Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 26, 2014 | Jun. 30, 2013 | |
Document And Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'INSV | ' | ' |
Entity Registrant Name | 'INSITE VISION INC | ' | ' |
Entity Central Index Key | '0000802724 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 131,951,033 | ' |
Entity Public Float | ' | ' | $25,667,000 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $3,251 | $1,323 |
Short-term investments | 5,000 | 7,999 |
Accounts receivable | 1,026 | 5,250 |
Other receivables | 1,114 | ' |
Prepaid expenses and other current assets | 95 | 144 |
Debt issuance costs, net | 2,248 | ' |
Total current assets | 12,734 | 14,716 |
Property and equipment, net | 1,431 | 377 |
Debt issuance costs, net | ' | 2,666 |
Total assets | 14,165 | 17,759 |
Current liabilities: | ' | ' |
Accounts payable | 394 | 677 |
Accrued liabilities | 2,345 | 1,535 |
Accrued compensation and related expense | 1,090 | 1,134 |
Accrued royalties | 776 | 1,104 |
Accrued interest | 826 | 1,038 |
Non-recourse secured notes, current | 41,281 | 10,395 |
Warrant liability | 1,685 | 2,257 |
Total current liabilities | 48,397 | 18,140 |
Lease incentive | 922 | ' |
Non-recourse secured notes, long-term | ' | 41,488 |
Total liabilities | 49,319 | 59,628 |
Commitments and contingencies (Note 9) | ' | ' |
Stockholders' deficit: | ' | ' |
Preferred stock, $0.01 par value, 5,000,000 shares authorized, none issued and outstanding | ' | ' |
Common stock, $0.01 par value, 240,000,000 shares authorized; 131,951,033 shares issued and outstanding at December 31, 2013 and 2012 | 1,320 | 1,320 |
Additional paid-in capital | 165,549 | 164,615 |
Accumulated deficit | -202,023 | -207,804 |
Total stockholders' deficit | -35,154 | -41,869 |
Total liabilities and stockholders' deficit | $14,165 | $17,759 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 240,000,000 | 240,000,000 |
Common stock, shares issued | 131,951,033 | 131,951,033 |
Common stock, shares outstanding | 131,951,033 | 131,951,033 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues: | ' | ' | ' |
Royalties | $14,787 | $21,641 | $15,138 |
Sale of royalty rights, net | 15,490 | ' | ' |
Licensing fee and milestone amortization | ' | ' | 275 |
Other product and service revenues | 545 | ' | 510 |
Total revenues | 30,822 | 21,641 | 15,923 |
Expenses: | ' | ' | ' |
Research and development | 11,578 | 15,479 | 7,337 |
General and administrative | 5,754 | 5,781 | 5,645 |
Cost of revenues, principally royalties to third parties | 385 | 1,062 | 1,917 |
Total expenses | 17,717 | 22,322 | 14,899 |
Income (loss) from operations | 13,105 | -681 | 1,024 |
Interest expense and other, net | -7,896 | -9,494 | -10,167 |
Change in fair value of warrant liability | 572 | 1,898 | 2,201 |
Net income (loss) | $5,781 | ($8,277) | ($6,942) |
Net income (loss) per share: | ' | ' | ' |
Income (loss) per share - basic | $0.04 | ($0.06) | ($0.06) |
Income (loss) per share - diluted | $0.04 | ($0.06) | ($0.06) |
Weighted average shares used in per share calculation: | ' | ' | ' |
- Basic | 131,951 | 131,951 | 111,769 |
- Diluted | 132,433 | 131,951 | 111,769 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Deficit (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
In Thousands, except Share data | ||||
Beginning balance at Dec. 31, 2010 | ($42,220) | $948 | $149,417 | ($192,585) |
Beginning balance (in shares) at Dec. 31, 2010 | ' | 94,822,593 | ' | ' |
Issuance of common stock from private placement, net of issuance costs | 20,399 | 370 | 20,029 | ' |
Issuance of common stock from private placement, net of issuance costs (in shares) | ' | 36,978,440 | ' | ' |
Issuance of common stock from exercise of stock options | 58 | 2 | 56 | ' |
Issuance of common stock from exercise of stock options (in shares) | 150,000 | 150,000 | ' | ' |
Initial value of warrant liability | -6,356 | ' | -6,356 | ' |
Stock-based compensation | 522 | ' | 522 | ' |
Net income (loss) | -6,942 | ' | ' | -6,942 |
Ending balance at Dec. 31, 2011 | -34,539 | 1,320 | 163,668 | -199,527 |
Ending balance (in shares) at Dec. 31, 2011 | ' | 131,951,033 | ' | ' |
Issuance of common stock from exercise of stock options (in shares) | 0 | ' | ' | ' |
Stock-based compensation | 947 | ' | 947 | ' |
Net income (loss) | -8,277 | ' | ' | -8,277 |
Ending balance at Dec. 31, 2012 | -41,869 | 1,320 | 164,615 | -207,804 |
Ending balance (in shares) at Dec. 31, 2012 | ' | 131,951,033 | ' | ' |
Issuance of common stock from exercise of stock options (in shares) | 0 | ' | ' | ' |
Stock-based compensation | 934 | ' | 934 | ' |
Net income (loss) | 5,781 | ' | ' | 5,781 |
Ending balance at Dec. 31, 2013 | ($35,154) | $1,320 | $165,549 | ($202,023) |
Ending balance (in shares) at Dec. 31, 2013 | ' | 131,951,033 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OPERATING ACTIVITIES: | ' | ' | ' |
Net income (loss) | $5,781 | ($8,277) | ($6,942) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' | ' |
Depreciation and amortization | 107 | 95 | 86 |
Amortization of debt issuance costs | 418 | 419 | 419 |
Stock-based compensation | 934 | 947 | 522 |
Change in fair value of warrant liability | -572 | -1,898 | -2,201 |
Changes in operating assets and liabilities: | ' | ' | ' |
Accounts receivable | 4,224 | -2,686 | 788 |
Other receivables | -1,114 | ' | ' |
Prepaid expenses and other current assets | 49 | -132 | 3 |
Accounts payable | -283 | -26 | 371 |
Accrued liabilities | 656 | 1,124 | -100 |
Accrued compensation and related expense | -44 | 156 | 358 |
Accrued royalties | -328 | 140 | 72 |
Accrued interest | -212 | -133 | -2,205 |
Deferred revenues | ' | ' | -75 |
Net cash provided by (used in) operating activities | 9,616 | -10,271 | -8,904 |
INVESTING ACTIVITIES: | ' | ' | ' |
Purchase of property and equipment | -85 | -127 | -184 |
Decrease (increase) in short-term investments | 2,999 | 16,496 | -19,496 |
Net cash provided by (used in) investing activities | 2,914 | 16,369 | -19,680 |
FINANCING ACTIVITIES: | ' | ' | ' |
Issuance of common stock from priviate placement, net of issuance costs | ' | ' | 20,399 |
Issuance of common stock from exercise of options, net of issuance costs | ' | ' | 58 |
Payment of secured notes payable | -10,602 | -6,675 | -1,442 |
Net cash provided by (used in) financing activities | -10,602 | -6,675 | 19,015 |
Net increase (decrease) in cash and cash equivalents | 1,928 | -577 | -9,569 |
Cash and cash equivalents at beginning of year | 1,323 | 1,900 | 11,469 |
Cash and cash equivalents at end of year | 3,251 | 1,323 | 1,900 |
Supplemental disclosure of cash flow information: | ' | ' | ' |
Interest received | 5 | 17 | 28 |
Interest paid | 7,694 | 9,224 | 11,981 |
Income taxes paid | 110 | 1 | 1 |
Non-cash investing activities - Lease incentives | $1,076 | ' | ' |
Business_and_Summary_of_Signif
Business and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Business and Summary of Significant Accounting Policies | ' | ||||||||||||
1. Business and Summary of Significant Accounting Policies | |||||||||||||
InSite Vision Incorporated (“InSite,” the “Company,” “we,” or “our”) is an ophthalmic product development company advancing ophthalmic pharmaceutical products to address unmet eye care needs. The Company’s current portfolio of products is based on its proprietary DuraSite® drug delivery technology. The Company’s DuraSite sustained drug delivery technology is a proven synthetic polymer-based formulation designed to extend the residence time of a drug relative to conventional topical therapies. It enables topical delivery of a drug as a solution, gel or suspension and can be customized for delivering a wide variety of drug candidates. | |||||||||||||
DuraSite® 2 is the Company’s next-generation enhanced drug delivery system, which is designed to provide a broad platform for developing superior ophthalmic therapeutics. DuraSite 2 is based on the original DuraSite technology, and incorporates a cationic polymer to achieve sustained and enhanced ocular delivery of drugs. The Company plans to initiate a broad licensing program for DuraSite 2 that provides access to industry partners through both exclusive and non-exclusive licensing and/or commercialization agreements. The Company plans to focus its research and development and commercial support efforts on topical products formulated with the DuraSite 2 drug delivery technology. | |||||||||||||
The Company has incurred substantial cumulative losses and negative cash flows from operations during the years ended December 31, 2012 and 2011. As of December 31, 2013, the Company’s accumulated deficit was $202.0 million and its cash and short-term investments were $8.3 million. Further, the Company anticipates that its existing cash and short-term investment balances, together with cash flows from operations, will only be adequate to fund its cash requirements through September 2014. In addition, the Company’s subsidiary does not anticipate it will be able to make the required interest payments required on the secured notes during 2014 and will trigger an event of default in May 2014. For further discussion, see Note 8. Management’s plans include exploring strategic alternatives or raising additional equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects relating to the recoverability and classification of the recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty. | |||||||||||||
Principles of Consolidation. The consolidated financial statements include the accounts of InSite Vision Incorporated as well as its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. | |||||||||||||
Industry Segment and Geographic Information. The Company operates in one segment and is focused on developing drugs and drug delivery systems principally for ophthalmic indications. The Company had limited foreign-based operations for the years ended December 31, 2013, 2012 and 2011. All long-lived assets are located in the United States. | |||||||||||||
Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |||||||||||||
Reclassifications. Certain amounts in prior years’ financial statements have been reclassified to conform to the current presentation. These reclassifications had no impact on previously reported results of operations or stockholders’ deficit. | |||||||||||||
Cash and cash equivalents. The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. | |||||||||||||
Short-term investments. The Company considers all investments with original maturities of 12 months or less from the date of purchase to be short-term investments. They are classified as trading securities principally bought and held for the purpose of selling them in the near term, with unrealized gains and losses included in earnings. | |||||||||||||
Property and Equipment. Property and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is provided over the estimated useful lives of the respective assets, which range from three to five years, using the straight-line method. Leasehold improvements and property acquired under capital leases are amortized over the lives of the related leases or their estimated useful lives, whichever is shorter, using the straight-line method. Depreciation and amortization expense for the years ended December 31, 2013, 2012 and 2011 was $107,000, $95,000 and $86,000, respectively. The costs of repairs and maintenance are expensed as incurred. | |||||||||||||
Impairment of Long-Lived Assets. The Company periodically assesses the recoverability of its long-lived assets for which an indicator of impairment exists by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If the Company concludes that the carrying value will not be recovered, the Company measures the amount of such impairment by comparing the fair value to the carrying value. For the years ended December 31, 2013, 2012 and 2011, no impairment of property and equipment was recorded. | |||||||||||||
Patents. As a result of the Company’s research and development efforts, the Company has obtained, or is applying for, a number of patents to protect proprietary technology and inventions. All costs associated with patents for product candidates under development are expensed as incurred. As of December 31, 2013 and 2012, the Company had no capitalized patent costs. | |||||||||||||
Debt Issuance Costs. Debt issuance costs paid to third parties are capitalized and amortized over the life of the underlying debt, using the straight-line method. Amortization of debt issuance costs for the years ended December 31, 2013, 2012 and 2011 were $418,000, $419,000 and $419,000, respectively, and are included in interest expense and other, net in the Consolidated Statements of Operations. See Note 8, “Non-Recourse Secured Notes Payable” for further discussion of the underlying debt. | |||||||||||||
Warrant Liability. The Company issued warrants to purchase shares of the Company’s common stock in connection with a private placement financing transaction in July 2011. The Company accounted for these warrants as a liability measured at fair value due to a provision included in the warrant agreements that provides the warrant holders with an option to require the Company (or its successor) to purchase their warrants for cash in the event of a “Fundamental Transaction” (as defined in the warrant agreements). The actual amount of cash required if the option is exercised would be determined using the Black-Scholes Option Pricing Model (the “Black-Scholes Model”) as determined in accordance with the terms of the warrant agreements. The fair value of the warrant liability is estimated using the Black-Scholes Model, which requires inputs such as the remaining term of the warrants, share price volatility and risk-free interest rate. These assumptions are reviewed on a monthly basis and changes in the estimated fair value of the outstanding warrants are recognized each reporting period in the Consolidated Statements of Operations under “Change in fair value of warrant liability.” | |||||||||||||
Fair Value Measurements. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | |||||||||||||
Level 1: | Quoted prices in active markets for identical assets or liabilities. | ||||||||||||
Level 2: | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||
Level 3: | Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. | ||||||||||||
As of December 31, 2013 and 2012, $8.2 million and $9.2 million, respectively, of the Company’s cash, cash equivalents and short-term investments consisted of Level 1 Treasury-backed government securities or money market funds that are measured at fair value on a recurring basis. | |||||||||||||
The Company’s financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable, other receivables, accounts payable, accrued liabilities and debt obligations. Accounts receivable, other receivables, and accounts payable are reflected in the accompanying consolidated financial statements at cost, which approximates fair value due to the short-term nature of these instruments. While the Company believes its valuation methodologies are appropriate and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. | |||||||||||||
The Company has debt in the form of non-recourse, secured notes payable with a fixed interest rate, which constitute $41.3 million of Level 2 borrowings outstanding at December 31, 2013, measured at fair value on a nonrecurring basis, with an interest rate of 16%. At December 31, 2013, the Company’s debt was reflected in the accompanying consolidated financial statements at face value. Due to a decline in and uncertainty regarding AzaSite earned royalty revenues, it is reasonably possible that the fair value of the debt has declined. The decline in value of debt is not reasonably determinable at this time. | |||||||||||||
As discussed above, the fair value of the warrant liability, determined using Level 3 criteria, was initially recorded on the grant date and remeasured at December 31, 2013 and 2012 using the Black-Scholes Model, which requires inputs such as the remaining term of the warrants, share price volatility and risk-free interest rate. These inputs are subjective and generally require significant analysis and judgment to develop. | |||||||||||||
The fair value of the warrant liability was estimated using the following assumptions, as determined in accordance with the terms of the warrant agreements, at December 31, 2013 and 2012: | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Risk-free interest rate | 0.8 | % | 0.4 | % | |||||||||
Remaining term (years) | 2.5 | 3.5 | |||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||
Volatility | 100 | % | 100 | % | |||||||||
The expected dividend yield is set at zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. Per the terms of the warrant agreements, expected volatility is based on the historical volatility of the Company’s common stock and is equal to the greater of 100% or the 30-day volatility rate. The risk-free interest rates are taken from the Daily Federal Yield Curve Rates as published by the Federal Reserve and represent the yields on actively-traded U.S. Treasury securities for a term equal to the remaining term of the warrants. | |||||||||||||
The following table provides a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended December 31, 2013 (in thousands): | |||||||||||||
Balance at December 31, 2012 | $ | 2,257 | |||||||||||
Net decrease in fair value of warrant liability on remeasurment | (572 | ) | |||||||||||
Balance at December 31, 2013 | $ | 1,685 | |||||||||||
The net decrease in the estimated fair value of the warrant liability was recognized as income under “Change in fair value of warrant liability” in the Consolidated Statements of Operations. | |||||||||||||
Revenue Recognition. The Company recognizes revenue when four basic criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. The Company has arrangements with multiple revenue-generating elements. The Company analyzes its multiple element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting. An item can generally be considered a separate unit of accounting if both of the following criteria are met: the delivered item(s) has value to the customer on a stand-alone basis and if the arrangement includes a general right of return and delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on the unit’s selling price and is recognized in full when the criteria are met. The Company deems service to be rendered if no continuing obligation exists on the part of the Company. | |||||||||||||
The Company’s revenues are primarily derived from royalties on product sales and licensing agreements, and such agreements may provide for various types of payments, including upfront payments, research funding and related fees during the terms of the agreements, milestone payments based on the achievement of established development objectives and licensing fees. | |||||||||||||
The Company receives royalties from licensees based on third-party sales. The royalties are recorded as earned in accordance with the contract terms when third-party results are reliably measured and collectability is reasonably assured. | |||||||||||||
Revenues associated with non-refundable up-front license fees under arrangements where the license fees cannot be accounted for as separate units of accounting are deferred and recognized as revenues on a straight-line basis over the expected term of the Company’s continued involvement. Revenues from the achievement of milestones are recognized as revenues when the milestones are achieved and the milestone payments are due and collectible. | |||||||||||||
The Company allocates revenue in multiple-deliverable revenue arrangements using estimated selling prices of the delivered goods and services based on the relative selling price method. | |||||||||||||
Research and Development Expenses. Research and development expenses include salaries, benefits, facility costs, services provided by outside consultants and contractors, administrative costs and materials for the Company’s research and development activities. The Company expenses these research and development activities as they are incurred. | |||||||||||||
The Company accrues and expenses the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as research and development expenses. Clinical trial site costs related to patient enrollment are accrued as patients are entered into the trial. | |||||||||||||
General and Administrative Expenses. General and administrative expenses include salaries, benefits, facility costs, services provided by outside consultants and contractors, legal services, advertising and marketing, investor relations, financial reporting, materials and other expenses related to general corporate and sales and marketing activities. The Company recognizes such costs as they are incurred. | |||||||||||||
Cost of Revenues. The Company recognizes royalties to third parties and the cost of inventory shipped related to the sale of the Company’s products when they are incurred. | |||||||||||||
Stock-Based Compensation. The Company’s stock-based compensation programs consist of stock options granted to employees as well as our employee stock purchase plan, based on the grant date fair value of those awards. | |||||||||||||
The grant date fair value of the award is recognized as expense over the requisite service period. The Company uses the Black-Sholes option pricing model to compute the estimated fair value of stock option awards. Using this model, fair value is calculated based on assumptions with respect to: expected volatility of our common stock price: the periods of time over which employees and members of our board are expected to hold their options prior to exercise; expected dividend yield on our common stock; and risk-free interest rates. Stock-based compensation expense also includes an estimate, which is made at the time of grant, of the number of awards that are expected to be forfeited. The estimate is revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||||||||||||
See Note 12, “Stock-Based Compensation” for further discussion of employee stock-based compensation. | |||||||||||||
The Company occasionally issues stock options and warrants to consultants of the Company in exchange for services. The Company has valued these options and warrants using the Black-Scholes option pricing model, at each reporting period and has recorded charges to operations over the vesting periods of the individual stock options or warrants. Such charges amounted to approximately $8,000, $56,000 and $20,000 during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Net Income (Loss) per Share. Basic net income (loss) per share has been computed using the weighted-average number of common shares outstanding during the period. Dilutive net income (loss) per share is computed using the sum of the weighted-average number of common shares outstanding and the potential number of dilutive common shares outstanding during the period. Potential common shares consist of the shares issuable upon exercise of stock options and warrants. Potentially dilutive securities have been excluded from the computation of diluted net loss per share in 2012 and 2011 as their inclusion would be anti-dilutive. | |||||||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share: | |||||||||||||
Year Ended December 31, | |||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2011 | ||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | 5,781 | $ | (8,277 | ) | $ | (6,942 | ) | |||||
Denominator: | |||||||||||||
Weighted-average shares outstanding | 131,951 | 131,951 | 111,769 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock options | 482 | — | — | ||||||||||
Weighted-average shares outstanding for diluted loss | 132,433 | 131,951 | 111,769 | ||||||||||
Net income (loss) per share: | |||||||||||||
Basic | $ | 0.04 | $ | (0.06 | ) | $ | (0.06 | ) | |||||
Diluted | $ | 0.04 | $ | (0.06 | ) | $ | (0.06 | ) | |||||
For the years ended December 31, 2012 and 2011, due to the loss applicable to common stockholders, loss per share is based on the weighted average number of common shares only, as the effect of including equivalent shares from stock options and warrants would be anti-dilutive. At December 31, 2013, 2012 and 2011, 31,407,604, 28,156,898 and 25,795,339 options and warrants, respectively, were excluded from the calculation of diluted earnings per share because the effect was anti-dilutive. | |||||||||||||
Comprehensive Income (Loss). Comprehensive income (loss) is the change in equity from transactions and other events and circumstances other than those resulting from investments by owners and distributions to owners. The consolidated comprehensive income (loss) for the Company was equal to the net income (loss) attributable to the Company for the years ended December 31, 2013, 2012 and 2011. | |||||||||||||
Key Suppliers. The Company is dependent on single or limited source suppliers for certain materials used in its research and development and commercial activities. The Company has generally been able to obtain adequate supplies of these components. However, an extended interruption in the supply of these components currently obtained from single or limited source suppliers could adversely affect the Company’s research and development and commercial efforts. | |||||||||||||
Income Taxes. The Company accounts for income taxes under the liability method; under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. | |||||||||||||
The Company utilizes a two-step approach to recognize and measure uncertain tax positions, if any. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. | |||||||||||||
Significant Customers and Risk. All revenues recognized and/or deferred were primarily from AzaSite licensees. The Company is entitled to receive royalty revenues from net sales of AzaSite under the terms of its agreement with Inspire. Inspire was acquired by Merck in May 2011 and subsequently acquired by Akorn in November 2013. Accordingly, all trade receivables are concentrated with these parties during the years ended December 31, 2013, 2012 and 2011. Under the terms of the license with Inspire, Inspire, through its applicable parent company, has significant influence over the commercial success of AzaSite. Revenues from Merck represented approximately 48%, 90% and 90% of total revenues for the years ended December 31, 2013, 2012 and 2011, respectively. In addition, in April 2013, the Company sold its rights to receive royalty payments relating to sales of Besivance and the amounts received in this sale represented 50% of the Company’s revenues for the year ended December 31, 2013. | |||||||||||||
Credit Risk. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and short-term investments. The Company’s cash, cash equivalents and short-term investments are primarily deposited in demand accounts with two financial institutions. | |||||||||||||
Risks from Third Party Manufacturing Concentration. The Company relies on a single source manufacturer for each of its product candidates and on a single source manufacturer for the active pharmaceutical ingredient in its product candidates. Accordingly, delays in the manufacture of the Company’s product candidates or the active pharmaceutical ingredients could adversely impact the development of the Company’s product candidates. Furthermore, the Company has no control over the manufacture and the overall product supply chain of products for which it is entitled to receive revenue. | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||
In July 2013, the Financial Accounting Standards Board (FASB) issued an amendment to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar loss or a tax credit carryforward exists. The amendment requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. This amendment is effective on a prospective basis for fiscal years beginning after December 15, 2013. The Company adopted this amendment in the year ended December 31, 2013. The adoption of this amendment did not impact the Company’s consolidated financial position, results of operations, or other additional disclosure and presentation requirements since the Company had no uncertain tax position reserves. |
License_Agreements
License Agreements | 12 Months Ended | |
Dec. 31, 2013 | ||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | |
License Agreements | ' | |
2 | License Agreements | |
In December 2003, the Company completed the sale of its drug candidate for the treatment of ocular infections to Bausch & Lomb Incorporated (“Bausch & Lomb”), wholly-owned by Valeant Pharmaceuticals International, Inc. (“Valeant”) as of August 2013, pursuant to a Purchase Agreement and a License Agreement. Accordingly, Besivance was developed by Bausch & Lomb. In May 2009, the United States Food and Drug Administration (“FDA”) approved Besivance to treat bacterial conjunctivitis (pink eye). Besivance was launched in the United States by Bausch & Lomb in the last half of 2009. In 2011, Besivance was launched internationally in select countries. During the years ended December 31, 2012 and 2011, the Company recognized $2,126,000 and $1,208,000, respectively, of royalties related to net sales of Besivance by Bausch & Lomb. In April 2013, the Company sold the rights to receive royalty payments on sales of Besivance, beginning on January 1, 2013, for $15 million at closing, with an additional $1 million paid in February 2014 after certain 2013 Besivance sales targets were met. $0.5 million of Besivance royalties previously recorded in 2013 were netted against the sales price. Under the terms of the agreement, if the purchasers receive specified levels of total cash from the Besivance royalty, the royalty would be returned to the Company in whole or in part. Patent protection for Besivance in the United States expires in 2021. | ||
On February 15, 2007, the Company entered into a license agreement for AzaSiteTM (the “Akorn License”) with Inspire Pharmaceuticals, Inc (“Inspire”). In May 2011, Merck & Co. (“Merck”) acquired Inspire and Inspire became a wholly-owned subsidiary of Merck. In November 2013, Akorn, Inc. (“Akorn”) acquired Inspire from Merck and Inspire became a wholly-owned subsidiary of Akorn. Under the Akorn License, the Company licensed to Inspire, exclusive development and commercialization rights in the United States and Canada, for topical anti-infective products containing azithromycin as the sole active ingredient for human ocular or ophthalmic indications. The Company also granted Inspire an exclusive sublicense under the Pfizer patent rights the Company has licensed under the Pfizer License discussed below. Inspire has the right to grant sublicenses under the terms of the Akorn License. | ||
Akorn, due to its acquisition of Inspire, pays the Company a royalty on net sales of AzaSite in the United States and Canada. The royalty rate is 25% of net sales. Akorn is obligated to pay the Company royalties under the Akorn License for the longer of (i) eleven years from the launch of the first product or (ii) the period during which a valid claim under a patent exists. Until September 30, 2013, Merck paid the Company certain tiered minimum royalties. The royalties discussed above are subject to certain reductions in the event of patent invalidity, generic competition, uncured material breach under the Akorn License or in the event that Akorn is required to pay license fees to third parties for the continued use of AzaSite. Akorn may also terminate the Akorn License at any time upon 6 months’ notice. | ||
The Company also entered into a supply agreement (the “Supply Agreement”) with Inspire on February 15, 2007 for the active pharmaceutical ingredient azithromycin. The Company had previously entered into a third-party supply agreement for the production of this active ingredient. The Supply Agreement was terminated in July 2012. | ||
On August 9, 2012, the Company and Merck amended the payment terms of the Akorn License. Under the amended terms, on a quarterly basis, Merck paid the Company the higher of the pro-rata annual minimum royalty or the earned royalty for 2012 and 2013. In addition, in August 2012, Merck paid the Company a $7.3 million catch-up payment for the difference between the earned royalties already paid for the fourth quarter of 2011 and the first and second quarters of 2012, and the pro-rata annual minimum royalties for those quarters. For the fiscal years ended September 30, 2013, 2012 and 2011, the measurement period pursuant to the terms of the Akorn License, the Company received $19 million, $17 million and $15 million, respectively, in minimum royalties from Merck. The obligation to make minimum royalty payments terminated in September 2013 and Akorn’s obligation to pay earned royalties may be suspended upon the occurrence of certain events, such as a requirement by the FDA or other governmental agency to suspend the marketing of AzaSite or withdraw it from the market in the United States. | ||
On June 20, 2013, the Company and Merck entered into an amendment (the “Amendment”) to the Akorn License. The Amendment grants back to the Company, the right to develop and commercialize AzaSite Xtra™ in the United States and Canada. The Amendment also grants Akorn the exclusive option, but not the obligation, to re-acquire the exclusive right to develop and commercialize AzaSite Xtra in the United States and Canada. The option can be exercised during the period commencing on the effective date of the Amendment and ending on the date that is ten (10) business days following the first regulatory approval of AzaSite Xtra in the United States, unless the Akorn License is earlier terminated or has expired in accordance with its terms. Upon exercise of the option, Akorn is required to pay the Company a one-time payment. In addition, in the event that Akorn exercises the option, Akorn will be obligated to pay the Company royalties on net sales of AzaSite Xtra consistent with the terms of the Akorn License for so long as the Company remains indebted under certain non-recourse secured notes (the “AzaSite Notes”). In the event that the Company is no longer indebted under the AzaSite Notes, the Company has agreed to negotiate in good faith a separate royalty buy-down agreement with Akorn with respect to AzaSite Xtra; provided that any modification to royalty payment obligations with respect to AzaSite Xtra would be subject to the Company and Akorn reaching a subsequent agreement. For a further discussion of the AzaSite Notes, see Note 8. | ||
During the years ended December 31, 2013, 2012 and 2011, the Company recognized $14.3 million, $19.5 million and $13.9 million, respectively, of royalties related to the Akorn License. During the years ended December 31, 2013 and 2011, the Company recognized $0.5 million and $0.4 million, respectively, of revenue from Merck for manufacturing equipment rental and the sale of the active ingredient, azithromycin. | ||
On February 15, 2007, the Company entered into a worldwide, exclusive, royalty-bearing license agreement with Pfizer Inc. (“Pfizer”) under Pfizer’s patent family titled “Method of Treating Eye Infections with Azithromycin” for ocular anti-infective product candidates known as AzaSite and AzaSite Plus (the “Pfizer License”). Under the Pfizer License, the Company is required to pay Pfizer a low single digit royalty based on net sales of the licensed products and to use reasonable commercial efforts to seek regulatory approval for and market licensed products. The Pfizer License provides the Company the right to grant sublicenses thereunder, subject to Pfizer’s prior approval, which approval shall not be unreasonably withheld. Pfizer approved the sublicense granted to Akorn, and previously to Merck prior to November 2013. Based on the royalty reports provided by Merck and Akorn, for the years ended December 31, 2013, 2012 and 2011, the Company recorded third-party royalties of $0.4 million, $1.1 million and $1.4 million, respectively, due primarily under the Pfizer License. | ||
The Company has entered into, and will continue to pursue additional licensing agreements, corporate collaborations and service contracts. There can be no assurance that the Company will be able to negotiate acceptable collaborative, licensing or service agreements, or that the existing arrangements will be successful or renewed or will not be terminated. |
Shortterm_Investments
Short-term Investments | 12 Months Ended | |
Dec. 31, 2013 | ||
Investments Debt And Equity Securities [Abstract] | ' | |
Short-term Investments | ' | |
3 | Short-term Investments | |
As of December 31, 2013 and 2012, the Company had $5.0 million and $8.0 million in short-term investments, respectively. The Company’s investment policy is to limit the risk of principal loss and to ensure safety of invested funds by generally attempting to limit market risk. Accordingly, the Company’s short-term investments were invested in U.S. Treasury securities with original maturities of 12 months or less. They are classified as trading securities principally bought and held for the purpose of selling them in the near term, with unrealized gains and losses included in earnings. At December 31, 2013 and 2012, the unrealized gains on these short-term investments were insignificant. |
Accounts_Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2013 | |
Receivables [Abstract] | ' |
Accounts Receivable | ' |
4. Accounts Receivable | |
Accounts receivable represent amounts due to the Company from its licensees or former licenses, including Merck, Akorn and other third parties. Accounts receivable decreased by $4.2 million for the year ended December 31, 2013 from December 31, 2012. The decrease primarily resulted from the $2.6 million minimum royalty true-up by Merck recorded at December 31, 2012, ceased sales promotion of AzaSite in August 2013 by Merck and a significant decline in net sales of AzaSite due to a scheduled production suite upgrade at the manufacturing plant in the last quarter of 2013 which resulted in a supply shortage. At December 31, 2013, accounts receivable also included $1.0 million for reaching certain 2013 Besivance sales targets related to the sale of the rights to receive Besivance royalty payments. At December 31, 2013 and 2012, the Company did not record a bad debt allowance related to any accounts receivable as all amounts were reasonably expected to be collected. The need for a bad debt allowance is evaluated each reporting period based on the Company’s assessment of the collectability of such amounts. |
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||
Property and Equipment, Net | ' | ||||||||
5 | Property and Equipment, net | ||||||||
Property and equipment, net consisted of the following (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Laboratory and other equipment | $ | 1,445 | $ | 1,399 | |||||
Leasehold improvements | 45 | 45 | |||||||
Furniture and fixtures | 14 | 14 | |||||||
Construction in Progress | 1,115 | — | |||||||
2,619 | 1,458 | ||||||||
Accumulated depreciation and amortization | (1,188 | ) | (1,081 | ) | |||||
Property and equipment, net | $ | 1,431 | $ | 377 | |||||
Warrant_Liability
Warrant Liability | 12 Months Ended | |
Dec. 31, 2013 | ||
Text Block [Abstract] | ' | |
Warrant Liability | ' | |
6 | Warrant Liability | |
On July 18, 2011, the Company completed a private placement financing transaction in which it sold shares of its common stock and warrants to purchase shares of its common stock. The Company sold a total of 36,978,440 shares of common stock, at a price of $0.60 per share, and issued warrants to purchase up to 14,791,376 shares of common stock. The warrants are exercisable at $0.75 per share and expire five years from the date of issuance. The private placement resulted in $22.2 million in gross proceeds and approximately $20.4 million in net proceeds to the Company after deducting placement agent fees, legal, accounting and other costs associated with the transaction. The Company has used the net proceeds of the transaction to fund clinical trials and for general corporate purposes, including working capital. | ||
As discussed in Note 1, the warrants issued in July 2011 include a provision that provides the warrant holders with an option to require the Company (or its successor) to purchase the warrants for cash in an amount equal to the Black-Scholes value in the event of a “Fundamental Transaction” (as defined in the warrant agreements). Accordingly, the fair value of the warrants at the issuance date was estimated using the Black-Scholes Model, as determined in accordance with the terms of the warrant agreements, and the Company recorded a warrant liability of $6.4 million. The Company remeasured the warrant liability at December 31, 2013 and 2012, and recorded a decrease to the warrant liability of approximately $0.6 million and $1.9 million, respectively, which was recognized as income in the Company’s Consolidated Statement of Operations for the years ended December 31, 2013 and 2012. Additional disclosures regarding assumptions used in calculating the fair value of the warrant liability are included in Note 1. |
Lease_Incentive
Lease Incentive | 12 Months Ended | |
Dec. 31, 2013 | ||
Text Block [Abstract] | ' | |
Lease Incentive | ' | |
7 | Lease Incentive | |
On August 1, 2013, the Company and Legacy Partners I Alameda, LLC entered into the fifth amendment to the Company’s lease, dated September 1, 1996, which covers the Company’s space at 965 Atlantic Avenue and 2020 Challenger Drive, in Alameda, California. Under the terms of the amendment, the term of the Company’s lease was extended until December 2020 and the Company is eligible to receive up to $1.3 million from Legacy Partners for leasehold improvements for both buildings. | ||
As of December 31, 2013, the Company incurred $1.1 million for leasehold improvements under the terms of the amendment for both buildings. The lease incentives will be recognized as reductions of rental expense on a straight-line basis over the term of the lease. As of December 31, 2013, the leasehold improvements have not been placed in service and are recorded as Construction in Progress, see Note 5. After the leasehold improvements are placed in service, they will be amortized over the life of the lease or their estimated useful lives, whichever is shorter, using the straight-line method. As of December 31, 2013, $0.9 million of the lease incentives were classified as long-term and $0.2 million were classified as current in Accrued liabilities in the Company’s Consolidated Balance Sheets. As of December 31, 2013, the reimbursement of $1.1 million from Legacy Partners was recorded as Other receivables in the Company’s Consolidated Balance Sheets. |
NonRecourse_Secured_Notes
Non-Recourse Secured Notes | 12 Months Ended |
Dec. 31, 2013 | |
Debt Disclosure [Abstract] | ' |
Non-Recourse Secured Notes | ' |
8. Non-Recourse Secured Notes | |
In February 2008, the Company’s wholly-owned subsidiary, Azithromycin Royalty Sub, LLC completed a private placement of $60.0 million in aggregate principal amount of non-convertible, non-recourse promissory notes due in 2019. Net proceeds from the financing were approximately $55.3 million after transaction costs of approximately $4.7 million. The annual interest rate on the notes is 16% with interest payable quarterly in arrears. The notes are secured by, and will be repaid from, royalties to be paid to the Company by Akorn from net sales of AzaSite in the United States. The secured notes are non-recourse to InSite Vision Incorporated. If the AzaSite royalties received for any quarter exceed the interest payments and certain expenses due that quarter, the excess will be applied to the repayment of principal of the notes until the notes have been paid in full. The notes may be redeemed at the Company’s option at the current principal amount. | |
The Company’s subsidiary received insufficient royalties to make the interest payment in full that was due on February 15, 2014. The Company has the ability to make-up this shortfall with its own cash resources. This shortfall in interest payments is not an event of default. However, if the Company does not pay in full the recent shortfall (plus interest thereon) by May 15, 2014, the Company’s subsidiary will trigger an event of default under the indenture. The Company has no intention to pay this shortfall. Accordingly, an event of default is likely on May 15, 2014. To the extent that an event of default occurs, the bondholders could seek available remedies, which includes foreclosure on our subsidiary. The Company’s ability to receive future revenue from sales of AzaSite is dependent on the Company’s subsidiary repaying the AzaSite Notes and interest in a timely fashion. If the Company’s subsidiary does not cure the expected event of default, the Company is highly unlikely to receive future revenue from AzaSite. Based on current earned royalty levels, the earned royalties will not cover future required interest payments. As such, as of December 31, 2013, $41.3 million of secured notes was classified as current along with the unamortized debt issuance costs. After default and assuming foreclosure by the noteholders on their collateral, primarily our subsidiary, the Company will lose all interest in AzaSite Royalty Sub and lose its right to receive AzaSite royalties in North America. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||||||||||
Commitments and Contingencies | ' | ||||||||||||
9 | Commitments and Contingencies | ||||||||||||
The Company has entered into certain license agreements that require it to make royalty payments for the life of the licensed patents. The estimated royalty payments related to the net sales of AzaSite in North America are approximately $0.3 million for the period 2014 through 2019. These contractual obligations are reflected in the Company’s financial statements once the related obligation becomes due. Much of these obligations have been eliminated since the Company expects to default on the AzaSite Notes in 2014, as the noteholders would be responsible for paying these royalties. | |||||||||||||
The Company conducts its operations from leased facilities in Alameda, California under non-cancelable operating lease agreements that expire in December 2020. Lease payments include rent and the Company’s pro-rata share of operation expenses. The Company subleases a portion of the facility under a lease agreement that expires in 2014. Lease income includes rent and a pro-rata share of operation expenses. For accounting purposes, the Company is amortizing all rent payments and receipts ratably over the life of the lease. Rent expense for the years ended December 31, 2013, 2012 and 2011, was $583,000, $697,000, and $697,000, respectively. Future minimum lease payments under the operating lease and future cash receipts from the sublease, are as follows (in thousands): | |||||||||||||
Operating Lease | Operating Sublease | Operating Lease | |||||||||||
Year Ending December 31, | Cash Payments | Cash Receipts | Cash Payments, net | ||||||||||
2014 | $ | 589 | $ | 151 | $ | 438 | |||||||
2015 | 709 | — | 709 | ||||||||||
2016 | 736 | — | 736 | ||||||||||
2017 | 762 | — | 762 | ||||||||||
2018 | 788 | — | 788 | ||||||||||
2019 and thereafter | 1,641 | — | 1,641 | ||||||||||
$ | 5,225 | $ | 151 | $ | 5,074 | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
10 | Income Taxes | ||||||||||||
Provision for Income Taxes | |||||||||||||
There was no provision for income taxes for the years ended December 31, 2013, 2012 and 2011 due to the Company’s net operating losses. | |||||||||||||
Income tax provision related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 34% to pretax loss as follows (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax provision at federal statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State taxes, net of federal benefit | 0 | % | 0 | % | 0 | % | |||||||
Warrant liability | -3.4 | % | 7.8 | % | 10.8 | % | |||||||
Other permanent differences | 0.1 | % | 0 | % | -0.1 | % | |||||||
Credits | -11.9 | % | 0 | % | 2.7 | % | |||||||
Expiring net operating losses | 0 | % | -15 | % | -11.4 | % | |||||||
True up of deferred tax assets | 0 | % | 0 | % | -4.3 | % | |||||||
Valuation allowance | -18.8 | % | -26.8 | % | -31.7 | % | |||||||
Effective tax rate | 0 | % | 0 | % | 0 | % | |||||||
Deferred Tax Assets and Liabilities | |||||||||||||
Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets for federal and state income taxes as of December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 39,555 | $ | 44,077 | |||||||||
Tax credit carryforwards | 8,936 | 7,870 | |||||||||||
Capitalized research and development | 11,746 | 9,926 | |||||||||||
Depreciation | 165 | 182 | |||||||||||
Other | 1,251 | 581 | |||||||||||
Total deferred tax assets | 61,653 | 62,636 | |||||||||||
Valuation allowance | (61,653 | ) | (62,636 | ) | |||||||||
Net deferred tax assets | $ | — | $ | — | |||||||||
Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Because of our lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance. During the years ended December 31, 2013 and 2012, the valuation allowance decreased by $1.0 million and increased by $0.3 million, respectively. | |||||||||||||
At December 31, 2013, the Company had net operating loss carryforwards for federal income tax purposes of approximately $100.9 million, which expire in the years 2018 through 2033 and federal tax credits of approximately $3.9 million, which expire in the years 2018 through 2033. At December 31, 2013, the Company also had net operating loss carryforwards for state income tax purposes of approximately $88.2 million, which expire in the years 2014 through 2033, and state research and development tax credits of approximately $5.0 million, which carry forward indefinitely. | |||||||||||||
The future utilization of the Company’s net operating loss carryforwards to offset future taxable income is subject to an annual limitation as a result of ownership changes that have occurred previously, and may be further impacted by future ownership changes. As necessary, the deferred tax assets have been reduced by any carryforwards that expire prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. These carryforwards may be further reduced if the Company has any additional ownership changes in the future. | |||||||||||||
The valuation allowance includes amounts of benefit at both December 31, 2013 and 2012 related to stock-based compensation and exercises, prior to the implementation of Accounting Standards Codification 515 and 718 that will be credited to additional paid-in capital when realized. | |||||||||||||
The American Taxpayer Relief Act of 2012 was signed into law on January 2, 2013. The act retroactively reinstated various expired tax extenders for the 2012 year. None of the extenders included in the Act were material to the Company’s financial statements and the impact of the tax law change has been accounted for in 2013 under ASC 740-10-45-15 as this is the period of enactment. One of the tax extenders reinstated by the Act was the federal research credit. The total 2012 federal research credit included in the 2013 provision is $0.3 million. | |||||||||||||
A change in California law occurred in November 2012 with the enactment of RTC Sec. 25128.7 related to apportionment of income. The new law was effective beginning in 2013. All California deferred tax assets have been adjusted using the rates that will be in effect when the deferred tax assets are expected to be utilized. | |||||||||||||
Unrecognized Tax Benefits | |||||||||||||
The Company has incurred net operating losses since inception and does not have any unrecognized tax benefits. The Company’s policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the consolidated statements of operations. If the Company is eventually able to recognize its uncertain positions, its effective tax rate would be reduced. The Company currently has a full valuation allowance against its net deferred tax assets which would impact the timing of the effective tax rate benefit should any uncertain tax positions be favorably settled in the future. Any adjustments to the Company’s uncertain tax positions would result in an adjustment of its net operating loss or tax credit carry forwards. | |||||||||||||
The Company files income tax returns in the U.S. federal and California jurisdictions. The Company is no longer subject to tax examinations for years before 2010 for federal returns and 2009 for California returns, except to the extent that it utilizes net operating losses or tax credit carryforwards that originated before those years. The Company is not currently under audit by any major tax jurisdiction nor has it been in the past. | |||||||||||||
Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. During the years ended December 31, 2013 and 2012, no interest or penalties were required to be recognized relating to unrecognized tax benefits. |
Common_Stock_Warrants
Common Stock Warrants | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Text Block [Abstract] | ' | ||||||||||||||||
Common Stock Warrants | ' | ||||||||||||||||
11 | Common Stock Warrants | ||||||||||||||||
The following table shows outstanding warrants as of December 31, 2013, all of which were issued in the July 2011 private placement financing transaction. All of the outstanding warrants have cashless exercise provisions in the event the registration statement registering the resale of the shares of common stock issuable upon exercise of the warrants is not effective or the prospectus forming a part of the registration statement is not current. All warrants are exercisable for common stock. | |||||||||||||||||
Date Issued | Warrant | Exercise | Expiration Date | Cash if | |||||||||||||
Shares | Price | Exercised | |||||||||||||||
July 18, 2011 | 14,791,376 | $ | 0.75 | July 18, 2016 | $ | 11,093,532 |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
12 | Stock-Based Compensation | ||||||||||||||||
Equity Incentive Program | |||||||||||||||||
Prior to October 15, 2007, the Company granted options under a stock option plan adopted in 1994 and amended thereafter (the “1994 Plan”), that allowed for the grant of non-qualified stock options, incentive stock options and stock purchase rights to the Company’s employees, directors, and consultants. On October 15, 2007, the Company’s stockholders approved a new equity incentive plan, the 2007 Performance Incentive Plan (the “2007 Plan”), that provides for grants of options and other equity-based awards to the Company’s employees, directors and consultants. The Company’s authority to grant new awards under the 1994 Plan terminated upon stockholder approval of the 2007 Plan. Options granted under these plans expire 10 years after the date of grant and become exercisable at such times and under such conditions as determined by the Company’s Board of Directors or a committee appointed by the Board (generally with 25% vesting after one year and the balance vesting on a daily basis over the next three years of service). Upon termination of the optionee’s service, unvested options terminate, and vested options generally expire at the end of three months. Only nonqualified stock options have been granted under these plans to date. On January 1 of each calendar year during the term of the 2007 Plan, the shares of Common Stock available for issuance will be increased by the lesser of 2% of the total outstanding shares of Common Stock on December 31 of the preceding calendar year, or 3,000,000 shares. | |||||||||||||||||
Employee Stock Purchase Plans | |||||||||||||||||
The Company maintained an employee stock purchase plan, adopted in 1994 and amended thereafter (the “Purchase Plan”), until August 2009. In August 2009, the Purchase Plan was suspended. No new offering period will commence and no additional shares will be added to the Purchase Plan under its evergreen provision unless and until approved by the Company’s Board of Directors. The Purchase Plan operated in 24-month “offering periods” that are each divided into four six-month “purchase periods.” The Purchase Plan allowed eligible employees to purchase Common Stock at 85% of the lower of the fair market value of the Common Stock on the first day of the applicable offering period or the fair market value of the Common Stock on the last day of the applicable purchase period. Purchases were limited to 10% of each employee’s eligible compensation, subject to certain Internal Revenue Service restrictions. All of the Company’s employees were eligible to participate in the Purchase Plan after certain service periods were met. The number of shares available for issuance under the Purchase Plan was automatically increased on the first trading day in January each calendar year, by an amount equal to 0.5% of the total number of shares of Common Stock outstanding on the last trading day in December in the immediately preceding calendar year, but in no event will any such annual increase exceed 125,000 shares. No shares have been issued under the Purchase Plan since 2009. As of December 31, 2013, there was no remaining unrecorded deferred stock-based compensation expense related to the Purchase Plan. As of December 31, 2013, 515,183 shares were reserved for issuance under the Purchase Plan. | |||||||||||||||||
Stock-based Compensation | |||||||||||||||||
Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. All of the Company’s stock compensation is accounted for as an equity instrument. | |||||||||||||||||
The effect of recording stock-based compensation for the years ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Stock-based compensation expense by type of award: | |||||||||||||||||
Employee stock options | $ | 926 | $ | 891 | $ | 502 | |||||||||||
Scientific Advisory Board stock options | 8 | 56 | 20 | ||||||||||||||
Total stock-based compensation | $ | 934 | $ | 947 | $ | 522 | |||||||||||
Stock-based compensation included in expense line items in the Consolidated Statements of Operations for the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Research and development | $ | 331 | $ | 271 | $ | 141 | |||||||||||
General and administrative | 603 | 676 | 381 | ||||||||||||||
$ | 934 | $ | 947 | $ | 522 | ||||||||||||
During the years ended December 31, 2013 and 2012, respectively, the Company granted options to purchase 4,124,374 and 4,047,500 shares of common stock with an estimated total grant date fair value of $0.9 million and $1.2 million. Based on the Company’s historical experience of option pre-vesting cancellations and estimates of future forfeiture rates, the Company has assumed an annualized forfeiture rate of 10% for its options for all periods disclosed. Accordingly, for the years ended December 31, 2013 and 2012, the Company estimated that the stock-based compensation for the awards not expected to vest was $0.3 million and $0.2 million, respectively. | |||||||||||||||||
As of December 31, 2013 and 2012, the unrecorded deferred stock-based compensation balances related to stock options were $1.2 million and $1.3 million, respectively, and will be recognized over an estimated weighted-average amortization period of 2.2 years. | |||||||||||||||||
Fair Value Assumptions | |||||||||||||||||
The fair value of each option grant is estimated using the Black-Scholes valuation model on the date of grant and the graded-vesting method with the following weighted-average assumptions: | |||||||||||||||||
Year ended | |||||||||||||||||
December 31, | |||||||||||||||||
Stock Options | 2013 | 2012 | 2011 | ||||||||||||||
Risk-free interest rate | 0.9 | % | 0.7 | % | 0.9 | % | |||||||||||
Expected term (years) | 5 | 5 | 5 | ||||||||||||||
Expected dividends | 0 | % | 0 | % | 0 | % | |||||||||||
Volatility | 89.9 | % | 90.9 | % | 89.7 | % | |||||||||||
The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility is based on the combination of historical volatility of the Company’s common stock and the common stock of the Company’s competitors, the expected moderation in future volatility over the period commensurate with the expected life of the options and other factors. The risk-free interest rates are taken from the Daily Federal Yield Curve Rates as of the grant dates as published by the Federal Reserve and represent the yields on actively traded Treasury securities for terms equal to the expected term of the options. The expected term calculation is based on the terms utilized by the Company’s competitors, observed historical option exercise behavior and post-vesting forfeitures of options by the Company’s employees. | |||||||||||||||||
The following is a summary of activity under the Company’s stock option plans for the indicated periods: | |||||||||||||||||
Number of | Weighted-Average | Weighted-Average | Aggregate | ||||||||||||||
shares | Exercise Price | Remaining Contractual | Intrinsic Value | ||||||||||||||
Term (Years) | (in thousands) | ||||||||||||||||
Outstanding at December 31, 2010 | 8,935,463 | $ | 0.4 | 8.79 | $ | 211 | |||||||||||
Granted | 2,955,000 | 0.44 | |||||||||||||||
Exercised | (150,000 | ) | 0.38 | ||||||||||||||
Forfeited | (455,000 | ) | 0.33 | ||||||||||||||
Expired | (281,500 | ) | 0.7 | ||||||||||||||
Outstanding at December 31, 2011 | 11,003,963 | 0.41 | 8.11 | 861 | |||||||||||||
Granted | 4,047,500 | 0.42 | |||||||||||||||
Exercised | — | 0 | |||||||||||||||
Forfeited | (784,223 | ) | 0.37 | ||||||||||||||
Expired | (901,718 | ) | 0.38 | ||||||||||||||
Outstanding at December 31, 2012 | 13,365,522 | 0.42 | 7.69 | 156 | |||||||||||||
Granted | 4,124,374 | 0.31 | |||||||||||||||
Exercised | — | 0 | |||||||||||||||
Forfeited | (323,479 | ) | 0.33 | ||||||||||||||
Expired | (68,433 | ) | 0.62 | ||||||||||||||
Outstanding at December 31, 2013 | 17,097,984 | $ | 0.39 | 7.22 | $ | 195 | |||||||||||
Options vested and expected to vest at December 31, 2013 | 16,614,008 | $ | 0.39 | 7.17 | $ | 189 | |||||||||||
Options exercisable at December 31, 2013 | 11,094,139 | $ | 0.41 | 6.49 | $ | 140 | |||||||||||
At December 31, 2013, the Company had 4,521,354 shares of common stock available for grant under its 2007 Plan. The weighted average grant date fair value of options granted during the years ended December 31, 2013, 2012 and 2011 was $0.21, $0.29 and $0.31, respectively. The total intrinsic value of options exercised during the year ended December 31, 2011 was $24,000. No options were exercised during the year ended December 31, 2013 and 2012. | |||||||||||||||||
At December 31, 2012 and 2011, options to purchase 7,752,944 and 4,718,014 shares of common stock were exercisable at weighted-average exercise prices of $0.42 and $0.43, per share, respectively. |
Legal_Proceedings
Legal Proceedings | 12 Months Ended | |
Dec. 31, 2013 | ||
Commitments And Contingencies Disclosure [Abstract] | ' | |
Legal Proceedings | ' | |
13 | Legal Proceedings | |
The Company is subject to various claims and legal actions during the ordinary course of its business. | ||
In April 2011, the Company received a Notice Letter that Sandoz, Inc. or Sandoz, has filed an Abbreviated New Drug Application, or ANDA, with the U.S. Food and Drug Administration (FDA) seeking marketing approval for a 1% azithromycin ophthalmic solution, or the Sandoz Product, prior to the expiration of the five U.S. patents listed in the Orange Books for AzaSite, which include four of our patents and one patent licensed to us by Pfizer. In the paragraph IV Certification accompanying the Sandoz ANDA filing, Sandoz alleges that the claims of the Orange Book listed patents are invalid, unenforceable and/or will not be infringed upon by the Sandoz Product. On May 26, 2011, we, Merck and Pfizer filed a patent infringement lawsuit against Sandoz and related entities. The plaintiff companies agreed that Merck would take the lead in prosecuting this lawsuit. Before the trial, the patents involved in the litigation were limited to the one Pfizer patent and three of our patents. On October 4, 2013, the United States District Court for the District of New Jersey entered a Final Judgment in favor of us and the other plaintiffs finding all the asserted claims of the patents in the litigation valid and infringed by Sandoz and related entities. The Court Order specified that the effective date of any FDA approval of a Sandoz ANDA for generic 1% azithromycin ophthalmic solution products would be no earlier than the expiration date of the patents in the litigation. On November 4, 2013, Sandoz filed an appeal of this decision to the United States Court of Appeals for the Federal Circuit. On November 15, 2013, Akorn acquired Inspire from Merck, and as such, acquired the rights to AzaSite in North America. We believe Akorn will continue to take the lead in prosecuting this lawsuit. We and the other plaintiffs intend to vigorously contest any Sandoz assertions that these patents should have been found not infringed, invalid or unenforceable. | ||
In May 2013, the Company received a Notice Letter that Mylan Pharmaceuticals, Inc. or Mylan, has filed an ANDA with the FDA seeking marketing approval for a 1% azithromycin ophthalmic solution, or the Mylan Product, prior to the expiration of the U.S. patents listed in the Orange Books for AzaSite, which include three of our patents and one patent licensed to us by Pfizer. In the paragraph IV Certification accompanying the Mylan ANDA filing, Mylan alleges that the claims of the Orange Book listed patents are invalid, unenforceable and/or will not be infringed upon by the Mylan Product. On June 14, 2013, we, Merck and Pfizer filed a patent infringement lawsuit against Mylan and a related entity. On November 15, 2013, Akorn acquired Inspire from Merck, and as such, acquired the rights to AzaSite in North America. The plaintiff companies have agreed that Akorn will take the lead in prosecuting this lawsuit. The filing of this lawsuit triggered an automatic stay, or bar, of the FDA’s approval of the ANDA for up to 30 months or until a final district court decision of the infringement lawsuit, whichever comes first. We and the other plaintiffs intend to vigorously enforce our patent rights relating to AzaSite and vigorously contest any Mylan assertions that these patents are invalid or unenforceable. | ||
On January 3, 2013, Janel Joseph and Mitchell Joseph III filed a complaint in circuit court in Fayette County, Kentucky against Bausch & Lomb and the Company alleging that Janel Joseph was injured when her physician treated her with the Bausch & Lomb product Besivance following a photorefractive keratectomy. The plaintiffs allege that the use was off-label but nonetheless marketed by the defendants. Ms. Joseph alleges loss of vision and Mr. Joseph, her husband, alleges loss of consortium. On February 1, 2013, Bausch & Lomb removed the case to the United States District Court for the Eastern District of Kentucky. On February 8, 2013, the defendants filed answers denying the allegations. Fact discovery closed on August 1, 2013. On December 4, 2013, the Company moved to dismiss the complaint for lack of personal jurisdiction and also moved for summary judgment. Bausch & Lomb, represented by the same counsel, moved for summary judgment on the same day. On January 3, 2014, the plaintiffs filed a response conceding to the Company’s motion to dismiss for lack of personal jurisdiction. The motion is under consideration by the court. The plaintiffs to date have not made a specific claim for damages. A trial date has been set for July 2014. | ||
There are currently no other claims or legal actions that would have a material adverse impact on our financial position, operations or potential performance. |
Quarterly_Results
Quarterly Results | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Quarterly Results | ' | ||||||||||||||||
14 | Quarterly Results (Unaudited) | ||||||||||||||||
The following table is a summary of the quarterly results of operations for the years ended December 31, 2013 and 2012. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The Company’s operating results for any quarter are not necessarily indicative of results for any future period. | |||||||||||||||||
2013 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(In thousands, except per share amounts) | Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenues | $ | 5,260 | $ | 19,240 | $ | 5,254 | $ | 1,068 | |||||||||
Cost of revenues | 85 | 167 | 130 | 3 | |||||||||||||
Gross profit | 5,175 | 19,073 | 5,124 | 1,065 | |||||||||||||
Income (loss) from operations | 355 | 13,972 | 1,319 | (2,541 | ) | ||||||||||||
Net income (loss) | (1,921 | ) | 12,116 | 579 | (4,993 | ) | |||||||||||
- basic | $ | (0.01 | ) | $ | 0.09 | $ | 0 | $ | (0.04 | ) | |||||||
- diluted | $ | (0.01 | ) | $ | 0.09 | $ | 0 | $ | (0.04 | ) | |||||||
2012 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(In thousands, except per share amounts) | Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenues | $ | 2,273 | $ | 1,816 | $ | 12,139 | $ | 5,413 | |||||||||
Cost of revenues | 265 | 186 | 313 | 298 | |||||||||||||
Gross profit | 2,008 | 1,630 | 11,826 | 5,115 | |||||||||||||
Income (loss) from operations | (3,412 | ) | (4,513 | ) | 7,603 | (359 | ) | ||||||||||
Net income (loss) | (4,847 | ) | (6,754 | ) | 5,142 | (1,818 | ) | ||||||||||
- basic | $ | (0.04 | ) | $ | (0.05 | ) | $ | 0.04 | $ | (0.01 | ) | ||||||
- diluted | $ | (0.04 | ) | $ | (0.05 | ) | $ | 0.04 | $ | (0.01 | ) |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
15. Subsequent Events | |
The Company evaluated subsequent events through the date on which the financial statements were issued, and has determined that there are no subsequent events that require adjustments or disclosure to the financial statements for the year ended December 31, 2013. |
Business_and_Summary_of_Signif1
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Principles of Consolidation | ' | ||||||||||||
Principles of Consolidation. The consolidated financial statements include the accounts of InSite Vision Incorporated as well as its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. | |||||||||||||
Industry Segment and Geographic Information | ' | ||||||||||||
Industry Segment and Geographic Information. The Company operates in one segment and is focused on developing drugs and drug delivery systems principally for ophthalmic indications. The Company had limited foreign-based operations for the years ended December 31, 2013, 2012 and 2011. All long-lived assets are located in the United States. | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |||||||||||||
Reclassifications | ' | ||||||||||||
Reclassifications. Certain amounts in prior years’ financial statements have been reclassified to conform to the current presentation. These reclassifications had no impact on previously reported results of operations or stockholders’ deficit. | |||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||
Cash and cash equivalents. The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. | |||||||||||||
Short-term investments | ' | ||||||||||||
Short-term investments. The Company considers all investments with original maturities of 12 months or less from the date of purchase to be short-term investments. They are classified as trading securities principally bought and held for the purpose of selling them in the near term, with unrealized gains and losses included in earnings. | |||||||||||||
Property and Equipment | ' | ||||||||||||
Property and Equipment. Property and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is provided over the estimated useful lives of the respective assets, which range from three to five years, using the straight-line method. Leasehold improvements and property acquired under capital leases are amortized over the lives of the related leases or their estimated useful lives, whichever is shorter, using the straight-line method. Depreciation and amortization expense for the years ended December 31, 2013, 2012 and 2011 was $107,000, $95,000 and $86,000, respectively. The costs of repairs and maintenance are expensed as incurred. | |||||||||||||
Impairment of Long-Lived Assets | ' | ||||||||||||
Impairment of Long-Lived Assets. The Company periodically assesses the recoverability of its long-lived assets for which an indicator of impairment exists by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If the Company concludes that the carrying value will not be recovered, the Company measures the amount of such impairment by comparing the fair value to the carrying value. For the years ended December 31, 2013, 2012 and 2011, no impairment of property and equipment was recorded. | |||||||||||||
Patents | ' | ||||||||||||
Patents. As a result of the Company’s research and development efforts, the Company has obtained, or is applying for, a number of patents to protect proprietary technology and inventions. All costs associated with patents for product candidates under development are expensed as incurred. As of December 31, 2013 and 2012, the Company had no capitalized patent costs. | |||||||||||||
Debt Issuance Costs | ' | ||||||||||||
Debt Issuance Costs. Debt issuance costs paid to third parties are capitalized and amortized over the life of the underlying debt, using the straight-line method. Amortization of debt issuance costs for the years ended December 31, 2013, 2012 and 2011 were $418,000, $419,000 and $419,000, respectively, and are included in interest expense and other, net in the Consolidated Statements of Operations. See Note 8, “Non-Recourse Secured Notes Payable” for further discussion of the underlying debt. | |||||||||||||
Warrant Liability | ' | ||||||||||||
Warrant Liability. The Company issued warrants to purchase shares of the Company’s common stock in connection with a private placement financing transaction in July 2011. The Company accounted for these warrants as a liability measured at fair value due to a provision included in the warrant agreements that provides the warrant holders with an option to require the Company (or its successor) to purchase their warrants for cash in the event of a “Fundamental Transaction” (as defined in the warrant agreements). The actual amount of cash required if the option is exercised would be determined using the Black-Scholes Option Pricing Model (the “Black-Scholes Model”) as determined in accordance with the terms of the warrant agreements. The fair value of the warrant liability is estimated using the Black-Scholes Model, which requires inputs such as the remaining term of the warrants, share price volatility and risk-free interest rate. These assumptions are reviewed on a monthly basis and changes in the estimated fair value of the outstanding warrants are recognized each reporting period in the Consolidated Statements of Operations under “Change in fair value of warrant liability.” | |||||||||||||
Fair Value Measurements | ' | ||||||||||||
Fair Value Measurements. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: | |||||||||||||
Level 1: | Quoted prices in active markets for identical assets or liabilities. | ||||||||||||
Level 2: | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||
Level 3: | Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. | ||||||||||||
As of December 31, 2013 and 2012, $8.2 million and $9.2 million, respectively, of the Company’s cash, cash equivalents and short-term investments consisted of Level 1 Treasury-backed government securities or money market funds that are measured at fair value on a recurring basis. | |||||||||||||
The Company’s financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable, other receivables, accounts payable, accrued liabilities and debt obligations. Accounts receivable, other receivables, and accounts payable are reflected in the accompanying consolidated financial statements at cost, which approximates fair value due to the short-term nature of these instruments. While the Company believes its valuation methodologies are appropriate and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. | |||||||||||||
The Company has debt in the form of non-recourse, secured notes payable with a fixed interest rate, which constitute $41.3 million of Level 2 borrowings outstanding at December 31, 2013, measured at fair value on a nonrecurring basis, with an interest rate of 16%. At December 31, 2013, the Company’s debt was reflected in the accompanying consolidated financial statements at face value. Due to a decline in and uncertainty regarding AzaSite earned royalty revenues, it is reasonably possible that the fair value of the debt has declined. The decline in value of debt is not reasonably determinable at this time. | |||||||||||||
As discussed above, the fair value of the warrant liability, determined using Level 3 criteria, was initially recorded on the grant date and remeasured at December 31, 2013 and 2012 using the Black-Scholes Model, which requires inputs such as the remaining term of the warrants, share price volatility and risk-free interest rate. These inputs are subjective and generally require significant analysis and judgment to develop. | |||||||||||||
The fair value of the warrant liability was estimated using the following assumptions, as determined in accordance with the terms of the warrant agreements, at December 31, 2013 and 2012: | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Risk-free interest rate | 0.8 | % | 0.4 | % | |||||||||
Remaining term (years) | 2.5 | 3.5 | |||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||
Volatility | 100 | % | 100 | % | |||||||||
The expected dividend yield is set at zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. Per the terms of the warrant agreements, expected volatility is based on the historical volatility of the Company’s common stock and is equal to the greater of 100% or the 30-day volatility rate. The risk-free interest rates are taken from the Daily Federal Yield Curve Rates as published by the Federal Reserve and represent the yields on actively-traded U.S. Treasury securities for a term equal to the remaining term of the warrants. | |||||||||||||
The following table provides a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended December 31, 2013 (in thousands): | |||||||||||||
Balance at December 31, 2012 | $ | 2,257 | |||||||||||
Net decrease in fair value of warrant liability on remeasurment | (572 | ) | |||||||||||
Balance at December 31, 2013 | $ | 1,685 | |||||||||||
The net decrease in the estimated fair value of the warrant liability was recognized as income under “Change in fair value of warrant liability” in the Consolidated Statements of Operations. | |||||||||||||
Revenue Recognition | ' | ||||||||||||
Revenue Recognition. The Company recognizes revenue when four basic criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. The Company has arrangements with multiple revenue-generating elements. The Company analyzes its multiple element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting. An item can generally be considered a separate unit of accounting if both of the following criteria are met: the delivered item(s) has value to the customer on a stand-alone basis and if the arrangement includes a general right of return and delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on the unit’s selling price and is recognized in full when the criteria are met. The Company deems service to be rendered if no continuing obligation exists on the part of the Company. | |||||||||||||
The Company’s revenues are primarily derived from royalties on product sales and licensing agreements, and such agreements may provide for various types of payments, including upfront payments, research funding and related fees during the terms of the agreements, milestone payments based on the achievement of established development objectives and licensing fees. | |||||||||||||
The Company receives royalties from licensees based on third-party sales. The royalties are recorded as earned in accordance with the contract terms when third-party results are reliably measured and collectability is reasonably assured. | |||||||||||||
Revenues associated with non-refundable up-front license fees under arrangements where the license fees cannot be accounted for as separate units of accounting are deferred and recognized as revenues on a straight-line basis over the expected term of the Company’s continued involvement. Revenues from the achievement of milestones are recognized as revenues when the milestones are achieved and the milestone payments are due and collectible. | |||||||||||||
The Company allocates revenue in multiple-deliverable revenue arrangements using estimated selling prices of the delivered goods and services based on the relative selling price method. | |||||||||||||
Research and Development Expenses | ' | ||||||||||||
Research and Development Expenses. Research and development expenses include salaries, benefits, facility costs, services provided by outside consultants and contractors, administrative costs and materials for the Company’s research and development activities. The Company expenses these research and development activities as they are incurred. | |||||||||||||
The Company accrues and expenses the costs for clinical trial activities performed by third parties based upon estimates of the percentage of work completed over the life of the individual study in accordance with agreements established with contract research organizations and clinical trial sites. The Company determines the estimates through discussions with internal clinical personnel and external service providers as to progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. Costs of setting up clinical trial sites for participation in the trials are expensed immediately as research and development expenses. Clinical trial site costs related to patient enrollment are accrued as patients are entered into the trial. | |||||||||||||
General and Administrative Expenses | ' | ||||||||||||
General and Administrative Expenses. General and administrative expenses include salaries, benefits, facility costs, services provided by outside consultants and contractors, legal services, advertising and marketing, investor relations, financial reporting, materials and other expenses related to general corporate and sales and marketing activities. The Company recognizes such costs as they are incurred. | |||||||||||||
Cost of Revenues | ' | ||||||||||||
Cost of Revenues. The Company recognizes royalties to third parties and the cost of inventory shipped related to the sale of the Company’s products when they are incurred. | |||||||||||||
Stock-Based Compensation | ' | ||||||||||||
Stock-Based Compensation. The Company’s stock-based compensation programs consist of stock options granted to employees as well as our employee stock purchase plan, based on the grant date fair value of those awards. | |||||||||||||
The grant date fair value of the award is recognized as expense over the requisite service period. The Company uses the Black-Sholes option pricing model to compute the estimated fair value of stock option awards. Using this model, fair value is calculated based on assumptions with respect to: expected volatility of our common stock price: the periods of time over which employees and members of our board are expected to hold their options prior to exercise; expected dividend yield on our common stock; and risk-free interest rates. Stock-based compensation expense also includes an estimate, which is made at the time of grant, of the number of awards that are expected to be forfeited. The estimate is revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||||||||||||
See Note 12, “Stock-Based Compensation” for further discussion of employee stock-based compensation. | |||||||||||||
The Company occasionally issues stock options and warrants to consultants of the Company in exchange for services. The Company has valued these options and warrants using the Black-Scholes option pricing model, at each reporting period and has recorded charges to operations over the vesting periods of the individual stock options or warrants. Such charges amounted to approximately $8,000, $56,000 and $20,000 during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
Net Income (Loss) per Share | ' | ||||||||||||
Net Income (Loss) per Share. Basic net income (loss) per share has been computed using the weighted-average number of common shares outstanding during the period. Dilutive net income (loss) per share is computed using the sum of the weighted-average number of common shares outstanding and the potential number of dilutive common shares outstanding during the period. Potential common shares consist of the shares issuable upon exercise of stock options and warrants. Potentially dilutive securities have been excluded from the computation of diluted net loss per share in 2012 and 2011 as their inclusion would be anti-dilutive. | |||||||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share: | |||||||||||||
Year Ended December 31, | |||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2011 | ||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | 5,781 | $ | (8,277 | ) | $ | (6,942 | ) | |||||
Denominator: | |||||||||||||
Weighted-average shares outstanding | 131,951 | 131,951 | 111,769 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock options | 482 | — | — | ||||||||||
Weighted-average shares outstanding for diluted loss | 132,433 | 131,951 | 111,769 | ||||||||||
Net income (loss) per share: | |||||||||||||
Basic | $ | 0.04 | $ | (0.06 | ) | $ | (0.06 | ) | |||||
Diluted | $ | 0.04 | $ | (0.06 | ) | $ | (0.06 | ) | |||||
For the years ended December 31, 2012 and 2011, due to the loss applicable to common stockholders, loss per share is based on the weighted average number of common shares only, as the effect of including equivalent shares from stock options and warrants would be anti-dilutive. At December 31, 2013, 2012 and 2011, 31,407,604, 28,156,898 and 25,795,339 options and warrants, respectively, were excluded from the calculation of diluted earnings per share because the effect was anti-dilutive. | |||||||||||||
Comprehensive Income (Loss) | ' | ||||||||||||
Comprehensive Income (Loss). Comprehensive income (loss) is the change in equity from transactions and other events and circumstances other than those resulting from investments by owners and distributions to owners. The consolidated comprehensive income (loss) for the Company was equal to the net income (loss) attributable to the Company for the years ended December 31, 2013, 2012 and 2011. | |||||||||||||
Key Suppliers | ' | ||||||||||||
Key Suppliers. The Company is dependent on single or limited source suppliers for certain materials used in its research and development and commercial activities. The Company has generally been able to obtain adequate supplies of these components. However, an extended interruption in the supply of these components currently obtained from single or limited source suppliers could adversely affect the Company’s research and development and commercial efforts. | |||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes. The Company accounts for income taxes under the liability method; under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. | |||||||||||||
The Company utilizes a two-step approach to recognize and measure uncertain tax positions, if any. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. | |||||||||||||
Significant Customers and Risk | ' | ||||||||||||
Significant Customers and Risk. All revenues recognized and/or deferred were primarily from AzaSite licensees. The Company is entitled to receive royalty revenues from net sales of AzaSite under the terms of its agreement with Inspire. Inspire was acquired by Merck in May 2011 and subsequently acquired by Akorn in November 2013. Accordingly, all trade receivables are concentrated with these parties during the years ended December 31, 2013, 2012 and 2011. Under the terms of the license with Inspire, Inspire, through its applicable parent company, has significant influence over the commercial success of AzaSite. Revenues from Merck represented approximately 48%, 90% and 90% of total revenues for the years ended December 31, 2013, 2012 and 2011, respectively. In addition, in April 2013, the Company sold its rights to receive royalty payments relating to sales of Besivance and the amounts received in this sale represented 50% of the Company’s revenues for the year ended December 31, 2013. | |||||||||||||
Credit Risk | ' | ||||||||||||
Credit Risk. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and short-term investments. The Company’s cash, cash equivalents and short-term investments are primarily deposited in demand accounts with two financial institutions. | |||||||||||||
Risks from Third Party Manufacturing Concentration | ' | ||||||||||||
Risks from Third Party Manufacturing Concentration. The Company relies on a single source manufacturer for each of its product candidates and on a single source manufacturer for the active pharmaceutical ingredient in its product candidates. Accordingly, delays in the manufacture of the Company’s product candidates or the active pharmaceutical ingredients could adversely impact the development of the Company’s product candidates. Furthermore, the Company has no control over the manufacture and the overall product supply chain of products for which it is entitled to receive revenue. | |||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||
Recent Accounting Pronouncements | |||||||||||||
In July 2013, the Financial Accounting Standards Board (FASB) issued an amendment to the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar loss or a tax credit carryforward exists. The amendment requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. This amendment is effective on a prospective basis for fiscal years beginning after December 15, 2013. The Company adopted this amendment in the year ended December 31, 2013. The adoption of this amendment did not impact the Company’s consolidated financial position, results of operations, or other additional disclosure and presentation requirements since the Company had no uncertain tax position reserves. |
Business_and_Summary_of_Signif2
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Estimated Fair Value of Warrant Liability | ' | ||||||||||||
The fair value of the warrant liability was estimated using the following assumptions, as determined in accordance with the terms of the warrant agreements, at December 31, 2013 and 2012: | |||||||||||||
December 31, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
Risk-free interest rate | 0.8 | % | 0.4 | % | |||||||||
Remaining term (years) | 2.5 | 3.5 | |||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||
Volatility | 100 | % | 100 | % | |||||||||
Changes in Fair Value of Level Three Financial Liabilities | ' | ||||||||||||
The following table provides a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended December 31, 2013 (in thousands): | |||||||||||||
Balance at December 31, 2012 | $ | 2,257 | |||||||||||
Net decrease in fair value of warrant liability on remeasurment | (572 | ) | |||||||||||
Balance at December 31, 2013 | $ | 1,685 | |||||||||||
Computation of Basic and Diluted Net Income (Loss) Per Share | ' | ||||||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share: | |||||||||||||
Year Ended December 31, | |||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2011 | ||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | 5,781 | $ | (8,277 | ) | $ | (6,942 | ) | |||||
Denominator: | |||||||||||||
Weighted-average shares outstanding | 131,951 | 131,951 | 111,769 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock options | 482 | — | — | ||||||||||
Weighted-average shares outstanding for diluted loss | 132,433 | 131,951 | 111,769 | ||||||||||
Net income (loss) per share: | |||||||||||||
Basic | $ | 0.04 | $ | (0.06 | ) | $ | (0.06 | ) | |||||
Diluted | $ | 0.04 | $ | (0.06 | ) | $ | (0.06 | ) | |||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||
Summary of Property and Equipment, Net | ' | ||||||||
Property and equipment, net consisted of the following (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Laboratory and other equipment | $ | 1,445 | $ | 1,399 | |||||
Leasehold improvements | 45 | 45 | |||||||
Furniture and fixtures | 14 | 14 | |||||||
Construction in Progress | 1,115 | — | |||||||
2,619 | 1,458 | ||||||||
Accumulated depreciation and amortization | (1,188 | ) | (1,081 | ) | |||||
Property and equipment, net | $ | 1,431 | $ | 377 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||||||||||
Future Minimum Lease Payments under Operating Lease and Future Cash Receipts from Sublease | ' | ||||||||||||
Future minimum lease payments under the operating lease and future cash receipts from the sublease, are as follows (in thousands): | |||||||||||||
Operating Lease | Operating Sublease | Operating Lease | |||||||||||
Year Ending December 31, | Cash Payments | Cash Receipts | Cash Payments, net | ||||||||||
2014 | $ | 589 | $ | 151 | $ | 438 | |||||||
2015 | 709 | — | 709 | ||||||||||
2016 | 736 | — | 736 | ||||||||||
2017 | 762 | — | 762 | ||||||||||
2018 | 788 | — | 788 | ||||||||||
2019 and thereafter | 1,641 | — | 1,641 | ||||||||||
$ | 5,225 | $ | 151 | $ | 5,074 | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Differences between Income Tax Provision Related to Continuing Operations and Amounts Computed by Applying Statutory Income Tax Rate | ' | ||||||||||||
Income tax provision related to continuing operations differ from the amounts computed by applying the statutory income tax rate of 34% to pretax loss as follows (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Tax provision at federal statutory rate | 34 | % | 34 | % | 34 | % | |||||||
State taxes, net of federal benefit | 0 | % | 0 | % | 0 | % | |||||||
Warrant liability | -3.4 | % | 7.8 | % | 10.8 | % | |||||||
Other permanent differences | 0.1 | % | 0 | % | -0.1 | % | |||||||
Credits | -11.9 | % | 0 | % | 2.7 | % | |||||||
Expiring net operating losses | 0 | % | -15 | % | -11.4 | % | |||||||
True up of deferred tax assets | 0 | % | 0 | % | -4.3 | % | |||||||
Valuation allowance | -18.8 | % | -26.8 | % | -31.7 | % | |||||||
Effective tax rate | 0 | % | 0 | % | 0 | % | |||||||
Significant Components of Deferred Tax Assets for Federal and State Income Taxes | ' | ||||||||||||
Significant components of the Company’s deferred tax assets for federal and state income taxes as of December 31, 2013 and 2012 were as follows (in thousands): | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating loss carryforwards | $ | 39,555 | $ | 44,077 | |||||||||
Tax credit carryforwards | 8,936 | 7,870 | |||||||||||
Capitalized research and development | 11,746 | 9,926 | |||||||||||
Depreciation | 165 | 182 | |||||||||||
Other | 1,251 | 581 | |||||||||||
Total deferred tax assets | 61,653 | 62,636 | |||||||||||
Valuation allowance | (61,653 | ) | (62,636 | ) | |||||||||
Net deferred tax assets | $ | — | $ | — | |||||||||
Common_Stock_Warrants_Tables
Common Stock Warrants (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Text Block [Abstract] | ' | ||||||||||||||||
Outstanding Common Stock Warrants | ' | ||||||||||||||||
The following table shows outstanding warrants as of December 31, 2013, all of which were issued in the July 2011 private placement financing transaction. All of the outstanding warrants have cashless exercise provisions in the event the registration statement registering the resale of the shares of common stock issuable upon exercise of the warrants is not effective or the prospectus forming a part of the registration statement is not current. All warrants are exercisable for common stock. | |||||||||||||||||
Date Issued | Warrant | Exercise | Expiration Date | Cash if | |||||||||||||
Shares | Price | Exercised | |||||||||||||||
July 18, 2011 | 14,791,376 | $ | 0.75 | July 18, 2016 | $ | 11,093,532 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
The effect of recording stock-based compensation for the years ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Stock-based compensation expense by type of award: | |||||||||||||||||
Employee stock options | $ | 926 | $ | 891 | $ | 502 | |||||||||||
Scientific Advisory Board stock options | 8 | 56 | 20 | ||||||||||||||
Total stock-based compensation | $ | 934 | $ | 947 | $ | 522 | |||||||||||
Stock-Based Compensation Expenses | ' | ||||||||||||||||
Stock-based compensation included in expense line items in the Consolidated Statements of Operations for the year ended December 31, 2013, 2012 and 2011 was as follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Research and development | $ | 331 | $ | 271 | $ | 141 | |||||||||||
General and administrative | 603 | 676 | 381 | ||||||||||||||
$ | 934 | $ | 947 | $ | 522 | ||||||||||||
Weighted-Average Fair Value Assumptions of Stock Options | ' | ||||||||||||||||
The fair value of each option grant is estimated using the Black-Scholes valuation model on the date of grant and the graded-vesting method with the following weighted-average assumptions: | |||||||||||||||||
Year ended | |||||||||||||||||
December 31, | |||||||||||||||||
Stock Options | 2013 | 2012 | 2011 | ||||||||||||||
Risk-free interest rate | 0.9 | % | 0.7 | % | 0.9 | % | |||||||||||
Expected term (years) | 5 | 5 | 5 | ||||||||||||||
Expected dividends | 0 | % | 0 | % | 0 | % | |||||||||||
Volatility | 89.9 | % | 90.9 | % | 89.7 | % | |||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
The following is a summary of activity under the Company’s stock option plans for the indicated periods: | |||||||||||||||||
Number of | Weighted-Average | Weighted-Average | Aggregate | ||||||||||||||
shares | Exercise Price | Remaining Contractual | Intrinsic Value | ||||||||||||||
Term (Years) | (in thousands) | ||||||||||||||||
Outstanding at December 31, 2010 | 8,935,463 | $ | 0.4 | 8.79 | $ | 211 | |||||||||||
Granted | 2,955,000 | 0.44 | |||||||||||||||
Exercised | (150,000 | ) | 0.38 | ||||||||||||||
Forfeited | (455,000 | ) | 0.33 | ||||||||||||||
Expired | (281,500 | ) | 0.7 | ||||||||||||||
Outstanding at December 31, 2011 | 11,003,963 | 0.41 | 8.11 | 861 | |||||||||||||
Granted | 4,047,500 | 0.42 | |||||||||||||||
Exercised | — | 0 | |||||||||||||||
Forfeited | (784,223 | ) | 0.37 | ||||||||||||||
Expired | (901,718 | ) | 0.38 | ||||||||||||||
Outstanding at December 31, 2012 | 13,365,522 | 0.42 | 7.69 | 156 | |||||||||||||
Granted | 4,124,374 | 0.31 | |||||||||||||||
Exercised | — | 0 | |||||||||||||||
Forfeited | (323,479 | ) | 0.33 | ||||||||||||||
Expired | (68,433 | ) | 0.62 | ||||||||||||||
Outstanding at December 31, 2013 | 17,097,984 | $ | 0.39 | 7.22 | $ | 195 | |||||||||||
Options vested and expected to vest at December 31, 2013 | 16,614,008 | $ | 0.39 | 7.17 | $ | 189 | |||||||||||
Options exercisable at December 31, 2013 | 11,094,139 | $ | 0.41 | 6.49 | $ | 140 |
Quarterly_Results_Tables
Quarterly Results (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Quarterly Results of Operations | ' | ||||||||||||||||
The following table is a summary of the quarterly results of operations for the years ended December 31, 2013 and 2012. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The Company’s operating results for any quarter are not necessarily indicative of results for any future period. | |||||||||||||||||
2013 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(In thousands, except per share amounts) | Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenues | $ | 5,260 | $ | 19,240 | $ | 5,254 | $ | 1,068 | |||||||||
Cost of revenues | 85 | 167 | 130 | 3 | |||||||||||||
Gross profit | 5,175 | 19,073 | 5,124 | 1,065 | |||||||||||||
Income (loss) from operations | 355 | 13,972 | 1,319 | (2,541 | ) | ||||||||||||
Net income (loss) | (1,921 | ) | 12,116 | 579 | (4,993 | ) | |||||||||||
- basic | $ | (0.01 | ) | $ | 0.09 | $ | 0 | $ | (0.04 | ) | |||||||
- diluted | $ | (0.01 | ) | $ | 0.09 | $ | 0 | $ | (0.04 | ) | |||||||
2012 | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
(In thousands, except per share amounts) | Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenues | $ | 2,273 | $ | 1,816 | $ | 12,139 | $ | 5,413 | |||||||||
Cost of revenues | 265 | 186 | 313 | 298 | |||||||||||||
Gross profit | 2,008 | 1,630 | 11,826 | 5,115 | |||||||||||||
Income (loss) from operations | (3,412 | ) | (4,513 | ) | 7,603 | (359 | ) | ||||||||||
Net income (loss) | (4,847 | ) | (6,754 | ) | 5,142 | (1,818 | ) | ||||||||||
- basic | $ | (0.04 | ) | $ | (0.05 | ) | $ | 0.04 | $ | (0.01 | ) | ||||||
- diluted | $ | (0.04 | ) | $ | (0.05 | ) | $ | 0.04 | $ | (0.01 | ) |
Business_and_Summary_of_Signif3
Business and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 29, 2008 | |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Accumulated deficit | ($202,023,000) | ($207,804,000) | ' | ' |
Cash and short-term investment balances | 8,300,000 | ' | ' | ' |
Depreciation and amortization expense | 107,000 | 95,000 | 86,000 | ' |
Impairment of property and equipment | 0 | 0 | 0 | ' |
Amortization of debt issuance costs | 418,000 | 419,000 | 419,000 | ' |
Interest rate on non-recourse, secured notes payable | ' | ' | ' | 16.00% |
Total stock-based compensation | 934,000 | 947,000 | 522,000 | ' |
Shares of options and warrants excluded from calculation of diluted earnings per share | 31,407,604 | 28,156,898 | 25,795,339 | ' |
Minimum [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | '3 years | ' | ' | ' |
Maximum [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | '5 years | ' | ' | ' |
Ophthalmic [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Number of operating segment | 1 | 1 | 1 | ' |
Level 3 [Member] | Fair Value on Recurring Basis [Member] | Warrant [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Expected dividend yield on warrant liabilities | 0.00% | 0.00% | ' | ' |
Cash dividends | 0 | ' | ' | ' |
Fair value of liabilities, volatility rate description | 'Expected volatility is based on the historical volatility of the Company's common stock and is equal to the greater of 100% or the 30-day volatility rate. | ' | ' | ' |
Fair value of liabilities, expected volatility rate | 100.00% | 100.00% | ' | ' |
Fair value of liabilities, duration of volatility rate | '30 days | ' | ' | ' |
Level 1 [Member] | Fair Value on Recurring Basis [Member] | U.S. Treasury-backed Money Market Funds [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents and short-term investments, at fair value | 8,200,000 | 9,200,000 | ' | ' |
Level 2 [Member] | Fair Value on Nonrecurring Basis [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Secured notes payable with fixed interest rate, fair value | 41,300,000 | ' | ' | ' |
Interest rate on non-recourse, secured notes payable | 16.00% | ' | ' | ' |
Patents [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Capitalized costs | 0 | 0 | ' | ' |
Merck [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Percentage of total revenues | 48.00% | 90.00% | 90.00% | ' |
Besivance [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Percentage of total revenues | 50.00% | ' | ' | ' |
Scientific Advisory Board Stock Options [Member] | ' | ' | ' | ' |
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Total stock-based compensation | $8,000 | $56,000 | $20,000 | ' |
Business_and_Summary_of_Signif4
Business and Summary of Significant Accounting Policies - Estimated Fair Value of Warrant Liability (Detail) (Warrant [Member], Level 3 [Member], Fair Value on Recurring Basis [Member]) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Warrant [Member] | Level 3 [Member] | Fair Value on Recurring Basis [Member] | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' |
Risk-free interest rate | 0.80% | 0.40% |
Remaining term (years) | '2 years 6 months | '3 years 6 months |
Expected dividends | 0.00% | 0.00% |
Volatility | 100.00% | 100.00% |
Business_and_Summary_of_Signif5
Business and Summary of Significant Accounting Policies - Changes in Fair Value of Level Three Financial Liabilities (Detail) (Warrant [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2011 |
Warrant [Member] | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' |
Balance at beginning of period | $2,257 | ' | $6,400 |
Net decrease in fair value of warrant liability on remeasurement | -572 | 1,900 | ' |
Balance at end of period | $1,685 | $2,257 | $6,400 |
Business_and_Summary_of_Signif6
Business and Summary of Significant Accounting Policies - Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ($4,993) | $579 | $12,116 | ($1,921) | ($1,818) | $5,142 | ($6,754) | ($4,847) | $5,781 | ($8,277) | ($6,942) |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 131,951 | 131,951 | 111,769 |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options | ' | ' | ' | ' | ' | ' | ' | ' | 482 | ' | ' |
Weighted-average shares outstanding for diluted loss | ' | ' | ' | ' | ' | ' | ' | ' | 132,433 | 131,951 | 111,769 |
Net income (loss) per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | ($0.06) | ($0.06) |
Diluted | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | ($0.06) | ($0.06) |
License_Agreements_Additional_
License Agreements - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 15, 2007 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2014 | |
Besivance [Member] | Besivance [Member] | Bausch & Lomb [Member] | Bausch & Lomb [Member] | Bausch & Lomb [Member] | Akorn [Member] | Akorn [Member] | Akorn [Member] | Akorn [Member] | Merck [Member] | Merck [Member] | Merck [Member] | Merck [Member] | Pfizer Inc [Member] | Pfizer Inc [Member] | Pfizer Inc [Member] | Subsequent Events [Member] | ||||
Besivance [Member] | ||||||||||||||||||||
Intangible Assets Goodwill And Other Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue from royalties | $14,787,000 | $21,641,000 | $15,138,000 | ' | ' | $500,000 | $2,126,000 | $1,208,000 | ' | $14,300,000 | $19,500,000 | $13,900,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Rights to receive royalty payments | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 |
Patent expire year | ' | ' | ' | ' | '2021 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of royalty on net sales | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalties payment description | ' | ' | ' | ' | ' | ' | ' | ' | 'Akorn is obligated to pay the Company royalties under the Akorn License for the longer of (i) eleven years from the launch of the first product or (ii) the period during which a valid claim under a patent exists. Until September 30, 2013, Akorn paid the Company certain tiered minimum royalties. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalties payment period from launch of first product | ' | ' | ' | ' | ' | ' | ' | ' | '11 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notice period of royalty agreement with Merck | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Supply Agreement termination date | ' | ' | ' | ' | ' | ' | ' | ' | '2012-07 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional royalties earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,300,000 | ' | ' | ' | ' | ' | ' | ' |
Minimum royalties received | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,000,000 | 17,000,000 | 15,000,000 | ' | ' | ' | ' |
Other product and service revenues | 545,000 | ' | 510,000 | ' | ' | ' | ' | ' | ' | 500,000 | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of revenues, principally royalties to third parties | $385,000 | $1,062,000 | $1,917,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400,000 | $1,100,000 | $1,400,000 | ' |
Shortterm_Investments_Addition
Short-term Investments - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Investments Schedule [Abstract] | ' | ' |
Short-term investments | $5,000 | $7,999 |
Accounts_Receivable_Additional
Accounts Receivable - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Accounts Receivable Net [Line Items] | ' | ' | ' |
Decrease in accounts receivable, net | ($4,224,000) | $2,686,000 | ($788,000) |
Bad debt allowance | 0 | 0 | ' |
Royalty true-up by Merck [Member] | ' | ' | ' |
Accounts Receivable Net [Line Items] | ' | ' | ' |
Decrease in accounts receivable, net | ' | 2,600,000 | ' |
Besivance [Member] | ' | ' | ' |
Accounts Receivable Net [Line Items] | ' | ' | ' |
Accounts receivable | $1,000,000 | ' | ' |
Property_and_Equipment_Net_Sum
Property and Equipment, Net - Summary of Property and Equipment, Net (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $2,619 | $1,458 |
Accumulated depreciation and amortization | -1,188 | -1,081 |
Property and equipment, net | 1,431 | 377 |
Laboratory and other equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 1,445 | 1,399 |
Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 45 | 45 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 14 | 14 |
Construction in Progress [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $1,115 | ' |
Warrant_Liability_Additional_I
Warrant Liability - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
Jul. 18, 2011 | Dec. 31, 2011 | Jul. 18, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Jul. 18, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2011 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | |||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common stock sold | ' | ' | 36,978,440 | 36,978,440 | ' | ' | ' | ' | ' |
Selling price per share | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' |
Number of warrants issued to purchase common stock | ' | ' | 14,791,376 | ' | 14,791,376 | ' | ' | ' | ' |
Warrants exercise price | ' | ' | ' | ' | ' | 0.75 | 0.75 | ' | ' |
Gross proceeds from private placement | $22,200,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from private placement | 20,400,000 | 20,399,000 | ' | ' | ' | ' | ' | ' | ' |
Expiration period of warrants | ' | ' | ' | ' | ' | '5 years | ' | ' | ' |
Warrant liability | ' | ' | ' | ' | ' | ' | 1,685,000 | 2,257,000 | 6,400,000 |
Decrease in warrant liability | ' | ' | ' | ' | ' | ' | ($572,000) | $1,900,000 | ' |
Lease_Incentive_Additional_Inf
Lease Incentive - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended |
Aug. 01, 2013 | Dec. 31, 2013 | |
Lease Liability [Line Items] | ' | ' |
Terms of lease extended | 'Under the terms of the amendment, the term of the Company's lease was extended until December 2020 | ' |
Lease incentives, long-term | ' | $922,000 |
Reimbursement from Legacy Partners | ' | 1,114,000 |
Legacy Partners [Member] | ' | ' |
Lease Liability [Line Items] | ' | ' |
Reimbursement from Legacy Partners | ' | 1,100,000 |
Leasehold Improvements [Member] | ' | ' |
Lease Liability [Line Items] | ' | ' |
Eligible receipts for leasehold improvements | 1,300,000 | 1,100,000 |
Lease Incentives [Member] | ' | ' |
Lease Liability [Line Items] | ' | ' |
Lease incentives, long-term | ' | 900,000 |
Lease incentives, accrued liabilities | ' | $200,000 |
NonRecourse_Secured_Notes_Addi
Non-Recourse Secured Notes - Additional Information (Detail) (USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Feb. 29, 2008 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ' | ' |
Non-recourse secured notes payable, principal amount | $60 | ' |
Non-recourse secured notes payable, maturity year | '2019 | ' |
Net proceeds from issuance of secured notes payable | 55.3 | ' |
Payments of transaction costs | 4.7 | ' |
Non-recourse secured notes payable, interest rate | 16.00% | ' |
Non-recourse secured notes payable | ' | $41.30 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Estimated royalties due | $300,000 | ' | ' |
Rent expense | $583,000 | $697,000 | $697,000 |
Non-cancelable operating lease [Member] | ' | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Lease agreements expiration date | 31-Dec-20 | ' | ' |
Sublease [Member] | ' | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Lease agreements expiration year | '2014 | ' | ' |
Beginning of Period [Member] | ' | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Estimated royalties due period | '2014 | ' | ' |
End of Period [Member] | ' | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Estimated royalties due period | '2019 | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments under Operating Lease and Future Cash Receipts from Sublease (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Operating Lease Cash Payments, net, 2014 | $438 |
Operating Lease Cash Payments, net, 2015 | 709 |
Operating Lease Cash Payments, net, 2016 | 736 |
Operating Lease Cash Payments, net, 2017 | 762 |
Operating Lease Cash Payments, net, 2018 | 788 |
Operating Lease Cash Payments, 2019 and thereafter | 1,641 |
Operating Lease Cash Payments, Total | 5,074 |
Operating Sublease Cash Receipts, 2014 | 151 |
Operating Sublease Cash Receipts, 2015 | ' |
Operating Sublease Cash Receipts, 2016 | ' |
Operating Sublease Cash Receipts, 2017 | ' |
Operating Sublease Cash Receipts, 2018 | ' |
Operating Sublease Cash Receipts, 2019 and thereafter | ' |
Operating Sublease Cash Receipts, Total | 151 |
Operating Lease Cash Payments, 2014 | 589 |
Operating Lease Cash Payments, 2015 | 709 |
Operating Lease Cash Payments, 2016 | 736 |
Operating Lease Cash Payments, 2017 | 762 |
Operating Lease Cash Payments, 2018 | 788 |
Operating Lease Cash Payments, 2019 and thereafter | 1,641 |
Operating Lease Cash Payments, Total | $5,225 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Taxes [Line Items] | ' | ' | ' |
Provision for income taxes | $0 | $0 | $0 |
Tax provision at federal statutory rate | 34.00% | 34.00% | 34.00% |
Changes in valuation allowance | -1,000,000 | 300,000 | ' |
Unrecognized tax benefits, Interest or penalties recognized | 0 | 0 | ' |
Federal Income Tax [Member] | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 100,900,000 | ' | ' |
Net operating loss carryforwards expiration beginning period | '2018 | ' | ' |
Net operating loss carryforwards expiration ending period | '2033 | ' | ' |
Tax credits carryforwards amount | 3,900,000 | ' | ' |
Tax credits expiration beginning period | '2018 | ' | ' |
Tax credits expiration ending period | '2033 | ' | ' |
Federal research credit included in current year provision | 300,000 | ' | ' |
State Taxes and Others [Member] | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Net operating loss carryforwards | 88,200,000 | ' | ' |
Net operating loss carryforwards expiration beginning period | '2014 | ' | ' |
Net operating loss carryforwards expiration ending period | '2033 | ' | ' |
State Taxes and Others [Member] | Carryforward Indefinitely [Member] | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' |
Tax credits carryforwards amount | $5,000,000 | ' | ' |
Income_Taxes_Differences_betwe
Income Taxes - Differences between Income Tax Provision Related to Continuing Operations and Amounts Computed by Applying Statutory Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule of Effective Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Tax provision at federal statutory rate | 34.00% | 34.00% | 34.00% |
State taxes, net of federal benefit | 0.00% | 0.00% | 0.00% |
Other permanent differences | 0.10% | 0.00% | -0.10% |
Credits | -11.90% | 0.00% | 2.70% |
True up of deferred tax assets | 0.00% | 0.00% | -4.30% |
Valuation allowance | -18.80% | -26.80% | -31.70% |
Effective tax rate | 0.00% | 0.00% | 0.00% |
Warrant Liability [Member] | ' | ' | ' |
Schedule of Effective Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Other adjustments | -3.40% | 7.80% | 10.80% |
Expiring Net Operating Losses [Member] | ' | ' | ' |
Schedule of Effective Tax Rate Reconciliation [Line Items] | ' | ' | ' |
Other adjustments | 0.00% | -15.00% | -11.40% |
Income_Taxes_Significant_Compo
Income Taxes - Significant Components of Deferred Tax Assets for Federal and State Income Taxes (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Net operating loss carryforwards | $39,555 | $44,077 |
Tax credit carryforwards | 8,936 | 7,870 |
Capitalized research and development | 11,746 | 9,926 |
Depreciation | 165 | 182 |
Other | 1,251 | 581 |
Total deferred tax assets | 61,653 | 62,636 |
Valuation allowance | -61,653 | -62,636 |
Net deferred tax assets | ' | ' |
Common_Stock_Warrants_Outstand
Common Stock Warrants - Outstanding Common Stock Warrants (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Jul. 18, 2011 | |
Warrant [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Date Issued | 18-Jul-11 | ' |
Exercise Price | 0.75 | 0.75 |
Expiration Date | 'July 18, 2016 | ' |
Potential Proceeds if Exercised for Cash | $11,093,532 | ' |
Common Stock [Member] | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' |
Warrant Shares | 14,791,376 | 14,791,376 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Term | Y | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Options granted, Performance Incentive Plan expiration period | ' | '10 years | ' | ' |
Options vested, Performance Incentive Plan one year in percentage | ' | 25.00% | ' | ' |
Balance options vested in daily basis | ' | 3 | ' | ' |
Unvested options terminate and vested options generally expire | ' | '3 months | ' | ' |
Common stock available for issuance and increased percentage of the total | ' | 2.00% | ' | ' |
Common stock shares available for issuance outstanding | ' | 3,000,000 | ' | ' |
Purchase Plan, offering periods | '24 months | ' | ' | ' |
Purchase Plan, number of purchase periods | 4 | ' | ' | ' |
Purchase Plan, purchase periods | '6 months | ' | ' | ' |
Percentage of fair market value of common stock purchased under Purchase Plan | 85.00% | ' | ' | ' |
Maximum percentage of each employee's eligible compensation that can contribute into Purchase Plan | 10.00% | ' | ' | ' |
Percentage of shares available for issuance increased amount for the first trading day in January each calendar year | 0.50% | ' | ' | ' |
Number of shares issued under Purchase Plan since 2009 | ' | 0 | ' | ' |
Unrecorded deferred stock-based compensation expense related to Purchase Plan | ' | $0 | ' | ' |
Shares reserved for issuance under Purchase Plan | ' | 515,183 | ' | ' |
Common stock shares granted options to purchase | ' | 4,124,374 | 4,047,500 | 2,955,000 |
Common stock shares, estimated total grant date fair value | ' | 900,000 | 1,200,000 | ' |
Common stock shares, annualized forfeiture rate | ' | 10.00% | ' | ' |
Stock-based compensation not expected to vest | ' | 300,000 | 200,000 | ' |
Unrecorded deferred stock-based compensation | ' | 1,200,000 | 1,300,000 | ' |
Recognized estimated weighted-average amortization period | ' | '2 years 2 months 12 days | '2 years 2 months 12 days | ' |
Expected dividend yield | ' | 0.00% | 0.00% | 0.00% |
Common stock shares available for grant or issuance under 2007 Plan | ' | 4,521,354 | ' | ' |
Weighted average fair value options granted | ' | $0.21 | $0.29 | $0.31 |
Total intrinsic value of options exercised | ' | $140,000 | ' | $24,000 |
Options exercised | ' | 0 | 0 | 150,000 |
Number of share options exercisable | ' | 11,094,139 | 7,752,944 | 4,718,014 |
Weighted-average exercise price of options exercisable | ' | $0.41 | $0.42 | $0.43 |
Maximum [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Annually increased number of shares available for issuance under Purchase Plan | 125,000 | ' | ' | ' |
StockBased_Compensation_StockB
Stock-Based Compensation - Stock-Based Compensation (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' | ' |
Total stock-based compensation expense | $934 | $947 | $522 |
Employee Stock Options [Member] | ' | ' | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' | ' |
Total stock-based compensation expense | 926 | 891 | 502 |
Scientific Advisory Board Stock Options [Member] | ' | ' | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' | ' |
Total stock-based compensation expense | $8 | $56 | $20 |
StockBased_Compensation_StockB1
Stock-Based Compensation - Stock-Based Compensation Expenses (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Total stock-based compensation expense | $934 | $947 | $522 |
Research and Development [Member] | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Total stock-based compensation expense | 331 | 271 | 141 |
General and Administrative [Member] | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Total stock-based compensation expense | $603 | $676 | $381 |
StockBased_Compensation_Weight
Stock-Based Compensation - Weighted-Average Fair Value Assumptions of Stock Options (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ' | ' |
Risk-free interest rate | 0.90% | 0.70% | 0.90% |
Expected term (years) | '5 years | '5 years | '5 years |
Expected dividends | 0.00% | 0.00% | 0.00% |
Volatility | 89.90% | 90.90% | 89.70% |
StockBased_Compensation_Summar
Stock-Based Compensation - Summary of Stock Option Activity (Detail) (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Number of shares | ' | ' | ' | ' |
Outstanding at beginning balance | 13,365,522 | 11,003,963 | 8,935,463 | ' |
Granted | 4,124,374 | 4,047,500 | 2,955,000 | ' |
Exercised | 0 | 0 | -150,000 | ' |
Forfeited | -323,479 | -784,223 | -455,000 | ' |
Expired | -68,433 | -901,718 | -281,500 | ' |
Outstanding at ending balance | 17,097,984 | 13,365,522 | 11,003,963 | 8,935,463 |
Options vested and expected to vest at ending balance | 16,614,008 | ' | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' | ' |
Outstanding at beginning balance | $0.42 | $0.41 | $0.40 | ' |
Granted | $0.31 | $0.42 | $0.44 | ' |
Exercised | $0 | $0 | $0.38 | ' |
Forfeited | $0.33 | $0.37 | $0.33 | ' |
Expired | $0.62 | $0.38 | $0.70 | ' |
Outstanding at ending balance | $0.39 | $0.42 | $0.41 | $0.40 |
Options vested and expected to vest at ending of balance | $0.39 | ' | ' | ' |
Options exercisable at ending balance | $0.41 | $0.42 | $0.43 | ' |
Options exercisable at ending balance | 11,094,139 | 7,752,944 | 4,718,014 | ' |
Weighted-Average Remaining Contractual Term (Years) | ' | ' | ' | ' |
Outstanding at ending balance | '7 years 2 months 19 days | '7 years 8 months 9 days | '8 years 1 month 10 days | '8 years 9 months 15 days |
Options vested and expected to vest at ending balance | '7 years 2 months 1 day | ' | ' | ' |
Options exercisable at ending balance | '6 years 5 months 27 days | ' | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' | ' |
Outstanding at ending balance | $195 | $156 | $861 | $211 |
Options vested and expected to vest at ending balance | 189 | ' | ' | ' |
Options exercisable at ending balance | $140 | ' | $24 | ' |
Legal_Proceedings_Additional_I
Legal Proceedings - Additional Information (Detail) | Apr. 30, 2011 | Jun. 14, 2013 | 31-May-13 | 26-May-11 | Apr. 30, 2011 | 31-May-13 | 26-May-11 | Apr. 30, 2011 |
Patent | Maximum [Member] | Company [Member] | Company [Member] | Company [Member] | Pfizer Inc [Member] | Pfizer Inc [Member] | Pfizer Inc [Member] | |
Patent | Patent | Patent | Patent | Patent | Patent | |||
Legal Proceedings [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of patents infringed | 5 | ' | 3 | 3 | 4 | 1 | 1 | 1 |
Period for filing of lawsuit | ' | '30 months | ' | ' | ' | ' | ' | ' |
Quarterly_Results_Quarterly_Re
Quarterly Results - Quarterly Results of Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $1,068 | $5,254 | $19,240 | $5,260 | $5,413 | $12,139 | $1,816 | $2,273 | $30,822 | $21,641 | $15,923 |
Cost of revenues | 3 | 130 | 167 | 85 | 298 | 313 | 186 | 265 | ' | ' | ' |
Gross profit | 1,065 | 5,124 | 19,073 | 5,175 | 5,115 | 11,826 | 1,630 | 2,008 | ' | ' | ' |
Income (loss) from operations | -2,541 | 1,319 | 13,972 | 355 | -359 | 7,603 | -4,513 | -3,412 | 13,105 | -681 | 1,024 |
Net income (loss) | ($4,993) | $579 | $12,116 | ($1,921) | ($1,818) | $5,142 | ($6,754) | ($4,847) | $5,781 | ($8,277) | ($6,942) |
- basic | ($0.04) | $0 | $0.09 | ($0.01) | ($0.01) | $0.04 | ($0.05) | ($0.04) | $0.04 | ($0.06) | ($0.06) |
- diluted | ($0.04) | $0 | $0.09 | ($0.01) | ($0.01) | $0.04 | ($0.05) | ($0.04) | $0.04 | ($0.06) | ($0.06) |