Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Fibrocell Science, Inc. | ' |
Entity Central Index Key | '0000357097 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Trading Symbol | 'fcsc | ' |
Entity Common Stock, Shares Outstanding | ' | 40,856,815 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $44,215 | $60,033 |
Accounts receivable, net of allowance for doubtful accounts of $20 and $5, respectively | 2 | 28 |
Inventory | 610 | 597 |
Prepaid expenses and other current assets | 480 | 1,202 |
Total current assets | 45,307 | 61,860 |
Property and equipment, net of accumulated depreciation of $994 and $735, respectively | 1,749 | 1,701 |
Intangible assets, net of accumulated amortization of $1,516 and $1,102, respectively | 4,824 | 5,238 |
Other assets | 1 | 215 |
Total assets | 51,881 | 69,014 |
Current liabilities: | ' | ' |
Accounts payable | 1,054 | 2,958 |
Accrued expenses | 2,041 | 487 |
Deferred revenue | 479 | 148 |
Total current liabilities | 3,574 | 3,593 |
Warrant liability | 14,081 | 15,216 |
Other long term liabilities | 679 | 539 |
Total liabilities | 18,334 | 19,348 |
Stockholders' equity: | ' | ' |
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares outstanding | ' | ' |
Common stock, $0.001 par value; 100,000,000 shares authorized; 40,856,815 and 39,832,225 shares issued and outstanding, respectively | 41 | 40 |
Additional paid-in capital | 142,852 | 136,694 |
Accumulated deficit | -109,346 | -87,068 |
Total stockholders' equity | 33,547 | 49,666 |
Total liabilities and stockholders' equity | $51,881 | $69,014 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Accounts receivable, allowance for doubtful accounts (in dollars) | $20 | $5 |
Property and equipment, accumulated depreciation (in dollars) | 994 | 735 |
Intangible assets, accumulated amortization (in dollars) | $1,516 | $1,102 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 40,856,815 | 39,832,225 |
Common stock, shares outstanding | 40,856,815 | 39,832,225 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Consolidated Statements of Operations | ' | ' | ' | ' |
Product sales | $20 | $68 | $124 | $156 |
Cost of sales | 512 | 1,792 | 1,852 | 6,109 |
Gross loss | -492 | -1,724 | -1,728 | -5,953 |
Selling, general and administrative expense | 2,810 | 2,746 | 9,112 | 7,250 |
Research and development expense | 2,889 | 8,651 | 12,947 | 11,636 |
Operating loss | -6,191 | -13,121 | -23,787 | -24,839 |
Other income (expense): | ' | ' | ' | ' |
Warrant revaluation and other finance income (expense) | 177 | 6,520 | 1,135 | -960 |
Other income | ' | ' | 370 | ' |
Interest income | 2 | ' | 4 | ' |
Loss from continuing operations before income taxes | -6,012 | -6,601 | -22,278 | -25,799 |
Loss from continuing operations, net of tax | -6,012 | -6,601 | -22,278 | -25,799 |
Loss from discontinued operations, net of tax | ' | -4 | ' | -13 |
Net loss | ($6,012) | ($6,605) | ($22,278) | ($25,812) |
Per Share Information: | ' | ' | ' | ' |
Loss from continuing operations, net of tax - basic (in dollars per share) | ($0.15) | ($0.24) | ($0.55) | ($0.97) |
Net loss per common share - basic (in dollars per share) | ($0.15) | ($0.24) | ($0.55) | ($0.97) |
Loss from continuing operations, net of tax - diluted (in dollars per share) | ($0.17) | ($0.31) | ($0.60) | ($1.04) |
Net loss per common share - diluted (in dollars per share) | ($0.17) | ($0.31) | ($0.60) | ($1.04) |
Weighted average number of common shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 |
Diluted (in shares) | 41,300,105 | 27,802,557 | 41,045,861 | 26,896,268 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock | Additional paid-in capital | Accumulated deficit | Total |
In Thousands, except Share data | ||||
Balance at Dec. 31, 2013 | $40 | $136,694 | ($87,068) | $49,666 |
Balance (shares) at Dec. 31, 2013 | 39,832,225 | ' | ' | 39,832,225 |
Stock-based compensation expense | ' | 1,005 | ' | 1,005 |
Issuance of common stock | 1 | 5,153 | ' | 5,154 |
Issuance of common stock (in shares) | 1,024,590 | ' | ' | ' |
Net loss | ' | ' | -22,278 | -22,278 |
Balance at Sep. 30, 2014 | $41 | $142,852 | ($109,346) | $33,547 |
Balance (shares) at Sep. 30, 2014 | 40,856,815 | ' | ' | 40,856,815 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($22,278) | ($25,812) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Stock-based compensation expense | 1,005 | 928 |
Stock issued for supplemental stock issuance agreement | 5,154 | 6,406 |
Warrant revaluation and other finance (income) expense | -1,135 | 960 |
Depreciation and amortization | 673 | 693 |
Provision for doubtful accounts | 15 | -7 |
Change in operating assets and liabilities: | ' | ' |
Accounts receivable | 11 | 23 |
Inventory | -13 | -97 |
Prepaid expenses and other current assets | 722 | -133 |
Other assets | 214 | -214 |
Accounts payable | -1,904 | 248 |
Accrued expenses and other long-term liabilities | 1,693 | 973 |
Deferred revenue | 331 | -7 |
Net cash used in operating activities | -15,512 | -16,039 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -307 | -162 |
Net cash used in investing activities | -307 | -162 |
Cash flows from financing activities: | ' | ' |
Subscriptions received | ' | 2,004 |
Deferred equity costs | ' | -274 |
Net cash provided by financing activities | ' | 1,730 |
Effect of exchange rate changes on cash balances | 1 | ' |
Net decrease in cash and cash equivalents | -15,818 | -14,471 |
Cash and cash equivalents, beginning of period | 60,033 | 31,346 |
Cash and cash equivalents, end of period | $44,215 | $16,875 |
Business_and_Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2014 | |
Business and Organization | ' |
Business and Organization | ' |
Note 1. Business and Organization | |
Fibrocell Science, Inc. (as used herein, “we,” “us,” “our,” “Fibrocell” or the “Company”) is the parent company of Fibrocell Technologies, Inc. (“Fibrocell Tech”) and Fibrocell Science Hong Kong Limited (“Fibrocell Hong Kong”), a company organized under the laws of Hong Kong. Fibrocell Tech is the parent company of Isolagen Europe Limited, a company organized under the laws of the United Kingdom (“Isolagen Europe”), Isolagen Australia Pty Limited, a company organized under the laws of Australia (“Isolagen Australia”), and Isolagen International, S.A., a company organized under the laws of Switzerland (“Isolagen Switzerland”). The Company’s international activities are currently immaterial. | |
The Company is an autologous cell therapy company focused on developing first-in-class treatments for rare and serious skin and connective tissue diseases with high unmet medical needs. Fibrocell’s lead orphan drug program is in late-stage pre-clinical development for the treatment of RDEB (recessive dystrophic epidermolysis bullosa) and DDEB (dominant dystrophic epidermolysis bullosa). The Company’s collaboration with Intrexon Corporation (NYSE:XON) (“Intrexon”), a leader in synthetic biology, includes using genetically-modified autologous fibroblast cells to express target proteins that are inactive or missing from patients with rare genetic skin and connective tissue disorders. The Company is also pursuing medical applications for azficel-T, the Company’s proprietary autologous fibroblast technology, for vocal cord scarring and restrictive burn scarring. Both indications are currently in Phase II clinical trials. The Company’s ongoing scientific research collaboration with the University of California, Los Angeles (“UCLA”) has yielded discoveries and technologies related to stem cells and regenerative cells in human skin. The technologies from this collaboration and the Company’s exclusive license agreements with UCLA enable the Company to expand its proprietary personalized biologics platform which uses human fibroblasts and stem cells from skin to create localized therapies that are compatible with the unique biology of each patient. | |
On August 18, 2014, the Company notified the NYSE MKT of its intention to delist its common stock from the NYSE MKT and to list on The NASDAQ Capital Market of The NASDAQ Stock Market LLC (“NASDAQ”). The Company’s securities ceased trading on the NYSE MKT effective at the close of business on August 28, 2014 and commenced trading on NASDAQ on August 29, 2014 when the market opened. The Company’s common stock continues to trade under its current trading symbol “FCSC”. | |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
Note 2. Basis of Presentation | |
The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments and the impact of restatements on prior periods discussed below) considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as amended, filed with the Securities and Exchange Commission (“SEC”) as discussed below. The results of the Company’s operations for any interim period are not necessarily indicative of the results of operations for any other interim period or full year. | |
On May 6, 2014, the Audit Committee of the Company’s Board of Directors, in connection with an internal review initiated by Company management, concluded that, because of a misapplication of the accounting guidance related to certain of the Company’s warrants, the Company’s previously issued consolidated financial statements for all periods beginning with the quarterly period ended September 30, 2011 through December 31, 2013 should no longer be relied upon. On June 2, 2014, the Company restated all affected interim and annual periods in its Annual Report on Form 10-K/A (Amendment No. 2) for the fiscal year ended December 31, 2013 in an SEC approved “omnibus” filing. As such, the comparative information provided for the year ended December 31, 2013 and the three and nine months ended September 30, 2013 contained in the preceding financial statements and the accompanying footnotes reflect these previously restated amounts. | |
The prior year financial statements contain certain reclassifications to the results of operations for the three and nine months ended September 30, 2013 to conform to the presentation for the three and nine months ended September 30, 2014 in this Form 10-Q. These reclassifications were made in conjunction with the Company’s de-emphasis on its commercial product LAVIV® and towards further research and development of the underlying azficel-T process as well as on developing first-in-class treatments for rare and serious skin and connective tissue diseases with high unmet medical needs. | |
For the three and nine months ended September 30, 2014, amortization expense of approximately $0.1 million and $0.4 million, respectively, was included in research and development expense on the Consolidated Statements of Operations. For the three and nine months ended September 30, 2013, amortization expense of approximately $0.1 million and $0.4 million, respectively, was reclassed from cost of sales to research and development expense on the Consolidated Statements of Operations to conform to the current presentation. For the three and nine months ended September 30, 2014, the Company’s Food and Drug Administration (“FDA”) license fees related to its Biologics License Application (“BLA”) of approximately $0.2 million and $0.5 million, respectively, were included in research and development expense on the Consolidated Statements of Operations. For the three and nine months ended September 30, 2013, FDA license fees of approximately $0.2 million and $0.5 million, respectively, were reclassified from selling, general and administrative expense to research and development expense on the Consolidated Statements of Operations to conform to the current presentation. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||
Sep. 30, 2014 | |||
Summary of Significant Accounting Policies | ' | ||
Summary of Significant Accounting Policies | ' | ||
Note 3. Summary of Significant Accounting Policies | |||
Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and notes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Actual results may differ materially from those estimates. | |||
Cost of Sales | |||
Cost of sales includes the costs related to the processing of cells for LAVIV®, including direct and indirect costs. Beginning in 2014, cost of sales is accounted for using a standard cost system which allocates the direct costs associated with the Company’s manufacturing, facility, quality control, and quality assurance operations as well as overhead costs. The principal reason for the relatively small level of revenue as compared to the cost of sales is that the Company changed corporate strategy in late 2013 to de-emphasize sales of LAVIV® into the aesthetic markets, and towards further research and development of the underlying azficel-T process as well as on developing first-in-class treatments for rare and serious skin and connective tissue diseases with high unmet medical needs. | |||
Research and Development Expenses | |||
Research and development costs are expensed as incurred and include salaries and benefits, costs paid to third party contractors to perform research, conduct clinical trials, develop and manufacture drug materials and delivery devices, and a portion of facilities cost. Research and development costs also include costs to manufacture product for clinical trial use and to develop manufacturing, cell collection and logistical process improvements. | |||
Clinical trial costs are a significant component of research and development expenses and include costs associated with third party contractors. Invoicing from third party contractors for services performed can lag several months. The Company accrues the costs of services rendered in connection with third party contractor activities based on its estimate of management fees, site management and monitoring costs and data management costs. | |||
Property and Equipment | |||
Property and equipment is carried at acquisition cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful life of the asset. The cost of repairs and maintenance is charged to expense as incurred. As of December 31, 2013, the useful life for all property and equipment was three years, except for leasehold improvements which were depreciated over the remaining lease term or the life of the asset, whichever was shorter. In the first quarter of 2014, the Company adjusted its useful lives to reflect the expected consumption of the economic benefit of these assets as noted in the following table: | |||
Property and equipment category | Useful life | ||
Laboratory equipment | 6 years | ||
Computer equipment and software | 3 years | ||
Furniture and fixtures | 10 years | ||
Leasehold improvements | Lesser of remaining lease term or life of asset | ||
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) ASC Topic 250 Accounting Changes and Error Corrections, the Company accounted for this change in useful lives as a change in estimate, with prospective application only. The impact of this change in estimate on depreciation expense for the three and nine months ended September 30, 2014 was immaterial to the results on the Consolidated Statements of Operations. | |||
Intangible Assets | |||
Intangible assets are research and development assets related to the Company’s primary study on azficel-T that was recognized upon emergence from bankruptcy. Azficel-T has three current or target indications: the Company’s commercial product, LAVIV®, a clinical development program for vocal cord scarring and a clinical development program for restrictive burn scarring. Effective January 1, 2012, the Company launched LAVIV® and as a result, the research and development intangible assets related to the Company’s primary study were considered to be finite-lived intangible assets and are being amortized over the 12 year period of exclusivity, commencing in June 2011, granted by the FDA. | |||
Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis. In accordance with the FASB’s ASC Subtopic 360-10-35 Impairment or Disposal of Long-Lived Assets, the Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There was no impairment expense recognized for either the three or nine months ended September 30, 2014 or 2013. | |||
Income Taxes | |||
Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which provides for reporting of amounts that are currently payable and also 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 will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2013 and September 30, 2014, the Company did not have any uncertain tax positions. | |||
Recently Issued Accounting Pronouncements | |||
In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements—Going Concern (ASC Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This ASU requires that an entity’s management shall evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Implementation of this ASU is effective for the annual and interim periods ending after December 15, 2016 and early application is permitted. | |||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” under ASC Topic 606 which supersedes the current revenue recognition requirements under ASC Topic 605 Revenue Recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. It also provides a five step approach to achieve this principle. For public entities, the new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently evaluating the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements. | |||
Subsequent Events | |||
The Company evaluates all subsequent events, through the date the consolidated financial statements are issued, to determine if there are any events that require disclosure. No such events have been identified through the date of this filing. | |||
Inventory
Inventory | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory | ' | |||||||
Inventory | ' | |||||||
Note 4. Inventory | ||||||||
Inventories consisted of the following as of: | ||||||||
September 30, | December 31, | |||||||
($ in thousands) | 2014 | 2013 | ||||||
Raw materials | $ | 327 | $ | 511 | ||||
Work in process | 283 | 86 | ||||||
Inventory | $ | 610 | $ | 597 | ||||
Warrants
Warrants | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Warrants | ' | ||||||||||
Warrants | ' | ||||||||||
Note 5. Warrants | |||||||||||
The Company accounts for stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Stock warrants are accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging (“ASC 815”) if the stock warrants contain “down-round protection” or other terms that could potentially require “net cash settlement” and therefore, do not meet the scope exception for treatment as a derivative. Since “down-round protection” is not an input into the calculation of the fair value of the warrants, the warrants cannot be considered indexed to the Company’s own stock which is a requirement for the scope exception as outlined under ASC 815. Warrant instruments that could potentially require “net cash settlement” in the absence of express language precluding such settlement and those which include “down-round provisions” are initially classified as derivative liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. The Company will continue to classify the fair value of the warrants that contain “down-round protection” or “net cash settlement” as a liability until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. | |||||||||||
The following table summarizes outstanding warrants to purchase common stock as of: | |||||||||||
Number of Warrants | |||||||||||
Liability-classified warrants | September 30, | December 31, | Exercise | Expiration | |||||||
2014 | 2013 | Price | Dates | ||||||||
Issued in March 2010 and Series A, B and D Preferred Stock offerings | 2,640,534 | 2,640,534 | $ | 6.25 | Oct 2015-Dec 2016 | ||||||
Issued in B, D and E Preferred Stock offerings | 76,120 | 76,120 | $ | 2.50 | Nov 2015-Sept 2017 | ||||||
Issued in June 2011 financing | 6,113 | 6,113 | $ | 22.50 | June 2016 | ||||||
Issued in August 2011 financing | 565,759 | 565,759 | $ | 18.75 | Aug-16 | ||||||
Issued to placement agents in August 2011 financing | 50,123 | 50,123 | $ | 13.64 | Aug-16 | ||||||
Issued with Convertible Notes | 1,125,578 | 1,125,578 | $ | 2.50 | June 2018 | ||||||
Issued in Series E Preferred Stock offering | 1,568,823 | 1,568,823 | $ | 7.50 | Sep-18 | ||||||
Total | 6,033,050 | 6,033,050 | |||||||||
There were no warrants exercised or cancelled during the nine months ended September 30, 2014. | |||||||||||
Liability-classified Warrants | |||||||||||
The foregoing warrants are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in the Company’s statements of operations in each subsequent period. The change in the estimated fair value of the Company’s warrant liability for the three and nine months ended September 30, 2014 resulted in non-cash income of approximately $0.2 million and $1.1 million, respectively. The change in the estimated fair value of the Company’s warrant liability for the three and nine months ended September 30, 2013 resulted in a non-cash impact of approximately $6.5 million of income and $1.0 million of expense, respectively. The Company utilizes the Monte Carlo simulation valuation method to value the liability classified warrants. | |||||||||||
The estimated fair value of these warrants is determined using Level 3 inputs. Inherent in the Monte Carlo valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero. | |||||||||||
The estimated fair value of these warrants also require Level 3 inputs which are based on the Company’s estimates of the probability and timing of potential future financings and qualifying fundamental transactions. The other assumptions used by the Company are summarized in the following table: | |||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||
Weighted average remaining expected life (years) | 2.8 | 3.8 | |||||||||
Interest rate | 0.9 | % | 0.8 | % | |||||||
Dividend yield | — | — | |||||||||
Volatility | 71 | % | 63 | % | |||||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
Note 6. Fair Value Measurements | ||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||||
The Company adopted the accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories: | ||||||||||||||
· | Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |||||||||||||
· | Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. | |||||||||||||
· | Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). | |||||||||||||
The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liability measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013: | ||||||||||||||
Fair value measurement using | ||||||||||||||
($ in thousands) | Quoted prices in | Significant | Significant | Total | ||||||||||
active markets (Level 1) | other | unobservable | ||||||||||||
observable | inputs | |||||||||||||
inputs (Level 2) | (Level 3) | |||||||||||||
Balance at September 30, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 44,215 | $ | — | $ | — | $ | 44,215 | ||||||
Liabilities: | ||||||||||||||
Warrant liability | $ | — | $ | — | $ | 14,081 | $ | 14,081 | ||||||
Fair value measurement using | ||||||||||||||
($ in thousands) | Quoted prices in | Significant | Significant | Total | ||||||||||
active markets (Level 1) | other | unobservable | ||||||||||||
observable | inputs | |||||||||||||
inputs (Level 2) | (Level 3) | |||||||||||||
Balance at December 31, 2013 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 60,033 | $ | — | $ | — | $ | 60,033 | ||||||
Liabilities: | ||||||||||||||
Warrant liability | $ | — | $ | — | $ | 15,216 | $ | 15,216 | ||||||
The reconciliation of warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows: | ||||||||||||||
Warrant | ||||||||||||||
($ in thousands) | Liability | |||||||||||||
Balance at December 31, 2013 | $ | 15,216 | ||||||||||||
Exercise of warrants | — | |||||||||||||
Change in fair value of warrant liability | (1,135 | ) | ||||||||||||
Balance at September 30, 2014 | $ | 14,081 | ||||||||||||
The fair value of the warrant liability is based on Level 3 inputs. For this liability, the Company developed its own assumptions that do not have observable inputs or available market data to support the fair value. See Note 5 for further discussion of the warrant liability. The Company believes that the fair values of the Company’s current assets and current liabilities approximate their reported carrying amounts. There were no transfers between Level 1, 2 and 3 during the periods presented. | ||||||||||||||
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-Based Compensation. | ' | |||||||||||||
Share-Based Compensation | ' | |||||||||||||
Note 7. Share-Based Compensation | ||||||||||||||
The Company’s board of directors (the “Board”) adopted the 2009 Equity Incentive Plan (as amended to date, the “Plan”) effective September 3, 2009. The Plan is intended to further align the interests of the Company and its stockholders with its employees, including its officers, non-employee directors, consultants and advisors by providing incentives for such persons to exert maximum efforts for the success of the Company. The Plan allows for the issuance of up to 5,600,000 shares of the Company’s common stock. The Company issued 206,000 options outside of the Plan to consultants. | ||||||||||||||
The types of awards that may be granted under the Plan include options (both nonqualified stock options and incentive stock options), stock appreciation rights, stock awards, stock units and other stock-based awards. The term of each award is determined by the Compensation Committee of the Board of Directors at the time each award is granted, provided that the terms of options do not exceed ten years. Vesting schedules for the stock options vary, but generally vest 25% per year, over four years. The Plan had 3,374,803 options available for grant as of September 30, 2014. | ||||||||||||||
Total share-based compensation expense recognized using the straight-line attribution method in the Consolidated Statements of Operations is as follows: | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
($ in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Stock option compensation expense for employees and directors | $ | 266 | $ | 620 | $ | 1,002 | $ | 826 | ||||||
Equity awards for nonemployees issued for services | — | 99 | 3 | 102 | ||||||||||
Total stock-based compensation expense | $ | 266 | $ | 719 | $ | 1,005 | $ | 928 | ||||||
($ in thousands except share and per share data) | Number of | Weighted- | Weighted-average | Aggregate | ||||||||||
shares | average | remaining | intrinsic | |||||||||||
exercise | contractual | value | ||||||||||||
price | term (in | |||||||||||||
years) | ||||||||||||||
Outstanding at December 31, 2013 | 2,068,720 | $ | 7.93 | 8.4 | $ | 544 | ||||||||
Granted | 348,000 | 4.19 | ||||||||||||
Exercised | — | — | ||||||||||||
Forfeited | (144,883 | ) | 4.05 | |||||||||||
Expired | (5,637 | ) | 13.94 | |||||||||||
Outstanding at September 30, 2014 | 2,266,200 | $ | 7.59 | 8.3 | $ | 1 | ||||||||
Exercisable at September 30, 2014 | 1,096,250 | $ | 11.46 | 7.5 | $ | — | ||||||||
The total fair value of shares vested during the nine months ended September 30, 2014 was approximately $1.1 million. As of September 30, 2014, there was approximately $2.7 million of total unrecognized compensation cost, related to time-based non-vested stock options. That cost is expected to be recognized over a weighted-average period of 4.0 years. As of September 30, 2014, there was no unrecognized compensation expense related to performance-based, non-vested non-employee options. | ||||||||||||||
During the nine months ended September 30, 2014 and 2013, the weighted average fair market value of the options granted was $2.64 and $3.47, respectively. The fair market value of these options was computed using the Black-Scholes option-pricing model with the following key weighted average assumptions for the nine months ended as of the dates indicated: | ||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||
Expected life (years) | 5.9 | 5.6 | ||||||||||||
Interest rate | 1.9 | % | 1.4 | % | ||||||||||
Dividend yield | — | — | ||||||||||||
Volatility | 70 | % | 71 | % | ||||||||||
Loss_Per_Share
Loss Per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Loss Per share | ' | |||||||||||||
Loss Per Share | ' | |||||||||||||
Note 8. Loss Per Share | ||||||||||||||
Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during a period. The diluted loss per share calculation gives effect to dilutive options, warrants, convertible notes, convertible preferred stock, and other potential dilutive common stock including selected restricted shares of common stock outstanding during the period. Diluted loss per share is based on the treasury stock method and includes the effect from potential issuance of common stock, such as shares issuable pursuant to the exercise of stock options, assuming the exercise of all in-the-money stock options. Common share equivalents have been excluded where their inclusion would be anti-dilutive. | ||||||||||||||
($ in thousands except share and per share | For the three months ended | For the nine months ended | ||||||||||||
September 30, | September 30, | |||||||||||||
data) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Loss per share - basic: | ||||||||||||||
Numerator for basic loss per share | $ | (6,012 | ) | $ | (6,605 | ) | $ | (22,278 | ) | $ | (25,812 | ) | ||
Denominator for basic loss per share | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 | ||||||||||
Basic loss per common share | $ | (0.15 | ) | $ | (0.24 | ) | $ | (0.55 | ) | $ | (0.97 | ) | ||
Loss per share - diluted: | ||||||||||||||
Numerator for diluted loss per share | $ | (6,012 | ) | $ | (6,605 | ) | $ | (22,278 | ) | $ | (25,812 | ) | ||
Add back: Fair value of “in the money” warrants outstanding | 1,098 | 1,887 | 2,364 | 2,202 | ||||||||||
Net loss attributable to common share | $ | (7,110 | ) | $ | (8,492 | ) | $ | (24,642 | ) | $ | (28,014 | ) | ||
Denominator for basic loss per share | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 | ||||||||||
Plus: Incremental shares underlying “in the money” warrants outstanding | 443,290 | 644,163 | 279,120 | 353,169 | ||||||||||
Denominator for diluted loss per share | 41,300,105 | 27,802,557 | 41,045,861 | 26,896,268 | ||||||||||
Diluted net loss per common share | $ | (0.17 | ) | $ | (0.31 | ) | $ | (0.60 | ) | $ | (1.04 | ) | ||
The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding, as their effect would be anti-dilutive: | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
“In the money” stock options | 15,000 | 198,000 | 15,000 | 198,000 | ||||||||||
“Out of the money” stock options | 2,392,200 | 1,070,720 | 2,392,200 | 1,070,720 | ||||||||||
“In the money” warrants | — | — | — | — | ||||||||||
“Out of the money” warrants | 4,831,352 | 4,831,352 | 4,831,352 | 4,831,352 | ||||||||||
Equity
Equity | 9 Months Ended |
Sep. 30, 2014 | |
Equity | ' |
Equity | ' |
Note 9. Equity | |
Preferred stock | |
The Company is authorized to issue 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of the Company’s preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change of control of the Company or other corporate action. There were no preferred shares issued or outstanding as of September 30, 2014 or December 31, 2013. | |
Common stock | |
In connection with the execution of the Second Amendment to the Exclusive Channel Collaboration Agreement (the “Second Amendment”) on January 10, 2014 between the Company and Intrexon Corporation (“Intrexon”), the Company entered into a Supplemental Stock Issuance Agreement with Intrexon. The Company agreed to issue to Intrexon, who is an affiliate of NRM VII Holdings I, LLC, the Company’s largest shareholder, a number of shares of Company common stock based on a per share value of the closing price of the Company’s common stock on the NYSE MKT on the day prior to execution of the Supplemental Stock Issuance Agreement (the “Supplemental Access Fee Shares”). The Supplemental Access Fee Shares were issued upon the satisfaction of customary closing conditions, including the approval for the listing of the Supplemental Access Fee Shares on the NYSE MKT. The closing took place on January 24, 2014. The Company recorded a research and development expense in the first quarter of 2014 for the 1,024,590 shares issued to Intrexon as a technology access fee. The shares were issued based on a per share value of $5.03 based on the closing price of the Company’s common stock on the closing date, totaling approximately $5.2 million. For additional discussion on the Company’s collaboration with Intrexon, see Note 11. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
Note 10. Income Taxes | |
In accordance with ASC Topic 270 Interim Reporting and ASC Topic 740 Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2014 and 2013, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. The Company had not recorded its net deferred tax asset as of either September 30, 2014 or December 31, 2013, because it maintains a full valuation against all deferred tax assets as management has determined that it is not more likely than not that the Company will realize these future tax benefits. | |
Collaboration_Agreements
Collaboration Agreements | 9 Months Ended |
Sep. 30, 2014 | |
Collaboration Agreements | ' |
Collaboration Agreements | ' |
Note 11. Collaboration Agreement with Related Party | |
Intrexon is an affiliate of the Company’s largest shareholder, NRM VII Holdings I, LLC. In addition, two of the Company’s seven directors are also affiliates of NRM VII Holdings I, LLC. | |
On January 10, 2014, the Company and Intrexon entered into a Second Amendment to the parties’ Exclusive Channel Collaboration Agreement dated October 5, 2012, as previously amended on September 28, 2013 (the “Channel Agreement” and such previous amendment, the “First Amendment”). The Channel Agreement provides for a “channel collaboration” arrangement governing a strategic collaboration for the development and commercialization of genetically-modified and non-genetically-modified autologous fibroblasts and autologous dermal cells in the United States. The Channel Agreement originally granted the Company an exclusive license to use proprietary technologies and other intellectual property of Intrexon to research, develop, use, import, export, make, have made, sell, and offer for sale certain products in the field in the United States. | |
Pursuant to the Channel Agreement, as amended, the Company engaged Intrexon for support services for the development of new products covered under the Channel Agreement, as amended, and will reimburse Intrexon for its fully-loaded cost for time and materials for transgenes, cell processing, or other work performed by Intrexon for such research and manufacturing. For the three and nine months ended September 30, 2014, the Company incurred expenses of $1.2 million and $3.0 million, respectively, for work performed. For the three and nine months ended September 30, 2013, the Company incurred expenses of $1.4 million and $2.4 million, respectively, for work performed. As of September 30, 2014 and December 31, 2013, the Company had outstanding payables to Intrexon of $0.9 million and $1.3 million, respectively. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Summary of Significant Accounting Policies | ' | ||
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 in the consolidated financial statements and notes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Actual results may differ materially from those estimates. | |||
Cost of Sales | ' | ||
Cost of Sales | |||
Cost of sales includes the costs related to the processing of cells for LAVIV®, including direct and indirect costs. Beginning in 2014, cost of sales is accounted for using a standard cost system which allocates the direct costs associated with the Company’s manufacturing, facility, quality control, and quality assurance operations as well as overhead costs. The principal reason for the relatively small level of revenue as compared to the cost of sales is that the Company changed corporate strategy in late 2013 to de-emphasize sales of LAVIV® into the aesthetic markets, and towards further research and development of the underlying azficel-T process as well as on developing first-in-class treatments for rare and serious skin and connective tissue diseases with high unmet medical needs. | |||
Research and Development Expenses | ' | ||
Research and Development Expenses | |||
Research and development costs are expensed as incurred and include salaries and benefits, costs paid to third party contractors to perform research, conduct clinical trials, develop and manufacture drug materials and delivery devices, and a portion of facilities cost. Research and development costs also include costs to manufacture product for clinical trial use and to develop manufacturing, cell collection and logistical process improvements. | |||
Clinical trial costs are a significant component of research and development expenses and include costs associated with third party contractors. Invoicing from third party contractors for services performed can lag several months. The Company accrues the costs of services rendered in connection with third party contractor activities based on its estimate of management fees, site management and monitoring costs and data management costs. | |||
Property and Equipment | ' | ||
Property and Equipment | |||
Property and equipment is carried at acquisition cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful life of the asset. The cost of repairs and maintenance is charged to expense as incurred. As of December 31, 2013, the useful life for all property and equipment was three years, except for leasehold improvements which were depreciated over the remaining lease term or the life of the asset, whichever was shorter. In the first quarter of 2014, the Company adjusted its useful lives to reflect the expected consumption of the economic benefit of these assets as noted in the following table: | |||
Property and equipment category | Useful life | ||
Laboratory equipment | 6 years | ||
Computer equipment and software | 3 years | ||
Furniture and fixtures | 10 years | ||
Leasehold improvements | Lesser of remaining lease term or life of asset | ||
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) ASC Topic 250 Accounting Changes and Error Corrections, the Company accounted for this change in useful lives as a change in estimate, with prospective application only. The impact of this change in estimate on depreciation expense for the three and nine months ended September 30, 2014 was immaterial to the results on the Consolidated Statements of Operations. | |||
Intangible Assets | ' | ||
Intangible Assets | |||
Intangible assets are research and development assets related to the Company’s primary study on azficel-T that was recognized upon emergence from bankruptcy. Azficel-T has three current or target indications: the Company’s commercial product, LAVIV®, a clinical development program for vocal cord scarring and a clinical development program for restrictive burn scarring. Effective January 1, 2012, the Company launched LAVIV® and as a result, the research and development intangible assets related to the Company’s primary study were considered to be finite-lived intangible assets and are being amortized over the 12 year period of exclusivity, commencing in June 2011, granted by the FDA. | |||
Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis. In accordance with the FASB’s ASC Subtopic 360-10-35 Impairment or Disposal of Long-Lived Assets, the Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There was no impairment expense recognized for either the three or nine months ended September 30, 2014 or 2013. | |||
Income Taxes | ' | ||
Income Taxes | |||
Income taxes are recorded in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which provides for reporting of amounts that are currently payable and also 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 will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2013 and September 30, 2014, the Company did not have any uncertain tax positions. | |||
Recently Issued Accounting Pronouncements | ' | ||
Recently Issued Accounting Pronouncements | |||
In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements—Going Concern (ASC Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This ASU requires that an entity’s management shall evaluate whether there are conditions and events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Implementation of this ASU is effective for the annual and interim periods ending after December 15, 2016 and early application is permitted. | |||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” under ASC Topic 606 which supersedes the current revenue recognition requirements under ASC Topic 605 Revenue Recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. It also provides a five step approach to achieve this principle. For public entities, the new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently evaluating the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements. | |||
Subsequent Events | ' | ||
Subsequent Events | |||
The Company evaluates all subsequent events, through the date the consolidated financial statements are issued, to determine if there are any events that require disclosure. No such events have been identified through the date of this filing. | |||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Summary of Significant Accounting Policies | ' | ||
Schedule of useful life of property and equipment | ' | ||
Property and equipment category | Useful life | ||
Laboratory equipment | 6 years | ||
Computer equipment and software | 3 years | ||
Furniture and fixtures | 10 years | ||
Leasehold improvements | Lesser of remaining lease term or life of asset | ||
Inventory_Tables
Inventory (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory | ' | |||||||
Inventories | ' | |||||||
September 30, | December 31, | |||||||
($ in thousands) | 2014 | 2013 | ||||||
Raw materials | $ | 327 | $ | 511 | ||||
Work in process | 283 | 86 | ||||||
Inventory | $ | 610 | $ | 597 | ||||
Warrants_Tables
Warrants (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Warrants | ' | ||||||||||
Outstanding Warrants to Purchase Common Stock | ' | ||||||||||
Number of Warrants | |||||||||||
Liability-classified warrants | September 30, | December 31, | Exercise | Expiration | |||||||
2014 | 2013 | Price | Dates | ||||||||
Issued in March 2010 and Series A, B and D Preferred Stock offerings | 2,640,534 | 2,640,534 | $ | 6.25 | Oct 2015-Dec 2016 | ||||||
Issued in B, D and E Preferred Stock offerings | 76,120 | 76,120 | $ | 2.50 | Nov 2015-Sept 2017 | ||||||
Issued in June 2011 financing | 6,113 | 6,113 | $ | 22.50 | June 2016 | ||||||
Issued in August 2011 financing | 565,759 | 565,759 | $ | 18.75 | Aug-16 | ||||||
Issued to placement agents in August 2011 financing | 50,123 | 50,123 | $ | 13.64 | Aug-16 | ||||||
Issued with Convertible Notes | 1,125,578 | 1,125,578 | $ | 2.50 | June 2018 | ||||||
Issued in Series E Preferred Stock offering | 1,568,823 | 1,568,823 | $ | 7.50 | Sep-18 | ||||||
Total | 6,033,050 | 6,033,050 | |||||||||
Shares underlying warrants outstanding | Significant unobservable inputs (Level 3) | ' | ||||||||||
Fair value assumptions | ' | ||||||||||
Summary of other assumptions used by entity | ' | ||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||
Weighted average remaining expected life (years) | 2.8 | 3.8 | |||||||||
Interest rate | 0.9 | % | 0.8 | % | |||||||
Dividend yield | — | — | |||||||||
Volatility | 71 | % | 63 | % | |||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Company's Financial Assets and Liability Measured at Fair Value on a Recurring Basis | ' | |||||||||||||
Fair value measurement using | ||||||||||||||
($ in thousands) | Quoted prices in | Significant | Significant | Total | ||||||||||
active markets (Level 1) | other | unobservable | ||||||||||||
observable | inputs | |||||||||||||
inputs (Level 2) | (Level 3) | |||||||||||||
Balance at September 30, 2014 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 44,215 | $ | — | $ | — | $ | 44,215 | ||||||
Liabilities: | ||||||||||||||
Warrant liability | $ | — | $ | — | $ | 14,081 | $ | 14,081 | ||||||
Fair value measurement using | ||||||||||||||
($ in thousands) | Quoted prices in | Significant | Significant | Total | ||||||||||
active markets (Level 1) | other | unobservable | ||||||||||||
observable | inputs | |||||||||||||
inputs (Level 2) | (Level 3) | |||||||||||||
Balance at December 31, 2013 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | 60,033 | $ | — | $ | — | $ | 60,033 | ||||||
Liabilities: | ||||||||||||||
Warrant liability | $ | — | $ | — | $ | 15,216 | $ | 15,216 | ||||||
Reconciliation of Warrant Liability Measured at Fair Value on Recurring Basis | ' | |||||||||||||
Warrant | ||||||||||||||
($ in thousands) | Liability | |||||||||||||
Balance at December 31, 2013 | $ | 15,216 | ||||||||||||
Exercise of warrants | — | |||||||||||||
Change in fair value of warrant liability | (1,135 | ) | ||||||||||||
Balance at September 30, 2014 | $ | 14,081 | ||||||||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Share-Based Compensation. | ' | |||||||||||||
Summary of Share-Based Compensation Expense | ' | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
($ in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Stock option compensation expense for employees and directors | $ | 266 | $ | 620 | $ | 1,002 | $ | 826 | ||||||
Equity awards for nonemployees issued for services | — | 99 | 3 | 102 | ||||||||||
Total stock-based compensation expense | $ | 266 | $ | 719 | $ | 1,005 | $ | 928 | ||||||
Summary of Stock Option Activity | ' | |||||||||||||
$ in thousands except share and per share data) | Number of | Weighted- | Weighted-average | Aggregate | ||||||||||
shares | average | remaining | intrinsic | |||||||||||
exercise | contractual | value | ||||||||||||
price | term (in | |||||||||||||
years) | ||||||||||||||
Outstanding at December 31, 2013 | 2,068,720 | $ | 7.93 | 8.4 | $ | 544 | ||||||||
Granted | 348,000 | 4.19 | ||||||||||||
Exercised | — | — | ||||||||||||
Forfeited | (144,883 | ) | 4.05 | |||||||||||
Expired | (5,637 | ) | 13.94 | |||||||||||
Outstanding at September 30, 2014 | 2,266,200 | $ | 7.59 | 8.3 | $ | 1 | ||||||||
Exercisable at September 30, 2014 | 1,096,250 | $ | 11.46 | 7.5 | $ | — | ||||||||
Details of Fair Value Option Award | ' | |||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||
Expected life (years) | 5.9 | 5.6 | ||||||||||||
Interest rate | 1.9 | % | 1.4 | % | ||||||||||
Dividend yield | — | — | ||||||||||||
Volatility | 70 | % | 71 | % | ||||||||||
Loss_Per_Share_Tables
Loss Per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Loss Per share | ' | |||||||||||||
Schedule of computation of basic and diluted earnings per share | ' | |||||||||||||
($ in thousands except share and per share | For the three months ended | For the nine months ended | ||||||||||||
September 30, | September 30, | |||||||||||||
data) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Loss per share - basic: | ||||||||||||||
Numerator for basic loss per share | $ | (6,012 | ) | $ | (6,605 | ) | $ | (22,278 | ) | $ | (25,812 | ) | ||
Denominator for basic loss per share | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 | ||||||||||
Basic loss per common share | $ | (0.15 | ) | $ | (0.24 | ) | $ | (0.55 | ) | $ | (0.97 | ) | ||
Loss per share - diluted: | ||||||||||||||
Numerator for diluted loss per share | $ | (6,012 | ) | $ | (6,605 | ) | $ | (22,278 | ) | $ | (25,812 | ) | ||
Add back: Fair value of “in the money” warrants outstanding | 1,098 | 1,887 | 2,364 | 2,202 | ||||||||||
Net loss attributable to common share | $ | (7,110 | ) | $ | (8,492 | ) | $ | (24,642 | ) | $ | (28,014 | ) | ||
Denominator for basic loss per share | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 | ||||||||||
Plus: Incremental shares underlying “in the money” warrants outstanding | 443,290 | 644,163 | 279,120 | 353,169 | ||||||||||
Denominator for diluted loss per share | 41,300,105 | 27,802,557 | 41,045,861 | 26,896,268 | ||||||||||
Diluted net loss per common share | $ | (0.17 | ) | $ | (0.31 | ) | $ | (0.60 | ) | $ | (1.04 | ) | ||
Securities Excluded from Calculation of Weighted-Average Shares Outstanding | ' | |||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
“In the money” stock options | 15,000 | 198,000 | 15,000 | 198,000 | ||||||||||
“Out of the money” stock options | 2,392,200 | 1,070,720 | 2,392,200 | 1,070,720 | ||||||||||
“In the money” warrants | — | — | — | — | ||||||||||
“Out of the money” warrants | 4,831,352 | 4,831,352 | 4,831,352 | 4,831,352 | ||||||||||
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Research and development | Research and development | Adjustment | Adjustment | Adjustment | Adjustment | Adjustment | Adjustment | |
Cost of sales | Cost of sales | Research and development | Research and development | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | |||
Finite-lived intangibles | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Intangible Assets | $0.10 | $0.40 | ($0.10) | ($0.40) | $0.10 | $0.40 | ' | ' |
FDA License Fees | ' | ' | ' | ' | ' | ' | ' | ' |
FDA license fees | $0.20 | $0.50 | ' | ' | $0.20 | $0.50 | ($0.20) | ($0.50) |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Laboratory equipment | ' | ' |
Property and equipment | ' | ' |
Useful life of property and equipment | '6 years | '3 years |
Computer equipment and software | ' | ' |
Property and equipment | ' | ' |
Useful life of property and equipment | '3 years | '3 years |
Furniture and fixtures | ' | ' |
Property and equipment | ' | ' |
Useful life of property and equipment | '10 years | '3 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (Research and development intangibles, LAVIV, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Research and development intangibles | LAVIV | ' | ' | ' | ' |
Finite-lived intangibles | ' | ' | ' | ' |
Intangible amortization period | ' | ' | '12 years | ' |
Impairment expenses recognized | $0 | $0 | $0 | $0 |
Inventory_Details
Inventory (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory | ' | ' |
Raw materials | $327 | $511 |
Work-in-process | 283 | 86 |
Inventory | $610 | $597 |
Warrants_Details
Warrants (Details) | Sep. 30, 2014 | Dec. 31, 2013 |
Warrants | ' | ' |
Warrants issued to purchase common stock | 6,033,050 | 6,033,050 |
Issued in March 2010 and Series, A, B and D Preferred Stock offerings | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 2,640,534 | 2,640,534 |
Warrant Exercise Price (in dollars per share) | 6.25 | 6.25 |
Issued In Series B, D And E Preferred Stock offerings | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 76,120 | 76,120 |
Warrant Exercise Price (in dollars per share) | 2.5 | 2.5 |
Issued in June 2011 financing | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 6,113 | 6,113 |
Warrant Exercise Price (in dollars per share) | 22.5 | 22.5 |
Issued in August 2011 financing | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 565,759 | 565,759 |
Warrant Exercise Price (in dollars per share) | 18.75 | 18.75 |
Issued to placement agents in August 2011 financing | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 50,123 | 50,123 |
Warrant Exercise Price (in dollars per share) | 13.64 | 13.64 |
Issued with Convertible Notes | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 1,125,578 | 1,125,578 |
Warrant Exercise Price (in dollars per share) | 2.5 | 2.5 |
Issued in Series E Preferred Stock offering | ' | ' |
Warrants | ' | ' |
Warrants issued to purchase common stock | 1,568,823 | 1,568,823 |
Warrant Exercise Price (in dollars per share) | 7.5 | 7.5 |
Warrants_Details_2
Warrants (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Warrants | ' | ' | ' | ' |
Warrants exercised | ' | ' | 0 | ' |
Cancellation of Warrants | ' | ' | 0 | ' |
Shares underlying warrants outstanding | Significant unobservable inputs (Level 3) | ' | ' | ' | ' |
Fair value assumptions | ' | ' | ' | ' |
Change in estimated fair value resulted in non-cash expense (income) | ($0.20) | ($6.50) | ($1.10) | $1 |
Weighted average remaining expected life | ' | ' | '2 years 9 months 18 days | '3 years 9 months 18 days |
Interest rate (as a percent) | ' | ' | 0.90% | 0.80% |
Volatility (as a percent) | ' | ' | 71.00% | 63.00% |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Liabilities | ' | ' |
Amount transferred from Level 1 to Level 2 | $0 | $0 |
Amount transferred from Level 2 to Level 1 | 0 | 0 |
Amount transferred from Level 1 to Level 2 | 0 | 0 |
Amount transferred from Level 2 to Level 1 | 0 | 0 |
Amount transferred into Level 3 | 0 | 0 |
Amount transferred out of Level 3 | 0 | 0 |
Amount transferred into Level 3 | 0 | 0 |
Amount transferred out of Level 3 | 0 | 0 |
Recurring | Measured at fair value | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 44,215 | 60,033 |
Liabilities | ' | ' |
Warrant liability | 14,081 | 15,216 |
Recurring | Measured at fair value | Quoted prices in active markets (Level 1) | ' | ' |
Assets | ' | ' |
Cash and cash equivalents | 44,215 | 60,033 |
Recurring | Measured at fair value | Significant unobservable inputs (Level 3) | ' | ' |
Liabilities | ' | ' |
Warrant liability | $14,081 | $15,216 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (Shares underlying warrants outstanding, USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Shares underlying warrants outstanding | ' |
Fair value measurements | ' |
Beginning Balance | $15,216 |
Change in fair value of warrant liability | -1,135 |
Ending Balance | $14,081 |
ShareBased_Compensation_Detail
Share-Based Compensation (Details) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
The Plan | The Plan | The Plan | Equity incentive outside of the Plan | |||
Options | Options | Options | ||||
Maximum | ||||||
Equity-based compensation | ' | ' | ' | ' | ' | ' |
Number of shares allowed for issuance | ' | ' | 5,600,000 | ' | ' | ' |
Options issued (in shares) | 2,266,200 | 2,068,720 | ' | ' | ' | 206,000 |
Terms of options | ' | ' | ' | ' | '10 years | ' |
Vesting percentage per year | ' | ' | ' | 25.00% | ' | ' |
Vesting period | ' | ' | ' | '4 years | ' | ' |
Options available for grant (in shares) | ' | ' | ' | 3,374,803 | ' | ' |
ShareBased_Compensation_Detail1
Share-Based Compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Equity-based compensation | ' | ' | ' | ' |
Stock-based compensation expense | $266 | $719 | $1,005 | $928 |
Options | Equity awards for nonemployees issued for services | ' | ' | ' | ' |
Equity-based compensation | ' | ' | ' | ' |
Stock-based compensation expense | ' | 99 | 3 | 102 |
Options | Employees and directors | ' | ' | ' | ' |
Equity-based compensation | ' | ' | ' | ' |
Stock-based compensation expense | $266 | $620 | $1,002 | $826 |
ShareBased_Compensation_Detail2
Share-Based Compensation (Details 3) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Number of shares | ' | ' |
Outstanding at beginning of period (in shares) | 2,068,720 | ' |
Granted (in shares) | 348,000 | ' |
Forfeited (in shares) | -144,883 | ' |
Expired (in shares) | -5,637 | ' |
Outstanding at end of period (in shares) | 2,266,200 | 2,068,720 |
Exercisable at end of period (in shares) | 1,096,250 | ' |
Weighted-average exercise price | ' | ' |
Outstanding at beginning of period (in dollars per share) | $7.93 | ' |
Granted (in dollars per share) | $4.19 | ' |
Forfeited (in dollars per share) | $4.05 | ' |
Expired (in dollars per share) | $13.94 | ' |
Outstanding at end of period (in dollars per share) | $7.59 | $7.93 |
Exercisable at end of period (in dollars per share) | $11.46 | ' |
Additional disclosures | ' | ' |
Weighted-average remaining contractual term (in years), Outstanding | '8 years 3 months 18 days | '8 years 4 months 24 days |
Weighted-average remaining contractual term (in years), Exercisable | '7 years 6 months | ' |
Aggregate intrinsic value, Outstanding | $1 | $544 |
ShareBased_Compensation_Detail3
Share-Based Compensation (Details 4) (USD $) | 9 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Equity-based compensation | ' | ' |
Fair value of shares vested | $1.10 | ' |
Fair market value of options granted (in dollars per share) | $2.64 | $3.47 |
Weighted average assumptions | ' | ' |
Expected life (years) | '5 years 10 months 24 days | '5 years 7 months 6 days |
Interest rate (as a percent) | 1.90% | 1.40% |
Volatility (as a percent) | 70.00% | 71.00% |
Time-based stock options | ' | ' |
Equity-based compensation | ' | ' |
Total unrecognized compensation cost | 2.7 | ' |
Weighted-average period to recognize compensation cost | '4 years | ' |
Performance based options | Equity awards for nonemployees issued for services | ' | ' |
Equity-based compensation | ' | ' |
Total unrecognized compensation cost | $0 | ' |
Loss_Per_Share_Details
Loss Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Loss per share - basic: | ' | ' | ' | ' |
Numerator for basic loss per share | ($6,012) | ($6,605) | ($22,278) | ($25,812) |
Denominator for basic loss per share | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 |
Basic loss per common share (in dollars per share) | ($0.15) | ($0.24) | ($0.55) | ($0.97) |
Loss per share - diluted: | ' | ' | ' | ' |
Numerator for diluted loss per share | -6,012 | -6,605 | -22,278 | -25,812 |
Add back: Fair value of "in the money" warrants outstanding | 1,098 | 1,887 | 2,364 | 2,202 |
Net loss attributable to common share | ($7,110) | ($8,492) | ($24,642) | ($28,014) |
Denominator for basic loss per share | 40,856,815 | 27,158,394 | 40,766,741 | 26,543,099 |
Plus: Incremental shares underlying "in the money" warrants outstanding (in shares) | 443,290 | 644,163 | 279,120 | 353,169 |
Denominator for diluted loss per share | 41,300,105 | 27,802,557 | 41,045,861 | 26,896,268 |
Diluted net loss per common share (in dollars per share) | ($0.17) | ($0.31) | ($0.60) | ($1.04) |
Loss_Per_Share_Details_2
Loss Per Share (Details 2) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
In the money stock options | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computations of diluted weighted-average shares outstanding | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computations of diluted weighted-average shares outstanding | 15,000 | 198,000 | 15,000 | 198,000 |
Out of the money stock options | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computations of diluted weighted-average shares outstanding | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computations of diluted weighted-average shares outstanding | 2,392,200 | 1,070,720 | 2,392,200 | 1,070,720 |
Out of the money warrants | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computations of diluted weighted-average shares outstanding | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computations of diluted weighted-average shares outstanding | 4,831,352 | 4,831,352 | 4,831,352 | 4,831,352 |
Equity_Details
Equity (Details) (USD $) | 9 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Equity | ' | ' |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Issuance of common stock | $5,154 | ' |
Intrexon Corporation | ' | ' |
Equity | ' | ' |
Issuance of common stock (in shares) | 1,024,590 | ' |
Issuance price of shares issued (in dollars per share) | $5.03 | ' |
Issuance of common stock | $5,200 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Income Taxes | ' | ' |
Tax expense or benefit | $0 | $0 |
Collaboration_Agreements_Detai
Collaboration Agreements (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' |
Number of directors | ' | ' | 7 | ' | ' |
NRM VII Holdings I, LLC | ' | ' | ' | ' | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' |
Number of directors that are affiliates of related party | ' | ' | 2 | ' | ' |
Intrexon Corporation | ' | ' | ' | ' | ' |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' |
Expenses for work performed | $1.20 | $1.40 | $3 | $2.40 | ' |
Outstanding trade payables | $0.90 | ' | $0.90 | ' | $1.30 |