Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ARIDIS PHARMACEUTICALS, INC. | |
Entity Central Index Key | 0001614067 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 8,923,374 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 11,812 | $ 20,897 |
Accounts receivable | 1,000 | 0 |
Other receivables | 352 | 413 |
Contract costs | 1,543 | 1,537 |
Prepaid expenses | 1,441 | 2,990 |
Total current assets | 16,148 | 25,837 |
Property and equipment, net | 845 | 1,006 |
Intangible assets, net | 30 | 32 |
Equity method investment | 9 | |
Contract costs | 520 | 526 |
Other assets | 572 | 557 |
Total assets | 18,115 | 27,967 |
Current liabilities: | ||
Accounts payable | 1,696 | 1,755 |
Accrued liabilities | 2,175 | 2,974 |
Deferred revenue, current | 14,661 | 14,602 |
Note payable, current | 277 | |
Total current liabilities | 18,809 | 19,331 |
Deferred revenue | 4,941 | 5,000 |
Note payable | 438 | |
Other liabilities | 1 | |
Total liabilities | 24,189 | 24,331 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity (deficit): | ||
Preferred stock (par value $0.0001; 60,000,000 shares authorized; zero shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively) | ||
Common stock (par value $0.0001; 100,000,000 shares authorized; shares issued and outstanding: 8,923,374 and 8,918,461 as of June 30, 2020 and December 31, 2019, respectively) | 1 | 1 |
Additional paid-in capital | 105,418 | 104,404 |
Accumulated deficit | (111,493) | (100,769) |
Total stockholders' equity (deficit) | (6,074) | 3,636 |
Total liabilities and stockholders' equity (deficit) | $ 18,115 | $ 27,967 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 8,923,374 | 8,918,461 |
Common stock, shares outstanding (in shares) | 8,923,374 | 8,918,461 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Grant revenue | $ 1,000 | $ 1,000 | $ 1,022 | |
Operating expenses: | ||||
Research and development | 3,647 | $ 6,653 | 8,564 | 13,771 |
General and administrative | 1,583 | 1,613 | 3,222 | 3,254 |
Total operating expenses | 5,230 | 8,266 | 11,786 | 17,025 |
Loss from operations | (4,230) | (8,266) | (10,786) | (16,003) |
Other income (expense): | ||||
Interest income, net | 10 | 69 | 71 | 185 |
Share of loss from equity method investment | (186) | (9) | (628) | |
Net loss | $ (4,220) | $ (8,383) | $ (10,724) | $ (16,446) |
Weighted-average common shares outstanding used in computing net loss, basic and diluted | 8,923,374 | 8,107,290 | 8,921,383 | 8,106,484 |
Net loss per share, basic and diluted | $ (0.47) | $ (1.03) | $ (1.20) | $ (2.03) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balances at the beginning of the period at Dec. 31, 2018 | $ 1 | $ 97,401 | $ (71,088) | $ 26,314 |
Balances at the beginning of the period (in shares) at Dec. 31, 2018 | 8,104,757 | |||
Changes in equity | ||||
Exercise of stock options | 8 | 8 | ||
Exercise of stock options (in shares) | 2,533 | |||
Stock-based compensation | 986 | 986 | ||
Net loss | (16,446) | (16,446) | ||
Balances at the end of the period at Jun. 30, 2019 | $ 1 | 98,395 | (87,534) | 10,862 |
Balances at the end of the period (shares) at Jun. 30, 2019 | 8,107,290 | |||
Balances at the beginning of the period at Mar. 31, 2019 | $ 1 | 97,859 | (79,151) | 18,709 |
Balances at the beginning of the period (in shares) at Mar. 31, 2019 | 8,107,290 | |||
Changes in equity | ||||
Stock-based compensation | 536 | 536 | ||
Net loss | (8,383) | (8,383) | ||
Balances at the end of the period at Jun. 30, 2019 | $ 1 | 98,395 | (87,534) | 10,862 |
Balances at the end of the period (shares) at Jun. 30, 2019 | 8,107,290 | |||
Balances at the beginning of the period at Dec. 31, 2019 | $ 1 | 104,404 | (100,769) | 3,636 |
Balances at the beginning of the period (in shares) at Dec. 31, 2019 | 8,918,461 | |||
Changes in equity | ||||
Exercise of stock options | 14 | $ 14 | ||
Exercise of stock options (in shares) | 4,913 | 4,913 | ||
Stock-based compensation | 1,000 | $ 1,000 | ||
Net loss | (10,724) | (10,724) | ||
Balances at the end of the period at Jun. 30, 2020 | $ 1 | 105,418 | (111,493) | (6,074) |
Balances at the end of the period (shares) at Jun. 30, 2020 | 8,923,374 | |||
Balances at the beginning of the period at Mar. 31, 2020 | $ 1 | 104,895 | (107,273) | (2,377) |
Balances at the beginning of the period (in shares) at Mar. 31, 2020 | 8,923,374 | |||
Changes in equity | ||||
Stock-based compensation | 523 | 523 | ||
Net loss | (4,220) | (4,220) | ||
Balances at the end of the period at Jun. 30, 2020 | $ 1 | $ 105,418 | $ (111,493) | $ (6,074) |
Balances at the end of the period (shares) at Jun. 30, 2020 | 8,923,374 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (10,724) | $ (16,446) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 167 | 166 |
Stock-based compensation expense | 1,000 | 986 |
Share of loss from equity method investment | 9 | 628 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,000) | 660 |
Other receivables | 61 | (1,010) |
Prepaid expenses | 1,548 | (833) |
Contract costs | (488) | |
Other assets | (15) | (20) |
Accounts payable | (44) | (787) |
Accrued liabilities and other | (311) | 979 |
Deferred revenue | (22) | |
Net cash used in operating activities | (9,797) | (15,699) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (17) | (27) |
Net cash used in investing activities | (17) | (27) |
Cash flows from financing activities: | ||
Proceeds from note payable | 715 | |
Proceeds from stock option exercises | 14 | 8 |
Net cash provided by financing activities | 729 | 8 |
Net decrease in cash and cash equivalents | (9,085) | (15,718) |
Cash and cash equivalents at: | ||
Beginning of period | 20,897 | 24,237 |
End of period | 11,812 | 8,519 |
Supplemental cash flow disclosures: | ||
Cash paid for taxes | $ 2 | $ 2 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Organization Aridis Pharmaceuticals, Inc. (the “Company” or “we” or “our”) was established as a California limited liability corporation in 2003. The Company converted to a Delaware C corporation on May 21, 2014. Our principal place of business is in San Jose, California. We are a late-stage biopharmaceutical company focused on developing new breakthrough therapies for infectious diseases and addressing the growing problem of antibiotic resistance. The Company has a deep, diversified portfolio of clinical and pre-clinical stage non-antibiotic anti-infective product candidates that are complimented by a fully human monoclonal antibody discovery platform technology. The Company’s suite of anti-infective product candidates offers opportunities to profoundly alter the current trajectory of increasing antibiotic resistance and improve the health outcome of many of the most serious life-threatening infections particularly in hospital settings. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements (unaudited) include the amounts of the Company and our wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated financial statements (unaudited) have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying condensed consolidated financial statements (unaudited) reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation. These condensed consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto for the preceding fiscal year included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on April 8, 2020. The condensed consolidated financial statements (unaudited) include the accounts of the Company and its two wholly‑owned subsidiaries, Aridis Biopharmaceuticals, Inc. and Aridis Pharmaceuticals, C.V. All intercompany balances and transactions have been eliminated in consolidation. The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported condensed consolidated balance sheet, net loss, stockholders’ equity (deficit) or cash flow activities. COVID-19 The COVID-19 outbreak in the United States has caused business disruption. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, and impact on the Company’s clinical trials, employees and vendors, all of which are uncertain and cannot be predicted. At this point, the extent to which COVID-19 may impact the Company’s financial condition or results of operations is uncertain. Going Concern The Company has had recurring losses from operations since inception and negative cash flows from operating activities during the six months ended June 30, 2020. Management expects to incur additional operating losses and negative cash flows from operations in the foreseeable future as the Company continues its product development programs. At June 30, 2020, the Company had cash and cash equivalents of $11.8 million. The Company's research and development expenses and resulting cash burn during the six months ended June 30, 2020, were largely due to costs associated with the Phase 3 study of AR-301 for the treatment of ventilator associated pneumonia (“VAP”) caused by the Staphylococcus aureus bacteria and the Phase 1/2 study of AR-501 for the treatment of chronic lung infections associated with cystic fibrosis. Current clinical development activities are focused on AR-301 and AR-501. We expect our expenses to continue to increase in connection with our ongoing development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, our therapeutic candidates. On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies, including by causing disruptions in the supply of the product candidates and the conduct of current and future clinical trials. Additionally, as the duration of the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact the Company’s short-term and long-term liquidity. These effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which the Company relies. The Company plans to fund its losses from operations through current cash on hand and future debt and equity financings which we may obtain through one or more public or private equity offerings, debt financings, government or other third-party funding, strategic alliances and licensing or collaboration arrangements. The Company may be unable to secure additional financing or other sources of funding on acceptable terms, or at all. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs or future commercialization efforts, which could adversely affect its future business prospects and its ability to continue as a going concern. The Company believes that its current available cash and cash equivalents will not be sufficient to fund its planned expenditures and meet the Company’s obligations for at least the one-year period following its condensed consolidated financial statement issuance date. The accompanying condensed consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities in their normal course of business. There is substantial doubt about the Company’s ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. These condensed consolidated financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Such estimates include those related to the evaluation of our ability to continue as a going concern, best estimate of standalone selling price of revenue deliverables, allowance for doubtful accounts, long-lived assets, classification of deferred revenue, income taxes, assumptions used in the Black-Scholes-Merton (“BSM”) model to calculate the fair value of stock-based compensation, deferred tax asset valuation allowances, preclinical study and clinical trial accruals. Actual results could differ from those estimates. Concentration of Risk Credit Risk The Company’s cash and cash equivalents are maintained at financial institutions in the United States of America. Deposits held by these institutions may exceed the amount of insurance provided on such deposits. Customer Risk For the three and six months ended June 30, 2020 and 2019, one customer accounted for 100% of total revenue. This customer is located in the United States. As of June 30, 2020, one customer accounted for 100% of accounts receivable. As of December 31, 2019, there were no accounts receivable. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of checking account and money market account balances. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company considers the credit worthiness of its customers but does not require collateral in advance of a sale. The Company evaluates collectability and maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio when necessary. The allowance is based on the Company’s best estimate of the amount of losses in the Company’s existing accounts receivable, which is based on customer creditworthiness, facts and circumstances specific to outstanding balances, and payment terms. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2020 and December 31, 2019, there were no allowances for doubtful accounts. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, generally between three and five years. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the condensed consolidated balance sheet and any resulting gain or loss is reflected in the condensed consolidated statement of operations in the period realized. Intangible Assets Intangible assets are recorded at cost and amortized over the estimated useful life of the asset. Intangible assets consist of licenses with various institutions whereby the Company has rights to use intangible property obtained from such institutions. Impairment of Long‑Lived Assets The Company reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future undiscounted net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment is measured by the excess of the carrying amount of the assets over fair value less the costs to sell the assets, generally determined using the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets as of June 30, 2020 and December 31, 2019. Revenue Recognition The Company recognizes revenue based on Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), which applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. See Note 6 for details of the development and license agreements. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company 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 at a point in time, or over time, as the entity satisfies performance obligations. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the accounting for customer arrangements, the Company must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above; b) the transaction price under step (iii) above; and c) the standalone selling price for each performance obligation identified in the contract for the allocation of the transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration should be included in the transaction price. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. In developing the standalone price for a performance obligation, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. The Company receives payments from its customers based on payment schedules established in each contract. The Company records any amounts received prior to satisfying the revenue recognition criteria as deferred revenue on its condensed consolidated balance sheets. Amounts recognized as revenue, but not yet received or invoiced are recorded within other receivables on the condensed consolidated balance sheet. Amounts are recorded as other receivables on the condensed consolidated balance sheet when our right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of a majority of the promised goods or services to the customer will be one year or less. Contract Assets The incremental costs of obtaining a contract under ASC 606 (i.e. costs that would not have been incurred if the contract had not been obtained) are recognized as an asset in the Company’s condensed consolidated balance sheets if the Company expects to recover them (see Note 6). Capitalized costs will be amortized to the respective expenses using a systematic basis that mirrors the pattern in which the Company transfers control of the goods and service to the customer. At each reporting date, the Company determines whether or not the capitalized costs to obtain a contract are impaired by comparing the carrying amount of the asset to the remaining amount of consideration that the Company received and expects to receive less the costs that relate to providing services under the relevant contract. For the six months ended June 30, 2020, there was no amortization of the contract assets and there have been no impairments as of June 30, 2020. Deferred Revenue Amounts received prior to satisfying the above revenue recognition criteria, or in which the Company has an unconditional right to payment, are recorded as deferred revenue in the Company’s condensed consolidated balance sheets. The Company has estimated the classification between current and noncurrent deferred revenue related to the respective license agreement within its condensed consolidated balance sheets at June 30, 2020 (see Note 6) and December 31, 2019. Research and Development Research and development costs are expensed to operations as incurred. Our research and development expenses consist primarily of: · salaries and related overhead expenses, which include stock-based compensation and benefits for personnel in research and development functions; · fees paid to consultants and contract research organizations, or CROs, including in connection with our preclinical studies and clinical trials and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial material management and statistical compilation and analyses; · costs related to acquiring and manufacturing clinical trial materials; · costs related to compliance with regulatory requirements; and · payments related to licensed products and technologies. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and clinical sites. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered or when the services are performed. Stock‑Based Compensation The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values, which the Company determines using the BSM option pricing model, on a straight-line basis over the requisite service period for the award. The Company accounts for forfeitures as they occur. The BSM option pricing model incorporates various highly sensitive assumptions, including the fair value of our common stock, expected volatility, expected term and risk-free interest rates. The weighted average expected life of options was calculated using the simplified method as prescribed by the SEC’s Staff Accounting Bulletin, Topic 14 (“SAB Topic 14”). This decision was based on the lack of relevant historical data due to our limited historical experience. In addition, due to our limited historical data, the estimated volatility also reflects the application of SAB Topic 14, incorporating the historical volatility of comparable companies whose stock prices are publicly available. The risk-free interest rate for the periods within the expected term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield was zero, as we have never declared or paid dividends and have no plans to do so in the foreseeable future. Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by the relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. At each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. Comprehensive Loss The Company has no items of comprehensive income or loss other than net loss. Loss Per Share Basic loss per share is calculated by dividing net loss for the period by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For the six months ended June 30, 2020 and 2019, there is no difference in the number of shares used to compute basic and diluted net loss per share due to the Company’s net loss position. The following tables presents the computation of the basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerator: (unaudited) (unaudited) (unaudited) (unaudited) Net loss (basic and diluted) $ (4,220) $ (8,383) $ (10,724) $ (16,446) Denominator: Weighted-average shares of common stock (basic and diluted) 8,923,374 8,107,290 8,921,383 8,106,484 Basic and diluted net loss per share $ (0.47) $ (1.03) $ (1.20) $ (2.03) The following potentially dilutive securities were excluded from the computation of diluted net loss per for the periods presented because including them would have been antidilutive: Three and Six Months Ended June 30, 2020 2019 (unaudited) (unaudited) Stock options to purchase common stock 1,517,301 1,250,145 Common stock warrants 1,733,322 1,966,930 3,250,623 3,217,075 JOBS Act Accounting Election The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to take advantage of this provision and, as a result, we will adopt the extended transition period available under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided under the JOBS Act. Recently Issued Accounting Pronouncements not yet adopted as of June 30, 2020 Accounting Standards Update 2016-02 and 2018-11 In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) . In July 2018, the FASB issued ASU 2018-10, Codification Improvements to ASC 842, Leases , which provides clarification to ASU 2016-02. These ASUs (collectively, the new lease standard) require an entity to recognize a lease liability and a right-of-use asset on the condensed consolidated balance sheet for leases with lease terms of more than twelve months. Lessor accounting is largely unchanged, while lessees will no longer be provided with a source of off-balance sheet financing. Initial guidance required the adoption of the new lease standard using the modified retrospective transition method. In July 2018, the FASB issued ASU 2018-11, Leases (ASC 842)—Targeted Improvements , which allows entities to elect an optional transition method where entities may continue to apply the existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative effect adjustment in the period of adoptions rather than in the earliest period presented. In March 2019, FASB issued ASU 2019-01, Codification improvements , which provides clarification on implementation issued associated with adopting ASU 2016-02. ASU 2019-01 enhances the guidance in ASC 842 surrounding the fair value of underlying assets for lessors, presentation of sales-type and direct financing leases on the condensed consolidated statement of cash flows, and transition guidance surrounding accounting changes and error corrections. This guidance was effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In November 2019, the FASB deferred the effective date for adopting the leasing standard updates for private companies, not-for-profit organizations, and smaller reporting companies. In June 2020, the FASB issued additional deferral guidance that defers the effective date of the leasing standard updates for one year for entities in the "all other" category and public not-for-profit entities that have not yet issued financial statements adopting the standard. The deferrals of the standard are intended to provide relief to nonpublic companies and not-for-profit entities that have had their implementation efforts delayed by the COVID-19 pandemic. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, the new leasing standard updates would be effective for the Company for the year ended December 31, 2022, and all interim periods within the year ended December 31, 2023. Early adoption is permitted. While the Company continues to review its current accounting policies and practices to identify potential differences that would result from applying the new guidance, the Company expects that its non-cancellable operating lease commitments with a term of more than twelve months will be subject to the new guidance and recognized as right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets upon adoption. The Company expects to elect transitional practical expedients such that the Company will not need to reassess whether contracts are leases and will retain lease classification and initial direct costs for leases existing prior to the adoption of the new lease standard. Accounting Standards Update 2016-13 In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (ASC 326) ”, which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. The new standard replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. For public business entities, ASU 2016-13 is effective for fiscal years and interim periods within those years beginning after December 15, 2020. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2016-13 is effective for the Company for the fiscal year ending on December 31, 2022, and all interim periods within. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-13 to have a material impact on the Company's condensed consolidated financial statements and disclosures. Accounting Standards Update 2019-12 In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes (ASC 740) ”, which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public entities, the ASU 2019-12 is effective for fiscal years and interim periods within those years beginning after December 15, 2020. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2019-12 is effective for the Company for the fiscal year ending on December 31, 2022, and all interim periods within. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. |
Fair Value Disclosure
Fair Value Disclosure | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosure | |
Fair Value Disclosure | 3. Fair Value Disclosure Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three‑level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying value of the Company's cash and cash equivalents, prepaid expenses and other current assets, other assets, accounts payable, accrued liabilities , and note payable approximate fair value due to the short-term nature of these items. As of June 30, 2020 and December 31, 2019, the Company did not have any assets or liabilities to be measured at fair value on its condensed consolidated balance sheets. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Components | |
Balance Sheet Components | 4. Balance Sheet Components Property and Equipment, net Property and equipment, net consist of the following (in thousands): June 30, December 31, 2020 2019 (unaudited) Lab equipment $ 1,808 $ 1,804 Computer equipment and software 25 25 Total property and equipment 1,833 1,829 Less: Accumulated depreciation (988) (823) Property and equipment, net $ 845 $ 1,006 Depreciation expense was approximately $83,000 and $82,000 for the three months ended June 30, 2020 and 2019, and approximately $165,000 and $163,000 for the six months ended June 30, 2020 and 2019, respectively. Intangible Assets, net Intangible assets, net consist of the following (in thousands): June 30, December 31, 2020 2019 (unaudited) Licenses $ 81 $ 81 Less: Accumulated amortization (51) (49) Intangible assets, net $ 30 $ 32 Amortization expense was approximately $1,000 and $1,000 for the three month periods ended June 30, 2020 and 2019, and approximately $2,000 and $3,000 for the six months ended June 30, 2020 and 2019, respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, December 31, 2020 2019 (unaudited) Research and development services $ 1,836 $ 2,709 Payroll related expenses 192 150 Professional services 147 115 Accrued liabilities $ 2,175 $ 2,974 |
Equity Method Investment
Equity Method Investment | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investment | |
Equity Method Investment | 5. Equity Method Investment On February 11, 2018, the Company entered into a joint venture agreement (the “JV Agreement”) with Shenzhen Hepalink Pharmaceutical Group Co., Ltd., a related party, principal shareholder of the Company, and a Chinese entity (“Hepalink”), for developing and commercializing products for infectious diseases. Under the terms of the JV Agreement, the Company contributed $1.0 million and the license of its technology relating to the Company’s AR-101 and AR-301 product candidates for use in the joint venture company named Shenzhen Arimab BioPharmaceuticals Co., Ltd. (the “JV Entity”) in the territories of the Republic of China, Hong Kong, Macau and Taiwan (the “Territory”) and initially owns 49% of the JV Entity. On August 6, 2018, the Company entered into an amendment to the JV Agreement with Hepalink whereby the Company agreed to additionally contribute an exclusive, revocable, and royalty-free right and license to its AR-105 product candidate in the Territory. Pursuant to the JV Agreement and the amendment, Hepalink initially owns 51% of the JV Entity and is obligated to contribute the equivalent of $7.2 million to the JV Entity. Additionally, Hepalink is obligated to make an additional equity investment of $10.8 million or more at the time of the JV Entity’s first future financing. It was agreed by the parties that the Company shall be reimbursed for certain legal and contract manufacturing expenses related to the clinical drug supply for a Phase 3 clinical study of AR-301 and the clinical drug supply for a clinical study of AR-105 (see Note 11). The Company accounted for its investment in the JV Entity as an equity method investment. The Company recorded the equity method investment at $1.0 million which represents the Company’s contribution into the JV Entity. The Company’s license contributed to the JV Entity was recorded at its carryover basis of $0. The Company recognized losses from the operations of the JV Entity of approximately $0 and $9,000 for the three and six months ended June 30, 2020 , respectively , and approximately $186,000 and $628,000 for the three and six months ended June 30, 2019, respectively. As of June 30, 2020 and December 31, 2019, the Company’s equity method investment in the JV Entity was approximately $0 and $9,000, respectively. |
Development and License Agreeme
Development and License Agreements | 6 Months Ended |
Jun. 30, 2020 | |
Development and License Agreements | |
Development and License Agreements | 6. Development and License Agreements Cystic Fibrosis Foundation Development Agreement In December 2016, the Company received an award from the Cystic Fibrosis Foundation (“CFF”), or the Development Program Letter Agreement (the “CFF Agreement”), for approximately $2.9 million. Under the CFF Agreement, CFF made an upfront payment of $200,000 and will make milestone payments to the Company as certain milestones defined in the agreement are met. The milestones relate to pre-clinical and clinical research activities. The agreement also specifies that we are obligated to cumulatively spend on the development program at least an equal amount as it receives from the non-profit organization. In the event that we do not spend as much as we received under the agreement, we are obligated to return any overage to the non-profit organization. In November 2018, the CF Foundation increased the award to approximately $7.5 million. The Company determined that the CFF Agreement was under the scope of ASC 606 and that the clinical research activities are considered one performance obligation. Hence, the entire estimated transaction price is allocated to this combined performance obligation and is recognized as revenue by measuring progress using the input (cost-to-cost) method, limited by the variable consideration attributed to the probable completion of certain milestones as defined in the CFF Agreement. The remaining milestones at June 30, 2020 of approximately $3.8 million related to clinical research activities are constrained and evaluated at every reporting period. For the three and six months ended June 30, 2020, the Company recognized $1.0 million in revenue from the CFF Agreement due to the achievement and recognition of a milestone during the second quarter of 2020. For the three and six months ended June 30, 2019, the Company recognized approximately $1.0 million in revenue from the CFF Agreement as the Company determined the achievement of a milestone was probable during the first quarter of 2019. The Company calculates the amount of revenue recognizable under ASC 606 from the CFF Agreement in any given period by accumulating the total related costs incurred under the CFF Agreement through the end of the reporting period using the input (cost-to-cost) method, and then determines the amount of revenue that can be recognized in the period based on a limit equal to the amount of accumulated milestones achieved or that were probable of being achieved through the end of the reporting period. Serum License Agreement In July 2019, the Company and Serum International B.V. (“SIBV”), an affiliate of Serum Institute of India Private Limited, entered into an option agreement which granted SIBV the option to license multiple programs from the Company and access the Company’s MabIgX® platform technology for asset identification and selection. The Company received an upfront cash payment of $5 million upon execution of this option agreement. In connection with the option agreement, SIBV made an equity investment whereby the Company issued 801,820 shares of its restricted common stock in a private placement to SIBV for total gross proceeds of $10 million. As a result of this transaction, SIBV and its affiliates, are considered related parties to the Company. In September 2019, the Company and Serum AMR Products (“SAMR”), a party under common ownership of SIBV, entered into a License, Development and Commercialization Agreement (the “License Agreement”). Under the License Agreement, the Company received upfront payments totaling $15 million, of which $5 million was received in July 2019 through the option agreement referred to above. Pursuant to the License Agreement, the Company granted to SAMR exclusive licenses, and rights to sublicense, certain patent rights and technology related know-how to the Company’s products AR-301, AR-105, AR-101 and AR-201 in certain territories as defined in the License Agreement (the “licenses and know-how”), and granted SAMR an option for the Company to provide research services using its MabIgX® platform technology for the identification of up to five (5) candidates including product development of these identified candidates and an exclusive license of these products in certain territories (the “research and development option”). Further, under the License Agreement the Company will provide development support related to the licensed products in order to assist SAMR in its efforts around the licensed products in SAMR’s authorized territories which will be performed under the direction of a Joint Steering Committee (“JSC”) which the Company will participate in (collectively “development support services”). In addition, under the License Agreement, SAMR was granted an exclusive manufacturing license option as the initial license granted above does not allow for manufacturing of certain products. This manufacturing option provides incremental rights related to these products beyond what is granted as part of the licensing discussed above (the “manufacturing rights option”). If a third party sublicensee of AR-301, AR-105 and AR-101 wishes to manufacture these products by itself for the territory for which it has a license from the Company, then the Company shall have the right to buy back the manufacturing rights for all territories outside of the certain territories by paying to SAMR $5 million. Given the equity investment by SIBV was negotiated in conjunction with the option agreement, which resulted in the execution of the License Agreement, all arrangements were evaluated as a single agreement and amounts were allocated to the elements of the arrangement based on their fair value. The Company recorded approximately $5.0 million, which represented the fair value of the restricted common stock issued of $5.4 million, net of $441,000 of issuance costs, to stockholders' equity within the Company's consolidated balance sheet. The Company allocated the net $4.6 million from the equity investment, after deducting commissions and offering costs, to the License Agreement. Therefore, the Company recorded approximately $19.6 million to deferred revenue based on the $15 million from upfront payments under the License Agreement and approximately $4.6 million from the equity allocation. The License Agreement is determined to be within the scope of ASC 606, as the transaction represents a contract with a customer where the participants function in a customer/vendor relationship and are not exposed equally to the risks and rewards of the activities contemplated under the License Agreement. Using the concepts of ASC 606, the Company identified the following performance obligations under the License Agreement: 1) the transfer of licenses of the intellectual property for AR-301, AR-101, AR-105 and AR-201, inclusive of the related technology know-how conveyance (referred to as the license and know-how above); and 2) the Company to deliver ongoing development support services related to the licensed products and the Company’s participation in the JSC (referred to as the development support services above); and identified the following material promises under the License Agreement: 3) SAMR was granted a research and development option of up to five identified product candidates for the Company to perform including specific development services (the research and development option referred to above); and 4) SAMR was granted an exclusive manufacturing license option which would provide for incremental manufacturing rights related to AR-301, AR-105 and AR-101 beyond what is granted in the License Agreement (the manufacturing rights option referred to above). The Company concluded that the performance obligations and material promises identified are separate and distinct from each other. The Company is also entitled to additional payments from SAMR of up to $42.5 million, conditioned upon the achievement of specified milestones related to completion of certain trials and regulatory approvals as defined in the License Agreement. Further, the Company may receive additional royalty-based payments from SAMR if certain sales levels on licensed products are achieved as defined in the License Agreement. The Company concluded that these milestones and royalty payments each contain a significant uncertainty associated with a future event. As such, these milestone and royalty payments are constrained at contract inception and are not included in the transaction price as the Company could not conclude that it is probable a significant reversal in the amount of cumulative revenue recognized will not occur surrounding these payments. At the end of each reporting period, the Company will update its assessment of whether the milestone and royalty payments are constrained by considering both the likelihood and magnitude of the potential revenue reversal. At June 30, 2020 and December 31, 2019, the Company performed an assessment and determined that these milestone and royalty payments are constrained. The Company determined that the transaction price under the License Agreement was $19.6 million, consisting of the $15 million from upfront payments under the License Agreement and approximately $4.6 million from the equity allocation as noted above, which was allocated among the performance obligations and material promises based on their respective related standalone selling prices. The Company allocated the $19.6 million transaction price to the following: approximately $14.5 million to the licenses and know-how; approximately $79,000 to the development support services; approximately $892,000 to the research and development option; and approximately $4.1 million to the manufacturing rights option. See further disclosure related to the License Agreement in the Company's audited consolidated financial statements and notes thereto for the preceding fiscal year included in the Company's Annual Report on Form 10-K filed with the United States SEC on April 8, 2020. The Company determined that the intellectual property licensed under the License Agreement represents functional intellectual property and it has significant standalone functionality and therefore should be recognized at a point in time upon satisfying the performance obligations. The Company will satisfy the performance obligations upon transfer of the licenses and know-how to SAMR, and expects to satisfy these performance obligations by June 30, 2021. The Company determined that no performance obligations or material promises were satisfied as of June 30, 2020 and December 31, 2019. Therefore, no revenue related to the License Agreement was recognized during the six months ended June 30, 2020 and the year ended December 31, 2019. The Company has recorded contract liabilities resulting from the License Agreement of approximately $14.7 million and $14.6 million to deferred revenue, current, and approximately $4.9 million and $5.0 million to deferred revenue, noncurrent, on its condensed consolidated balance sheets at June 30, 2020 and December 31, 2019, respectively. The Company capitalized a contract asset resulting from the License Agreement of approximately $2.1 million related to the incremental costs of obtaining the License Agreement on its condensed consolidated balance sheets, of which approximately $1.5 million and $1.5 million is classified as current, and approximately $520,000 and $526,000 is classified as noncurrent, as of June 30, 2020 and December 31, 2019, respectively. |
Paycheck Protection Program Loa
Paycheck Protection Program Loan | 6 Months Ended |
Jun. 30, 2020 | |
Paycheck Protection Program Loan | |
Paycheck Protection Program Loan | 7. Paycheck Protection Program Loan The Company applied for and received a loan, which is in the form of a note dated May 1, 2020, from Silicon Valley Bank (“SVB”) in the aggregate amount of approximately $715,000 (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest may be forgiven as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the covered period. The Loan is payable over two years at an interest rate of 1% per annum, with a deferral of payments for the first six months. The Company is required to pay principal and interest on the Loan in equal monthly installments beginning on December 1, 2020 and the outstanding interest balance accrued during the deferral period to be paid on the maturity date, which is May 1, 2022. The Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The Loan contain events of default (as defined in the PPP Loan agreement), in which the occurrence could result in the acceleration of all amounts due under the Loan. As of June 30, 2020, there were no events of default under the PPP Loan. The Company believes in good faith that it met the eligibility requirements for the PPP Loan and expects to meet the forgiveness criteria. Since the forgiveness of the Loan is outside the Company’s control, the Company has accounted for its PPP Loan as debt. If the PPP Loan is ultimately forgiven and the Company is legally released from being the Loan’s primary obligor, the extinguishment of the liability will be recognized in the Company’s consolidated statement of operations as a gain. While the criteria for loan forgiveness is stated in the Small Business Administration (“SBA”) loan forgiveness application, the SBA also indicated that it intends to issue more guidance which could affect the conditions for forgiveness. The Company will closely monitor the PPP Loan forgiveness criteria. At June 30, 2020, the Company recognized the entire amount of the PPP Loan proceeds of approximately $715,000 as a note payable, approximately $277,000 as current and $438,000 as noncurrent, in its condensed consolidated balance sheets. For the three and six months ended June 30, 2020, the Company recognized $1,000 in interest expense in its consolidated statements of operations. Future payments on the Loan as of June 30, 2020 are as follows (in thousands): Period ending, Six months ending December 31, 2020 $ 40 Year ending December 31, 2021 480 Year ending December 31, 2022 204 Total minimum payments 724 Less amount representing interest (9) Loan, gross $ 715 |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2020 | |
Warrants | |
Warrants | 8. Warrants Common Stock Warrant Expense On December 12, 2016, the Company issued 234,860 common stock warrants at an exercise price of $14.50 per share to its former Vice Chairman of the Board of Directors. The total fair value of the award was approximately $661,000 and was being amortized over a five-year vesting period. On August 13, 2019, this board member was not up for re-election at the annual shareholder’s meeting, therefore the vesting of the common stock warrants ceased on August 13, 2019 resulting in the cancellation of 109,601 unvested warrants. For the three and six months ended June 30, 2019, the Company recorded stock-based compensation expense of approximately $ 33,000 and $ 66,000 , respectively, related to these warrants. For the three and six months ended June 30, 2020, the Company did not record any stock-based compensation expense related to these warrants. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2020 | |
Common Stock | |
Common Stock | 9. Common Stock As of June 30, 2020 (unaudited), the Company had reserved the following common stock for future issuance: Shares reserved for exercise of outstanding warrants to purchase common stock 1,733,322 Shares reserved for exercise of outstanding options to purchase common stock 1,517,301 Shares reserved for issuance of future options 617,816 Total 3,868,439 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 10. Stock‑Based Compensation Equity Incentive Plan In May 2014, the Company adopted and the shareholders approved the 2014 Equity Incentive Plan (the 2014 Plan). Under the 2014 Plan, 233,722 shares of the Company’s common stock were initially reserved for the issuance of stock options to employees, directors, and consultants, under terms and provisions established by the Board of Directors. Under the terms of the 2014 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive stock options may not be less than 110% of fair market value, as determined by the Board of Directors. The terms of options granted under the 2014 Plan may not exceed ten years. In addition, the 2014 Plan contains an “evergreen” provision allowing for an annual increase in the number of shares of our common stock available for issuance under the 2014 Plan on the first day of each fiscal year beginning in fiscal year 2015. The annual increase in the number of shares shall be equal to the greater of: · 77,908 shares of our common stock; or · such number of shares as is equal to the number of shares sufficient to cause the option pool to equal 20% of the issued and outstanding common stock of the Company, provided, however, that if on any calculation date the number of shares equal to 20% of the total issued and outstanding shares of common stock is less than the number of shares of common stock available for issuance under the 2014 Plan, no change will be made to the aggregate number of shares of common stock issuable under the 2014 Plan for that year (such that the aggregate number of shares of common stock available for issuance under the 2014 Plan will never decrease). In June 2020, the adoption of an amendment to the 2014 Plan to eliminate the evergreen provision and setting the number of shares of common stock reserved for issuance thereunder to 2,183,692 shares was approved by the Company's stockholders. The additional shares reserved in the below stock option activity table includes 162,736 shares reserved pursuant to the evergreen provision and 400,000 shares reserved pursuant to the amendment to the 2014 Plan. Stock Options The number of shares, terms, and vesting periods are determined by the Company’s Board of Directors or a committee thereof on an option by option basis. Options generally vest ratably over service periods of up to four years and expire ten years from the date of grant. Stock option activity for the six months ended June 30, 2020 is represented in the following table: Options Outstanding Shares Weighted- Available Number of Average for Grant Shares Exercise Price Balances at December 31, 2019 196,982 1,380,312 $ 10.06 Additional shares reserved 562,736 — — Options granted (173,500) 173,500 5.67 Options exercised — (4,913) 2.89 Options cancelled 31,598 (31,598) 14.65 Balances at June 30, 2020 617,816 1,517,301 $ 9.48 The Company estimated the fair value of options using the BSM option valuation model. The fair value of options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of the options granted during the three and six months ended June 30, 2020 and 2019 were estimated using the following assumptions: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Expected term (in years) 6.00 6.25 6.00 6.25 Expected volatility 94% - 96% 95% 84% - 96% 78% - 95% Risk-free interest-rate 0.43% - 0.46% 2.06% 0.43% - 1.73% 2.06% - 2.67% Dividend yield 0% 0% 0% 0% During the three and six months ended June 30, 2020, the Company granted options to purchase 145,000 and 173,500 shares with a weighted-average grant date fair value of $4.83 and $4.63 per share, respectively. During the three and six months ended June 30, 2019, the Company granted options to purchase 40,000 and 383,875 shares with a weighted-average grant date fair value of $6.47 and $6.51 per share, respectively. There were no options exercised during the three months ended June 30, 2020 and 2019. There were 4,913 and 2,533 options exercised during the six months ended June 30, 2020 and 2019, respectively.The aggregate intrinsic value of options exercised during the six months ended June 30, 2020 and 2019 was approximately $17,000 and $15,000, respectively. Stock-Based Compensation The following table presents stock-based compensation expense related to stock options (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (unaudited) (unaudited) (unaudited) (unaudited) Research and development $ 130 $ 198 $ 275 $ 371 General and administrative 393 305 725 549 Total $ 523 $ 503 $ 1,000 $ 920 As of June 30, 2020, total unrecognized stock-based compensation expenses related to unvested stock options was approximately $4.4 million, which is expected to be recognized on a straight-line basis over a weighted-average period of approximately 2.38 years. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2020 | |
Related Parties | |
Related Parties | 11. Related Parties Joint Venture On February 11, 2018, the Company entered into a Joint Venture (“JV”) Agreement with Hepalink which is a related party and principal shareholder in the Company, pursuant to which the Company formed a JV Entity for developing and commercializing products for infectious diseases in the greater China territories. It was agreed by the parties that the Company shall be reimbursed for certain legal and contract manufacturing expenses related to the clinical drug supply for a Phase 3 clinical study of AR-301 and the clinical drug supply for a clinical study of AR-105. For the three months ended June 30, 2020 and 2019, the Company recorded approximately $112,000 and $ 232,000, respectively, and for the six months ended June 30, 2020 and 2019, the Company recorded approximately $184,000 and $935,000, respectively, as a reduction to operating expenses in the condensed consolidated statements of operations for amounts reimbursed to the Company by the JV Entity under this arrangement. As of June 30, 2020 and December 31, 2019, the Company recorded approximately $112,000 and $152,000, respectively, in other receivables on the condensed consolidated balance sheets for amounts owed to the Company by the JV Entity under this arrangement and the Company expects the amounts to be collectable and as a result, no reserve for uncollectability was established. Serum International B.V. In July 2019, the Company issued 801,820 shares of its restricted common stock in a private placement to Serum International B.V. (“SIBV”), an affiliate of Serum Institute of India Private Limited, for total gross proceeds of $10 million. As a result of this transaction, SIBV and its affiliates, are considered related parties to the Company. In September 2019, the Company and Serum AMR Products (“SAMR”), a party under common ownership of SIBV, entered into a License, Development and Commercialization Agreement (the “ License Agreement ”) (see Note 6). The Company determined that no performance obligations or material promises were satisfied as of June 30, 2020 and December 31, 2019. Therefore, no revenue related to the License Agreement was recognized during the six months ended June 30, 2020 and the year ended December 31, 2019. The Company has recorded contract liabilities resulting from the License Agreement of approximately $14.7 million and $14.6 million to deferred revenue, current, and approximately $4.9 million and $5.0 million to deferred revenue, noncurrent, on its condensed consolidated balance sheets at June 30, 2020 and December 31, 2019, respectively. The Company capitalized a contract asset resulting from the License Agreement of approximately $2.1 million related to the incremental costs of obtaining the License Agreement on its condensed consolidated balance sheets, of which approximately $1.5 million and $1.5 million is classified as current, and approximately $520,000 and $526,000 is classified as noncurrent, as of June 30, 2020 and December 31, 2019, respectively. Cytovance Biologics, Inc. On June 26, 2020, the Company entered into a Scope of Work for a Non-Exclusive License Agreement (the "Scope of Work") with Cytovance Biologics, Inc., a wholly owned subsidiary of Hepalink which is a related party and principal shareholder of the Company. Under the Scope of Work, Cytovance will execute and deliver to the Company a non-exclusive license to certain technology in a form to be mutually agreed upon. As of June 30, 2020, nothing has been executed or delivered to the Company under the Scope of Work. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Leases The Company leases office and lab space in San Jose, California under an operating lease arrangement which can be terminated at any time with 90 days’ notice. The Company recognizes rent expense as incurred. Rent expense was approximately $113,000 and $82,000 for the three months ended June 30, 2020 and 2019, respectively, and $215,000 and $163,000 for the six months ended June 30, 2020 and 2019, respectively. The Company is planning to move into new larger premises during the second half of 2020. On July 30, 2020, a complaint for declaratory relief was filed in Superior Court of California, City and County of San Francisco against the Company by its current landlord, San Jose Biocube II, LLC. The complaint seeks a declaratory judgment regarding whether the defendant's tenancy has been terminated and defendant can be evicted at the present time. The Company believes the complaint is without merit and intends to vigorously defend itself against it. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may incur charges in the future as a result of these indemnification obligations. License Agreements The Company has entered into various collaboration and licensing agreements that provide it with access to certain technology and patent rights. Under the terms of the agreements, the Company may be required to make milestone payments upon achievement of certain development and regulatory activities. See further disclosure related to these agreements in the Company's audited consolidated financial statements and notes thereto for the preceding fiscal year included in the Company's Annual Report on Form 10-K filed with the SEC on April 8, 2020. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of June 30, 2020 and December 31, 2019, no accruals have been made related to commitments and contingencies. From time to time, the Company may be involved in various legal proceedings, claims and litigation arising in the ordinary course of business. See below Legal Proceeding for a legal complaint filed during the six months ended June 30, 2020 and Subsequent Events Note 13 for legal complaint filed on July 30, 2020. As of December 31, 2019, there were no pending legal proceedings. Legal Proceeding A complaint was filed in February 2020 in the New York State Supreme Court against the Company by an investor who invested in the Company’s preferred stock in July 2017 prior to the Company’s IPO in August 2018. The complaint alleges, among other things, that the Company breached its contract and fiduciary duty, by not issuing additional securities to the investor as a result of the Company’s IPO. The plaintiff is asking for approximately $277,000 in compensatory damages. The parties are currently in fact discovery. The Company believes that the claims in this complaint are without merit and intends to defend vigorously against them. Grant Income The Company receives various grants that are subject to audit by the grantors or their representatives. Such audits could result in requests for reimbursement for expenditures disallowed under the terms of the grant; however, management believes that these disallowances, if any, would be immaterial. Cystic Fibrosis Foundation Agreement In December 2016, the Company received an award for up to $2.9 million from the CFF to advance research on potential drugs utilizing inhaled gallium citrate anti-infective. In November 2018, the CFF increased the award to $7.5 million. Under the award agreement, the CFF will make payments to the Company as certain milestones are met. The award agreement also contains a provision whereby if the Company spends less on developing a potential drug utilizing inhaled gallium citrate anti-infective than the Company actually receives under this award agreement, the Company will be required to return the excess portion of the award to the CFF. At the end of any reporting period, if the Company determines that the cumulative amount spent on this program is less than the cumulative cash received from the CFF, the Company will record the excess amount received as a liability. No liability related to this excess amount was recorded by the Company as of June 30, 2020 and December 31, 2019. In the event that development efforts are successful and the Company commercialized a drug from these related development efforts, the Company will be subject to paying to CFF a one-time amount over time equal to nine times the actual net award received from CFF. Such amount shall be paid in not more than five annual installments, as follows: within ninety days of the end of the calendar year in which the first commercial sale occurs, and within ninety days of the end of each subsequent calendar year until the net amount received from CFF is repaid. The Company shall pay 15% of net sales for that calendar year up to the amount of the net award received from CFF (except that in the fifth installment, if any, the Company shall pay the remaining unpaid portion of the net award received from CFF). In the event that Aridis licenses rights to the product in the field to a third party, sells the product, or consummates a change of control transaction prior to the first commercial sale, the Company shall pay to CFF an amount equal to 15% of the amounts received by Aridis and its shareholders in connection with such disposition (whether paid upfront or in accordance with subsequent milestones and whether paid in cash or property) up to nine times the actual net award received from CFF. The payment shall be made within sixty days after the closing of such a transaction. In the event that the development efforts are delayed, which result from events within the Company’s control, for more than one hundred eighty (180) consecutive days at any time before the first commercialization of the drug from the related development efforts, the CFF may provide an interruption notice to the Company. The Company then has thirty (30) days to respond to such notice. If the Company does not respond within thirty (30) days, an interruption license shall be effective. The interruption license to the CFF is an exclusive, worldwide license under the development program technology to manufacture, have manufactured, license, use, sell, offer to sell, and support the product in the field and includes financial conditions for both parties. None of these events have occurred as of June 30, 2020. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events On July 30, 2020, a complaint for declaratory relief was filed in Superior Court of California, City and County of San Francisco against the Company by its current landlord, San Jose Biocube II, LLC. The complaint seeks a declaratory judgment regarding whether the defendant's tenancy has been terminated and defendant can be evicted at the present time. The Company believes the complaint is without merit and intends to vigorously defend itself against it. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Such estimates include those related to the evaluation of our ability to continue as a going concern, best estimate of standalone selling price of revenue deliverables, allowance for doubtful accounts, long-lived assets, classification of deferred revenue, income taxes, assumptions used in the Black-Scholes-Merton (“BSM”) model to calculate the fair value of stock-based compensation, deferred tax asset valuation allowances, preclinical study and clinical trial accruals. Actual results could differ from those estimates. |
Concentration of Risk | Concentration of Risk Credit Risk The Company’s cash and cash equivalents are maintained at financial institutions in the United States of America. Deposits held by these institutions may exceed the amount of insurance provided on such deposits. Customer Risk For the three and six months ended June 30, 2020 and 2019, one customer accounted for 100% of total revenue. This customer is located in the United States. As of June 30, 2020, one customer accounted for 100% of accounts receivable. As of December 31, 2019, there were no accounts receivable. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of checking account and money market account balances. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company considers the credit worthiness of its customers but does not require collateral in advance of a sale. The Company evaluates collectability and maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio when necessary. The allowance is based on the Company’s best estimate of the amount of losses in the Company’s existing accounts receivable, which is based on customer creditworthiness, facts and circumstances specific to outstanding balances, and payment terms. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2020 and December 31, 2019, there were no allowances for doubtful accounts. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful lives of the assets, generally between three and five years. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the condensed consolidated balance sheet and any resulting gain or loss is reflected in the condensed consolidated statement of operations in the period realized. |
Intangible Assets | Intangible Assets Intangible assets are recorded at cost and amortized over the estimated useful life of the asset. Intangible assets consist of licenses with various institutions whereby the Company has rights to use intangible property obtained from such institutions. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets The Company reviews long‑lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future undiscounted net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment is measured by the excess of the carrying amount of the assets over fair value less the costs to sell the assets, generally determined using the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets as of June 30, 2020 and December 31, 2019. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue based on Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), which applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. See Note 6 for details of the development and license agreements. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company 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 at a point in time, or over time, as the entity satisfies performance obligations. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. As part of the accounting for customer arrangements, the Company must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above; b) the transaction price under step (iii) above; and c) the standalone selling price for each performance obligation identified in the contract for the allocation of the transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration should be included in the transaction price. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. In developing the standalone price for a performance obligation, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. The Company receives payments from its customers based on payment schedules established in each contract. The Company records any amounts received prior to satisfying the revenue recognition criteria as deferred revenue on its condensed consolidated balance sheets. Amounts recognized as revenue, but not yet received or invoiced are recorded within other receivables on the condensed consolidated balance sheet. Amounts are recorded as other receivables on the condensed consolidated balance sheet when our right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of a majority of the promised goods or services to the customer will be one year or less. Contract Assets The incremental costs of obtaining a contract under ASC 606 (i.e. costs that would not have been incurred if the contract had not been obtained) are recognized as an asset in the Company’s condensed consolidated balance sheets if the Company expects to recover them (see Note 6). Capitalized costs will be amortized to the respective expenses using a systematic basis that mirrors the pattern in which the Company transfers control of the goods and service to the customer. At each reporting date, the Company determines whether or not the capitalized costs to obtain a contract are impaired by comparing the carrying amount of the asset to the remaining amount of consideration that the Company received and expects to receive less the costs that relate to providing services under the relevant contract. For the six months ended June 30, 2020, there was no amortization of the contract assets and there have been no impairments as of June 30, 2020. Deferred Revenue Amounts received prior to satisfying the above revenue recognition criteria, or in which the Company has an unconditional right to payment, are recorded as deferred revenue in the Company’s condensed consolidated balance sheets. The Company has estimated the classification between current and noncurrent deferred revenue related to the respective license agreement within its condensed consolidated balance sheets at June 30, 2020 (see Note 6) and December 31, 2019. |
Research and Development | Research and Development Research and development costs are expensed to operations as incurred. Our research and development expenses consist primarily of: · salaries and related overhead expenses, which include stock-based compensation and benefits for personnel in research and development functions; · fees paid to consultants and contract research organizations, or CROs, including in connection with our preclinical studies and clinical trials and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial material management and statistical compilation and analyses; · costs related to acquiring and manufacturing clinical trial materials; · costs related to compliance with regulatory requirements; and · payments related to licensed products and technologies. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and clinical sites. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered or when the services are performed. |
Stock-Based Compensation | Stock‑Based Compensation The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values, which the Company determines using the BSM option pricing model, on a straight-line basis over the requisite service period for the award. The Company accounts for forfeitures as they occur. The BSM option pricing model incorporates various highly sensitive assumptions, including the fair value of our common stock, expected volatility, expected term and risk-free interest rates. The weighted average expected life of options was calculated using the simplified method as prescribed by the SEC’s Staff Accounting Bulletin, Topic 14 (“SAB Topic 14”). This decision was based on the lack of relevant historical data due to our limited historical experience. In addition, due to our limited historical data, the estimated volatility also reflects the application of SAB Topic 14, incorporating the historical volatility of comparable companies whose stock prices are publicly available. The risk-free interest rate for the periods within the expected term of the option is based on the U.S. Treasury yield in effect at the time of grant. The dividend yield was zero, as we have never declared or paid dividends and have no plans to do so in the foreseeable future. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by the relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. At each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. |
Comprehensive Loss | Comprehensive Loss The Company has no items of comprehensive income or loss other than net loss. |
Loss Per Share | Loss Per Share Basic loss per share is calculated by dividing net loss for the period by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For the six months ended June 30, 2020 and 2019, there is no difference in the number of shares used to compute basic and diluted net loss per share due to the Company’s net loss position. The following tables presents the computation of the basic and diluted net loss per share (in thousands, except share and per share data): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerator: (unaudited) (unaudited) (unaudited) (unaudited) Net loss (basic and diluted) $ (4,220) $ (8,383) $ (10,724) $ (16,446) Denominator: Weighted-average shares of common stock (basic and diluted) 8,923,374 8,107,290 8,921,383 8,106,484 Basic and diluted net loss per share $ (0.47) $ (1.03) $ (1.20) $ (2.03) The following potentially dilutive securities were excluded from the computation of diluted net loss per for the periods presented because including them would have been antidilutive: Three and Six Months Ended June 30, 2020 2019 (unaudited) (unaudited) Stock options to purchase common stock 1,517,301 1,250,145 Common stock warrants 1,733,322 1,966,930 3,250,623 3,217,075 |
JOBS Act Accounting Election | JOBS Act Accounting Election The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to take advantage of this provision and, as a result, we will adopt the extended transition period available under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided under the JOBS Act. |
Recently Issued Accounting Pronouncements not yet adopted as of June 30, 2020 | Recently Issued Accounting Pronouncements not yet adopted as of June 30, 2020 Accounting Standards Update 2016-02 and 2018-11 In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) . In July 2018, the FASB issued ASU 2018-10, Codification Improvements to ASC 842, Leases , which provides clarification to ASU 2016-02. These ASUs (collectively, the new lease standard) require an entity to recognize a lease liability and a right-of-use asset on the condensed consolidated balance sheet for leases with lease terms of more than twelve months. Lessor accounting is largely unchanged, while lessees will no longer be provided with a source of off-balance sheet financing. Initial guidance required the adoption of the new lease standard using the modified retrospective transition method. In July 2018, the FASB issued ASU 2018-11, Leases (ASC 842)—Targeted Improvements , which allows entities to elect an optional transition method where entities may continue to apply the existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative effect adjustment in the period of adoptions rather than in the earliest period presented. In March 2019, FASB issued ASU 2019-01, Codification improvements , which provides clarification on implementation issued associated with adopting ASU 2016-02. ASU 2019-01 enhances the guidance in ASC 842 surrounding the fair value of underlying assets for lessors, presentation of sales-type and direct financing leases on the condensed consolidated statement of cash flows, and transition guidance surrounding accounting changes and error corrections. This guidance was effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In November 2019, the FASB deferred the effective date for adopting the leasing standard updates for private companies, not-for-profit organizations, and smaller reporting companies. In June 2020, the FASB issued additional deferral guidance that defers the effective date of the leasing standard updates for one year for entities in the "all other" category and public not-for-profit entities that have not yet issued financial statements adopting the standard. The deferrals of the standard are intended to provide relief to nonpublic companies and not-for-profit entities that have had their implementation efforts delayed by the COVID-19 pandemic. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, the new leasing standard updates would be effective for the Company for the year ended December 31, 2022, and all interim periods within the year ended December 31, 2023. Early adoption is permitted. While the Company continues to review its current accounting policies and practices to identify potential differences that would result from applying the new guidance, the Company expects that its non-cancellable operating lease commitments with a term of more than twelve months will be subject to the new guidance and recognized as right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets upon adoption. The Company expects to elect transitional practical expedients such that the Company will not need to reassess whether contracts are leases and will retain lease classification and initial direct costs for leases existing prior to the adoption of the new lease standard. Accounting Standards Update 2016-13 In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (ASC 326) ”, which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. The new standard replaces the existing incurred loss impairment methodology with a methodology that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. For public business entities, ASU 2016-13 is effective for fiscal years and interim periods within those years beginning after December 15, 2020. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2016-13 is effective for the Company for the fiscal year ending on December 31, 2022, and all interim periods within. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-13 to have a material impact on the Company's condensed consolidated financial statements and disclosures. Accounting Standards Update 2019-12 In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes (ASC 740) ”, which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies U.S. GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public entities, the ASU 2019-12 is effective for fiscal years and interim periods within those years beginning after December 15, 2020. As a result of the Company having elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act, ASU 2019-12 is effective for the Company for the fiscal year ending on December 31, 2022, and all interim periods within. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of computation of the basic and diluted net loss per share | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerator: (unaudited) (unaudited) (unaudited) (unaudited) Net loss (basic and diluted) $ (4,220) $ (8,383) $ (10,724) $ (16,446) Denominator: Weighted-average shares of common stock (basic and diluted) 8,923,374 8,107,290 8,921,383 8,106,484 Basic and diluted net loss per share $ (0.47) $ (1.03) $ (1.20) $ (2.03) |
Schedule of potentially dilutive securities were excluded from the computation of diluted net loss per share | Three and Six Months Ended June 30, 2020 2019 (unaudited) (unaudited) Stock options to purchase common stock 1,517,301 1,250,145 Common stock warrants 1,733,322 1,966,930 3,250,623 3,217,075 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Components | |
Schedule of property and equipment, net | Property and equipment, net consist of the following (in thousands): June 30, December 31, 2020 2019 (unaudited) Lab equipment $ 1,808 $ 1,804 Computer equipment and software 25 25 Total property and equipment 1,833 1,829 Less: Accumulated depreciation (988) (823) Property and equipment, net $ 845 $ 1,006 |
Schedule of intangible assets, net | Intangible assets, net consist of the following (in thousands): June 30, December 31, 2020 2019 (unaudited) Licenses $ 81 $ 81 Less: Accumulated amortization (51) (49) Intangible assets, net $ 30 $ 32 |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): June 30, December 31, 2020 2019 (unaudited) Research and development services $ 1,836 $ 2,709 Payroll related expenses 192 150 Professional services 147 115 Accrued liabilities $ 2,175 $ 2,974 |
Paycheck Protection Program L_2
Paycheck Protection Program Loan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Paycheck Protection Program Loan | |
Schedule of future payments on the loan | Future payments on the Loan as of June 30, 2020 are as follows (in thousands): Period ending, Six months ending December 31, 2020 $ 40 Year ending December 31, 2021 480 Year ending December 31, 2022 204 Total minimum payments 724 Less amount representing interest (9) Loan, gross $ 715 |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Common Stock | |
Schedule of company reserved common stock for future issuance | As of June 30, 2020 (unaudited), the Company had reserved the following common stock for future issuance: Shares reserved for exercise of outstanding warrants to purchase common stock 1,733,322 Shares reserved for exercise of outstanding options to purchase common stock 1,517,301 Shares reserved for issuance of future options 617,816 Total 3,868,439 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation | |
Schedule of stock option activity | Options Outstanding Shares Weighted- Available Number of Average for Grant Shares Exercise Price Balances at December 31, 2019 196,982 1,380,312 $ 10.06 Additional shares reserved 562,736 — — Options granted (173,500) 173,500 5.67 Options exercised — (4,913) 2.89 Options cancelled 31,598 (31,598) 14.65 Balances at June 30, 2020 617,816 1,517,301 $ 9.48 |
Schedule of fair value of the options granted estimated using assumptions | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Expected term (in years) 6.00 6.25 6.00 6.25 Expected volatility 94% - 96% 95% 84% - 96% 78% - 95% Risk-free interest-rate 0.43% - 0.46% 2.06% 0.43% - 1.73% 2.06% - 2.67% Dividend yield 0% 0% 0% 0% |
Schedule of stock-based compensation expense related to stock options | The following table presents stock-based compensation expense related to stock options (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 (unaudited) (unaudited) (unaudited) (unaudited) Research and development $ 130 $ 198 $ 275 $ 371 General and administrative 393 305 725 549 Total $ 523 $ 503 $ 1,000 $ 920 |
Description of Business and B_2
Description of Business and Basis of Presentation - Basis of Presentation and Consolidation (Details) | 6 Months Ended |
Jun. 30, 2020segmentsubsidiary | |
Description of Business and Basis of Presentation | |
Subsidiaries (in subsidiaries) | subsidiary | 2 |
Operating segments (in segments) | 1 |
Reporting segments (in segments) | 1 |
Description of Business and B_3
Description of Business and Basis of Presentation - Going Concern (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Description of Business and Basis of Presentation | ||
Cash and cash equivalents | $ 11,812 | $ 20,897 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Concentration of Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |||||
Accounts receivable | $ 1,000 | $ 1,000 | $ 0 | ||
Contract revenue | Customer 1 | Customer risk | |||||
Summary of Significant Accounting Policies | |||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Accounts receivable | Customer 1 | Customer risk | |||||
Summary of Significant Accounting Policies | |||||
Concentration risk percentage | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment and Impairment of Long-Lived Assets (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Minimum | |
Property and Equipment, net | |
Estimated useful life (in years) | 3 years |
Maximum | |
Property and Equipment, net | |
Estimated useful life (in years) | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Impairment of Long-Lived Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Impairments of long-lived assets | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Summary of Significant Accounting Policies | |
Amortization of contract assets | $ 0 |
Impairments of contract assets | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Common Stock for future issuance | ||||
Dividend yield (in percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Options | ||||
Common Stock for future issuance | ||||
Dividend yield (in percent) | 0.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||
Net loss (basic and diluted) | $ (4,220) | $ (8,383) | $ (10,724) | $ (16,446) |
Denominator: | ||||
Weighted-average shares of common stock (basic and diluted) | 8,923,374 | 8,107,290 | 8,921,383 | 8,106,484 |
Basic and diluted net loss per share | $ (0.47) | $ (1.03) | $ (1.20) | $ (2.03) |
Potentially dilutive securities excluded from computation of diluted net loss per share | 3,250,623 | 3,217,075 | ||
Options | ||||
Denominator: | ||||
Potentially dilutive securities excluded from computation of diluted net loss per share | 1,517,301 | 1,250,145 | ||
Warrants | Common Stock | ||||
Denominator: | ||||
Potentially dilutive securities excluded from computation of diluted net loss per share | 1,733,322 | 1,966,930 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property and Equipment, net | |||||
Total property and equipment | $ 1,833,000 | $ 1,833,000 | $ 1,829,000 | ||
Less: Accumulated depreciation | (988,000) | (988,000) | (823,000) | ||
Property and equipment, net | 845,000 | 845,000 | 1,006,000 | ||
Depreciation expense | 83,000 | $ 82,000 | 165,000 | $ 163,000 | |
Lab equipment | |||||
Property and Equipment, net | |||||
Total property and equipment | 1,808,000 | 1,808,000 | 1,804,000 | ||
Computer equipment and software | |||||
Property and Equipment, net | |||||
Total property and equipment | $ 25,000 | $ 25,000 | $ 25,000 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible Assets, net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Intangible Assets, net | |||||
Less: Accumulated amortization | $ (51,000) | $ (51,000) | $ (49,000) | ||
Intangible assets, net | 30,000 | 30,000 | 32,000 | ||
Amortization of Intangible Assets | 1,000 | $ 1,000 | 2,000 | $ 3,000 | |
License Agreement | |||||
Intangible Assets, net | |||||
Intangible assets, gross | $ 81,000 | $ 81,000 | $ 81,000 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities | ||
Research and development services | $ 1,836 | $ 2,709 |
Payroll related expenses | 192 | 150 |
Professional services | 147 | 115 |
Accrued liabilities | $ 2,175 | $ 2,974 |
Equity Method Investment (Detai
Equity Method Investment (Details) - USD ($) | Feb. 11, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Aug. 06, 2018 |
Equity Method Investment | |||||||
Loss from equity method investment | $ 186,000 | $ 9,000 | $ 628,000 | ||||
Equity method investment | $ 9,000 | ||||||
JV Entity | |||||||
Equity Method Investment | |||||||
Contribution into the JV Entity | $ 1,000,000 | ||||||
Loss from equity method investment | $ 0 | $ 186,000 | 9,000 | $ 628,000 | |||
Carryover basis of license contributed | 0 | 0 | |||||
Equity method investment | $ 1,000,000 | $ 0 | $ 0 | $ 9,000 | |||
SABC | JV Entity | |||||||
Equity Method Investment | |||||||
Percentage of ownership interest | 49.00% | ||||||
Hepalink | JV Entity | |||||||
Equity Method Investment | |||||||
Contribution obligated | $ 7,200,000 | ||||||
Percentage of ownership interest | 51.00% | ||||||
Minimum amount obligated to make an additional equity investment at first future financing | $ 10,800,000 |
Development and License Agree_2
Development and License Agreements - Cystic Fibrosis Foundation Development Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2016 | Dec. 31, 2019 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||||
Deferred revenue, current | $ 14,661,000 | $ 14,661,000 | $ 14,602,000 | ||||
Grant revenue | 1,000,000 | 1,000,000 | $ 1,022,000 | ||||
CFF | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||||
Collaboration revenue | $ 2,900,000 | ||||||
Grant revenue | 1,000,000 | $ 1,000,000 | 1,000,000 | $ 1,000,000 | |||
Amount of increase in award | $ 7,500,000 | ||||||
Remaining milestones related to clinical research activities | $ 3,800,000 | $ 3,800,000 | |||||
CFF | Upfront payment | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||||
Deferred revenue, current | $ 200,000 |
Development and License Agree_3
Development and License Agreements - Serum License Agreement (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Jul. 31, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue, current | $ 14,661,000 | $ 14,602,000 | |||
Deferred revenue, noncurrent | 4,941,000 | 5,000,000 | |||
Capitalized contract cost, Current | 1,543,000 | 1,537,000 | |||
Capitalized contract cost, Noncurrent | 520,000 | 526,000 | |||
License Agreement | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Total revenue | 0 | 0 | |||
Licenses and know-how | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue | 14,500,000 | ||||
Development support services | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue | 79,000 | ||||
Research and Development Option | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue | 892,000 | ||||
Manufacturing rights option | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue | 4,100,000 | ||||
License Agreement with SIBV | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Upfront payment received | $ 15,000,000 | $ 5,000,000 | |||
License Agreement with SAMR | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Buy back manufacturing rights | $ 5,000,000 | ||||
Maximum additional payments entitled | 42,500,000 | ||||
License Agreement and Option Agreement | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue | 19,600,000 | ||||
Deferred revenue based on upfront payments | 15,000,000 | ||||
Deferred revenue from equity allocation | 4,600,000 | ||||
Serum International B.V. ("SIBV") | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Issuance of common stock (in shares) | 801,820 | ||||
Issuance of common stock | $ 10,000,000 | ||||
Deferred revenue | 19,600,000 | ||||
Serum International B.V. ("SIBV") | License Agreement | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Capitalized contract costs | 2,100,000 | 2,100,000 | |||
Deferred revenue, current | 14,700,000 | 14,600,000 | $ 14,600,000 | ||
Deferred revenue, noncurrent | 4,900,000 | 5,000,000 | |||
Capitalized incremental costs of obtaining the License Agreement | 2,100,000 | 2,100,000 | |||
Capitalized contract cost, Current | 1,500,000 | 1,500,000 | |||
Capitalized contract cost, Noncurrent | 520,000 | 526,000 | |||
Serum International B.V. ("SIBV") | License Agreement with SIBV | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Deferred revenue | 19,600,000 | ||||
Deferred revenue based on upfront payments | 15,000,000 | ||||
Deferred revenue from equity allocation | 4,600,000 | ||||
Issuance costs from equity allocation | 4,600,000 | ||||
Deferred revenue, noncurrent | $ 5,000,000 | ||||
Capitalized contract cost, Noncurrent | $ 526,000 | ||||
Restricted common stock | Serum International B.V. ("SIBV") | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Issuance of common stock (in shares) | 801,820 | ||||
Issuance of common stock | $ 10,000,000 | ||||
Proceeds from sale of restricted common stock and upfront payment | 5,400,000 | ||||
Fair value of net proceeds | 441,000 | ||||
Payments of Stock Issuance Costs | $ 5,000,000 |
Paycheck Protection Program L_3
Paycheck Protection Program Loan (Details) - USD ($) | May 01, 2020 | Jun. 30, 2020 | Jun. 30, 2020 |
Debt Instrument [Line Items] | |||
Note payable, current | $ 277,000 | $ 277,000 | |
Note payable, noncurrent | 438,000 | 438,000 | |
Paycheck Protection Program (the "PPP") | |||
Debt Instrument [Line Items] | |||
Aggregate loan amount granted | $ 715,000 | ||
Debt instrument maturity period | 2 years | ||
Effective interest rate | 1.00% | ||
Note payable | 715,000 | 715,000 | |
Note payable, current | 277,000 | 277,000 | |
Note payable, noncurrent | 438,000 | 438,000 | |
Interest expense | $ 1,000 | $ 1,000 |
Paycheck Protection Program L_4
Paycheck Protection Program Loan - Future payments on the loan (Details) - Paycheck Protection Program (the "PPP") $ in Thousands | Jun. 30, 2020USD ($) |
Debt Instrument [Line Items] | |
Six months ending December 31, 2020 | $ 40 |
Year ending December 31, 2021 | 480 |
Year ending December 31, 2022 | 204 |
Total minimum payments | 724 |
Less amount representing interest | (9) |
Loan, gross | $ 715 |
Warrants (Details)
Warrants (Details) - USD ($) | Dec. 12, 2016 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 13, 2019 |
Warrants to Purchase Common Stock | |||||
Share-based Compensation | $ 1,000,000 | $ 986,000 | |||
Number of unvested warrants cancelled | 109,601 | ||||
Performance Award | |||||
Warrants to Purchase Common Stock | |||||
Number of common stock warrants issued | 234,860 | ||||
Warrants exercise price | $ 14.50 | ||||
Total fair value of warrants | $ 661,000 | ||||
Share-based Compensation | $ 33,000 | $ 66,000 | |||
Vesting period | 5 years |
Common Stock (Details)
Common Stock (Details) | Jun. 30, 2020shares |
Common Stock for future issuance | |
Total common stock for future issuance | 3,868,439 |
Options | |
Common Stock for future issuance | |
Total common stock for future issuance | 1,517,301 |
Future Options | |
Common Stock for future issuance | |
Total common stock for future issuance | 617,816 |
Warrants | |
Common Stock for future issuance | |
Total common stock for future issuance | 1,733,322 |
Stock-Based Compensation - (Det
Stock-Based Compensation - (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
May 31, 2014 | Jun. 30, 2020 | |
Stock-Based Compensation | ||
Reserved for issuance (in shares) | 233,722 | 2,183,692 |
Voting rights of all classes of stock (in percent) | 10.00% | |
Exercise price for incentive stock options to the percentage of fair market value | 110.00% | |
Annual increase in the number of shares to the shares of common stock | 77,908 | 562,736 |
Annual increase in the number of shares to the percentage of the issued and outstanding common stock | 20.00% | |
Amendment To The 2014 Plan | ||
Stock-Based Compensation | ||
Annual increase in the number of shares to the shares of common stock | 400,000 | |
Evergreen Provision | ||
Stock-Based Compensation | ||
Annual increase in the number of shares to the shares of common stock | 162,736 | |
Options | ||
Stock-Based Compensation | ||
Unrecognized stock-based compensation expenses related to stock options | $ 4.4 | |
Unrecognized stock-based compensation expenses expected to be recognized | 2 years 4 months 17 days | |
Vesting period (in years) | 4 years | |
Expiration period (in years) | 10 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May 31, 2014 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Shares Available for Grant | |||||
Beginning of the period (in shares) | 196,982 | ||||
Additional shares reserved (in shares) | 77,908 | 562,736 | |||
Options granted (in shares) | (145,000) | (40,000) | (173,500) | (383,875) | |
Options exercised (in shares) | 0 | 0 | 4,913 | 2,533 | |
Options cancelled (in shares) | 31,598 | ||||
End of the period (in shares) | 617,816 | 617,816 | |||
Number of options | |||||
Number of Shares, beginning of the period (in shares) | 1,380,312 | ||||
Number of Shares, Stock option granted | 145,000 | 40,000 | 173,500 | 383,875 | |
Number of Shares, Options exercised (in shares) | (4,913) | ||||
Number of Shares, Options cancelled (in shares) | (31,598) | ||||
Number of Shares, end of the period (in shares) | 1,517,301 | 1,517,301 | |||
Weighted average exercise price | |||||
Weighted-Average Exercise Price, beginning of the period (in dollars per share) | $ 10.06 | ||||
Weighted-Average Exercise Price, Options granted (in dollars per share) | 5.67 | ||||
Weighted-Average Exercise Price, Options exercised (in dollars per share) | 2.89 | ||||
Weighted-Average Exercise Price, Options cancelled (in dollars per share) | 14.65 | ||||
Weighted-Average Exercise Price, end of the period (in dollars per share) | $ 9.48 | $ 9.48 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair value of the options granted, estimated using assumptions | ||||
Expected term (in years) | 6 years | 6 years 3 months | 6 years | 6 years 3 months |
Expected volatility, minimum | 94.00% | 84.00% | 78.00% | |
Expected volatility, maximum | 96.00% | 96.00% | 95.00% | |
Expected volatility | 95.00% | |||
Risk-free interest-rate, minimum | 0.43% | 0.43% | 2.06% | |
Risk-free interest-rate, maximum | 0.46% | 1.73% | 2.67% | |
Risk-free interest-rate | 2.06% | |||
Dividend yield (in percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Granted (in shares) | 145,000 | 40,000 | 173,500 | 383,875 |
Weighted-average grant date fair value (in dollars per share) | $ 4.83 | $ 6.47 | $ 4.63 | $ 6.51 |
Aggregate intrinsic value | $ 17,000 | $ 15,000 | ||
Options | ||||
Fair value of the options granted, estimated using assumptions | ||||
Dividend yield (in percent) | 0.00% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 523 | $ 503 | $ 1,000 | $ 920 |
Research and development | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | 130 | 198 | 275 | 371 |
General and administrative | ||||
Stock-Based Compensation | ||||
Total stock-based compensation expense | $ 393 | $ 305 | $ 725 | $ 549 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May 31, 2014 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stock-Based Compensation | |||||
Reserved for issuance (in shares) | 233,722 | 2,183,692 | 2,183,692 | ||
Voting rights of all classes of stock (in percent) | 10.00% | ||||
Exercise price for incentive stock options to the percentage of fair market value | 110.00% | ||||
Annual increase in the number of shares to the shares of common stock | 77,908 | 562,736 | |||
Annual increase in the number of shares to the percentage of the issued and outstanding common stock | 20.00% | ||||
Number of Shares, Stock option granted | 145,000 | 40,000 | 173,500 | 383,875 | |
Weighted-average grant date fair value (in dollars per share) | $ 4.83 | $ 6.47 | $ 4.63 | $ 6.51 | |
Weighted-average exercise price of stock option granted | $ 5.67 | ||||
Aggregate intrinsic value | $ 17,000 | $ 15,000 | |||
Stock-based compensation expense | $ 523,000 | $ 503,000 | 1,000,000 | 920,000 | |
Stock-based compensation expense | $ 1,000,000 | $ 986,000 | |||
Options exercised (in shares) | 0 | 0 | 4,913 | 2,533 | |
Options | |||||
Stock-Based Compensation | |||||
Vesting period (in years) | 4 years | ||||
Expiration period (in years) | 10 years | ||||
Unrecognized stock-based compensation expenses expected to be recognized | 2 years 4 months 17 days |
Related Parties (Details)
Related Parties (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Related parties | ||||||
Deferred revenue, current | $ 14,661,000 | $ 14,661,000 | $ 14,602,000 | |||
Deferred revenue, noncurrent | 4,941,000 | 4,941,000 | 5,000,000 | |||
Capitalized contract cost, Current | 1,543,000 | 1,543,000 | 1,537,000 | |||
Capitalized contract cost, Noncurrent | 520,000 | 520,000 | 526,000 | |||
License Agreement | ||||||
Related parties | ||||||
Revenue | 0 | 0 | ||||
Shenzen Hepalink Pharmaceutical Group Co., Ltd.("Hepalink") | ||||||
Related parties | ||||||
Reduction to operating expenses on reimbursed to JV entity | 112,000 | $ 232,000 | 184,000 | $ 935,000 | ||
Serum International B.V. ("SIBV") | ||||||
Related parties | ||||||
Issuance of common stock (in shares) | 801,820 | |||||
Issuance of stock | $ 10,000,000 | |||||
Serum International B.V. ("SIBV") | License Agreement | ||||||
Related parties | ||||||
Deferred revenue, current | 14,700,000 | $ 14,600,000 | 14,700,000 | $ 14,600,000 | 14,600,000 | |
Deferred revenue, noncurrent | 4,900,000 | 4,900,000 | 5,000,000 | |||
Capitalized contract costs | 2,100,000 | 2,100,000 | 2,100,000 | |||
Capitalized contract cost, Current | 1,500,000 | 1,500,000 | 1,500,000 | |||
Capitalized contract cost, Noncurrent | 520,000 | 520,000 | 526,000 | |||
Other receivables | Shenzen Hepalink Pharmaceutical Group Co., Ltd.("Hepalink") | ||||||
Related parties | ||||||
Outstanding receivable for reimbursable expenses | $ 112,000 | $ 112,000 | $ 152,000 |
Commitments and Contingencies -
Commitments and Contingencies - Leases and Contingencies (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Feb. 29, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)item | |
Commitments and Contingencies | ||||||
Notice period for termination of lease | 90 days | |||||
Rent expense | $ 113,000 | $ 82,000 | $ 215,000 | $ 163,000 | ||
Accruals for commitment and contingencies | ||||||
Number of pending legal proceedings | item | 0 | |||||
Compensatory damages sought | $ 277,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Cystic Fibrosis Foundation Agreement and Joint Venture Agreement (Details) - CF Foundation | 1 Months Ended | |||
Dec. 31, 2016USD ($)item | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 30, 2018USD ($) | |
Cystic Fibrosis Foundation Agreement | ||||
Amount of award received for advance research on potential drugs | $ 2,900,000 | $ 7,500,000 | ||
Excess amount recorded as liability | $ 0 | $ 0 | ||
Period for payment of annual installments | 90 days | |||
Maximum percentage of awarded amount of net sales | 15.00% | |||
Payment of amount received in connection with Disposition Transaction (as a percent) | 15.00% | |||
Number of multiplication on awarded amount payable if change of control prior to completion of the first commercial sale | item | 9 | |||
Maximum | ||||
Cystic Fibrosis Foundation Agreement | ||||
Number of annual installments for repayment of award | 5 |