Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover Abstract | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38670 | |
Entity Registrant Name | Entasis Therapeutics Holdings Inc. | |
Entity Central Index Key | 0001724344 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4592913 | |
Entity Address, Address Line One | 35 Gatehouse Drive | |
Entity Address, City or Town | Waltham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02451 | |
City Area Code | 781 | |
Local Phone Number | 810-0120 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | ETTX | |
Security Exchange Name | NASDAQ | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,310,254 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 44,937 | $ 53,247 |
Grants receivable | 2,559 | 1,890 |
Prepaid expenses | 2,711 | 4,160 |
Other current assets | 1,338 | 835 |
Total current assets | 51,545 | 60,132 |
Property and equipment, net | 205 | 222 |
Operating lease right-of-use assets | 1,012 | 1,141 |
Other assets | 63 | 63 |
Total assets | 52,825 | 61,558 |
Current liabilities: | ||
Accounts payable | 434 | 660 |
Accrued expenses and other current liabilities | 7,599 | 7,905 |
Total current liabilities | 8,033 | 8,565 |
Operating lease liabilities, net of current portion | 535 | 704 |
Total liabilities | 8,568 | 9,269 |
Commitments (Notes 4 and 10) | ||
Stockholders' equity: | ||
Common stock, par value $0.001; 125,000,000 shares authorized and 37,310,254 and 36,637,357 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 38 | 37 |
Additional paid-in capital | 239,375 | 236,707 |
Accumulated deficit | (195,156) | (184,455) |
Total stockholders' equity | 44,257 | 52,289 |
Total liabilities and stockholders' equity | $ 52,825 | $ 61,558 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock par value (in dollar per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock issued (in shares) | 37,310,254 | 36,637,357 |
Common stock outstanding (in shares) | 37,310,254 | 36,637,357 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating expenses: | ||
Research and development | $ 9,370 | $ 11,623 |
General and administrative | 3,307 | 3,780 |
Total operating expenses | 12,677 | 15,403 |
Loss from operations | (12,677) | (15,403) |
Other income: | ||
Grant income | 1,972 | 13 |
Interest income | 4 | 124 |
Total other income | 1,976 | 137 |
Net loss | $ (10,701) | $ (15,266) |
Net loss per share-basic and diluted | $ (0.29) | $ (1.15) |
Weighted average common stock outstanding-basic and diluted (in shares) | 37,078,478 | 13,291,563 |
Other comprehensive loss: | ||
Net loss | $ (10,701) | $ (15,266) |
Net unrealized gain on investments held | 28 | |
Comprehensive loss | $ (10,701) | $ (15,238) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 13 | $ 176,103 | $ (133,959) | $ 42,157 | |
Balance (in shares) at Dec. 31, 2019 | 13,291,563 | ||||
Stock-based compensation expense | 785 | 785 | |||
Unrealized gain on investments held | $ 28 | 28 | |||
Net loss | (15,266) | (15,266) | |||
Balance at Mar. 31, 2020 | $ 13 | 176,888 | $ 28 | (149,225) | 27,704 |
Balance (in shares) at Mar. 31, 2020 | 13,291,563 | ||||
Balance at Dec. 31, 2020 | $ 37 | 236,707 | (184,455) | 52,289 | |
Balance (in shares) at Dec. 31, 2020 | 36,637,357 | ||||
Stock-based compensation expense | 869 | 869 | |||
Exercise of warrants | $ 1 | 1,799 | 1,800 | ||
Exercise of warrants (in shares) | 672,897 | ||||
Net loss | (10,701) | (10,701) | |||
Balance at Mar. 31, 2021 | $ 38 | $ 239,375 | $ (195,156) | $ 44,257 | |
Balance (in shares) at Mar. 31, 2021 | 37,310,254 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (10,701) | $ (15,266) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 28 | 37 |
Stock-based compensation expense | 869 | 785 |
Amortization and accretion of investments | (27) | |
Changes in operating assets and liabilities: | ||
Grants receivable | (669) | 331 |
Prepaid expenses | 1,449 | 1,628 |
Other assets | (374) | 1,032 |
Accounts payable | (226) | (154) |
Accrued expenses and other liabilities | (475) | (1,934) |
Net cash used in operating activities | (10,099) | (13,568) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (11) | |
Proceeds from maturities of short-term investments | 15,000 | |
Net cash (used in) provided by investing activities | (11) | 15,000 |
Cash flows from financing activities: | ||
Proceeds from the exercise of warrants | 1,800 | |
Payments of financing costs | (16) | |
Net cash provided by (used in) financing activities | 1,800 | (16) |
Net (decrease) increase in cash and cash equivalents | (8,310) | 1,416 |
Cash and cash equivalents at beginning of the year | 53,247 | 16,034 |
Cash and cash equivalents at end of the year | $ 44,937 | 17,450 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Deferred financing costs included in accrued expenses and current liabilities | $ 166 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business Entasis Therapeutics Holdings Inc., or Entasis, or the Company, is an advanced, clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of targeted antibacterial products that address high unmet medical needs to treat serious infections caused by multidrug-resistant pathogens. The Company has four subsidiaries: Entasis Therapeutics Limited; Entasis Therapeutics Inc.; Entasis Therapeutics Security Corporation; and Entasis Therapeutics (Ireland) Limited. On April 12, 2020, the Company entered into a securities purchase agreement, or the First Securities Purchase Agreement, with Innoviva Inc., or Innoviva, pursuant to which the Company issued and sold to Innoviva, in a private placement, 14,000,000 newly issued shares of common stock of the Company at $2.50 per share, and warrants to purchase up to 14,000,000 shares of common stock with an exercise price per share of $2.50, resulting in an aggregate gross purchase price of approximately $35.0 million, collectively, the First Private Placement. As a result of the transaction, Innoviva acquired control of the Company, owning approximately 51.3% of the Company’s common stock without giving effect to the potential exercise of its warrants. On August 27, 2020, the Company entered into another securities purchase agreement, or the Second Securities Purchase Agreement, with the purchasers named therein, or the Investors, which included existing stockholder Innoviva. Pursuant to the Second Securities Purchase Agreement, the Company issued and sold to the Investors in a private placement (i) 8,183,878 newly issued shares of common stock of the Company at $2.675 per share, (ii) warrants to purchase an aggregate of 9,345,794 shares of common stock with an exercise price of $2.675, and (iii) pre-funded warrants, in lieu of common stock, to purchase an aggregate of 1,161,916 shares of common stock with an exercise price of $0.001 per share, resulting in aggregate gross proceeds of approximately $25.0 million, which is referred to collectively as the Second Private Placement. The closing of the Second Private Placement occurred on September 1, 2020. As a result of the transaction, Innoviva owned approximately Risks and Uncertainties As of March 31, 2021, the Company had $44.9 million in cash and cash equivalents, and an accumulated deficit of $195.2 million. Since its inception through March 31, 2021, the Company has funded its operations primarily with proceeds from the sale of preferred stock, common stock, warrants and pre-funded warrants. The Company also has either directly received funding or financial commitments from, or has had its program activities conducted and funded by, United States government agencies, non-profit entities and the collaboration agreement with Zai Lab (Shanghai), Co., Ltd., or Zai Lab. In the absence of positive cash flows from operations, the Company is highly dependent on its ability to find additional sources of funding in the form of debt, equity financing, strategic collaborations, or partnerships. If the Company raises additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, it may be required to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable. If the Company is unable to raise additional funds through equity or debt financings when needed, it may be required to delay, limit, reduce or terminate drug development or future commercialization efforts or grant rights to a third party to develop and market product candidates. The Company’s failure to raise capital as and when needed would compromise its ability to pursue its business strategy. As discussed further in Note 12, Subsequent Events As a clinical-stage company, Entasis is subject to a number of risks common to other life science companies, including, but not limited to, raising additional capital, development by its competitors of new technological innovations, risk of failure in preclinical and clinical studies, safety and efficacy of its product candidates in clinical trials, the risk of relying on external parties such as contract research organizations and contract manufacturing organizations, the regulatory approval process, market acceptance of the Company’s products once approved, lack of marketing and sales history, dependence on key personnel and protection of proprietary technology. The Company’s therapeutic programs are currently pre-commercial, spanning discovery through late-stage development and will require additional research and development efforts, including the completion of Phase 3 registration trials and regulatory approval, prior to commercialization of any product candidates. These efforts require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company may never achieve profitability, and unless and until it does, it will continue to need to raise additional capital or obtain financing from other sources, such as strategic collaborations or partnerships. The COVID-19 pandemic has, and will likely continue to have, a significant impact on the U.S. economy and businesses. The pandemic also has taxed healthcare systems both in the U.S. and around the world, resulting in disruption to or temporary suspension of certain clinical trials. The nature, extent and duration of the COVID-19 pandemic remains uncertain. Although vaccines are now being administered around the world, the time needed for businesses and healthcare systems to recover from the disruptions caused, and changes needed by businesses to adopt new working conditions remains unknown. The full impact of the pandemic on the economy, including the capital markets, remains uncertain. The prolonged adverse economic conditions could limit the Company’s access to financial resources from the capital markets and other sources. It is not possible to predict the full impact of the COVID-19 pandemic on the Company’s business and access to capital in the future. Although the Company has continued to enroll patients in the SUL-DUR phase 3 registration trial, or ATTACK trial, some clinical sites in high COVID-19 impact areas continue to experience disruptions in new patient enrollment due to redirection of resources as dictated by local conditions. Furthermore, from March 2020 to June 2020, Global Antibiotic Research and Development Partnership, or GARDP, with the Company’s full agreement, had temporarily paused patient enrollment into the zoliflodacin Phase 3 registration trial at U.S. sites and activation of new clinical trial sites in ex-U.S. regions. Although the trial resumed enrollment and site activation activities in July 2020, further disruptions may occur in the future if there are continued resurgences of the pandemic. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2020 and the notes thereto, which are included in the Company’s most recent Annual Report on Form 10-K. Since the date of those consolidated financial statements, there have been no material changes to its significant accounting policies. Basis of Presentation and Consolidation The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The December 31, 2020 consolidated balance sheet was derived from audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission, or SEC, on March 23, 2021. The interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. The accompanying consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or any other future year or period. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the recognition of revenue and the recognition of certain development costs. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. Recently Adopted Accounting Pronouncements Effective January 1, 2021, the Company adopted the provisions of FASB ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments The following tables set forth the Company’s assets that were accounted for at fair value on a recurring basis: March 31, 2021 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 44,128 $ — $ — $ 44,128 Total $ 44,128 $ — $ — $ 44,128 December 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 49,125 $ — $ — $ 49,125 Total $ 49,125 $ — $ — $ 49,125 The Company classifies its money market funds and U.S. Treasury securities as Level 1 assets under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets without any valuation adjustment. The carrying amounts of the Company’s cash equivalents, grants receivable, accounts payable and accrued expenses approximate their fair value due to the short-term nature of these amounts. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases | |
Leases | 4. Leases During the three months ended March 31, 2021 and 2020, the Company recorded lease expense of $0.2 million. See Note 11, Related Party Transactions, In calculating the present value of future lease payments, the Company utilized its incremental borrowing rate based on the remaining lease term at the date of adoption. One lease contains a renewal option that can extend the lease for three years. Because the Company is not reasonably certain to exercise this renewal option, the option is not considered in determining the lease term, and associated potential additional payments are excluded from lease payments. The Company elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. The Company has existing net leases in which the non-lease components (e.g., common area maintenance) are paid separately from rent based on actual costs incurred and therefore are not included in the operating lease right-of-use assets and lease liabilities and are reflected as an expense in the period incurred. The following table summarizes the presentation of the Company’s operating leases in its consolidated balance sheets (in thousands): As of As of March 31, 2021 December 31, 2020 Assets Operating lease right-of-use assets $ 1,012 $ 1,141 Liabilities Operating lease liabilities, current $ 638 $ 617 Operating lease liabilities, net of current portion 535 704 Total operating lease liabilities $ 1,173 $ 1,321 Future minimum lease payments under non-cancelable leases were as detailed below (in thousands): Fiscal Year As of March 31, 2021 2021 (remaining 9 months) $ 537 2022 737 2023 1 Total undiscounted lease payments 1,275 Less: imputed interest (102) Total operating lease liabilities $ 1,173 As of March 31, 2021, the weighted average remaining lease term was 1.8 years and the weighted-average incremental borrowing rate used to determine the operating lease right-of-use assets was 9.1%. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Expenses and Other Current Liabilities. | |
Accrued Expenses and Other Current Liabilities | 5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): As of As of Accrued compensation and benefits $ 1,483 $ 2,935 Accrued contract manufacturing 3,875 2,959 Accrued clinical 543 504 Accrued professional services 583 435 Accrued research 337 349 Current portion of operating lease liabilities 638 617 Other 140 106 Total accrued expenses and other current liabilities $ 7,599 $ 7,905 |
Funding Arrangements
Funding Arrangements | 3 Months Ended |
Mar. 31, 2021 | |
Funding Arrangements | |
Funding Arrangements | 6. Funding Arrangements NIH In June 2020, the Company entered into a contract, or NIH Contract, with the National Institute of Allergy and Infectious Diseases, or NIAID, part of the National Institutes of Health, or NIH, which was effective beginning July 1, 2020 and provides the Company with reimbursement of certain qualified expenses incurred The initial award consists of approximately , with the potential to increase up to , and will be used to develop novel molecules from the Company’s non-β-lactam inhibitor, or NBP, platform. Funding from the contract will support research towards developing molecules with expanded Gram-negative spectrum against antibiotic resistant bacterial pathogens including E. coli, Acinetobacter, Pseudomonas and Klebsiella . The contract will be accounted for in a way that is consistent with the Company’s Government Contracts and Grant Agreements accounting policy. Summary of Significant Accounting Policies - Government Contracts and Grant Agreements Annual Report on Form 10-K filed with the SEC on March 23, 2021 The Company recognized grant income in connection with the NIH contract of $0.7 million during the three months ended March 31, 2021 and no grant income during the three months ended March 31, 2020. As of March 31, 2021, the Company’s receivables for unreimbursed, eligible costs incurred under the NIH contract totaled $0.8 million, including both billed and unbilled amounts. CARB-X In March 2017 and October 2017, the Company entered into funding arrangements with the Trustees of Boston University to utilize funds from the U.S. government through the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, or CARB-X, program, in support of the Company’s ETX0282CPDP and ETX0462 programs. The amount of specified research expenditures of the Company that could be covered is $18.5 million from April 2017 through May 2023. Through March 31, 2021, the Company has received $10.2 million in payments and recorded $11.6 million of grant income under these funding arrangements. The remaining $8.3 million that could be received is related to the Company’s ETX0462 program. The Company recognized grant income in connection with the CARB-X agreements of $1.3 million and $13,000 during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, the Company’s receivables for unreimbursed, eligible costs incurred under the CARB-X agreements totaled $1.7 million and $1.1 million, respectively, including both billed and unbilled amounts. |
License and Collaboration Agree
License and Collaboration Agreements | 3 Months Ended |
Mar. 31, 2021 | |
License and Collaboration Agreements | |
License and Collaboration Agreements | 7. License and Collaboration Agreements GARDP In July 2017, the Company entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership, or GARDP, for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries. Under the terms of the collaboration agreement, GARDP will use commercially reasonable endeavors to perform and fully fund the Phase 3 registration trial, including the manufacture and supply of the product candidate containing zoliflodacin, in uncomplicated gonorrhea. The Phase 3 registration trial was initiated in September 2019 with activation of U.S. sites. In March 2020, in response to the COVID-19 pandemic, GARDP, with the Company’s full agreement, had temporarily paused patient enrollment at U.S. sites and activation of new clinical trial sites in ex-U.S. regions. In July 2020, GARDP resumed patient enrollment into the Phase 3 registration trial at U.S. sites and activated new clinical trial sites in the Netherlands, Thailand and South Africa . In addition, under the collaboration agreement, the Company has granted GARDP a worldwide, fully paid, exclusive and royalty-free license, with the right to sublicense, to use its zoliflodacin technology in connection with GARDP’s development, manufacture and commercialization of zoliflodacin in low-income and specified middle-income countries. The Company has retained commercial rights in all other countries worldwide, including the major markets in North America, Europe and Asia-Pacific. The Company has also retained the right to use and grant licenses to its zoliflodacin technology to perform its obligations under the collaboration agreement and for any purpose other than gonorrhea or community-acquired indications. If the Company believes that the results of the Phase 3 registration trial of zoliflodacin would be supportive of an application for marketing approval, it is obligated to use its best efforts to file an application for marketing approval with the FDA within six months of the completion of the trial and to use commercially reasonable endeavors to file an application for marketing approval with the EMA. Each party is responsible for using commercially reasonable efforts to obtain marketing authorizations for the product candidate in their respective territories. Zai Lab In April 2018, the Company entered into a license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd., or Zai Lab, pursuant to which Zai Lab licensed exclusive rights to durlobactam and sulbactam-durlobactam, or SUL-DUR, in the Asia-Pacific region, or the Zai Agreement. Under the terms of the Zai Agreement, Zai Lab will fund most of the Company’s clinical trial costs in China for SUL-DUR, including all costs in China for the Company’s Phase 3 registration trial of SUL-DUR, with the exception of Phase 3 patient drug supply. Zai Lab will conduct development activities and plan and obtain regulatory approval in a specified number of countries in the Asia-Pacific region beyond China after regulatory approval of a licensed product in China. Zai Lab is also solely responsible for commercializing licensed products in the Asia-Pacific region and will commercialize licensed products for which it has obtained regulatory approval. The Company is obligated to supply Zai Lab with the licensed products for clinical development, although Zai Lab may take over manufacturing responsibilities for its own commercialization activities within a specified time period following the effective date of the Zai Agreement. The Company received an upfront, non-refundable payment of $5.0 million, milestone payments of $7.0 million, research support funding of $0.6 million and certain other reimbursable registration trial costs of $4.2 million, less applicable taxes of $2.1 million, from Zai Lab through March 31, 2021. During the three months ended March 31, 2021 and 2020, the Company recognized no revenue under the Zai Agreement. The Company is eligible to receive up to an aggregate of $91.0 million in additional research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products. Zai Lab will pay the Company a tiered royalty equal from a high-single digit to low-double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. Payments received for research support and reimbursable clinical trial costs are recorded as an offset to research and development expense during the period in which the qualifying expenses are incurred. The Company determined the $5.0 million non-refundable upfront payment was the entire transaction price at the outset of the Zai Agreement. All other future potential milestone payments were excluded from the transaction price as they were fully constrained as the risk of significant reversal of revenue had not yet been resolved. At the outset of the Zai Agreement, the achievement of the future potential milestones was not within the Company’s control and was subject to certain research and development success, regulatory approvals or commercial success and therefore carried significant uncertainty. The Company reevaluates the likelihood of achieving the future milestones at the end of each reporting period. Future development milestone revenue from the arrangement will be recognized as revenue in the period when it is no longer probable that revenue attributable to the milestone will result in a significant reversal of cumulative revenue. Payments received for research support and reimbursable clinical trial costs are recorded as an offset to research and development expense during the period in which the qualifying expenses are incurred. The Company evaluated the Zai Agreement under Topic 606 and identified two material promises: (1) an exclusive license to develop, manufacture and commercialize products containing durlobactam or SUL-DUR in the territory and (2) the initial technology transfer of licensed know-how. The Company determined that the exclusive license and initial technology transfer were not distinct from one another, as the license has limited value without the transfer of the Company’s technology and Zai Lab would incur additional costs to recreate the Company’s know-how. Therefore, the license and initial technology transfer were combined as a single performance obligation |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation Expense | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity and Stock-Based Compensation Expense | |
Stockholders' Equity and Stock-Based Compensation Expense | 8. Stockholders’ Equity and Stock-Based Compensation Expense Second Private Placement On August 27, 2020, the Company entered into the Second Securities Purchase Agreement with the Investors, including existing stockholder Innoviva, pursuant to which the Company issued and sold to the Investors in a private placement (i) 8,183,878 newly issued shares of common stock of the Company at $2.675 per share, (ii) warrants to purchase an aggregate of 9,345,794 shares of common stock with and exercise price of $2.675, and (iii) pre-funded warrants, in lieu of common stock, to purchase an aggregate of 1,161,916 shares of common stock, with an exercise price of $0.001 per share, resulting in aggregate gross proceeds of approximately $25.0 million. The closing of the Second Private Placement occurred on September 1, 2020. The exercise price and the number of shares of common stock issuable upon exercise of each warrant is subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock. Each warrant is exercisable from the date of issuance and has a term of five years. First Private Placement On April 12, 2020, the Company entered into the First Securities Purchase Agreement with Innoviva, pursuant to which the Company issued and sold to Innoviva 14,000,000 newly issued shares of common stock of the Company at $2.50 per share, and warrants to purchase up to 14,000,000 shares of common stock with an exercise price per share of $2.50. Under the First Securities Purchase Agreement, the First Private Placement occurred in two tranches. At the closing of the first tranche, which occurred on April 22, 2020, Innoviva purchased 1,322,510 shares of common stock and warrants to purchase 1,322,510 shares of common stock, for an aggregate gross purchase price of approximately $3.3 million. At the closing of the second tranche, which occurred on June 11, 2020, Innoviva purchased the remaining 12,677,490 shares of common stock and warrants to purchase 12,677,490 shares of the common stock for an aggregate gross purchase price of approximately $31.7 million. As a result of the closing of both the First Private Placement and the Second Private Placement, Innoviva owned approximately 52.6% of the Company’s outstanding common stock without the exercise of the warrants. Investor Rights Agreement At the First Closing, Innoviva and the Company entered into an investors rights agreement, or the Investor Rights Agreement, which provides that for so long as Innoviva and its affiliates hold at least 15% of the outstanding shares of the Company’s common stock on a fully-diluted basis, Innoviva shall have the right to designate two directors to the board of directors of the Company, or the Board; and for so long as Innoviva and its affiliates hold at least 8% of the outstanding shares of the Company’s common stock on a fully-diluted basis, Innoviva shall have the right to designate one director to the Board, subject to certain qualifications and conditions in the Investor Rights Agreement. The Investor Rights Agreement also provides for participation rights for Innoviva to participate pro rata in future offerings of securities by the Company. Warrants As of March 31, 2021, outstanding warrants to purchase shares of the Company’s common stock are as follows: Shares Underlying Outstanding Warrants Exercise Price Expiration Date 1,322,510 $ 2.50 April 22, 2025 12,677,490 $ 2.50 June 11, 2025 8,672,897 $ 2.675 September 1, 2025 22,672,897 Aspire Common Stock Purchase Agreement In October 2019, the Company entered into a common stock purchase agreement, or CSPA, with Aspire Capital Fund, LLC, or Aspire, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire is committed to purchase up to an aggregate of $20.0 million of shares of the Company’s common stock over the 30-month term of the CSPA. Under the CSPA, on any trading day selected by the Company on which the closing price of its common stock is equal to or greater than $0.25 per share, the Company has the right, in its sole discretion, to present Aspire with a purchase notice directing Aspire to purchase up to 50,000 shares of common stock per business day, at a purchase price equal to the lesser of the lowest sale price of common stock on the purchase date, or the arithmetic average of the three lowest closing sale prices during the 10 consecutive business days ending on the trading day immediately preceding the purchase date. The Company and Aspire also may mutually agree to increase the number of shares that may be sold to as much as 2,000,000 shares per business day. In addition, on any date on which the Company submits a purchase notice to Aspire in an amount equal to 50,000 shares, the Company also has the right, in its sole discretion, to present Aspire with a volume-weighted average price purchase notice, or the VWAP Purchase Notice, directing Aspire to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day, or the VWAP Purchase Date, subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. Under the CSPA, the Company controls the timing and amount of any sales to Aspire, and is not limited with respect to use of proceeds or by any financial or business covenants, restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the CSPA. The CSPA may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire has no trading volume requirements or restrictions and has no right to require any sales by the Company but is obligated to make purchases as directed by the Company in accordance with the CSPA. Aspire has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of common stock during any time prior to the termination of the CSPA. The CSPA further provides that the number of shares that may be sold pursuant to the CSPA will be limited to 2,626,165 shares, including 104,167 shares of common stock issued to Aspire as a commitment fee, which represented 19.99% of the Company’s outstanding shares of common stock as of October 21, 2019, unless stockholder approval is obtained to issue more than 19.99%. This limitation will not apply under certain circumstances specified in the CSPA. We have not sold any shares to Aspire pursuant to the CSPA during the quarter ended March 31, 2021 and there is $19.7 million remaining available under the arrangement. Stock Incentive Plans In September 2018, the Company’s board of directors adopted, and its stockholders approved the 2018 Equity Incentive Plan, or the 2018 Plan, which became effective on September 25, 2018, at which point no further grants will be made under the 2015 Stock Incentive Plan, or the 2015 Plan. In June 2020, the Board adopted, and its stockholders approved an amendment to the 2018 Plan, to increase the number of shares available for stock-based awards by 500,000. Under the 2018 Plan, the Company may grant incentive stock options, or ISOs, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. As of March 31, 2021, stock options to purchase an aggregate of 3,735,759 shares had been granted, restricted stock units, or RSUs, of 904,600 had been awarded, and 1,421,657 shares were available for future issuance under the 2018 Plan, as amended. The options issued under the 2018 Plan expire after 10 years from the grant date. At its inception, the aggregate number of shares of the Company’s common stock available for issuance under the 2018 Plan was 2,350,000. The number of shares of the Company’s common stock reserved for issuance under the 2018 Plan automatically increases on January 1 of each year, for a period of 10 years, from January 1, 2019 continuing through January 1, 2028, 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 Board. Accordingly, on January 1, 2021 and 2020, 1,465,494 and 531,662 shares were added to the number of available shares, respectively. The maximum number of shares that may be issued pursuant to the exercise of ISOs under the 2018 Plan is 7,500,000. The maximum number of shares of the Company’s common stock subject to awards granted under the 2018 Plan or otherwise during a single calendar year to any nonemployee director, taken together with any cash fees paid by the Company to such nonemployee director during the calendar year for serving on the Board, will not exceed $500,000 in total value, or, with respect to the calendar year in which a nonemployee director is first appointed or elected to the Company’s board of directors, $800,000. As of September 25, 2018, no additional stock awards have been or will be granted under the 2015 Plan. Although the 2015 Plan was terminated as to future awards in September 2018, it continues to govern the terms of options that remain outstanding under the 2015 Plan. Stock Option Activity Stock option activity under both plans during the three months ended March 31, 2021 is summarized as follows: Weighted- Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value (in thousands) Outstanding as of December 31, 2020 3,112,704 $ 5.58 7.76 $ 44 Granted 15,250 2.79 Forfeited (78,597) 3.29 Outstanding as of March 31, 2021 3,049,357 $ 5.62 7.64 $ 19 Exercisable as of March 31, 2021 1,764,848 $ 5.72 7.05 $ — The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. During the three months ended March 31, 2021, the weighted-average grant date fair value per granted option was $1.95. Restricted Stock Unit Activity During the first quarter of 2021, the Company granted 509,500 RSUs to executives, of which 254,750 contained a performance condition. As of March 31, 2021, the performance condition was not probable of being met. Restricted stock unit activity for the three months ended March 31, 2021 is summarized as follows: Weighted- Average Number of Grant Date Units Fair Value Outstanding as of December 31, 2020 395,100 $ 1.65 Granted 509,500 2.64 Forfeited (42,900) 1.65 Outstanding as of March 31, 2021 861,700 $ 2.24 Employee Stock Purchase Plan In September 2018, the Company’s board of directors and its stockholders approved the 2018 Employee Stock Purchase Plan, or the ESPP, which became effective as of September 25, 2018. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the U.S. Internal Revenue Code of 1986, as amended. The number of shares of common stock initially reserved for issuance under the ESPP was 140,000 shares. The ESPP provides for an annual increase on the first day of each year beginning in 2019 and ending in 2028, in each case subject to the approval of the board of directors, equal to the lesser of (i) 1% of the shares of common stock outstanding on the last day of the prior fiscal year or (ii) 250,000 shares; provided, that prior to the date of any such increase, the board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Pursuant to the terms of the 2018 Employee Stock Purchase Plan, an additional 250,000 and 132,915 shares were added to the number of available shares effective January 1, 2021 and 2020, respectively. As of March 31, 2021, no shares of common stock had been issued under the ESPP and 654,163 shares remained available for future issuance under the ESPP. No offering period under the ESPP has been set by the Company’s board of directors. Stock-Based Compensation Stock-based compensation expense was classified in the consolidated statement of operations as follows (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 421 $ 349 General and administrative 448 436 Total stock-based compensation expense $ 869 $ 785 The following table summarizes stock-based compensation by type of award (in thousands): Three Months Ended March 31, 2021 2020 Stock options $ 665 $ 785 Restricted stock units 204 — Total stock-based compensation expense $ 869 $ 785 For the three months ended March 31, 2021, the restricted stock units performance obligation was not probable of being met, and as such no expense was recognized. The following table summarizes unrecognized stock-based compensation expense as of March 31, 2021, by type of awards, and the weighted-average period over which that expense is expected to be recognized. The total unrecognized stock-based compensation expense will be adjusted for actual forfeitures as they occur. As of March 31, 2021 Unrecognized Expense Weighted-average Recognition Period (in thousands) (in years) Stock options $ 4,551 2.23 Restricted stock units $ 998 1.56 |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2021 | |
Net Loss per Share | |
Net Loss per Share | 9. Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options and warrants, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following outstanding securities have been excluded from the computation of diluted weighted average shares outstanding for the three months ended March 31, 2021 and 2020, as they would have been anti-dilutive: As of March 31, 2021 2020 Options to purchase shares of common stock 3,049,357 3,216,500 Warrants to purchase shares of common stock 22,672,897 — Unvested restricted stock units 861,700 — 26,583,954 3,216,500 |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Commitments | |
Commitments | 10. Commitments Lease Commitments The Company has an operating lease agreement for its office and laboratory space with AstraZeneca. See Note 4, Leases AstraZeneca Subscription Agreement In connection with the Company’s 2015 spin-out from AstraZeneca, the Company entered into a business transfer and subscription agreement with AstraZeneca pursuant to which the Company agreed to pay AstraZeneca a one-time milestone payment of $5.0 million within three months of achieving a specified cumulative net sales milestone for durlobactam. This milestone payment will be automatically waived should the Company’s common stock trade on The Nasdaq Global Market at or above a specified price at any time prior to achieving such specified cumulative net sales milestone for durlobactam. The Company is also obligated to pay AstraZeneca a one-time milestone payment of $10.0 million within two years of achieving the first commercial sale of zoliflodacin. At the Company’s election, either milestone payment may be paid in cash, common stock, or a combination of cash and common stock. Additionally, the Company is obligated to pay AstraZeneca tiered, single-digit, per-country royalties on the annual worldwide net sales of durlobactam and zoliflodacin. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 11. Related Party Transactions AstraZeneca The Company was formed in May 2015 as a wholly owned subsidiary of AstraZeneca. Prior to the closing of the initial public offering on September 28, 2018, AstraZeneca was the sole series A preferred stockholder. Upon the closing of the initial public offering, all shares of preferred stock were converted into shares of common stock of the Company. AstraZeneca continues to maintain an ownership interest in the Company. The Company has an operating lease agreement for its office and laboratory space with AstraZeneca. See Note 4, Leases, Pharmaron Beijing Co., Ltd. (China) The Company contracts with Pharmaron Beijing Co., Ltd. (China), or Pharmaron, to provide various medicinal chemistry research, manufacturing development and clinical services related to the Company’s ongoing product candidates. The Company began utilizing Pharmaron as a service provider prior to the spin-out in 2015 (see Note 1, Organization and Description of Business, |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events Securities Purchase Agreement On May 3, 2021, the Company entered into a securities purchase agreement, or the Securities Purchase Agreement, with a subsidiary of Innoviva, Inc., or Innoviva, pursuant to which the Company agreed to issue and sell to Innoviva, in a private placement under the applicable Nasdaq Stock Market LLC, or Nasdaq, rules up to 10,000,000 newly issued shares of common stock, par value $0.001 per share, of the Company, or the Common Stock, and warrants, or the Common Warrants, to purchase up to 10,000,000 shares of common stock, each with an exercise price per share of $2.00, collectively the Private Placement. The Common Warrants will be exercisable immediately and will have a five-year term. Each share of Common Stock and Common Warrant, or together, the Common Unit, will be issued and sold together to Innoviva at a price per Common Unit of $2.00. Under the Securities Purchase Agreement, the Private Placement will occur in two tranches. At the closing of the first tranche, or the First Closing, which occurred on May 3, 2021, Innoviva purchased 3,731,025 shares of the Common Stock and the Common Warrants to purchase 3,731,025 shares of common stock, for an aggregate purchase price of approximately $7.5 million. At the closing of the second tranche, or the Second Closing, subject to satisfaction of certain closing conditions, Innoviva will purchase the remaining shares of the Common Stock and Common Warrants, which is anticipated to be 6,268,975 shares of the Common Stock and the Common Warrants to purchase 6,268,975 shares of common stock for an aggregate purchase price of approximately $12.5 million. The Company expects to receive aggregate gross proceeds from the Private Placement of $20.0 million, before deducting transaction expenses, and excluding proceeds (if any) received in connection with the exercise of any of the Common Warrants. At the effective time of the Second Closing, assuming the exercise of all of the Common Warrants, Innoviva will hold approximately 75.5% of the Company’s outstanding common stock. The Securities Purchase Agreement contains customary representations and warranties as well as certain operating covenants applicable to the Company until the Second Closing. The Second Closing is expected to occur in the second quarter of 2021, subject to the satisfaction of certain closing conditions referenced above. Registration Rights Agreements At the First Closing, the Company and Innoviva entered into a registration rights agreement, or the Registration Rights Agreement, pursuant to which, among other things, the Company must prepare and file with the SEC a registration statement with respect to resales of the shares of the Common Stock and the Common Warrants purchased by Innoviva under the Securities Purchase Agreement within 30 days of the First Closing. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The December 31, 2020 consolidated balance sheet was derived from audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission, or SEC, on March 23, 2021. The interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. The accompanying consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or any other future year or period. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the recognition of revenue and the recognition of certain development costs. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2021, the Company adopted the provisions of FASB ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value of Financial Instruments | |
Schedule of assets that were accounted for at fair value on recurring basis | March 31, 2021 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 44,128 $ — $ — $ 44,128 Total $ 44,128 $ — $ — $ 44,128 December 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 49,125 $ — $ — $ 49,125 Total $ 49,125 $ — $ — $ 49,125 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases | |
Schedule of operating lease balance sheet information | The following table summarizes the presentation of the Company’s operating leases in its consolidated balance sheets (in thousands): As of As of March 31, 2021 December 31, 2020 Assets Operating lease right-of-use assets $ 1,012 $ 1,141 Liabilities Operating lease liabilities, current $ 638 $ 617 Operating lease liabilities, net of current portion 535 704 Total operating lease liabilities $ 1,173 $ 1,321 |
Schedule of future lease payments | Future minimum lease payments under non-cancelable leases were as detailed below (in thousands): Fiscal Year As of March 31, 2021 2021 (remaining 9 months) $ 537 2022 737 2023 1 Total undiscounted lease payments 1,275 Less: imputed interest (102) Total operating lease liabilities $ 1,173 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accrued Expenses and Other Current Liabilities. | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): As of As of Accrued compensation and benefits $ 1,483 $ 2,935 Accrued contract manufacturing 3,875 2,959 Accrued clinical 543 504 Accrued professional services 583 435 Accrued research 337 349 Current portion of operating lease liabilities 638 617 Other 140 106 Total accrued expenses and other current liabilities $ 7,599 $ 7,905 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity and Stock-Based Compensation Expense | |
Summary of outstanding warrants to purchase shares of common stock | As of March 31, 2021, outstanding warrants to purchase shares of the Company’s common stock are as follows: Shares Underlying Outstanding Warrants Exercise Price Expiration Date 1,322,510 $ 2.50 April 22, 2025 12,677,490 $ 2.50 June 11, 2025 8,672,897 $ 2.675 September 1, 2025 22,672,897 |
Summary of Stock option activity under the 2015 and 2018 Plan | Weighted- Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value (in thousands) Outstanding as of December 31, 2020 3,112,704 $ 5.58 7.76 $ 44 Granted 15,250 2.79 Forfeited (78,597) 3.29 Outstanding as of March 31, 2021 3,049,357 $ 5.62 7.64 $ 19 Exercisable as of March 31, 2021 1,764,848 $ 5.72 7.05 $ — |
Summary of Restricted Stock Unit activity | Weighted- Average Number of Grant Date Units Fair Value Outstanding as of December 31, 2020 395,100 $ 1.65 Granted 509,500 2.64 Forfeited (42,900) 1.65 Outstanding as of March 31, 2021 861,700 $ 2.24 |
Schedule of stock-based compensation expense | Stock-based compensation expense was classified in the consolidated statement of operations as follows (in thousands): Three Months Ended March 31, 2021 2020 Research and development $ 421 $ 349 General and administrative 448 436 Total stock-based compensation expense $ 869 $ 785 The following table summarizes stock-based compensation by type of award (in thousands): Three Months Ended March 31, 2021 2020 Stock options $ 665 $ 785 Restricted stock units 204 — Total stock-based compensation expense $ 869 $ 785 |
Schedule of unrecognized stock-based compensation expense | As of March 31, 2021 Unrecognized Expense Weighted-average Recognition Period (in thousands) (in years) Stock options $ 4,551 2.23 Restricted stock units $ 998 1.56 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Net Loss per Share | |
Schedule of anti-dilutive securities | As of March 31, 2021 2020 Options to purchase shares of common stock 3,049,357 3,216,500 Warrants to purchase shares of common stock 22,672,897 — Unvested restricted stock units 861,700 — 26,583,954 3,216,500 |
Organization and Description _2
Organization and Description of Business - General (Details) $ in Thousands | May 03, 2021USD ($) | Apr. 30, 2021USD ($) | Mar. 31, 2021USD ($)subsidiary | Dec. 31, 2020USD ($) |
Number of subsidiaries | subsidiary | 4 | |||
Risks and Uncertainties | ||||
Cash and cash equivalents | $ 44,937 | $ 53,247 | ||
Accumulated deficit | $ 195,156 | $ 184,455 | ||
Subsequent Events. | Securities purchase agreement | ||||
Risks and Uncertainties | ||||
Aggregate purchase price of common stock and warrants | $ 7,500 | |||
Private Placement | Subsequent Events. | ||||
Risks and Uncertainties | ||||
Proceeds from issuance of private placement | $ 20,000 | $ 12,500 |
Organization and Description _3
Organization and Description of Business - Securities Purchase Agreement (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 27, 2020 | Apr. 12, 2020 | Mar. 31, 2021 |
Common Stock | |||
Warrants to purchase common stock | 22,672,897 | ||
Securities purchase agreement | Private Placement | |||
Common Stock | |||
Price per share | $ 2.50 | ||
Percentage of Outstanding Shares Of Common Stock | 52.60% | 51.30% | |
Warrant exercise price | $ 2.50 | ||
Securities purchase agreement | Second Private Placement | |||
Common Stock | |||
Shares issued (in shares) | 8,183,878 | ||
Price per share | $ 2.675 | ||
Warrants to purchase common stock | 9,345,794 | ||
Warrant exercise price | $ 2.675 | ||
Proceeds from the issuance of common stock and warrants in private placements, net | $ 25 | ||
Securities purchase agreement | Pre-funded Warrants | |||
Common Stock | |||
Shares issued (in shares) | 1,161,916 | ||
Warrant exercise price | $ 0.001 | ||
Proceeds from the issuance of common stock and warrants in private placements, net | $ 25 | ||
Securities purchase agreement | Minimum | Private Placement | |||
Common Stock | |||
Aggregate purchase price of warrants | $ 35 | ||
Securities purchase agreement | Maximum | Private Placement | |||
Common Stock | |||
Shares issued (in shares) | 14,000,000 | ||
Warrants to purchase common stock | 14,000,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Company's assets that were accounted for at fair value on a recurring basis | ||
Total | $ 44,128 | $ 49,125 |
Level 1 | ||
Company's assets that were accounted for at fair value on a recurring basis | ||
Total | 44,128 | 49,125 |
Money market funds | ||
Company's assets that were accounted for at fair value on a recurring basis | ||
Cash equivalents | 44,128 | 49,125 |
Money market funds | Level 1 | ||
Company's assets that were accounted for at fair value on a recurring basis | ||
Cash equivalents | $ 44,128 | $ 49,125 |
Leases - Lease Commitments (Det
Leases - Lease Commitments (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Mar. 31, 2021 | Mar. 31, 2020 |
Leases | |||
Lessee, Operating Lease, Existence of Option to Extend | true | ||
Renewal term | 3 years | ||
Waltham, Massachusetts lease | |||
Leases | |||
Operating lease expense | $ 0.2 | $ 0.2 |
Leases - Lease Balance Sheet (D
Leases - Lease Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases | ||
Operating lease right-of-use assets | $ 1,012 | $ 1,141 |
Operating lease liabilities, current | $ 638 | $ 617 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Expenses And Other Current Liabilities | Accrued Expenses And Other Current Liabilities |
Operating lease liabilities, net of current portion | $ 535 | $ 704 |
Total operating lease liabilities | $ 1,173 | $ 1,321 |
Leases -Operating Lease Maturit
Leases -Operating Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases | ||
2021 (remaining 9 months) | $ 537 | |
2022 | 737 | |
2023 | 1 | |
Total undiscounted lease payments | 1,275 | |
Less: imputed interest | (102) | |
Total operating lease liabilities | $ 1,173 | $ 1,321 |
Weighted average remaining lease term | 1 year 9 months 18 days | |
weighted average incremental borrowing rate (as a percent) | 9.10% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accrued Expenses and Other Current Liabilities. | ||
Accrued compensation and benefits | $ 1,483 | $ 2,935 |
Accrued contract manufacturing | 3,875 | 2,959 |
Accrued clinical | 543 | 504 |
Accrued professional services | 583 | 435 |
Accrued research | 337 | 349 |
Current portion of operating lease liabilities | 638 | 617 |
Other | 140 | 106 |
Total accrued expenses and other current liabilities | $ 7,599 | $ 7,905 |
Funding Arrangements (Details)
Funding Arrangements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 49 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Jul. 01, 2020 | |
CARB-X program | ||||||
Funding Arrangements | ||||||
Grant income recognized | $ 1,300,000 | $ 13,000 | $ 11,600,000 | |||
Funds received during the period | 10,200,000 | |||||
Grants receivable | 1,700,000 | 1,700,000 | $ 1,100,000 | |||
ETX0462 program | ||||||
Funding Arrangements | ||||||
Grants receivable | 8,300,000 | 8,300,000 | ||||
National Institute of Allergy and Infectious Diseases | ||||||
Funding Arrangements | ||||||
Eligible amount receivable in research and development support payments and development, regulatory and sales milestone payments | $ 3,000,000 | |||||
Grant income recognized | 700,000 | $ 0 | ||||
Grants receivable | $ 800,000 | $ 800,000 | ||||
Maximum | CARB-X program | ||||||
Funding Arrangements | ||||||
Reimbursable research expenditures | $ 18,500,000 | |||||
Maximum | National Institute of Allergy and Infectious Diseases | ||||||
Funding Arrangements | ||||||
Eligible amount receivable in research and development support payments and development, regulatory and sales milestone payments | $ 15,500,000 |
License and Collaboration Agr_2
License and Collaboration Agreements (Details) - License and collaboration agreement with Zai Lab - USD ($) $ in Millions | 3 Months Ended | 36 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | |
License and Collaboration Agreement with Zai Lab | |||
Upfront, non-refundable payment received | $ 5 | ||
Research support funding | 0.6 | ||
Certain other reimbursable registration trial costs | 4.2 | ||
Payment received, tax expense | 2.1 | ||
Eligible amount receivable in research and development support payments and development, regulatory and sales milestone payments | $ 91 | 91 | |
Revenue | $ 0 | $ 0 | $ 7 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation Expense - Equity (Details) $ / shares in Units, $ in Millions | Aug. 27, 2020USD ($)$ / sharesshares | Jun. 11, 2020USD ($)shares | Apr. 22, 2020USD ($)shares | Apr. 12, 2020USD ($)directoritem$ / sharesshares | Oct. 21, 2019shares | Oct. 31, 2019USD ($)item$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares |
Common Stock | |||||||
Warrants to purchase common stock | 22,672,897 | ||||||
April 22, 2025 Expiration Date | |||||||
Common Stock | |||||||
Warrants to purchase common stock | 1,322,510 | ||||||
Warrant exercise price | $ / shares | $ 2.50 | ||||||
June 11, 2025 Expiration Date | |||||||
Common Stock | |||||||
Warrants to purchase common stock | 12,677,490 | ||||||
Warrant exercise price | $ / shares | $ 2.50 | ||||||
September 1, 2025 Expiration Date | |||||||
Common Stock | |||||||
Warrants to purchase common stock | 8,672,897 | ||||||
Warrant exercise price | $ / shares | $ 2.675 | ||||||
Securities purchase agreement | Private Placement | |||||||
Common Stock | |||||||
Price per share | $ / shares | $ 2.50 | ||||||
Number of tranches | item | 2 | ||||||
Percentage of Outstanding Shares Of Common Stock | 52.60% | 51.30% | |||||
Warrant exercise price | $ / shares | $ 2.50 | ||||||
Securities purchase agreement | Second Private Placement | |||||||
Common Stock | |||||||
Shares issued (in shares) | 8,183,878 | ||||||
Proceeds from the issuance of common stock and warrants in private placements, net | $ | $ 25 | ||||||
Term of warrant | 5 years | ||||||
Price per share | $ / shares | $ 2.675 | ||||||
Warrants to purchase common stock | 9,345,794 | ||||||
Warrant exercise price | $ / shares | $ 2.675 | ||||||
Securities purchase agreement | Pre-funded Warrants | |||||||
Common Stock | |||||||
Shares issued (in shares) | 1,161,916 | ||||||
Proceeds from the issuance of common stock and warrants in private placements, net | $ | $ 25 | ||||||
Warrant exercise price | $ / shares | $ 0.001 | ||||||
Securities purchase agreement | Minimum | Private Placement | |||||||
Common Stock | |||||||
Aggregate purchase price of warrants | $ | $ 35 | ||||||
Securities purchase agreement | Minimum | Closing of first tranche | Private Placement | |||||||
Common Stock | |||||||
Shares issued (in shares) | 1,322,510 | ||||||
Aggregate purchase price of warrants | $ | $ 3.3 | ||||||
Warrants to purchase common stock | 1,322,510 | ||||||
Securities purchase agreement | Minimum | Closing of second tranche | Private Placement | |||||||
Common Stock | |||||||
Shares issued (in shares) | 12,677,490 | ||||||
Aggregate purchase price of warrants | $ | $ 31.7 | ||||||
Warrants to purchase common stock | 12,677,490 | ||||||
Securities purchase agreement | Maximum | Private Placement | |||||||
Common Stock | |||||||
Shares issued (in shares) | 14,000,000 | ||||||
Warrants to purchase common stock | 14,000,000 | ||||||
Investor rights agreement | Scenario 1 | |||||||
Common Stock | |||||||
Number of directors designated as board of directors | director | 2 | ||||||
Investor rights agreement | Scenario 2 | |||||||
Common Stock | |||||||
Number of directors designated as board of directors | director | 1 | ||||||
Investor rights agreement | Minimum | Scenario 1 | |||||||
Common Stock | |||||||
Percentage of Outstanding Shares Of Common Stock | 15.00% | ||||||
Investor rights agreement | Minimum | Scenario 2 | |||||||
Common Stock | |||||||
Percentage of Outstanding Shares Of Common Stock | 8.00% | ||||||
Aspire | |||||||
Common Stock | |||||||
Maximum amount committed to be purchased | $ | $ 20 | ||||||
Term over which the purchase can be made | 30 months | ||||||
Threshold triggering closing price per share to issue purchase notice | $ / shares | $ 0.25 | ||||||
Maximum number of shares that can be purchased under purchase notice | 50,000 | ||||||
Number of lowest closing sales price | item | 3 | ||||||
Number of consecutive business days immediately preceding the purchase date | 10 days | ||||||
Maximum shares sold per business day | 2,000,000 | ||||||
Volume-weighted average price notice, percentage of companys common stock | 30.00% | ||||||
Purchase price as a percentage of volume-weighted average price | 97.00% | ||||||
Number of commitment shares issued | 104,167 | ||||||
Maximum number of shares sold | 2,626,165 | ||||||
Commitment fee percentage | 19.99% | ||||||
Amount available for issuance | $ | $ 19.7 | ||||||
Number of commitment shares purchased | 50,000 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-Based Compensation Expense - Other (Details) - USD ($) | Jan. 01, 2021 | Jan. 01, 2020 | Sep. 25, 2018 | Sep. 30, 2018 | Mar. 31, 2021 | Jun. 30, 2020 |
Incentive stock options | ||||||
Stock-Based Compensation | ||||||
Annual increase in the number of shares to the shares of common stock (in shares) | 1,465,494 | 531,662 | ||||
2015 Stock Incentive Plan | ||||||
Stock-Based Compensation | ||||||
Number of options granted (in shares) | 0 | |||||
Number of shares available for future issuance (in shares) | 0 | |||||
2018 Stock Incentive Plan | ||||||
Stock-Based Compensation | ||||||
Increase in number of shares available for grant (in shares) | 500,000 | |||||
2018 Stock Incentive Plan | Non-employee directors | ||||||
Stock-Based Compensation | ||||||
Maximum cash fee paid | $ 500,000 | |||||
2018 Stock Incentive Plan | Board of directors | ||||||
Stock-Based Compensation | ||||||
Maximum cash fee paid | $ 800,000 | |||||
2018 Stock Incentive Plan | Options to purchase shares of common stock | ||||||
Stock-Based Compensation | ||||||
Number of options granted (in shares) | 3,735,759 | |||||
Number of shares available for future issuance (in shares) | 1,421,657 | |||||
Number of shares available for grant (in shares) | 2,350,000 | |||||
Period of options | 10 years | 10 years | ||||
Percentage of annual increase to the total number of common stock outstanding (as a percent) | 4.00% | |||||
2018 Stock Incentive Plan | Unvested restricted stock units | ||||||
Stock-Based Compensation | ||||||
Number of options granted (in shares) | 904,600 | |||||
2018 Stock Incentive Plan | Incentive stock options | ||||||
Stock-Based Compensation | ||||||
Maximum number of shares issued (in shares) | 7,500,000 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-Based Compensation Expense - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2021 | Jan. 01, 2020 | Sep. 30, 2018 | Mar. 31, 2021 | Dec. 31, 2020 |
Employee Stock Purchase Plan | |||||
Stock-Based Compensation | |||||
Number of shares available for future issuance (in shares) | 140,000 | 654,163 | |||
Percentage of annual increase to the total number of common stock outstanding (as a percent) | 1.00% | ||||
Annual increase in the number of shares to the shares of common stock (in shares) | 250,000 | 132,915 | 250,000 | ||
Maximum number of shares issued (in shares) | 0 | ||||
2015 and 2018 Stock Incentive Plan | |||||
Number of Options | |||||
Outstanding, as of beginning of period (in shares) | 3,112,704 | 3,112,704 | |||
Granted (in shares) | 15,250 | ||||
Forfeited (in shares) | (78,597) | ||||
Outstanding, as of end of period (in shares) | 3,049,357 | 3,112,704 | |||
Exercisable (in shares) | 1,764,848 | ||||
Weighted Average Exercise Price | |||||
Outstanding, as of beginning of period (in dollar per share) | $ 5.58 | $ 5.58 | |||
Granted (in dollar per share) | 2.79 | ||||
Forfeited (in dollars per share) | 3.29 | ||||
Outstanding, as of end of period (in dollar per share) | 5.62 | $ 5.58 | |||
Exercisable (in dollar per share) | $ 5.72 | ||||
Weighted Average Remaining Contractual Term (Years) | |||||
Options outstanding | 7 years 7 months 20 days | 7 years 9 months 3 days | |||
Exercisable | 7 years 18 days | ||||
Aggregate Intrinsic Value | |||||
Options outstanding | $ 19 | $ 44 | |||
Weighted average grant date fair value per share of options granted (in dollar per share) | $ 1.95 |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock-Based Compensation Expense - AstraZeneca Shares Option and Incentive Plan (Details) - Unvested restricted stock units | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Units | |
Outstanding, beginning balance (in shares) | 395,100 |
Granted (in shares) | 509,500 |
Forfeited (in shares) | (42,900) |
Outstanding, ending balance (in shares) | 861,700 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 1.65 |
Granted (in dollars per share) | $ / shares | 2.64 |
Forfeited (in dollars per share) | $ / shares | 1.65 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 2.24 |
Performance condition | |
Number of Units | |
Granted (in shares) | 254,750 |
Stockholders' Equity and Stoc_7
Stockholders' Equity and Stock-Based Compensation Expense - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 869 | $ 785 |
Research and development. | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | 421 | 349 |
General and administrative | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | 448 | 436 |
Options to purchase shares of common stock | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | 665 | $ 785 |
Unrecognized compensation cost | $ 4,551 | |
Period for recognition | 2 years 2 months 23 days | |
Unvested restricted stock units | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 204 | |
Unrecognized compensation cost | $ 998 | |
Period for recognition | 1 year 6 months 21 days |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net Loss per Share | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 26,583,954 | 3,216,500 |
Options to purchase shares of common stock | ||
Net Loss per Share | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,049,357 | 3,216,500 |
Warrants to purchase shares of common stock | ||
Net Loss per Share | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 22,672,897 | |
Unvested restricted stock units | ||
Net Loss per Share | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 861,700 |
Commitments (Details)
Commitments (Details) - AstraZeneca $ in Millions | 1 Months Ended |
Apr. 30, 2018USD ($) | |
Commitments and Contingencies | |
Subscription agreement one-time milestone payment on net sales | $ 5 |
Term of the milestone payment on net sales | 3 months |
Subscription agreement one-time milestone payment on first commercial sale | $ 10 |
Term of the milestone payment on first commercial sale | 2 years |
Related Party Transactions (Det
Related Party Transactions (Details) - Pharmaron Beijing Co., Ltd. - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transactions | |||
Expenses recorded | $ 1.2 | $ 0.9 | |
Owed to related party | $ 3.2 | $ 2 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | May 03, 2021USD ($)item$ / sharesshares | Apr. 30, 2021USD ($) | Aug. 27, 2020 | Apr. 12, 2020item$ / sharesshares | Mar. 31, 2021$ / sharesshares | Dec. 31, 2020$ / shares |
Subsequent Event | ||||||
Par value of common stock | $ / shares | $ 0.001 | $ 0.001 | ||||
Warrants to purchase common stock | 22,672,897 | |||||
Securities purchase agreement | Private Placement | ||||||
Subsequent Event | ||||||
Warrant exercise price | $ / shares | $ 2.50 | |||||
Price per share | $ / shares | $ 2.50 | |||||
Number of tranches | item | 2 | |||||
Percentage of outstanding shares of common stock | 52.60% | 51.30% | ||||
Maximum | Securities purchase agreement | Private Placement | ||||||
Subsequent Event | ||||||
Warrants to purchase common stock | 14,000,000 | |||||
Shares issued (in shares) | 14,000,000 | |||||
Subsequent Events. | Private Placement | ||||||
Subsequent Event | ||||||
Proceeds from issuance of private placement | $ | $ 20 | $ 12.5 | ||||
Subsequent Events. | Securities purchase agreement | ||||||
Subsequent Event | ||||||
Aggregate purchase price of common stock and warrants | $ | $ 7.5 | |||||
Subsequent Events. | Securities purchase agreement | Private Placement | ||||||
Subsequent Event | ||||||
Number of tranches | item | 2 | |||||
Subsequent Events. | Securities purchase agreement | Closing of first tranche | Private Placement | ||||||
Subsequent Event | ||||||
Warrants to purchase common stock | 3,731,025 | |||||
Shares issued (in shares) | 3,731,025 | |||||
Aggregate purchase price of common stock and warrants | $ | $ 7.5 | |||||
Subsequent Events. | Securities purchase agreement | Closing of second tranche | Private Placement | ||||||
Subsequent Event | ||||||
Warrants to purchase common stock | 6,268,975 | |||||
Shares issued (in shares) | 6,268,975 | |||||
Aggregate purchase price of common stock and warrants | $ | $ 12.5 | |||||
Subsequent Events. | Innoviva | ||||||
Subsequent Event | ||||||
Maximum amount of shares issued | 10,000,000 | |||||
Par value of common stock | $ / shares | $ 0.001 | |||||
Warrant exercise price | $ / shares | $ 2 | |||||
Term of warrant | 5 years | |||||
Price per share | $ / shares | $ 2 | |||||
Percentage of outstanding shares of common stock | 75.50% | |||||
Subsequent Events. | Innoviva | Maximum | ||||||
Subsequent Event | ||||||
Warrants to purchase common stock | 10,000,000 |