan. The Agreement may be terminated by either party for material breach, upon a party’s insolvency or bankruptcy or upon a challenge by one party of any patents of the other party, and Kaken may terminate in specified situations, including for a safety concern or clinical failure, or at its convenience following the second anniversary of the first commercial sale of a Licensed Product in either of the Initial Indications in the Territory, with 180 days’ notice. Pursuant to the Agreement, the parties agreed to develop a joint steering committee to provide strategic oversight of the parties’ activities under the Agreement, as well as a joint development committee to coordinate the development of Licensed Products in Japan. Additionally, the parties will establish a joint commercialization committee to review and confirm commercialization activities with respect to Licensed Products in Japan upon regulatory approval of such Licensed Product. The Agreement also contains customary representations, warranties and covenants by both parties, as well as customary provisions relating to indemnification, confidentiality and other matters. The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Kaken, is a customer. The Company identified the following material promises under the arrangement: (1) the exclusive license to commercialize lenabasum; (2) the product’s initial know-how transfer; (3) election to use the product trademarks; (4) the sharing of data gathered through the execution of the Global Development Plan for the Initial Indications; and (5) Japanese Pharmaceuticals and Medical Devices Agency (“PMDA”)-required supplemental studies. The Company identified two performance obligations; (1) the combined performance obligation of the License, initial know-how transfer and license to the Company’s product trademarks; and (2) the sharing of data gathered through the execution of the Global Development Plan (as defined in the Agreement) for the Initial Indications. The Company determined that the license and initial know-how transfer were not distinct from another in the context of the contract, as initial know-how transfer is highly interrelated to the license and Kaken would incur significant costs to re-create the know-how of the Company. The Company determined that the election to use the product trademarks license contributes to the exclusivity of the license and, therefore, is combined with the license. The PMDA-required supplemental study is a contingent promise although not a performance obligation as the promise does not provide Kaken with a material right. Under the Agreement, in order to evaluate the appropriate transaction price, the Company determined that the upfront amount of $27,000,000 constituted the entirety of the consideration to be included in the transaction price at the outset of the arrangement, which was allocated to the two performance obligations. The potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestone payments are fully constrained based on the probability of achievement. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust its estimate of the transaction price. The Company estimated the stand-alone selling price of each performance obligation using a market approach and allocated the transaction price on a relative basis. This allocation resulted in a de minimis value attributable the obligation to sharing of data gathered through the execution of the Global Development Plan for the Initial Indications and effectively all of the value to the combined license, initial know-how transfer and license to product trademarks. Therefore, the full upfront payment of $27,000,000 is allocated to the combined performance obligation of the license, initial technology transfer and license to the product trademarks. The Company received the upfront payment of $27,000,000 in March 2019 and, as the performance obligations were not yet satisfied at that time, the payment was recorded in deferred revenue as of March 31, 2019. The Company satisfied the combined performance obligation by June 30, 2019, upon which the Company recognized the $27,000,000 upfront payment as revenue in the second quarter of 2019. The Company was required to make a $2,700,000 royalty payment to CFF within 60 days of receipt of the upfront cash payment from Kaken pursuant to the 2018 CFF Award. This obligation was paid by the Company to CFF in May 2019. 2018 CFF Award On January 26, 2018, the Company entered into the Cystic Fibrosis Program Related Investment Agreement with the CFF (“Investment Agreement”), a non-profit drug discovery and development corporation, pursuant to which the Company received an award for up to $25 million in funding (the “2018 CFF Award”) to support a Phase 2b Clinical Trial (the “Phase 2b Clinical Trial”) of lenabasum in patients with cystic fibrosis, of which the Company has received $17.5 million in the aggregate through December 31, 2019 upon the Company’s achievement of milestones related to the progress of the Phase 2b Clinical Trial, as set forth in the Investment Agreement. The Company expects that the remainder of the 2018 CFF Award will be paid incrementally upon the Company’s achievement of the remaining milestones related to the progress of the Phase 2b Clinical Trial, as set forth in the Investment Agreement, and we expect to receive the remainder before the end of the fourth quarter of 2020. Pursuant to the terms of the Investment Agreement, the Company is obligated to make certain royalty payments to CFF, including a royalty payment of one and one-half times the amount of the 2018 CFF Award, payable in cash within sixty days upon the first receipt of approval of lenabasum in the United States and a second royalty payment of one and one-half times the amount of the 2018 CFF Award upon approval in another major market, as set forth in the Investment Agreement (the “Approval Royalty”). At the Company’s election, the Company may satisfy the first of the two Approval Royalties in registered shares of the Company’s common stock. Additionally, the Company is obligated to make (i) royalty payments to CFF of two and one-half percent of net sales from lenabasum due within sixty days after any quarter in which such net sales occur in the Field, as defined in the Investment Agreement, (ii) royalty payments to CFF of one percent of net sales of Non-Field Products, as defined in the Investment Agreement due within sixty days after any quarter in which such net sales occur, and (iii) royalty payments to CFF of ten percent of any amount the Company and its stockholders receive in connection with the license, sale, or other transfer to a third party of lenabasum, if indicated for the treatment or prevention of CF, or a change of control transaction, except that such payment shall not exceed five times the amount of the 2018 CFF Award, with such payments to be credited against any other net sales royalty payments due. Accordingly, the Company will owe to CFF a royalty payment equal to 10% of any amounts the Company receives as payment under the collaboration agreement with Kaken, provided that the total royalties that the Company will be required to pay under the Investment Agreement resulting from income from licenses or sales subject to the Investment Agreement are capped at five times the total amount of the 2018 CFF Award, and the Company may credit such royalties against any royalties on net sales otherwise owed to CFF under the Investment Agreement. Accordingly, the Company was required to pay CFF $2,700,000 in May 2019 as a result of its receipt of the $27,000,000 upfront cash payment from Kaken. Either CFF or the Company may terminate the Investment Agreement for cause, which includes the Company’s material failure to achieve certain commercialization and development milestones. The Company’s payment obligations survive the termination of the Investment Agreement. Pursuant to the terms of the Investment Agreement, the Company issued a warrant to CFF to purchase an aggregate of 1,000,000 shares of the Company’s common stock (the “CFF Warrant”). The CFF Warrant is exercisable at a price equal to $13.20 per share and is immediately exercisable for 500,000 shares of the Company’s common stock. Upon completion of the final milestone set forth in the Investment Agreement and receipt of the final payment from CFF to the Company pursuant to the Investment Agreement, the CFF Warrant will be exercisable for the remaining 500,000 shares of the Company’s common stock. The CFF Warrant expires on January 26, 2025. Any shares of the Company’s common stock issued upon exercise of the CFF Warrant will be unregistered and subject to a one-year lock-up. Under the Investment Agreement, the Company recorded $9,143,568 and $4,822,272 of revenue during the year ended December 31, 2019 and 2018. The Company assessed the 2018 CFF Award for accounting under ASC 606, which it adopted in the first quarter of 2018. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, CFF, is a customer. The Company identified the following material promise under the arrangement: research and development activities and related services under the Phase 2b Clinical Trial. Based on these assessments, the Company identified one performance obligation at the outset of the Investment Agreement, which consists of: Phase 2b Clinical Trial research and development activities and related services. To determine the transaction price, the Company included the total aggregate payments under the Investment Agreement which amount to $25 million and reduced the revenue to be recognized by the payment to the customer of $6,215,225 in the form of the CFF Warrant representing its fair value, leaving the remaining $18,784,775 as the transaction price as of the outset of the arrangement, which will be recognized as revenue over the performance period as discussed below. The $6,215,225 fair value of the warrant was also recorded as an increase to additional paid in capital. The Company billed and collected $12,500,000 in milestone payments during the year ended December 31, 2018 and 5,000,000 during the year ended December 31, 2019, which was recorded as an increase to deferred revenue. A roll forward of deferred revenue related to the Investment Agreement for the year ended December 31, 2019 is presented below. December 31, 2019 Beginning balance, December 31, 2018 $ 1,462,503 Billing to CFF upon achievement of milestones 5,000,000 Recognition of revenue (9,143,568 ) Reclassification to contract asset 2,681,065 Ending balance, December 31, 2019 $ — The CFF Warrant is accounted for as a payment to the customer under ASC 606. See Note 13 for further information related to the CFF Warrant. The Company notes that the Investment Agreement contains an initial payment that was received upon contract execution and subsequent milestone payments, which are a form of variable consideration that require evaluation for constraint considerations. The Company concluded that the related performance milestones are generally within the Company’s control and as result are considered probable. Revenue associated with the performance obligation is being recognized as revenue as the research and development services are provided using an input method, according to the costs incurred as related to the research and development activities on each program and the costs expected to be incurred in the future to satisfy the performance obligation. The transfer of control occurs over this time period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation. The research and development services related to this performance obligation are expected to be performed over approximately 2.75 years and is expected to be completed in the third quarter of 2020. The amounts received that have not yet been recognized as revenue are recorded in deferred revenue and the amounts recognized as revenue, but not yet received or invoiced are generally recognized as contract assets on the Company’s condensed consolidated balance sheet. 2015 CFFT Award On April 20, 2015, the Company entered into an award agreement (the “2015 CFFT Award Agreement”) with the Cystic Fibrosis Foundation Therapeutics, Inc (“CFFT”), a non-profit drug discovery and development affiliate of the Cystic Fibrosis Foundation (“CFF”) pursuant to which the Company received a development award (the “2015 CFFT Award”) for up to $5.0 million in funding. The funding from the 2015 CFFT Award supported a first-in-patient Phase 2 clinical trial of the Company’s oral anti-inflammatory drug lenabasum in adults with cystic fibrosis (“CF”). The Company received $5.0 million in payments under the 2015 CFFT Award. The payments received under the 2015 CFFT Award were recorded as deferred revenue when the triggering event to receive those amounts had occurred and were amortized on a straight-line basis over the expected duration of the remaining performance period under the 2015 CFFT Award which concluded in the third quarter of 2017. In accordance with ASC 605, the Company recorded $2,440,195 of revenue during the year ended December 31, 2017 under the 2015 CFFT Award Agreement. No revenue was recorded under the 2015 CFFT Award Agreement during the year ended December 31, 2018 as the final performance period concluded in the third quarter of 2017. Under ASC 605, milestone payments were initially recognized only in the period that the payment-triggering event occurred or was achieved. Effective January 1, 2018, ASC 605 was superseded by Accounting Standards Codification 606 Revenue Recognition — Revenue from Contracts with Customers Pursuant to the terms of the 2015 CFFT Award Agreement, the Company is obligated to make royalty payments to CFFT contingent upon commercialization of lenabasum in the Field of Use (as defined in the 2015 CFFT Award Agreement) as follows: (i) a royalty payment equal to five times the amount the Company receives under the 2015 CFFT Award Agreement, up to $25 million, payable in three equal annual installments following the first commercial sale of lenabasum, the first of which is due within 90 days following the first commercial sale of lenabasum, (ii) a royalty payment to CFFT equal to the amount the Company receives under the 2015 CFFT Award Agreement, up to $5 million, due in the first calendar year in which the aggregate cumulative net sales of lenabasum in the Field of Use exceed $500 million, and (iii) royalty payment(s) to CFFT of up to approximately $15 million if the Company transfers, sells or licenses lenabasum in the Field of Use other than for certain clinical or development purposes, or if the Company enters into a change of control transaction, with such payment(s) to be credited against the royalty payments due upon commercialization. The Field of Use is defined in the 2015 CFFT Award as the treatment in humans of CF, asbestosis, bronchiectasis, byssinosis, chronic bronchitis/COPD hypersensitivity pneumonitis, pneumoconiosis, primary ciliary dyskinesis, sarcoidosis and silicosis. Either CFFT or the Company may terminate the agreement for cause, which includes the Company’s material failure to achieve certain commercialization and development milestones. The Company’s payment obligations, if any, would survive the termination of the 2015 CFFT Award Agreement. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. INCOME TAXES No provision or benefit for federal or state income taxes has been recorded, as the Company has incurred a net loss for all of the periods presented, and the Company has provided a full valuation allowance against its deferred tax assets. At December 31, 2019 and 2018, the Company had federal net operating loss carryforwards of approximately $99,754,000 and $82,545,000, respectively, of which federal carryforwards will expire in varying amounts beginning in 2029. Of the federal net operating loss carryforwards of $99,754,000, approximately $43,403,000 are from 2018 and 2019, have no expiration date, and are limited to 80% of taxable income. At December 31, 2019 and 2018, the Company had Massachusetts net operating loss carryforwards of approximately $94,884,000 and $78,152,000, respectively. Utilization of net operating losses may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code, and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization. The Company has not yet conducted a study to determine if any such changes have occurred that could limit the Company’s ability to use the net operating losses and tax credit carryforwards. The Company also had research and development tax credit carryforwards at December 31, 2019 and 2018 of approximately $6,031,000 and $2,926,000, respectively. In the second half of 2019, the Company received from a foreign and domestic taxing authorities, an aggregate $4.6 million of cash payments for refundable research and development tax credits that were earned on certain research and development expenses. The Company recorded the $4.6 million in other income in the accompanying statements of operations for the year ended December 31, 2019. Significant components of the Company’s net deferred tax asset are as follows: December 31, 2019 2018 NOL carryforward $ 26,945,090 $ 22,273,661 Foreign net operating loss carryforward 10,875,395 3,616,502 Tax credits 5,844,918 2,793,247 Stock based compensation 5,373,539 3,381,969 Accrued expenses 1,120,196 660,427 Other temporary differences 962,981 186,069 Subtotal 51,122,119 32,911,875 Valuation allowance (51,122,119 ) (32,911,875 ) Net deferred tax asset $ — $ — The Company has maintained a full valuation allowance against its deferred tax assets in all periods presented. A valuation allowance is required to be recorded when it is not more likely than not that some portion or all of the net deferred tax assets will be realized. Since the Company cannot determine that it is more likely than not that it will generate taxable income, and thereby realize the net deferred tax assets, a full valuation allowance has been provided. The valuation allowance increased by $18,210,244 and $14,583,207 in 2019 and 2018, respectively, due to the increase in deferred tax assets, primarily due to net operating loss carryforwards. The Company has no uncertain tax positions at December 31, 2019 and 2018 that would affect its effective tax rate. Since the Company is in a loss carryforward position, the Company is generally subject to U.S. federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. Income tax benefits computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following: December 31, 2019 2018 Tax provision at statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 5.25 % 5.42 % Permanent differences -2.76 % -2.00 % Foreign expected tax 21.76 % 9.85 % Tax credits 8.82 % 4.31 % Income tax rate change 0.07 % — % Other 0.45 % 1.14 % Increase in valuation reserve -54.59 % -39.72 % Total 0.00 % 0.00 % |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Common Stock | 11. COMMON STOCK The Company has authorized 150,000,000 shares of common stock, $0.0001 par value per share, of which 64,672,893 shares, and 57,247,496 shares were issued and outstanding as of December 31, 2019, and 2018, respectively. On January 5, 2018, the Company entered into a sales agreement with Cantor Fitzgerald under which the Company had the ability to direct Cantor Fitzgerald as its sales agent to sell common stock up to an aggregate offering of up to $50 million under an “At the Market Offering” (“January 2018 Sales Agreement”). Sales of common stock under the January 2018 Sales Agreement were made pursuant to an effective registration statement for an aggregate offering of up to $50 million. During the first quarter of 2018, the Company sold 1,500,000 shares of its common stock to an institutional investor under the January 2018 Sales Agreement for which the Company received net proceeds of approximately $11.2 million. The Company did not sell any shares under the January 2018 Sales Agreement in remainder of 2018 and through February 8, 2019, the effective date of the Company’s termination of the January 2018 Sales Agreement. On January 30, 2019, the Company consummated an underwritten public offering of shares of its common stock pursuant to which the Company sold an aggregate of 6,198,500 shares of its common stock, including 808,500 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a purchase price of $6.50 per share with gross proceeds to the Company totaling approximately $40.3 million, less issuance costs incurred of approximately $2.6 million. During the year ended December 31, 2019 and 2018, the Company issued 107,029 and 144,069 shares of common stock upon the exercise of stock options to purchase common stock and the Company received proceeds of $386,810 and $352,645 from these exercises, respectively. During the year ended December 31, 2019, warrants to purchase 1,283,500 shares of stock were exercised on a cashless basis resulting in the issuance of 1,119,868 shares of common stock. During the year ended December 31, 2018, warrants to purchase 5,000 shares were exercised for proceeds of $5,000. On February 11, 2020, the Company consummated an underwritten public offering of shares of its common stock. See Note 14. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | 12. STOCK OPTIONS In April 2014, the Company adopted the Corbus Pharmaceuticals Holdings, Inc. 2014 Equity Incentive Plan (the “2014 Plan”). Pursuant to the 2014 Plan, the Company’s Board of Directors may grant incentive and nonqualified stock options and restricted stock to employees, officers, directors, consultants and advisors. Pursuant to the terms of an annual evergreen provision in the 2014 Plan, the number of shares of common stock available for issuance under the 2014 Plan shall automatically increase on January 1 of each year by at least seven percent (7%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or, pursuant to the terms of the 2014 Plan, in any year, the Board of Directors may determine that such increase will provide for a lesser number of shares. On January 1, 2019, pursuant to an annual evergreen provision contained in the 2014 Plan, the number of shares reserved for future grants was increased by 3,000,000 shares, which was less than seven percent (7%) of the outstanding shares of common stock on December 31, 2018. As of December 31, 2019, there was a total of 18,543,739 shares reserved for issuance under the 2014 Plan and there were 4,313,836 shares available for future grants. Options issued under the 2014 Plan generally vest over 4 years from the date of grant in multiple tranches and are exercisable for up to 10 years from the date of issuance. In accordance with the terms of the 2014 Plan, effective as of January 1, 2020, the number of shares of common stock available for issuance under the 2014 Plan increased by 4,527,103 shares, which was seven percent (7%) of the outstanding shares of common stock on December 31, 2019. As of January 1, 2020, the 2014 Plan had a total reserve of 22,770,842 shares and there were 8,540,939 shares available for future grants. Share-based Compensation For stock options issued and outstanding for the years ended December 31, 2019 and 2018, the Company recorded non-cash, stock-based compensation expense of $11,981,655 and $7,609,508, respectively, net of estimated forfeitures. The fair value of each option award for employees is estimated on the date of grant and for non-employees is estimated at the end of each reporting period until vested using the Black-Scholes option pricing model that uses the assumptions noted in the following table. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercises and employee terminations in order to estimate its forfeiture rate. The expected term of options granted under the 2014 Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history, and is 6.25 years based on the average between the vesting period and the contractual life of the option. For non-employee options, the expected term is the contractual term. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. The weighted average assumptions used principally in determining the fair value of options granted were as follows: 2019 2018 Risk free interest rate 2.33 % 2.53 % Expected dividend yield 0 % 0 % Expected term in years 6.25 6.25 Expected volatility 86.98 % 87.70 % Estimated forfeiture rate 4.85 % 5.00 % A summary of option activity for years ended December 31, 2019 and 2018 is presented below: Options Shares Weighted Weighted Intrinsic Outstanding at December 31, 2017 7,844,966 $ 3.75 Granted 2,378,500 $ 7.58 Exercised (139,069 ) $ 2.50 Forfeited (490,407 ) $ 7.85 Outstanding at December 31, 2018 9,593,990 $ 4.51 Granted 4,125,800 $ 6.91 Exercised (107,029 ) $ 3.61 Forfeited (367,395 ) $ 7.10 Outstanding at December 31, 2019 13,245,366 $ 5.19 7.02 $ 20,076,015 Exercisable at December 31, 2019 7,836,094 $ 3.83 5.78 $ 19,809,807 Vested and expected to vest at December 31, 2019 12,913,044 $ 5.15 6.97 $ 20,058,031 The weighted average grant-date fair value of options granted during the years ended December 31, 2019 and 2018 was $5.03 and $5.63 per share, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2019 and 2018 was approximately $324,567 and $543,060, respectively. As of December 31, 2019, there was approximately $22,101,610 of total unrecognized compensation expense, related to non-vested share-based compensation arrangements. The unrecognized compensation expense is estimated to be recognized over a period of 2.60 years at December 31, 2019. As summary of non-vested stock options for the years ended December 31, 2019 and 2018 is presented below: Options Shares Weighted Non-vested at December 31, 2017 3,329,989 $ 4.61 Granted 2,378,500 $ 5.63 Vested (1,643,772 ) $ 3.98 Forfeited (438,428 ) $ 5.91 Nonvested at December 31, 2018 3,626,289 $ 5.32 Granted 4,125,800 $ 5.03 Vested (2,038,128 ) $ 4.95 Forfeited (304,689 ) $ 5.22 Non-vested at December 31, 2019 5,409,272 $ 5.21 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Warrants | 13. WARRANTS During the year ended December 31, 2019, warrants to purchase 1,283,500 shares of stock were exercised on a cashless basis resulting in the issuance of 1,119,868 shares of common stock. During the year ended December 31, 2018, warrants to purchase 5,000 shares of common stock were exercised for proceeds of $5,000. At December 31, 2019, there were warrants outstanding to purchase 1,000,000 shares of common stock with a weighted average exercise price of $13.20 and a weighted average remaining life of 5.08 years, related only to the warrant issued to CFF pursuant to the terms of the Investment Agreement (Note 9). The Company issued a warrant to CFF to purchase an aggregate of 1,000,000 shares of the Company’s common stock (the “CFF Warrant”). The CFF Warrant is exercisable at a price equal to $13.20 per share and is immediately exercisable for 500,000 shares of the Company’s common stock. Upon completion of the final milestone set forth in the Investment Agreement and receipt of the final payment from CFF to the Company pursuant to the Investment Agreement, the CFF Warrant will be exercisable for the remaining 500,000 shares of the Company’s common stock. The CFF Warrant expires on January 26, 2025. Any shares of the Company’s common stock issued upon exercise of the CFF Warrant will be unregistered and subject to a one-year lock-up. The CFF Warrant is classified as equity as it meets all the conditions under GAAP for equity classification. In accordance with GAAP, the Company has calculated the fair value of the warrant for initial measurement and will reassess whether equity classification for the warrant is appropriate upon any changes to the warrants or capital structure, at each balance sheet date. The weighted average assumptions used in determining the $6,215,225 fair value of the CFF Warrant were as follows: Risk free interest rate 2.60 % Expected dividend yield 0 % Expected term in years 7.00 Expected volatility 83.5 % |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSEQUENT EVENTS Evergreen Provision Pursuant to the terms of an annual evergreen provision in the 2014 Plan, the number of shares of common stock available for issuance under the 2014 Plan shall automatically increase on January 1 of each year by at least seven percent (7%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or, pursuant to the terms of the 2014 Plan, in any year, the Board of Directors may determine that such increase will provide for a lesser number of shares. In accordance with the terms of the 2014 Plan, effective as of January 1, 2020, the number of shares of common stock available for issuance under the 2014 Plan increased by 4,527,103 shares, such amount being equal to seven percent (7%) of the outstanding shares of common stock on December 31, 2019. As of January 1, 2020, the 2014 Plan had a total reserve of 23,070,842 shares and there were 8,840,939 shares available for future grants. Public Offering On February 11, 2020, the Company consummated an underwritten public offering of shares of its common stock pursuant to which the Company sold an aggregate of 7,666,667 shares of its common stock, including 1,000,000 shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a purchase price of $6.00 per share with gross proceeds to the Company totaling $46.0 million, less estimated issuance costs incurred of approximately $3.0 million. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and changes in estimates may occur. The most significant estimates are related to stock-based compensation expense, the accrual of research, product development and clinical obligations, the recognition of revenue under the Investment Agreement (see Note 9) and the valuation of the CFF Warrant discussed in Note 13). |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers only those investments which are highly liquid, readily convertible to cash, and that mature within three months from date of purchase to be cash equivalents. Marketable investments are those with original maturities in excess of three months. At December 31, 2019 and 2018, cash equivalents were comprised of money market funds. The Company had no marketable investments at December 31, 2019 and 2018. Cash and cash equivalents consists of the following: December 31, 2019 2018 Cash $ 884,115 $ 808,943 Money market fund 30,864,571 40,939,525 Total cash and cash equivalents $ 31,748,686 $ 41,748,468 As of December 31, 2019, all of the Company’s cash and cash equivalents was held in the United States, except for approximately $466,000 of cash which was held principally in our subsidiary in the United Kingdom. As of December 31, 2018, all of the Company’s cash was held in the United States, except for approximately $702,000 of cash which was held primarily in our subsidiary in the United Kingdom. |
Financial Instruments | Financial Instruments The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, receivables, accounts payable and accrued expenses approximate their fair value based on the short-term nature of these instruments. The carrying values of the notes payable approximate their fair value due to the fact that they are at market terms. |
Property and Equipment | Property and Equipment The estimated life for the Company’s property and equipment is as follows: three years for computer hardware and software and three to five years for office furniture and equipment. The Company’s leasehold improvements and assets under capital lease are amortized over the shorter of their useful lives or the respective leases. See Note 5 for details of property and equipment and Note 6 for operating and capital lease commitments. |
Research and Development Expenses | Research and Development Expenses Costs incurred for research and development are expensed as incurred. Nonrefundable advance payments for goods or services that have the characteristics that will be used or rendered for future research and development activities pursuant to executory contractual arrangements with third party research organizations are deferred and recognized as an expense as the related goods are delivered or the related services are performed. |
Accruals for Research and Development Expenses and Clinical Trials | Accruals for Research and Development Expenses and Clinical Trials As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment terms that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the timing of various aspects of the expenses. The Company determines the accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third-party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in it reporting amounts that are too high or too low for any particular period. For the years ended December 31, 2019 and 2018, there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. This is the rate the Company would have to pay if borrowing on a collateralized basis over a similar term to each lease. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company has no significant off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other hedging arrangements. The Company may from time to time have cash in banks in excess of Federal Deposit Insurance Corporation insurance limits. However, the Company believes the risk of loss is minimal as these banks are large financial institutions. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as principally one operating segment, which is developing and commercializing therapeutics to treat rare life-threatening inflammatory and fibrotic diseases. As of December 31, 2019, all of the Company’s assets were located in the United States, except for approximately $466,000 of cash, $1,606,000 of prepaid expenses and other current assets, $23,000 of other assets, and $52,000 of property and equipment, net which were held outside of the United States, principally in our subsidiary in the United Kingdom. As of December 31, 2018, all of the Company’s assets were located in the United States, except for approximately $702,000 of cash, $1,183,000 of prepaid expenses and other current assets, $28,000 of other assets, and $54,000 of property and equipment, net which were held in our subsidiary in the United Kingdom. |
Income Taxes | Income Taxes For federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse. A valuation allowance is recorded to reduce a net deferred tax benefit when it is not more likely than not that the tax benefit from the deferred tax assets will be realized. Accordingly, given the cumulative losses since inception, the Company has provided a valuation allowance equal to 100% of the deferred tax assets in order to eliminate the deferred tax assets amounts. Tax positions taken or expected to be taken in the course of preparing the Company’s tax returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold, as well as accrued interest and penalties, if any, would be recorded as a tax expense in the current year. There were no uncertain tax positions that require accrual or disclosure to the financial statements as of December 31, 2019 or 2018. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company continually monitors events and changes in circumstances that could indicate that carrying amounts of long-lived assets may not be recoverable. An impairment loss is recognized when expected undiscounted cash flows of an asset are less than an asset’s carrying value. Accordingly, when indicators of impairment are present, the Company evaluates the carrying value of such assets in relation to the operating performance and future undiscounted cash flows of the underlying assets. An impairment loss equal to the excess of the fair value of the asset over its carrying amount, is recorded when it is determined that the carrying value of the asset may not be recoverable. No impairment charges were recorded for the years ended December 31, 2019 and 2018. |
Stock-based Payments | Stock-based Payments The Company recognizes compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense in the statement of operations over the service period based on a measurement of fair value for each stock-based award. The fair value of each option grant to employees is estimated as of the date of grant using the Black-Scholes option-pricing model, net of estimated forfeitures. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Prior to the Company’s adoption of ASU 2018-07, (see Recent Accounting Pronouncements |
Net Loss Per Common Share | Net Loss Per Common Share Basic and diluted net loss per share of the Company’s common stock has been computed by dividing net loss by the weighted average number of shares outstanding during the period. For years in which there is a net loss, options and warrants are anti-dilutive and therefore excluded from diluted loss per share calculations. The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019 and 2018: Years Ended December 31, 2019 2018 Basic and diluted net loss per share of common stock: Net loss $ (71,453,718 ) $ (55,672,139 ) Weighted average shares of common stock outstanding 63,899,184 56,999,741 Net loss per share of common stock-basic and diluted $ (1.12 ) $ (0.98 ) The impact of the following potentially dilutive securities outstanding as of December 31, 2019 and 2018 have been excluded from the computation of dilutive weighted average shares outstanding as the inclusion would be antidilutive. December 31, 2019 2018 Warrants 1,000,000 2,283,500 Stock options 13,245,366 9,593,990 14,245,366 11,877,490 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s balance sheets or statements of operations. Accounting for Leases In February 2016, the FASB issued ASU No . Leases (Topic 842), . Nonemployee Share-Based Payment Accounting In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting Collaborative Arrangements In November 2018, the FASB issued ASU 2018-08, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 . ASU 2018-08 clarifies the interaction between the accounting guidance for collaborative arrangements and revenue from contracts with customers. . Early adoption, including adoption in any interim period, is permitted. The Company is currently . Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consists of the following: December 31, 2019 2018 Cash $ 884,115 $ 808,943 Money market fund 30,864,571 40,939,525 Total cash and cash equivalents $ 31,748,686 $ 41,748,468 |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019 and 2018: Years Ended December 31, 2019 2018 Basic and diluted net loss per share of common stock: Net loss $ (71,453,718 ) $ (55,672,139 ) Weighted average shares of common stock outstanding 63,899,184 56,999,741 Net loss per share of common stock-basic and diluted $ (1.12 ) $ (0.98 ) |
Schedule of Potentially Dilutive Securities Excluded from Computation of Dilutive Weighted Average Shares Outstanding | The impact of the following potentially dilutive securities outstanding as of December 31, 2019 and 2018 have been excluded from the computation of dilutive weighted average shares outstanding as the inclusion would be antidilutive. December 31, 2019 2018 Warrants 1,000,000 2,283,500 Stock options 13,245,366 9,593,990 14,245,366 11,877,490 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and Equipment consisted of the following: December 31, 2019 2018 Computer hardware and software $ 711,442 $ 431,637 Office furniture and equipment 1,627,896 914,742 Leasehold improvements 4,150,488 2,025,410 Property and equipment, gross 6,489,826 3,371,789 Less: accumulated depreciation (1,405,961 ) (666,583 ) Property and equipment, net $ 5,083,865 $ 2,705,206 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Costs | The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the year ended December 31, 2019: Lease cost Operating lease cost $ 1,025,899 Total lease cost $ 1,025,899 Other information Operating cash flows received for operating leases $ 338,435 Weighted average remaining lease term 6.9 years Weighted average discount rate 8.00 % |
Schedule of Maturities of Operating Lease Liabilities | Pursuant to the terms of the Company’s non-cancelable lease agreements in effect at December 31, 2019, the following table summarizes the Company’s maturities of operating lease liabilities as of December 31, 2019: Year ending December 31, 2019: 2020 $ 1,265,760 2021 1,605,121 2022 1,652,563 2023 1,700,005 2024 1,747,447 Thereafter 3,483,034 Total lease payments $ 11,453,929 Less: imputed interest (2,760,957 ) Total $ 8,692,973 |
Schedule of Future Minimum Operating Lease Payments | The following disclosures as of December 31, 2018 continue to be in accordance with ASC 840. Future minimum lease payments for operating leases as of December 31, 2018 were as follows: 2019 $ 623,958 2020 784,243 2021 830,600 2022 855,150 2023 879,699 Thereafter 1,055,639 Total $ 5,029,289 |
Schedule of Future Minimum Capital Lease Commitments | The following disclosures as of December 31, 2018 continue to be in accordance with ASC 840. Future minimum lease payments for capital leases as of December 31, 2018 was as follows: Total future minimum lease payments – end in 2019 $ 378 Less: interest (3 ) Future capital lease obligations 375 Less: current portion (375 ) Long-term portion $ — |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: December 31, 2019 2018 Accrued clinical operations and trials costs $ 14,242,669 $ 4,914,881 Accrued product development costs 3,573,231 2,222,093 Accrued compensation 3,673,111 2,253,621 Accrued other 958,928 460,596 Total $ 22,447,939 $ 9,851,191 |
Development Awards and Deferr_2
Development Awards and Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Roll Forward of Deferred Revenue | A roll forward of deferred revenue related to the Investment Agreement for the year ended December 31, 2019 is presented below. December 31, 2019 Beginning balance, December 31, 2018 $ 1,462,503 Billing to CFF upon achievement of milestones 5,000,000 Recognition of revenue (9,143,568 ) Reclassification to contract asset 2,681,065 Ending balance, December 31, 2019 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Net Deferred Tax Asset | Significant components of the Company’s net deferred tax asset are as follows: December 31, 2019 2018 NOL carryforward $ 26,945,090 $ 22,273,661 Foreign net operating loss carryforward 10,875,395 3,616,502 Tax credits 5,844,918 2,793,247 Stock based compensation 5,373,539 3,381,969 Accrued expenses 1,120,196 660,427 Other temporary differences 962,981 186,069 Subtotal 51,122,119 32,911,875 Valuation allowance (51,122,119 ) (32,911,875 ) Net deferred tax asset $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | Income tax benefits computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following: December 31, 2019 2018 Tax provision at statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 5.25 % 5.42 % Permanent differences -2.76 % -2.00 % Foreign expected tax 21.76 % 9.85 % Tax credits 8.82 % 4.31 % Income tax rate change 0.07 % — % Other 0.45 % 1.14 % Increase in valuation reserve -54.59 % -39.72 % Total 0.00 % 0.00 % |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Assumptions Used Principally in Determining Fair Value of Options Granted | The weighted average assumptions used principally in determining the fair value of options granted were as follows: 2019 2018 Risk free interest rate 2.33 % 2.53 % Expected dividend yield 0 % 0 % Expected term in years 6.25 6.25 Expected volatility 86.98 % 87.70 % Estimated forfeiture rate 4.85 % 5.00 % |
Summary of Option Activity | A summary of option activity for years ended December 31, 2019 and 2018 is presented below: Options Shares Weighted Weighted Intrinsic Outstanding at December 31, 2017 7,844,966 $ 3.75 Granted 2,378,500 $ 7.58 Exercised (139,069 ) $ 2.50 Forfeited (490,407 ) $ 7.85 Outstanding at December 31, 2018 9,593,990 $ 4.51 Granted 4,125,800 $ 6.91 Exercised (107,029 ) $ 3.61 Forfeited (367,395 ) $ 7.10 Outstanding at December 31, 2019 13,245,366 $ 5.19 7.02 $ 20,076,015 Exercisable at December 31, 2019 7,836,094 $ 3.83 5.78 $ 19,809,807 Vested and expected to vest at December 31, 2019 12,913,044 $ 5.15 6.97 $ 20,058,031 |
Summary of Non-Vested Stock Options | As summary of non-vested stock options for the years ended December 31, 2019 and 2018 is presented below: Options Shares Weighted Non-vested at December 31, 2017 3,329,989 $ 4.61 Granted 2,378,500 $ 5.63 Vested (1,643,772 ) $ 3.98 Forfeited (438,428 ) $ 5.91 Nonvested at December 31, 2018 3,626,289 $ 5.32 Granted 4,125,800 $ 5.03 Vested (2,038,128 ) $ 4.95 Forfeited (304,689 ) $ 5.22 Non-vested at December 31, 2019 5,409,272 $ 5.21 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Weighted Average Assumption of Warrants | The weighted average assumptions used in determining the $6,215,225 fair value of the CFF Warrant were as follows: Risk free interest rate 2.60 % Expected dividend yield 0 % Expected term in years 7.00 Expected volatility 83.5 % |
Liquidity and Going Concern (De
Liquidity and Going Concern (Details Narrative) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Accumulated deficit | $ (192,823,958) | $ (121,370,240) |
Cash and cash equivalents | $ 31,748,686 | $ 41,748,468 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Jan. 02, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||
Marketable investments | |||
Operating segments | Segment | 1 | ||
Cash | $ 884,115 | 808,943 | |
Prepaid expenses and other current assets | 3,724,932 | 2,491,844 | |
Property and equipment, net | $ 5,083,865 | $ 2,705,206 | |
Valuation allowance | (54.59%) | (39.72%) | |
Impairment charges | |||
Operating lease liability | 8,692,973 | ||
Operating lease, right of use asset | $ 5,818,983 | ||
ASU 2016-02 [Member] | |||
Significant Accounting Policies [Line Items] | |||
Operating lease liability | $ 3,800,000 | ||
Operating lease, right of use asset | $ 2,400,000 | ||
Deferred Tax Assets [Member] | |||
Significant Accounting Policies [Line Items] | |||
Valuation allowance | 100.00% | ||
Computer Hardware and Software [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of all property and equipment | 3 years | ||
Office Furniture and Equipment [Member] | Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of all property and equipment | 3 years | ||
Office Furniture and Equipment [Member] | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of all property and equipment | 5 years | ||
United Kingdom [Member] | |||
Significant Accounting Policies [Line Items] | |||
Cash held in subsidiary | $ 466,000 | 702,000 | |
Cash | 466,000 | 702,000 | |
Prepaid expenses and other current assets | 1,606,000 | 1,183,000 | |
Other assets | 23,000 | 28,000 | |
Property and equipment, net | $ 52,000 | $ 54,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash | $ 884,115 | $ 808,943 |
Money market fund | 30,864,571 | 40,939,525 |
Total cash and cash equivalents | $ 31,748,686 | $ 41,748,468 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Net loss | $ (71,453,718) | $ (55,672,139) |
Weighted average shares of common stock outstanding | 63,899,184 | 56,999,741 |
Net loss per share of common stock-basic and diluted | $ (1.12) | $ (0.98) |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Potentially Dilutive Securities Excluded from Computation of Dilutive Weighted Average Shares Outstanding (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from computation of dilutive weighted average shares outstanding | 14,245,366 | 11,877,490 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from computation of dilutive weighted average shares outstanding | 1,000,000 | 2,283,500 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potential dilutive securities excluded from computation of dilutive weighted average shares outstanding | 13,245,366 | 9,593,990 |
License Agreement (Details Narr
License Agreement (Details Narrative) - USD ($) | Sep. 20, 2018 | Sep. 30, 2018 | Dec. 31, 2019 |
Research and Development Expense [Member] | |||
Upfront cash payment | $ 250,000 | ||
Potential milestone payments | $ 18,400,000 | ||
Jenrin Agreement [Member] | |||
Upfront cash payment | $ 250,000 | ||
Potential milestone payments | $ 18,400,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 739,378 | $ 493,938 | |
Write off of fully amortized leasehold improvements | $ 191,244 | $ 191,244 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,489,826 | $ 3,371,789 |
Less: accumulated depreciation | (1,405,961) | (666,583) |
Property and equipment, net | 5,083,865 | 2,705,206 |
Computer Hardware and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 711,442 | 431,637 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,627,896 | 914,742 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,150,488 | $ 2,025,410 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Oct. 25, 2019ft² | Feb. 26, 2019USD ($)ft² | Aug. 21, 2017USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 02, 2019USD ($) |
Commitment And Contingencies [Line Items] | |||||||
Rent expense | $ 1,123,667 | $ 587,963 | |||||
Operating lease liability | $ 8,692,973 | 8,692,973 | |||||
Operating lease, right of use asset | 5,818,983 | 5,818,983 | |||||
Increase in operating lease liabilities | 971,696 | ||||||
ASU 2016-02 [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Operating lease liability | $ 3,800,000 | ||||||
Operating lease, right of use asset | $ 2,400,000 | ||||||
August 2017 Lease Agreement [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Area of office space | ft² | 32,733 | ||||||
Operating lease, term | 7 years | ||||||
Leasehold improvements | $ 1,080,189 | ||||||
Irrevocable letter of credit | 400,000 | ||||||
Unsecured letter of credit | 400,000 | ||||||
Incurred interest expense | $ 19,025 | $ 7,431 | |||||
August 2017 Lease Agreement [Member] | First Year [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Rent expense | 470,000 | ||||||
August 2017 Lease Agreement [Member] | Seventh Year [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Rent expense | 908,000 | ||||||
August 2017 Lease Agreement [Member] | Third Anniversary [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Irrevocable letter of credit | 300,000 | ||||||
August 2017 Lease Agreement [Member] | Fourth Anniversary [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Irrevocable letter of credit | $ 200,000 | ||||||
February 2019 Lease Agreement [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Irrevocable letter of credit | $ 369,900 | ||||||
Operating lease liability | 855,000 | ||||||
Operating lease, right of use asset | $ 855,000 | ||||||
Operating lease, option to extend | Per ASC 842, the February 2019 Lease Agreement constitutes a modification as it extends the original lease term and increases the scope of the lease (additional space provided under the amendment), which requires evaluation of the remeasurement of the lease liability and corresponding ROU asset. Per ASC 842, an extension of the lease term does not constitute a separate contract. Accordingly, the Company reassessed the classification of the Leased Premises and remeasured the lease liability on the basis of the extended lease term using the 20 additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 9%. | ||||||
Percentage of incremental borrowing rate from present value of lease | 9.00% | ||||||
Leasehold improvements reimbursement | $ 990,759 | ||||||
February 2019 Lease Agreement [Member] | New Premises [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Area of office space | ft² | 30,023 | ||||||
Operating lease liability | $ 2,700,000 | ||||||
Operating lease, right of use asset | $ 2,700,000 | ||||||
February 2019 Lease Agreement [Member] | Total Premises [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Area of office space | ft² | 62,756 | ||||||
February 2019 Lease Agreement [Member] | Third Anniversary [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Irrevocable letter of credit | $ 277,425 | ||||||
February 2019 Lease Agreement [Member] | Fourth Anniversary [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Irrevocable letter of credit | $ 184,950 | ||||||
October 2019 Lease Amendment [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Operating lease, option to extend | Per ASC 842, the October 2019 Lease Amendment constitutes a modification as it extends the original lease term and increases the scope of the lease (additional space provided under the amendment), which requires evaluation of the remeasurement of the lease liability and corresponding ROU asset. Per ASC 842, an extension of the lease term does not constitute a separate contract. Accordingly, the Company reassessed the classification of the Amended Leased Premises and remeasured the lease liability on the basis of the extended lease term using the additional monthly rent payments and the incremental borrowing rate at the effective date of the modification of 8%. | ||||||
Percentage of incremental borrowing rate from present value of lease | 8.00% | ||||||
Increase in operating lease liabilities | $ 381,000 | ||||||
October 2019 Lease Amendment [Member] | Total Premises [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Area of office space | ft² | 63,256 | ||||||
October 2019 Lease Amendment [Member] | Amended Premises [Member] | |||||||
Commitment And Contingencies [Line Items] | |||||||
Area of office space | ft² | 500 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Lease Costs (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease cost | $ 1,025,899 |
Total lease cost | 1,025,899 |
Operating cash flows received for operating leases | $ (416,769) |
Weighted average remaining lease term | 6 years 10 months 25 days |
Weighted average discount rate | 8.00% |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Details) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 1,265,760 |
2021 | 1,605,121 |
2022 | 1,652,563 |
2023 | 1,700,005 |
2024 | 1,747,447 |
Thereafter | 3,483,034 |
Total lease payments | 11,453,929 |
Less: imputed interest | (2,760,957) |
Total | $ 8,692,973 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Operating Lease Payments (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 623,958 |
2020 | 784,243 |
2021 | 830,600 |
2022 | 855,150 |
2023 | 879,699 |
Thereafter | 1,055,639 |
Total | $ 5,029,289 |
Commitments and Contingencies_5
Commitments and Contingencies - Schedule of Future Minimum Capital Lease Commitments (Details) - Copier Machine [Member] | Dec. 31, 2019USD ($) |
Commitment And Contingencies [Line Items] | |
Total future minimum lease payments - end in 2019 | $ 378 |
Less: interest | (3) |
Future capital lease obligations | 375 |
Less: current portion | (375) |
Long-term portion |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | ||||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Insurance Policy [Member] | |||||
Debt Instrument [Line Items] | |||||
Prepaid expenses | $ 923,292 | $ 441,875 | |||
Loan Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 963,514 | $ 491,629 | $ 415,265 | ||
Monthly principal and interest payments | $ 109,413 | $ 49,857 | $ 41,975 | ||
Monthly loan payments term | 9 months | 10 months | 10 months | ||
Annual interest rate | 5.25% | 3.07% | 2.35% | ||
Loan repayment term description | This loan was fully repaid in August 2019. | This loan was fully repaid in August 2018. |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued clinical operations and trials costs | $ 14,242,669 | $ 4,914,881 |
Accrued product development costs | 3,573,231 | 2,222,093 |
Accrued compensation | 3,673,111 | 2,253,621 |
Accrued other | 958,928 | 460,596 |
Total | $ 22,447,939 | $ 9,851,191 |
Development Awards and Deferr_3
Development Awards and Deferred Revenue (Details Narrative) - USD ($) | Jan. 26, 2018 | Apr. 20, 2015 | Apr. 20, 2015 | May 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2017 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Development Award [Line Items] | |||||||||||
Revenue recognized | $ (9,143,568) | ||||||||||
Revenue | $ 36,143,568 | $ 4,822,272 | |||||||||
Additional paid in capital, fair value of warrant issued | 6,215,225 | ||||||||||
CFF Warrant [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Warrant exercisable price per share | $ 13.20 | ||||||||||
Cystic Fibrosis Foundation [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Payments for royalty | $ 2,700,000 | ||||||||||
Collaboration and License Agreement [Member] | Kaken Pharmaceutical Co., Ltd. [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Upfront payment, received from related party | $ 27,000,000 | ||||||||||
Consideration receivable on milestone payments | $ 173,000,000 | ||||||||||
Royalty term description | The period beginning on the date of the first commercial sale of the Licensed Product in Japan and ends on the latest of (i) the expiration of the last valid claim of the royalty patents covering such Licensed Product in Japan, (ii) the expiration of regulatory exclusivity for such Licensed Product for such Initial Indication in Japan, or (iii) ten (10) years after the first commercial sale of such Licensed Product for such Initial Indication in Japan. The Agreement may be terminated by either party for material breach, upon a party's insolvency or bankruptcy or upon a challenge by one party of any patents of the other party, and Kaken may terminate in specified situations, including for a safety concern or clinical failure, or at its convenience following the second anniversary of the first commercial sale of a Licensed Product in either of the Initial Indications in the Territory, with 180 days' notice | ||||||||||
Revenue from related parties, recorded as deferred revenue | $ 27,000,000 | ||||||||||
Revenue recognized | $ 27,000,000 | ||||||||||
Royalty payable | $ 2,700,000 | ||||||||||
Cystic Fibrosis Program Related Investment Agreement [Member] | Phase 2b Clinical Trial [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Proceeds from investments on achieving milestones | $ 17,500,000 | ||||||||||
Cystic Fibrosis Program Related Investment Agreement [Member] | Maximum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Development award received | $ 25,000,000 | ||||||||||
Collaboration Agreement [Member] | Cystic Fibrosis Foundation [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Royalty payment percentage | 10.00% | ||||||||||
Investment Agreement [Member] | 2018 CFF Award [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Revenue | $ 9,143,568 | 4,822,272 | |||||||||
Investment Agreement [Member] | CFF Warrant [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Warrant to purchase of common stock | 1,000,000 | ||||||||||
Warrant exercisable price per share | $ 13.20 | ||||||||||
Warrants expiration term | Jan. 26, 2025 | ||||||||||
Investment Agreement [Member] | CFF Warrant [Member] | Immediately Exercisable Warrants [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Warrant to purchase of common stock | 500,000 | ||||||||||
Investment Agreement [Member] | CFF Warrant [Member] | Warrants Exercisable On Completion Of Final Milestone [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Warrant to purchase of common stock | 500,000 | ||||||||||
Investment Agreement [Member] | Cystic Fibrosis Foundation Warrants [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Revenue | $ 5,000,000 | 12,500,000 | |||||||||
Additional paid in capital, fair value of warrant issued | 6,215,225 | ||||||||||
Revenue to be recognized | $ 18,784,775 | ||||||||||
Increase to deferred revenue, amount | $ 5,000,000 | ||||||||||
Research and development period | 2 years 9 months | ||||||||||
2015 CFFT Award Agreement [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Revenue | $ 2,440,195 | ||||||||||
Proceeds from investment award | $ 5,000,000 | ||||||||||
Cumulative effect of new accounting principle | |||||||||||
Royalty payments, description | (i) a royalty payment equal to five times the amount the Company receives under the 2015 CFFT Award Agreement, up to $25 million, payable in three equal annual installments following the first commercial sale of lenabasum, the first of which is due within 90 days following the first commercial sale of lenabasum, (ii) a royalty payment to CFFT equal to the amount the Company receives under the 2015 CFFT Award Agreement, up to $5 million, due in the first calendar year in which the aggregate cumulative net sales of lenabasum in the Field of Use exceed $500 million, and (iii) royalty payment(s) to CFFT of up to approximately $15 million if the Company transfers, sells or licenses lenabasum in the Field of Use other than for certain clinical or development purposes, or if the Company enters into a change of control transaction, with such payment(s) to be credited against the royalty payments due upon commercialization. | ||||||||||
2015 CFFT Award Agreement [Member] | First Commercial Sale [Member] | Lenabasum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Payment due period after the first commercial sale | 90 days | ||||||||||
2015 CFFT Award Agreement [Member] | Upon Reaching the Sales Target [Member] | Lenabasum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Royalty payment, sales target | 500,000,000 | $ 500,000,000 | |||||||||
2015 CFFT Award Agreement [Member] | Maximum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Development award received | 5,000,000 | 5,000,000 | |||||||||
2015 CFFT Award Agreement [Member] | Maximum [Member] | Upon Commercialization of the Product [Member] | Lenabasum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Royalty payable | 25,000,000 | 25,000,000 | |||||||||
2015 CFFT Award Agreement [Member] | Maximum [Member] | Upon Reaching the Sales Target [Member] | Lenabasum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Royalty payable | 5,000,000 | 5,000,000 | |||||||||
2015 CFFT Award Agreement [Member] | Maximum [Member] | Upon Transfer, Sale or Licensing [Member] | Lenabasum [Member] | |||||||||||
Development Award [Line Items] | |||||||||||
Royalty payable | $ 15,000,000 | $ 15,000,000 |
Development Awards and Deferr_4
Development Awards and Deferred Revenue - Schedule of Roll Forward of Deferred Revenue (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, beginning balance | $ 1,462,503 |
Billing to CFF upon achievement of milestones | 5,000,000 |
Recognition of revenue | (9,143,568) |
Reclassification to contract asset | 2,681,065 |
Deferred revenue, ending balance |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes [Line Items] | ||
Net operating loss carryforwards | $ 99,754,000 | $ 82,545,000 |
Corporate tax rate percentage | 21.00% | 21.00% |
Research and development tax credit carryforwards | $ 6,031,000 | $ 2,926,000 |
Other income | 4,581,838 | |
Deferred tax assets valuation allowance increase | 18,210,244 | 14,583,207 |
Uncertain tax position | ||
Federal [Member] | ||
Income Taxes [Line Items] | ||
Net operating loss carryforwards | $ 99,754,000 | $ 43,403,000 |
Operating loss carryforwards expiration year | 2029 | 2029 |
Corporate tax rate percentage | 80.00% | |
Massachusett [Member] | ||
Income Taxes [Line Items] | ||
Net operating loss carryforwards | $ 94,884,000 | $ 78,152,000 |
Foreign and Domestic [Member] | ||
Income Taxes [Line Items] | ||
Research and development tax credit carryforwards | $ 4,600,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Net Deferred Tax Asset (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets, Net [Abstract] | ||
NOL carryforward | $ 26,945,090 | $ 22,273,661 |
Foreign net operating loss carryforward | 10,875,395 | 3,616,502 |
Tax credits | 5,844,918 | 2,793,247 |
Stock based compensation | 5,373,539 | 3,381,969 |
Accrued expenses | 1,120,196 | 660,427 |
Other temporary differences | 962,981 | 186,069 |
Subtotal | 51,122,119 | 32,911,875 |
Valuation allowance | (51,122,119) | (32,911,875) |
Net deferred tax asset |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax provision at statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 5.25% | 5.42% |
Permanent differences | (2.76%) | (2.00%) |
Foreign expected tax | 21.76% | 9.85% |
Tax credits | 8.82% | 4.31% |
Income tax rate change | 0.07% | 0.00% |
Other | 0.45% | 1.14% |
Increase in valuation reserve | (54.59%) | (39.72%) |
Total | 0.00% | 0.00% |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Jan. 05, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Common stock, shares issued | 64,672,893 | 57,247,496 | ||
Common stock, shares outstanding | 64,672,893 | 57,247,496 | ||
Gross proceeds from sale of stock | $ 40,677,060 | $ 12,052,645 | ||
Issuance of common stock upon exercise of stock options, shares | 107,029 | 139,069 | ||
Warrants [Member] | ||||
Issuance of common stock upon exercise of stock options, shares | 1,119,868 | |||
Warrants to purchase shares of common stock, exercised | 1,283,500 | 5,000 | ||
Proceeds from exercise of stock options | $ 5,000 | |||
Equity Option [Member] | ||||
Issuance of common stock upon exercise of stock options, shares | 107,029 | 144,069 | ||
Proceeds from exercise of stock options | $ 386,810 | $ 352,645 | ||
January 2018 Sales Agreement [Member] | Institutional Investor [Member] | ||||
Aggregate common stock sold, shares | 1,500,000 | |||
Gross proceeds from sale of stock | $ 11,200,000 | |||
At the Market Offering [Member] | Maximum [Member] | ||||
Number of common stock value sold | $ 50,000,000 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | Jan. 02, 2020 | Jan. 01, 2020 | Apr. 30, 2015 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 11,981,655 | $ 7,609,508 | |||
Weighted average grant-date fair value, options granted | $ 5.03 | $ 5.63 | |||
Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant-date fair value, options granted | $ 5.03 | $ 5.63 | |||
Average intrinsic value of options exercised | $ 324,567 | $ 543,060 | |||
Total unrecognized compensation expense | $ 22,101,610 | ||||
Share-based compensation expense, not yet recognized weighted average period of recognition | 2 years 7 months 6 days | ||||
2014 Equity Incentive Plan [Member] | Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate common stock available for stock options granted, shares | 18,543,739 | ||||
Shares available for grant | 4,313,836 | ||||
Stock option vesting term | 4 years | ||||
Stock option expiration period | 10 years | ||||
Option granted expected term | 6 years 2 months 30 days | ||||
Evergreen Provision [Member] | 2014 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of outstanding common shares | 7.00% | 7.00% | |||
Increase in number of shares of common stock available for issuance | 3,000,000 | ||||
Evergreen Provision [Member] | 2014 Equity Incentive Plan [Member] | Subsequent Event [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of outstanding common shares | 7.00% | 7.00% | |||
Increase in number of shares of common stock available for issuance | 4,527,103 | ||||
Aggregate common stock available for stock options granted, shares | 23,070,842 | 22,770,842 | |||
Shares available for grant | 8,840,939 | 8,540,939 |
Stock Options - Summary of Assu
Stock Options - Summary of Assumptions Used Principally in Determining Fair Value of Options Granted (Details) - Employee Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 2.33% | 2.53% |
Expected dividend yield | 0.00% | 0.00% |
Expected term in years | 6 years 2 months 30 days | 6 years 2 months 30 days |
Expected volatility | 86.98% | 87.70% |
Estimated forfeiture rate | 4.85% | 5.00% |
Stock Options - Summary of Opti
Stock Options - Summary of Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Shares, Outstanding, Beginning balance | 9,593,990 | 7,844,966 |
Shares, Granted | 4,125,800 | 2,378,500 |
Shares, Exercised | (107,029) | (139,069) |
Shares, Forfeited | (367,395) | (490,407) |
Shares, Outstanding, Ending balance | 13,245,366 | 9,593,990 |
Shares, Exercisable | 7,836,094 | |
Shares, Vested and expected to vest | 12,913,044 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 4.51 | $ 3.75 |
Weighted Average Exercise Price, Granted | 6.91 | 7.58 |
Weighted Average Exercise Price, Exercised | 3.61 | 2.50 |
Weighted Average Exercise Price, Forfeited | 7.10 | 7.85 |
Weighted Average Exercise Price, Outstanding, Ending balance | 5.19 | $ 4.51 |
Weighted Average Exercise Price, Exercisable | 3.83 | |
Weighted Average Exercise Price, Vested and expected to vest | $ 5.15 | |
Weighted Average Remaining Contractual Term in Years, Outstanding | 7 years 7 days | |
Weighted Average Remaining Contractual Term in Years, Exercisable | 5 years 9 months 11 days | |
Weighted Average Remaining Contractual Term in Years, Vested and expected to vest | 6 years 11 months 19 days | |
Average Intrinsic Value, Outstanding | $ 20,076,015 | |
Average Intrinsic Value, Exercisable | 19,809,807 | |
Average Intrinsic Value, Vested and expected to vest | $ 20,058,031 |
Stock Options - Summary of Non-
Stock Options - Summary of Non-Vested Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Shares Non-vested , Beginning balance | 3,626,289 | 3,329,989 |
Shares, Granted | 4,125,800 | 2,378,500 |
Shares, Vested | (2,038,128) | (1,643,772) |
Shares, Forfeited | (304,689) | (438,428) |
Shares Outstanding, Ending balance | 5,409,272 | 3,626,289 |
Weighted Average Fair Value Non Vested, Beginning Balance | $ 5.32 | $ 4.61 |
Weighted Average Fair Value, Granted | 5.03 | 5.63 |
Weighted Average Fair Value, Vested | 4.95 | 3.98 |
Weighted Average Fair Value, Forfeited | 5.22 | 5.91 |
Weighted Average Fair Value Non Vested, Ending Balance | $ 5.21 | $ 5.32 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Warrant or Right [Line Items] | ||
Warrants outstanding to purchase of common stock shares | 1,283,500 | 5,000 |
Proceeds from exercise of warrants | $ 1,119,868 | $ 5,000 |
Fair value of warrants issued | $ 6,215,225 | |
CFF Warrant [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding to purchase of common stock shares | 1,000,000 | |
Weighted average exercise price of warrants | $ 13.20 | |
Number of warrants exercisable for common stock | 500,000 | |
Investment Agreement [Member] | CFF Warrant [Member] | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding to purchase of common stock shares | 1,000,000 | |
Weighted average exercise price of warrants | $ 13.20 | |
Weighted average remaining life of warrants | 5 years 29 days | |
Number of warrants exercisable for common stock | 500,000 | |
Warrants expiration term | Jan. 26, 2025 |
Warrants - Schedule of Weighted
Warrants - Schedule of Weighted Average Assumption of Warrants (Details) - Warrants [Member] | Dec. 31, 2019 |
Risk Free Interest Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding measurement input, percentage | 2.60 |
Expected Dividend Yield [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding measurement input, percentage | 0 |
Expected Term in Years [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding measurement input, term | 7 years |
Expected Volatility [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding measurement input, percentage | 83.5 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 11, 2020 | Jan. 02, 2020 | Jan. 01, 2020 | Apr. 30, 2015 | Dec. 31, 2019 | Dec. 31, 2018 |
Proceeds from sale of common stock | $ 40,677,060 | $ 12,052,645 | ||||
Evergreen Provision [Member] | 2014 Equity Incentive Plan [Member] | ||||||
Percentage of outstanding common shares | 7.00% | 7.00% | ||||
Subsequent Event [Member] | Public Offering [Member] | ||||||
Number of common stock share sold | 7,666,667 | |||||
Sale price per share | $ 6 | |||||
Proceeds from sale of common stock | $ 46,000,000 | |||||
Stock issuance cost | $ 3,000,000 | |||||
Subsequent Event [Member] | Public Offering [Member] | Underwriters' Option [Member] | ||||||
Number of common stock share sold | 1,000,000 | |||||
Subsequent Event [Member] | Evergreen Provision [Member] | 2014 Equity Incentive Plan [Member] | ||||||
Increases in number of shares of common stock available for issuance, minimum percentage of outstanding common stock | 7.00% | |||||
Number of shares of common stock available for issuance | 4,527,103 | |||||
Percentage of outstanding common shares | 7.00% | 7.00% | ||||
Shares available for future issuance | 23,070,842 | 22,770,842 | ||||
Shares available for future grants | 8,840,939 | 8,540,939 |