Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2017 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Strongbridge Biopharma plc |
Entity Central Index Key | 1,634,432 |
Document Type | 6-K |
Document Period End Date | Mar. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 49,898 | $ 66,837 |
Prepaid expenses and other current assets | 962 | 764 |
Total current assets | 50,860 | 67,601 |
Property and equipment, net | 22 | 25 |
Deferred tax asset | 1,599 | |
Intangible assets, net | 59,644 | 60,900 |
Goodwill | 7,256 | 7,256 |
Other assets | 151 | 150 |
Total assets | 117,933 | 137,531 |
Current liabilities: | ||
Accounts payable | 1,880 | 1,089 |
Accrued liabilities | 7,877 | 14,868 |
Total current liabilities | 9,757 | 15,957 |
Long-term debt | 18,424 | 18,434 |
Warrant liability | 26,018 | 11,090 |
Supply agreement liability, noncurrent | 25,078 | 25,078 |
Total liabilities | 79,277 | 70,559 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Deferred shares, $1.098 par value, 40,000 shares authorized, issued and outstanding at March 31, 2017 and December 31, 2016 | 44 | 44 |
Ordinary shares, $0.01 par value, 600,000,000 shares authorized at March 31, 2017 and December 31, 2016; 35,335,026 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 353 | 353 |
Additional paid-in capital | 197,144 | 195,975 |
Accumulated deficit | (158,885) | (129,400) |
Total stockholders’ equity | 38,656 | 66,972 |
Total liabilities and stockholders’ equity | $ 117,933 | $ 137,531 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Deferred shares, par value (in dollars per share) | $ 1.098 | $ 1.098 |
Deferred shares, shares authorized | 40,000 | 40,000 |
Deferred shares, shares issued | 40,000 | 40,000 |
Deferred shares, shares outstanding | 40,000 | 40,000 |
Ordinary shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 600,000,000 | 600,000,000 |
Ordinary shares, shares issued | 35,335,026 | 35,335,026 |
Ordinary shares, shares outstanding | 35,335,026 | 35,335,026 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating expenses: | ||
Research and development | $ 3,481 | $ 6,794 |
Selling, general and administrative | 7,442 | 4,129 |
Amortization of intangible asset | 1,256 | |
Total operating expenses | 12,179 | 10,923 |
Operating loss | (12,179) | (10,923) |
Other expense, net: | ||
Unrealized loss on fair value of warrants | (14,928) | |
Interest expense | (737) | |
Foreign exchange loss | (12) | (47) |
Other expense, net | (35) | (1,290) |
Total other expense, net | (15,712) | (1,337) |
Loss before income taxes | (27,891) | (12,260) |
Income tax (expense) benefit | (1,594) | 55 |
Net loss | (29,485) | (12,205) |
Net loss attributable to non-controlling interest | 51 | |
Net loss attributable to Strongbridge Biopharma | (29,485) | (12,154) |
Net loss attributable to ordinary shareholders: | ||
Basic and diluted | $ (29,485) | $ (12,154) |
Net loss per share attributable to ordinary shareholders: | ||
Basic and diluted | $ (0.83) | $ (0.57) |
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders: | ||
Basic and diluted | 35,335,026 | 21,205,382 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Ordinary Shares | Deferred Shares | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2016 | $ 353 | $ 44 | $ 195,975 | $ (129,400) | $ 66,972 |
Balance (in shares) at Dec. 31, 2016 | 35,335,026 | 40,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (29,485) | (29,485) | |||
Stock-based compensation | 1,169 | 1,169 | |||
Balance at end of period at Mar. 31, 2017 | $ 353 | $ 44 | $ 197,144 | $ (158,885) | $ 38,656 |
Balance (in shares) at Mar. 31, 2017 | 35,335,026 | 40,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (29,485) | $ (12,205) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 3 | 3 |
Stock-based compensation | 1,169 | 1,328 |
Amortization of intangible asset | 1,256 | |
Amortization of debt discounts and debt issuance costs | 140 | |
Deferred income tax expense (benefit) | 1,599 | (55) |
Impairment/loss on investment in Antisense Therapeutics | 550 | |
Change in fair value of warrant liability | 14,928 | |
Changes in operating assets and liabilities: | ||
Accounts payable | 791 | (1,488) |
Accrued liabilities and other liabilities | 509 | 2,124 |
Other assets | (1) | 456 |
Prepaid expenses and other current assets | (198) | (8) |
Net cash used in operating activities | (9,289) | (9,295) |
Cash flows from investing activities: | ||
Payments for acquisition | (7,500) | |
Net cash used in investing activities | (7,500) | |
Cash flows from financing activities: | ||
Payment for amendment of long-term debt | (150) | |
Net cash used in financing activities | (150) | |
Effect of exchange rate changes on cash and cash equivalents | (21) | |
Net decrease in cash and cash equivalents | (16,939) | (9,316) |
Cash and cash equivalents-beginning of period | 66,837 | 51,623 |
Cash and cash equivalents-end of period | 49,898 | $ 42,307 |
Supplemental disclosures of cash flow information - Cash paid during the year for: | ||
Income taxes other, net of refunds | 255 | |
Interest | $ 295 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2017 | |
Organization | |
Organization | 1. Organizatio Strongbridge Biopharma plc is a global commercial-stage biopharmaceutical company focused on the development and commercialization of therapies for rare diseases with significant unmet needs. Our first commercial product is Keveyis® (dichlorphenamide), the first and only treatment approved by the U.S. Food and Drug Administration ("FDA") for hyperkalemic, hypokalemic, and related variants of primary periodic paralysis. Keveyis has orphan drug exclusivity status in the United States through August 7, 2022. In addition to this neuromuscular disease product, we have two clinical-stage product candidates for rare endocrine diseases, Recorlev™ and veldoreotide. Recorlev (levoketoconazole) is a cortisol synthesis inhibitor currently being studied for the treatment of endogenous Cushing's syndrome. Veldoreotide is a next-generation somatostatin analog (SSA) being investigated for the treatment of acromegaly, with potential additional applications in Cushing's syndrome and neuroendocrine tumors. Both Recorlev and veldoreotide have received orphan designation from the FDA and the European Medicines Agency ("EMA"). Given the well-identified and concentrated prescriber base addressing our target markets, we intend to use a small, focused sales force to effectively market Keveyis and our other products and product candidates, if approved, in the United States, the European Union and other key global markets. We believe that our ability to execute on this strategy is enhanced by the significant commercial and clinical development experience of key members of our management team. We will continue to identify and evaluate the acquisition of products and product candidates that would be complementary to our existing rare neuromuscular and endocrine franchises or that would form the basis for new rare disease franchises. We believe this approach will enable us to maximize our commercial potential by further leveraging our existing resources and expertise. Liquidity We believe that our cash resources of $49.9 million at March 31, 2017 will be sufficient to allow us to fund planned operations into 2019, which is after the expected receipt of data from the Recorlev SONICS and LOGICS Phase 3 clinical trials. We expect our funding requirements for operating activities to increase in 2017 and possibly beyond due to expenses associated with the commercialization of Keveyis, the execution of the Recorlev SONICS and LOGICS Phase 3 clinical trials, and selling, general and administrative expenses. We also expect our cash needs to increase to fund potential in-licenses, acquisitions or similar transactions as we pursue our strategy. These expenses may be offset only in part by sales of Keveyis. In addition, beginning in June 2018, we will be required to make monthly principal payments to repay amounts borrowed under our credit facility. We may never achieve profitability, and unless and until we do, we will continue to need to raise additional capital. We plan to continue to fund our operations and capital funding needs through equity or debt financing along with revenues from Keveyis. There can be no assurances, however, that additional funding will be available on terms acceptable to us. Our loan and security agreement, under which outstanding borrowings were $20.0 million at March 31, 2017, contains financial and non-financial covenants including minimum amounts of net revenue in 2017 and beyond. Failure to comply with the covenants could result in the lenders declaring the loan immediately due and payable. Our liquidity requirements are predicated on maintaining compliance with the debt covenants and repaying outstanding borrowings in accordance with the 48-month loan term. |
Summary of significant accounti
Summary of significant accounting policies and basis of presentation | 3 Months Ended |
Mar. 31, 2017 | |
Summary of significant accounting policies and basis of presentation | |
Summary of significant accounting policies and basis of presentation | 2. Summary of significant accounting policies and basis of presentation Basis of presentation These unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). The unaudited consolidated financial statements reflect all adjustments, which include only normal recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. These unaudited consolidated financial statements should be read in conjunction with the accounting policies and notes to the audited consolidated financial statements included in Strongbridge Biopharma’s 2016 Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 4, 2017. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Foreign currency translation The consolidated financial statements are reported in United States dollars, which is the functional currency of our Company, including each of our consolidated subsidiaries. Transactions in foreign currencies are remeasured into our functional currency at the rate of exchange prevailing at the date of the transaction. Any monetary assets and liabilities arising from these transactions are remeasured into our functional currency at exchange rates prevailing at the balance sheet date or on settlement. Resulting gains and losses are recorded in foreign exchange gain (loss) in our consolidated statements of operations. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. We must apply significant judgment in this process. Actual results could materially differ from those estimates. Net loss per share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted‑average number of shares of common stock outstanding for the period, including any dilutive effect from outstanding stock options or other equity-based awards. Shares used in the diluted net loss per share calculations exclude anti‑dilutive common equivalent shares, which currently consist of outstanding stock options, unvested restricted stock units and warrants. The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as of March 31, 2017 and 2016, as they would be anti-dilutive: Three Months Ended March 31, 2017 2016 Warrants 7,428,571 — Stock options issued and outstanding 5,291,986 3,279,030 Unvested restricted stock units 194,000 187,000 Recent accounting pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ( ASU) 2017-04, Intangibles - Goodwill and Other : Simplifying the Accounting for Goodwill Impairment . ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2021, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order to reduce diversity in practice. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Improvements to Employee Share-Based Payment Accounting , which effects all entities that issue share-based payment awards to their employees. The amendments in this ASU cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. The Company has adopted the standard effective January 1, 2017 and has elected to account for forfeitures as they occur as opposed to estimating forfeitures. The adoption of this standard did not have a material impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , that discusses how an entity should account for lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , that modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The accounting standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We are currently assessing the impact that adopting this new accounting guidance will have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The FASB has subsequently issued ASU No. 2016-10, Revenue from Contracts with Customer (Topic 606): Identifying Performance Obligations and Licensing, to address issues arising from implementation of the new revenue recognition standard. ASU 2014-09 and ASU 2016-10 are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. The Company plans to early adopt this standard as we recognize revenue with the launch of Keveyis during 2017. Early adopting will allow the Company to record revenue based on shipments and estimate any deductions to revenue. |
Fair value measurement
Fair value measurement | 3 Months Ended |
Mar. 31, 2017 | |
Fair value measurement | |
Fair value measurement | 3. Fair value measurement The Company follows FASB accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. Because of their short term nature, the amounts reported in the balance sheet for cash and cash equivalents, and accounts payable approximate fair value. The guidance requires fair value measurements to maximize the use of “observable inputs.” The three-level hierarchy of inputs to measure fair value are as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Because of their short term nature, the amounts reported in the balance sheet for cash and cash equivalents, and accounts payable approximate fair value. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The fair values of the outstanding warrants were measured using the Black-Scholes option-pricing model. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis for the periods presented (in thousands) : As of March 31, 2017 Level I Level II Level III Total Cash equivalents 49,601 — — 49,601 Total assets $ 49,601 $ — $ — $ 49,601 Warrant liabilities — — 26,018 26,018 Total liabilities $ — $ — $ 26,018 $ 26,018 As of December 31, 2016 Level I Level II Level III Total Warrant liabilities — — 11,090 11,090 Total liabilities $ — $ — $ 11,090 $ 11,090 |
Intangible assets and goodwill
Intangible assets and goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Intangible assets and goodwill | |
Intangible assets and goodwill | 4. Intangible assets and goodwill The gross carrying amount of in‑process research and development, acquired developed product rights and goodwill is as follows (in thousands): As of March 31, 2017 Beginning of Period Additions Amortization End of Period IPR&D $ 20,723 $ — $ — $ 20,723 Acquired product rights 40,177 — (1,256) 38,921 Goodwill 7,256 — — 7,256 Total $ 68,156 $ — $ (1,256) $ 66,900 As of December 31, 2016 Beginning of Period Additions Impairment End of Period IPR&D $ 36,551 $ — $ (15,828) $ 20,723 Acquired product rights — 40,177 — 40,177 Goodwill 7,256 — — 7,256 Total $ 43,807 $ 40,177 $ (15,828) $ 68,156 Our finite lived intangible asset consists of acquired developed product rights obtained from the asset acquisition of Keveyis® (dichlorphenamide) from a subsidiary of Taro Pharmaceutical Industries Ltd. (“Taro”). Keveyis is approved in the U.S. to treat hyperkalemic, hypokalemic and related variants of primary periodic paralysis, a group of rare hereditary disorders that cause episodes of muscle weakness or paralysis. Keveyis has received orphan drug exclusivity status in the U.S. through August 7, 2022. In connection with the Asset Purchase and Supply Agreement we entered into with Taro, we have paid Taro an upfront payment in two installments of $1 million in December 2016 and $7.5 million in March 2017. We have concluded that the supply price payable by us exceeds fair value and, therefore, have used a discounted cash flow method with a probability assumption to value the payments in excess of fair value at $29.3 million, for which we have recorded an intangible asset and corresponding liability. This liability will be reduced as we purchase inventory over the term of the agreement. In addition, we incurred transaction costs of $2.4 million. The overall recording of the transaction resulted in the recording of an intangible asset of $40.2 million. This asset is being amortized over an eight-year period using the straight-line method. We recorded amortization expense of $1.3 million and $0 for the three months ended March 31, 2017 and 2016, respectively. |
Accrued liabilities
Accrued liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Accrued liabilities | |
Accrued liabilities | 5. Accrued liabilities Accrued liabilities consist of the following (in thousands): March 31, December 31, 2017 2016 Consulting and professional fees $ 2,865 $ 1,110 Accrued payable due Taro Pharmaceuticals Industries Ltd. — 7,500 Accrued interest 245 — Supply agreement - current portion 4,207 4,207 Employee compensation 553 1,554 Other 7 497 Total accrued liabilities $ 7,877 $ 14,868 |
Long Term Debt
Long Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure | |
Long Term Debt | 6. Long-Term debt On December 28, 2016, the Company entered into a loan and security agreement (the “Loan Agreement”) with Oxford Finance LLC (“Oxford”) and Horizon Technology Finance Corporation (“Horizon”). The Loan Agreement provided for a $40 million credit facility, of which $20 million was borrowed initially. Under the Loan Agreement, the Company has access to two additional tranches of $10 million each, which would be available to the Company subject to the achievement of certain specified milestones. The borrowings pursuant to the Loan Agreement mature after 48 months. The Loan Agreement provides for interest-only payments initially for the first 18 months of the loan followed by an amortization period of 30 months, a final payment fee equal to 8% of the amount borrowed, and interest payable at an annual rate equal to the sum of 8.22% plus the greater of 0.53% or the 30-day US LIBOR rate. The credit facility provides that if the Company satisfies certain milestones and borrows the final $10 million tranche, the interest-only period would be extended by an additional six months and the amortization period would be 24 months. The Company has granted a security interest in substantially all of its existing assets and assets acquired by the Company in the future , including intellectual property. The Loan Agreement contains facility and prepayment fees, and customary affirmative and negative covenants, including a financial covenant regarding minimum amounts of net revenue and events of default and restricts the payment of cash dividends. The Loan Agreement contains a material adverse change clause whereby a material adverse change in the Company’s business, operations or financial condition would be considered an event of default whereby the lenders could declare all amounts under the Loan Agreement as immediately due and payable. We incurred $1.3 million in debt discounts and $0.3 million of debt issuance costs relating to this Loan Agreement which have been recorded as a reduction to the long-term debt. These amounts will be amortized over the outstanding period of the debt to interest expense using the effective interest rate method. In connection with the execution of the Loan Agreement, we issued warrants to the Lenders to purchase an aggregate of 428,571 ordinary shares at an exercise price equal to $2.45 per share. The warrants are immediately exercisable and expire after ten years. We accounted for these warrants as equity, and the fair value was recorded into APIC. On March 31, 2017 we entered into an amendment to the Loan Agreement that was made effective as of January 27, 2017 and provided for an extension to the dates by which the Company’s Swedish subsidiary was required to enter into security documents granting security interests on certain of its assets in favor of Oxford, as collateral agent for the Lender, and to increase the amount of debt the Company can incur under, and the amount of cash collateral it can provide for purposes of, its corporate credit card program from $100,000 to $250,000. In connection with the amendment, the Company paid $150,000 to the Oxford Finance LLC ("Oxford") and Horizon Technology Finance Corporation ("Horizon") (collectively, the “Lenders”). The $150,000 was recorded as additional debt discount cost and will be amortized as an adjustment of interest expense over the remaining term of the Loan. Future principal payments due under the Loan Agreement are as follows (in thousands) : Principal Payments 2017 $ — 2018 4,000 2019 8,000 2020 8,000 Total future payments $ 20,000 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and contingencies | |
Commitments and contingencies | 7. Commitments and contingencies (a) Lease obligations In March 2015, the Company entered into a 52‑month building sublease agreement for 14,743 square feet of office space in Trevose, Pennsylvania. The lease has annual rent escalations and is recognized on a straight‑line basis over the term of the lease. As of March 31, 2017, future minimum commitments under facility operating leases were as follows (in thousands): Operating leases 2017 $ 303 2018 319 2019 184 Total minimum lease payments $ 806 Rent expense recognized under our operating lease, including additional rent charges for utilities, parking, maintenance and real estate taxes, was approximately $79,000 and $76,000 for the three months ended March 31, 2017 and 2016, respectively. (b) Commitments to Taro Pharmaceuticals Industries Ltd. In December 2016, we acquired the U.S. marketing rights to Keveyis® (dichlorphenamide) from a subsidiary of Taro. Keveyis is approved in the U.S. to treat hyperkalemic, hypokalemic and related variants of primary periodic paralysis, a group of rare hereditary disorders that cause episodes of muscle weakness or paralysis. Keveyis has received orphan drug exclusivity status in the U.S. through August 7, 2022. Under the terms of an asset purchase agreement, we paid Taro an upfront payment in two installments of $1 million in December 2016 and $7.5 million in March 2017, and will pay an aggregate of $7.5 million in potential milestones upon the achievement of certain product sales targets. Taro has agreed to continue to manufacture Keveyis for us under an exclusive supply agreement through the orphan exclusivity period. We are obligated to purchase certain annual minimum amounts of product totaling approximately $29 million over a six-year period. The supply agreement may extend beyond the orphan exclusivity period unless terminated by either party pursuant to the terms of the agreement. If terminated by Taro at the conclusion of the orphan exclusivity period, we have the right to manufacture the product on our own or have the product manufactured by a third party on our behalf. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income taxes | |
Income taxes | 8 . Income taxes Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts and tax bases of assets and liabilities and operating loss carryforwards and other attributes using enacted rates expected to be in effect when those differences reverse. Valuation allowances are provided against deferred tax assets that are not more likely than not to be realized. The Company assesses its ability to realize deferred tax assets. Changes in future earnings projections, among other factors, may cause the Company to adjust its valuation allowance on deferred tax assets, which would impact the Company’s income tax expense in the period in which it is determined that these factors have changed. For the three months ended March 31, 2017, the Company recorded a full valuation allowance against our deferred tax asset, resulting in income tax expense of $1.6 million. |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based compensation | |
Stock based compensation | 9. Stock‑based compensation Our board of directors has adopted, the 2017 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity-based awards to new employees. The purpose of the Inducement Plan is to attract valued employees by offering them a greater stake in our success and a closer identity with us, and to encourage ownership of our ordinary shares by such employees. The Inducement Plan is effective as of February 23, 2017. As of March 31, 2017, 733,450 shares are available for issuance pursuant to the Inducement Plan. Our board of directors has adopted, and our shareholders have approved, the 2015 Equity Compensation Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options to our employees and any parent or subsidiary corporations’ employees, and for the grant of nonstatutory stock options, stock awards, and restricted stock units to our employees, directors and consultants and our parent or subsidiary corporations’ employees and consultants. The 2015 Plan is effective as of September 3, 2015. As of March 31, 2017, 422,133 shares are available for issuance pursuant to the 2015 Plan. Our board of directors has adopted, and our shareholders have approved, the Non‑Employee Director Equity Compensation Plan (the “Non‑Employee Director Plan”). The Non‑Employee Director Plan provides for the grant of nonstatutory stock options, stock awards, and restricted stock units to our non‑employee directors. The Non‑Employee Director Plan is effective as of September 3, 2015. As of March 31, 2017, 240,792 shares are available for issuance pursuant to the Non‑Employee Director Plan. A summary of the outstanding stock options as of March 31, 2017 is as follows: Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Aggregate Shares Price (Years) Intrinsic Value (in thousands) Outstanding—January 1, 2017 3,249,784 $ 11.00 6.89 $ — Granted 2,087,600 $ 3.02 Forfeited and cancelled (45,398) $ 7.58 Exercised — — Outstanding—March 31, 2017 5,291,986 $ 7.88 6.89 $ 4,326 Vested and exercisable—March 31, 2017 1,343,945 $ 11.99 4.92 $ 172 Included in the stock options outstanding at March 31, 2017 are unvested stock options to purchase 88,908 shares at a weighted average exercise price of $18.80 per share for which the vesting of certain tranches will accelerate if the fair value per share of our stock reaches $31.46. In addition, the options outstanding include 97,652 shares that vest upon a market appreciation event so long as it occurs prior to May 26, 2019 of which all were unvested as of March 31, 2017 and 97,652 shares that will vest upon the one year anniversary of the market appreciation event of which all were unvested as of March 31, 2017. The market appreciation event is defined as the last trading day in the period in which the closing stock price on each of 20 consecutive trading days reported on NASDAQ has been at least $30.14 or $33.66 for the respective grantee. Stock‑based compensation expense We recognized stock‑based compensation expense for employees and directors for stock options and RSUs in the accompanying unaudited consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2017 2016 Research and development $ 216 $ 283 General and administrative 953 1,045 Total stock-based compensation $ 1,169 $ 1,328 As of March 31, 2017, the total unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, is $10.0 million, which we expect to recognize over an estimated weighted‑average period of 3.02 years. In determining the estimated fair value of our service-based awards, we use the Black‑Scholes option‑pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment. The fair value of our service-based awards which were granted during the years, was estimated with the following assumptions: Three Months Ended March 31, 2017 2016 Expected term (in years) 6.09 6.07 Risk-free interest rate 1.98% - 2.26% 1.4% - 1.6% Expected volatility 81.1% - 81.8% 78.1% - 78.6% Dividend rate —% —% Restricted Stock Units On February 26, 2016, our board of directors approved grants of restricted stock units (RSUs) to employees. These RSUs vest two years from the date of issuance, provided that the employee is employed by the Company on such vesting date. All RSUs will fully vest upon a change of control of our company. If and when the RSUs vest, the Company will issue one ordinary share of the Company for each whole RSU that has vested, subject to satisfaction of the executive’s tax withholding obligations. The RSUs will cease to be outstanding upon such issuance of shares. We recorded expense of $88,000 and $34,000 for the three months ended March 31, 2017 and 2016, respectively, which is included in the stock based compensation table above. As of March 31, 2017, the total unrecognized compensation expense related to unvested RSUs is $0.4 million, which we expect to recognize over an estimated weighted‑average period of 1.8 years. A summary of the unvested RSUs as of March 31, 2017 is as follows: Number of Shares Unvested—January 1, 2017 184,000 Granted 12,000 Forfeited (2,000) Vested — Unvested—March 31, 2017 194,000 |
Summary of significant accoun16
Summary of significant accounting policies and basis of presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of significant accounting policies and basis of presentation | |
Basis of presentation | Basis of presentation These unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). The unaudited consolidated financial statements reflect all adjustments, which include only normal recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. These unaudited consolidated financial statements should be read in conjunction with the accounting policies and notes to the audited consolidated financial statements included in Strongbridge Biopharma’s 2016 Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 4, 2017. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. |
Foreign currency translation | Foreign currency translation The consolidated financial statements are reported in United States dollars, which is the functional currency of our Company, including each of our consolidated subsidiaries. Transactions in foreign currencies are remeasured into our functional currency at the rate of exchange prevailing at the date of the transaction. Any monetary assets and liabilities arising from these transactions are remeasured into our functional currency at exchange rates prevailing at the balance sheet date or on settlement. Resulting gains and losses are recorded in foreign exchange gain (loss) in our consolidated statements of operations. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. We must apply significant judgment in this process. Actual results could materially differ from those estimates. |
Net loss per share | Net loss per share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted‑average number of shares of common stock outstanding for the period, including any dilutive effect from outstanding stock options or other equity-based awards. Shares used in the diluted net loss per share calculations exclude anti‑dilutive common equivalent shares, which currently consist of outstanding stock options, unvested restricted stock units and warrants. The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as of March 31, 2017 and 2016, as they would be anti-dilutive: Three Months Ended March 31, 2017 2016 Warrants 7,428,571 — Stock options issued and outstanding 5,291,986 3,279,030 Unvested restricted stock units 194,000 187,000 |
Recent accounting pronouncements | Recent accounting pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update ( ASU) 2017-04, Intangibles - Goodwill and Other : Simplifying the Accounting for Goodwill Impairment . ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2021, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order to reduce diversity in practice. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Improvements to Employee Share-Based Payment Accounting , which effects all entities that issue share-based payment awards to their employees. The amendments in this ASU cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. The Company has adopted the standard effective January 1, 2017 and has elected to account for forfeitures as they occur as opposed to estimating forfeitures. The adoption of this standard did not have a material impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , that discusses how an entity should account for lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , that modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The accounting standard update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We are currently assessing the impact that adopting this new accounting guidance will have on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The FASB has subsequently issued ASU No. 2016-10, Revenue from Contracts with Customer (Topic 606): Identifying Performance Obligations and Licensing, to address issues arising from implementation of the new revenue recognition standard. ASU 2014-09 and ASU 2016-10 are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. The Company plans to early adopt this standard as we recognize revenue with the launch of Keveyis during 2017. Early adopting will allow the Company to record revenue based on shipments and estimate any deductions to revenue. |
Summary of significant accoun17
Summary of significant accounting policies and basis of presentation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of significant accounting policies and basis of presentation | |
Schedule of potentially dilutive securities excluded from computations of diluted weighted average shares outstanding | Three Months Ended March 31, 2017 2016 Warrants 7,428,571 — Stock options issued and outstanding 5,291,986 3,279,030 Unvested restricted stock units 194,000 187,000 |
Fair value measurement (Tables)
Fair value measurement (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair value measurement | |
Schedule of fair value of financial assets by level | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis for the periods presented (in thousands) : As of March 31, 2017 Level I Level II Level III Total Cash equivalents 49,601 — — 49,601 Total assets $ 49,601 $ — $ — $ 49,601 Warrant liabilities — — 26,018 26,018 Total liabilities $ — $ — $ 26,018 $ 26,018 As of December 31, 2016 Level I Level II Level III Total Warrant liabilities — — 11,090 11,090 Total liabilities $ — $ — $ 11,090 $ 11,090 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible assets and goodwill | |
Schedule of gross carrying amount of in process research and development and goodwill | The gross carrying amount of in‑process research and development, acquired developed product rights and goodwill is as follows (in thousands): As of March 31, 2017 Beginning of Period Additions Amortization End of Period IPR&D $ 20,723 $ — $ — $ 20,723 Acquired product rights 40,177 — (1,256) 38,921 Goodwill 7,256 — — 7,256 Total $ 68,156 $ — $ (1,256) $ 66,900 As of December 31, 2016 Beginning of Period Additions Impairment End of Period IPR&D $ 36,551 $ — $ (15,828) $ 20,723 Acquired product rights — 40,177 — 40,177 Goodwill 7,256 — — 7,256 Total $ 43,807 $ 40,177 $ (15,828) $ 68,156 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accrued liabilities | |
Schedule of accrued liabilities | Accrued liabilities consist of the following (in thousands): March 31, December 31, 2017 2016 Consulting and professional fees $ 2,865 $ 1,110 Accrued payable due Taro Pharmaceuticals Industries Ltd. — 7,500 Accrued interest 245 — Supply agreement - current portion 4,207 4,207 Employee compensation 553 1,554 Other 7 497 Total accrued liabilities $ 7,877 $ 14,868 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure | |
Future principal payments | Future principal payments due under the Loan Agreement are as follows (in thousands) : Principal Payments 2017 $ — 2018 4,000 2019 8,000 2020 8,000 Total future payments $ 20,000 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and contingencies | |
Schedule of future minimum commitments under facility operating leases | As of March 31, 2017, future minimum commitments under facility operating leases were as follows (in thousands): Operating leases 2017 $ 303 2018 319 2019 184 Total minimum lease payments $ 806 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based compensation | |
Schedule of summary of outstanding stock options activity | Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Aggregate Shares Price (Years) Intrinsic Value (in thousands) Outstanding—January 1, 2017 3,249,784 $ 11.00 6.89 $ — Granted 2,087,600 $ 3.02 Forfeited and cancelled (45,398) $ 7.58 Exercised — — Outstanding—March 31, 2017 5,291,986 $ 7.88 6.89 $ 4,326 Vested and exercisable—March 31, 2017 1,343,945 $ 11.99 4.92 $ 172 |
Schedule of stock-based compensation | We recognized stock‑based compensation expense for employees and directors for stock options and RSUs in the accompanying unaudited consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2017 2016 Research and development $ 216 $ 283 General and administrative 953 1,045 Total stock-based compensation $ 1,169 $ 1,328 |
Schedule of assumptions for estimating fair value of stock option awards | Three Months Ended March 31, 2017 2016 Expected term (in years) 6.09 6.07 Risk-free interest rate 1.98% - 2.26% 1.4% - 1.6% Expected volatility 81.1% - 81.8% 78.1% - 78.6% Dividend rate —% —% |
Schedule of summary of unvested RSUs | Number of Shares Unvested—January 1, 2017 184,000 Granted 12,000 Forfeited (2,000) Vested — Unvested—March 31, 2017 194,000 |
Organization - Liquidity (Detai
Organization - Liquidity (Details) - USD ($) $ in Thousands | Dec. 28, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Liquidity | |||||
Cash | $ 49,898 | $ 66,837 | $ 42,307 | $ 51,623 | |
Outstanding borrowings | 20,000 | ||||
Credit Facility | |||||
Liquidity | |||||
Outstanding borrowings | $ 20,000 | ||||
Credit facility term | 48 months | 48 months |
Summary of significant accoun25
Summary of significant accounting policies and basis of presentation - Antidilutive securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Warrants | ||
Net loss per share | ||
Anti-dilutive shares of common stock (in shares) | 7,428,571 | |
Stock options | ||
Net loss per share | ||
Anti-dilutive shares of common stock (in shares) | 5,291,986 | 3,279,030 |
RSUs | ||
Net loss per share | ||
Anti-dilutive shares of common stock (in shares) | 194,000 | 187,000 |
Fair value measurement (Details
Fair value measurement (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Liabilities | ||
Warrant liabilities | $ 26,018 | $ 11,090 |
Recurring | ||
Assets | ||
Cash equivalents | 49,601 | |
Total Assets | 49,601 | |
Liabilities | ||
Warrant liabilities | 26,018 | 11,090 |
Total liabilities | 26,018 | 11,090 |
Recurring | Level I | ||
Assets | ||
Cash equivalents | 49,601 | |
Total Assets | 49,601 | |
Recurring | Level III | ||
Liabilities | ||
Warrant liabilities | 26,018 | 11,090 |
Total liabilities | $ 26,018 | $ 11,090 |
Intangible assets and goodwil27
Intangible assets and goodwill - Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
In-process research and development and Goodwill | ||
Goodwill, Beginning of Period | $ 7,256 | $ 7,256 |
Goodwill, End of Period | 7,256 | 7,256 |
Total, Beginning of Period | 68,156 | 43,807 |
Total, Additions | 40,177 | |
Total Impairment | (1,256) | (15,828) |
Total, End of Period | 66,900 | 68,156 |
Acquired product rights | ||
In-process research and development and Goodwill | ||
Acquired product rights, Beginning of Period | 40,177 | |
Acquired product rights, Additions | 40,177 | |
Acquired product rights, Impairment | (1,256) | |
Acquired product rights, End of Period | 38,921 | 40,177 |
IPR&D | ||
In-process research and development and Goodwill | ||
IPR&D, Beginning of Period | 20,723 | 36,551 |
IPR&D, Impairment | (15,828) | |
IPR&D, End of Period | $ 20,723 | $ 20,723 |
Intangible assets and goodwil28
Intangible assets and goodwill - Asset purchase (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($)payment | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)payment | Dec. 31, 2016item | Dec. 31, 2016USD ($) | |
In-process research and development and Goodwill | |||||
Amortization of intangible asset | $ 1,256 | ||||
Acquired product rights | |||||
In-process research and development and Goodwill | |||||
Acquired product rights | 38,921 | $ 40,177 | |||
Transaction costs | $ 2,400 | ||||
Estimated life | 8 years | ||||
IPR&D | |||||
In-process research and development and Goodwill | |||||
IPR&D, Impairment | $ (15,828) | ||||
Asset Purchase Agreement | Keveyis | Taro | Acquired product rights | |||||
In-process research and development and Goodwill | |||||
Number of installment payments | 2 | 2 | 2 | ||
Installment payment | $ 1,000 | $ 7,500 | |||
Supply Agreement | Keveyis | Taro | Acquired product rights | |||||
In-process research and development and Goodwill | |||||
Acquired product rights | $ 29,300 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued liabilities | ||
Consulting and professional fees | $ 2,865 | $ 1,110 |
Accrued payable due Taro Pharmaceuticals Industries Ltd | 7,500 | |
Accrued interest | 245 | |
Supply agreement - current portion | 4,207 | 4,207 |
Employee compensation | 553 | 1,554 |
Other | 7 | 497 |
Total accrued liabilities | $ 7,877 | $ 14,868 |
Long Term Debt - Agreements (De
Long Term Debt - Agreements (Details) | Mar. 31, 2017USD ($) | Dec. 28, 2016USD ($)item$ / sharesshares | Mar. 31, 2017USD ($) |
Loan agreement | |||
Payment for amendment of long-term debt | $ 150,000 | ||
Credit Facility | |||
Loan agreement | |||
Maximum credit facility | $ 40,000,000 | ||
Line of credit proceeds | $ 20,000,000 | ||
Number of additional tranches | item | 2 | ||
Credit facility term | 48 months | 48 months | |
Interest-only payment period | 18 months | ||
Amortization period | 30 months | ||
Final payment fee (as a percent) | 8.00% | ||
Fixed interest rate (as a percent) | 8.22% | ||
Variable interest rate (as a percent) | 0.53% | ||
Debt discounts | $ 1,300,000 | ||
Debt issuance costs | 300,000 | ||
Payment for amendment of long-term debt | $ 150,000 | ||
Additional debt discount | 150,000 | $ 150,000 | |
Credit Facility | Minimum | |||
Loan agreement | |||
Amount of cash collateral | 100,000 | 100,000 | |
Credit Facility | Maximum | |||
Loan agreement | |||
Amount of cash collateral | $ 250,000 | $ 250,000 | |
Credit Facility-Tranche One | |||
Loan agreement | |||
Additional contingent borrowing capacity | 10,000,000 | ||
Credit Facility-Tranche Two | |||
Loan agreement | |||
Additional contingent borrowing capacity | $ 10,000,000 | ||
Amortization period | 24 months | ||
Interest payment only extension period | 6 months | ||
Warrants in connection with loan agreement | Credit Facility | |||
Loan agreement | |||
Securities that warrants may purchase (in shares) | shares | 428,571 | ||
Warrant exercise price (in dollars per share) | $ / shares | $ 2.45 | ||
Warrant expiration period | 10 years |
Long Term Debt - Future princip
Long Term Debt - Future principal payments (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Future principal payments | |
2,018 | $ 4,000 |
2,019 | 8,000 |
2,020 | 8,000 |
Total future payments | $ 20,000 |
Commitments and contingencies -
Commitments and contingencies - Lease (Details) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2015ft² | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Future minimum commitments under facility operating leases | |||
2,017 | $ 303,000 | ||
2,018 | 319,000 | ||
2,019 | 184,000 | ||
Total minimum lease payments | 806,000 | ||
Rent expense | $ 79,000 | $ 76,000 | |
Building lease, March 2015 | |||
Lease | |||
Lease term | 52 months | ||
Amount of space leased (in square feet) | ft² | 14,743 |
Commitments and contingencies33
Commitments and contingencies - Commitments to Taro (Details) - Acquired product rights - Taro - Keveyis $ in Millions | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2016USD ($)payment | Mar. 31, 2017USD ($) | Dec. 31, 2016item | Dec. 31, 2016USD ($) | |
Asset Purchase Agreement | ||||
Other Commitments | ||||
Number of installment payments | 2 | 2 | ||
Installment payment | $ 1 | $ 7.5 | ||
Potential milestone payments | $ 7.5 | |||
Supply Agreement | ||||
Other Commitments | ||||
Minimum amount of purchases obligated | $ 29 | |||
Purchase obligation period | 6 years |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Components of income tax (benefit) provision | ||
Income tax expense | $ 1,594 | $ (55) |
Stock-based compensation - Gene
Stock-based compensation - General (Details) | Mar. 31, 2017shares |
Inducement Plan | |
Stock-based compensation | |
Number of shares available for issuance | 733,450 |
2015 Plan | |
Stock-based compensation | |
Number of shares available for issuance | 422,133 |
Non-Employee Director Plan | |
Stock-based compensation | |
Number of shares available for issuance | 240,792 |
Stock-based compensation - Stoc
Stock-based compensation - Stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Summary of outstanding stock options | ||
Outstanding at beginning of period (in shares) | 3,249,784 | |
Granted (in shares) | 2,087,600 | |
Forfeited and cancelled (in shares) | (45,398) | |
Outstanding at end of period (in shares) | 5,291,986 | 3,249,784 |
Vested and exercisable at end of period (in shares) | 1,343,945 | |
Weighted-Average Exercise Price | ||
Granted (in dollars per share) | $ 3.02 | |
Forfeited and cancelled (in dollars per share) | 7.58 | |
Outstanding (in dollars per share) | 7.88 | $ 11 |
Vested and exercisable at end of period (in dollars per share) | $ 11.99 | |
Additional Disclosures | ||
Weighted Average Remaining Contractual Term, Outstanding | 6 years 10 months 21 days | 6 years 10 months 21 days |
Weighted Average Remaining Contractual Term, Vested and exercisable | 4 years 11 months 1 day | |
Aggregate Intrinsic Value (in dollars) | $ 4,326 | |
Vested and exercisable at end of the period (in dollars) | $ 172 |
Stock-based compensation - Opti
Stock-based compensation - Options outstanding (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Stock options | ||
Options outstanding (in shares) | 5,291,986 | 3,249,784 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 7.88 | $ 11 |
Vesting subject to acceleration | ||
Stock options | ||
Options outstanding (in shares) | 88,908 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 18.80 | |
Vesting subject to acceleration | Grantee, Two | ||
Stock options | ||
Share price threshold | 31.46 | |
Vesting based on market appreciation event | Grantee, Four | ||
Stock options | ||
Share price threshold | 30.14 | |
Vesting based on market appreciation event | Grantee, Five | ||
Stock options | ||
Share price threshold | $ 33.66 | |
Vesting based on market appreciation event | Vesting at market appreciation event | ||
Stock options | ||
Options outstanding (in shares) | 97,652 | |
Consecutive trading days threshold | 20 days | |
Vesting based on market appreciation event | Vesting at one year anniversary of market appreciation event | ||
Stock options | ||
Options outstanding (in shares) | 97,652 | |
Vesting period following event | 1 year | |
Consecutive trading days threshold | 20 days |
Stock-based compensation - St38
Stock-based compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation expense | ||
Total stock-based compensation | $ 1,169 | $ 1,328 |
Employee and directors stock options | ||
Stock-based compensation expense | ||
Total unrecognized compensation expense | $ 10,000 | |
Estimated weighted average period over which expense is expected to be recognized | 3 years 7 days | |
Research and development | ||
Stock-based compensation expense | ||
Total stock-based compensation | $ 216 | 283 |
General and administration expense | ||
Stock-based compensation expense | ||
Total stock-based compensation | $ 953 | $ 1,045 |
Stock-based compensation - Fair
Stock-based compensation - Fair value assumptions (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fair value assumptions | ||
Expected term (in years) | 6 years 1 month 2 days | 6 years 26 days |
Minimum Risk-free interest rate (as a percent) | 1.98% | 1.40% |
Maximum Risk-free interest rate (as a percent) | 2.26% | 1.60% |
Minimum Expected volatility (as a percent) | 81.10% | 78.10% |
Maximum Expected volatility (as a percent) | 81.80% | 78.60% |
Stock-based compensation - Rest
Stock-based compensation - Restricted stock units (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation | ||
Stock-based compensation | $ 1,169,000 | $ 1,328,000 |
RSUs | ||
Stock-based compensation | ||
Stock-based compensation | 88,000 | $ 34,000 |
Total unrecognized compensation expense | $ 400,000 | |
Estimated weighted average period over which expense is expected to be recognized | 1 year 9 months 18 days | |
Summary of unvested RSUs | ||
Unvested - Beginning of period (in shares) | 184,000 | |
Granted (in shares) | 12,000 | |
Forfeited (in shares) | (2,000) | |
Unvested - End of period (in shares) | 194,000 |