Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2014 | Mar. 12, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NVET | |
Entity Registrant Name | Nexvet Biopharma plc | |
Entity Central Index Key | 1618561 | |
Current Fiscal Year End Date | -24 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 11,350,845 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash | $21,665 | $30,041 |
Other income receivable | 1,560 | 2,404 |
Prepaid expenses and other | 1,692 | 643 |
Total current assets | 24,917 | 33,088 |
Property, plant and equipment, net | 565 | 514 |
Intangible assets, net | 1 | 2 |
Total assets | 25,483 | 33,604 |
Current liabilities | ||
Accounts payable | 661 | 870 |
Accrued expenses | 2,182 | 2,299 |
Lease incentive liability | 25 | 28 |
Total current liabilities | 2,868 | 3,197 |
Lease incentive liability | 77 | 103 |
Warrants | 5,435 | |
Total noncurrent liabilities | 77 | 5,538 |
Total liabilities | 2,945 | 8,735 |
Commitments and contingencies (Note 11) | ||
Convertible preferred stock | 33,826 | |
Shareholders’ equity (deficit) | ||
Ordinary shares, $0.125 nominal value per share, 20,000,000 shares authorized—1,232,702 and 1,268,810 shares issued and outstanding as of December 31, 2014 and June 30, 2014, respectively | 154 | 126 |
Euro deferred shares, €100 nominal value per share, 400 shares authorized—400 and zero shares issued and outstanding as of December 31, 2014 and June 30, 2014, respectively | 13 | |
Convertible preferred stock | 33,826 | |
Additional paid-in capital | 8,298 | 2,342 |
Accumulated other comprehensive (loss) income | -3,245 | 373 |
Accumulated deficit | -16,508 | -11,798 |
Total shareholders’ equity (deficit) | 22,538 | -8,957 |
Total liabilities, convertible preference shares and shareholders’ equity (deficit) | 25,483 | 33,604 |
SIRPS Convertible Preference Shares | ||
Current liabilities | ||
Convertible preferred stock | 8,177 | |
Shareholders’ equity (deficit) | ||
Convertible preferred stock | 8,177 | |
Series B Convertible Preference Shares | ||
Current liabilities | ||
Convertible preferred stock | 25,649 | |
Shareholders’ equity (deficit) | ||
Convertible preferred stock | $25,649 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) | Dec. 31, 2014 | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | Jun. 30, 2014 |
USD ($) | EUR (€) | USD ($) | EUR (€) | SIRPS Convertible Preference Shares | SIRPS Convertible Preference Shares | Series B Convertible Preference Shares | Series B Convertible Preference Shares | |
USD ($) | USD ($) | USD ($) | USD ($) | |||||
Convertible preference shares, nominal value per share | $0.13 | $0.13 | $0.13 | $0.13 | ||||
Convertible preference shares, shares authorized | 4,000,000 | 4,000,000 | 8,000,000 | 8,000,000 | ||||
Convertible preference shares, shares issued | 0 | 1,737,132 | 0 | 4,200,006 | ||||
Convertible preference shares, shares outstanding | 5,937,138 | 5,937,138 | 0 | 1,737,132 | 0 | 4,200,006 | ||
Ordinary shares, nominal value per share | $0.13 | $0.13 | ||||||
Ordinary shares, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||
Ordinary shares, shares issued | 1,232,702 | 1,232,702 | 1,268,810 | 1,268,810 | ||||
Ordinary shares, shares outstanding | 1,232,702 | 1,232,702 | 1,268,810 | 1,268,810 | ||||
Euro deferred shares, nominal value per share | € 100 | € 100 | ||||||
Euro deferred shares, shares authorized | 400 | 400 | 400 | 400 | ||||
Euro deferred shares, shares issued | 400 | 400 | 0 | 0 | ||||
Euro deferred shares, shares outstanding | 400 | 400 | 0 | 0 | ||||
Convertible preference shares, nominal value per share | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 | |||
Convertible preference shares, shares authorized | 12,000,000 | 12,000,000 | 4,000,000 | 4,000,000 | 8,000,000 | 8,000,000 | ||
Convertible preference shares, shares issued | 1,737,144 | 0 | 4,200,016 | 0 | ||||
Convertible preference shares, shares outstanding | 5,937,160 | 5,937,160 | 1,737,144 | 0 | 4,200,016 | 0 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Revenue | ||||
Other | $25 | |||
Total revenue | 25 | |||
Operating Expenses | ||||
Research and development | 2,226 | 780 | 4,765 | 2,020 |
General and administrative | 2,440 | 884 | 5,258 | 1,452 |
Total operating expenses | 4,666 | 1,664 | 10,023 | 3,472 |
Loss from operations | -4,666 | -1,664 | -9,998 | -3,472 |
Other Income (Expense) | ||||
Research and development incentive income | 941 | 314 | 1,682 | 817 |
Government grant income | 22 | 348 | 319 | 666 |
Exchange gain (loss) | 1,270 | -9 | 3,254 | -39 |
Interest income | 20 | 18 | 33 | 19 |
Net loss | -2,413 | -993 | -4,710 | -2,009 |
Net loss per share attributable to ordinary shareholders, basic and diluted | ($2.01) | ($0.99) | ($4.14) | ($2.01) |
Weighted-average ordinary shares outstanding, basic and diluted | 1,198,828 | 1,000,000 | 1,138,520 | 1,000,000 |
Comprehensive Loss | ||||
Net loss | -2,413 | -993 | -4,710 | -2,009 |
Net (loss) gain in foreign currency translation adjustments | -1,477 | -127 | -3,618 | 78 |
Total comprehensive loss | ($3,890) | ($1,120) | ($8,328) | ($1,931) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERENCE SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) (unaudited) (USD $) | Total | Ordinary Shares | Ordinary Shares Subject to Limited Recourse Loans | Euro Deferred Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Convertible Preferred Stock | Convertible Preferred Stock | SIRPS Convertible Preference Shares | Series B Convertible Preference Shares |
In Thousands, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Convertible Preference Shares, Beginning balance at Jun. 30, 2013 | $3,597 | ||||||||||
Beginning balance at Jun. 30, 2013 | -2,914 | 124 | 1,979 | 71 | -5,088 | ||||||
Convertible Preference Shares, Beginning balance, shares at Jun. 30, 2013 | 792,117 | ||||||||||
Beginning balance, shares at Jun. 30, 2013 | 1,000,000 | 264,386 | |||||||||
Issuance of ordinary shares—payment of limited recourse loan, amount | 37 | 1 | 36 | ||||||||
Issuance of ordinary shares—payment of limited recourse loan, shares | 9,706 | 9,706 | -9,706 | ||||||||
Issuance of ordinary shares | 22 | 1 | 21 | ||||||||
Issuance of ordinary shares, shares | 4,424 | ||||||||||
Share-based compensation expense | 306 | 306 | |||||||||
Exchange difference on translation of foreign operations | 302 | 302 | |||||||||
Net loss | -6,710 | -6,710 | |||||||||
Issuance of convertible preference shares, net of issuance costs | 4,580 | 25,649 | |||||||||
Issuance of convertible preference shares, shares | 945,015 | 4,200,006 | |||||||||
Convertible Preference Shares, Ending balance at Jun. 30, 2014 | 33,826 | 33,826 | 8,177 | 25,649 | |||||||
Ending balance at Jun. 30, 2014 | -8,957 | 126 | 2,342 | 373 | -11,798 | ||||||
Convertible Preference Shares, Ending balance, shares at Jun. 30, 2014 | 5,937,138 | 5,937,138 | 1,737,132 | 4,200,006 | |||||||
Ending balance, shares at Jun. 30, 2014 | 1,014,130 | 254,680 | |||||||||
Issuance of ordinary shares—payment of limited recourse loan, amount | 14 | -14 | |||||||||
Issuance of ordinary shares—payment of limited recourse loan, shares | 109,611 | 109,611 | -109,611 | ||||||||
Issuance of ordinary shares, shares | 1 | 6 | |||||||||
Share-based compensation expense | 538 | 538 | |||||||||
Exchange difference on translation of foreign operations | -3,618 | -3,618 | |||||||||
Net loss | -4,710 | -4,710 | |||||||||
Issuance of ordinary shares and euro deferred shares, amount | 13 | 13 | |||||||||
Issuance of ordinary shares and euro deferred shares, shares | 2 | 400 | |||||||||
Share repurchase, shares | -145,069 | -145,069 | |||||||||
Issuance of share warrants | 5,435 | 5,435 | |||||||||
Issuance of ordinary shares—conversion of share-based compensation, amount | 11 | 14 | -3 | ||||||||
Issuance of ordinary shares—conversion of share-based compensation, shares | 108,949 | ||||||||||
Reclassification into shareholders’ equity, shares | 5,937,160 | -5,937,160 | |||||||||
Adjustment for shares issued in connection with share consolidation | 9 | ||||||||||
Reclassification into shareholders’ equity | 33,826 | 33,826 | -33,826 | ||||||||
Reclassification into shareholders’ equity, shares | -5,937,160 | ||||||||||
Adjustment for convertible preference shares issued in connection with share consolidation | 16 | ||||||||||
Ending balance at Dec. 31, 2014 | $22,538 | $154 | $13 | $8,298 | ($3,245) | ($16,508) | $33,826 | ||||
Convertible Preference Shares, Ending balance, shares at Dec. 31, 2014 | 0 | 0 | |||||||||
Ending balance, shares at Dec. 31, 2014 | 1,232,702 | 400 | 5,937,160 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERENCE SHARES AND SHAREHOLDERS' EQUITY (DEFICIT) (unaudited) (Parenthetical) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
SIRPS Convertible Preference Shares | |
Issuance of convertible preference shares, issuance costs | $294 |
Series B Convertible Preference Shares | |
Issuance of convertible preference shares, issuance costs | $1,021 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | 6 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Cash Flows from Operating Activities | |||
Net loss | ($4,710) | ($2,009) | ($6,710) |
Adjustments to reconcile net loss to cash used in operating activities: | |||
Share-based compensation expense | 538 | 27 | |
Depreciation and amortization expense | 76 | 9 | |
Changes in assets and liabilities: | |||
Other income receivable | 844 | 223 | |
Prepaid expenses and other | -1,049 | -89 | |
Accounts payable, accrued expenses and lease incentive liability | -355 | 323 | |
Net cash used in operating activities | -4,656 | -1,516 | |
Cash Flows from Investing Activities | |||
Purchase of property, plant and equipment | -176 | -102 | |
Purchase of intangible assets | -2 | ||
Net cash used in investing activities | -176 | -104 | |
Cash Flows from Financing Activities | |||
Proceeds from issuance of ordinary shares | 24 | ||
Proceeds from issuance of convertible preference shares and warrants | 4,580 | ||
Net cash provided by financing activities | 24 | 4,580 | |
Effect of exchange rate changes on cash | -3,568 | 119 | |
Net (decrease) increase in cash | -8,376 | 3,079 | |
Cash at beginning of period | 30,041 | 483 | 483 |
Cash at end of period | 21,665 | 3,562 | 30,041 |
Supplemental Disclosure | |||
Offering costs in connection with (convertible preference shares and warrants) recorded in equity | 294 | ||
Issuance of share options for accrued consulting services | $102 |
Organization_and_Description_o
Organization and Description of Business | 6 Months Ended |
Dec. 31, 2014 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business |
Nexvet Biopharma public limited company and its subsidiaries (the “Company”) is a clinical stage biopharmaceutical company focused on transforming the therapeutic market for companion animals by developing and commercializing novel, species-specific biologics based on human biologics. As a class, biologics, which include monoclonal antibodies (“mAbs”) and fusion proteins, have transformed human medicine in recent decades and represent some of the top-selling therapies on the market today. The Company’s proprietary platform, which it refers to as “PETization,” is an algorithmic approach that enables the Company to rapidly create mAbs that are designed to be recognized as “self” or “native” by an animal’s immune system, a property referred to as “100% species-specificity.” PETization is also designed to build upon the safety and efficacy data from clinically tested human therapies to create new therapies for companion animals, thereby reducing clinical risk and development cost. The Company’s first product candidate, NV–01, is a mAb that is a nerve growth factor inhibitor for the control of pain associated with osteoarthritis in dogs. The Company’s second product candidate, NV–02, is a mAb that is a nerve growth factor inhibitor for the control of pain associated with degenerative joint disease in cats. The Company expects data from its pivotal safety and efficacy studies for NV–01 by the end of 2015 and for NV–02 in 2016. The Company’s third product candidate, NV–08, is a fusion protein that is a tumor necrosis factor inhibitor for the treatment of chronic inflammatory diseases, including atopic dermatitis, in dogs. If its proof-of-concept safety and efficacy studies for NV–08 are successful, the Company will progress this product into formal development. Using PETization, the Company is seeking to advance one new product candidate into development per year commencing in the second half of 2015. | |
The Company has experienced losses since its inception and had an accumulated deficit of $16.5 million and $11.8 million as of December 31, 2014 and June 30, 2014, respectively. For the foreseeable future, management expects the Company to continue to incur losses and negative cash flows, which will increase significantly from historical levels as the Company expands its development activities, seeks regulatory approvals for its lead product candidates and begins to commercialize any approved products. To date, the Company has been funded primarily through sales of capital shares. Management believes the Company’s cash of $21.7 million as of December 31, 2014 together with the initial public offering proceeds will be sufficient to fund its operations for at least the next 12 months. | |
The Company will require additional capital until such time as the Company can generate revenue in excess of operating expenses. The Company may seek such funding through public or private equity, debt financing or other sources, such as corporate collaborations and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all. The sale of additional equity would result in additional dilution to the Company’s shareholders, and the terms of any financing may adversely affect the rights of the Company’s shareholders. The incurrence of any debt financing could result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict the Company’s operations. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs or commercialization efforts, which could adversely affect its business prospects. | |
In August 2014, the Company completed a one-for-four share consolidation. Each holder of ordinary shares and preference shares received one ordinary share or preference share for every four ordinary shares or preference shares held by such holder. The number of ordinary shares that may be acquired upon exercise of options or warrants or upon conversion of restricted share units was similarly reduced on a one-for-four basis, with a proportionate adjustment to the exercise or conversion price, as applicable. | |
In September 2014, Nexvet Australia Pty Ltd (“Nexvet Australia”) completed a transaction in which (i) Nexvet Biopharma Limited became the parent company of Nexvet Australia and its subsidiaries and (ii) all of the holders of ordinary shares, preference shares, restricted share units and options and warrants to purchase ordinary shares of Nexvet Australia exchanged their holdings for equivalent ordinary shares, preference shares, restricted share units or options or warrants to purchase ordinary shares, as applicable, of Nexvet Biopharma Limited (the “Irish Exchange”). Nexvet Biopharma Limited then re-registered as an Irish public limited company in September 2014 (together with the Irish Exchange, the “Irish Reorganization”). Nexvet Biopharma plc became the parent company of Nexvet Australia pursuant to the Irish Reorganization, and for financial reporting purposes the historical condensed consolidated financial statements of Nexvet Australia became the historical condensed consolidated financial statements of Nexvet Biopharma plc and its subsidiaries as a continuation of the predecessor. | |
In November 2014, the Company completed a four-for-five share consolidation. Each holder of ordinary shares and preference shares received four ordinary shares or four preference shares for every five ordinary shares or five preference shares held by such holder. The number of ordinary shares that may be acquired upon exercise of options or warrants on upon conversion of restricted share units was similarly reduced on a four-for-five basis, with a proportionate adjustment to the exercise or conversion price, as applicable. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||
Basis of Presentation and Principles of Consolidation | |||||
The accompanying interim condensed consolidated financial statements of the Company include the operations of all its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Such operations include the Company, Nexvet Australia, NVIP Pty Limited, Nexvet UK Limited and Nexvet US, Inc. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on June 30, and references to any fiscal year are to the Company’s year ended June 30 in that year. | |||||
Unaudited Interim Financial Information | |||||
The accompanying interim condensed consolidated financial statements and related disclosures as of December 31, 2014 and for the three and six months ended December 31, 2014 and 2013 are unaudited and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of December 31, 2014 and the results of its operations and comprehensive loss and its cash flows for the three and/or six months ended December 31, 2014 and 2013. The financial data and other information disclosed in these notes related to the three and/or six months ended December 31, 2014 and 2013 are unaudited. The results for the three and six months ended December 31, 2014 and 2013 are not necessarily indicative of results to be expected for a full year, any other interim periods or any future year or period. | |||||
These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended June 30, 2014 included in Company’s registration statement on Form S‑1 (Registration No. 333-201309) filed pursuant to rule 424(b) on February 5, 2015 with the SEC. The condensed consolidated balance sheet data as of June 30, 2014 was derived from audited consolidated financial statements. | |||||
Use of Estimates | |||||
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include research and development incentive income, research and development accruals, share-based payments, valuation of warrants, options and restricted share units and deferred income taxes. Actual results could differ from those estimates. | |||||
Net Loss Per Share | |||||
Net loss per share information is determined using the two-class method, which includes the weighted-average number of ordinary shares outstanding during the period and other securities that participate in dividends (a participating security). The Company’s convertible preference shares are participating securities as defined by Accounting Standards Codification (“ASC”) Topic 260-10, Earnings Per Share. Net loss per share disclosures for all periods have been revised to give effect to the share consolidations that took place in the reporting period. | |||||
Under the two-class method, basic net loss per share applicable to ordinary shareholders is computed by dividing the net loss applicable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the reporting period. | |||||
Diluted net loss per share gives effect to all potentially dilutive securities, including convertible preference shares and shares issuable upon the exercise or conversion, as applicable, of outstanding warrants, share options and restricted share units, using the treasury shares method. For the three and six months ended December 31, 2014 and 2013, the Company has excluded the effects of all potentially dilutive shares, which include convertible preference shares, warrants to purchase ordinary shares, ordinary share options, restricted share units and the ordinary shares issued subject to limited recourse loans, from the weighted-average number of ordinary shares outstanding as their inclusion in the computation for all periods would be anti-dilutive due to net losses. | |||||
Cash | |||||
As of December 31, 2014 and June 30, 2014, the Company’s cash consisted of cash deposited in a business operating account or in short-term deposit accounts of less than 90 days’ duration. | |||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||
The Company receives research and development incentive income and grants from a single source, the Australian government. | |||||
The Company’s cash is deposited with several large commercial banks located in the United States and Australia that are federally insured or guaranteed, limiting the amount of credit exposure to any one financial institution. The Company’s cash balances with these financial institutions often exceed the amount insured. | |||||
The Company is subject to risks common to companies in the biotechnology industry. The Company’s research and development may not be successfully completed, adequate protection for the Company’s technology may not be obtained, any products developed may not obtain necessary government regulatory approval and any approved products may not be commercially viable. The Company operates in an environment of substantial competition from other animal health companies, some of which have substantially more resources at their disposal. In addition, the Company is dependent upon the services of its employees and consultants, as well as third-party contract research organizations and manufacturers. | |||||
Fair Value Measurements | |||||
The Company records certain assets and liabilities at fair value in accordance with the provisions of ASC Topic 820, Fair Value Measurements. As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. | |||||
· | Level 1—Unadjusted quoted prices in active, accessible markets for identical assets or liabilities. | ||||
· | Level 2—Other inputs that are directly or indirectly observable in the marketplace. | ||||
· | Level 3—Unobservable inputs that are supported by little or no market activity. | ||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||||
The Company’s material financial instruments include cash, other income receivables, accrued liabilities and warrants. The carrying amounts of these instruments are considered to be representative of their respective fair values because of the short-term nature of those investments. The Company determined its warrants liability to be Level 3 fair value measurement as of June 30, 2014. | |||||
Other Income Receivable | |||||
Other income receivable is recorded at the invoiced amount where available. | |||||
Nexvet Australia is eligible under the AusIndustry research and tax development tax incentive program to obtain a cash amount from the Australian Taxation Office (“ATO”). The tax incentive is available to Nexvet Australia on the basis of specific criteria with which Nexvet Australia must comply. Specifically, Nexvet Australia must have revenue of less than A$20 million and cannot be controlled by income tax exempt entities. Tax incentives are classified as other income receivable. | |||||
Foreign Currency | |||||
Items included in the Company’s condensed consolidated financial statements are measured using the currency of the primary economic environment in which the Company operates, referred to as the functional currency. Financial statements of companies operating outside the United States generally are measured using the local currency as the functional currency. Adjustments to translate those statements into United States dollars are recorded in other comprehensive income (loss) (“OCI”) as a net change in foreign currency translation. Non-cash currency translation adjustments in accumulated OCI were primarily related to a translation of U.S. dollar-denominated bank accounts from Nexvet Australia’s Australian dollar functional currency to U.S. dollars. | |||||
Foreign currency transactions are translated into the functional currency using the current exchange rate. For assets and liabilities, the exchange rate at the balance sheet date is used. For revenue and expenses and gains and losses, a weighted-average exchange rate for the period is used to translate those elements. The reporting currency of these condensed consolidated financial statements is U.S. dollars. These losses and gain relate to a translation of U.S. dollar-denominated bank accounts into the Company’s Australian dollar functional currency and are included in other income (expense). | |||||
Under U.S. GAAP, there is no offset of these two exchange-related items within the condensed consolidated statements of operations and comprehensive loss. Net loss and associated calculations are impacted by this treatment. | |||||
Warrants | |||||
The Company’s liabilities primarily consist of warrants that were issued to investors and financial advisors in connection with private placements of the Company’s securities in May 2014. The warrants permit the holders to purchase ordinary shares at exercise prices of $8.625 and $7.50 per share on or before May 2019. Because the warrants may be net exercised and are exercisable in U.S. dollars, and the functional currency of Nexvet Australia, the original issuer of the warrants, is Australian dollars, they were classified as a liability as of June 30, 2014 and were reclassified to shareholders’ equity in September 2014 following the Irish Reorganization (in which the original warrants were exchanged for warrants issued by the Company) and the change in the functional currency of the Company to U.S. dollars. | |||||
Warrants recorded as liabilities ($5.4 million as of June 30, 2014) are valued at fair value using the binomial option-pricing model and the expected term based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations. At applicable balance sheet dates, the outstanding warrants were revalued to their then-current fair value, with the difference in fair value recorded in the condensed consolidated statements of operations and comprehensive loss. | |||||
Warrants are classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs. The significant assumptions used in estimating the fair value of the warrants include the estimated fair value of the underlying shares, exercise price, volatility of the shares underlying the warrant and the expected term of the warrant. The fair value of the underlying ordinary shares was estimated by reference to the price per share paid by investors for the Company’s Series B preference shares in May 2014. The fair values of the warrants were estimated using the following assumptions: | |||||
June 30, | |||||
2014 | |||||
Fair value per ordinary share | $6.35 | ||||
Risk free interest rate | 1.70% | ||||
Expected term (in years) | 4 years | ||||
Expected volatility | 75% | ||||
Expected dividend yield | Zero | ||||
There were warrants to purchase 1,766,998 ordinary shares issued during fiscal year 2014 and no warrants issued during the six months ended December 31, 2014. | |||||
The Company reclassified the warrants to shareholders’ equity (deficit) in additional paid-in capital in September 2014 following the Irish Reorganization and the change in the Company’s functional currency to U.S. dollars. | |||||
Income Taxes | |||||
The Company has historically filed income tax returns in Australia and the United States and in the future also expects to file tax returns in Ireland. | |||||
The Company applies ASC Topic 740, Income Taxes, which establishes financial accounting and reporting requirements for the effects of income taxes that result from the Company’s activities during the current and preceding years. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities on their respective tax bases, and operating losses and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted statutory tax rates expected to apply to taxable income in the jurisdictions and years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. | |||||
When the Company determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized in the future, the deferred tax assets are reduced by a valuation allowance. The valuation allowance is sufficient to reduce the deferred tax assets to the amount that the Company determines is more likely than not to be realized. | |||||
Research and Development Expense | |||||
Research and development costs are expensed as incurred and consist primarily of (i) payroll and related expense for all employees engaged in scientific research and development functions, including wages, related benefits and share-based compensation, (ii) fees for regulatory, professional and other consultants and (iii) development costs, including costs of drug discovery, safety, proof-of-concept and pivotal safety and efficacy studies, development of biological materials and service providers. The Company is currently pursuing its NV-01, NV-02 and NV-08 lead product candidates and typically uses its employee and infrastructure resources across multiple development programs. The Company tracks outsourced development costs by lead product candidates but does not allocate personnel or other internal costs related to development to specific product candidates. | |||||
General and Administrative Expense | |||||
General and administrative expense consists primarily of non-research and development-related payroll and related expense for employees, consultants and directors, including wages, related benefits and share-based compensation. General and administrative expense also includes professional and consulting fees for legal, accounting, tax services and other general business services, as well other expenses such as travel, rent and facilities costs. | |||||
Other Income (Expense) | |||||
Nexvet Australia is eligible under the AusIndustry research and development tax incentive program to obtain a cash amount from the ATO. The tax incentive is available to Nexvet Australia on the basis of specific criteria with which Nexvet Australia must comply. Although the tax incentive is administered through the ATO, the Company has accounted for the tax incentive outside the scope of ASC Topic 740, Income Taxes, as an income tax benefit since Nexvet Australia meets the applicable requirements to participate in the program and the incentive is not linked to Nexvet Australia’s income tax liability and can be realized regardless of whether Nexvet Australia has generated taxable income. Research and development incentive income is recognized when the research and development activities have been undertaken and the Company has completed its assessment of whether such activities meet the relevant qualifying criteria. | |||||
The Company recognizes government grant income at the fair value of the grant when it is received and all substantive conditions have been satisfied. When the grant relates to an expense item, it is recognized as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. | |||||
Exchange (loss) gain consists primarily of losses or gains due to foreign exchange translation, primarily reflecting changes in Australian and U.S. foreign exchange rates. Under U.S. GAAP, these items relate to a translation of U.S. dollar-denominated bank accounts into Nexvet Australia’s Australian dollar functional currency and represent a non-cash item. | |||||
Comprehensive Loss | |||||
Comprehensive loss is defined as the total change in shareholders’ equity (deficit) during the period other than from transactions with shareholders, which for the Company includes net change in foreign currency translation adjustments. | |||||
Share-Based Compensation | |||||
The Company’s share-based compensation plan (see Note 9) provides for the grant of share options, restricted share units and other share-based awards. The fair value of share options is determined as of the date of grant using the binomial option-pricing model. This method incorporates the fair value of the Company’s ordinary shares at the date of each grant and various assumptions such as the risk-free interest rate, expected volatility based on the historic volatility of peer companies, expected dividend yield, and expected term of the share option. Restricted share units are valued at the fair value of the underlying ordinary shares as of the date of grant. To date, the Company has granted options to purchase ordinary shares with an exercise price of their nominal value of $0.125 per ordinary share and restricted share units to acquire ordinary shares with a conversion price of the nominal value of $0.125 per ordinary share on the date of grant. The Company classifies share-based compensation expense in the statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified. | |||||
Equity instruments issued to non-employees, including consultants, are accounted for in accordance with Financial Accounting Standards Board (“FASB”) guidance. All transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date on which it is probable that performance will occur. | |||||
For transactions where the fair value of the equity instrument issued to non-employees is the more reliable measurement and a measurement date has not been reached, the fair value is re-measured at each balance sheet date using the binomial option-pricing model. Compensation expense for these share-based awards is recognized over the term of the consulting agreement or until the award is approved and settled. | |||||
Segment Data | |||||
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is a clinical stage biopharmaceutical company focusing on developing therapies for companion animals. As of December 31, 2014 and June 30, 2014, all major assets were held in Australia. | |||||
Recently Adopted Accounting Pronouncements | |||||
The Company has early adopted the provisions of Accounting Standards Update (“ASU”) No. 2014-10, Elimination of Certain Financial Requirements, Including an Amendment to Variable Interest Entities Guidance Topic in Topic 810, Consolidation, starting in fiscal year 2014. In June 2014, the FASB issued guidance removing the definition of a development stage entity from the Master Glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. This guidance also eliminates an exception provided to development stage entities in ASC Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of the investment equity that is at risk. On adoption, the Company was not required to present or disclose any information required by ASC Topic 915, Development Stage Entities. | |||||
Recently Issued Accounting Pronouncements | |||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about: | |||||
· | Contracts with customers—including revenue and impairments recognized, disaggregation of revenue and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations). | ||||
· | Significant judgments and changes in judgments—determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations. | ||||
· | Certain assets—assets recognized from the costs to obtain or fulfill a contract. | ||||
This guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the impact that this guidance will have on the Company’s condensed consolidated results of operations, financial position and cash flows. | |||||
In June 2014, the FASB issued ASU 2014-12, Compensation—Stock Compensation. This guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply the existing guidance in ASC Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This guidance will be effective for annual reporting periods beginning after December 15, 2015. The Company is currently evaluating the impact that this guidance will have on the Company’s condensed consolidated results of operations, financial position and cash flows. | |||||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40). This guidance defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under the guidance, management is required to evaluate, for each annual and interim reporting period, whether it is probable that the entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued or are available to be issued. When management identifies substantial doubt about the entity’s ability to continue as a going concern, additional disclosures are required. This guidance will be effective for annual reporting periods beginning after December 15, 2016. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or cash flows. | |||||
Accrued_Expenses
Accrued Expenses | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Accrued Expenses | 3. Accrued Expenses | ||||||||
Accrued expenses consisted of the following as of the dates indicated: | |||||||||
December 31, | June 30, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Accrued payroll and related expenses | $ | 573 | $ | 502 | |||||
Accrued professional fees | 956 | 355 | |||||||
Accrued research and development costs | 653 | 1,442 | |||||||
Accrued expenses | $ | 2,182 | $ | 2,299 | |||||
Warrants
Warrants | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Warrants And Rights Note Disclosure [Abstract] | |||||||||
Warrants | 4. Warrants | ||||||||
December 31, | June 30, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Warrants | $ | — | $ | 5,435 | |||||
In May 2014, the Company issued warrants to purchase 1,574,998 ordinary shares to purchasers of its Series B preference shares with an exercise price of $8.625 per share. In addition, the Company issued warrants to purchase 192,000 ordinary shares to financial advisors with an exercise price of $7.50 per share. | |||||||||
All warrants have a five year contractual life, are exercisable in U.S. dollars and were revalued to fair value at June 30, 2014 using the appropriate exchange rate. The warrants were reclassified to shareholders’ equity in September 2014 following the Irish Reorganization and the change in the functional currency of the Company to U.S. dollars. |
Convertible_Preference_Shares
Convertible Preference Shares | 6 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Convertible Preference Shares | 5. Convertible Preference Shares | ||||||||||||
The Company has issued Series A investment preference shares (“SIRPS Preference Shares”) and Series B convertible preference shares (“Series B Preference Shares”) (collectively, the “Preference Shares”). The Company’s Memorandum and Articles of Association as of December 31, 2014 authorized 12,000,000 Preference Shares with a nominal value of $0.125 per Preference Share. | |||||||||||||
Preference Shares consisted of the following as of December 31, 2014 and June 30, 2014: | |||||||||||||
December 31, 2014 | Preference | Liquidation | Carrying | ||||||||||
Shares | Preference | Value | |||||||||||
Issued and | |||||||||||||
Outstanding | |||||||||||||
(in thousands) | |||||||||||||
SIRPS Preference Shares | 1,737,144 | $ | 16,353 | $ | 8,177 | ||||||||
Series B Preference Shares | 4,200,016 | 51,298 | 25,649 | ||||||||||
5,937,160 | $ | 67,651 | $ | 33,826 | |||||||||
June 30, 2014 | Preference | Liquidation | Carrying | ||||||||||
Shares | Preference | Value | |||||||||||
Issued and | |||||||||||||
Outstanding | |||||||||||||
(in thousands) | |||||||||||||
SIRPS Preference Shares | 1,737,132 | $ | 16,353 | $ | 8,177 | ||||||||
Series B Preference Shares | 4,200,006 | 51,298 | 25,649 | ||||||||||
5,937,138 | $ | 67,651 | $ | 33,826 | |||||||||
Following changes to the redemption features of the Preference Shares in August 2014, the Preference Shares have been reclassified into shareholders’ equity (deficit). | |||||||||||||
Prior to August 2014, upon certain insolvency and other events, the holders of the Preference Shares could require their redemption. Therefore, the Preference Shares were classified outside of shareholders’ equity (deficit) in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities as of June 30, 2014. In August 2014, these redemption features were eliminated. Accordingly, such amounts have been reclassified from mezzanine to shareholders’ equity (deficit) as of December 31, 2014. | |||||||||||||
Each Preference Share automatically converted into one ordinary share on completion of the Company’s initial public offering. |
Ordinary_Shares
Ordinary Shares | 6 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Ordinary Shares | 6. Ordinary Shares |
The Company’s Memorandum and Articles of Association as of December 31, 2014 authorized 20,000,000 ordinary shares with a $0.125 nominal value per ordinary share. As of December 31, 2014 and June 30, 2014, there were 1,232,702 and 1,268,810 ordinary shares outstanding, respectively, which included zero and 254,680 ordinary shares subject to limited recourse loans, respectively. | |
Fair_Value_Measurement
Fair Value Measurement | 6 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurement | 7. Fair Value Measurement | ||||||||||||||||
Assets and liabilities carried at fair value on a recurring basis as of December 31, 2014 and June 30, 2014, including financial instruments, which the Company accounts for under the fair value option, are summarized in the following tables. | |||||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | Assets/ | |||||||||||||
Liabilities at | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 21,665 | $ | — | $ | — | $ | 21,665 | |||||||||
30-Jun-14 | Level 1 | Level 2 | Level 3 | Assets/ | |||||||||||||
Liabilities at | |||||||||||||||||
Fair Value | |||||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 30,041 | $ | — | $ | — | $ | 30,041 | |||||||||
Liabilities | |||||||||||||||||
Warrants | $ | — | $ | — | $ | 5,435 | $ | 5,435 | |||||||||
In September 2014 the warrants were transferred out of level 3 due to the change in organizational structure, which resulted in the warrants no longer being valued at fair value. There were no other transfers between the levels within the reporting period. |
Net_Loss_Per_Share
Net Loss Per Share | 6 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Net Loss Per Share | 8. Net Loss Per Share | ||||||||||||||||
The calculation of net loss per participating securities (“EPS”) for the three months ended December 31, 2014 and 2013 and the six months ended December 31, 2014 and 2013 is presented below. For more information on the calculation of EPS, see Note 2. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Net loss | $ | (2,413 | ) | $ | (993 | ) | $ | (4,710 | ) | $ | (2,009 | ) | |||||
Weighted-average ordinary shares issued and | 1,198,828 | 1,000,000 | 1,138,520 | 1,000,000 | |||||||||||||
outstanding—basic and diluted | |||||||||||||||||
Net loss per ordinary share—basic and diluted | $ | (2.01 | ) | $ | (0.99 | ) | $ | (4.14 | ) | $ | (2.01 | ) | |||||
The following ordinary share equivalents were excluded from the calculation of diluted net loss per share for the periods ended on the dates indicated because including them would have an anti-dilutive effect: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Preference Shares | 5,937,160 | 1,737,132 | 5,937,160 | 1,737,132 | |||||||||||||
Share-based awards | 477,392 | — | 477,392 | — | |||||||||||||
Warrants | 1,766,998 | — | 1,766,998 | — | |||||||||||||
Shares subject to limited recourse loans (see Note 9) | — | 264,386 | — | 264,386 | |||||||||||||
Total | 8,181,550 | 2,001,518 | 8,181,550 | 2,001,518 | |||||||||||||
Unaudited basic and diluted net loss per share for the three months ended December 31, 2014 and 2013 and the six months ended December 31, 2014 and 2013 are computed using the weighted-average number of ordinary shares outstanding after giving effect to the conversion of all Preference Shares into ordinary shares as if such conversion had occurred at the beginning of the period presented, or the date of original issuance, if later. Outstanding share options, restricted share units and warrants were excluded from the calculation of net loss per share because including them would have had an anti-dilutive effect. | |||||||||||||||||
Share_Based_Awards
Share Based Awards | 6 Months Ended |
Dec. 31, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Awards | 9. Share-Based Awards |
As permitted by Australian law, the Company’s board of directors has historically granted share options and restricted share units with an exercise or conversion price, as applicable, of zero to recipients in Australia. Contemporaneously with these awards and based upon information available at the time of grant, the Company’s board of directors, with the assistance of management, also determined the fair value of the shares underlying these share options for financial reporting purposes. To determine the best estimate of the fair value of the Company’s ordinary shares at each grant date, the Company’s board of directors considered numerous factors, including contemporaneous third-party valuations, current business conditions and projections, risks inherent to the development of the Company’s research and development programs, including the status of pivotal safety and efficacy studies for its lead product candidates, the Company’s financial condition, the Company’s need for future financing to fund its research and development efforts and the commercialization of its lead product candidates, and other relevant factors. | |
2012 Employee Share Option Plan | |
In August 2012, the Company’s board of directors adopted the Company’s Employee Share Option Plan (the “2012 Plan”). Pursuant to the 2012 Plan, the Company issued 264,386 ordinary shares at a purchase price of $4.20 per share to employees (including executive officers), consultants and each member of the Company’s board of directors who could purchase such ordinary shares with an interest-free, limited recourse loan payable to the Company. These limited recourse loans were not collateralized and were not recourse to the assets of the borrower, except to the extent of the ordinary shares issued. Because the loans were the sole consideration for the shares issued, the Company accounted for these arrangements as share options since the substance is similar to the grant of an option, with a deemed exercise price equal to the loan amount. The fair value of the notional share options was expensed in fiscal year 2013 when vested with a corresponding credit to additional paid-in capital. | |
The limited recourse loans were repayable within 30 days of the termination of service to the Company of the employee, director or consultant. Failure to pay back the loan within that time frame would have resulted in the relinquishment of those shares by the shareholder. The balance of loans outstanding as of December 31, 2014 was zero and as of June 30, 2014 was $1.0 million. As discussed in Note 2, the Company has not recognized a separate receivable for limited recourse loans. | |
The 2012 Plan is no longer in use. Between June 30, 2014 and December 31, 2014, all of the limited recourse loans were either repaid in cash or satisfied by the repurchase by the Company of certain ordinary shares issued subject to such loans at a purchase price of $6.35 per ordinary share. The Company issued to each former holder of such ordinary shares an option to purchase a number of ordinary shares equal to the number of ordinary shares repurchased with an exercise price of $6.35 per ordinary share. The new options expire in February 2018, consistent with the original repayment date of the loan. With respect to Dr. Heffernan, his $0.3 million loan amount was satisfied with a repurchase by the Company of 52,040 ordinary shares held by him and the grant to him of an option to purchase 52,040 ordinary shares. With respect to Dr. Gearing, his $0.3 million loan amount was satisfied with a repurchase by the Company of 46,372 ordinary shares held by him and the grant to him of an option to purchase 46,372 ordinary shares. | |
2013 Long Term Incentive Plan | |
In September 2013, the Company’s board of directors approved a long-term incentive plan for its employees (including executive officers), directors and consultants pursuant to which in November 2013 the Company issued share options to purchase 215,799 ordinary shares and restricted share units to acquire 29,214 ordinary shares to employees, directors and consultants. The underlying ordinary shares had a fair value of $5.15 per share, but the awards had an exercise or conversion price, as applicable, of zero, as permitted under Australian law. Because Irish law requires the payment to an issuer of at least the nominal value of shares in order to acquire such shares from the issuer, any options or restricted share units with a zero exercise or conversion price became exercisable or convertible, as applicable, at the nominal value per ordinary share in August 2014 in anticipation of the Irish Exchange. This nominal value became $0.10 per ordinary share in September 2014 in connection with the Irish Exchange and was revised to $0.125 per ordinary share in connection with the four-for-five share consolidation in November 2014. In September 2014, the Company also issued share options to purchase 16,800 ordinary shares and restricted share units to acquire 21,240 ordinary shares to employees, directors and consultants. The underlying ordinary shares had a fair value of $6.35 per ordinary share, but the awards had an exercise or conversion price of the nominal value of $0.10 per ordinary share, which nominal value became $0.125 per ordinary share in connection with the four-for-five share consolidation in November 2014. Except for share options and restricted share units held by directors (which vested either beginning in September 2014 and quarterly thereafter or in November 2014), share options and restricted share units held by employees and consultants vested or will vest, as applicable, in three equal tranches in November 2014, November 2015 and November 2016. The Company revised this plan in September 2014 and refers to this plan as its “2013 Plan.” | |
The 2013 Plan was terminated in connection with the Company’s initial public offering. The 2013 Plan will continue to govern outstanding awards granted thereunder. Appropriate adjustments will be made in the number of authorized ordinary shares and other numerical limits in the 2013 Plan and in outstanding awards to prevent dilution or enlargement of participants’ rights in the event of a share split or other change in the Company’s capital structure. | |
The 2013 Plan is administered by the Company’s board of directors. All awards are evidenced by a written agreement between the Company and the holder of the award. The board of directors has the authority to construe and interpret the terms of the 2013 Plan and awards granted under the 2013 Plan. | |
In the event of a change of control as described in the 2013 Plan, the acquiring or successor entity may assume or continue all or any awards outstanding under the 2013 Plan or substitute substantially equivalent awards. Any awards which are not assumed or continued in connection with a change of control or are not exercised or settled prior to the change of control will terminate effective as of the time of the change of control. The board of directors may provide for the acceleration of vesting of any or all outstanding awards upon such terms and to such extent as it determines, except that the vesting of all awards held by members of the board of directors who are not employees will automatically be accelerated in full. The 2013 Plan also authorizes the board of directors, in its discretion and without the consent of any participant, to cancel each or any outstanding award denominated in ordinary shares upon a change of control in exchange for a payment to the participant with respect to each share subject to the cancelled award of an amount equal to the excess of the consideration to be paid per ordinary share in the change of control transaction over the exercise price per ordinary share, if any, under the award. | |
Share Awards to Consultants or Advisors for Services Provided | |
In November 2013, the Company entered into an agreement with a financial advisor for the provision of certain financial services. Pursuant to the agreement, the financial advisor elected to receive payment of fees in ordinary shares. In November 2013, the Company issued 8,849 SIRPS Preference Shares at $5.18 per share to the financial advisor. | |
Related Party Transactions | |
Dr. Andrew Gearing is a former director, a co-founder of the Company and a brother of David Gearing, a co-founder of the Company and its Chief Scientific Officer. Dr. Andrew Gearing serves on the board of directors of Biocomm Squared Pty Ltd. In August 2013, the Company entered into a consulting agreement with Biocomm Squared Pty Ltd for research and development support services. This agreement was superseded by a new consulting agreement in December 2013, which was amended in April 2014. The Company recorded research and development expense of $62,000, $54,000, $115,000 and $79,000 for the three and six months ended December 31, 2014 and 2013, respectively, related to these agreements. As of December 31, 2014 and June 30, 2014, there was $18,000 and $23,000 payable to Biocomm Squared Pty Ltd, respectively. | |
Ridge Biotechnology Consulting, LLC is owned and operated by Dr. Robert Gearing, the brother of David Gearing, a co-founder of the Company and its Chief Scientific Officer. In October 2010, the Company entered into a consulting agreement with Ridge Biotechnology Consulting, LLC for the provision of services to the Company. The agreement was superseded by agreements entered into in April 2011 and April 2012, and a new consulting agreement with Ridge Biotechnology Consulting, LLC was entered into in January 2014. The Company recorded general and administrative expense of $67,000, $32,000, $100,000 and $41,000 in three and six months ended December 31, 2014 and 2013, respectively, related to these agreements. As of December 31, 2014 and June 30, 2014, there was $19,000 and $19,000 payable to Ridge Biotechnology Consulting, LLC, respectively. Dr. Robert Gearing was also a party to a 2012 agreement with the Company pursuant to which the Company issued Dr. Gearing 4,424 ordinary shares in fiscal year 2014 and 6,250 ordinary shares in fiscal year 2013, with an aggregate value of $48,000, for arranging certain research and development services. | |
Peter Howard is a former director of the Company. In July 2011, the Company entered into a consultancy agreement with Mr. Howard for financial advisory services. The Company recorded expense of $27,000, $7,000, $27,000 and $14,000, for the three and six months ended December 31, 2014 and 2013, respectively, related to this agreement. | |
Dr. Paul Wood is a former director of the Company. In May 2013, the Company entered into a consultancy agreement with Dr. Wood for consulting services. The Company recorded expense of $6,000, $3,000, $9,000 and $24,000 for the three and six months ended December 31, 2014 and 2013, respectively, related to this agreement. | |
Valuation_of_Share_Awards
Valuation of Share Awards | 6 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||
Valuation of Share Awards | 10. Valuation of Share Awards | ||||||||||||||||
The fair value of each share option is estimated on the date of grant using the binomial option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected share volatility based on the historical volatility of its publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The expected term of the Company’s share options has been determined utilizing the “simplified” method as the Company has insufficient historical experience for share options overall, rendering existing historical experience irrelevant to expectations for current grants. The risk-free interest rate is determined by reference to the appropriate reserve bank yield in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The fair value of the underlying ordinary shares considered the price per share paid by investors in the Company’s private financings, including the Series B Preference Shares in May 2014. The fair value of the share options was estimated using the following assumptions: | |||||||||||||||||
Six Months Ended | Year Ended | ||||||||||||||||
December 31, 2014 | June 30, 2014 | ||||||||||||||||
Fair value per ordinary share | $6.35 - $9.50 | $5.15 | |||||||||||||||
Risk free interest rate | 1.70% | 4.00% | |||||||||||||||
Expected term (in years) | 5 years | 5-10 years | |||||||||||||||
Expected volatility | 80% | 80% | |||||||||||||||
Expected dividend yield | zero | zero | |||||||||||||||
The following table summarizes share option activity for fiscal year 2014 and the six months ended December 31, 2014: | |||||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | ||||||||||||||
Issuable | Average | Average | Intrinsic | ||||||||||||||
Under | Exercise | Remaining | Value | ||||||||||||||
Options | Price | Contractual | (in thousands) | ||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding as of June 30, 2013 | 264,386 | $ | 4.2 | 5 | $ | 708 | |||||||||||
Granted | 215,799 | 0.125 | 4.75 | 1,115 | |||||||||||||
Exercised | — | — | — | — | |||||||||||||
Ordinary shares no longer subject to limited recourse loans | (9,706 | ) | -1 | 4.2 | 5 | (26 | ) | ||||||||||
Expired or forfeited | — | — | — | — | |||||||||||||
Outstanding as of June 30, 2014 | 470,479 | $ | 2.33 | 5 | $ | 1,797 | |||||||||||
Granted | 303,661 | $ | 3.1 | 5 | $ | 3,431 | |||||||||||
Exercised | (92,940 | ) | 0.125 | 5 | (13 | ) | |||||||||||
Ordinary shares no longer subject to limited recourse loans | (109,611 | ) | -1 | 4.2 | 5 | (460 | ) | ||||||||||
Repurchased | (145,069 | ) | -1 | 6.35 | 5 | (222 | ) | ||||||||||
Expired or forfeited | — | — | — | — | |||||||||||||
Outstanding as of December 31, 2014 | 426,520 | $ | 2.31 | 5 | $ | 4,533 | |||||||||||
Options vested and expected to vest, as of June 30, 2013 | — | $ | — | ||||||||||||||
Options vested and expected to vest, as of June 30, 2014 | 6,195 | $ | 0.125 | ||||||||||||||
Options vested and expected to vest, as of December 31, 2014 | 158,137 | $ | 5.84 | ||||||||||||||
(1) Reflects ordinary shares issued subject to limited recourse loans. See Note 9. | |||||||||||||||||
The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares. | |||||||||||||||||
In addition to the share options described above, the Company has granted restricted share units to its directors, employees and consultants. Restricted share units are valued at the fair value of the underlying ordinary shares as of the date of grant. The fair value of the ordinary shares issuable upon conversion of restricted share units considered the price per share paid by investors in the Company’s private financings, including the SIRPS Preference Shares in July 2013. The ordinary shares subject to the restricted share units are generally issued when they vest. The table below presents the Company’s restricted share unit activity for fiscal year 2014 and the six months ended December 31, 2014: | |||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Restricted | Average | Average | Intrinsic | ||||||||||||||
Share Units | Grant Date | Remaining | Value | ||||||||||||||
Fair Value | Contractual | (in thousands) | |||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding as of June 30, 2013 | — | $ | — | — | $ | — | |||||||||||
Granted | 29,214 | 5.15 | 2.1 | 151 | |||||||||||||
Converted | — | — | — | — | |||||||||||||
Forfeited | — | — | — | — | |||||||||||||
Outstanding as of June 30, 2014 | 29,214 | $ | 5.15 | 2.1 | $ | 151 | |||||||||||
Granted | 37,667 | $ | 7.72 | $ | 2.2 | $ | 286 | ||||||||||
Converted | (16,009 | ) | 5.31 | — | (85 | ) | |||||||||||
Forfeited | — | — | — | — | |||||||||||||
Outstanding as of December 31, 2014 | 50,872 | 7.01 | 1.9 | $ | 352 | ||||||||||||
Converted and expected to convert, as of June 30, 2013 | — | $ | — | ||||||||||||||
Converted and expected to convert, as of June 30, 2014 | — | $ | — | ||||||||||||||
Converted and expected to convert, as of December 31, 2014 | 3,700 | $ | 6.35 | ||||||||||||||
As of December 31, 2014 and June 30, 2014, the Company had approximately $2.4 million and $0.1 million, respectively, of unrecognized compensation expense related to unvested restricted share units, which is expected to be recognized over a weighted average period of 1.9 years and 2.4 years, respectively. | |||||||||||||||||
Share-Based Compensation | |||||||||||||||||
The Company recognizes share-based compensation expense for only the portion of awards that are expected to vest. In developing a forfeiture rate estimate, the Company has considered its historical experience to estimate pre-vesting forfeitures for service-based awards. The impact of a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual forfeiture rate is materially different from the Company’s estimate, the Company may be required to record adjustments to share-based compensation expense in future periods. | |||||||||||||||||
The Company recorded share-based compensation expense related to share options and restricted share units for the three and six months ended December 31, 2014 and 2013 as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | |||||||||||||||||
Research and development | $ | 131 | $ | — | $ | 173 | $ | — | |||||||||
General and administrative | 212 | 27 | 365 | 27 | |||||||||||||
Total | $ | 343 | $ | 27 | $ | 538 | $ | 27 | |||||||||
The Company had an aggregate of $2.4 million and $1.0 million, respectively, of unrecognized share-based compensation expense for share options and restricted share units outstanding as of December 31, 2014 and June 30, 2014, which is expected to be recognized over an estimated period of 3.0 years and 2.4 years, respectively, for share options and restricted share units under the 2013 Plan. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies | 11. Commitments and Contingencies | ||||||||||||||||||||
Indemnities and Guarantees | |||||||||||||||||||||
The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions. The Company indemnifies its officers and directors to the maximum extent permitted under the laws of Ireland. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. These indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheets. | |||||||||||||||||||||
As of December 31, 2014, future payments under non-cancellable operating leases (associated with office space) and purchase obligations (associated with suppliers of goods and services) were as follows: | |||||||||||||||||||||
Total | Less than | 3-Jan | 5-Mar | After 5 | |||||||||||||||||
1 Year | Years | Years | Years | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Operating leases | $ | 372 | $ | 86 | $ | 230 | $ | 56 | $ | — | |||||||||||
Purchase obligations | 898 | 898 | — | — | — | ||||||||||||||||
Total | $ | 1,270 | $ | 984 | $ | 230 | $ | 56 | $ | — | |||||||||||
Subsequent_Events
Subsequent Events | 6 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | 12. Subsequent Events | |
In February 2015, the Company’s the 2015 Equity Incentive Plan (the “2015 Plan”) became effective. The 2015 Plan is intended to allow the Company to provide incentives that will assist it to attract, retain and motivate employees, including officers, consultants and directors. The Company may provide these incentives through the grant of share options, restricted share units, performance shares and units and other cash-based or share-based awards. A total of 1,280,000 of the Company’s ordinary shares are initially authorized and reserved for issuance under the 2015 Plan. | ||
In February 2015, the Company closed its initial public offering of 4.0 million ordinary shares at a price to the public of $10.00 per share. In March 2015, the underwriters partially exercised their over-allotment option and purchased an additional 0.2 million shares. Following the sales of these securities, the Company received aggregate gross proceeds of $41.8 million and net proceeds of $36.0 million, after deducting the underwriting discount of $2.9 million and estimated offering expenses of $2.8 million payable by the Company. Upon the initial closing, all Preference Shares were converted to ordinary shares. The Company’s ordinary shares are listed on the Nasdaq Global Market under the symbol “NVET.” | ||
In addition, upon the initial closing of the Company’s initial public offering: | ||
· | Mr. Rajiv Patel was appointed to the board of directors; | |
· | all existing shareholder agreements terminated; and | |
· | an amended and restated Memorandum and Articles of Association became effective for the Company. | |
In March 2015, the Company received the results of a sample size reassessment for its NV-01 pivotal safety and efficacy study. The results indicated that, in order to have a high probability of a statistically significant endpoint at the day 28 primary assessment, it will be necessary to increase the current size of the study. The results also indicated that placebo was not superior to NV-01 with regard to treatment success and that it was not necessary to increase the number of NV-01 treated dogs to potentially over 1,000 participants. The Company is meeting with regulatory authorities to discuss the results of the sample size reassessment. The Company is considering the optimal size for the study but currently intends to continue recruiting dogs for the study as planned. The Company is assessing the impact of time, cost, and related logistical issues regarding the feasibility of substantially increasing the number of dogs in the current study, or initiating additional studies. | ||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation | ||||
The accompanying interim condensed consolidated financial statements of the Company include the operations of all its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Such operations include the Company, Nexvet Australia, NVIP Pty Limited, Nexvet UK Limited and Nexvet US, Inc. All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on June 30, and references to any fiscal year are to the Company’s year ended June 30 in that year. | |||||
Unaudited Interim Financial Information | Unaudited Interim Financial Information | ||||
The accompanying interim condensed consolidated financial statements and related disclosures as of December 31, 2014 and for the three and six months ended December 31, 2014 and 2013 are unaudited and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of December 31, 2014 and the results of its operations and comprehensive loss and its cash flows for the three and/or six months ended December 31, 2014 and 2013. The financial data and other information disclosed in these notes related to the three and/or six months ended December 31, 2014 and 2013 are unaudited. The results for the three and six months ended December 31, 2014 and 2013 are not necessarily indicative of results to be expected for a full year, any other interim periods or any future year or period. | |||||
These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended June 30, 2014 included in Company’s registration statement on Form S‑1 (Registration No. 333-201309) filed pursuant to rule 424(b) on February 5, 2015 with the SEC. The condensed consolidated balance sheet data as of June 30, 2014 was derived from audited consolidated financial statements. | |||||
Use of Estimates | Use of Estimates | ||||
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include research and development incentive income, research and development accruals, share-based payments, valuation of warrants, options and restricted share units and deferred income taxes. Actual results could differ from those estimates. | |||||
Net Loss Per Share | Net Loss Per Share | ||||
Net loss per share information is determined using the two-class method, which includes the weighted-average number of ordinary shares outstanding during the period and other securities that participate in dividends (a participating security). The Company’s convertible preference shares are participating securities as defined by Accounting Standards Codification (“ASC”) Topic 260-10, Earnings Per Share. Net loss per share disclosures for all periods have been revised to give effect to the share consolidations that took place in the reporting period. | |||||
Under the two-class method, basic net loss per share applicable to ordinary shareholders is computed by dividing the net loss applicable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the reporting period. | |||||
Diluted net loss per share gives effect to all potentially dilutive securities, including convertible preference shares and shares issuable upon the exercise or conversion, as applicable, of outstanding warrants, share options and restricted share units, using the treasury shares method. For the three and six months ended December 31, 2014 and 2013, the Company has excluded the effects of all potentially dilutive shares, which include convertible preference shares, warrants to purchase ordinary shares, ordinary share options, restricted share units and the ordinary shares issued subject to limited recourse loans, from the weighted-average number of ordinary shares outstanding as their inclusion in the computation for all periods would be anti-dilutive due to net losses. | |||||
Cash | Cash | ||||
As of December 31, 2014 and June 30, 2014, the Company’s cash consisted of cash deposited in a business operating account or in short-term deposit accounts of less than 90 days’ duration. | |||||
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties | ||||
The Company receives research and development incentive income and grants from a single source, the Australian government. | |||||
The Company’s cash is deposited with several large commercial banks located in the United States and Australia that are federally insured or guaranteed, limiting the amount of credit exposure to any one financial institution. The Company’s cash balances with these financial institutions often exceed the amount insured. | |||||
The Company is subject to risks common to companies in the biotechnology industry. The Company’s research and development may not be successfully completed, adequate protection for the Company’s technology may not be obtained, any products developed may not obtain necessary government regulatory approval and any approved products may not be commercially viable. The Company operates in an environment of substantial competition from other animal health companies, some of which have substantially more resources at their disposal. In addition, the Company is dependent upon the services of its employees and consultants, as well as third-party contract research organizations and manufacturers. | |||||
Fair Value Measurements | Fair Value Measurements | ||||
The Company records certain assets and liabilities at fair value in accordance with the provisions of ASC Topic 820, Fair Value Measurements. As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. | |||||
· | Level 1—Unadjusted quoted prices in active, accessible markets for identical assets or liabilities. | ||||
· | Level 2—Other inputs that are directly or indirectly observable in the marketplace. | ||||
· | Level 3—Unobservable inputs that are supported by little or no market activity. | ||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||||
The Company’s material financial instruments include cash, other income receivables, accrued liabilities and warrants. The carrying amounts of these instruments are considered to be representative of their respective fair values because of the short-term nature of those investments. The Company determined its warrants liability to be Level 3 fair value measurement as of June 30, 2014. | |||||
Other Income Receivable | Other Income Receivable | ||||
Other income receivable is recorded at the invoiced amount where available. | |||||
Nexvet Australia is eligible under the AusIndustry research and tax development tax incentive program to obtain a cash amount from the Australian Taxation Office (“ATO”). The tax incentive is available to Nexvet Australia on the basis of specific criteria with which Nexvet Australia must comply. Specifically, Nexvet Australia must have revenue of less than A$20 million and cannot be controlled by income tax exempt entities. Tax incentives are classified as other income receivable. | |||||
Foreign Currency | Foreign Currency | ||||
Items included in the Company’s condensed consolidated financial statements are measured using the currency of the primary economic environment in which the Company operates, referred to as the functional currency. Financial statements of companies operating outside the United States generally are measured using the local currency as the functional currency. Adjustments to translate those statements into United States dollars are recorded in other comprehensive income (loss) (“OCI”) as a net change in foreign currency translation. Non-cash currency translation adjustments in accumulated OCI were primarily related to a translation of U.S. dollar-denominated bank accounts from Nexvet Australia’s Australian dollar functional currency to U.S. dollars. | |||||
Foreign currency transactions are translated into the functional currency using the current exchange rate. For assets and liabilities, the exchange rate at the balance sheet date is used. For revenue and expenses and gains and losses, a weighted-average exchange rate for the period is used to translate those elements. The reporting currency of these condensed consolidated financial statements is U.S. dollars. These losses and gain relate to a translation of U.S. dollar-denominated bank accounts into the Company’s Australian dollar functional currency and are included in other income (expense). | |||||
Under U.S. GAAP, there is no offset of these two exchange-related items within the condensed consolidated statements of operations and comprehensive loss. Net loss and associated calculations are impacted by this treatment. | |||||
Warrants | Warrants | ||||
The Company’s liabilities primarily consist of warrants that were issued to investors and financial advisors in connection with private placements of the Company’s securities in May 2014. The warrants permit the holders to purchase ordinary shares at exercise prices of $8.625 and $7.50 per share on or before May 2019. Because the warrants may be net exercised and are exercisable in U.S. dollars, and the functional currency of Nexvet Australia, the original issuer of the warrants, is Australian dollars, they were classified as a liability as of June 30, 2014 and were reclassified to shareholders’ equity in September 2014 following the Irish Reorganization (in which the original warrants were exchanged for warrants issued by the Company) and the change in the functional currency of the Company to U.S. dollars. | |||||
Warrants recorded as liabilities ($5.4 million as of June 30, 2014) are valued at fair value using the binomial option-pricing model and the expected term based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations. At applicable balance sheet dates, the outstanding warrants were revalued to their then-current fair value, with the difference in fair value recorded in the condensed consolidated statements of operations and comprehensive loss. | |||||
Warrants are classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs. The significant assumptions used in estimating the fair value of the warrants include the estimated fair value of the underlying shares, exercise price, volatility of the shares underlying the warrant and the expected term of the warrant. The fair value of the underlying ordinary shares was estimated by reference to the price per share paid by investors for the Company’s Series B preference shares in May 2014. The fair values of the warrants were estimated using the following assumptions: | |||||
June 30, | |||||
2014 | |||||
Fair value per ordinary share | $6.35 | ||||
Risk free interest rate | 1.70% | ||||
Expected term (in years) | 4 years | ||||
Expected volatility | 75% | ||||
Expected dividend yield | Zero | ||||
There were warrants to purchase 1,766,998 ordinary shares issued during fiscal year 2014 and no warrants issued during the six months ended December 31, 2014. | |||||
The Company reclassified the warrants to shareholders’ equity (deficit) in additional paid-in capital in September 2014 following the Irish Reorganization and the change in the Company’s functional currency to U.S. dollars. | |||||
Income Taxes | Income Taxes | ||||
The Company has historically filed income tax returns in Australia and the United States and in the future also expects to file tax returns in Ireland. | |||||
The Company applies ASC Topic 740, Income Taxes, which establishes financial accounting and reporting requirements for the effects of income taxes that result from the Company’s activities during the current and preceding years. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities on their respective tax bases, and operating losses and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted statutory tax rates expected to apply to taxable income in the jurisdictions and years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. | |||||
When the Company determines that it is more likely than not that some portion or all of the deferred tax assets will not be realized in the future, the deferred tax assets are reduced by a valuation allowance. The valuation allowance is sufficient to reduce the deferred tax assets to the amount that the Company determines is more likely than not to be realized. | |||||
Research and Development Expense | Research and Development Expense | ||||
Research and development costs are expensed as incurred and consist primarily of (i) payroll and related expense for all employees engaged in scientific research and development functions, including wages, related benefits and share-based compensation, (ii) fees for regulatory, professional and other consultants and (iii) development costs, including costs of drug discovery, safety, proof-of-concept and pivotal safety and efficacy studies, development of biological materials and service providers. The Company is currently pursuing its NV-01, NV-02 and NV-08 lead product candidates and typically uses its employee and infrastructure resources across multiple development programs. The Company tracks outsourced development costs by lead product candidates but does not allocate personnel or other internal costs related to development to specific product candidates. | |||||
General and Administrative Expense | General and Administrative Expense | ||||
General and administrative expense consists primarily of non-research and development-related payroll and related expense for employees, consultants and directors, including wages, related benefits and share-based compensation. General and administrative expense also includes professional and consulting fees for legal, accounting, tax services and other general business services, as well other expenses such as travel, rent and facilities costs. | |||||
Other Income (Expense) | Other Income (Expense) | ||||
Nexvet Australia is eligible under the AusIndustry research and development tax incentive program to obtain a cash amount from the ATO. The tax incentive is available to Nexvet Australia on the basis of specific criteria with which Nexvet Australia must comply. Although the tax incentive is administered through the ATO, the Company has accounted for the tax incentive outside the scope of ASC Topic 740, Income Taxes, as an income tax benefit since Nexvet Australia meets the applicable requirements to participate in the program and the incentive is not linked to Nexvet Australia’s income tax liability and can be realized regardless of whether Nexvet Australia has generated taxable income. Research and development incentive income is recognized when the research and development activities have been undertaken and the Company has completed its assessment of whether such activities meet the relevant qualifying criteria. | |||||
The Company recognizes government grant income at the fair value of the grant when it is received and all substantive conditions have been satisfied. When the grant relates to an expense item, it is recognized as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. | |||||
Exchange (loss) gain consists primarily of losses or gains due to foreign exchange translation, primarily reflecting changes in Australian and U.S. foreign exchange rates. Under U.S. GAAP, these items relate to a translation of U.S. dollar-denominated bank accounts into Nexvet Australia’s Australian dollar functional currency and represent a non-cash item. | |||||
Comprehensive Loss | Comprehensive Loss | ||||
Comprehensive loss is defined as the total change in shareholders’ equity (deficit) during the period other than from transactions with shareholders, which for the Company includes net change in foreign currency translation adjustments. | |||||
Share-Based Compensation | Share-Based Compensation | ||||
The Company’s share-based compensation plan (see Note 9) provides for the grant of share options, restricted share units and other share-based awards. The fair value of share options is determined as of the date of grant using the binomial option-pricing model. This method incorporates the fair value of the Company’s ordinary shares at the date of each grant and various assumptions such as the risk-free interest rate, expected volatility based on the historic volatility of peer companies, expected dividend yield, and expected term of the share option. Restricted share units are valued at the fair value of the underlying ordinary shares as of the date of grant. To date, the Company has granted options to purchase ordinary shares with an exercise price of their nominal value of $0.125 per ordinary share and restricted share units to acquire ordinary shares with a conversion price of the nominal value of $0.125 per ordinary share on the date of grant. The Company classifies share-based compensation expense in the statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified. | |||||
Equity instruments issued to non-employees, including consultants, are accounted for in accordance with Financial Accounting Standards Board (“FASB”) guidance. All transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date on which it is probable that performance will occur. | |||||
For transactions where the fair value of the equity instrument issued to non-employees is the more reliable measurement and a measurement date has not been reached, the fair value is re-measured at each balance sheet date using the binomial option-pricing model. Compensation expense for these share-based awards is recognized over the term of the consulting agreement or until the award is approved and settled. | |||||
Segment Data | Segment Data | ||||
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is a clinical stage biopharmaceutical company focusing on developing therapies for companion animals. As of December 31, 2014 and June 30, 2014, all major assets were held in Australia. | |||||
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements | ||||
The Company has early adopted the provisions of Accounting Standards Update (“ASU”) No. 2014-10, Elimination of Certain Financial Requirements, Including an Amendment to Variable Interest Entities Guidance Topic in Topic 810, Consolidation, starting in fiscal year 2014. In June 2014, the FASB issued guidance removing the definition of a development stage entity from the Master Glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. This guidance also eliminates an exception provided to development stage entities in ASC Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of the investment equity that is at risk. On adoption, the Company was not required to present or disclose any information required by ASC Topic 915, Development Stage Entities. | |||||
Recently Issued Accounting Pronouncements | |||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about: | |||||
· | Contracts with customers—including revenue and impairments recognized, disaggregation of revenue and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations). | ||||
· | Significant judgments and changes in judgments—determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations. | ||||
· | Certain assets—assets recognized from the costs to obtain or fulfill a contract. | ||||
This guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the impact that this guidance will have on the Company’s condensed consolidated results of operations, financial position and cash flows. | |||||
In June 2014, the FASB issued ASU 2014-12, Compensation—Stock Compensation. This guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply the existing guidance in ASC Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This guidance will be effective for annual reporting periods beginning after December 15, 2015. The Company is currently evaluating the impact that this guidance will have on the Company’s condensed consolidated results of operations, financial position and cash flows. | |||||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40). This guidance defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Under the guidance, management is required to evaluate, for each annual and interim reporting period, whether it is probable that the entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued or are available to be issued. When management identifies substantial doubt about the entity’s ability to continue as a going concern, additional disclosures are required. This guidance will be effective for annual reporting periods beginning after December 15, 2016. The Company does not expect the adoption of this guidance to have a material impact on the Company’s financial condition, results of operations or cash flows. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Assumptions Used to Estimate Fair Values of Warrants | The fair values of the warrants were estimated using the following assumptions: | ||||
June 30, | |||||
2014 | |||||
Fair value per ordinary share | $6.35 | ||||
Risk free interest rate | 1.70% | ||||
Expected term (in years) | 4 years | ||||
Expected volatility | 75% | ||||
Expected dividend yield | Zero | ||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables And Accruals [Abstract] | |||||||||
Accrued Expenses | Accrued expenses consisted of the following as of the dates indicated: | ||||||||
December 31, | June 30, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Accrued payroll and related expenses | $ | 573 | $ | 502 | |||||
Accrued professional fees | 956 | 355 | |||||||
Accrued research and development costs | 653 | 1,442 | |||||||
Accrued expenses | $ | 2,182 | $ | 2,299 | |||||
Warrants_Tables
Warrants (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Warrants And Rights Note Disclosure [Abstract] | |||||||||
Schedule of Warrants | December 31, | June 30, | |||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Warrants | $ | — | $ | 5,435 | |||||
Convertible_Preference_Shares_
Convertible Preference Shares (Tables) | 6 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Schedule of Convertible Preference Shares | Preference Shares consisted of the following as of December 31, 2014 and June 30, 2014: | ||||||||||||
December 31, 2014 | Preference | Liquidation | Carrying | ||||||||||
Shares | Preference | Value | |||||||||||
Issued and | |||||||||||||
Outstanding | |||||||||||||
(in thousands) | |||||||||||||
SIRPS Preference Shares | 1,737,144 | $ | 16,353 | $ | 8,177 | ||||||||
Series B Preference Shares | 4,200,016 | 51,298 | 25,649 | ||||||||||
5,937,160 | $ | 67,651 | $ | 33,826 | |||||||||
June 30, 2014 | Preference | Liquidation | Carrying | ||||||||||
Shares | Preference | Value | |||||||||||
Issued and | |||||||||||||
Outstanding | |||||||||||||
(in thousands) | |||||||||||||
SIRPS Preference Shares | 1,737,132 | $ | 16,353 | $ | 8,177 | ||||||||
Series B Preference Shares | 4,200,006 | 51,298 | 25,649 | ||||||||||
5,937,138 | $ | 67,651 | $ | 33,826 | |||||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities carried at fair value on a recurring basis as of December 31, 2014 and June 30, 2014, including financial instruments, which the Company accounts for under the fair value option, are summarized in the following tables. | ||||||||||||||||
31-Dec-14 | Level 1 | Level 2 | Level 3 | Assets/ | |||||||||||||
Liabilities at | |||||||||||||||||
Fair Value | |||||||||||||||||
(in thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 21,665 | $ | — | $ | — | $ | 21,665 | |||||||||
30-Jun-14 | Level 1 | Level 2 | Level 3 | Assets/ | |||||||||||||
Liabilities at | |||||||||||||||||
Fair Value | |||||||||||||||||
Assets | |||||||||||||||||
Cash | $ | 30,041 | $ | — | $ | — | $ | 30,041 | |||||||||
Liabilities | |||||||||||||||||
Warrants | $ | — | $ | — | $ | 5,435 | $ | 5,435 | |||||||||
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Calculation of Net Loss Per Participating Securities | The calculation of net loss per participating securities (“EPS”) for the three months ended December 31, 2014 and 2013 and the six months ended December 31, 2014 and 2013 is presented below. For more information on the calculation of EPS, see Note 2. | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Net loss | $ | (2,413 | ) | $ | (993 | ) | $ | (4,710 | ) | $ | (2,009 | ) | |||||
Weighted-average ordinary shares issued and | 1,198,828 | 1,000,000 | 1,138,520 | 1,000,000 | |||||||||||||
outstanding—basic and diluted | |||||||||||||||||
Net loss per ordinary share—basic and diluted | $ | (2.01 | ) | $ | (0.99 | ) | $ | (4.14 | ) | $ | (2.01 | ) | |||||
Ordinary Share Equivalents Excluded from Calculation of Diluted Net Loss Per Share | The following ordinary share equivalents were excluded from the calculation of diluted net loss per share for the periods ended on the dates indicated because including them would have an anti-dilutive effect: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Preference Shares | 5,937,160 | 1,737,132 | 5,937,160 | 1,737,132 | |||||||||||||
Share-based awards | 477,392 | — | 477,392 | — | |||||||||||||
Warrants | 1,766,998 | — | 1,766,998 | — | |||||||||||||
Shares subject to limited recourse loans (see Note 9) | — | 264,386 | — | 264,386 | |||||||||||||
Total | 8,181,550 | 2,001,518 | 8,181,550 | 2,001,518 | |||||||||||||
Valuation_of_Share_Awards_Tabl
Valuation of Share Awards (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||
Estimated Fair Value of Share Options | The fair value of the share options was estimated using the following assumptions: | ||||||||||||||||
Six Months Ended | Year Ended | ||||||||||||||||
December 31, 2014 | June 30, 2014 | ||||||||||||||||
Fair value per ordinary share | $6.35 - $9.50 | $5.15 | |||||||||||||||
Risk free interest rate | 1.70% | 4.00% | |||||||||||||||
Expected term (in years) | 5 years | 5-10 years | |||||||||||||||
Expected volatility | 80% | 80% | |||||||||||||||
Expected dividend yield | zero | zero | |||||||||||||||
Summary of Share Option Activities | The following table summarizes share option activity for fiscal year 2014 and the six months ended December 31, 2014: | ||||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | ||||||||||||||
Issuable | Average | Average | Intrinsic | ||||||||||||||
Under | Exercise | Remaining | Value | ||||||||||||||
Options | Price | Contractual | (in thousands) | ||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding as of June 30, 2013 | 264,386 | $ | 4.2 | 5 | $ | 708 | |||||||||||
Granted | 215,799 | 0.125 | 4.75 | 1,115 | |||||||||||||
Exercised | — | — | — | — | |||||||||||||
Ordinary shares no longer subject to limited recourse loans | (9,706 | ) | -1 | 4.2 | 5 | (26 | ) | ||||||||||
Expired or forfeited | — | — | — | — | |||||||||||||
Outstanding as of June 30, 2014 | 470,479 | $ | 2.33 | 5 | $ | 1,797 | |||||||||||
Granted | 303,661 | $ | 3.1 | 5 | $ | 3,431 | |||||||||||
Exercised | (92,940 | ) | 0.125 | 5 | (13 | ) | |||||||||||
Ordinary shares no longer subject to limited recourse loans | (109,611 | ) | -1 | 4.2 | 5 | (460 | ) | ||||||||||
Repurchased | (145,069 | ) | -1 | 6.35 | 5 | (222 | ) | ||||||||||
Expired or forfeited | — | — | — | — | |||||||||||||
Outstanding as of December 31, 2014 | 426,520 | $ | 2.31 | 5 | $ | 4,533 | |||||||||||
Options vested and expected to vest, as of June 30, 2013 | — | $ | — | ||||||||||||||
Options vested and expected to vest, as of June 30, 2014 | 6,195 | $ | 0.125 | ||||||||||||||
Options vested and expected to vest, as of December 31, 2014 | 158,137 | $ | 5.84 | ||||||||||||||
(1) Reflects ordinary shares issued subject to limited recourse loans. See Note 9. | |||||||||||||||||
Summary of Restricted Share Unit Activity | The table below presents the Company’s restricted share unit activity for fiscal year 2014 and the six months ended December 31, 2014: | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Restricted | Average | Average | Intrinsic | ||||||||||||||
Share Units | Grant Date | Remaining | Value | ||||||||||||||
Fair Value | Contractual | (in thousands) | |||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding as of June 30, 2013 | — | $ | — | — | $ | — | |||||||||||
Granted | 29,214 | 5.15 | 2.1 | 151 | |||||||||||||
Converted | — | — | — | — | |||||||||||||
Forfeited | — | — | — | — | |||||||||||||
Outstanding as of June 30, 2014 | 29,214 | $ | 5.15 | 2.1 | $ | 151 | |||||||||||
Granted | 37,667 | $ | 7.72 | $ | 2.2 | $ | 286 | ||||||||||
Converted | (16,009 | ) | 5.31 | — | (85 | ) | |||||||||||
Forfeited | — | — | — | — | |||||||||||||
Outstanding as of December 31, 2014 | 50,872 | 7.01 | 1.9 | $ | 352 | ||||||||||||
Converted and expected to convert, as of June 30, 2013 | — | $ | — | ||||||||||||||
Converted and expected to convert, as of June 30, 2014 | — | $ | — | ||||||||||||||
Converted and expected to convert, as of December 31, 2014 | 3,700 | $ | 6.35 | ||||||||||||||
Share Based Compensation Expense Related to Share Options and Restricted Share Units | The Company recorded share-based compensation expense related to share options and restricted share units for the three and six months ended December 31, 2014 and 2013 as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | |||||||||||||||||
Research and development | $ | 131 | $ | — | $ | 173 | $ | — | |||||||||
General and administrative | 212 | 27 | 365 | 27 | |||||||||||||
Total | $ | 343 | $ | 27 | $ | 538 | $ | 27 | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Summary of Future Payments Non-Cancellable Operating Leases and Purchase Obligations | As of December 31, 2014, future payments under non-cancellable operating leases (associated with office space) and purchase obligations (associated with suppliers of goods and services) were as follows: | ||||||||||||||||||||
Total | Less than | 3-Jan | 5-Mar | After 5 | |||||||||||||||||
1 Year | Years | Years | Years | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Operating leases | $ | 372 | $ | 86 | $ | 230 | $ | 56 | $ | — | |||||||||||
Purchase obligations | 898 | 898 | — | — | — | ||||||||||||||||
Total | $ | 1,270 | $ | 984 | $ | 230 | $ | 56 | $ | — | |||||||||||
Organization_and_Description_o1
Organization and Description of Business - Addtional Information (Details) (USD $) | 1 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Aug. 31, 2014 | Dec. 31, 2014 | Jun. 30, 2014 |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Accumulated deficit | -16,508 | ($11,798) | ||
Cash | 21,665 | $30,041 | ||
Share consolidation, ratio | 0.8 | |||
Nexvet Biopharma | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Share consolidation, ratio | 0.25 | |||
Stockholders' Equity, Reverse Stock Split | In August 2014, the Company completed a one-for-four share consolidation. Each holder of ordinary shares and preference shares received one ordinary share or preference share for every four ordinary shares or preference shares held by such holder. The number of ordinary shares that may be acquired upon exercise of options or warrants or upon conversion of restricted share units was similarly reduced on a one-for-four basis, with a proportionate adjustment to the exercise or conversion price, as applicable. | |||
Nexvet Australia Pty Ltd | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Share consolidation, ratio | 0.8 | |||
Stockholders' Equity, Reverse Stock Split | In November 2014, the Company completed a four-for-five share consolidation. Each holder of ordinary shares and preference shares received four ordinary shares or four preference shares for every five ordinary shares or five preference shares held by such holder. The number of ordinary shares that may be acquired upon exercise of options or warrants on upon conversion of restricted share units was similarly reduced on a four-for-five basis, with a proportionate adjustment to the exercise or conversion price, as applicable. |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Details) (USD $) | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Jun. 30, 2014 | 31-May-14 | Apr. 30, 2014 | Jun. 30, 2013 | |
Accounting Policies [Line Items] | |||||
Revenues | $20,000,000 | ||||
Warrants exercise price | $8.63 | $7.50 | |||
Warrants exercisable date | 2019-05 | ||||
Warrants recorded as liabilities | $5,435,000 | ||||
Warrants issued to purchase ordinary shares | 0 | 1,766,998 | |||
Exercise price per share | $2.31 | $2.33 | $4.20 | ||
Employee Stock Option | |||||
Accounting Policies [Line Items] | |||||
Exercise price per share | $0.13 | ||||
Restricted Stock | |||||
Accounting Policies [Line Items] | |||||
Conversion price per share | $0.13 |
Summary_of_Significant_Acconti
Summary of Significant Acconting Policies - Assumptions Used to Estimate Fair Values of Warrants (Details) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Fair Value Disclosures [Abstract] | |
Fair value per ordinary share | $6.35 |
Risk free interest rate | 1.70% |
Expected term (in years) | 4 years |
Expected volatility | 75.00% |
Expected dividend yield | 0.00% |
Accrued_Expenses_Schedule_of_A
Accrued Expenses - Schedule of Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Payables And Accruals [Abstract] | ||
Accrued payroll and related expenses | $573 | $502 |
Accrued professional fees | 956 | 355 |
Accrued research and development costs | 653 | 1,442 |
Accrued expenses | $2,182 | $2,299 |
Warrants_Schedule_of_Warrants_
Warrants - Schedule of Warrants (Details) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Warrants And Rights Note Disclosure [Abstract] | |
Warrants | $5,435 |
Warrants_Additional_Informatio
Warrants - Additional Information (Details) (USD $) | 6 Months Ended | 12 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Jun. 30, 2014 | 31-May-14 | Apr. 30, 2014 | |
Class Of Warrant Or Right [Line Items] | ||||
Warrants issued to purchase ordinary shares | 0 | 1,766,998 | ||
Warrants exercise price | $8.63 | $7.50 | ||
Warrants contractual life | 5 years | |||
Series B Preferred Stock | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants issued to purchase ordinary shares | 1,574,998 | |||
Warrants exercise price | $8.63 | |||
Financial Advisors | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants issued to purchase ordinary shares | 192,000 | |||
Warrants exercise price | $7.50 |
Convertible_Preference_Shares_1
Convertible Preference Shares - Additional Information (Details) (USD $) | Dec. 31, 2014 |
Equity [Abstract] | |
Convertible preference shares, shares authorized | 12,000,000 |
Convertible preference shares, nominal value per share | $0.13 |
Convertible_Preference_Shares_2
Convertible Preference Shares - Schedule of Convertible Preference Shares (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Class Of Stock [Line Items] | ||
Preference Shares, Outstanding | 5,937,160 | |
Preference Shares, Liquidation Preference | $67,651 | |
Convertible preferred stock | 33,826 | |
Preference Shares, Outstanding | 5,937,138 | |
Preference Shares, Liquidation Preference | 67,651 | |
Convertible preferred stock | 33,826 | |
SIRPS Convertible Preference Shares | ||
Class Of Stock [Line Items] | ||
Preference Shares, Outstanding | 1,737,144 | 0 |
Preference Shares, Liquidation Preference | 16,353 | |
Convertible preferred stock | 8,177 | |
Preference Shares, Outstanding | 0 | 1,737,132 |
Preference Shares, Liquidation Preference | 16,353 | |
Convertible preferred stock | 8,177 | |
Series B Convertible Preference Shares | ||
Class Of Stock [Line Items] | ||
Preference Shares, Outstanding | 4,200,016 | 0 |
Preference Shares, Liquidation Preference | 51,298 | |
Convertible preferred stock | 25,649 | |
Preference Shares, Outstanding | 0 | 4,200,006 |
Preference Shares, Liquidation Preference | 51,298 | |
Convertible preferred stock | $25,649 |
Ordinary_Shares_Additional_Inf
Ordinary Shares - Additional Information (Details) (USD $) | Dec. 31, 2014 | Nov. 30, 2014 | Jun. 30, 2014 |
Class Of Stock [Line Items] | |||
Ordinary shares, shares authorized | 20,000,000 | 20,000,000 | |
Ordinary shares, nominal value per share | $0.13 | $0.10 | $0.13 |
Ordinary shares, shares outstanding | 1,232,702 | 1,268,810 | |
Ordinary Shares Subject to Limited Recourse Loans | |||
Class Of Stock [Line Items] | |||
Ordinary shares, shares outstanding | 0 | 254,680 |
Fair_Value_Measurement_Summary
Fair Value Measurement - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Cash | $21,665 | $30,041 |
Liabilities | ||
Warrants | 5,435 | |
Level 1 | ||
Assets | ||
Cash | 21,665 | 30,041 |
Level 3 | ||
Liabilities | ||
Warrants | $5,435 |
Net_Loss_Per_Share_Calculation
Net Loss Per Share - Calculation of Net Loss Per Participating Securities (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Earnings Per Share Basic And Diluted [Abstract] | |||||
Net loss | ($2,413) | ($993) | ($4,710) | ($2,009) | ($6,710) |
Weighted-average ordinary shares issued and outstanding—basic and diluted | 1,198,828 | 1,000,000 | 1,138,520 | 1,000,000 | |
Net loss per ordinary share—basic and diluted | ($2.01) | ($0.99) | ($4.14) | ($2.01) |
Net_Loss_Per_Share_Ordinary_Sh
Net Loss Per Share - Ordinary Share Equivalents Excluded from Calculation of Diluted Net Loss Per Share (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 8,181,550 | 2,001,518 | 8,181,550 | 2,001,518 |
Preferred Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 5,937,160 | 1,737,132 | 5,937,160 | 1,737,132 |
Share-Based Awards | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 477,392 | 477,392 | ||
Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 1,766,998 | 1,766,998 | ||
Ordinary Shares Subject to Limited Recourse Loans | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share | 264,386 | 264,386 |
Share_Based_Awards_2012_Employ
Share Based Awards - 2012 Employee Share Option Plan - Additional Information (Details) (USD $) | 1 Months Ended | 6 Months Ended | |
Aug. 31, 2012 | Dec. 31, 2014 | Jun. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Repurchased ordinary shares | 145,069 | ||
2012 Employee Share Option Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Ordinary shares issued | 264,386 | ||
Ordinary shares issued, purchase price per share | $4.20 | $6.35 | |
Limited recourse loan, repayment term | 30 days | ||
Limited recourse loan | $0 | $1,000,000 | |
New options expire period | 2018-02 | ||
2012 Employee Share Option Plan | Dr. Heffernan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Loan amount | 300,000 | ||
Repurchased ordinary shares | 52,040 | ||
Share options to purchase ordinary shares | 52,040 | ||
2012 Employee Share Option Plan | Dr. Gearing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Loan amount | $300,000 | ||
Repurchased ordinary shares | 46,372 | ||
Share options to purchase ordinary shares | 46,372 |
Share_Based_Awards_2013_Long_T
Share Based Awards - 2013 Long Term Incentive Plan - Additional Infromation (Details) (USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2014 | Sep. 30, 2014 | Nov. 30, 2013 | Dec. 31, 2014 | Jun. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Ordinary shares, nominal value per share | $0.10 | $0.13 | $0.13 | ||
Share consolidation, ratio | 0.8 | ||||
Previously Reported Value | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Ordinary shares, nominal value per share | 0.1 | ||||
Employee Stock Option | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share options to purchase ordinary shares | 16,800 | 215,799 | |||
Restricted Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted share units to acquire ordinary shares | 21,240 | 29,214 | 37,667 | 29,214 | |
Incentive awards, fair value per share of underlying ordinary shares | 6.35 | 5.15 | $7.72 | $5.15 | |
2013 Long Term Incentive Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Ordinary share exercise price | 0.1 | 0 | |||
Share options and restricted share units vesting description | Except for share options and restricted share units held by directors (which vested either beginning in September 2014 and quarterly thereafter or in November 2014), share options and restricted share units held by employees and consultants vested or will vest, as applicable, in three equal tranches in November 2014, November 2015 and November 2016. | ||||
Vesting period of share options and restricted share units held by held by employees and consultants | 3 years |
Share_Based_Awards_Share_Award
Share Based Awards - Share Awards to Consultants or Advisors for Services Provided - Additional information (Details) (Financial Advisors, USD $) | 1 Months Ended |
Nov. 30, 2013 | |
Financial Advisors | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Financial advisor fees in ordinary shares | 8,849 |
Preference shares issued per share | $5.18 |
Share_Based_Awards_Related_Par
Share Based Awards - Related Party Transactions - Additional Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Research and development | $2,226 | $780 | $4,765 | $2,020 | ||
General and administrative | 2,440 | 884 | 5,258 | 1,452 | ||
Ordinary shares, shares issued | 1,232,702 | 1,232,702 | 1,268,810 | |||
Biocomm Squared Pty Ltd | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Research and development | 62 | 54 | 115 | 79 | ||
Payable to related party | 18 | 18 | 23 | |||
Ridge Biotechnology Consulting L L C | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Payable to related party | 19 | 19 | 19 | |||
General and administrative | 67 | 32 | 100 | 41 | ||
Robert Gearing | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Research and development services | 48 | |||||
Robert Gearing | 2012 Employee Share Option Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Ordinary shares, shares issued | 6,250 | 4,424 | ||||
Peter Howard | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Research and development services | 27 | 7 | 27 | 14 | ||
Dr Paul Wood | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Research and development services | $6 | $3 | $9 | $24 |
Valuation_of_Share_Awards_Esti
Valuation of Share Awards - Estimated Fair Value of Share Options (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Jun. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value per ordinary share | $5.15 | |
Risk free interest rate | 1.70% | 4.00% |
Expected term (in years) | 5 years | |
Expected volatility | 80.00% | 80.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value per ordinary share | 6.35 | |
Expected term (in years) | 5 years | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Fair value per ordinary share | 9.5 | |
Expected term (in years) | 10 years |
Valuation_of_Share_Awards_Summ
Valuation of Share Awards - Summary of Share Option Activities (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Shares Issuable Under Options, Outstanding | 470,479 | 264,386 | |
Shares Issuable Under Options, Granted | 303,661 | 215,799 | |
Shares Issuable Under Options, Exercised | -92,940 | ||
Shares Issuable Under Options, Ordinary shares no longer subject to limited recourse loans | -109,611 | -9,706 | |
Shares Issuable Under Options, Outstanding | 426,520 | 470,479 | 264,386 |
Shares Issuable Under Options, Repurchased | -145,069 | ||
Shares Issuable Under Options, vested and expected to vest | 158,137 | 6,195 | |
Weighted Average Exercise Price, Outstanding | $2.33 | $4.20 | |
Weighted Average Exercise Price, Granted | $3.10 | $0.13 | |
Weighted Average Exercise Price, Exercised | $0.13 | ||
Weighted Average Exercise Price, Ordinary shares no longer subject to limited recourse loans | $4.20 | $4.20 | |
Weighted Average Exercise Price, Repurchased | $6.35 | ||
Weighted Average Exercise Price, Outstanding | $2.31 | $2.33 | $4.20 |
Weighted Average Exercise Price, Options vested and expected to vest | $5.84 | $0.13 | |
Weighted-Average Remaining Contractual Term, Outstanding | 5 years | 5 years | 5 years |
Weighted-Average Remaining Contractual Term, Granted | 5 years | 4 years 9 months | |
Weighted-Average Remaining Contractual Term, Exercised | 5 years | ||
Weighted-Average Remaining Contractual Term, Ordinary shares no longer subject to limited recourse loans | 5 years | 5 years | |
Weighted-Average Remaining Contractual Term, Repurchased | 5 years | ||
Weighted-Average Remaining Contractual Term, Outstanding | 5 years | 5 years | 5 years |
Aggregate Intrinsic Value, Outstanding | $1,797 | $708 | |
Aggregate Intrinsic Value, Granted | 3,431 | 1,115 | |
Aggregate Intrinsic Value, Exercised | -13 | ||
Aggregate Intrinsic Value, Ordinary shares no longer subject to limited recourse loans | -460 | -26 | |
Aggregate Intrinsic Value, Repurchased | -222 | ||
Aggregate Intrinsic Value, Outstanding | $4,533 | $1,797 | $708 |
Valuation_of_Share_Awards_Summ1
Valuation of Share Awards - Summary of Restricted Share Unit Activity (Details) (Restricted Stock, USD $) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Nov. 30, 2013 | Dec. 31, 2014 | Jun. 30, 2014 |
Restricted Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of Restricted Share Units, Outstanding | 29,214 | |||
Restricted share units to acquire ordinary shares | 21,240 | 29,214 | 37,667 | 29,214 |
Number of Restricted Share Units, Converted | -16,009 | |||
Number of Restricted Share Units, Outstanding | 50,872 | 29,214 | ||
Number of Restricted Share Units , Converted and expected to convert | 3,700 | |||
Weighted Average Grant Date Fair Value, Outstanding | $5.15 | |||
Weighted Average Grant Date Fair Value, Granted | $6.35 | $5.15 | $7.72 | $5.15 |
Weighted Average Grant Date Fair Value, Converted | $5.31 | |||
Weighted Average Grant Date Fair Value, Outstanding | $7.01 | $5.15 | ||
Weighted Average Grant Date Fair Value, Converted and expected to convert | $6.35 | |||
Weighted Average Remaining Contractual Term, Outstanding | 1 year 10 months 24 days | 2 years 1 month 6 days | ||
Weighted Average Remaining Contractual Term, Granted | 2 years 2 months 12 days | 2 years 1 month 6 days | ||
Aggregate Intrinsic Value, Outstanding | $151 | |||
Aggregate Intrinsic Value, Granted | 286 | 151 | ||
Aggregate Intrinsic Value, Converted | -85 | |||
Aggregate Intrinsic Value, Outstanding | $352 | $151 |
Valuation_of_Share_Awards_Addi
Valuation of Share Awards - Additional Information (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation expense weighted average period | 3 years | 2 years 4 months 24 days |
Unrecognized share-based compensation expenses | $2.40 | $1 |
Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation expense unvested restricted share | $2.40 | $0.10 |
Unrecognized compensation expense weighted average period | 1 year 10 months 24 days | 2 years 4 months 24 days |
Valuation_of_Share_Awards_Shar
Valuation of Share Awards - Share Based Compensation Expense Related to Share Options and Restricted Share Units (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Recognized share-based compensation expense | $343 | $27 | $538 | $27 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Recognized share-based compensation expense | 131 | 173 | ||
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Recognized share-based compensation expense | $212 | $27 | $365 | $27 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Summary of Future Payments Non-Cancellable Operating Leases and Purchase Obligations (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | |
Operating leases | $372 |
Operating leases Less than1 Year | 86 |
Operating leases 1-3Years | 230 |
Operating leases 3-5Years | 56 |
Purchase obligations | 898 |
Purchase obligations Less than 1 Year | 898 |
Total contractual | 1,270 |
Total contractual, Less than 1 year | 984 |
Total contractual, 1-3 years | 230 |
Total contractual, 3-5 years | $56 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Details) (USD $) | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended |
Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2015 | Feb. 28, 2015 | |
Ordinary Shares | ||||
Subsequent Event [Line Items] | ||||
Issuance of ordinary shares, shares | 1 | 4,424 | ||
Forecast | Over-Allotment Option | ||||
Subsequent Event [Line Items] | ||||
Issuance of ordinary shares, shares | 200,000 | |||
Subsequent Event | Ordinary Shares | ||||
Subsequent Event [Line Items] | ||||
Issuance of ordinary shares, shares | 4,000,000 | |||
Public offering price (in dollars per share) | $10 | |||
Proceeds from Initial Public Offering, Gross | $41,800,000 | |||
Proceeds from Initial Public Offering, Net | 36,000,000 | |||
Underwriting discount | 2,900,000 | |||
Subsequent Event | Over-Allotment Option | ||||
Subsequent Event [Line Items] | ||||
Offering expenses payable | $2,800,000 | |||
Subsequent Event | 2015 Equity Incentive Plan | ||||
Subsequent Event [Line Items] | ||||
Shares authorized and reserved for issuance | 1,280,000 |