Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 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 | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 28,202,266 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and equivalents | $ 134,695 | $ 94,846 |
Accounts receivable, net | 3,409 | |
Inventory, net | 563 | |
Prepaid expenses and other current assets | 2,343 | 1,471 |
Total current assets | 141,010 | 96,317 |
Furniture and equipment, net | 257 | 62 |
Total assets | 141,267 | 96,379 |
Current liabilities | ||
Accounts payable | 1,542 | 1,263 |
Accrued expenses | 7,409 | 2,520 |
Accrued interest | 76 | 1,005 |
Due to related party | 97 | |
Early exercise liability, related party | 100 | |
Note payable, short-term | 30,212 | |
Current portion of long-term debt | 1,667 | |
Total current liabilities | 10,694 | 35,197 |
Deferred revenue | 2,373 | |
Long-term debt | 18,483 | |
Total liabilities | 31,550 | 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 June 30, 2018 and December 31, 2017, respectively | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 28,202,266 and 25,652,457 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 28 | 26 |
Additional paid-in capital | 200,261 | 118,301 |
Accumulated deficit | (90,572) | (57,145) |
Total stockholders' equity | 109,717 | 61,182 |
Total liabilities and stockholders' equity | $ 141,267 | $ 96,379 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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 | 28,202,266 | 25,652,457 |
Common stock, shares outstanding | 28,202,266 | 25,652,457 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | ||||
Total revenue, net | $ 4,584 | $ 4,584 | ||
Operating expenses: | ||||
Cost of product sales | 519 | 519 | ||
Research and development | 4,508 | $ 3,293 | 7,924 | $ 7,569 |
Selling, general and administrative | 18,565 | 1,905 | 28,826 | 2,860 |
Total operating expenses | 23,592 | 5,198 | 37,269 | 10,429 |
Loss from operations | (19,008) | (5,198) | (32,685) | (10,429) |
Interest income and other income (expense), net | (195) | (14) | 27 | 19 |
Interest expense | (454) | (295) | (769) | (521) |
Total other expenses, net | (649) | (309) | (742) | (502) |
Other income (expenses) | ||||
Interest income and other income (expense), net | (195) | (14) | 27 | 19 |
Net loss | $ (19,657) | $ (5,507) | $ (33,427) | $ (10,931) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.70) | $ (0.32) | $ (1.22) | $ (0.63) |
Weighted average common shares outstanding, basic and diluted (in shares) | 28,194,046 | 17,332,257 | 27,396,052 | 17,332,257 |
Product sales, net | ||||
Revenue | ||||
Total revenue, net | $ 1,957 | $ 1,957 | ||
Other revenue | ||||
Revenue | ||||
Total revenue, net | $ 2,627 | $ 2,627 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (33,427) | $ (10,931) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash research and development expenses | 6,570 | |
Depreciation | 9 | |
Loss on disposal of furniture and equipment | 35 | |
Amortization of debt discount and debt issuance costs | 188 | |
Stock-based compensation | 7,007 | 619 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (3,409) | |
Inventory | (563) | |
Prepaid expenses | (872) | (70) |
Accounts payable | 279 | 14 |
Accrued expenses | 5,754 | 678 |
Accrued interest | (929) | 144 |
Due to related party | (97) | (35) |
Deferred revenue | 2,373 | |
Net cash used in operating activities | (23,652) | (3,011) |
Cash flows from investing activities | ||
Purchases of furniture and equipment | (239) | (34) |
Net cash used in investing activities | (239) | (34) |
Cash flows from financing activities | ||
Payment of note payable | (31,077) | |
Debt issuance costs | (38) | |
Proceeds from the issuance of debt | 20,000 | |
Proceeds from exercise of stock options | 125 | |
Proceeds from the issuance of common stock | 80,000 | |
Payment of offering cost in connection with issuance of common stock | (5,270) | (902) |
Net cash provided by (used in) financing activities | 63,740 | (902) |
Net increase (decrease) in cash and equivalents | 39,849 | (3,947) |
Cash and equivalents at the beginning of the period | 94,846 | 28,709 |
Cash and equivalents at the end of the period | 134,695 | 24,762 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,511 | 377 |
Supplemental disclosure of noncash investing and financing activities: | ||
Change in note payable | 11,177 | |
Unpaid deferred offering costs | $ (1,317) | |
Shares issued from the early exercise of options | $ 100 |
Organization and description of
Organization and description of business operations | 6 Months Ended |
Jun. 30, 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. On May 21, 2018, the U.S. Food and Drug Administration (“FDA”) approved DOPTELET (avatrombopag), which is an orally administered thrombopoietin receptor agonist for the treatment of thrombocytopenia in adult patients with chronic liver disease (“CLD”) scheduled to undergo a procedure. 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 and six months ended June 30, 2018 and June 30, 2017. |
Significant accounting policies
Significant accounting policies | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 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 June 30, 2018, the Company had an accumulated deficit of $90.6 million. Since inception, the Company has financed its operations through the issuance of equity and debt with net aggregate proceeds of $238.0 million. Although the Company began generating revenue from product sales of DOPTELET in May 2018, the Company does not expect product revenues to be sufficient to satisfy its operating needs for several years, if ever. As of June 30, 2018, the Company had $134.7 million in cash and equivalents. 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 variable consideration for product sales, share-based compensation and some of its 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. Inventory Inventory acquired prior to receipt of the FDA approval for DOPTELET was expensed as research and development expense as incurred. The Company began capitalizing inventory upon receipt of FDA approval on May 21, 2018. The Company reduces its inventory to net realizable value for potentially excess, dated or obsolete inventory based on an analysis of forecasted demand compared to quantities on hand and any firm purchase orders, as well as product shelf life. At June 30, 2018, the Company determined that no write downs to inventory for potentially excess, dated or obsolete inventory were required. The Company’s inventory consists of finished goods only. 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 and six months ended June 30, 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 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. Product sales The Company is currently approved to sell DOPTELET in the United States market. The product is distributed through an exclusive distribution model with Integrated Commercialization Solutions (“ICS”). ICS sells DOPTELET to a limited number of specialty pharmacies (“customers”), who have agreements in place with the Company. Patients and healthcare providers purchase the product from the specialty pharmacy providers. (See Note 7 “Significant agreements and contracts” for more information on the Company’s agreement with ICS). The Company recognizes revenue on product sales when the control of the Company’s product passes to its customers, which occurs at a point in time, upon delivery to the customers. The Company has determined that the delivery of its product to its customers constitutes a single performance obligation as there are no other promises to deliver goods or services. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. The Company has assessed the existence of a significant financing component in the agreements with its customers. The trade payment terms with its customers do not exceed one year and therefore the Company has elected to apply the practical expedient and no amount of consideration has been allocated as a financing component. Revenue from product sales is recorded at the net sales price, which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, government chargebacks, discounts and rebates, and other incentives, such as voluntary patient assistance, and other fee for service amounts that are detailed within contracts between the Company and its customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable or a current liability. These reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. Revenue from product sales is recorded after considering the impact of the following variable consideration amounts at the time of revenue recognition: Trade discounts and distribution fees : Trade discounts relate to prompt settlement discounts provided to ICS and the customers. Distribution fees include fees paid to ICS for the distribution of the product (which is based on a percentage of sales). In addition, the Company compensates its customers for data and other activities. The Company has determined that such services received to date are not distinct from its sale of products and may not reasonably represent fair value for these services. Therefore, estimates of these payments are recorded as a reduction of revenue based on contractual terms. Product returns: Consistent with industry practice, the Company generally offers customers a limited right of return for product that has been purchased from the Company based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, as well as within accrued expenses on the condensed consolidated balance sheets. The Company currently estimates product return liabilities using available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has not received any returns to date and believes that returns of DOPTELET will be minimal. Government rebates and chargebacks : The Company will contract with Medicaid, Medicare, U.S Department of Veterans Affairs and other government agencies (“Government Payors”) so that DOPTELET will be eligible for purchase by, or partial or full reimbursement from, such Government Payors. The Company estimates the rebates, chargebacks and discounts it will provide to Government Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. The Company estimates these reserves based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company estimates the rebates, chargebacks and discounts that it will provide to Government Payors based upon (i) the government-mandated discounts applicable to government-funded programs, (ii) information obtained from its customers and (iii) information obtained from other third parties regarding the payor mix for DOPTELET. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product shipments that have been recognized as revenue, but remain in the distribution channel inventories at the end of each reporting period. Other incentives — Other incentives which the Company offers include voluntary patient assistance and assurance programs, such as a co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payers. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets. Strategic agreements The Company’s other revenue consists of revenue from the Company’s strategic agreements for the development and commercialization of DOPTELET. The terms of the agreements typically include non-refundable upfront fees, payments based upon achievement of milestones and eventually revenue from the commercialized product. These agreements usually have both fixed and variable consideration. Non-refundable upfront fees are considered fixed, while milestone payments and revenues from the commercialized product are identified as variable consideration. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under these agreements, 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. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. As part of the accounting for these arrangements, the Company develops assumptions that require judgment to determine the estimated selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the selling price on a stand alone basis, which may include forecasted revenue, development timelines, and probabilities of regulatory success. 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. 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. 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 cost of goods sold, general and administrative or research and development expenses in the consolidated 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 and six months ended June 30, 2018 did not include options to purchase 2,596,080 shares and 2,425,386 shares, respectively, of common stock, as the inclusion of these securities would have been antidilutive. Recent accounting pronouncements 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. 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 June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The changes take effect for public companies for fiscal years starting after Dec. 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company expects that the adoption of this ASU would not have a material impact on the Company’s consolidated financial statements. |
The purchase agreement with Eis
The purchase agreement with Eisai and related transactions | 6 Months Ended |
Jun. 30, 2018 | |
The purchase agreement with Eisai and related transactions | |
The purchase agreement with Eisai and related transactions | Note 3—The purchase agreement with Eisai and related transactions Purchase agreement with Eisai 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 DOPTELET, 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 DOPTELET from Eisai until the later of March 30, 2021 or the third anniversary of the commercialization of DOPTELET. 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 DOPTELET, other associated intellectual property, inventory, documentation and records, and related materials. Because DOPTELET 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 June 30, 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 of DOPTELET from Eisai and Eisai agreed to supply finished drug product of DOPTELET. 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 DOPTELET. 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 of DOPTELET, 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 DOPTELET 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 DOPTELET. Transition services agreement In March 2016, in connection with the Company’s acquisition of the rights to DOPTELET, 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 DOPTELET 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 DOPTELET 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 DOPTELET, 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 DOPTELET 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. No amounts have been accrued for any potential milestone payments as the payments were not deemed probable. In addition, the Company is required to pay Astellas tiered royalties ranging from the mid to high single digits on net sales of DOPTELET, which are recorded in cost of product sales. 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 DOPTELET, and (iii) 10 years after the last date of launch of DOPTELET 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 | 6 Months Ended |
Jun. 30, 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, a “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 the three months and six months ended June 30, 2018, the Company incurred expenses under the SAs of $52,200 and $202,200, respectively, which were included in selling, general and administrative expenses. For the three months and six months ended June 30, 2017, the Company incurred expenses under the SAs of $150,000 and $300,000, respectively, which were included in selling, general and administrative expenses. |
Stockholders' equity
Stockholders' equity | 6 Months Ended |
Jun. 30, 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, 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 condensed 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 offering expenses. |
Stock-based compensation
Stock-based compensation | 6 Months Ended |
Jun. 30, 2018 | |
Stock-based compensation | |
Stock-based compensation | Note 6—Stock-based compensation Options The Company maintains the Amended and Restated 2017 Equity Incentive Plan ( “2017 Equity Incentive Plan”). The 2017 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 2017 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 and six months ended June 30, 2018 have a maximum contractual term of 10 years. The Company initially reserved 4,285,250 shares of common stock for issuance under the 2017 Equity Incentive Plan. The number of shares of common stock reserved for issuance under the 2017 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 June 30, 2018, 2,592,404 shares were reserved for grant under the 2017 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 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: Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Exercise price $24.46-$33.47 $3.73-$7.32 $24.46-$33.47 $3.73-$7.32 Risk-free rate of interest 2.60%-3.02% 1.71%-1.96% 2.41%-3.02% 1.71%-1.96% Expected term (years) 5.1-7.0 5.2-7.1 5.0-7.0 5.2-7.1 Expected stock price volatility 64%-65% 87%-88% 64%-88% 87%-88% The following table summarizes the Company’s stock option activity for the six months ended June 30, 2018: Weighted- Weighted- Aggregate Average Average Intrinsic Number of Options Exer. Price Contractual Term Value Outstanding - December 31, 2017 $ Granted $ Exercised ) Forfeited ) Outstanding - June 30, 2018 $ Options vested and exercisable - June 30, 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 June 29, 2018, or $29.92 per share, and the exercise price of the stock options that had strike prices below $29.92 per share. The weighted average grant date fair value per share of options granted during six months ended June 30, 2018 was $20.17. As of June 30, 2018, there was approximately $20.2 million of total unrecognized compensation expense, related to the unvested stock options shown in the table above, which is expected to be recognized over a weighted average period of 1.1 years. Stock-based compensation expense has been reported in the Company’s consolidated statements of operations for the three and six months ended June 30, 2018 as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Cost of product sales $ $ — $ $ — Selling, general and administrative Research and development Total stock-based compensation $ $ $ $ |
Significant agreements and cont
Significant agreements and contracts | 6 Months Ended |
Jun. 30, 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 entered into 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 DOPTELET in mainland China and Hong Kong (“territory”). Under the terms of the agreement, Fosun will have the right to exclusively commercialize and to assist the Company with the registration of DOPTELET in the territory. Fosun is solely responsible for commercialization activities in the territory and associated expenses. 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 a non-refundable upfront payment of $4.5 million during the second quarter of 2018, which consisted of an upfront payment of $5.0 million, less $0.5 million that was withheld in accordance with tax withholding requirements in China and recorded as an expense during the three and six months ended June 30, 2018. The Company is also eligible to receive additional future payments upon the achievement of certain regulatory milestones. The Company assessed this arrangement in accordance with ASC Topic 606 and concluded that the contract counterparty, Fosun, is a customer. The Company determined the distinct, material performance obligations within this agreement consist of (1) the exclusive right to develop and commercialize DOPTELET for multiple indications in the territory, (2) the delivery of certain indication specific information, and (3) manufacture and supply of commercial product. The transaction price includes the $5.0 million up-front consideration. None of the regulatory milestones have been included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and Fosun’s efforts. During the three and six months ended June 30, 2018, the Company recognized $2.6 million related to the up-front payment as other revenue in connection with the Fosun agreement. The amount of revenue recognized in connection with this agreement is commensurate with the deliverables provided by the Company to Fosun in achieving the performance obligation. The remaining transaction price of $2.4 million is recorded in deferred revenue as of June 30, 2018, on the condensed consolidated balance sheet and will be recognized upon the delivery of certain information packages for indications which are currently in development. Integrated Commercial Solutions, LLC (“ICS”) On March 1, 2018, the Company entered into a Commercial Outsourcing Master Services Agreement with ICS, a division of AmerisourceBergen Specialty Group, a subsidiary of AmerisourceBergen, pursuant to which ICS is the exclusive provider of various third-party logistics services to support the Company’s distribution of DOPTELET in the United States. The key services provided by ICS include logistics, warehousing, returns and inventory management, contract administration and chargebacks processing and accounts receivable management. Effective March 1, 2018, the Company also entered into a first amendment to the Commercial Outsourcing Master Services Agreement in order for ICS to purchase and sell DOPTELET to the Company’s customers in the United States. Pursuant to the amendment, ICS will only make shipments to customers who have an executed contract with the Company. Under this arrangement, ICS places orders with the Company to maintain an appropriate level of inventory. ICS assumes all inventory risk and has sole responsibility for determining the prices at which it sells these products, subject to specified limitations in the amendment. The agreement will terminate on a date that is mutually agreed upon, in good faith, between ICS and the Company. If the Company does not attain all regulatory approvals and licenses to sell and distribute DOPTELET within one calendar year from the effective date, ICS may terminate the agreement upon 30 days written notice. Upon termination of this arrangement, ICS will be allowed to return one hundred percent of all inventory and revert to be the Company’s third-party logistics provider. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt | |
Debt | Note 8 — Debt 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. The final payment amount of $2.0 million has been recorded as a debt discount and is being accreted to the carrying value of the debt using the effective interest method. 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, 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. The agreement bears interest at the WSJ prime rate plus 1.25% per annum. In connection with the Loan and Security Agreement, the Company incurred debt issuance costs totaling approximately $38,000. These costs are being amortized over the estimated term of the debt using the effective interest method. The Company deducted the debt issuance costs from the carrying amount of the debt as of June 30, 2018. As of June 30, 2018, the carrying value of the term loan was approximately $20.2 million, of which $1.7 million was due within 12 months and $18.5 million was due in greater than 12 months. The Term Loan 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. As of June 30, 2018, annual principal payments due under the Term Loan are as follows: Aggregate Year (in thousands) 2019 2020 2021 Total $ Less unamortized debt issuance costs and final payment ) Total $ |
Commitments and contingencies
Commitments and contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and contingencies | |
Commitments and contingencies | Note 9—Commitments and contingencies Office lease On May 22, 2018, the Company entered into an Office Lease Agreement (the “Lease”) with Pine Forest 240 TT, LLC, a Delaware limited liability company (the “Landlord”), under which the Company will lease 21,745 square feet of space for its corporate headquarters located at 240 Leigh Farm Road, Durham, North Carolina. Pursuant to the Lease, the Company will effectively renew the Company’s lease of its existing 14,378 square feet of office space (the “Existing Office Space”) that the Company currently subleases from Paidian Research, Inc. pursuant to a sublease agreement, which is scheduled to expire on April 30, 2020, effective May 1, 2020. The Company will also lease an additional 1,961 square feet of office space (“Suite 200”), which the Landlord has agreed to use commercially reasonable efforts to deliver on or before September 1, 2018, and 5,406 square feet of office space (“Suite 215”), which the Landlord has agreed to use commercially reasonable efforts to deliver on or before August 1, 2019. Under the Lease, subject to specified exceptions, the Company will pay an initial annual base rent of (i) $51,476, or $4,290 per month, for Suite 200, subject to an increase of approximately 2.7% per year, (ii) $145,800, or $12,150 per month, for Suite 215, subject to an increase of approximately 2.7% per year and (iii) $387,774, or $32,315 per month, for the Existing Office Space, subject to an increase of approximately 2.7% per year. In addition, the Company will pay its proportionate share of the Landlord’s annual operating expenses associated with the premises. The term of the Lease will continue until September 30, 2023. The Company has an option to renew the Lease for one additional term of five years. If exercised, rent during the renewal term will be at the fair market rental rate as defined in the Lease. The lease provides for a tenant improvement allowance of approximately $264,090. As of June 30, 2018, none of the allowance was utilized. We incurred rent expense of $71,600 and $177,000 for the three and six months ended June 30, 2018. There was no rent expense for the three and six months ended June 30, 2017. Current future minimum lease payments under the Company’s lease obligations are $152,000, $310,000 and $104,000 for the remainder of 2018, 2019 and 2020, respectively. Purchase commitments As noted in Note 3, the Company has an agreement with Eisai for the commercial supply of DOPTELET. Under the terms of the agreement, the Company will supply Eisai with non-cancelable firm commitment purchase orders. Future minimum purchase obligations are $1.8 million for the remainder of 2018 and $1.3 million for 2019. The Company has also entered into other agreements with certain vendors for the provision of services, including services related to data access and packaging, under which the Company is contractually obligated to make certain payments to the vendors. The Company enters into contracts in the normal course of business that include, among others, arrangements with clinical research orgnanizations for clinical trials, vendors for preclinical research, and vendors for manufacturing. These contracts generally provide for termination upon notice, and therefore the Company believes that its obligations under these agreements are not material. 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 | 6 Months Ended |
Jun. 30, 2018 | |
Income taxes | |
Income taxes | Note 10—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 and six months ended June 30, 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 June 30, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Employee benefit plan | |
Employee benefit plan | Note 11—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 deferral per employee of 4% of the employee’s salary. The Company’s matching contributions totaled approximately $72,000 and $109,000 during the three and six months ended June 30, 2018, respectively. There were no such contributions for the three and six month ended June 30, 2017. |
Significant accounting polici17
Significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 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 June 30, 2018, the Company had an accumulated deficit of $90.6 million. Since inception, the Company has financed its operations through the issuance of equity and debt with net aggregate proceeds of $238.0 million. Although the Company began generating revenue from product sales of DOPTELET in May 2018, the Company does not expect product revenues to be sufficient to satisfy its operating needs for several years, if ever. As of June 30, 2018, the Company had $134.7 million in cash and equivalents. 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 variable consideration for product sales, share-based compensation and some of its 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. |
Inventory | Inventory Inventory acquired prior to receipt of the FDA approval for DOPTELET was expensed as research and development expense as incurred. The Company began capitalizing inventory upon receipt of FDA approval on May 21, 2018. The Company reduces its inventory to net realizable value for potentially excess, dated or obsolete inventory based on an analysis of forecasted demand compared to quantities on hand and any firm purchase orders, as well as product shelf life. At June 30, 2018, the Company determined that no write downs to inventory for potentially excess, dated or obsolete inventory were required. The Company’s inventory consists of finished goods only. |
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 and six months ended June 30, 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 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. Product sales The Company is currently approved to sell DOPTELET in the United States market. The product is distributed through an exclusive distribution model with Integrated Commercialization Solutions (“ICS”). ICS sells DOPTELET to a limited number of specialty pharmacies (“customers”), who have agreements in place with the Company. Patients and healthcare providers purchase the product from the specialty pharmacy providers. (See Note 7 “Significant agreements and contracts” for more information on the Company’s agreement with ICS). The Company recognizes revenue on product sales when the control of the Company’s product passes to its customers, which occurs at a point in time, upon delivery to the customers. The Company has determined that the delivery of its product to its customers constitutes a single performance obligation as there are no other promises to deliver goods or services. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. The Company has assessed the existence of a significant financing component in the agreements with its customers. The trade payment terms with its customers do not exceed one year and therefore the Company has elected to apply the practical expedient and no amount of consideration has been allocated as a financing component. Revenue from product sales is recorded at the net sales price, which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, government chargebacks, discounts and rebates, and other incentives, such as voluntary patient assistance, and other fee for service amounts that are detailed within contracts between the Company and its customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable or a current liability. These reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. Revenue from product sales is recorded after considering the impact of the following variable consideration amounts at the time of revenue recognition: Trade discounts and distribution fees : Trade discounts relate to prompt settlement discounts provided to ICS and the customers. Distribution fees include fees paid to ICS for the distribution of the product (which is based on a percentage of sales). In addition, the Company compensates its customers for data and other activities. The Company has determined that such services received to date are not distinct from its sale of products and may not reasonably represent fair value for these services. Therefore, estimates of these payments are recorded as a reduction of revenue based on contractual terms. Product returns: Consistent with industry practice, the Company generally offers customers a limited right of return for product that has been purchased from the Company based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, as well as within accrued expenses on the condensed consolidated balance sheets. The Company currently estimates product return liabilities using available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has not received any returns to date and believes that returns of DOPTELET will be minimal. Government rebates and chargebacks : The Company will contract with Medicaid, Medicare, U.S Department of Veterans Affairs and other government agencies (“Government Payors”) so that DOPTELET will be eligible for purchase by, or partial or full reimbursement from, such Government Payors. The Company estimates the rebates, chargebacks and discounts it will provide to Government Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. The Company estimates these reserves based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company estimates the rebates, chargebacks and discounts that it will provide to Government Payors based upon (i) the government-mandated discounts applicable to government-funded programs, (ii) information obtained from its customers and (iii) information obtained from other third parties regarding the payor mix for DOPTELET. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product shipments that have been recognized as revenue, but remain in the distribution channel inventories at the end of each reporting period. Other incentives — Other incentives which the Company offers include voluntary patient assistance and assurance programs, such as a co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payers. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets. Strategic agreements The Company’s other revenue consists of revenue from the Company’s strategic agreements for the development and commercialization of DOPTELET. The terms of the agreements typically include non-refundable upfront fees, payments based upon achievement of milestones and eventually revenue from the commercialized product. These agreements usually have both fixed and variable consideration. Non-refundable upfront fees are considered fixed, while milestone payments and revenues from the commercialized product are identified as variable consideration. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under these agreements, 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. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. As part of the accounting for these arrangements, the Company develops assumptions that require judgment to determine the estimated selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the selling price on a stand alone basis, which may include forecasted revenue, development timelines, and probabilities of regulatory success. 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. 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. |
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 cost of goods sold, general and administrative or research and development expenses in the consolidated 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 and six months ended June 30, 2018 did not include options to purchase 2,596,080 shares and 2,425,386 shares, respectively, of common stock, as the inclusion of these securities would have been antidilutive. |
Recent accounting pronouncements | Recent accounting pronouncements 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. 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 June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The changes take effect for public companies for fiscal years starting after Dec. 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company expects that the adoption of this ASU would not have a material impact on the Company’s consolidated financial statements. |
Stock-based compensation (Table
Stock-based compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock-based compensation | |
Summary of assumptions used to estimate fair value of option awards | Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Exercise price $24.46-$33.47 $3.73-$7.32 $24.46-$33.47 $3.73-$7.32 Risk-free rate of interest 2.60%-3.02% 1.71%-1.96% 2.41%-3.02% 1.71%-1.96% Expected term (years) 5.1-7.0 5.2-7.1 5.0-7.0 5.2-7.1 Expected stock price volatility 64%-65% 87%-88% 64%-88% 87%-88% |
Summary of stock option activity | Weighted- Weighted- Aggregate Average Average Intrinsic Number of Options Exer. Price Contractual Term Value Outstanding - December 31, 2017 $ Granted $ Exercised ) Forfeited ) Outstanding - June 30, 2018 $ Options vested and exercisable - June 30, 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 and six months ended June 30, 2018 as follows (in thousands): Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Cost of product sales $ $ — $ $ — Selling, general and administrative Research and development Total stock-based compensation $ $ $ $ |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt | |
Schedule of annual principal payments due under term loan | Aggregate Year (in thousands) 2019 2020 2021 Total $ Less unamortized debt issuance costs and final payment ) Total $ |
Significant accounting polici20
Significant accounting policies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018USD ($)itemshares | Jun. 30, 2018USD ($)segmentitemshares | Dec. 31, 2017USD ($) | |
Liquidity and capital resources | |||
Accumulated deficit | $ (90,572) | $ (90,572) | $ (57,145) |
Net aggregate proceeds from issuance of equity and debt | 238,000 | ||
Cash and equivalents | $ 134,695 | $ 134,695 | $ 94,846 |
Segments | |||
Number of operating segments | segment | 1 | ||
Inventory | |||
Inventory write down | $ 0 | ||
Concentrations of credit risk and off-balance sheet risk | |||
Number of financial instruments with off-balance sheet risk of loss | item | 0 | 0 | |
Revenue recognition | |||
Practical expedient | true | ||
Stock Options | |||
Net loss per share | |||
Antidilutive shares | shares | 2,596,080 | 2,425,386 |
The purchase agreement with E21
The purchase agreement with Eisai and related transactions - Eisai (Details) - USD ($) $ in Thousands | Mar. 16, 2018 | Mar. 29, 2016 | Jun. 30, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | Mar. 30, 2016 |
The purchase agreement with Eisai and related transactions | ||||||
Outstanding borrowings | $ 30,212 | |||||
Purchase agreement | AkaRx | Eisai | ||||||
The purchase agreement with Eisai 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 | ||||||
The purchase agreement with Eisai 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 | ||||||
The purchase agreement with Eisai 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 with E22
The purchase agreement with Eisai and related transactions - Astellas Pharma Inc (Details) - License agreement - Astellas Pharma Inc - USD ($) $ in Millions | Sep. 21, 2017 | Jun. 30, 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) - PBM Capital Group, LLC - Services Agreement - USD ($) | Apr. 01, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 01, 2018 |
Related party agreements | ||||||
Monthly management fees payable | $ 17,400 | |||||
Expenses incurred included in selling, general and administrative expenses | $ 52,200 | $ 150,000 | $ 202,200 | $ 300,000 | ||
Dova | ||||||
Related party agreements | ||||||
Agreement term | 12 months | |||||
Renewal term | 1 year | |||||
Monthly management fees payable | $ 25,000 | |||||
AkaRx | ||||||
Related party agreements | ||||||
Agreement term | 12 months | |||||
Renewal term | 1 year | |||||
Monthly management fees payable | $ 25,000 |
Stockholders' equity (Details)
Stockholders' equity (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 | ||
Net proceeds from issuance of stock | $ 78.7 | ||
Common stock | Underwritten public offering | |||
Stockholders' equity | |||
Shares issued | 2,500,000 | ||
Share price | $ 32 | ||
Net proceeds from issuance of 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) - 2017 Equity Incentive Plan | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018shares | Jun. 30, 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 | 4,285,250 |
Remaining shares reserved for grant | 2,592,404 | 2,592,404 |
Stock Options | ||
Stock-based compensation | ||
Maximum contractual term | 10 years | 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 - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Minimum | ||||
Assumptions used to estimate fair value of options | ||||
Exercise price | $ 24.46 | $ 3.73 | $ 24.46 | $ 3.73 |
Risk-free rate of interest | 2.60% | 1.71% | 2.41% | 1.71% |
Expected term (years) | 5 years 1 month 6 days | 5 years 2 months 12 days | 5 years | 5 years 2 months 12 days |
Expected stock price volatility | 64.00% | 87.00% | 64.00% | 87.00% |
Maximum | ||||
Assumptions used to estimate fair value of options | ||||
Exercise price | $ 33.47 | $ 7.32 | $ 33.47 | $ 7.32 |
Risk-free rate of interest | 3.02% | 1.96% | 3.02% | 1.96% |
Expected term (years) | 7 years | 7 years 1 month 6 days | 7 years | 7 years 1 month 6 days |
Expected stock price volatility | 65.00% | 88.00% | 88.00% | 88.00% |
Stock-based compensation - Stoc
Stock-based compensation - Stock Option Activity (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Stock Options | |||
Aggregate intrinsic value | |||
Total unrecognized compensation expense | $ 20,200,000 | ||
Unrecognized compensation expense, weighted average recognition period | 1 year 1 month 6 days | ||
Stock Options | Maximum | |||
Aggregate intrinsic value | |||
Exercise price | $ 33.47 | $ 7.32 | |
2017 Equity Incentive Plan | Common stock | |||
Aggregate intrinsic value | |||
Share Price | $ 29.92 | ||
2017 Equity Incentive Plan | Stock Options | |||
Total options outstanding | |||
Outstanding, beginning balance (in shares) | 2,128,641 | ||
Granted (in shares) | 834,150 | ||
Exercised (in shares) | (49,809) | ||
Forfeited (in shares) | (242,775) | ||
Outstanding, ending balance (in shares) | 2,670,207 | 2,128,641 | |
Options vested and exercisable (in shares) | 481,108 | ||
Weighted average exercise price | |||
Outstanding, beginning balance (in dollars per share) | $ 7.90 | ||
Granted (in dollars per share) | 29.24 | ||
Exercised (in dollars per share) | 4.52 | ||
Forfeited (in dollars per share) | 6.29 | ||
Outstanding, ending balance (in dollars per share) | 14.78 | $ 7.90 | |
Options vested and exercisable (in dollars per share) | $ 5.21 | ||
Weighted average remaining contractual life (in years) | |||
Granted | 9 years 7 months 6 days | ||
Outstanding | 9 years 1 month 6 days | 9 years 4 months 24 days | |
Options vested and exercisable | 8 years 9 months 18 days | ||
Aggregate intrinsic value | |||
Outstanding at beginning of the period | $ 44,481,000 | ||
Granted | 1,036,000 | ||
Outstanding at the end of the period | 40,898,000 | $ 44,481,000 | |
Options vested and exercisable | $ 11,888,000 | ||
Weighted average grant date fair value | $ 20.17 | ||
2017 Equity Incentive Plan | Stock Options | Maximum | |||
Aggregate intrinsic value | |||
Exercise price | $ 29.92 |
Stock-based compensation - Allo
Stock-based compensation - Allocation of expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based compensation | ||||
Stock-based compensation | $ 4,192 | $ 619 | $ 7,007 | $ 619 |
Cost of product sales | ||||
Stock-based compensation | ||||
Stock-based compensation | 292 | 292 | ||
Selling, general and administrative | ||||
Stock-based compensation | ||||
Stock-based compensation | 3,318 | 489 | 5,703 | 489 |
Research and development | ||||
Stock-based compensation | ||||
Stock-based compensation | $ 582 | $ 130 | $ 1,012 | $ 130 |
Significant agreements and co29
Significant agreements and contracts (Details) - USD ($) $ in Thousands | Mar. 01, 2018 | Jun. 30, 2018 | Jun. 30, 2018 |
Significant agreements and contracts | |||
Revenue | $ 4,584 | $ 4,584 | |
Commercial Outsourcing Master Services Agreement | Integrated Commercial Solutions, LLC | |||
Significant agreements and contracts | |||
Maximum time period to terminate the agreement | 1 year | ||
Grace period of time for terminate the agreement | 30 days | ||
Percentage of inventory returns upon the termination of the agreement | 100.00% | ||
Fosun Agreement | |||
Significant agreements and contracts | |||
Upfront payment received, Net of tax withholding | 4,500 | ||
Total non-refundable upfront consideration including taxes withholdings | 5,000 | ||
Taxes withheld on upfront consideration | 500 | ||
Revenue | 2,600 | 2,600 | |
Deferred revenue | $ 2,400 | $ 2,400 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Apr. 17, 2018 | Jun. 30, 2018 |
Annual principal payments | ||
Total | $ 18,483 | |
Term Loan | ||
Annual principal payments | ||
2,019 | 6,667 | |
2,020 | 10,000 | |
2,021 | 5,333 | |
Total | 22,000 | |
Less unamortized debt issuance costs and final payment | (1,850) | |
Total | 20,150 | |
Term Loan | Co-Borrowers | ||
Debt | ||
Borrowing amount | $ 20,000 | |
Final payment at maturity if term loan is repaid after after interest-only period | 2,000 | |
Final payment if term loan is repaid during the interest-only period | $ 600 | |
Percentage of outstanding loan principal amount for calculation of prepayment charge | 4.00% | |
Debt issuance costs | 38,000 | |
Carrying value of debt amount due within 12 months | 1,700 | |
Carrying value of debt amount due in greater then 12 months | 18,500 | |
Annual principal payments | ||
Total | $ 20,200 | |
Term Loan | Co-Borrowers | WSJ prime rate | ||
Debt | ||
Variable reference rate | prime rate | |
Basis points spread over variable reference rate | 1.25% |
Commitments and contingencies (
Commitments and contingencies (Details) | May 22, 2018USD ($)ft² | Mar. 22, 2018item | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Office Lease | ||||||
Number of options to renewal the lease | item | 1 | |||||
Renewal period of lease | 5 years | |||||
Tenant improvement allowance | $ 264,090 | $ 264,090 | ||||
Tenant allowance utilized | 0 | 0 | ||||
Rent expense | 71,600 | $ 0 | 177,000 | $ 0 | ||
Future rental payments | ||||||
Remainder period of 2018 | 152,000 | 152,000 | ||||
2,019 | 310,000 | 310,000 | ||||
2,020 | 104,000 | 104,000 | ||||
Purchase agreement | Eisai | ||||||
Purchase commitments | ||||||
Remainder of 2018 | 1,800,000 | 1,800,000 | ||||
2,019 | $ 1,300,000 | $ 1,300,000 | ||||
Property at 240 Leigh Farm Road, Office Space | Pine Forest 240 TT, LLC. | ||||||
Office Lease | ||||||
Leased office space | ft² | 21,745 | |||||
Existing Office Space | Paidian Research, Inc. | ||||||
Office Lease | ||||||
Leased office space | ft² | 14,378 | |||||
Annual lease rent expense | $ 387,774 | |||||
Monthly lease rent expenses | $ 32,315 | |||||
Percentage of annual increase in lease rental expenses | 2.70% | |||||
Suite 200 office space | Pine Forest 240 TT, LLC. | ||||||
Office Lease | ||||||
Leased office space | ft² | 1,961 | |||||
Annual lease rent expense | $ 51,476 | |||||
Monthly lease rent expenses | $ 4,290 | |||||
Percentage of annual increase in lease rental expenses | 2.70% | |||||
Suite 215 office space | Pine Forest 240 TT, LLC. | ||||||
Office Lease | ||||||
Leased office space | ft² | 5,406 | |||||
Annual lease rent expense | $ 145,800 | |||||
Monthly lease rent expenses | $ 12,150 | |||||
Percentage of annual increase in lease rental expenses | 2.70% |
Income taxes (Details)
Income taxes (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 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 | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Employee benefit plan | ||||
Employer matching contribution, as a percent of employee contribution | 50.00% | |||
Defined Contribution Plan, Employer Matching Contribution, Aggregate Amount | $ 72,000 | $ 0 | $ 109,000 | $ 0 |
Maximum | ||||
Employee benefit plan | ||||
Employer matching contribution, as a percent of employee gross pay | 4.00% |