Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 12-May-14 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'INSV | ' |
Entity Registrant Name | 'INSITE VISION INC | ' |
Entity Central Index Key | '0000802724 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 131,951,033 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $4,353 | $3,251 |
Short-term investments | 1,000 | 5,000 |
Accounts receivable | 1,146 | 1,026 |
Other receivables | 653 | 1,114 |
Prepaid expenses and other current assets | 320 | 95 |
Debt issuance costs, net | 2,145 | 2,248 |
Total current assets | 9,617 | 12,734 |
Property and equipment, net | 1,803 | 1,431 |
Total assets | 11,420 | 14,165 |
Current liabilities: | ' | ' |
Accounts payable | 807 | 394 |
Accrued liabilities | 2,233 | 2,345 |
Accrued compensation and related expense | 1,125 | 1,090 |
Accrued royalties | 910 | 776 |
Non-recourse accrued interest | 2,491 | 826 |
Non-recourse secured notes payable | 41,281 | 41,281 |
Warrant liability | 1,105 | 1,685 |
Total current liabilities | 49,952 | 48,397 |
Lease incentive | 1,049 | 922 |
Total liabilities | 51,001 | 49,319 |
Commitments and contingencies | ' | ' |
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 March 31, 2014 and December 31, 2013 | 1,320 | 1,320 |
Additional paid-in capital | 165,801 | 165,549 |
Accumulated deficit | -206,702 | -202,023 |
Total stockholders' deficit | -39,581 | -35,154 |
Total liabilities and stockholders' deficit | $11,420 | $14,165 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
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 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Royalties | $1,146 | $5,260 |
Other revenues | 7 | ' |
Total revenues | 1,153 | 5,260 |
Expenses: | ' | ' |
Research and development | 2,547 | 3,367 |
General and administrative | 1,940 | 1,453 |
Cost of revenues, principally royalties to third parties | 138 | 85 |
Total expenses | 4,625 | 4,905 |
Income (loss) from operations | -3,472 | 355 |
Interest expense and other, net | -1,787 | -2,131 |
Change in fair value of warrant liability | 580 | -145 |
Net loss | ($4,679) | ($1,921) |
Net loss per share: | ' | ' |
Loss per share - basic | ($0.04) | ($0.01) |
Loss per share - diluted | ($0.04) | ($0.01) |
Weighted average shares used in per-share calculation: | ' | ' |
Basic | 131,951 | 131,951 |
Diluted | 131,951 | 131,951 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
OPERATING ACTIVITIES: | ' | ' |
Net loss | ($4,679) | ($1,921) |
Adjustment to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 81 | 26 |
Amortization of debt issuance costs | 103 | 104 |
Amortization of lease incentive | -46 | ' |
Stock-based compensation | 252 | 266 |
Change in fair value of warrant liability | -580 | 145 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -120 | 90 |
Other receivables | 461 | ' |
Prepaid expenses and other current assets | -225 | -149 |
Accounts payable | 413 | 288 |
Accrued liabilities | -140 | -516 |
Accrued compensation and related expense | 35 | -577 |
Accrued royalties | 134 | -171 |
Accrued interest | 1,665 | -48 |
Net cash used in operating activities | -2,646 | -2,463 |
INVESTING ACTIVITIES: | ' | ' |
Purchase of property and equipment | -252 | -18 |
Decrease in short-term investments | 4,000 | 4,999 |
Net cash provided by investing activities | 3,748 | 4,981 |
FINANCING ACTIVITIES: | ' | ' |
Payment of secured notes payable | ' | -2,372 |
Net cash used in financing activities | ' | -2,372 |
Net increase in cash and cash equivalents | 1,102 | 146 |
Cash and cash equivalents at beginning of period | 3,251 | 1,323 |
Cash and cash equivalents at end of period | 4,353 | 1,469 |
Supplemental disclosure of cash flow information: | ' | ' |
Interest received | 1 | 1 |
Interest paid | 18 | 2,075 |
Income taxes paid | 1 | 1 |
Non-cash investing activities - Lease incentive | $201 | ' |
Significant_Accounting_Policie
Significant Accounting Policies and Use of Estimates | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Significant Accounting Policies and Use of Estimates | ' | ||||||||
Note 1. Significant Accounting Policies and Use of Estimates | |||||||||
Basis of Presentation | |||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of InSite Vision Incorporated (“InSite” or the “Company”) and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the preparation of the condensed consolidated financial statements. | |||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial results and financial condition have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for any future period. | |||||||||
The Company operates in one segment using one measure of profitability to manage its business. All of the Company’s long-lived assets are located in the United States. Revenues are primarily royalties from the North American license (the “Akorn License”) of AzaSite to Akorn, Inc. (“Akorn”). | |||||||||
The Company has incurred substantial cumulative losses and negative cash flows from operations during the quarter ended March 31, 2014 and the years ended December 31, 2012 and 2011. As of March 31, 2014, the Company’s accumulated deficit was $206.7 million and its cash and short-term investments were $5.4 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 was not able to make the required interest payments on the secured notes during 2014 and will trigger an event of default on May 15, 2014. For further discussion, see Note 5. Management’s plans include exploring strategic alternatives or raising additional 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. | |||||||||
These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2013. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. | |||||||||
Short-Term Investments | |||||||||
The Company’s investment policy is to limit the risk of principal loss of invested funds by generally attempting to limit market risk. Accordingly, as of March 31, 2014, the Company’s short-term investments of $1.0 million were invested in U.S. Treasury securities with original maturities of twelve 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 included in earnings. As of March 31, 2014, the unrealized gain on these short-term investments was insignificant. | |||||||||
Warrant Liability | |||||||||
In July 2011, the Company issued warrants to purchase shares of the Company’s common stock in connection with a private placement financing transaction. 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 mandatory purchase 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 Condensed 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. | ||||||||
The Company’s financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and debt obligations. Accounts receivable and accounts payable are reflected in the accompanying unaudited condensed 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. | |||||||||
At March 31, 2014, $5.1 million of the Company’s cash and cash equivalents and short-term investments consisted of Level 1 U.S. Treasury-backed government securities or money market funds that are measured at fair value on a recurring basis. | |||||||||
The Company has debt, the AzaSite Notes, 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 March 31, 2014, measured at fair value on a nonrecurring basis, with an interest rate of 16%. At March 31, 2014, the Company’s debt was reflected in the accompanying unaudited condensed consolidated financial statements at face value. Due to a significant decline in, and uncertainty regarding the future of, AzaSite earned royalty revenues, it is reasonably possible that the fair value of the debt has declined. However, the amount of the decline in value of this debt is not reasonably determinable at this time. For a further discussion of the AzaSite Notes, see Note 5. | |||||||||
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 March 31, 2014 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. A significant increase (decrease) of any of the subjective variables would result in a correlated increase (decrease) in the warrant liability and an inverse effect on net income (loss). | |||||||||
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 March 31, 2014 and December 31, 2013: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Risk-free interest rate | 0.4 | % | 0.8 | % | |||||
Remaining term (years) | 2.3 | 2.5 | |||||||
Expected dividends | 0 | % | 0 | % | |||||
Volatility | 118 | % | 100 | % | |||||
The expected dividend yield was set at zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility was based on the historical volatility of the Company’s common stock and was equal to the greater of 100% or the 30-day volatility rate. The risk-free interest rates were 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 three months ended March 31, 2014 (in thousands): | |||||||||
Balance at December 31, 2013 | $ | 1,685 | |||||||
Net decrease in fair value of warrant liability on remeasurement | (580 | ) | |||||||
Balance at March 31, 2014 | $ | 1,105 | |||||||
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 Condensed Consolidated Statements of Operations. | |||||||||
The warrant liability’s exposure to market risk will vary over time depending on interest rates and the Company’s stock price. Although the table above reflects the current estimated fair value of the warrant liability, it does not reflect the gains or losses associated with market exposures, which will depend on actual market conditions during the remaining life of the warrants. |
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
Note 2. Stock-Based Compensation | |||||||||||||||||
Equity Incentive Program | |||||||||||||||||
In 2007, the Company’s stockholders approved the Company’s 2007 Performance Incentive Plan (the “2007 Plan”), which provides for grants of options and other equity-based awards to the Company’s employees, directors and consultants. Options granted under this plan, and its predecessor plan, 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 (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 three months thereafter, if not exercised. 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 under the 2007 Plan will be increased by the lesser of (i) 2% of the total outstanding shares of common stock on December 31 of the preceding calendar year and (ii) 3,000,000 shares. On January 1, 2014, the shares of common stock available for issuance under the 2007 Plan increased by 2,639,020 shares. | |||||||||||||||||
Stock-based Compensation | |||||||||||||||||
The Company’s 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. | |||||||||||||||||
The effect of recording stock-based compensation for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Stock-based compensation expense by type of award: | |||||||||||||||||
Employee stock options | $ | 255 | $ | 266 | |||||||||||||
Scientific Advisory Board stock options | (3 | ) | — | ||||||||||||||
Total stock-based compensation expense | $ | 252 | $ | 266 | |||||||||||||
Stock-based compensation included in expense line items in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Research and development | $ | 104 | $ | 90 | |||||||||||||
General and administrative | 148 | 176 | |||||||||||||||
$ | 252 | $ | 266 | ||||||||||||||
During the three months ended March 31, 2014 and 2013, the Company granted options to purchase 2,777,000 and 3,056,874 shares of common stock, respectively, with an estimated total grant date fair value of $555,000 and $683,000, respectively. 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 quarters ended March 31, 2014 and 2013, the Company estimated that the stock-based compensation for the awards not expected to vest was $319,000 and $373,000, respectively. | |||||||||||||||||
As of March 31, 2014, unrecorded deferred stock-based compensation balance related to stock options was $1.4 million and will be recognized over an estimated weighted-average amortization period of 2.6 years. | |||||||||||||||||
Valuation assumptions | |||||||||||||||||
The Company estimates the fair value of stock options using a Black-Scholes valuation model using the graded-vesting method with the following weighted-average assumptions: | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
Stock Options | 2014 | 2013 | |||||||||||||||
Risk-free interest rate | 1.7 | % | 0.8 | % | |||||||||||||
Expected term (years) | 5 | 5 | |||||||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||||||
Volatility | 88.2 | % | 90.1 | % | |||||||||||||
The expected dividend yield was set at zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility was based on the historical volatility of the Company’s common stock and 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 were 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 U.S. Treasury securities for terms equal to the expected term of the options. The expected term calculation was based on the terms utilized by the Company’s peers, observed historical option exercise behavior and post-vesting forfeitures of options by the Company’s employees. | |||||||||||||||||
The following is a summary of activity 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, 2013 | 17,097,984 | $ | 0.39 | ||||||||||||||
Granted | 2,777,000 | 0.29 | |||||||||||||||
Exercised | — | 0 | |||||||||||||||
Forfeited | (26,714 | ) | 0.36 | ||||||||||||||
Expired | (82,021 | ) | 0.62 | ||||||||||||||
Outstanding at March 31, 2014 | 19,766,249 | $ | 0.38 | 7.37 | $ | 0 | |||||||||||
Options vested and expected to vest at March 31, 2014 | 18,968,598 | $ | 0.38 | 7.29 | $ | 0 | |||||||||||
Options exercisable at March 31, 2014 | 12,307,366 | $ | 0.4 | 6.46 | $ | 0 | |||||||||||
At March 31, 2014, the Company had 4,492,109 shares of common stock available for grant or issuance under its 2007 Plan. The weighted average grant date fair value of options granted during the three months ended March 31, 2014 and 2013 was $0.20 and $0. 22 per share, respectively. No options were exercised during the three months ended March 31, 2014 and 2013. |
Net_Loss_per_Share
Net Loss per Share | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Net Loss per Share | ' | ||||||||
Note 3. Net Loss per Share | |||||||||
Basic net loss per share has been computed using the weighted-average number of common shares outstanding during the period. Dilutive net loss per share was 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 2014 and 2013 as their inclusion would be anti-dilutive. For the three months ended March 31, 2014 and 2013, respectively, 34,557,625 and 31,185,339 options and warrants were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive. | |||||||||
The following table sets forth the computation of basic and diluted net loss per share: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
(in thousands, except per share data) | 2014 | 2013 | |||||||
Numerator: | |||||||||
Net loss | $ | (4,679 | ) | $ | (1,921 | ) | |||
Denominator: | |||||||||
Weighted-average shares outstanding | 131,951 | 131,951 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | — | — | |||||||
Weighted-average shares outstanding for diluted loss per share | 131,951 | 131,951 | |||||||
Net loss per share: | |||||||||
Basic | $ | (0.04 | ) | $ | (0.01 | ) | |||
Diluted | $ | (0.04 | ) | $ | (0.01 | ) | |||
Warrant_Liability
Warrant Liability | 3 Months Ended |
Mar. 31, 2014 | |
Text Block [Abstract] | ' |
Warrant Liability | ' |
Note 4. Warrant Liability | |
In July 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 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 in July 2011 and remeasured to $1.7 million and $1.1 million at December 31, 2013 and March 31, 2014, respectively. The Company recorded a decrease to the warrant liability of approximately $0.6 million for the three months ended March 31, 2014 and an increase of $0.1 million for the three months ended March 31, 2013, which was recognized as income and expense, respectively, in the Company’s Condensed Consolidated Statement of Operations. Additional disclosures regarding the assumptions used in calculating the fair value of the warrant liability are included in Note 1. |
NonRecourse_Secured_Notes_Paya
Non-Recourse Secured Notes Payable | 3 Months Ended |
Mar. 31, 2014 | |
Debt Disclosure [Abstract] | ' |
Non-Recourse Secured Notes Payable | ' |
Note 5. Non-Recourse Secured Notes Payable | |
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 the AzaSite Notes, which are 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. | |
For the quarter ended December 31, 2013, the Company’s subsidiary received insufficient royalties to make the interest payment in full that was due on February 15, 2014. This shortfall in interest payments was not an event of default. However, if the Company does not pay in full the interest shortfall (plus interest thereon) by May 15, 2014, the Company’s subsidiary will trigger an event of default under the indenture. For the quarter ended March 31, 2014, the Company’s subsidiary again received insufficient royalties to pay the interest shortfall from February 15, 2014 and the interest payment that is due on May 15, 2014. The Company has the ability to make-up this shortfall with its own cash resources. However, the Company has no intention to use its cash to pay this shortfall. Accordingly, an event of default will occur on May 15, 2014. Upon the event of default, the noteholders could seek available remedies, which include 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. Assuming the Company’s subsidiary does not cure the expected event of default and is unable to negotiate a settlement or restructuring with the noteholders, the noteholders will have the right to foreclose on their collateral, primarily our subsidiary, and the Company will lose all interest in AzaSite Royalty Sub and lose its right to receive AzaSite royalties or any future revenue from AzaSite in North America. Based on current earned royalty levels, the earned royalties will not cover future required interest payments. Accordingly, as of March 31, 2014, $41.3 million of secured notes has been classified as current along with the unamortized debt issuance costs. |
Common_Stock_Warrants
Common Stock Warrants | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Text Block [Abstract] | ' | ||||||||||||||
Common Stock Warrants | ' | ||||||||||||||
Note 6. Common Stock Warrants | |||||||||||||||
The following table shows outstanding warrants as of March 31, 2014, 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 Shares | Exercise Price | Expiration Date | Potential Proceeds if | |||||||||||
Exercised for Cash | |||||||||||||||
July 18, 2011 | 14,791,376 | $ | 0.75 | July 18, 2016 | $ | 11,093,532 |
Legal_Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 31, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Legal Proceedings | ' |
Note 7. 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. Akorn has taken 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 they were injured when treated with the Bausch & Lomb product Besivance following a photorefractive keratectomy. On February 1, 2013, Bausch & Lomb removed the case to the United States District Court for the Eastern District of Kentucky. The Company moved to dismiss for lack of jurisdiction and on January 3, 2014, the plaintiffs filed a response conceding to the Company’s motion to dismiss for lack of personal jurisdiction. On March 7, 2014, the matter was taken off docket by the District Court. The Company subsequently received a complete release of all claims. | |
There are currently no other claims or legal actions that would have a material adverse impact on our financial position, operations or potential performance. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 8. Subsequent Events | |
The Company evaluated subsequent events through the date on which the financial statements were issued and determined that there were no subsequent events that required adjustments or disclosures to the financial statements for the quarter ended March 31, 2014. |
Significant_Accounting_Policie1
Significant Accounting Policies and Use of Estimates (Policies) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Basis of Presentation | ' | ||||||||
Basis of Presentation | |||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of InSite Vision Incorporated (“InSite” or the “Company”) and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the preparation of the condensed consolidated financial statements. | |||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial results and financial condition have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for any future period. | |||||||||
The Company operates in one segment using one measure of profitability to manage its business. All of the Company’s long-lived assets are located in the United States. Revenues are primarily royalties from the North American license (the “Akorn License”) of AzaSite to Akorn, Inc. (“Akorn”). | |||||||||
The Company has incurred substantial cumulative losses and negative cash flows from operations during the quarter ended March 31, 2014 and the years ended December 31, 2012 and 2011. As of March 31, 2014, the Company’s accumulated deficit was $206.7 million and its cash and short-term investments were $5.4 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 was not able to make the required interest payments on the secured notes during 2014 and will trigger an event of default on May 15, 2014. For further discussion, see Note 5. Management’s plans include exploring strategic alternatives or raising additional 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. | |||||||||
These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2013. | |||||||||
Use of Estimates | ' | ||||||||
Use of Estimates | |||||||||
The preparation of financial statements requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. | |||||||||
Short-Term Investments | ' | ||||||||
Short-Term Investments | |||||||||
The Company’s investment policy is to limit the risk of principal loss of invested funds by generally attempting to limit market risk. Accordingly, as of March 31, 2014, the Company’s short-term investments of $1.0 million were invested in U.S. Treasury securities with original maturities of twelve 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 included in earnings. As of March 31, 2014, the unrealized gain on these short-term investments was insignificant. | |||||||||
Warrant Liability | ' | ||||||||
Warrant Liability | |||||||||
In July 2011, the Company issued warrants to purchase shares of the Company’s common stock in connection with a private placement financing transaction. 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 mandatory purchase 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 Condensed 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. | ||||||||
The Company’s financial instruments consist mainly of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and debt obligations. Accounts receivable and accounts payable are reflected in the accompanying unaudited condensed 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. | |||||||||
At March 31, 2014, $5.1 million of the Company’s cash and cash equivalents and short-term investments consisted of Level 1 U.S. Treasury-backed government securities or money market funds that are measured at fair value on a recurring basis. | |||||||||
The Company has debt, the AzaSite Notes, 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 March 31, 2014, measured at fair value on a nonrecurring basis, with an interest rate of 16%. At March 31, 2014, the Company’s debt was reflected in the accompanying unaudited condensed consolidated financial statements at face value. Due to a significant decline in, and uncertainty regarding the future of, AzaSite earned royalty revenues, it is reasonably possible that the fair value of the debt has declined. However, the amount of the decline in value of this debt is not reasonably determinable at this time. For a further discussion of the AzaSite Notes, see Note 5. | |||||||||
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 March 31, 2014 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. A significant increase (decrease) of any of the subjective variables would result in a correlated increase (decrease) in the warrant liability and an inverse effect on net income (loss). | |||||||||
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 March 31, 2014 and December 31, 2013: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Risk-free interest rate | 0.4 | % | 0.8 | % | |||||
Remaining term (years) | 2.3 | 2.5 | |||||||
Expected dividends | 0 | % | 0 | % | |||||
Volatility | 118 | % | 100 | % | |||||
The expected dividend yield was set at zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility was based on the historical volatility of the Company’s common stock and was equal to the greater of 100% or the 30-day volatility rate. The risk-free interest rates were 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 three months ended March 31, 2014 (in thousands): | |||||||||
Balance at December 31, 2013 | $ | 1,685 | |||||||
Net decrease in fair value of warrant liability on remeasurement | (580 | ) | |||||||
Balance at March 31, 2014 | $ | 1,105 | |||||||
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 Condensed Consolidated Statements of Operations. | |||||||||
The warrant liability’s exposure to market risk will vary over time depending on interest rates and the Company’s stock price. Although the table above reflects the current estimated fair value of the warrant liability, it does not reflect the gains or losses associated with market exposures, which will depend on actual market conditions during the remaining life of the warrants. | |||||||||
Net Loss per Share | ' | ||||||||
Basic net loss per share has been computed using the weighted-average number of common shares outstanding during the period. Dilutive net loss per share was 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 2014 and 2013 as their inclusion would be anti-dilutive. For the three months ended March 31, 2014 and 2013, respectively, 34,557,625 and 31,185,339 options and warrants were excluded from the calculation of diluted net loss per share because the effect was anti-dilutive. |
Significant_Accounting_Policie2
Significant Accounting Policies and Use of Estimates (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
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 March 31, 2014 and December 31, 2013: | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Risk-free interest rate | 0.4 | % | 0.8 | % | |||||
Remaining term (years) | 2.3 | 2.5 | |||||||
Expected dividends | 0 | % | 0 | % | |||||
Volatility | 118 | % | 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 three months ended March 31, 2014 (in thousands): | |||||||||
Balance at December 31, 2013 | $ | 1,685 | |||||||
Net decrease in fair value of warrant liability on remeasurement | (580 | ) | |||||||
Balance at March 31, 2014 | $ | 1,105 | |||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
The effect of recording stock-based compensation for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Stock-based compensation expense by type of award: | |||||||||||||||||
Employee stock options | $ | 255 | $ | 266 | |||||||||||||
Scientific Advisory Board stock options | (3 | ) | — | ||||||||||||||
Total stock-based compensation expense | $ | 252 | $ | 266 | |||||||||||||
Stock-Based Compensation Expenses | ' | ||||||||||||||||
Stock-based compensation included in expense line items in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Research and development | $ | 104 | $ | 90 | |||||||||||||
General and administrative | 148 | 176 | |||||||||||||||
$ | 252 | $ | 266 | ||||||||||||||
Weighted-Average Fair Value Assumptions of Stock Options | ' | ||||||||||||||||
The Company estimates the fair value of stock options using a Black-Scholes valuation model using the graded-vesting method with the following weighted-average assumptions: | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | |||||||||||||||||
Stock Options | 2014 | 2013 | |||||||||||||||
Risk-free interest rate | 1.7 | % | 0.8 | % | |||||||||||||
Expected term (years) | 5 | 5 | |||||||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||||||
Volatility | 88.2 | % | 90.1 | % | |||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
The following is a summary of activity 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, 2013 | 17,097,984 | $ | 0.39 | ||||||||||||||
Granted | 2,777,000 | 0.29 | |||||||||||||||
Exercised | — | 0 | |||||||||||||||
Forfeited | (26,714 | ) | 0.36 | ||||||||||||||
Expired | (82,021 | ) | 0.62 | ||||||||||||||
Outstanding at March 31, 2014 | 19,766,249 | $ | 0.38 | 7.37 | $ | 0 | |||||||||||
Options vested and expected to vest at March 31, 2014 | 18,968,598 | $ | 0.38 | 7.29 | $ | 0 | |||||||||||
Options exercisable at March 31, 2014 | 12,307,366 | $ | 0.4 | 6.46 | $ | 0 |
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Computation of Basic and Diluted Net Loss Per Share | ' | ||||||||
The following table sets forth the computation of basic and diluted net loss per share: | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
(in thousands, except per share data) | 2014 | 2013 | |||||||
Numerator: | |||||||||
Net loss | $ | (4,679 | ) | $ | (1,921 | ) | |||
Denominator: | |||||||||
Weighted-average shares outstanding | 131,951 | 131,951 | |||||||
Effect of dilutive securities: | |||||||||
Stock options | — | — | |||||||
Weighted-average shares outstanding for diluted loss per share | 131,951 | 131,951 | |||||||
Net loss per share: | |||||||||
Basic | $ | (0.04 | ) | $ | (0.01 | ) | |||
Diluted | $ | (0.04 | ) | $ | (0.01 | ) | |||
Common_Stock_Warrants_Tables
Common Stock Warrants (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2014 | |||||||||||||||
Text Block [Abstract] | ' | ||||||||||||||
Outstanding Common Stock Warrants | ' | ||||||||||||||
The following table shows outstanding warrants as of March 31, 2014, 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 Shares | Exercise Price | Expiration Date | Potential Proceeds if | |||||||||||
Exercised for Cash | |||||||||||||||
July 18, 2011 | 14,791,376 | $ | 0.75 | July 18, 2016 | $ | 11,093,532 |
Significant_Accounting_Policie3
Significant Accounting Policies and Use of Estimates - Additional Information (Detail) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2014 | Dec. 31, 2013 | Feb. 29, 2008 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Segment | U.S. Treasury Securities [Member] | Level 1 [Member] | Level 2 [Member] | Level 3 [Member] | Level 3 [Member] | |||
Fair Value on Recurring Basis [Member] | Fair Value on Nonrecurring Basis [Member] | Fair Value on Recurring Basis [Member] | Fair Value on Recurring Basis [Member] | |||||
U.S. Treasury-backed Money Market Funds [Member] | Warrant [Member] | Warrant [Member] | ||||||
Schedule Of Description Of Business Basis Of Presentation And Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of operating segment | 1 | ' | ' | ' | ' | ' | ' | ' |
Accumulated deficit | ($206,702,000) | ($202,023,000) | ' | ' | ' | ' | ' | ' |
Cash and short-term investment balances | 5,400,000 | ' | ' | ' | ' | ' | ' | ' |
Short-term investments | 1,000,000 | 5,000,000 | ' | 1,000,000 | ' | ' | ' | ' |
Short-term investments, description | ' | ' | ' | 'Securities with original maturities of twelve months or less. | ' | ' | ' | ' |
Short-term investments, maximum maturity | ' | ' | ' | '12 months | ' | ' | ' | ' |
Cash and cash equivalents and short-term investments, at fair value | ' | ' | ' | ' | 5,100,000 | ' | ' | ' |
Secured notes payable with fixed interest rate, fair value | ' | ' | ' | ' | ' | 41,300,000 | ' | ' |
Interest rate on non-recourse, secured notes payable | ' | ' | 16.00% | ' | ' | 16.00% | ' | ' |
Expected dividend yield on warrant liabilities | ' | ' | ' | ' | ' | ' | 0.00% | 0.00% |
Cash dividends | ' | ' | ' | ' | ' | ' | $0 | ' |
Fair value of liabilities, volatility rate description | ' | ' | ' | ' | ' | ' | 'Expected volatility was based on the historical volatility of the Company's common stock and was equal to the greater of 100% or the 30-day volatility rate. | ' |
Fair value of liabilities, expected volatility rate | ' | ' | ' | ' | ' | ' | 118.00% | 100.00% |
Fair value of liabilities, duration of volatility rate | ' | ' | ' | ' | ' | ' | '30 days | ' |
Significant_Accounting_Policie4
Significant Accounting Policies and Use of Estimates - Estimated Fair Value of Warrant Liability (Detail) (Warrant [Member], Level 3 [Member], Fair Value on Recurring Basis [Member]) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2013 | |
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 | 0.40% | 0.80% |
Remaining term (years) | '2 years 3 months 18 days | '2 years 6 months |
Expected dividends | 0.00% | 0.00% |
Volatility | 118.00% | 100.00% |
Significant_Accounting_Policie5
Significant Accounting Policies and Use of Estimates - Changes in Fair Value of Level Three Financial Liabilities (Detail) (Warrant [Member], USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Jul. 31, 2011 | |
Warrant [Member] | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' |
Balance at beginning of period | $1,685,000 | ' | $6,400,000 |
Net decrease in fair value of warrant liability on remeasurement | -580,000 | 100,000 | ' |
Balance at end of period | $1,105,000 | ' | $6,400,000 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ' | ' |
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 years | ' | ' |
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 | ' | ' |
Increase in the number of shares of common stock available for issuance | ' | ' | 2,639,020 |
Common stock, shares granted options to purchase | 2,777,000 | 3,056,874 | ' |
Common stock, shares estimated total grant date fair value | $555,000 | $683,000 | ' |
Common stock, shares annualized forfeiture rate | 10.00% | ' | ' |
Stock-based compensation not expected to vest | 319,000 | 373,000 | ' |
Unrecorded deferred stock-based compensation | $1,400,000 | ' | ' |
Recognized estimated weighted-average amortization period | '2 years 7 months 6 days | ' | ' |
Expected dividend yield | 0.00% | 0.00% | ' |
Common stock, shares available for grant or issuance under 2007 Plan | 4,492,109 | ' | ' |
Weighted average fair value options granted | $0.20 | $0.22 | ' |
Options exercised | 0 | 0 | ' |
StockBased_Compensation_StockB
Stock-Based Compensation - Stock-Based Compensation (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' |
Total stock-based compensation expense | $252 | $266 |
Employee Stock Options [Member] | ' | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' |
Total stock-based compensation expense | 255 | 266 |
Scientific Advisory Board Stock Options [Member] | ' | ' |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ' | ' |
Total stock-based compensation expense | ($3) | ' |
StockBased_Compensation_StockB1
Stock-Based Compensation - Stock-Based Compensation Expenses (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation expense | $252 | $266 |
Research and Development [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation expense | 104 | 90 |
General and Administrative [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Total stock-based compensation expense | $148 | $176 |
StockBased_Compensation_Weight
Stock-Based Compensation - Weighted-Average Fair Value Assumptions of Stock Options (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ' |
Risk-free interest rate | 1.70% | 0.80% |
Expected term (years) | '5 years | '5 years |
Expected dividends | 0.00% | 0.00% |
Volatility | 88.20% | 90.10% |
StockBased_Compensation_Summar
Stock-Based Compensation - Summary of Stock Option Activity (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Number of shares | ' | ' |
Outstanding at beginning balance | 17,097,984 | ' |
Granted | 2,777,000 | 3,056,874 |
Exercised | 0 | 0 |
Forfeited | -26,714 | ' |
Expired | -82,021 | ' |
Outstanding at ending balance | 19,766,249 | ' |
Options vested and expected to vest at ending balance | 18,968,598 | ' |
Options exercisable at ending balance | 12,307,366 | ' |
Weighted-Average Exercise Price | ' | ' |
Outstanding at beginning balance | $0.39 | ' |
Granted | $0.29 | ' |
Exercised | $0 | ' |
Forfeited | $0.36 | ' |
Expired | $0.62 | ' |
Outstanding at ending balance | $0.38 | ' |
Options vested and expected to vest at ending balance | $0.38 | ' |
Options exercisable at ending balance | $0.40 | ' |
Weighted-Average Remaining Contractual Term (Years) | ' | ' |
Outstanding at ending balance | '7 years 4 months 13 days | ' |
Options vested and expected to vest at ending balance | '7 years 3 months 15 days | ' |
Options exercisable at ending balance | '6 years 5 months 16 days | ' |
Aggregate Intrinsic Value | ' | ' |
Outstanding at ending balance | $0 | ' |
Options vested and expected to vest at ending balance | 0 | ' |
Options exercisable at ending balance | $0 | ' |
Net_Loss_per_Share_Additional_
Net Loss per Share - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Earnings Per Share [Abstract] | ' | ' |
Options and warrants excluded from calculation of diluted net loss per share | 34,557,625 | 31,185,339 |
Net_Loss_per_Share_Computation
Net Loss per Share - Computation of Basic and Diluted Net Loss Per Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Numerator: | ' | ' |
Net loss | ($4,679) | ($1,921) |
Denominator: | ' | ' |
Weighted-average shares outstanding | 131,951 | 131,951 |
Effect of dilutive securities: | ' | ' |
Stock options | ' | ' |
Weighted-average shares outstanding for diluted loss per share | 131,951 | 131,951 |
Net loss per share: | ' | ' |
Basic | ($0.04) | ($0.01) |
Diluted | ($0.04) | ($0.01) |
Warrant_Liability_Additional_I
Warrant Liability - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2011 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' |
Gross proceeds from private placement | $22,200,000 | ' | ' | ' |
Net proceeds from private placement | 20,400,000 | ' | ' | ' |
Common Stock [Member] | ' | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' |
Number of common stock sold | 36,978,440 | ' | ' | ' |
Selling price per share | $0.60 | ' | ' | ' |
Number of warrants issued to purchase common stock | 14,791,376 | 14,791,376 | ' | ' |
Warrant [Member] | ' | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' |
Warrants exercise price | 0.75 | 0.75 | ' | ' |
Expiration period of warrants | '5 years | ' | ' | ' |
Warrant liability | 6,400,000 | 1,105,000 | ' | 1,685,000 |
Increase (decrease) in warrant liability | ' | ($580,000) | $100,000 | ' |
NonRecourse_Secured_Notes_Paya1
Non-Recourse Secured Notes Payable - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Feb. 29, 2008 | Mar. 31, 2014 | 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, interest payment due date | ' | 15-May-14 | 15-Feb-14 |
Non-recourse secured notes payable | ' | $41.30 | ' |
Common_Stock_Warrants_Outstand
Common Stock Warrants - Outstanding Common Stock Warrants (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Jul. 31, 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 |
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 | ' | ' | ' | ' | ' | ' |