Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Entity Registrant Name | Zynerba Pharmaceuticals, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,950,608 | |
Entity Central Index Key | 0001621443 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 60,638,853 | $ 70,063,242 |
Incentive and tax receivables | 12,906,735 | 14,613,969 |
Prepaid expenses and other current assets | 1,474,930 | 2,378,812 |
Total current assets | 75,020,518 | 87,056,023 |
Property and equipment, net | 587,267 | 362,724 |
Incentive and tax receivables | 571,329 | |
Right-of-use assets | 287,160 | 345,849 |
Total assets | 76,466,274 | 87,764,596 |
Current liabilities: | ||
Accounts payable | 3,328,339 | 4,740,981 |
Accrued expenses | 6,676,988 | 7,073,506 |
Lease liabilities | 252,394 | 243,677 |
Total current liabilities | 10,257,721 | 12,058,164 |
Lease liabilities, long-term | 44,237 | 109,689 |
Total liabilities | 10,301,958 | 12,167,853 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 200,000,000 shares authorized; 23,572,391 shares issued and outstanding at March 31, 2020 and 23,211,391 shares issued and outstanding at December 31, 2019 | 23,572 | 23,211 |
Additional paid-in capital | 229,314,197 | 226,409,156 |
Accumulated deficit | (163,173,453) | (150,835,624) |
Total stockholders' equity | 66,164,316 | 75,596,743 |
Total liabilities and stockholders' equity | $ 76,466,274 | $ 87,764,596 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 23,572,391 | 23,211,391 |
Common stock, shares outstanding | 23,572,391 | 23,211,391 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating expenses: | ||
Research and development | $ 6,882,793 | $ 6,306,712 |
General and administrative | 3,916,569 | 3,159,657 |
Total operating expenses | 10,799,362 | 9,466,369 |
Loss from operations | (10,799,362) | (9,466,369) |
Other income (expense): | ||
Interest income | 201,684 | 350,951 |
Foreign exchange loss | (1,740,151) | (31,599) |
Total other income | (1,538,467) | 319,352 |
Net loss | $ (12,337,829) | $ (9,147,017) |
Net loss per share basic and diluted | $ (0.53) | $ (0.47) |
Basic and diluted weighted average shares outstanding | 23,399,438 | 19,452,088 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) | Common stock | Additional paid-capital | Accumulated deficit | Total |
Balance at Dec. 31, 2018 | $ 17,627 | $ 175,476,075 | $ (117,892,041) | $ 57,601,661 |
Balance (in shares) at Dec. 31, 2018 | 17,626,873 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 3,439 | 18,076,359 | 18,079,798 | |
Issuance of common stock, net of issuance costs (in shares) | 3,439,523 | |||
Issuance of restricted stock | $ 9 | (9) | ||
Issuance of restricted stock (in shares) | 8,600 | |||
Stock-based compensation expense | 1,496,292 | 1,496,292 | ||
Net loss | (9,147,017) | (9,147,017) | ||
Balance at Mar. 31, 2019 | $ 21,075 | 195,048,717 | (127,039,058) | 68,030,734 |
Balance (in shares) at Mar. 31, 2019 | 21,074,996 | |||
Balance at Dec. 31, 2018 | $ 17,627 | 175,476,075 | (117,892,041) | 57,601,661 |
Balance (in shares) at Dec. 31, 2018 | 17,626,873 | |||
Balance at Dec. 31, 2019 | $ 23,211 | 226,409,156 | (150,835,624) | 75,596,743 |
Balance (in shares) at Dec. 31, 2019 | 23,211,391 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 356 | 1,581,694 | 1,582,050 | |
Issuance of common stock, net of issuance costs (in shares) | 356,000 | |||
Issuance of restricted stock | $ 5 | (5) | ||
Issuance of restricted stock (in shares) | 5,000 | |||
Stock-based compensation expense | 1,323,352 | 1,323,352 | ||
Net loss | (12,337,829) | (12,337,829) | ||
Balance at Mar. 31, 2020 | $ 23,572 | $ 229,314,197 | $ (163,173,453) | $ 66,164,316 |
Balance (in shares) at Mar. 31, 2020 | 23,572,391 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net loss | $ (12,337,829) | $ (9,147,017) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 41,216 | 29,256 | |
Stock-based compensation | 1,323,352 | 1,496,292 | |
Changes in operating assets and liabilities: | |||
Incentive and tax receivables | 1,135,905 | (643,219) | |
Prepaid expenses and other assets | 767,903 | 1,222,686 | |
Right-of-use assets | 1,954 | (1,303) | |
Accounts payable | (1,535,807) | (510,643) | |
Accrued expenses | (394,859) | (1,965,896) | |
Net cash used in operating activities | (10,998,165) | (9,519,844) | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (138,209) | (24,616) | |
Net cash used in investing activities | (138,209) | (24,616) | |
Cash flows from financing activities: | |||
Proceeds from the issuance of common stock | 1,816,471 | 18,713,185 | |
Payment of financing fees and expenses | (104,486) | (633,387) | |
Net cash provided by financing activities | 1,711,985 | 18,079,798 | |
Net (decrease) increase in cash and cash equivalents | (9,424,389) | 8,535,338 | |
Cash and cash equivalents at beginning of period | 70,063,242 | 59,763,773 | $ 59,763,773 |
Cash and cash equivalents at end of period | 60,638,853 | 68,299,111 | $ 70,063,242 |
Supplemental disclosures of cash flow information: | |||
Deferred financing costs included in accounts payable and accrued expenses | 57,526 | ||
Property and equipment acquired unpaid at end of period | $ 143,150 | ||
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | 12,824 | ||
Right-of-use assets and lease liability recorded upon adoption of ASC 842 | $ 325,683 |
Nature of Business and Liquidit
Nature of Business and Liquidity | 3 Months Ended |
Mar. 31, 2020 | |
Nature of Business and Liquidity | |
Nature of Business and Liquidity | (1) Nature of Business and Liquidity Zynerba Pharmaceuticals, Inc., together with its subsidiary, Zynerba Pharmaceuticals Pty Ltd (“Zynerba”, the “Company”, “we”), is a clinical stage specialty pharmaceutical company focused on the development of pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders, including Fragile X syndrome, autism spectrum disorder, 22q11.2 deletion syndrome, and a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies. The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $163.2 million as of March 31, 2020. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenue from its product candidates currently in development. The Company's primary source of liquidity has been the issuance of equity securities. In August 2019, the Company entered into a Controlled Equity Offering Sales Agreement SM (the “2019 Sales Agreement”) with Cantor Fitzgerald & Co., Canaccord Genuity, LLC, H.C. Wainwright & Co. LLC and Ladenburg Thalmann & Co. Inc., as sales agents (the “Agents”), pursuant to which the Company may sell, from time to time, up to $75.0 million of its common stock. In 2019, the Company sold and issued 13,381 shares of its common stock in the open market at a weighted-average selling price of $7.00, for gross and net proceeds of $0.1 million. From January 1, 2020 through May 4, 2020, the Company sold and issued 1,734,217 shares of its common stock in the open market at a weighted average selling price of $4.32 per share, for gross proceeds of $7.5 million and net proceeds, after deducting commissions and offering expenses, of $7.1 million. From January 1, 2020 through March 31, 2020, the Company sold and issued 356,000 shares of its common stock in the open market at a weighted-average selling price of $5.10 per share, for gross proceeds of $1.8 million and net proceeds, after deducting commissions and offering expenses, of $1.6 million. The balance of the shares were sold from April 1, 2020 through April 30, 2020. In June 2017, the Company entered into an Open Market Sales Agreement (the “2017 Sales Agreement”) with Jefferies LLC, (“Jefferies”) pursuant to which the Company sold $50.0 million of its common stock. In the first quarter of 2019, the Company sold and issued 3,439,523 shares of common stock under the 2017 Sales Agreement with Jefferies in the open market at a weighted average selling price of $5.44 per share, resulting in gross proceeds of $18.7 million. Net proceeds received after deducting commissions and offering expenses were $18.1 million. In the second quarter of 2019, the Company sold and issued 2,082,031 shares of common stock under the 2017 Sales Agreement with Jefferies in the open market at a weighted average selling price of $13.50 per share, resulting in gross proceeds of $28.1 million. Net proceeds received after deducting commissions and offering expenses were $27.0 million. The last sale under the 2017 Sales Agreement was made on May 16, 2019. From June 2017 through May 16, 2019, the Company has cumulative gross proceeds of $50.0 million from shares sold in the open market under the 2017 Sales Agreement, which was terminated pursuant to its terms. In July 2019, the Australian government’s Department of Industry, Innovation and Science (“AusIndustry”) responded to an Advance Overseas Finding (“AOF”) application submitted by Zynerba that will allow certain research and development expenses incurred with respect to the Company’s product candidate Zygel™ outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. During the year ended December 31, 2019, the Company recorded $8.3 million as an Incentive and Tax Receivable and recorded a corresponding credit to research and development expense for amounts expected to be received through the AOF for the period January 1, 2018 through December 31, 2019. Although the AOF approval extended into 2020, management believes that substantially all qualifying amounts have been recorded as of December 31, 2019. Management believes that current cash and cash equivalents and the proceeds anticipated from the AOF are sufficient to fund operations and capital requirements into the second half of 2021. Substantial additional financings will be needed by the Company to fund its operations, to complete clinical development of and to commercially develop its product candidates. Our ability to raise sufficient additional financing depends on many factors beyond our control, including the current volatility in the capital markets as a result of the COVID-19 pandemic. There is no assurance that such financing will be available when needed or on acceptable terms. The Company is subject to those risks associated with any clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company's research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies a. Basis of Presentation The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The interim unaudited consolidated financial statements have been prepared on the same basis as the consolidated financial statements as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report”), filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying consolidated financial statements of the Company include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the consolidated financial statements) considered necessary to present fairly the Company's financial position as of March 31, 2020 its results of operations and cash flows for the three months ended March 31, 2020 and 2019. Operating results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2019 Annual Report. Certain prior period balances have been reclassified to conform to the current year presentation. b. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from such estimates. c. Incentive and Tax Receivables The Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd (the “Subsidiary”), is incorporated in Australia. The Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, the Subsidiary is eligible to receive a cash refund from the Australian Taxation Office for a percentage of the research and development costs expended by the Subsidiary in Australia. The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million (Australian dollars) during the reimbursable period. The Company’s estimate of the amount of cash refund it expects to receive related to the Australian research and development tax incentive program is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of March 31, 2020, the Company’s estimate of the amount of cash refund it expects to receive in 2020 for 2019 and 2018 eligible spending as part of this incentive program was $5.3 million and was recorded as a current asset. The Company’s estimate of the amount of cash refund it expects to receive in 2021 for 2020 eligible spending through March 31, 2020 was $0.6 million and was recorded as a non-current asset. In July 2019, AusIndustry responded to an AOF application submitted by Zynerba that will allow certain research and development expenses incurred with respect to Zygel outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. During the year ended December 31, 2019, the Company recorded $8.3 million as an incentive and tax receivable and recorded a corresponding credit to research and development expense for amounts expected to be received through the AOF for the period January 1, 2018 through December 31, 2019. As of March 31, 2020, incentive and tax receivables included $7.3 million related to the AOF. The reduction of $1.0 million was due to unrealized f oreign currency losses related to the remeasurement of the Subsidiary’s assets and liabilities. In addition, the Subsidiary incurs Goods and Services Tax (“GST”) on services provided by Australian vendors. As an Australian entity, the Subsidiary is entitled to a refund of the GST paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST incurred is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of March 31, 2020, incentive and tax receivables included $0.3 million for refundable GST on expenses incurred with Australian vendors during the three months ended March 31, 2020. Current incentive and tax receivables consisted of the following as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 $ 2,749,930 $ 3,126,750 Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 2,562,308 2,913,417 Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 7,261,397 8,256,416 Goods and services tax 333,100 317,386 Total incentive and tax receivables - current assets $ 12,906,735 $ 14,613,969 d. Research and Development Research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants and employee-related expenses including salaries and benefits. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. R esearch and development expenses are recorded net of expected refunds of eligible research and development costs paid pursuant to the Australian research and development tax incentive program and GST incurred on services provided by Australian vendors . For the three months ended March 31, 2020 and 2019, the Company incurred research and development expenses of $6.9 million and $6.3 million, respectively, which were net of $0.6 million and $0.7 million, respectively, associated with the Australian research and development tax incentive program. e . Net Loss Per Share Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as restricted stock and stock options, which would result in the issuance of incremental shares of common stock. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of restricted stock and stock options would be anti-dilutive. The following potentially dilutive securities outstanding as of March 31, 2020 and 2019 have been excluded from the computation of diluted weighted average shares outstanding, as their effects on net loss per share for the periods presented would be anti-dilutive: March 31, 2020 2019 Stock options 4,704,196 3,846,712 Unvested restricted stock 11,800 11,600 4,715,996 3,858,312 f. Recently Adopted Accounting Pronouncements In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), Accounting Standards Codification 842 (“ASC 842”), which amends a number of aspects of lease accounting and requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for leases with lease terms of more than 12 months. ASC 842 became effective on January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which offered a transition option to entities adopting ASC 842. Under ASU 2018-11, entities could elect to apply ASC 842 using a modified-retrospective adoption approach resulting in a cumulative effect adjustment, if any, to retained earnings at the beginning of the year in which the new lease standard is adopted, rather than adjustments to the earliest comparative period presented in their financial statements. As of January 1, 2019, the Company adopted ASC 842 using the modified-retrospective method and recognized right-of-use assets and corresponding lease liability of $325,683, which represented the present value of the remaining lease payments of $350,507, discounted using the Company’s incremental borrowing rate of 11.17%. In addition, the Company eliminated its deferred rent liability and recorded an adjustment to decrease its right-of-use assets by $12,824. The adoption of the standard did not have an impact on the Company’s consolidated statements of cash flows and had no impact on the Company’s consolidated statement of operations . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | (3) Fair Value Measurements The Company measures certain assets and liabilities at fair value in accordance with Accounting Standards Codification 820 (“ASC 820”), Fair Value Measurements and Disclosures . ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy that serves to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows : Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3 — Valuations based on unobservable inputs and models that are supported by little or no market activity. In accordance with the fair value hierarchy described above, the following table sets forth the Company's financial assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019: Fair Value Measurement Carrying amount as of March 31, 2020 as of March 31, 2020 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 60,236,804 $ 60,236,804 $ — $ — $ 60,236,804 $ 60,236,804 $ — $ — Fair Value Measurement Carrying amount as of December 31, 2019 as of December 31, 2019 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 69,686,350 $ 69,686,350 $ — $ — $ 69,686,350 $ 69,686,350 $ — $ — |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2020 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Prepaid development expenses $ 569,393 $ 957,814 Prepaid insurance 495,322 841,858 Deferred financing costs 57,527 193,505 Other current assets 352,688 385,635 Total prepaid expenses and other current assets $ 1,474,930 $ 2,378,812 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment | |
Property and Equipment | (5) Property and Equipment Property and equipment consisted of the following as of March 31, 2020 and December 31, 2019: Estimated useful life March 31, December 31, (in years) 2020 2019 Equipment 2-5 $ 342,602 $ 263,829 Computer equipment 3-5 30,319 30,319 Furniture and fixtures 3-5 311,355 311,355 Leasehold improvements various 68,881 68,881 Construction in process 265,759 78,773 Total cost 1,018,916 753,157 Less accumulated depreciation (431,649) (390,433) Property and equipment, net $ 587,267 $ 362,724 Depreciation expense was $41,216 and $29,256 for the three months ended March 31, 2020 and 2019, respectively. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | (6) Accrued Expenses Accrued expenses consisted of the following as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Accrued compensation $ 897,674 $ 2,340,533 Accrued research and development 5,330,543 4,343,322 Other 448,771 389,651 Total accrued expenses $ 6,676,988 $ 7,073,506 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders’ Equity | |
Common Stock | (7) Common Stock In August 2019, the Company entered into the 2019 Sales Agreement with the Agents pursuant to which the Company may sell, from time to time, up to $75.0 million of its common stock. In 2019, the Company has sold and issued 13,381 shares of its common stock in the open market at a weighted-average selling price of $7.00, for gross and net proceeds of $0.1 million. From January 1, 2020 through May 4, 2020, the Company sold and issued 1,734,217 shares of its common stock in the open market at a weighted-average selling price of $4.32 per share, for gross proceeds of $7.5 million and net proceeds, after deducting commissions and offering expenses, of $7.1 million. From January 1, 2020 through March 31, 2020, the Company sold and issued 356,000 shares of its common stock in the open market at a weighted-average selling price of $5.10 per share, for gross proceeds of $1.8 million and net proceeds, after deducting commissions and offering expenses, of $1.6 million. The balance of the shares were sold from April 1, 2020 through April 30, 2020. In the first quarter of 2019, the Company sold and issued 3,439,523 shares of common stock under the 2017 Sales Agreement with Jefferies in the open market at a weighted average selling price of $5.44 per share, resulting in gross proceeds of $18.7 million. Net proceeds received after deducting commissions and offering expenses were $18.1 million. In the second quarter of 2019, the Company sold and issued 2,082,031 shares of common stock under the 2017 Sales Agreement with Jefferies in the open market at a weighted average selling price of $13.50 per share, resulting in gross proceeds of $28.1 million. Net proceeds received after deducting commissions and offering expenses were $27.0 million. The last sale under the 2017 Sales Agreement was made on May 16, 2019. From June 2017 through May 16, 2019, the Company has cumulative gross proceeds of $50.0 million from shares sold in the open market under the 2017 Sales Agreement, which has terminated pursuant to its terms. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | (8) Stock-Based Compensation The Company maintains the Amended and Restated 2014 Omnibus Incentive Compensation Plan, as amended (the “2014 Plan”), which allows for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, performance units and other stock‑based awards to employees, officers, non-employee directors, consultants, and advisors. In addition, the 2014 Plan provides selected executive employees with the opportunity to receive bonus awards that are considered qualified performance‑based compensation. T he 2014 Plan is subject to automatic annual increases in the number of shares authorized for issuance under the 2014 Plan on the first trading day of January each year equal to the lesser of 1.5 million shares or 10% of the number of shares of common stock outstanding on the last trading day of December of the preceding year. As of January 1, 2020, the number of shares of common stock that may be issued under the 2014 Plan was automatically increased by 1.5 million shares, increasing the number of shares of common stock available for issuance under the 2014 Plan to 7,804,869 shares. As of March 31, 2020, 2,547,297 shares were available for future issuance under the 2014 Plan. Options issued under the 2014 Plan have a contractual life of 10 years and may be exercisable in cash or as otherwise determined by the board of directors. The Company has granted options to employees and non‑employee directors. Stock options granted to employees primarily vest 25% upon the first anniversary of the grant date and the balance of unvested options vests in quarterly installments over the remaining three years. Stock options granted annually to non-employee directors vest on the earlier of the one-year anniversary of the grant date, or the date of the Company’s next annual stockholders’ meeting that occurs after the grant date. The Company’s non-employee director compensation policy enables directors to receive stock options in lieu of quarterly cash payments. Any option granted to the directors in lieu of cash compensation vests in full on the grant date. The Company records forfeitures as they occur. During 2018, the Company granted 83,280 performance-based stock options to certain employees. These performance options have a 10-year life and an exercise price equal to the fair value of the Company’s stock at the grant date. During 2019, the Company granted 5,000 performance-based restricted stock awards . Vesting of the performance-based options and restricted stock awards is dependent on meeting certain performance conditions, which relate to the Company’s research and development progress, which were established by the Company’s board of directors. The Company’s board of directors determines if the performance conditions have been met. Stock-based compensation expense for these performance-based grants are recorded when management estimates that the vesting of these shares is probable based on the status of the Company’s research and development programs and other relevant factors. For the three months ended March 31, 2020, none of the performance-based metrics were deemed probable of achievement. Any change in these estimates will result in a cumulative adjustment in the period in which the estimate is changed, so that as of the end of a period, the cumulative compensation expense recognized for an award or grant equals the amount that would be recognized on a straight-line basis as if the current estimates had been utilized since the beginning of the service period. As of March 31, 2020, the aggregate estimated grant date fair values of options and restricted stock awards for which the satisfaction of the related-performance conditions have not been deemed probable were $663,484 and $24,850, respectively. For the three months ended March 31, 2020 and 2019, the Company recorded stock-based compensation expense related to its stock option grants and restricted stock awards, as follows: Stock Option Grants Restricted stock awards Total 2020 2019 2020 2019 2020 2019 Research and development $ 503,235 $ 659,159 $ 7,241 $ 7,020 $ 510,476 $ 666,179 General and administrative 812,876 830,113 — — 812,876 830,113 $ 1,316,111 $ 1,489,272 $ 7,241 $ 7,020 $ 1,323,352 $ 1,496,292 The following table summarizes the stock option activity for the three months ended March 31, 2020: Weighted- Weighted- Average Average Aggregate Number Exercise Contractual Intrinsic of Shares Price Life (in Years) Value Outstanding as of December 31, 2019 3,988,716 $ 10.83 Granted 750,480 5.08 Forfeited (35,000) 12.06 Outstanding as of March 31, 2020 4,704,196 9.90 7.44 $ 119,654 Exercisable as of March 31, 2020 2,658,973 11.50 6.32 $ 30,116 Vested and expected to vest as of March 31, 2020 4,620,916 $ 9.87 The weighted-average grant date fair values of options granted during the three months ended March 31, 2020 and 2019 was $3.60 and $2.63, respectively. The fair values of stock options granted were calculated using the Black-Scholes option pricing model with the following weighted-average assumptions: Three months ended March 31, 2020 2019 Weighted-average risk-free interest rate Expected term of options (in years) Expected stock price volatility Expected dividend yield As of March 31, 2020, excluding performance-based stock options that have not been deemed probable, there was $8.7 million of unrecognized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.51 years. The following table summarizes the restricted stock award activity under the 2014 Plan for the three months ended March 31, 2020: Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2019 8,600 $ 4.42 Granted 5,000 5.70 Vested (1,800) 3.65 Unvested as of March 31, 2020 11,800 $ 5.08 As of March 31, 2020, excluding performance-based restricted stock awards that have not been deemed probable, there was $28,243 of unrecognized stock-based compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 0.81 years. The Company expects that all 11,800 of the unvested, non-performance based, restricted stock awards will vest. |
Operating Lease Obligations
Operating Lease Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Operating Lease Obligations | |
Operating Lease Obligations | (9) Operating Lease Obligations The Company adopted ASC 842 prospectively using the modified-retrospective method and elected the package of transition practical expedients that does not require reassessment of: (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and nonlease components, which consist principally of common area maintenance charges, and to exclude leases with an initial term of 12 months or less. The Company leases its headquarters where it occupies 10,877 square feet of office space. On November 11, 2019, the Company extended its original five-year lease for one additional year until May 31, 2021. The Company’s lease contains variable lease costs that do not depend on a rate or index and consist primarily of common area maintenance, taxes, and insurance charges. As the implicit rate was not readily determinable for the Company’s lease, the Company used an estimated incremental borrowing rate, or discount rate, to determine the initial present value of the lease payments. The discount rate for the lease was calculated using a synthetic credit rating model. As of January 1, 2019, the Company recognized a lease liability of $325,683 and a right-of-use asset of $312,859, which was recorded net of a pre-existing deferred rent liability of $12,824. As of November 11, 2019, the effective date of the lease modification, the Company remeasured the lease liability for the remaining portion of the lease and adjusted the lease liability to $392,822 and right-of-use assets to $386,609, which was recorded net of a deferred rent liability of $6,213. As of March 31, 2020, the Company’s right-of-use asset, net of amortization, was $287,160. Other operating lease information as of March 31, 2020: Weighted-average remaining lease term - operating leases years Weighted-average discount rate - operating leases % The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of March 31, 2020 and December 31, 2019: March 31, December 31, Year ended: 2020 2019 December 31, 2020 $ 197,610 $ 259,864 December 31, 2021 111,506 111,506 Total minimum lease payments 309,116 371,370 Less: imputed lease interest (12,485) (18,004) Total lease liabilities $ 296,631 $ 353,366 Lease expense for the three months ended March 31, 2020 and 2019 was comprised of the following: Three months ended March 31, 2020 2019 Operating lease expense $ 64,209 $ 59,591 Variable lease expense 14,674 14,674 Total lease expense $ 78,883 $ 74,265 Cash payments related to operating leases was $62,254 and $60,894 for the three months ended March 31, 2020 and 2019, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | a. Basis of Presentation The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The interim unaudited consolidated financial statements have been prepared on the same basis as the consolidated financial statements as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report”), filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying consolidated financial statements of the Company include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the consolidated financial statements) considered necessary to present fairly the Company's financial position as of March 31, 2020 its results of operations and cash flows for the three months ended March 31, 2020 and 2019. Operating results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2019 Annual Report. Certain prior period balances have been reclassified to conform to the current year presentation. |
Use of Estimates | b. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from such estimates. |
Incentive and Tax Receivables | c. Incentive and Tax Receivables The Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd (the “Subsidiary”), is incorporated in Australia. The Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, the Subsidiary is eligible to receive a cash refund from the Australian Taxation Office for a percentage of the research and development costs expended by the Subsidiary in Australia. The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million (Australian dollars) during the reimbursable period. The Company’s estimate of the amount of cash refund it expects to receive related to the Australian research and development tax incentive program is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of March 31, 2020, the Company’s estimate of the amount of cash refund it expects to receive in 2020 for 2019 and 2018 eligible spending as part of this incentive program was $5.3 million and was recorded as a current asset. The Company’s estimate of the amount of cash refund it expects to receive in 2021 for 2020 eligible spending through March 31, 2020 was $0.6 million and was recorded as a non-current asset. In July 2019, AusIndustry responded to an AOF application submitted by Zynerba that will allow certain research and development expenses incurred with respect to Zygel outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. During the year ended December 31, 2019, the Company recorded $8.3 million as an incentive and tax receivable and recorded a corresponding credit to research and development expense for amounts expected to be received through the AOF for the period January 1, 2018 through December 31, 2019. As of March 31, 2020, incentive and tax receivables included $7.3 million related to the AOF. The reduction of $1.0 million was due to unrealized f oreign currency losses related to the remeasurement of the Subsidiary’s assets and liabilities. In addition, the Subsidiary incurs Goods and Services Tax (“GST”) on services provided by Australian vendors. As an Australian entity, the Subsidiary is entitled to a refund of the GST paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST incurred is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of March 31, 2020, incentive and tax receivables included $0.3 million for refundable GST on expenses incurred with Australian vendors during the three months ended March 31, 2020. Current incentive and tax receivables consisted of the following as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 $ 2,749,930 $ 3,126,750 Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 2,562,308 2,913,417 Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 7,261,397 8,256,416 Goods and services tax 333,100 317,386 Total incentive and tax receivables - current assets $ 12,906,735 $ 14,613,969 |
Research and Development | d. Research and Development Research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants and employee-related expenses including salaries and benefits. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. R esearch and development expenses are recorded net of expected refunds of eligible research and development costs paid pursuant to the Australian research and development tax incentive program and GST incurred on services provided by Australian vendors . For the three months ended March 31, 2020 and 2019, the Company incurred research and development expenses of $6.9 million and $6.3 million, respectively, which were net of $0.6 million and $0.7 million, respectively, associated with the Australian research and development tax incentive program. |
Net Loss per Share | e . Net Loss Per Share Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as restricted stock and stock options, which would result in the issuance of incremental shares of common stock. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of restricted stock and stock options would be anti-dilutive. The following potentially dilutive securities outstanding as of March 31, 2020 and 2019 have been excluded from the computation of diluted weighted average shares outstanding, as their effects on net loss per share for the periods presented would be anti-dilutive: March 31, 2020 2019 Stock options 4,704,196 3,846,712 Unvested restricted stock 11,800 11,600 4,715,996 3,858,312 |
Accounting Pronouncements | f. Recently Adopted Accounting Pronouncements In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), Accounting Standards Codification 842 (“ASC 842”), which amends a number of aspects of lease accounting and requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for leases with lease terms of more than 12 months. ASC 842 became effective on January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which offered a transition option to entities adopting ASC 842. Under ASU 2018-11, entities could elect to apply ASC 842 using a modified-retrospective adoption approach resulting in a cumulative effect adjustment, if any, to retained earnings at the beginning of the year in which the new lease standard is adopted, rather than adjustments to the earliest comparative period presented in their financial statements. As of January 1, 2019, the Company adopted ASC 842 using the modified-retrospective method and recognized right-of-use assets and corresponding lease liability of $325,683, which represented the present value of the remaining lease payments of $350,507, discounted using the Company’s incremental borrowing rate of 11.17%. In addition, the Company eliminated its deferred rent liability and recorded an adjustment to decrease its right-of-use assets by $12,824. The adoption of the standard did not have an impact on the Company’s consolidated statements of cash flows and had no impact on the Company’s consolidated statement of operations . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of incentive and tax receivables | March 31, December 31, 2020 2019 Research and development incentive (non-AOF) for the period 1/1/18 - 12/31/18 $ 2,749,930 $ 3,126,750 Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 2,562,308 2,913,417 Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 7,261,397 8,256,416 Goods and services tax 333,100 317,386 Total incentive and tax receivables - current assets $ 12,906,735 $ 14,613,969 |
Summary of potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding | March 31, 2020 2019 Stock options 4,704,196 3,846,712 Unvested restricted stock 11,800 11,600 4,715,996 3,858,312 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements | |
Summary of financial assets measured at fair value on a recurring basis | Fair Value Measurement Carrying amount as of March 31, 2020 as of March 31, 2020 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 60,236,804 $ 60,236,804 $ — $ — $ 60,236,804 $ 60,236,804 $ — $ — Fair Value Measurement Carrying amount as of December 31, 2019 as of December 31, 2019 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 69,686,350 $ 69,686,350 $ — $ — $ 69,686,350 $ 69,686,350 $ — $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | March 31, December 31, 2020 2019 Prepaid development expenses $ 569,393 $ 957,814 Prepaid insurance 495,322 841,858 Deferred financing costs 57,527 193,505 Other current assets 352,688 385,635 Total prepaid expenses and other current assets $ 1,474,930 $ 2,378,812 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property and Equipment | |
Schedule of property and equipment | Estimated useful life March 31, December 31, (in years) 2020 2019 Equipment 2-5 $ 342,602 $ 263,829 Computer equipment 3-5 30,319 30,319 Furniture and fixtures 3-5 311,355 311,355 Leasehold improvements various 68,881 68,881 Construction in process 265,759 78,773 Total cost 1,018,916 753,157 Less accumulated depreciation (431,649) (390,433) Property and equipment, net $ 587,267 $ 362,724 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | March 31, December 31, 2020 2019 Accrued compensation $ 897,674 $ 2,340,533 Accrued research and development 5,330,543 4,343,322 Other 448,771 389,651 Total accrued expenses $ 6,676,988 $ 7,073,506 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense | Stock Option Grants Restricted stock awards Total 2020 2019 2020 2019 2020 2019 Research and development $ 503,235 $ 659,159 $ 7,241 $ 7,020 $ 510,476 $ 666,179 General and administrative 812,876 830,113 — — 812,876 830,113 $ 1,316,111 $ 1,489,272 $ 7,241 $ 7,020 $ 1,323,352 $ 1,496,292 |
Summary of stock option activity | Weighted- Weighted- Average Average Aggregate Number Exercise Contractual Intrinsic of Shares Price Life (in Years) Value Outstanding as of December 31, 2019 3,988,716 $ 10.83 Granted 750,480 5.08 Forfeited (35,000) 12.06 Outstanding as of March 31, 2020 4,704,196 9.90 7.44 $ 119,654 Exercisable as of March 31, 2020 2,658,973 11.50 6.32 $ 30,116 Vested and expected to vest as of March 31, 2020 4,620,916 $ 9.87 |
Schedule of weighted-average assumptions used to calculate fair values of stock options | Three months ended March 31, 2020 2019 Weighted-average risk-free interest rate Expected term of options (in years) Expected stock price volatility Expected dividend yield |
Summary of restricted stock activity | Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2019 8,600 $ 4.42 Granted 5,000 5.70 Vested (1,800) 3.65 Unvested as of March 31, 2020 11,800 $ 5.08 |
Operating Lease Obligations (Ta
Operating Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Operating Lease Obligations | |
Schedule of other operating lease information | Weighted-average remaining lease term - operating leases years Weighted-average discount rate - operating leases % |
Schedule of operating lease liabilities maturity analysis | March 31, December 31, Year ended: 2020 2019 December 31, 2020 $ 197,610 $ 259,864 December 31, 2021 111,506 111,506 Total minimum lease payments 309,116 371,370 Less: imputed lease interest (12,485) (18,004) Total lease liabilities $ 296,631 $ 353,366 |
Schedule of lease expense | Three months ended March 31, 2020 2019 Operating lease expense $ 64,209 $ 59,591 Variable lease expense 14,674 14,674 Total lease expense $ 78,883 $ 74,265 |
Nature of Business and Liquid_2
Nature of Business and Liquidity - Common Stock and Other (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 12 Months Ended | 23 Months Ended | |||
Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | May 04, 2020 | Dec. 31, 2019 | May 16, 2019 | Aug. 31, 2019 | |
Sales of Stock | |||||||
Accumulated deficit | $ 163,173,453 | $ 150,835,624 | |||||
Proceeds from the issuance of common stock | $ 1,816,471 | $ 18,713,185 | |||||
2019 Sales Agreement | |||||||
Sales of Stock | |||||||
Maximum aggregate value of common stock available for offering | $ 75,000,000 | ||||||
Shares issued | 356,000 | 1,734,217 | 13,381 | ||||
Weighted average selling price per share | $ 5.10 | $ 4.32 | $ 7 | ||||
Gross proceeds from issuance of common stock | $ 1,800,000 | $ 7,500,000 | $ 100,000 | ||||
Proceeds from the issuance of common stock | $ 1,600,000 | $ 7,100,000 | $ 100,000 | ||||
2017 Sales Agreement | |||||||
Sales of Stock | |||||||
Maximum aggregate value of common stock available for offering | $ 50,000,000 | ||||||
Shares issued | 2,082,031 | 3,439,523 | |||||
Weighted average selling price per share | $ 13.50 | $ 5.44 | |||||
Gross proceeds from issuance of common stock | $ 28,100,000 | $ 18,700,000 | $ 50,000,000 | ||||
Proceeds from the issuance of common stock | $ 27,000,000 | $ 18,100,000 |
Nature of Business and Liquid_3
Nature of Business and Liquidity - Incentive and Tax (Details) - Australian Taxation Office $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Research and development | |
Research and development incentive and tax receivable | $ 8.3 |
Research and development incentive tax credit | $ 8.3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Incentive and Tax Receivable (Details) - Australian Taxation Office $ in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Mar. 31, 2020AUD ($) | Mar. 31, 2020USD ($) | |
Incentive and Tax Receivable | |||
Aggregate revenue maximum to be eligible to receive a cash refund | $ 20 | ||
Research and development incentive and tax receivable | $ 8.3 | ||
Research and development incentive tax credit | $ 8.3 | ||
Research and development incentive receivable, advance overseas finding, net | $ 7.3 | ||
Tax receivable due to unrealized foreign currency losses | 1 | ||
Incentive And Tax Receivables Current | |||
Incentive and Tax Receivable | |||
Cash refund from research and development incentive program | 5.3 | ||
Estimated GST receivable | 0.3 | ||
Incentive And Tax Receivables Noncurrent | |||
Incentive and Tax Receivable | |||
Cash refund from research and development incentive program | $ 0.6 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Current incentive and Tax Receivable (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Incentive and Tax Receivable | ||
Total incentive and tax receivables - current assets | $ 12,906,735 | $ 14,613,969 |
Australian Taxation Office | ||
Incentive and Tax Receivable | ||
Research and development incentive for the period 1/1/18 - 12/31/18 | 2,749,930 | 3,126,750 |
Research and development incentive (non-AOF) for the period 1/1/19 - 12/31/19 | 2,562,308 | 2,913,417 |
Research and development incentive (AOF) for the period 1/1/18 - 12/31/19 | 7,261,397 | 8,256,416 |
Goods and services tax | 333,100 | 317,386 |
Total incentive and tax receivables - current assets | $ 12,906,735 | $ 14,613,969 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Research and Development | ||
Research and development | $ 6,882,793 | $ 6,306,712 |
Australian Taxation Office | ||
Research and Development | ||
Research and development tax incentive refunds | $ 600,000 | $ 700,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Anti-dilutive securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities | 4,715,996 | 3,858,312 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities | 4,704,196 | 3,846,712 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities | 11,800 | 11,600 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recently Adopted (Details) - USD ($) | Jan. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Nov. 11, 2019 |
Recently Adopted Accounting Pronouncements | |||||
Operating Lease, Liability | $ 296,631 | $ 353,366 | |||
Remaining lease payments | $ 309,116 | $ 371,370 | |||
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 | ||||
Lease discount rate | 6.60% | ||||
Accounting Standards Update 2016-02 | |||||
Recently Adopted Accounting Pronouncements | |||||
Lease discount rate | 11.17% | ||||
Accounting Standards Update 2016-02 | Adjustment | |||||
Recently Adopted Accounting Pronouncements | |||||
Operating Lease, Liability | $ 325,683 | $ 392,822 | |||
Remaining lease payments | 350,507 | ||||
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Carrying value | ||
Fair value on a recurring basis | ||
Cash equivalents (money market accounts) | $ 60,236,804 | $ 69,686,350 |
Total | 60,236,804 | 69,686,350 |
Recurring | Fair Value Measurement | Level 1 | ||
Fair value on a recurring basis | ||
Cash equivalents (money market accounts) | 60,236,804 | 69,686,350 |
Total | $ 60,236,804 | $ 69,686,350 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Prepaid Expenses and Other Current Assets | ||
Prepaid development expenses | $ 569,393 | $ 957,814 |
Prepaid insurance | 495,322 | 841,858 |
Deferred financing costs | 57,527 | 193,505 |
Other current assets | 352,688 | 385,635 |
Total prepaid expenses and other current assets | $ 1,474,930 | $ 2,378,812 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment | |||
Total cost | $ 1,018,916 | $ 753,157 | |
Less accumulated depreciation | (431,649) | (390,433) | |
Property and equipment, net | 587,267 | 362,724 | |
Depreciation expense | 41,216 | $ 29,256 | |
Equipment | |||
Property, Plant and Equipment | |||
Total cost | $ 342,602 | $ 263,829 | |
Equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | P2Y | P2Y | |
Equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | P5Y | P5Y | |
Computer equipment | |||
Property, Plant and Equipment | |||
Total cost | $ 30,319 | $ 30,319 | |
Computer equipment | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | P3Y | P3Y | |
Computer equipment | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | P5Y | P5Y | |
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Total cost | $ 311,355 | $ 311,355 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | P3Y | P3Y | |
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | P5Y | P5Y | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Estimated useful life (in years) | various | various | |
Total cost | $ 68,881 | $ 68,881 | |
Construction in process | |||
Property, Plant and Equipment | |||
Total cost | $ 265,759 | $ 78,773 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Accrued compensation | $ 897,674 | $ 2,340,533 |
Accrued research and development | 5,330,543 | 4,343,322 |
Other | 448,771 | 389,651 |
Total accrued expenses | $ 6,676,988 | $ 7,073,506 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 12 Months Ended | 23 Months Ended | |||
Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | May 04, 2020 | Dec. 31, 2019 | May 16, 2019 | Aug. 31, 2019 | |
Sales of Stock | |||||||
Proceeds from the issuance of common stock | $ 1,816,471 | $ 18,713,185 | |||||
2019 Sales Agreement | |||||||
Sales of Stock | |||||||
Maximum aggregate value of common stock available for offering | $ 75,000,000 | ||||||
Shares issued | 356,000 | 1,734,217 | 13,381 | ||||
Weighted average selling price per share | $ 5.10 | $ 4.32 | $ 7 | ||||
Gross proceeds from issuance of common stock | $ 1,800,000 | $ 7,500,000 | $ 100,000 | ||||
Proceeds from the issuance of common stock | $ 1,600,000 | $ 7,100,000 | $ 100,000 | ||||
2017 Sales Agreement | |||||||
Sales of Stock | |||||||
Maximum aggregate value of common stock available for offering | $ 50,000,000 | ||||||
Shares issued | 2,082,031 | 3,439,523 | |||||
Weighted average selling price per share | $ 13.50 | $ 5.44 | |||||
Gross proceeds from issuance of common stock | $ 28,100,000 | $ 18,700,000 | $ 50,000,000 | ||||
Proceeds from the issuance of common stock | $ 27,000,000 | $ 18,100,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation Narrative (Details) - 2014 Plan - USD ($) | Jan. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Stock-Based Compensation | ||||
Annual threshold increase of authorized shares for issuance | 1,500,000 | |||
Annual threshold increase of authorized shares for issuance (as a percent) | 10.00% | |||
Additional number of shares authorized for issuance | 1,500,000 | |||
Shares reserved for issuance | 7,804,869 | |||
Shares available for issuance | 2,547,297 | |||
Stock options | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 750,480 | |||
Contractual life (in years) | 10 years | |||
Stock options | Employees | ||||
Stock-Based Compensation | ||||
Vesting percentage | 25.00% | |||
Vesting period | 3 years | |||
Stock options | Board of Directors | ||||
Stock-Based Compensation | ||||
Vesting period | 1 year | |||
Performance-based awards | ||||
Stock-Based Compensation | ||||
Shares options vested based upon performance-based metrics | 0 | |||
Performance Based Stock Options | ||||
Stock-Based Compensation | ||||
Granted (in shares) | 83,280 | |||
Contractual life (in years) | 10 years | |||
Aggregate estimated grant date fair value of performance awards | $ 663,484 | |||
Performance Based Restricted Awards | ||||
Stock-Based Compensation | ||||
Shares granted | 5,000 | |||
Aggregate estimated grant date fair value of performance awards | $ 24,850 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - 2014 Plan - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock-Based Compensation | ||
Stock-based compensation | $ 1,323,352 | $ 1,496,292 |
Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation | 510,476 | 666,179 |
General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation | 812,876 | 830,113 |
Stock options | ||
Stock-Based Compensation | ||
Stock-based compensation | 1,316,111 | 1,489,272 |
Stock options | Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation | 503,235 | 659,159 |
Stock options | General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation | 812,876 | 830,113 |
Restricted stock | ||
Stock-Based Compensation | ||
Stock-based compensation | 7,241 | 7,020 |
Restricted stock | Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation | $ 7,241 | $ 7,020 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Activity, Unrecognized Costs, Valuation (Details) - 2014 Plan - Stock options - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Options | ||
Balance (in shares) | 3,988,716 | |
Granted (in shares) | 750,480 | |
Forfeited (in shares) | (35,000) | |
Balance (in shares) | 4,704,196 | |
Options exercisable (in shares) | 2,658,973 | |
Options vested and expected to vest (in shares) | 4,620,916 | |
Weighted average exercise price per share | ||
Balance (in dollars per shares) | $ 10.83 | |
Granted (in dollars per shares) | 5.08 | |
Forfeited (in dollars per share) | 12.06 | |
Balance (in dollars per shares) | 9.90 | |
Options exercisable (in dollars per shares) | 11.50 | |
Options vested and expected to vest (in dollars per share) | $ 9.87 | |
Additional disclosures | ||
Options Outstanding Weighted Average Contractual term | 7 years 5 months 9 days | |
Options Vested and Expected to Vest Weighted Average Contractual Life | 6 years 3 months 26 days | |
Options Outstanding Aggregate Intrinsic Value | $ 119,654 | |
Options Exercisable Aggregate Intrinsic Value | 30,116 | |
Expected stock based compensation expense | $ 8,700,000 | |
Recognition period for compensation costs | 2 years 6 months 4 days | |
Weighted Average Grant Date Fair Value | ||
Granted (in dollars per share) | $ 3.60 | $ 2.63 |
Assumptions and Methodology | ||
Weighted average risk-free interest rate (as a percent) | 1.39% | 2.54% |
Expected term of options (in years) | 6 years 3 months 4 days | 6 years 2 months 23 days |
Expected stock price volatility (as a percent) | 82.00% | 80.00% |
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity, Unrecognized Costs (Details) - 2014 Plan - Restricted stock | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Restricted stock award activity | |
Unvested balance (in shares) | 8,600 |
Granted (in shares) | 5,000 |
Vested (in shares) | (1,800) |
Unvested balance (in shares) | 11,800 |
Weighted Average Grant Date Fair Value | |
Unvested balance (in dollars per share) | $ / shares | $ 4.42 |
Granted (in dollars per share) | $ / shares | 5.70 |
Vested (in dollars per share) | $ / shares | 3.65 |
Unvested balance (in dollars per share) | $ / shares | $ 5.08 |
Unrecognized compensation expense related to unvested awards | $ | $ 28,243 |
Recognition period for compensation costs | 9 months 22 days |
Unvested restricted stock awards expected to vest (in shares) | 11,800 |
Operating Lease Obligations - N
Operating Lease Obligations - Narrative (Details) | Nov. 11, 2019USD ($) | Jan. 01, 2019USD ($) | Mar. 31, 2020USD ($)ft² | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Operating Lease Obligations | |||||
Practical expedients - Package | true | ||||
Practical expedients - Single lease component | true | ||||
Area of leasable office space | ft² | 10,877 | ||||
Term of lease | 5 years | ||||
Extended term of lease | 1 year | ||||
Operating lease liability | $ 296,631 | $ 353,366 | |||
Right-of-use assets | $ 287,160 | $ 345,849 | |||
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 | ||||
Accounting Standards Update 2016-02 | Adjustment | |||||
Operating Lease Obligations | |||||
Operating lease liability | $ 392,822 | $ 325,683 | |||
Right-of-use assets | 386,609 | 312,859 | |||
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 | ||||
Deferred rent liability included in right-of-use assets | $ 6,213 |
Operating Lease Obligations - O
Operating Lease Obligations - Other Operating Lease Information (Details) | Mar. 31, 2020 |
Operating Lease Obligations | |
Weighted-average remaining lease term - operating leases | 1 year 2 months 12 days |
Weighted-average discount rate - operating leases | 6.60% |
Operating Lease Obligations - M
Operating Lease Obligations - Maturities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Maturity Analysis of Operating Lease Liabilities | ||
December 31, 2020 (remaining months) | $ 197,610 | |
December 31, 2020 | $ 259,864 | |
December 31, 2021 | 111,506 | 111,506 |
Total minimum lease payments | 309,116 | 371,370 |
Less: imputed lease interest | (12,485) | (18,004) |
Total lease liabilities | $ 296,631 | $ 353,366 |
Operating Lease Obligations - L
Operating Lease Obligations - Lease Expense and Payments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease expense | ||
Operating lease expense | $ 64,209 | $ 59,591 |
Variable lease expense | 14,674 | 14,674 |
Total lease expense | 78,883 | 74,265 |
Cash payments related to operating leases | $ 62,254 | $ 60,894 |