Document_and_Entity_Informatio
Document and Entity Information Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Flex Pharma, Inc. | |
Entity Central Index Key | 1615219 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q1 | |
Amendment Flag | FALSE | |
Entity Common Stock, Shares Outstanding | 17,934,831 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $110,522,454 | $33,854,153 |
Prepaid expenses and other current assets | 1,054,674 | 370,396 |
Total current assets | 111,577,128 | 34,224,549 |
Property and equipment, net | 104,516 | 85,144 |
Deferred IPO issuance costs | 0 | 1,074,794 |
Deferred tax assets | 50,103 | 50,103 |
Other assets | 85,200 | 50,000 |
Restricted cash | 126,835 | 126,808 |
Total assets | 111,943,782 | 35,611,398 |
Current liabilities: | ||
Accounts payable | 567,893 | 578,653 |
Accrued expenses and other current liabilities | 777,524 | 416,524 |
Deferred tax liabilities | 50,103 | 50,103 |
Deferred rent, current portion | 21,881 | 21,881 |
Total current liabilities | 1,417,401 | 1,067,161 |
Deferred rent, net of current portion | 29,748 | 35,968 |
Other long term liabilities | 415,442 | 15,442 |
Total liabilities | 1,862,591 | 1,118,571 |
Convertible preferred stock: | ||
Preferred stock, carrying value | 0 | 0 |
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value; 100,000,000 and 61,000,000 shares authorized at March 31, 2015 and December 31, 2014, respectively, 17,933,664 and 5,434,301 shares issued at March 31, 2015 and December 31, 2014, respectively, and 14,932,098 and 2,215,711 shares outstanding at March 31, 2015 and December 31, 2014, respectively | 1,493 | 221 |
Additional paid-in capital | 124,108,139 | 1,472,299 |
Accumulated deficit | -14,028,441 | -8,010,860 |
Total stockholders' equity (deficit) | 110,081,191 | -6,538,340 |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | 111,943,782 | 35,611,398 |
Series A convertible preferred stock | ||
Convertible preferred stock: | ||
Preferred stock, carrying value | 0 | 15,637,032 |
Series B Preferred Stock | ||
Convertible preferred stock: | ||
Preferred stock, carrying value | $0 | $25,394,135 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in usd per share) | $0.00 | $0 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 61,000,000 |
Common stock, shares issued | 17,933,664 | 5,434,301 |
Common stock, shares outstanding | 14,932,098 | 2,215,711 |
Series A preferred stock | ||
Preferred stock, par value (in usd per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 0 | 16,000,000 |
Preferred stock, shares issued | 0 | 15,775,221 |
Preferred stock, shares outstanding | 0 | 15,775,221 |
Series B Preferred Stock | ||
Preferred stock, par value (in usd per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 0 | 14,500,000 |
Preferred stock, shares issued | 0 | 14,078,647 |
Preferred stock, shares outstanding | 0 | 14,078,647 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (USD $) | 1 Months Ended | 3 Months Ended |
Mar. 31, 2014 | Mar. 31, 2015 | |
Operating expenses: | ||
Research and development | $30,023 | $2,804,946 |
General and administrative | 62,700 | 3,216,212 |
Total operating expenses | 92,723 | 6,021,158 |
Loss from operations | -92,723 | -6,021,158 |
Interest income | 0 | 3,577 |
Net loss | -92,723 | -6,017,581 |
Comprehensive loss | ($92,723) | ($6,017,581) |
Net loss per share attributable to common stockholders - basic and diluted (in usd per share) | ($0.07) | ($0.59) |
Weighted-average number of common shares outstanding — basic and diluted | 1,370,125 | 10,179,955 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 1 Months Ended | 3 Months Ended |
Mar. 31, 2014 | Mar. 31, 2015 | |
Operating activities | ||
Net loss | ($92,723) | ($6,017,581) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 0 | 9,359 |
Stock-based compensation | 11,935 | 1,745,760 |
Changes in operating assets and liabilities: | ||
Restricted cash | 0 | -27 |
Prepaid expenses and other current assets | -364 | -684,278 |
Other assets | 0 | -35,200 |
Accounts payable | 0 | 311,305 |
Accrued expenses | 155,454 | 536,148 |
Deferred rent | 0 | -6,220 |
Net cash (used in) provided by operating activities | 74,302 | -4,140,734 |
Investing activities | ||
Purchases of property and equipment | 0 | -26,395 |
Net cash used in by investing activities | 0 | -26,395 |
Financing activities | ||
Proceeds from initial public offering, net of offering costs | 0 | 80,435,430 |
Proceeds from sale of restricted common stock to founders | 1,950 | 0 |
Proceeds from early exercise of stock options | 0 | 400,000 |
Net cash provided by financing activities | 10,636,950 | 80,835,430 |
Net increase in cash | 10,711,252 | 76,668,301 |
Cash at beginning of period | 0 | 33,854,153 |
Cash at end of period | 10,711,252 | 110,522,454 |
Supplemental cash flow information | ||
Property and equipment purchases included in accounts payable | 0 | 23,336 |
IPO issuance costs included in accounts payable and accrued expenses at December 31, 2014 | 0 | 499,549 |
IPO issuance costs paid in cash through December 31, 2014 | 0 | 575,245 |
Series A preferred stock | ||
Financing activities | ||
Proceeds from issuance of convertible preferred stock, net of issuance costs | 9,920,000 | 0 |
Series B Preferred Stock | ||
Financing activities | ||
Proceeds from issuance of convertible preferred stock, net of issuance costs | $715,000 | $0 |
Organization_and_operations
Organization and operations | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and operations | Organization and operations |
The Company | |
Flex Pharma, Inc. (the "Company") is a biotechnology company that was incorporated in Delaware on February 26, 2014 and has a principal place of business in Boston, Massachusetts. The Company is developing innovative and proprietary treatments for nocturnal leg cramps and spasms associated with severe neuromuscular conditions. The Company believes that activation of certain receptors in primary sensory neurons reduces the repetitive firing, or hyperexcitability, of alpha-motor neurons, thereby preventing or reducing the frequency and intensity of muscle cramps and spasms. The Company also believes that it is the only company developing products based on this mechanism of muscle cramp and spasm inhibition. | |
The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, risks of failure of pre-clinical studies, clinical studies and clinical trials, the need to obtain marketing approval for its drug product candidates, the need to successfully commercialize and gain market acceptance of its drug product candidates and its consumer products, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products. | |
In February 2015, the Company sold 5,491,191 shares of common stock (inclusive of 91,191 shares of common stock sold by the Company pursuant to the exercise of an overallotment option granted to the underwriters in connection with the offering) through an underwritten initial public offering ("IPO") at a price of $16.00 per share. The aggregate net proceeds received by the Company from the offering were approximately $79,900,000, after deducting underwriting discounts and commissions and offering expenses payable by the Company of approximately $8,000,000 (See Note 2). | |
Liquidity | |
The Company has incurred an accumulated deficit of $14,028,441 since inception and will require substantial additional capital to fund its research and development and the launch and growth of its consumer brand. The Company had an unrestricted cash balance of $110,522,454 at March 31, 2015. The Company believes its existing unrestricted cash will be sufficient to allow the Company to fund its current operating plan for at least the next 12 months. |
Summary_of_significant_account
Summary of significant accounting policies and recent accounting pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies and recent accounting pronouncements | Summary of significant accounting policies and recent accounting pronouncements |
The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the condensed consolidated financial statements. As of March 31, 2015, the Company’s significant accounting policies, which are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “2014 10-K”), have not changed. | |
Unaudited interim financial information | |
Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s 2014 10-K. | |
The unaudited condensed consolidated financial statements as of March 31, 2015 and March 31, 2014, for the three months ended March 31, 2015 and for the period from February 26, 2014 (inception) to March 31, 2014 and the related information contained within the notes to the condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of March 31, 2015, and the condensed consolidated statements of operations and comprehensive loss and cash flows for the three months ended March 31, 2015 and for the period from February 26, 2014 (inception) to March 31, 2014. The results for the three months ended March 31, 2015 are not necessarily indicative of results to be expected for the year ending December 31, 2015, or any other future annual or interim periods. | |
Initial public offering | |
On February 3, 2015, the Company completed its IPO, whereby the Company sold 5,491,191 shares of its common stock (inclusive of 91,191 shares of common stock sold by the Company pursuant to the exercise of an overallotment option granted to the underwriters in connection with the IPO) at a price of $16.00 per share. The shares began trading on the Nasdaq Global Market on January 29, 2015. The aggregate net proceeds received by the Company from the IPO were approximately $79,900,000, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Upon the closing of the IPO, all outstanding shares of convertible preferred stock converted into 6,971,108 shares of common stock. Additionally, the Company is now authorized to issue 100,000,000 shares of common stock. | |
Deferred IPO issuance costs, which primarily consisted of direct incremental legal and accounting fees related to the Company's IPO, were previously capitalized at December 31, 2014. Upon the closing of the IPO in February 2015, IPO issuance costs, which totaled $1,848,737, were offset against the IPO proceeds within additional paid-in capital. | |
Reverse stock split | |
On January 15, 2015, the Company effected a one-for-4.2825 reverse stock split of its issued and outstanding common stock. All share and per share amounts related to issued and outstanding common stock and stock options included in the Company's condensed consolidated financial statements and notes to the condensed consolidated financial statements have been retroactively adjusted for all periods presented to reflect this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in-capital. The conversion ratios of the Company's previously outstanding shares of convertible preferred stock were also adjusted to reflect the reverse stock split. | |
Basis of presentation and use of estimates | |
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, estimates related to clinical study accruals, stock-based compensation expense, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. | |
Prior to the completion of its IPO in February 2015, the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The Company utilized various valuation methodologies in accordance with the framework of the 2004 and 2013 American Institute of Certified Public Accountants Technical Practice Aids, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. Each valuation methodology included estimates and assumptions that required the Company's judgment. These estimates and assumptions included a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company's common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date and materially affect the financial statements. | |
Principles of consolidation | |
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, TK Pharma, Inc., a Massachusetts Securities Corporation. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Recent accounting pronouncements | |
In June 2014, the FASB issued ASU No. 2014-10 "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". Under this ASU, the definition of a development stage entity was removed from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities under GAAP. This standard is effective for annual reporting periods beginning after December 15, 2014. Early adoption is permitted for certain entities. The Company was eligible for early adoption and adopted this standard in the accompanying financial statements. | |
In August 2014, the FASB issued ASU No. 2014-15 "Presentation of Financial Statements - Going Concern (Subtopic 205-40)". The ASU requires all entities to evaluate for the existence of conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the issuance date of the financial statements. The accounting standard is effective for interim and annual periods ending after December 15, 2016, and will not have a material impact on the consolidated financial statements, but may impact the Company's footnote disclosures. | |
The Company believes that the impact of other recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. |
Net_loss_per_share
Net loss per share | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Net loss per share | Net loss per share | ||||
Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period, determined using the treasury stock method and the if-converted method, for convertible securities, if inclusion of these is dilutive. | |||||
Because the Company has reported a net loss for the periods presented, diluted net loss per common share is the same as basic net loss per common share. | |||||
The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an antidilutive impact due to the loss reported for the three months ended March 31, 2015 and for the period from February 26, 2014 (inception) to March 31, 2014: | |||||
Three Months Ended March 31, 2015 | Period from | ||||
February 26, 2014 | |||||
(Inception) to | |||||
31-Mar-14 | |||||
Unvested restricted common stock sold to founders | 2,964,502 | 3,343,922 | |||
Unvested restricted common stock issued upon early exercise of stock options | 37,064 | — | |||
Options to purchase common stock | 1,154,161 | — | |||
Series A preferred stock | — | 10,000,000 | |||
Total | 4,155,727 | 13,343,922 | |||
Accrued_expenses_and_other_cur
Accrued expenses and other current liabilities | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Payables and Accruals [Abstract] | |||||||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | ||||||
Accrued expenses and other current liabilities consisted of the following: | |||||||
31-Mar-15 | 31-Dec-14 | ||||||
Payroll and employee-related costs | $ | 378,805 | $ | 34,218 | |||
Consumer brand-related costs | 179,028 | 23,635 | |||||
Research and development costs | 91,179 | 125,067 | |||||
Professional fees | 81,375 | 15,500 | |||||
Other | 47,137 | 42,955 | |||||
Deferred IPO issuance costs | — | 175,149 | |||||
Total | $ | 777,524 | $ | 416,524 | |||
Common_stock
Common stock | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Equity [Abstract] | |||||||
Common stock | Common stock | ||||||
As of March 31, 2015, the Company had authorized 100,000,000 shares of common stock, $0.0001 par value per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors. | |||||||
Restricted common stock | |||||||
In March 2014, the Company sold 4,553,415 shares of restricted common stock to the founders of the Company ("recipients"), for $0.0004 per share, for total proceeds of $1,950. In April 2014, based upon anti-dilution provisions granted to the recipients, an additional 867,314 shares of restricted common stock were sold to the same recipients, after which the anti-dilution provisions were terminated. The restricted common stock vested 25% upon issuance, and the remaining 75% vests ratably over four years, during which time the Company has the right to repurchase the unvested shares held by a recipient if the relationship between such recipient and the Company ceases. If the relationship terminates, the Company has 90 days to repurchase unvested shares at $0.0004 per share. Such shares are not accounted for as outstanding until they vest. There were 2,456,227 shares of restricted common stock outstanding as of March 31, 2015. Unvested restricted common stock awards to non-employees are re-measured at each vest date and each financial reporting date. | |||||||
The following is a summary of restricted common stock activity related to shares sold to the Company's founders: | |||||||
Number of | Weighted-Average | ||||||
Shares | Grant Date | ||||||
Fair Value | |||||||
Non-vested at December 31, 2014 | 3,218,590 | $ | 0.1 | ||||
Vested | (254,088 | ) | 0.1 | ||||
Non-vested at March 31, 2015 | 2,964,502 | $ | 0.1 | ||||
Early exercise of stock options | |||||||
During the first quarter of 2015, 37,064 employee stock options, with a weighted-average grant date fair value of $10.79 per share, were exercised pursuant to an early exercise provision in an employee's stock option agreement. None of the exercised options had vested as of March 31, 2015, and the early exercise provision contains a repurchase option by the Company. Accordingly, the $400,000 of exercise proceeds received by the Company are being accounted for as a liability on the Company's condensed consolidated balance sheet at March 31, 2015. The proceeds received will remain classified as a liability and the related shares will not be considered outstanding, for accounting purposes, until the shares vest in the first quarter of 2016. | |||||||
Stockbased_compensation
Stock-based compensation | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-based compensation | Stock-based compensation | ||||||||||||
In March 2014, the Company adopted the Flex Pharma, Inc. 2014 Equity Incentive Plan (the "2014 Plan"), under which it had the ability to grant incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights to purchase up to 116,754 shares of common stock. In April 2014, the Company amended the 2014 Plan to reserve for the issuance of up to 1,451,087 shares of common stock pursuant to equity awards. In September 2014, the Company further amended the 2014 Plan to reserve for the issuance of up to 2,070,200 shares of common stock pursuant to equity awards. Terms of stock award agreements, including vesting requirements, were determined by the board of directors, subject to the provisions of the 2014 Plan. For options granted under the 2014 Plan, the exercise price equaled the fair market value of the common stock as determined by the board of directors on the date of grant. No further awards will be granted under the 2014 Plan. | |||||||||||||
In January 2015, the Company's board of directors adopted and the Company's stockholders approved the 2015 Equity Incentive Plan (the "2015 Plan"), which became effective immediately prior to the closing of the Company's IPO. The 2015 Plan provides for the grant of incentive stock options ("ISOs"), nonstatutory stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance-based stock awards, and other stock-based awards. Additionally, the 2015 Plan provides for the grant of performance-based cash awards. ISOs may be granted only to the Company's employees. All other awards may be granted to the Company's employees, including officers, and to non-employee directors and consultants. As of March 31, 2015, there were 887,583 shares remaining available for the grant of stock awards under the 2015 Plan (inclusive of 65,489 shares remaining available for grant of stock awards transferred from the 2014 Plan). | |||||||||||||
The Company has awarded stock options to its employees, directors, advisors and consultants, pursuant to the plans described above. Stock options subsequent to the completion of the Company's IPO are granted with an exercise price equal to the closing market price of the Company's common stock on the date of grant. Stock options generally vest over four years and have a contractual term of ten years. Stock options are valued using the Black-Scholes option pricing model and compensation cost is recognized based on the resulting value over the service period. Unvested awards to non-employees are re-measured at each vest date and at each financial reporting date. The following table summarizes stock option activity for employees and non-employees for the three months ended March 31, 2015: | |||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | ||||||||||
Exercise Price | Remaining | Intrinsic | |||||||||||
Contractual | Value | ||||||||||||
Term (in years) | |||||||||||||
Outstanding at December 31, 2014 | 926,832 | $ | 3.4 | ||||||||||
Granted | 287,743 | 13.19 | |||||||||||
Exercised | (37,064 | ) | 10.79 | ||||||||||
Cancelled or forfeited | (23,350 | ) | 10.79 | ||||||||||
Outstanding at March 31, 2015 | 1,154,161 | $ | 5.46 | 9.5 | $ | 16,324,513 | |||||||
Exercisable at March 31, 2015 | 13,017 | $ | 0.61 | 9.04 | $ | 247,174 | |||||||
Vested or expected to vest at March 31, 2015 | 1,084,741 | $ | 5.37 | 9.5 | $ | 15,431,131 | |||||||
Total stock-based compensation expense recognized for employee and non-employee restricted common stock, and stock options granted to employees and non-employees is included in the Company's condensed consolidated statement of operations and comprehensive loss as follows: | |||||||||||||
Three Months Ended | Period from | ||||||||||||
31-Mar-15 | February 26, 2014 | ||||||||||||
(Inception) to | |||||||||||||
31-Mar-14 | |||||||||||||
Research and development | $ | 957,210 | $ | 6,558 | |||||||||
General and administrative | 788,550 | 5,377 | |||||||||||
Total | $ | 1,745,760 | $ | 11,935 | |||||||||
As of March 31, 2015, there was approximately $21,954,603 of total unrecognized compensation cost related to non-vested equity awards. Total unrecognized compensation cost will be adjusted for the re-measurement of non-employee awards as well as future changes in employee and non-employee forfeitures, if any. The Company expects to recognize that cost over a remaining weighted-average period of 3.08 years. | |||||||||||||
Employee stock purchase plan | |||||||||||||
In January 2015, the Company's board of directors also adopted, and the Company's stockholders approved, the 2015 Employee Stock Purchase Plan ("the ESPP"), which became effective upon the date of execution of the underwriting agreement pursuant to which the Company's common stock was priced in connection with the IPO. As of March 31, 2015, the Company had not yet instituted any offering periods under the ESPP and no shares of the Company's common stock have been purchased under the ESPP. |
Income_taxes
Income taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes |
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Based upon the Company's history of operating losses and the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, the Company has recorded a full valuation allowance against the Company’s otherwise recognizable net deferred tax assets. There was no significant income tax provision or benefit for the three months ended March 31, 2015 and for the period from February 26, 2014 (inception) to March 31, 2014. |
Summary_of_significant_account1
Summary of significant accounting policies and recent accounting pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). |
Use of estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, estimates related to clinical study accruals, stock-based compensation expense, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Prior to the completion of its IPO in February 2015, the Company utilized significant estimates and assumptions in determining the fair value of its common stock. The Company utilized various valuation methodologies in accordance with the framework of the 2004 and 2013 American Institute of Certified Public Accountants Technical Practice Aids, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. Each valuation methodology included estimates and assumptions that required the Company's judgment. These estimates and assumptions included a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company's common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date and materially affect the financial statements. | |
Principles of consolidation | Principles of consolidation |
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, TK Pharma, Inc., a Massachusetts Securities Corporation. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Recent accounting pronouncements | Recent accounting pronouncements |
In June 2014, the FASB issued ASU No. 2014-10 "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". Under this ASU, the definition of a development stage entity was removed from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities under GAAP. This standard is effective for annual reporting periods beginning after December 15, 2014. Early adoption is permitted for certain entities. The Company was eligible for early adoption and adopted this standard in the accompanying financial statements. | |
In August 2014, the FASB issued ASU No. 2014-15 "Presentation of Financial Statements - Going Concern (Subtopic 205-40)". The ASU requires all entities to evaluate for the existence of conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the issuance date of the financial statements. The accounting standard is effective for interim and annual periods ending after December 15, 2016, and will not have a material impact on the consolidated financial statements, but may impact the Company's footnote disclosures. | |
The Company believes that the impact of other recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. |
Net_loss_per_share_Tables
Net loss per share (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Schedule of antidilutive securities excluded from computation of earnings per share | The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an antidilutive impact due to the loss reported for the three months ended March 31, 2015 and for the period from February 26, 2014 (inception) to March 31, 2014: | ||||
Three Months Ended March 31, 2015 | Period from | ||||
February 26, 2014 | |||||
(Inception) to | |||||
31-Mar-14 | |||||
Unvested restricted common stock sold to founders | 2,964,502 | 3,343,922 | |||
Unvested restricted common stock issued upon early exercise of stock options | 37,064 | — | |||
Options to purchase common stock | 1,154,161 | — | |||
Series A preferred stock | — | 10,000,000 | |||
Total | 4,155,727 | 13,343,922 | |||
Accrued_expenses_and_other_cur1
Accrued expenses and other current liabilities (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Payables and Accruals [Abstract] | |||||||
Schedule of accrued expenses | Accrued expenses and other current liabilities consisted of the following: | ||||||
31-Mar-15 | 31-Dec-14 | ||||||
Payroll and employee-related costs | $ | 378,805 | $ | 34,218 | |||
Consumer brand-related costs | 179,028 | 23,635 | |||||
Research and development costs | 91,179 | 125,067 | |||||
Professional fees | 81,375 | 15,500 | |||||
Other | 47,137 | 42,955 | |||||
Deferred IPO issuance costs | — | 175,149 | |||||
Total | $ | 777,524 | $ | 416,524 | |||
Schedule of other current liabilities | Accrued expenses and other current liabilities consisted of the following: | ||||||
31-Mar-15 | 31-Dec-14 | ||||||
Payroll and employee-related costs | $ | 378,805 | $ | 34,218 | |||
Consumer brand-related costs | 179,028 | 23,635 | |||||
Research and development costs | 91,179 | 125,067 | |||||
Professional fees | 81,375 | 15,500 | |||||
Other | 47,137 | 42,955 | |||||
Deferred IPO issuance costs | — | 175,149 | |||||
Total | $ | 777,524 | $ | 416,524 | |||
Common_stock_Common_stock_Tabl
Common stock Common stock (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Equity [Abstract] | |||||||
Restricted common stock activity | The following is a summary of restricted common stock activity related to shares sold to the Company's founders: | ||||||
Number of | Weighted-Average | ||||||
Shares | Grant Date | ||||||
Fair Value | |||||||
Non-vested at December 31, 2014 | 3,218,590 | $ | 0.1 | ||||
Vested | (254,088 | ) | 0.1 | ||||
Non-vested at March 31, 2015 | 2,964,502 | $ | 0.1 | ||||
Stockbased_compensation_Tables
Stock-based compensation (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Summary of stock option activity | The following table summarizes stock option activity for employees and non-employees for the three months ended March 31, 2015: | ||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | ||||||||||
Exercise Price | Remaining | Intrinsic | |||||||||||
Contractual | Value | ||||||||||||
Term (in years) | |||||||||||||
Outstanding at December 31, 2014 | 926,832 | $ | 3.4 | ||||||||||
Granted | 287,743 | 13.19 | |||||||||||
Exercised | (37,064 | ) | 10.79 | ||||||||||
Cancelled or forfeited | (23,350 | ) | 10.79 | ||||||||||
Outstanding at March 31, 2015 | 1,154,161 | $ | 5.46 | 9.5 | $ | 16,324,513 | |||||||
Exercisable at March 31, 2015 | 13,017 | $ | 0.61 | 9.04 | $ | 247,174 | |||||||
Vested or expected to vest at March 31, 2015 | 1,084,741 | $ | 5.37 | 9.5 | $ | 15,431,131 | |||||||
Summary of stock-based compensation expense | Total stock-based compensation expense recognized for employee and non-employee restricted common stock, and stock options granted to employees and non-employees is included in the Company's condensed consolidated statement of operations and comprehensive loss as follows: | ||||||||||||
Three Months Ended | Period from | ||||||||||||
31-Mar-15 | February 26, 2014 | ||||||||||||
(Inception) to | |||||||||||||
31-Mar-14 | |||||||||||||
Research and development | $ | 957,210 | $ | 6,558 | |||||||||
General and administrative | 788,550 | 5,377 | |||||||||||
Total | $ | 1,745,760 | $ | 11,935 | |||||||||
Organization_and_operations_De
Organization and operations (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | ||
Feb. 03, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Feb. 26, 2014 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from initial public offering, net of offering costs | $79,900,000 | $0 | $80,435,430 | ||
Underwriting discounts, commissions, and offering expenses | 8,000,000 | ||||
Retained earnings (accumulated deficit) | -14,028,441 | -8,010,860 | |||
Cash | $10,711,252 | $110,522,454 | $33,854,153 | $0 | |
IPO [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares issued | 5,491,191 | ||||
Common stock, price per share (in usd per share) | $16 | ||||
Over-Allotment Option [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common stock, shares issued | 91,191 |
Summary_of_significant_account2
Summary of significant accounting policies and recent accounting pronouncements - Narrative (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | |||
Feb. 03, 2015 | Jan. 15, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Feb. 03, 2015 | Dec. 31, 2014 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Proceeds from initial public offering, net of offering costs | $79,900,000 | $0 | $80,435,430 | |||
Common stock, number of shares issued from conversion of preferred stock (in shares) | 6,971,108 | |||||
Common stock, shares authorized | 100,000,000 | 61,000,000 | ||||
IPO issuance cost | $1,848,737 | $1,848,737 | ||||
Reverse stock split conversion ratio | 0.2335 | |||||
IPO [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, shares issued | 5,491,191 | |||||
Common stock, price per share (in usd per share) | $16 | $16 | ||||
Over-Allotment Option [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, shares issued | 91,191 |
Net_loss_per_share_Details
Net loss per share (Details) | 1 Months Ended | 3 Months Ended |
Mar. 31, 2014 | Mar. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 13,343,922 | 4,155,727 |
Unvested restricted common stock sold to founders | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 3,343,922 | 2,964,502 |
Unvested restricted common stock issued upon early exercise of stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 37,064 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 1,154,161 |
Series A preferred stock | Preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 10,000,000 | 0 |
Accrued_expenses_and_other_cur2
Accrued expenses and other current liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Payroll and employee-related costs | $378,805 | $34,218 |
Consumer brand-related costs | 179,028 | 23,635 |
Research and development costs | 91,179 | 125,067 |
Professional fees | 81,375 | 15,500 |
Other | 47,137 | 42,955 |
Deferred IPO issuance costs | 0 | 175,149 |
Total | $777,524 | $416,524 |
Common_stock_Narrative_Details
Common stock - Narrative (Details) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2015 | Apr. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized | 100,000,000 | 61,000,000 | |||
Common stock, par value (in usd per share) | $0.00 | $0.00 | |||
Proceeds from sale of restricted common stock to founders | $1,950 | $0 | |||
Restricted common stock, vesting period | 4 years | ||||
Shares exercised | 37,064 | ||||
Shares exercised, weighted-average exercise price (in usd per share) | $10.79 | ||||
Proceeds from early exercise of stock options | 0 | 400,000 | |||
Unvested restricted common stock sold to founders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, shares sold | 867,314 | 4,553,415 | |||
Restricted common stock, price per share (in usd per share) | $0.00 | $0.00 | |||
Proceeds from sale of restricted common stock to founders | $1,950 | ||||
Restricted common stock, repurchase period | 90 days | ||||
Restricted common stock, repurchase price (in usd per share) | $0.00 | ||||
Restricted common stock, shares outstanding | 2,456,227 | ||||
Employee stock option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares exercised | 37,064 | ||||
Shares exercised, weighted-average exercise price (in usd per share) | $10.79 | ||||
Vests upon issuance | Unvested restricted common stock sold to founders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, percent vested | 25.00% | ||||
Vests ratably over four years | Unvested restricted common stock sold to founders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, percent vested | 75.00% | ||||
Restricted common stock, vesting period | 4 years |
Common_stock_Restricted_common
Common stock - Restricted common stock activity (Details) (Unvested restricted common stock sold to founders, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Unvested restricted common stock sold to founders | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance, non-vested, number of shares | 3,218,590 |
Vested, number of shares | -254,088 |
Ending balance, non-vested, number of shares | 2,964,502 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance, weighted average grant date fair value (in usd per share) | $0.10 |
Vested, weighted average grant date fair value (in usd per share) | $0.10 |
Ending balance, weighted average grant date fair value (in usd per share) | $0.10 |
Stockbased_compensation_Narrat
Stock-based compensation - Narrative (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Sep. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, vesting period | 4 years | |||
Stock options, contractual term | 10 years | |||
Unrecognized compensation cost | $21,954,603 | |||
Unrecognized compensation cost, recognition period | 3 years 29 days | |||
Flex Pharma, Inc. 2014 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized | 2,070,200 | 1,451,087 | 116,754 | |
Shares remaining available for grant of stock awards | 65,489 | |||
2015 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares remaining available for grant of stock awards | 887,583 |
Stockbased_compensation_Summar
Stock-based compensation - Summary of stock option activity (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Shares outstanding, Beginning Balance | 926,832 |
Shares granted | 287,743 |
Shares exercised | -37,064 |
Shares canceled or forfeited | -23,350 |
Shares outstanding, Ending Balance | 1,154,161 |
Shares exercisable | 13,017 |
Shares vested or expected to vest | 1,084,741 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Shares outstanding, weighted-average exercise price, Ending Balance (in usd per share) | $3.40 |
Shares granted, weighted-average exercise price (in usd per share) | $13.19 |
Shares exercised, weighted-average exercise price (in usd per share) | $10.79 |
Shares canceled or forfeited, weighted-average exercise price (in usd per share) | $10.79 |
Shares outstanding, weighted-average exercise price, Beginning Balance (in usd per share) | $5.46 |
Shares exercisable, weighted-average exercise price (in usd per share) | $0.61 |
Shares vested or expected to vest, weighted-average exercise price (in usd per share) | $5.37 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, weighted-average remaining contractual term | 9 years 6 months |
Exercisable, weighted-average remaining contractual term | 9 years 15 days |
Vested or expected to vest, weighted-average remaining contractual term | 9 years 6 months |
Outstanding, aggregate intrinsic value | $16,324,513 |
Exercisable, aggregate intrinsic value | 247,174 |
Vested or expected to vest, aggregate intrinsic value | $15,431,131 |
Stockbased_compensation_Summar1
Stock-based compensation - Summary of stock-based compensation expense (Details) (USD $) | 1 Months Ended | 3 Months Ended |
Mar. 31, 2014 | Mar. 31, 2015 | |
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $11,935 | $1,745,760 |
Research and development | ||
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 6,558 | 957,210 |
General and administrative | ||
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $5,377 | $788,550 |