| 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 consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). 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 consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company has no unconsolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform with the current period presentation. These reclassifications had no effect on the previously reported results of operations. A 1-for-8 reverse share split of the Company's outstanding common stock was effected on May 8, 2019 as approved by the Company's Board of Directors and a majority of its shareholders. The reverse share split reduced the number of common shares issued and outstanding from approximately 182.2 million to 22.8 million as of March 31, 2019 . As such, all references to share and per share amounts in the financial statements and accompanying notes to the financial statements have been retroactively restated to reflect the 1-for-8 reverse share split, except for the authorized number of shares of the Company's common stock and the par value per share, which were not affected. (B) Going Concern and Management's Plans: The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Topic 205-40, " Presentation of Financial Statements—Going Concern ," which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that its annual and interim consolidated financial statements are issued. Certain additional financial statement disclosures are required if such conditions or events are identified. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting. Determining the extent, if any, to which conditions or events raise substantial doubt about the Company’s ability to continue as a going concern, or the extent to which mitigating plans sufficiently alleviate any such substantial doubt, as well as whether or not liquidation is imminent, requires significant judgment by management. The Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. As of March 31, 2019 , the Company’s cash and cash equivalents totaled $107.0 million and its accumulated deficit was $686.0 million . For the fiscal years ended March 31, 2019 and 2018 , the Company incurred net losses of $129.1 million and $221.6 million , respectively. As of March 31, 2019 , the Company had aggregate net interest-bearing indebtedness of $44.2 million , of which $21.2 million was due within one year. The Company also had $22.3 million of other non-interest-bearing current liabilities due within one year. The Company’s Loan Agreement (as defined in Note 6) with Hercules Capital, Inc. ("Hercules") requires that the Company maintain a minimum cash balance equal to the lesser of $30.0 million or the outstanding amount due under the Loan Agreement. Failure to meet this minimum covenant would be considered an event of default under the Loan Agreement and could result in the acceleration of the Company’s existing indebtedness. The Company expects to continue to incur significant operating and net losses, as well as negative cash flows, for the foreseeable future as it continues to develop its gene therapy product candidates and prepares for potential future regulatory approvals and commercialization of its products. The Company has not generated any revenue to date and does not expect to generate product revenue unless and until it successfully completes development and obtains regulatory approval for at least one of its product candidates. The Company anticipates that its current cash and cash equivalents balance will not be sufficient to maintain compliance with the minimum liquidity financial covenant under the Loan Agreement beyond the one-year period following the date that these consolidated financial statements were issued if the Loan Agreement is not amended or an additional financing is not completed. The Company's current cash and cash equivalents balance will also not be sufficient to complete all necessary development activities and commercially launch its products. To continue as a going concern, the Company will need, among other things, to raise additional capital resources. The Company continually assesses multiple options to obtain additional funding to support its operations, including proceeds from offerings of the Company’s equity securities or debt, cash received from the exercise of outstanding common stock options, or transactions involving product development, technology licensing or collaboration arrangements, or other sources of capital to complete its currently planned development programs. Management can provide no assurances that any sources of a sufficient amount of financing will be available to the Company on favorable terms, if at all. Although the Company has successfully obtained financing in the past, and management believes that it will continue to do so in the future, ASC Subtopic 205-40, " Financial Statement Presentation - Going Concern ," does not permit future financing activities that are not probable of being implemented and probable of alleviating the conditions that raise substantial doubt to be included in the Company's assessment of its liquidity. Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as going concern. The consolidated financial statements and footnotes have been prepared on the basis that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. (C) 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 certain assets, including assumptions used in the determination of some of its costs incurred under the services agreements with Roivant Sciences, Inc. ("RSI") and Roivant Sciences GmbH ("RSG"), which costs are charged to research and development and general and administrative expense, as well as assumptions used to estimate its ability to continue as a going concern and estimate the fair value of its common shares. Specifically, the Company estimates the grant date fair value of stock option awards with only time-based vesting requirements using a Black-Scholes valuation model and uses a Monte Carlo Simulation method under the income approach to estimate the grant date fair value of stock option awards with market-based performance conditions. 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. (D) Risks and Uncertainties: The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of intellectual property rights. (E) Concentrations of Credit Risk: Financial instruments that potentially subject the Company to concentration of credit risk include cash. At March 31, 2019, substantially all of the cash balances are deposited in 7 banking institutions and are all in excess of insured levels. (F) Cash and Cash Equivalents: The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and amounts held in money market funds. (G) Property and Equipment: Property and equipment, consisting of leasehold improvements, furniture and fixtures, computers, software and other office equipment, is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Upon disposal, retirement or sale, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Depreciation is recorded for property and equipment using the straight-line method over the estimated useful lives of the respective assets, generally three to five years, once the asset is installed and placed in service. Amortization of leasehold improvements is recorded over the shorter of the lease term or estimated useful life of the related asset. The Company reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. Recoverability is measured by comparison of the book values of the assets to future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value, which is measured based on the projected discounted future net cash flows arising from the assets. (H) Debt Issuance Costs and Debt Discount: Debt issuance costs related to a recognized debt liability are presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, and are amortized to interest expense over the term of the related debt using the effective interest method. Further, debt discounts created as a result of the allocation of proceeds received from a debt issuance to warrants issued in conjunction with the debt issuance are amortized to interest expense under the effective interest method over the life of the recognized debt liability. (I) Research and Development Expense: Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development. Milestone payments made in connection with regulatory approvals are capitalized and amortized to cost of revenue over the remaining useful life of the asset. Research and development costs primarily consist of intellectual property and research and development materials acquired under license and license and collaboration agreements (see Note 3), certain costs charged by RSI and RSG under their services agreements with the Company (see Note 7) and expenses from third parties who conduct research and development activities on behalf of the Company. The Company expenses in-process research and development projects acquired as asset acquisitions which have not reached technological feasibility, and which have no alternative future use. (J) Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded when, after consideration of all positive and negative evidence, it is not more likely than not that the Company's deferred tax assets will be realizable. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. When and if the Company were to recognize interest and penalties related to unrecognized tax benefits, they would be reported in tax expense in the consolidated statement of operations. (K) Share-Based Compensation: Share-based awards to employees and directors with only time-based vesting requirements are valued at fair value on the date of grant and that fair value is recognized on a straight-line basis over the requisite service period of the entire award. The Company values such time-based stock options using the Black-Scholes option pricing model. Certain assumptions are made with respect to utilizing the Black-Scholes option pricing model, including the expected life of the award, volatility of the underlying shares and the risk-free interest rate. The expected life of such time-based stock options is calculated using the simplified method (based on the mid-point between the vesting date and the end of the contractual term), and the risk-free interest rate is based on the rates paid on securities issued by the U.S. Treasury with a term approximating the expected life of the equity award. The expected share price volatility for such time-based stock option awards was estimated by taking the average historical price volatility for industry peers. The Company estimates the grant date fair value of stock option awards to employees with market-based performance conditions using a Monte Carlo Simulation method under the income approach. Certain assumptions are made with respect to utilizing the Monte Carlo Simulation method, including the volatility of the underlying shares and the drift rate, or estimated cost of equity. The expected share price volatility for such market-based performance stock option awards was estimated by taking the median historical price volatility for industry peers over the contractual term of the options. The drift rate, or estimated cost of equity, for such market-based performance stock option awards is based on various financial and risk-associated metrics of industry peers, as well as estimated factors specific to us. The Company accounts for share-based payments to nonemployees issued in exchange for services based upon the fair value of the equity instruments issued. Compensation expense for stock options issued to nonemployees is calculated using the Black-Scholes option pricing model and is recorded over the service performance period. Prior to the Company's adoption of ASU No. 2018-07, " Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting " ("ASU No. 2018-07") on April 1, 2019, options subject to vesting were periodically remeasured over the service performance period, which was generally the same as the vesting period. After the adoption of ASU No. 2018-07, the Company measures equity-classified share-based payment awards issued to nonemployees on the grant date, rather than remeasuring the awards through the performance completion date as previously required (see Note 2(N)). The Company recognizes forfeitures of awards when they occur. (L) Net Loss per Common Share: Basic net loss per common share is computed by dividing the net loss applicable to common shareholders by the weighted-average number of common shares outstanding during the year. 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 year calculated in accordance with the treasury stock method. Stock options and a warrant to purchase a total of 1.9 million and 1.8 million common shares were not included in the calculation of diluted weighted-average common shares outstanding for the years ended March 31, 2019 and 2018 , respectively, because they were anti-dilutive given the net loss of the Company. (M) Financial Instruments and Fair Value Measurement: 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 defined as the exchange price, or exit price, representing the amount that would be received from the sale of 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 include cash and cash equivalents, accounts payable and long-term debt. Cash consists of non-interest-bearing deposits denominated in the U.S. dollar and Swiss franc, while cash equivalents consists of interest-bearing money market fund deposits denominated in the U.S. dollar, which are invested in debt securities issued or guaranteed by the U.S. government and repurchase agreements fully collateralized by U.S. Treasury and U.S. government securities. Cash and accounts payable are stated at their respective historical carrying amounts, which approximate fair value due to their short-term nature. The carrying value of the Company's money market fund included in cash and cash equivalents of $30.0 million at March 31, 2019 approximates fair value, which is based on quoted prices in active markets for identical securities. At March 31, 2019, the Company held a long-term investment in nonredeemable convertible preferred stock, which is accounted for in accordance with the provisions of ASC 321, " Investments - Equity Securities " whereby the Company elected to use the measurement alternative therein (see Note 4). The following table summarizes the fair value of the Company's money market fund included in cash equivalents based on the inputs used at March 31, 2019 in determining such values (in thousands): Fair Value Price Quotations (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Money market fund $ 30,000 $ 30,000 $ — $ — The carrying value of the Company’s debt of $44.2 million at March 31, 2019 approximates fair value, which is based on current interest rates for similar types of borrowings and is in Level 2 of the fair value hierarchy. (N) Recent Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, " Leases (Topic 842) " ("ASU No. 2016-02"), which requires lessees to recognize on the consolidated balance sheets a liability to make lease payments and a right-of-use ("ROU") asset representing its right to use the underlying asset for the lease term for both finance and operating leases with lease terms greater than twelve months. 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. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. ASU No. 2016-02 allows entities to choose to use either (i) the effective date or (ii) the beginning of the earliest comparative period presented in the financial statements as the date of initial application. ASU No. 2016-02 provides a number of optional practical expedients in transition. The Company adopted the provisions of ASU No. 2016-02 on April 1, 2019 using the effective date as its date of initial application, and elected the “package of practical expedients,” which permits it to not reassess under ASU No. 2016-02 its prior conclusions about lease identification, lease classification, and initial direct costs. While the Company continues to assess all the effects of adoption, the Company believes the most significant effects relate to the recognition of ROU assets and corresponding lease liabilities on its consolidated balance sheet, primarily related to existing facility operating leases, and providing new disclosures with regards to the Company’s leasing activities. The Company currently expects that the adoption of ASU No. 2016-02 will result in the recording of ROU assets and corresponding liabilities of approximately $3.0 million and $2.4 million , respectively, in its consolidated balance sheet. In October 2016, the FASB issued ASU No. 2016-16, " Intra-Entity Transfers of Assets Other Than Inventory" ("ASU No. 2016-16"), which eliminates the prohibition of immediate recognition of current and deferred income tax impact for all intra-entity asset transfers, except for inventory. The Company has adopted ASU No. 2016-16 in the year ended March 31, 2019 and recognized a deferred tax asset of $3.8 million upon adoption with a corresponding valuation allowance of $3.8 million , which was subsequently impaired. In November 2016, the FASB issued ASU No. 2016-18 " Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2016-18"). ASU 2016-18 requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown in the statements of cash flows. ASU 2016-18 is effective for annual reporting periods beginning after December 15, 2017 and is required to be adopted using a retrospective approach, if applicable, with early adoption permitted. The Company adopted the provisions of ASU 2016-18 on April 1, 2018, which did not have an impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, " Business Combinations (Topic 805): Clarifying the Definition of a Business" ("ASU No. 2017-01"), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the provisions of ASU No. 2017-01 on April 1, 2018, on a prospective basis. The impact on the Company's consolidated financial statements and disclosures will depend on the facts and circumstances of any specific future transactions. See Note 3 for further information regarding the impact of the adoption of ASU No. 2017-01 on the license agreements executed during the year ended March 31, 2019. In February 2018, the FASB issued ASU No. 2018-02, " Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU No. 2018-02"). On December 22, 2017, an Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 (commonly known as the "Tax Cuts and Jobs Act") was enacted in the United States, which introduced a comprehensive set of tax reforms. ASU No. 2018-02 allows companies to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act, from accumulated other comprehensive (loss) income to retained earnings. ASU No. 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company adopted the provisions of ASU No. 2018-02 for the fiscal year beginning April 1, 2019 and does not expect it to have a material impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU No. 2018-07, which requires equity-classified share-based payment awards issued to nonemployees to be measured on the grant date, rather than remeasuring the awards through the performance completion date as previously required. Additionally, for nonemployee awards with performance conditions, compensation cost associated with the award is to be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. Further, the requirement to reassess the liability or equity classification for nonemployee awards upon vesting is eliminated, except for awards in the form of convertible instruments. ASU No. 2018-07 also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, " Revenue from Contracts with Customers" . ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, with early adoption permitted after the adoption of ASU No. 2014-09. The Company adopted the provisions of ASU No. 2018-07 for the fiscal year beginning April 1, 2019, which did not have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, " Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement " ("ASU No. 2018-13"). ASU No. 2018-13 removes, modifies, and adds certain recurring and nonrecurring fair value measurement disclosures, including removing disclosures around the amount(s) of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements, among other things. ASU No. 2018-13 adds disclosure requirements around changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and a narrative description of measurement uncertainty. The amendments in ASU No. 2018-13 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption, with all other amendments applied retrospectively to all periods presented. Early adoption is permitted. The Company early adopted the provisions of ASU No. 2018-13 during the three months ended September 30, 2018, which did not have a material impact on its consolidated financial statements or disclosures because the Company did not have any Level 3 fair value measurements on a recurring or nonrecurring basis at the adoption date, and also did not have transfers between Level 1 and Level 2 of the fair value hierarchy. (O) Foreign Currency: The Company has operations in the United States, the United Kingdom, Ireland and Switzerland. The results of its non-U.S. dollar based functional currency operations are translated to U.S. dollars at the average exchange rates during the year. The Company’s assets and liabilities are translated using the current exchange rate as of the balance sheet date and shareholders’ equity is translated using historical rates. Adjustments resulting from the translation of the financial statements of the Company’s foreign functional currency subsidiaries into U.S. dollars are excluded from the determination of net loss and are accumulated in a separate component of shareholders’ equity. Foreign exchange transaction gains and losses are included in other (income) expense in the Company’s results of operations. |
