Sio Gene Therapies (SIOX) 10-Q 7 Nov 16 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2016	Nov. 04, 2016
Document and Entity Information
Entity Registrant Name	Axovant Sciences Ltd.
Entity Central Index Key	1,636,050
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		99,161,719
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Current assets:
Cash	$ 229,664	$ 276,251
Prepaid expenses and other current assets	4,105	4,865
Income tax receivable	675	970
Total current assets	234,444	282,086
Property, plant and equipment, net	103	89
Deferred tax assets	40	323
Total assets	234,587	282,498
Current liabilities:
Accounts payable	9,510	622
Due to Roivant Sciences Ltd. and Roivant Sciences, Inc.	2,706	1,814
Accrued expenses	16,427	8,319
Contingent payment liability	0	5,000
Total current liabilities	28,643	15,755
Total liabilities	28,643	15,755
Commitments and contingencies
Shareholders’ equity:
Common shares, par value $0.00001 per share, 1,000,000,000 shares authorized, 99,161,719 and 99,150,000 issued and outstanding at September 30, 2016 and March 31, 2016	1	1
Additional paid-in capital	440,442	420,934
Accumulated deficit	(234,499)	(154,192)
Total shareholders’ equity	205,944	266,743
Total liabilities and shareholders’ equity	$ 234,587	$ 282,498

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Mar. 31, 2016
Common stock
Common shares par value (in dollars per share)	$ 0.00001	$ 0.00001
Common shares authorized (in shares)	1,000,000,000	1,000,000,000
Common shares issued (in shares)	99,161,719	99,150,000
Common shares outstanding (in shares)	99,161,719	99,150,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating expenses:
Research and development expenses	$ 32,074	$ 9,399	$ 57,350	$ 18,886
General and administrative expenses	9,449	5,743	22,080	21,134
Total operating expenses	41,523	15,142	79,430	40,020
Loss before provision for income tax	(41,523)	(15,142)	(79,430)	(40,020)
Income tax expense	729	24	877	99
Net loss	(42,252)	(15,166)	(80,307)	(40,119)
Comprehensive Loss	$ (42,252)	$ (15,166)	$ (80,307)	$ (40,119)
Net loss per common share — basic and diluted (in dollars per share)	$ (0.43)	$ (0.15)	$ (0.81)	$ (0.45)
Weighted average common shares outstanding - basic and diluted (in shares)	99,160,445	99,150,000	99,155,251	89,780,328

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Research and development
Share-based compensation	$ 4,473	$ 2,921	$ 9,437	$ 9,822
General and administrative
Share-based compensation	$ 3,464	$ 2,804	$ 10,061	$ 15,080

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Shareholders' Equity - 6 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Total	Common Shares	Additional Paid in Capital	Accumulated Deficit
Balance at Mar. 31, 2016	$ 266,743	$ 1	$ 420,934	$ (154,192)
Balance (in shares) at Mar. 31, 2016		99,150,000
Increase (Decrease) in Shareholders' Equity (Deficit)
Exercise of stock options	$ 10
Exercise of stock options (in shares)	11,719
Share-based compensation expense	$ 14,034		14,034
Capital contribution —share-based compensation expense	5,464		5,464
Net loss	(80,307)			(80,307)
Balance at Sep. 30, 2016	$ 205,944	$ 1	$ 440,442	$ (234,499)
Balance (in shares) at Sep. 30, 2016		99,161,719

Condensed Consolidated Stateme7

Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (80,307)	$ (40,119)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	19,498	24,902
Depreciation and amortization	22	14
Deferred tax assets	283	(388)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	760	(2,027)
Accounts payable	8,888	294
Due to Roivant Sciences Ltd. and Roivant Sciences, Inc.	892	334
Accrued liabilities	8,108	2,009
Income tax receivable	295	284
Net cash used in operating activities	(41,561)	(14,697)
Cash flows from investing activities:
Purchase of furniture and equipment	(36)	(37)
Net cash used in investing activities	(36)	(37)
Cash flows from financing activities:
Cash proceeds from issuance of common shares in initial public offering, net of underwriting discount	0	336,893
Initial public offering costs paid	0	(2,351)
Cash capital contribution from Roivant Sciences Ltd.	0	751
Repayment of amounts due to Roivant Sciences Ltd. and Roivant Sciences, Inc. for amounts paid on behalf of the Company	0	(627)
Payment of contingent liability	(5,000)	0
Exercise of stock options	10	0
Due to Roivant Sciences Ltd. and Roivant Sciences, Inc. for amounts paid on behalf of the Company	0	279
Net cash (used in) provided by financing activities	(4,990)	334,945
Net change in cash	(46,587)	320,211
Cash—beginning of period	276,251	0
Cash—end of period	229,664	320,211
Non-cash financing activities:
Unpaid initial public offering costs	0	40
Supplemental disclosure of cash paid:
Income Taxes	$ 299	$ 203

Description of Business

Description of Business	6 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Axovant Sciences Ltd., inclusive of its wholly-owned subsidiaries (the ‘‘Company’’) is a clinical-stage biopharmaceutical company focused on acquiring, developing and commercializing novel therapeutics for the treatment of dementia. The Company intends to develop a pipeline of product candidates to comprehensively address the cognitive, functional and behavioral aspects of dementia and related neurological disorders. The Company was founded on October 31, 2014 as a Bermuda Exempted Limited Company and a wholly-owned subsidiary of Roivant Sciences Ltd. (‘‘RSL’’), under the name Roivant Neurosciences Ltd. The Company changed its name to Axovant Sciences Ltd. in March 2015 . On February 24, 2015, Axovant Sciences, Inc. (“ASI”) was formed, and on March 7, 2015 it became a wholly-owned subsidiary of the Company based in the United States of America. In August 2016, the Company incorporated as its wholly-owned subsidiaries Axovant Holdings Limited, a private limited company incorporated under the laws of England and Wales, and Axovant Sciences GmbH, a company with limited liability formed under the laws of Switzerland. The Company expects that Axovant Sciences GmbH will be the principal operating company for conducting its business and the entity that will hold its intellectual property rights. From its inception, the Company has devoted substantially all of its efforts to organizing and staffing the Company, raising capital, acquiring product candidates and preparing for and advancing its lead product candidates, intepirdine, previously referred to as RVT-101, and nelotanserin into clinical development for patients with Alzheimer's disease or Lewy body dementia. In addition, the Company has the rights to develop RVT-103, a combination of donepezil and a peripheral muscarinic receptor antagonist, and RVT -104, a combination of rivastigamine and a peripheral muscarinic receptor antagonist, and intends to develop these product candidates alone and in combination with intepirdine as potential treatments for patients with Alzheimer's disease or Lewy body dementia. The Company has determined that it has one operating and reporting segment.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies [A] Basis of Presentation: The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31. The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 , filed with the Securities and Exchange Commission (“SEC”) on June 6, 2016. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented have been included. Operating results for the six months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending March 31, 2017, for any other interim period, or for any other future year. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Update (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). The condensed consolidated financial statements include the accounts of the Company and ASI, its wholly-owned subsidiary. The Company has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. There have been no significant changes in the Company’s accounting policies from those disclosed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2016, filed with the SEC on June 6, 2016. [B] Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs and expenses, including compensation expense allocated to the Company under its services agreement with Roivant Sciences, Inc. (“RSI”), a wholly-owned subsidiary of RSL, and ASI, as well as contingent liabilities, share-based compensation and research and development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. [C] Net Loss per Common Share: Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares of outstanding during the period. Diluted net loss per common share is computed by dividing the net loss applicable to common shareholders by the diluted weighted-average number of common shares outstanding during the period calculated in accordance with the treasury stock method. Stock options to purchase 7.4 million common shares were not included in the calculation of diluted weighted-average common shares outstanding for the three and six months ended September 30, 2016 , respectively, because they were anti-dilutive. Stock options to purchase 5.2 million common shares were not included in the calculation of diluted weighted-average common shares outstanding for the three and six months ended September 30, 2015 because they were anti-dilutive. [D] Financial Instruments: The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. Fair value is identified as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a three-tier fair value hierarchy that distinguishes among the following: • Level 1-Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2-Valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. • Level 3-Valuations are based on inputs that are unobservable (supported by little or no market activity) and significant to the overall fair value measurement. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist of cash and accounts payable. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. [E] Recent Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, ‘‘Leases (Topic 842)’’ (ASU No. 2016-02), which is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of ASU No. 2016-02 will require lessees to present the assets and liabilities that arise from leases on their balance sheets. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the new standard and its impact on the Company's consolidated financial position and results of operations. In March 2016, the FASB issued ASU No. 2016-09, ‘‘Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting’’ (ASU No. 2016-09). This ASU makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation, and the financial statement presentation of excess tax benefits or deficiencies. ASU No. 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

Accrued Expenses

Accrued Expenses	6 Months Ended
	Sep. 30, 2016
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses As of September 30, 2016 and March 31, 2016 the Company’s accrued expenses consisted of the following (in thousands): September 30, 2016 March 31, 2016 Research and development expenses $ 12,885 $ 5,659 Salaries, bonuses, and other compensation 1,666 1,893 Legal expenses 1,105 183 Other expenses 771 584 Total accrued expenses $ 16,427 $ 8,319

License Agreement

License Agreement	6 Months Ended
	Sep. 30, 2016
Research and Development [Abstract]
License Agreement	License Agreement In August 2016, the Company entered into an exclusive license agreement with Qaam Pharmaceuticals, LLC (“Qaam”) for intellectual property covering the combination of cholinesterase inhibitors with peripheral muscarinic receptor antagonists and the Company expects to develop and, if successful, commercialize products covered by the licensed intellectual property. The Company will initially develop RVT-103, a combination of a peripheral muscarinic receptor antagonist and donepezil. In addition, the Company expects to develop RVT-104, a combination of a peripheral muscarinic receptor antagonist and high-dose rivastigmine. The Company paid an initial license fee of $0.6 million which was recorded as research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions [A] Services Agreement: During 2015, the Company and ASI entered into a services agreement with RSI (the ‘‘Services Agreement’’) under which RSI has agreed to provide certain administrative and research and development services to the Company. The Company and ASI amended and restated the Services Agreement with RSI on October 13, 2015 effective for the fiscal year commencing April 1, 2015. Under the Services Agreement, as amended and restated, the Company pays or reimburses RSI for any expenses it, or third parties acting on its behalf, incurs for the Company. For any general and administrative and research and development activities performed by RSI employees, RSI charges back the employee compensation expense plus a pre-determined mark-up. Employee compensation expense, inclusive of base salary and fringe benefits, is determined based upon the relative percentage of time utilized on Company matters. All other costs are billed back at cost. The accompanying interim unaudited condensed consolidated financial statements include third-party expenses that have been paid by RSI and RSL. Under the Services Agreement, for the three months ended September 30, 2016 and 2015 , the Company incurred expenses of $1.5 million and $0.7 million respectively, inclusive of the mark-up. For the six months ended September 30, 2016 and 2015 , the Company incurred expenses of $3.4 million and $3.3 million , respectively. [B] Family Relationships: Geetha Ramaswamy, MD, the Vice President, Medical Affairs for ASI, is the mother of Vivek Ramaswamy, the Chief Executive Officer of ASI and the Company’s principal executive officer. Shankar Ramaswamy, MD, the Vice President of Corporate Development of ASI, is the brother of Vivek Ramaswamy. Sarah Friedhoff, Senior Business Operations and Research and Development Specialist, is the daughter of Lawrence Friedhoff, the Company's Chief Development Officer. Salary expenses were $65,000 and $62,500 for both Geetha Ramaswamy and Shankar Ramaswamy for the three months ended September 30, 2016 and 2015, respectively. Salary expenses were $130,000 and $125,000 for both Geetha and Shankar Ramaswamy for the six months ended September 30, 2016 and 2015, respectively. Salary expenses were $18,750 and $7,003 for Sarah Friedhoff for the three months ended September 30, 2016 and 2015, respectively. Salary expenses were $37,500 and $7,003 for Sarah Friedhoff for the six months ended September 30, 2016 and 2015, respectively.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Share-Based Compensation [A] Stock Options Granted to Employees and Directors: In March 2015, the Company adopted its 2015 Equity Incentive Plan (the ‘‘2015 Plan’’), under which 7.5 million of the Company’s common shares were originally reserved for grant. In May 2015, the Company’s Board of Directors amended the 2015 Plan to increase the number of common shares authorized for issuance thereunder to 9.5 million common shares. The amendment of the 2015 Plan became effective upon the execution of the underwriting agreement relating to the Company’s initial public offering of common share in June 2015. On April 1, 2016, the number of common shares authorized for issuance increased automatically to 12.5 million in accordance with the terms of the 2015 Plan. At September 30, 2016 , a total of 5.1 million common shares were available for future grant under the 2015 Plan. At September 30, 2016 and 2015 , there were 7.4 million and 5.2 million options outstanding, respectively, with a weighted average exercise price of $7.11 and $3.17 , respectively. At September 30, 2016 , there were 1.9 million vested options. During the six months ended September 30, 2016 and 2015 , the Company granted to its employees and directors a total of 2.0 million and 1.2 million options, respectively, with a weighted average exercise price of $13.04 and $10.36 , respectively, under the 2015 Plan. The Company recorded share-based compensation expense related to stock options issued to Company employees and directors of $5.0 million and $3.9 million , respectively, for the three months ended September 30, 2016 and 2015, and $12.8 million and $7.6 million , respectively, for the six months ended September 30, 2016 and 2015. At September 30, 2016 , total unrecognized compensation expense related to non-vested options was $53.7 million and is expected to be recognized over the remaining weighted-average service period of 2.84 years . [B] Share-Based Compensation for Related Parties: [1] Stock Options Granted to Non-Employees: During the six months ended September 30, 2016 and 2015 , the Company granted stock options to purchase 83,500 and 70,000 shares, respectively, of the Company's common stock to employees of RSI as compensation for support services provided to the Company. The fair value of the stock options granted to RSI employees is accounted for by the Company in accordance with the authoritative guidance for non-employee equity awards and is remeasured on each valuation date until performance is complete using the Black-Scholes pricing model. Each award is subject to a specified vesting schedule. Compensation expense will be recognized by the Company over the required service period to earn each award. The Company recorded $0.4 million and $41,403 of share-based compensation expense for the three months ended September 30, 2016 and 2015, respectively, and $0.8 million and $0.6 million of share-based compensation expense for the six months ended September 30, 2016 and 2015, respectively. The share-based compensation was recorded as research and development and general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss. The total remaining unrecognized compensation cost related to the non-vested stock options amounted to $4.8 million as of September 30, 2016 , which will be recognized over the weighted-average remaining requisite service period of 2.55 years. [2] Share-Based Compensation Allocated to the Company by RSL: The Company incurs share-based compensation expense for RSL common share awards and RSL options issued by RSL to RSI employees. Share-based compensation expense is allocated to the Company by RSL based upon the relative percentage of time utilized by RSI employees on Company matters. These share-based compensation amounts include compensation expense for BVC awards prior to the BVC Merger on December 4, 2015. On December 4, 2015, BVC Ltd. (‘‘BVC’’), a non-public entity, which held a non-controlling ownership interest in RSL, the parent of the Company, was merged with and into RSL (the ‘‘BVC Merger’’), with RSL as the surviving entity, as disclosed in Note E[1] to the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016. Prior to the BVC Merger, the Company recorded share-based compensation expense, in relation to the share-based awards issued by BVC to RSI employees based on the changes in fair value of BVC share-based awards. As these BVC share-based awards were not based on the Company's or RSL’s shares, they were remeasured at each reporting period date until performance was completed. As a result of the BVC Merger, all outstanding BVC share-based awards were converted into RSL common share awards, with the same vesting and forfeiture terms as the original grant. The RSL common share awards are fair valued on the date of grant and that fair value is recognized over the requisite service period. On December 8, 2015 following the BVC Merger, RSL was recapitalized in conjunction with a private financing. The estimated fair value of these RSL common share awards was determined by the valuation of RSL in the December 8, 2015 private financing. As RSL is a non-public entity, the majority of the inputs used to estimate the fair value of the BVC awards prior to the BVC Merger and the RSL common share awards following the BVC Merger are classified as level 3 due to their unobservable nature. Significant judgment and estimates were used to estimate the fair value of these awards, as they are not publicly traded. RSL common share awards are subject to specified vesting schedules and requirements (a mix of time-based, performance-based and corporate event-based, including targets for RSL’s post-IPO market capitalization and future financing events). The Company estimated the fair value of each RSL option on the date of grant using the Black-Scholes closed-form option-pricing model. The Company recorded share-based compensation expense of $2.3 million and $0.9 million , respectively, for the three months ended September 30, 2016 and 2015 and $5.4 million and $15.8 million , respectively, for the six months ended September 30, 2016 and 2015, in relation to the RSL common share awards and options issued by RSL to RSI employees. [3] Share-Based Compensation for Family Members: During the six months ended September 30, 2016 , the Company granted Geetha Ramaswamy, Shankar Ramaswamy and Sarah Friedhoff options to purchase 43,000 common shares, 43,000 common shares and 10,000 common shares, respectively, as annual stock option grants in their capacities as employees of ASI. The Company recorded aggregate share-based compensation expense of $0.9 million and $0.9 million for the three months ended September 30, 2016 and 2015, respectively, and $1.8 million and $1.7 million for the six months ended September 30, 2016 and 2015, respectively, in connection with the Company's option grants. Shankar Ramaswamy, while previously employed by RSI, was also granted restricted stock in BVC. Following the BVC Merger, this restricted stock in BVC was converted into RSL common shares, subject to vesting and forfeiture terms consistent with the original grant. (Refer to Note 6[B][2]).The Company recorded share-based compensation expense of $0.1 million and $0.1 million , respectively, for the three months ended September 30, 2016 and 2015 and $0.3 million and $0.1 million , respectively, for the six months ended September 30, 2016 and 2015 related to the RSL common share awards held by Shankar Ramaswamy (inclusive of the compensation expense noted above for BVC awards prior to the BVC Merger on December 4, 2015), which the Company has recorded as research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss. At September 30, 2016 , total unrecognized compensation expense related to these non-vested RSL common share awards was $0.8 million and is expected to be recognized over the remaining weighted-average service period of 1.77 years .

Income Taxes

Income Taxes	6 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s provision for income taxes is based on income taxes in the United States for federal, state and local income taxes. The effective income tax rate for the Company for the three months ended September 30, 2016 and 2015 was (1.8)% and (0.2)% , respectively. The effective tax rate for the Company for the six months ended September 30, 2016 and 2015 was (1.1)% and (0.2)% , respectively, primarily due to the organization of the Company as a Bermuda Exempted Limited Company, for which there is no current tax regime, due to the U.S. permanent unfavorable tax differences, and a valuation allowance that effectively eliminates the Company's net deferred tax assets in the United States. The Company assesses the realizability of its deferred tax assets at each balance sheet date based on available positive and negative evidence in order to determine the proper amount, if any, required for a valuation allowance. As a result of this assessment, a valuation allowance of $16.2 million and $6.9 million related to share-based compensation has been recorded as of September 30, 2016 and March 31, 2016, respectively. The Company believes that it is more likely than not, given the weight of available evidence, that all other deferred tax assets will be realized. As of September 30, 2016 and March 31, 2016, the Company had an unrecognized tax benefit of $0.3 million and $0.3 million , respectively, which if recognized would be reflected as an income tax benefit. The Company files income tax returns in the United States for federal, state and local jurisdictions. The Company is subject to tax examinations for fiscal year 2015 and forward in all applicable tax jurisdictions.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company has entered into commitments under an asset purchase agreement with GlaxoSmithKline (“GSK”), a development, marketing, and supply agreement with Arena Pharmaceuticals, GmbH (“Arena”), a Services Agreement with RSI (Refer to Note 5[A]) and a license agreement with Qaam Pharmaceuticals LLC (Refer to Note 4). Under the GSK agreement, the Company made a $ 5.0 million milestone payment in June 2016, which had been recorded as a contingent payment liability as of March 31, 2016 in the accompanying condensed consolidated balance sheet. In addition, the Company has entered into services agreements with third parties for pharmaceutical research and manufacturing activities. The manufacturing agreements can be terminated by the Company with 30 days written notice. The Company expects to enter into other commitments as its business further develops.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation: The Company’s fiscal year ends on March 31, and its fiscal quarters end on June 30, September 30, and December 31. The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 , filed with the Securities and Exchange Commission (“SEC”) on June 6, 2016. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented have been included. Operating results for the six months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending March 31, 2017, for any other interim period, or for any other future year. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Update (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). The condensed consolidated financial statements include the accounts of the Company and ASI, its wholly-owned subsidiary. The Company has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. There have been no significant changes in the Company’s accounting policies from those disclosed in its Annual Report on Form 10-K for the fiscal year ended March 31, 2016, filed with the SEC on June 6, 2016.
Use of Estimates	Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company regularly evaluates estimates and assumptions related to assets, liabilities, costs and expenses, including compensation expense allocated to the Company under its services agreement with Roivant Sciences, Inc. (“RSI”), a wholly-owned subsidiary of RSL, and ASI, as well as contingent liabilities, share-based compensation and research and development costs. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
Net Loss per Common Share	Net Loss per Common Share: Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted-average number of common shares of outstanding during the period. Diluted net loss per common share is computed by dividing the net loss applicable to common shareholders by the diluted weighted-average number of common shares outstanding during the period calculated in accordance with the treasury stock method. Stock options to purchase 7.4 million common shares were not included in the calculation of diluted weighted-average common shares outstanding for the three and six months ended September 30, 2016 , respectively, because they were anti-dilutive. Stock options to purchase 5.2 million common shares were not included in the calculation of diluted weighted-average common shares outstanding for the three and six months ended September 30, 2015 because they were anti-dilutive.
Financial Instruments	Financial Instruments: The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. Fair value is identified as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a three-tier fair value hierarchy that distinguishes among the following: • Level 1-Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2-Valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. • Level 3-Valuations are based on inputs that are unobservable (supported by little or no market activity) and significant to the overall fair value measurement. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist of cash and accounts payable. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature.
Recent Accounting Pronouncements	Recent Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, ‘‘Leases (Topic 842)’’ (ASU No. 2016-02), which is a comprehensive new lease standard that amends various aspects of existing accounting guidance for leases. The core principle of ASU No. 2016-02 will require lessees to present the assets and liabilities that arise from leases on their balance sheets. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the new standard and its impact on the Company's consolidated financial position and results of operations. In March 2016, the FASB issued ASU No. 2016-09, ‘‘Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting’’ (ASU No. 2016-09). This ASU makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation, and the financial statement presentation of excess tax benefits or deficiencies. ASU No. 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Sep. 30, 2016
Payables and Accruals [Abstract]
Schedule of Accrued Expenses	As of September 30, 2016 and March 31, 2016 the Company’s accrued expenses consisted of the following (in thousands): September 30, 2016 March 31, 2016 Research and development expenses $ 12,885 $ 5,659 Salaries, bonuses, and other compensation 1,666 1,893 Legal expenses 1,105 183 Other expenses 771 584 Total accrued expenses $ 16,427 $ 8,319

Description of Business (Detail

Description of Business (Details)	6 Months Ended
	Sep. 30, 2016segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1
Number of reporting segments	1

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Stock options
Net Loss per Common Share
Anti-dilutive securities not included in calculation of common shares outstanding (in shares)	7.4	5.2	7.4	5.2

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Mar. 31, 2016
Payables and Accruals [Abstract]
Research and development expenses	$ 12,885	$ 5,659
Salaries, bonuses, and other compensation	1,666	1,893
Legal expenses	1,105	183
Other expenses	771	584
Total accrued expenses	$ 16,427	$ 8,319

License Agreement (Details)

License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Aug. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development expense		$ 32,074	$ 9,399	$ 57,350	$ 18,886
License Agreement with Qaam Pharmaceuticals, LLC
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Research and development expense	$ 600

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
RSI
Related Party Transaction [Line Items]
Expense under service agreement	$ 1,500,000	$ 700,000	$ 3,400,000	$ 3,300,000
Geetha Ramaswamy
Related Party Transaction [Line Items]
Salary expense	65,000	62,500	130,000	125,000
Shankar Ramaswamy
Related Party Transaction [Line Items]
Salary expense	65,000	62,500	130,000	125,000
Sarah Friedhoff
Related Party Transaction [Line Items]
Salary expense	$ 18,750	$ 7,003	$ 37,500	$ 7,003

Share-Based Compensation (Detai

Share-Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Apr. 01, 2016	May 31, 2015	Mar. 31, 2015
RSI
Share-Based Compensation
Share-based compensation expense	$ 2,300,000	$ 900,000	$ 5,400,000	$ 15,800,000
Stock options
Share-Based Compensation
Share-based compensation expense	900,000	900,000	1,800,000	1,700,000
Total unrecognized compensation expense, stock options	53,700,000		$ 53,700,000
Remaining weighted-average service period			2 years 10 months 2 days
Stock options | Directors and Employees
Share-Based Compensation
Share-based compensation expense	5,000,000	3,900,000	$ 12,800,000	$ 7,600,000
Stock options | RSI Employees
Share-Based Compensation
Number of options granted (in shares)			83,500	70,000
Share-based compensation expense	400,000	41,403	$ 800,000	$ 600,000
Total unrecognized compensation expense, stock options	4,800,000		$ 4,800,000
Remaining weighted-average service period			2 years 6 months 18 days
Stock options | Geetha Ramaswamy
Share-Based Compensation
Number of options granted (in shares)			43,000
Stock options | Shankar Ramaswamy
Share-Based Compensation
Number of options granted (in shares)			43,000
Stock options | Sarah Friedhoff
Share-Based Compensation
Number of options granted (in shares)			10,000
Common share awards | RSL
Share-Based Compensation
Share-based compensation expense	100,000	$ 100,000	$ 300,000	$ 100,000
Total unrecognized compensation expense, common share awards	$ 800,000		$ 800,000
Remaining weighted-average service period			1 year 9 months 7 days
2015 Plan | Equity Incentive Plan
Share-Based Compensation
Number of shares reserved for grant (in shares)					12,500,000	9,500,000	7,500,000
Number of shares available for future grant (in shares)	5,100,000		5,100,000
2015 Plan | Stock options
Share-Based Compensation
Number of options granted (in shares)			2,000,000	1,200,000
Weighted average exercise price of options granted (in dollars per share)			$ 13.04	$ 10.36
Number of options outstanding (in shares)	7,400,000	5,200,000	7,400,000	5,200,000
Weighted average exercise price of options outstanding (in dollars per share)	$ 7.11	$ 3.17	$ 7.11	$ 3.17
Options vested (in shares)	1,900,000		1,900,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Effective income tax rate	(1.80%)	(0.20%)	(1.10%)	(0.20%)
Deferred tax asset, valuation allowance	$ 16.2		$ 16.2		$ 6.9
Unrecognized tax benefits	$ 0.3		$ 0.3		$ 0.3

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Jun. 30, 2016	Sep. 30, 2016
Manufacturing Agreements
Other Commitments [Line Items]
Minimum notice period required to terminate contract		30 days
GSK
Other Commitments [Line Items]
Contingent payment	$ 5