Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 07, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Dova Pharmaceuticals, Inc. | |
Entity Central Index Key | 1,685,071 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 28,191,266 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and equivalents | $ 126,897 | $ 94,846 |
Prepaid expenses and other current assets | 1,665 | 1,471 |
Total current assets | 128,562 | 96,317 |
Furniture and equipment, net | 188 | 62 |
Total assets | 128,750 | 96,379 |
Current liabilities | ||
Accounts payable | 431 | 1,263 |
Accrued expenses | 3,169 | 2,520 |
Accrued interest | 1,005 | |
Due to related party | 4 | 97 |
Early exercise liability, related party | 100 | |
Other current liabilities | 44 | |
Note payable, short-term | 30,212 | |
Total current liabilities | 3,648 | 35,197 |
Total liabilities | 3,648 | 35,197 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018 and December 31, 2017 | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 28,191,266 and 25,652,457 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 28 | 26 |
Additional paid-in capital | 195,989 | 118,301 |
Accumulated deficit | (70,915) | (57,145) |
Total stockholders' equity | 125,102 | 61,182 |
Total liabilities and stockholders' equity | $ 128,750 | $ 96,379 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 28,191,266 | 25,652,457 |
Common stock, shares outstanding | 28,191,266 | 25,652,457 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating expenses: | ||
Research and development | $ 3,416 | $ 4,276 |
General and administrative | 10,261 | 955 |
Total operating expenses | 13,677 | 5,231 |
Loss from operations | (13,677) | (5,231) |
Interest and other income, net | 222 | 33 |
Interest expense | (315) | (226) |
Total other expenses, net | (93) | (193) |
Net loss | $ (13,770) | $ (5,424) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.52) | $ (0.31) |
Weighted average common shares outstanding, basic and diluted (in shares) | 26,589,192 | 17,332,257 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (13,770) | $ (5,424) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash research and development expenses | 4,267 | |
Depreciation | 3 | |
Stock-based compensation | 2,816 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (153) | 11 |
Accounts payable | (832) | (31) |
Accrued expenses | 1,249 | 10 |
Accrued interest | (1,005) | (151) |
Due to related party | (93) | (35) |
Other current liabilities | 44 | |
Net cash used in operating activities | (11,741) | (1,353) |
Cash flows from investing activities | ||
Purchases of furniture and equipment | (129) | |
Net cash used in investing activities | (129) | |
Cash flows from financing activities | ||
Payment of note payable | (31,077) | |
Prepaid term loan closing costs | (40) | |
Proceeds from exercise of stock options | 45 | |
Proceeds from the issuance of common stock | 80,000 | |
Payment of offering cost in connection with issuance of common stock | (5,007) | (711) |
Net cash provided by (used in) financing activities | 43,921 | (711) |
Net increase (decrease) in cash and equivalents | 32,051 | (2,064) |
Cash and equivalents at the beginning of the period | 94,846 | 28,709 |
Cash and equivalents at the end of the period | 126,897 | 26,645 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,321 | 377 |
Supplemental disclosure of noncash investing and financing activities: | ||
Change in note payable | 6,897 | |
Accrued offering costs | 265 | $ 169 |
Shares issued from the early exercise of options | $ 100 |
Organization and description of
Organization and description of business operations | 3 Months Ended |
Mar. 31, 2018 | |
Organization and description of business operations | |
Organization and description of business operations | Note 1—Organization and description of business operations Dova Pharmaceuticals, Inc. (“Dova”) was originally formed as PBM AKX Holdings, LLC, a limited liability company formed under the laws of the State of Delaware on March 24, 2016 (“Inception”). PBM AKX Holdings, LLC changed its name to Dova Pharmaceuticals, LLC by filing a Certificate of Amendment to its Certificate of Formation with the State of Delaware on June 15, 2016. Dova converted from a limited liability company to a corporation on September 15, 2016. Dova is a pharmaceutical company focused on acquiring, developing and commercializing drug candidates for diseases that are treated by specialist physicians, with an initial focus on addressing thrombocytopenia, a disorder characterized by a low blood platelet count. The Company’s drug candidate, avatrombopag, is an orally administered thrombopoietin receptor agonist that the Company is developing for the treatment of thrombocytopenia. On September 21, 2017, a New Drug Application (“NDA”) was submitted to the U.S. Food and Drug Administration (“FDA”) for the treatment of thrombocytopenia in patients with chronic liver disease (“CLD”) scheduled to undergo a procedure. The NDA submission was supported by two identically designed pivotal Phase 3 clinical trials, both of which met the primary and secondary endpoints with high statistical significance. The NDA was granted priority review by the FDA in November 2017 and the Prescription Drug User Fee Act goal date for an FDA decision is May 21, 2018. The unaudited condensed consolidated financial statements of Dova and its wholly owned subsidiaries AkaRx, Inc. (“AkaRx”) and Dova Pharmaceuticals Ireland Limited (together, the “Company”) include the results of operations for the three months ended March 31, 2018 and March 31, 2017. |
Significant accounting policies
Significant accounting policies | 3 Months Ended |
Mar. 31, 2018 | |
Significant accounting policies | |
Significant accounting policies | Note 2—Significant accounting policies Basis of presentation and principles of consolidation The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results for the full year or the results for any future periods. These financial statements have been prepared on a going concern basis and should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2017 in the Company’s Annual Report on Form 10-K. Liquidity and capital resources The Company has incurred substantial operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of March 31, 2018, the Company had an accumulated deficit of $70.9 million. Since inception, the Company has financed its operations through the issuance of equity and debt with net aggregate proceeds of $238.0 million. As at March 31, 2018, the Company had $126.9 million in cash and equivalents and on April 17, 2018 the Company entered into a Loan and Security Agreement with Silicon Valley Bank, pursuant to which the Company borrowed $20.0 million. See Note 11 for more information. Based on the Company’s forecast of future cash flows, the Company believes that it has adequate cash and equivalents to continue to fund operations in the normal course of business for at least the next 12 months. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in the Company’s condensed consolidated financial statements relate to the determination of share-based compensation and some of our research and development expenses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates, which could affect the Company’s future results of operations. Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Cash and 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 equivalents include cash held in banks and money market mutual funds. The carrying amount of the Company’s cash equivalents approximates its fair value. Research and development prepaid and accrued expenses As part of the process of preparing financial statements, the Company is required to estimate its expenses resulting from its obligation under contracts with vendors and consultants and clinical site agreements in connection with its research and development efforts. The financial terms of these contracts are subject to negotiations which vary contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines prepaid and accrual estimates through discussion with applicable personnel and outside service providers as to the progress or state of communication of clinical trials, or other services completed. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its prepaid and accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. The Company’s clinical trial prepaid and accrual expense is dependent upon the timely and accurate reporting of fee billings and pass-through expenses from contract research organizations and other third-party vendors as well as the timely processing of any change orders from the contract research organizations. Concentrations of credit risk and off-balance sheet risk Cash and equivalents are financial instruments that are potentially subject to concentrations of credit risk. The Company’s cash and equivalents are deposited in accounts at large financial institutions, and amounts may exceed federally insured limits. The majority of the Company’s cash equivalents is in money market mutual funds invested solely in U.S. Government securities. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and equivalents are held. The Company has no financial instruments with off-balance sheet risk of loss. Research and development costs Research and development (“R&D”) expenses for three months ended March 31, 2018 include direct and indirect R&D costs. Direct R&D costs consist principally of external costs, such as fees paid to investigators, consultants, central laboratories and clinical research organizations, including costs incurred in connection with clinical trials, and related clinical trial fees and all employee-related expenses for those employees working in R&D functions, including stock-based compensation for R&D personnel. Indirect R&D costs include insurance or other indirect costs related to the Company’s R&D function to specific product candidates. The Company expenses pre-approval inventory as R&D until regulatory approval is received. Revenue recognition Effective January 1, 2018, the Company has adopted the provisions of Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers . The guidance provides a unified model to determine how revenue is recognized. The Company’s contract revenue consist of revenue from the Company’s strategic agreements for the development and commercialization of avatrombopag. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under this agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. The Company’s performance obligations include intellectual property rights, development services, and services associated with regulatory submission and approval processes. At the inception of the arrangement, the Company evaluates whether the development milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until those approvals are received. The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation. If the right to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the right when the right is transferred to the customer, and the customer can use and benefit from the right. For rights that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Stock-based compensation The Company expenses stock-based compensation to employees, consultants and Board members over the requisite service period based on the estimated grant-date fair value of the awards. Stock-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company records the expense for stock-based compensation awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. All stock-based compensation costs are recorded in general and administrative or R&D costs in the statements of operations based upon the underlying individual’s role at the Company. Income taxes Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. 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. Net loss per share Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period assuming the retrospective conversion of member units described above. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same. The computations of diluted net loss per common share for the three months ended March 31, 2018 did not include options to purchase 2,414,707 shares of common stock, as the inclusion of these securities would have been antidilutive. Recent accounting pronouncements In May 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The Company adopted ASU No. 2017-09 as of January 1, 2018. The adoption of this standard did not impact the Company’s consolidated financial statements and disclosures. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842), which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the estimated term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The Company expects to adopt ASU 2016-02 in the first quarter of 2019. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company’s balance sheet for real estate operating leases. |
The purchase agreement and rela
The purchase agreement and related transactions | 3 Months Ended |
Mar. 31, 2018 | |
The purchase agreement and related transactions | |
The purchase agreement and related transactions | Note 3—The purchase agreement and related transactions Purchase agreement with Eisai As described in Note 1, Dova entered into a Purchase Agreement dated March 29, 2016 (the “Purchase Agreement”) with Eisai, Inc. (“Eisai”) for all of the issued and outstanding shares of the capital stock of AkaRx. The terms of the Purchase Agreement included (i) an upfront payment of $5.0 million that was paid at closing , (ii) milestone payments up to $135.0 million in the aggregate based on annual net sales of avatrombopag, and (iii) a commitment to negotiate in good faith to secure a long-term supply agreement with Eisai to govern manufacturing support and the purchase of avatrombopag from Eisai until the later of March 30, 2021 or the third anniversary of the commercialization of avatrombopag. The transaction was accounted for as an asset acquisition pursuant to ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, as the majority of the fair value of the assets acquired was concentrated in a group of similar assets, and the acquired assets did not have outputs or employees. The assets acquired under the Purchase Agreement included a license to avatrombopag, other associated intellectual property, inventory, documentation and records, and related materials. Because avatrombopag had not yet received regulatory approval, the $5.0 million purchase price paid to date for these assets was expensed in the Company’s statement of operations for the period from Inception to December 31, 2016. In addition, the potential milestone payments based on annual net sales are not yet considered probable, and no milestone payments have been accrued at March 31, 2018. Long-term supply agreement with Eisai In June 2017, the Company entered into a supply agreement with Eisai, pursuant to which the Company agreed to purchase finished drug product for avatrombopag from Eisai and Eisai agreed to supply finished drug product for avatrombopag. The initial term of the agreement will terminate on the later of March 30, 2021 and the third anniversary of the Company’s first commercial sale of avatrombopag. After the initial term, the supply agreement may be renewed by mutual agreement of the parties. During the initial term, Eisai is the Company’s exclusive supplier of finished drug product, except that the Company has the right to terminate the exclusivity early by payment to Eisai of a fee calculated based on the Company’s forecasted purchases of avatrombopag during the remainder of the initial term. In addition, in the event that Eisai fails to deliver substantially all of the finished drug product due to the Company under the agreement, the Company may elect to seek alternative supply arrangements so long as such failure remains uncured, subject to certain exceptions. The aggregate payments to Eisai under the supply agreement for finished drug product will be the greater of a fixed payment per tablet or a payment calculated in the mid-single digit percentages of net sales of avatrombopag. Transition services agreement In March 2016, in connection with the Company’s acquisition of the rights to avatrombopag, the Company entered into a transition services agreement with Eisai (“TSA”). Pursuant to the terms and conditions of the TSA, Eisai agreed to manage clinical trials for the Company through regulatory approval of avatrombopag based on an agreed upon fee schedule for services plus reimbursement of certain out-of-pocket expenses. Services are being provided by Eisai’s full-time employees, its affiliates or third-party contractors. Payments due under this agreement that exceed $51.0 million would reduce any milestone payments due to Eisai under the Purchase Agreement. To date, the Company has incurred $31.1 million under this agreement. Pursuant to the TSA, payments due were financed under the Eisai note described below. The Company has final decision-making authority related to development of avatrombopag and the regulatory approval process. Eisai note and security agreement On March 30, 2016, the Company issued a Note to Eisai, which had an interest rate of 5% per annum, and enabled the Company to finance payments due to Eisai under the TSA for all costs incurred through December 31, 2017. The principal amount of the Note was increased on a quarterly basis by the amount of unpaid service fees and out-of-pocket expenses due and owed to Eisai under the TSA. The total aggregate spend through this Note was $31.1 million and on March 16, 2018, this principal balance along with accumulated interest of $1.3 million was repaid in full. The Note was secured by a blanket security interest on all of the assets of AkaRx, including the worldwide rights to avatrombopag, which was terminated and automatically released as of March 16, 2018. Payments due to Eisai under the Note were guaranteed by PBM Capital Investments, LLC. License agreement with Astellas Pharma Inc. The primary intellectual property related to avatrombopag is licensed from Astellas Pharma Inc. (“Astellas”) on an exclusive, worldwide basis under the terms of a license agreement that the Company acquired from Eisai under the Purchase Agreement. Under the terms of the license agreement, the Company is required to make payments upon the achievement of certain milestones. On September 21, 2017, upon the filing of the NDA, the Company became obligated to make a milestone payment of $1.0 million, which was expensed and included in Research and development — licenses acquired. The Company will be required to make additional aggregate milestone payments of up to $4.0 million to Astellas if certain other regulatory milestones are achieved. In addition, the Company will be required to pay Astellas tiered royalties ranging from the mid to high single digits on net sales of avatrombopag. No amounts have been accrued for any potential milestone payments as the payments were not deemed probable. Unless earlier terminated, this license agreement with Astellas will expire on a country-by-country and product-by-product basis upon the latest of (i) the expiration of the last-to-expire claim of the licensed patents, (ii) the expiration of any government-granted marketing exclusivity period for avatrombopag, and (iii) 10 years after the last date of launch of avatrombopag to have occurred in any country. Thereafter, the term of the license agreement may be extended for successive one-year terms if the Company notifies Astellas in writing of its desire to extend such term at least three months before it is otherwise set to expire. |
Related party agreements
Related party agreements | 3 Months Ended |
Mar. 31, 2018 | |
Related party agreements | |
Related party agreements | Note 4—Related party agreements Dova and AkaRx management services agreements On April 1, 2016, Dova and AkaRx each entered into a Services Agreement (each, an “SA”) with PBM Capital Group, LLC. Pursuant to the terms of each of the SAs, which have terms of twelve months each (and are automatically renewable for successive one-year periods), PBM Capital Group, LLC will render advisory and consulting services to Dova and AkaRx. Services provided under the SAs may include certain scientific and technical, accounting, operations and back office support services. In consideration for these services, Dova and AkaRx are each obligated to pay PBM Capital Group, LLC a monthly management fee of $25,000. On March 30, 2018, the SA agreement between AkaRx and PBM Capital Group, LLC was terminated. Effective April 1, 2018, the monthly management fee for the SA between Dova and PBM Capital Group, LLC was reduced to $17,400. For each of the three months ended March 31, 2018 and 2017, the Company incurred expenses under the SAs of $150,000, which were included in general and administrative expenses. As of March 31, 2018, the Company owed PBM Capital Group, LLC and its affiliates approximately $4,000. |
Stockholders' equity
Stockholders' equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' equity | |
Stockholders' equity | Note 5—Stockholders’ equity Series A preferred stock Between September 19, 2016 and November 18, 2016, the Company closed on the sale of an aggregate of 982,714 shares of Series A preferred stock for gross proceeds of $29.0 million. The Series A preferred stock was entitled to non-cumulative, non-compounding dividends at 8.0% per annum (based on the original issue price), when, as and if any dividends are declared by the Board. Each share of Series A preferred stock was convertible, at the option of the holder and at any time, into a number of fully paid and non-assessable shares of common stock determined by dividing the Series A Original Issue Price by the Series A Conversion Price in effect at the time of conversion. The Series A preferred stock was mandatorily convertible under certain conditions (i) when the Company issued shares of common stock in a public offering generating gross proceeds of at least $60.0 million to the Company, at a price per share of at least $17.88, or (ii) by majority vote of the then outstanding shares of Series A preferred stock. The Series A Conversion Price was $8.94, and was subject to adjustment based on events including the issuance of additional equity securities, certain dividends and distributions, mergers and reorganizations, and stock splits and combinations. The Series A preferred stock was not mandatorily redeemable and did not embody an unconditional obligation to settle in a variable number of equity shares. As such, the Series A preferred stock is classified as permanent equity on the consolidated balance sheet. The holders’ contingent redemption right in the event of certain deemed liquidation events did not preclude permanent equity classification. Further, the Series A preferred stock is considered an equity-like host for purposes of assessing embedded derivative features for potential bifurcation. The embedded conversion feature is considered to be clearly and closely related to the associated preferred stock host instrument and therefore was not bifurcated from the equity host. The contingent put right upon certain deemed liquidation events was not clearly and closely related to the associated preferred stock host instrument but did not meet the definition of a derivative and therefore was not bifurcated from the equity host. Upon the closing of the Company’s initial public offering (“IPO”) on July 5, 2017, all outstanding shares of the Company’s Series A convertible preferred stock were automatically converted into 3,242,950 shares of the Company’s common stock. Common stock On July 5, 2017, the Company closed its IPO, which resulted in the issuance and sale of 5,077,250 shares of its common stock at a public offering price of $17.00 per share, generating net proceeds of approximately $78.7 million after deducting underwriting discounts and commissions and other offering costs. On February 27, 2018, the Company completed an underwritten public offering of 2,500,000 shares of its common stock at an offering price of $32.00 per share. Net proceeds raised by the Company from the offering were approximately $74.7 million, after deducting underwriting discounts and commissions and other estimated offering expenses. |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based compensation | |
Stock-based compensation | Note 6—Stock-based compensation Options The Company maintains the Amended and Restated 2017 Equity Incentive Plan (“A&R Equity Incentive Plan”). The A&R Equity Incentive Plan provides for the grant of incentive stock options to employees, and for the grant of nonstatutory options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance-based stock awards and other forms of stock awards to employees, including officers, consultants and directors. The A&R Equity Incentive Plan also provides for the grant of performance-based cash awards to employees, including officers, consultants and directors. The Company’s stock options generally vest as follows: 25% after 12 months of continuous services and the remaining 75% on a ratable basis over a 36-month period from 12 months after the grant date. Stock options granted during the three months ended March 31, 2018 have a maximum contractual term of 10 years. The Company initially reserved 4,285,250 shares of common stock for issuance under the A&R Equity Incentive Plan. The number of shares of common stock reserved for issuance under the A&R Equity Incentive Plan automatically increases on January 1 each year, for a period of ten years, from January 1, 2018 through January 1, 2027, by 4% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board. As of March 31, 2018, 2,858,905 shares were reserved for grant under the A&R Equity Incentive Plan. Stock option valuation The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. Due to the lack of historical exercise history, the expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to nonemployees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Prior to the IPO, the fair values of the shares of common stock underlying the Company options were estimated on each grant date by the Company. In order to determine the fair value, the Company considered, among other things, contemporaneous valuations of the Company’s common stock and preferred stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering (“IPO”), or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. Since the IPO, the fair value of the common stock underlying the Company’s options has been based upon the closing price of the Company’s common stock on the grant date. Option awards The fair value of the Company’s option awards was estimated using the assumptions below: For the three March 31, 2018 Exercise price $29.33 - $31.86 Risk-free rate of interest 2.41% - 2.79% Expected term (years) 6.2 Expected stock price volatility 86.66% - 87.67% Dividend yield 0% The following table summarizes the Company’s stock option activity under our 2017 Equity Incentive Plan and A&R Equity Incentive Plan for the three months ended March 31, 2018: Total options Weighted Weighted average Aggregate Outstanding as of December 31, 2017 $ $ Options granted — Exercised ) — — Forfeited ) — — Outstanding as of March 31, 2018 $ $ Options vested and exercisable as of March 31, 2018 $ $ The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s closing common stock price on March 31, 2018, or $27.12 per share, and the exercise price of the stock options that had exercise prices below $27.12 per share. The weighted average grant date fair value per share of options granted during the three months ended March 31, 2018 was $30.24. On March 21, 2018 the Company granted 15,000 performance-based options to a non-employee under the A&R Equity Incentive Plan. The options are subject to performance milestones that are not considered probable as of March 31, 2018. Therefore, the Company has not recorded any compensation expense related to this non-employee award for the three months ended March 31, 2018. As of March 31, 2018, there was approximately $19.8 million of total unrecognized compensation expense, related to the unvested stock options, which is expected to be recognized over a weighted average period of 1.3 years. Stock-based compensation expense has been reported in the Company’s consolidated statements of operations for the three months ended March 31, 2018 is as follows (in thousands): For the three March 31, 2018 General and administrative $ Research and development Total stock-based compensation $ There was no stock-based compensation expense for the three months ended March 31, 2017. |
Significant agreements and cont
Significant agreements and contracts | 3 Months Ended |
Mar. 31, 2018 | |
Significant agreements and contracts | |
Significant agreements and contracts | Note 7 — Significant agreements and contracts Fosun Agreement On March 16, 2018, the Company, through its wholly-owned subsidiary, AkaRx Inc. entered in to an agreement by which it granted Shanghai Fosun Pharmaceutical Industrial Development Co., Ltd., a wholly owned subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., (collectively, “Fosun”) the exclusive development and distribution rights of avatrombopag in mainland China and Hong Kong (“territory”). Under the terms of the agreement, Fosun will have the right to exclusively develop and commercialize and to assist the Company with the registration of avatrombopag in the territory. The company is responsible for supplying product at a fixed price to Fosun for the distribution of product upon approval. The agreement between Fosun and the Company is governed by a joint steering committee comprised of equal representation by the Company and Fosun and operated on a consensus basis. In the event that the parties do not agree, the Company will have deciding authority, except with respect to matters that solely affect the territory. Under the agreement, the Company received an upfront payment during the second quarter of 2018, and is eligible to receive additional future payments upon the achievement of regulatory milestones. The Company has not recognized any revenue from this agreement as no performance obligations were met as of March 31, 2018. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and contingencies | |
Commitments and contingencies | Note 8—Commitments and contingencies Office Lease The Company leases 14,378 square feet of office space in Durham, North Carolina. Rent expense totaled $72,000 for the three months ended March 31, 2018. There was no rent expense for the three months ended March 31, 2017. The lease requires future rental payments of $0.2 million for the final nine months of the year ending December 31, 2018 and payments of $0.3 million and $0.1 million during the years ending December 31, 2019 and 2020, respectively. Litigation The Company is not a party to any material legal proceedings and is not aware of any pending or threatened claims. From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income taxes | |
Income taxes | Note 9—Income taxes The Company estimates an annual effective tax rate of 0% for the year ending December 31, 2018 as the Company incurred losses for the three months ended March 31, 2018 and is forecasting additional losses through the fourth quarter of 2018, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2018. Therefore, no federal or state income taxes are expected and none have been recorded at this time. Income taxes have been accounted for using the liability method in accordance with ASC 740. Due to the Company’s history of losses since inception, the Company has determined, based upon available evidence, that it is more likely than not that the net deferred tax asset will not be realized and, accordingly, has provided a full valuation allowance against its net deferred tax asset. At March 31, 2018, the Company had no unrecognized tax benefits that would reduce the Company’s effective tax rate if recognized. |
Employee benefit plan
Employee benefit plan | 3 Months Ended |
Mar. 31, 2018 | |
Employee benefit plan | |
Employee benefit plan | Note 10—Employee benefit plan The Company maintains a defined contribution 401(k) plan, under which employee contributions are voluntary and are determined on an individual basis, limited by the maximum amounts allowable under federal tax regulations. The Company provides an automatic matching contribution of $0.50 per $1.00 of employee contribution into the plan up to a maximum of 4% of employee deferral. The Company’s matching contributions to employees totaled approximately $37,000 during the three months ended March 31, 2018. There was no such contributions for the three month ended March 31, 2017. |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent events | |
Subsequent events | Note 11—Subsequent events The Company has evaluated subsequent events through the issuance date of these financial statements to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of March 31, 2018, and events which occurred subsequently but were not recognized in the financial statements. On April 17, 2018, the Company and its wholly owned subsidiary, AkaRx (collectively “Co-Borrowers”), entered into a Loan and Security Agreement with Silicon Valley Bank (“Term Loan”) pursuant to which the Co-Borrowers borrowed $20.0 million. The loan matures on April 17, 2021 unless the Company achieves a specified revenue milestone in which case the maturity date will be extended to April 17, 2022. The Co-Borrowers are only required to make monthly interest payments until April 30, 2019 unless the Company achieves the specified revenue milestone in which case the interest-only period will be extended until October 31, 2019. Following the interest-only period, the Co-Borrowers will be required to also make equal monthly payments of principal and interest for the remainder of the term. The Co-Borrowers will also be required to pay an additional final payment at maturity equal to $2.0 million if the term loan is repaid after the interest-only period or a final payment of $0.6 million if the term loan is repaid during the interest-only period. In addition, at its option, the Co-Borrowers may prepay all amounts owed under the Loan and Security Agreement (including all accrued and unpaid interest), subject to a prepayment charge if the loan has been outstanding for less than one year and when a cash collateralization period (as defined in the Loan and Security Agreement) is not in effect, which prepayment charge of 4% of the outstanding principal amount on the date the loan is prepaid. All obligations under this agreement are guaranteed by all the assets of the Co-Borrowers, except for intellectual property and certain other assets. In addition, if the Co-Borrowers do not deliver satisfactory evidence to Silicon Valley Bank that avatrombopag has received full regulatory approval from the FDA on or prior to September 30, 2018, the Co-Borrowers will be required to maintain cash collateral at Silicon Valley Bank equal to the full amount of the outstanding principal amount until such time as avatrombopag is approved by the FDA. The agreement bears interest at the WSJ prime rate plus 1.25% per annum. The Loan and Security Agreement also provides for standard indemnification of Silicon Valley Bank and contains representations, warranties and certain covenants of the Co-Borrowers. While any amounts are outstanding under the Loan and Security Agreement, the Co-Borrowers are subject to a number of affirmative and negative covenants, including covenants regarding dispositions of property, business combinations or acquisitions, incurrence of additional indebtedness and transactions with affiliates, among other customary covenants. The Co-Borrowers are also restricted from paying dividends or making other distributions or payments on their capital stock, subject to limited exceptions. |
Significant accounting polici17
Significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Significant accounting policies | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results for the full year or the results for any future periods. These financial statements have been prepared on a going concern basis and should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2017 in the Company’s Annual Report on Form 10-K. |
Liquidity and capital resources | Liquidity and capital resources The Company has incurred substantial operating losses since inception and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. As of March 31, 2018, the Company had an accumulated deficit of $70.9 million. Since inception, the Company has financed its operations through the issuance of equity and debt with net aggregate proceeds of $238.0 million. As at March 31, 2018, the Company had $126.9 million in cash and equivalents and on April 17, 2018 the Company entered into a Loan and Security Agreement with Silicon Valley Bank, pursuant to which the Company borrowed $20.0 million. See Note 11 for more information. Based on the Company’s forecast of future cash flows, the Company believes that it has adequate cash and equivalents to continue to fund operations in the normal course of business for at least the next 12 months. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in the Company’s condensed consolidated financial statements relate to the determination of share-based compensation and some of our research and development expenses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates, which could affect the Company’s future results of operations. |
Segments | Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Cash and equivalents | Cash and 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 equivalents include cash held in banks and money market mutual funds. The carrying amount of the Company’s cash equivalents approximates its fair value. |
Research and development prepaid and accrued expenses | Research and development prepaid and accrued expenses As part of the process of preparing financial statements, the Company is required to estimate its expenses resulting from its obligation under contracts with vendors and consultants and clinical site agreements in connection with its research and development efforts. The financial terms of these contracts are subject to negotiations which vary contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by matching those expenses with the period in which services and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines prepaid and accrual estimates through discussion with applicable personnel and outside service providers as to the progress or state of communication of clinical trials, or other services completed. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its prepaid and accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. The Company’s clinical trial prepaid and accrual expense is dependent upon the timely and accurate reporting of fee billings and pass-through expenses from contract research organizations and other third-party vendors as well as the timely processing of any change orders from the contract research organizations. |
Concentrations of credit risk and off-balance sheet risk | Concentrations of credit risk and off-balance sheet risk Cash and equivalents are financial instruments that are potentially subject to concentrations of credit risk. The Company’s cash and equivalents are deposited in accounts at large financial institutions, and amounts may exceed federally insured limits. The majority of the Company’s cash equivalents is in money market mutual funds invested solely in U.S. Government securities. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and equivalents are held. The Company has no financial instruments with off-balance sheet risk of loss. |
Research and development costs | Research and development costs Research and development (“R&D”) expenses for three months ended March 31, 2018 include direct and indirect R&D costs. Direct R&D costs consist principally of external costs, such as fees paid to investigators, consultants, central laboratories and clinical research organizations, including costs incurred in connection with clinical trials, and related clinical trial fees and all employee-related expenses for those employees working in R&D functions, including stock-based compensation for R&D personnel. Indirect R&D costs include insurance or other indirect costs related to the Company’s R&D function to specific product candidates. The Company expenses pre-approval inventory as R&D until regulatory approval is received. |
Revenue recognition | Revenue recognition Effective January 1, 2018, the Company has adopted the provisions of Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers . The guidance provides a unified model to determine how revenue is recognized. The Company’s contract revenue consist of revenue from the Company’s strategic agreements for the development and commercialization of avatrombopag. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under this agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606. The Company’s performance obligations include intellectual property rights, development services, and services associated with regulatory submission and approval processes. At the inception of the arrangement, the Company evaluates whether the development milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. Milestone payments that are not within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until those approvals are received. The Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or service underlying each performance obligation. If the right to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the right when the right is transferred to the customer, and the customer can use and benefit from the right. For rights that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. |
Stock-based compensation | Stock-based compensation The Company expenses stock-based compensation to employees, consultants and Board members over the requisite service period based on the estimated grant-date fair value of the awards. Stock-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company records the expense for stock-based compensation awards subject to performance-based milestone vesting over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. All stock-based compensation costs are recorded in general and administrative or R&D costs in the statements of operations based upon the underlying individual’s role at the Company. |
Income taxes | Income taxes Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. 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. |
Net loss per share | Net loss per share Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period assuming the retrospective conversion of member units described above. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same. The computations of diluted net loss per common share for the three months ended March 31, 2018 did not include options to purchase 2,414,707 shares of common stock, as the inclusion of these securities would have been antidilutive. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The Company adopted ASU No. 2017-09 as of January 1, 2018. The adoption of this standard did not impact the Company’s consolidated financial statements and disclosures. In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842), which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the estimated term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. The Company expects to adopt ASU 2016-02 in the first quarter of 2019. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company’s balance sheet for real estate operating leases. |
Stock-based compensation (Table
Stock-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based compensation | |
Summary of assumptions used to estimate fair value of option awards | For the three March 31, 2018 Exercise price $29.33 - $31.86 Risk-free rate of interest 2.41% - 2.79% Expected term (years) 6.2 Expected stock price volatility 86.66% - 87.67% Dividend yield 0% |
Summary of stock option activity | Total options Weighted Weighted average Aggregate Outstanding as of December 31, 2017 $ $ Options granted — Exercised ) — — Forfeited ) — — Outstanding as of March 31, 2018 $ $ Options vested and exercisable as of March 31, 2018 $ $ |
Schedule of stock-based compensation expense | Stock-based compensation expense has been reported in the Company’s consolidated statements of operations for the three months ended March 31, 2018 is as follows (in thousands): For the three March 31, 2018 General and administrative $ Research and development Total stock-based compensation $ |
Organization and description 19
Organization and description of business operations (Details) | 3 Months Ended |
Mar. 31, 2018item | |
Organization and description of business operations | |
Number of Phase 3 clinical trials completed | 2 |
Significant accounting polici20
Significant accounting policies (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)segmentitemshares | Apr. 17, 2018USD ($) | Dec. 31, 2017USD ($) | |
Liquidity and capital resources | |||
Accumulated deficit | $ (70,915) | $ (57,145) | |
Net aggregate proceeds from issuance of equity and debt | 238,000 | ||
Cash and equivalents | $ 126,897 | $ 94,846 | |
Segments | |||
Number of operating segments | segment | 1 | ||
Concentrations of credit risk and off-balance sheet risk | |||
Number of financial instruments with off-balance sheet risk of loss | item | 0 | ||
Stock Options | |||
Net loss per share | |||
Antidilutive shares | shares | 2,414,707 | ||
Subsequent events | Term Loan | |||
Liquidity and capital resources | |||
Borrowing amount | $ 20,000 |
The purchase agreement and re21
The purchase agreement and related transactions - Eisai (Details) - USD ($) $ in Thousands | Mar. 16, 2018 | Mar. 29, 2016 | Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | Mar. 30, 2016 |
Purchase agreement and related transactions | ||||||
Outstanding borrowings | $ 30,212 | |||||
Purchase agreement | AkaRx | Eisai | ||||||
Purchase agreement and related transactions | ||||||
Payment made on closing date | $ 5,000 | |||||
Maximum milestone payments due | $ 135,000 | |||||
Research and development-licenses acquired, expensed | $ 5,000 | |||||
Milestone payments accrued | $ 0 | |||||
Transition services agreement | AkaRx | Eisai | ||||||
Purchase agreement and related transactions | ||||||
Threshold amount after which amounts in excess will be credited against milestone payments | 51,000 | |||||
Transition incurred for expenses incurred | 31,100 | |||||
Note and security agreement | Eisai | Notes payable | ||||||
Purchase agreement and related transactions | ||||||
Interest rate (as a percent) | 5.00% | |||||
Outstanding borrowings | $ 31,100 | |||||
Repayment of principal balance along with accumulated interest | $ 1,300 |
The purchase agreement and re22
The purchase agreement and related transactions - Astellas Pharma Inc (Details) - License agreement - Astellas Pharma Inc - USD ($) $ in Millions | Sep. 21, 2017 | Mar. 31, 2018 |
License agreement with Astellas Pharma Inc | ||
Maximum milestone payments due | $ 4 | |
Milestone payments accrued | $ 0 | |
Agreement term | 10 years | |
Agreement term, extensions | 1 year | |
Termination notice period | 3 months | |
Research and development - licenses acquired | ||
License agreement with Astellas Pharma Inc | ||
Milestone Expense | $ 1 |
Related party agreements (Detai
Related party agreements (Details) - USD ($) | Apr. 01, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Apr. 01, 2018 | Dec. 31, 2017 |
Related party agreements | |||||
Due to related party | $ 4,000 | $ 97,000 | |||
PBM Capital Group, LLC | Services Agreement | |||||
Related party agreements | |||||
Monthly management fees payable | $ 17,400 | ||||
Expenses incurred included in general and administrative expenses | 150,000 | $ 150,000 | |||
Due to related party | $ 4,000 | ||||
Dova | PBM Capital Group, LLC | Services Agreement | |||||
Related party agreements | |||||
Agreement term | 12 months | ||||
Renewal term | 1 year | ||||
Monthly management fees payable | $ 25,000 | ||||
AkaRx | PBM Capital Group, LLC | Services Agreement | |||||
Related party agreements | |||||
Agreement term | 12 months | ||||
Renewal term | 1 year | ||||
Monthly management fees payable | $ 25,000 |
Stockholders' equity - Series A
Stockholders' equity - Series A preferred stock and common stock initial public offering (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 27, 2018 | Jul. 05, 2017 | Nov. 18, 2016 |
Series A preferred stock | |||
Stockholders' equity | |||
Shares issued | 982,714 | ||
Gross proceeds from sale of shares | $ 29 | ||
Non-cumulative, non-compounding dividends | 8.00% | ||
Common stock | |||
Stockholders' equity | |||
Shares issued upon conversion | 3,242,950 | ||
Common stock | IPO | |||
Stockholders' equity | |||
Shares issued | 5,077,250 | ||
Share price | $ 17 | ||
Proceeds from issuance of common stock | $ 78.7 | ||
Common stock | Underwritten public offering | |||
Stockholders' equity | |||
Shares issued | 2,500,000 | ||
Share price | $ 32 | ||
Proceeds from issuance of common stock | $ 74.7 | ||
Conditions when preferred shares are mandatorily convertible | Series A preferred stock | |||
Stockholders' equity | |||
Conversion price | $ 8.94 | ||
Conditions when preferred shares are mandatorily convertible | Common stock | IPO | Minimum | |||
Stockholders' equity | |||
Share price | $ 17.88 | ||
Proceeds from issuance of common stock | $ 60 |
Stock-based compensation - Opti
Stock-based compensation - Options (Details) - A&R Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2018shares | |
Stock-based compensation | |
Period in which reserved shares will increase annually | 10 years |
Annual increase in reserved shares (as a percent) | 4.00% |
Common stock | |
Stock-based compensation | |
Common stock initially reserved for future issuance | 4,285,250 |
Remaining shares reserved for grant | 2,858,905 |
Stock Options | |
Stock-based compensation | |
Maximum contractual term | 10 years |
Stock Options | Ratable basis over a 36-month period from 12 months after the grant date | |
Stock-based compensation | |
Vesting percentage | 75.00% |
Vesting period | 36 months |
Stock Options | Continuous service | 12 months after grant date | |
Stock-based compensation | |
Vesting percentage | 25.00% |
Vesting period | 12 months |
Stock-based compensation - Assu
Stock-based compensation - Assumptions used to calculate fair value of options (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2018$ / shares | |
Assumptions used to estimate fair value of options | |
Expected term (years) | 6 years 2 months 12 days |
Dividend yield (as a percent) | 0.00% |
Minimum | |
Assumptions used to estimate fair value of options | |
Exercise price | $ 29.33 |
Risk-free rate of interest | 2.41% |
Expected stock price volatility | 86.66% |
Maximum | |
Assumptions used to estimate fair value of options | |
Exercise price | $ 31.86 |
Risk-free rate of interest | 2.79% |
Expected stock price volatility | 87.67% |
Stock-based compensation - Stoc
Stock-based compensation - Stock Option Activity (Details) - USD ($) | Mar. 31, 2018 | Mar. 21, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Stock Options | ||||
Aggregate intrinsic value | ||||
Total unrecognized compensation expense | $ 19,800,000 | $ 19,800,000 | ||
Unrecognized compensation expense, weighted average recognition period | 1 year 3 months 18 days | |||
Stock Options | Maximum | ||||
Aggregate intrinsic value | ||||
Exercise price | $ 31.86 | $ 31.86 | ||
2017 Plan and A&R Equity Incentive Plan | Common stock | ||||
Aggregate intrinsic value | ||||
Share Price | $ 27.12 | $ 27.12 | ||
2017 Plan and A&R Equity Incentive Plan | Stock Options | ||||
Total options outstanding | ||||
Outstanding, beginning balance (in shares) | 2,128,641 | |||
Options granted (in shares) | 557,650 | |||
Exercised (in shares) | (38,809) | |||
Forfeited (in shares) | (232,775) | |||
Outstanding, ending balance (in shares) | 2,414,707 | 2,414,707 | 2,128,641 | |
Options vested and exercisable (in shares) | 276,927 | 276,927 | ||
Weighted average exercise price | ||||
Outstanding, beginning balance (in dollars per share) | $ 7.90 | |||
Options granted (in dollars per share) | 30.24 | |||
Exercised (in dollars per share) | 3.73 | |||
Forfeited (in dollars per share) | 5.20 | |||
Outstanding, ending balance (in dollars per share) | $ 13.38 | 13.38 | $ 7.90 | |
Options vested and exercisable (in dollars per share) | $ 3.73 | $ 3.73 | ||
Weighted average remaining contractual life (in years) | ||||
Outstanding | 9 years 3 months 18 days | 9 years 4 months 24 days | ||
Options granted | 9 years 10 months 24 days | |||
Options vested and exercisable | 9 years | |||
Aggregate intrinsic value | ||||
Outstanding, ending balance | $ 34,908,000 | $ 34,908,000 | $ 44,481,000 | |
Options vested and exercisable | $ 6,477,000 | $ 6,477,000 | ||
Weighted average grant date fair value | $ 30.24 | |||
2017 Plan and A&R Equity Incentive Plan | Stock Options | Maximum | ||||
Aggregate intrinsic value | ||||
Exercise price | $ 27.12 | $ 27.12 | ||
A&R Equity Incentive Plan | Performance Shares | Non-employee | ||||
Total options outstanding | ||||
Options granted (in shares) | 15,000 |
Stock-based compensation - Allo
Stock-based compensation - Allocation of expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-based compensation | ||
Stock-based compensation | $ 2,816 | $ 0 |
General and administrative | ||
Stock-based compensation | ||
Stock-based compensation | 2,385 | |
Research and development | ||
Stock-based compensation | ||
Stock-based compensation | $ 431 |
Significant agreements and co29
Significant agreements and contracts (Details) - Fosun Agreement | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Significant agreements and contracts | |
Revenue | $ 0 |
Performance obligation | $ 0 |
Commitments and contingencies (
Commitments and contingencies (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)ft² | Mar. 31, 2017USD ($) | |
Office Lease | ||
Leased office space | ft² | 14,378 | |
Monthly payments | $ 72,000 | $ 0 |
Future rental payments | ||
Remainder period of 2018 | 200,000 | |
2,019 | 300,000 | |
2,020 | $ 100,000 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2018 | |
Reconciliation of the statutory U.S. federal rate to the Company's effective tax rate | ||
Federal and state income taxes | $ 0 | |
Unrecognized tax benefits | $ 0 | |
Forecast | ||
Reconciliation of the statutory U.S. federal rate to the Company's effective tax rate | ||
Annual effective tax rate | 0.00% |
Employee benefit plan (Details)
Employee benefit plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee benefit plan | ||
Employer matching contribution, as a percent of employee contribution | 50.00% | |
Defined Contribution Plan, Employer Matching Contribution, Aggregate Amount | $ 37,000 | $ 0 |
Maximum | ||
Employee benefit plan | ||
Employer matching contribution, as a percent of employee gross pay | 4.00% |
Subsequent events (Details)
Subsequent events (Details) - Term Loan - Subsequent events $ in Millions | Apr. 17, 2018USD ($) |
Subsequent events | |
Borrowing amount | $ 20 |
Co-Borrowers | |
Subsequent events | |
Borrowing amount | 20 |
Final payment at maturity if term loan is repaid after after interest-only period | 2 |
Final payment if term loan is repaid during the interest-only period | $ 0.6 |
Percentage of outstanding loan principal amount for calculation of prepayment charge | 4.00% |
Co-Borrowers | WSJ prime rate | |
Subsequent events | |
Basis points spread over variable reference rate | 1.25% |