COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 12, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-21088 | |
Entity Registrant Name | BRICKELL BIOTECH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 93-0948554 | |
Entity Address, Address Line One | 5777 Central Avenue, | |
Entity Address, City or Town | Boulder, | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80301 | |
City Area Code | 720 | |
Local Phone Number | 505-4755 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Trading Symbol | BBI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,787,081 | |
Entity Central Index Key | 0000819050 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 21,570 | $ 7,232 |
Marketable securities, available-for-sale | 0 | 4,497 |
Prepaid expenses and other current assets | 5,736 | 6,240 |
Total current assets | 27,306 | 17,969 |
Property and equipment, net | 10 | 16 |
Operating lease right-of-use asset | 114 | 159 |
Total assets | 27,430 | 18,144 |
Current liabilities: | ||
Accounts payable | 566 | 2,245 |
Accrued liabilities | 6,261 | 6,379 |
Lease liability, current portion | 83 | 78 |
Deferred revenue | 142 | 1,795 |
Note payable, current portion | 194 | 0 |
Total current liabilities | 7,246 | 10,497 |
Lease liability, net of current portion | 31 | 73 |
Note payable, net of current portion | 243 | 0 |
Total liabilities | 7,520 | 10,570 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Common stock, $0.01 par value, 50,000,000 shares authorized at June 30, 2020 and December 31, 2019; 26,671,573 and 8,480,968 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 267 | 85 |
Additional paid-in capital | 113,845 | 92,497 |
Accumulated other comprehensive gain | 0 | (28) |
Accumulated deficit | (94,202) | (84,980) |
Total stockholders’ equity | 19,910 | 7,574 |
Total liabilities and stockholders’ equity | $ 27,430 | $ 18,144 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 26,671,573 | 8,480,968 |
Common stock, shares outstanding (in shares) | 26,671,573 | 8,480,968 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Collaboration revenue | $ 607 | $ 2,573 | $ 1,653 | $ 6,065 |
Operating expenses: | ||||
Research and development | 2,712 | 4,229 | 5,376 | 10,248 |
General and administrative | 3,021 | 1,323 | 5,502 | 3,389 |
Total operating expenses | 5,733 | 5,552 | 10,878 | 13,637 |
Loss from operations | (5,126) | (2,979) | (9,225) | (7,572) |
Investment and other income, net | 7 | 4 | 3 | 10 |
Interest expense | 0 | (660) | 0 | (884) |
Change in fair value of derivative liability | 0 | 11 | 0 | 11 |
Change in fair value of warrant liability | 0 | (8) | 0 | 223 |
Net loss | (5,119) | (3,654) | (9,222) | (8,234) |
Reduction (accretion) of redeemable convertible preferred stock to redemption value | 0 | (163) | 0 | 10,356 |
Net income (loss) attributable to common stockholders | $ (5,119) | $ (3,817) | $ (9,222) | $ 2,122 |
Net loss per common share share attributable to common stockholders, basic (in usd per share) | $ (0.43) | $ (6.48) | $ (0.87) | $ 3.60 |
Net income (loss) per common share attributable to common stockholders, diluted (in usd per share) | $ (0.43) | $ (6.48) | $ (0.87) | $ (4.46) |
Weighted-average shares used to compute net loss per share attributable to common stockholders, basic (in shares) | 11,819,152 | 589,001 | 10,595,960 | 589,001 |
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders, diluted (in shares) | 11,819,152 | 589,001 | 10,595,960 | 1,845,467 |
CONDENSED CONSOLIDATED STATMENT
CONDENSED CONSOLIDATED STATMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (5,119) | $ (3,654) | $ (9,222) | $ (8,234) |
Other comprehensive income: | ||||
Unrealized gain on available-for-sale marketable securities arising during holding period, net of tax benefit of $0 | 0 | 0 | 28 | 0 |
Total comprehensive loss | $ (5,119) | $ (3,654) | $ (9,194) | $ (8,234) |
CONDENSED CONSOLIDATED STATME_2
CONDENSED CONSOLIDATED STATMENTS OF COMPREHENSIVE LOSS (PARENTHETICAL) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized loss arising during holding period, tax benefit (expense) | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Series A, B, C & C-1 Redeemable Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance (in shares) at Dec. 31, 2018 | 589,001 | |||||
Beginning Balance at Dec. 31, 2018 | $ (71,618) | $ 6 | $ 0 | $ 0 | $ (71,624) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 384 | 384 | ||||
Net income (loss) | (4,580) | (4,580) | ||||
Reduction of redeemable convertible preferred stock to redemption value | 10,519 | 10,519 | ||||
Ending Balance (in shares) at Mar. 31, 2019 | 589,001 | |||||
Ending Balance at Mar. 31, 2019 | (65,295) | $ 6 | 384 | 0 | (65,685) | |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,256,466 | |||||
Beginning Balance at Dec. 31, 2018 | $ 58,290 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Reduction of redeemable convertible preferred stock to redemption value | $ (10,519) | |||||
Ending Balance (in shares) at Mar. 31, 2019 | 1,256,466 | |||||
Ending Balance at Mar. 31, 2019 | $ 47,771 | |||||
Beginning Balance (in shares) at Dec. 31, 2018 | 589,001 | |||||
Beginning Balance at Dec. 31, 2018 | (71,618) | $ 6 | 0 | 0 | (71,624) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Unrealized loss on available-for-sale marketable securities | 0 | |||||
Net income (loss) | (8,234) | |||||
Ending Balance (in shares) at Jun. 30, 2019 | 589,001 | |||||
Ending Balance at Jun. 30, 2019 | (68,813) | $ 6 | 520 | 0 | (69,339) | |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,256,466 | |||||
Beginning Balance at Dec. 31, 2018 | $ 58,290 | |||||
Ending Balance (in shares) at Jun. 30, 2019 | 1,256,466 | |||||
Ending Balance at Jun. 30, 2019 | $ 47,934 | |||||
Beginning Balance (in shares) at Mar. 31, 2019 | 589,001 | |||||
Beginning Balance at Mar. 31, 2019 | (65,295) | $ 6 | 384 | 0 | (65,685) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation | 299 | 299 | ||||
Unrealized loss on available-for-sale marketable securities | 0 | |||||
Net income (loss) | (3,654) | (3,654) | ||||
Accretion of redeemable convertible preferred stock to redemption value | (163) | (163) | ||||
Ending Balance (in shares) at Jun. 30, 2019 | 589,001 | |||||
Ending Balance at Jun. 30, 2019 | $ (68,813) | $ 6 | 520 | 0 | (69,339) | |
Beginning Balance (in shares) at Mar. 31, 2019 | 1,256,466 | |||||
Beginning Balance at Mar. 31, 2019 | $ 47,771 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Accretion of redeemable convertible preferred stock to redemption value | $ 163 | |||||
Ending Balance (in shares) at Jun. 30, 2019 | 1,256,466 | |||||
Ending Balance at Jun. 30, 2019 | $ 47,934 | |||||
Beginning Balance (in shares) at Dec. 31, 2019 | 8,480,968 | 8,480,968 | ||||
Beginning Balance at Dec. 31, 2019 | $ 7,574 | $ 85 | 92,497 | (28) | (84,980) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock and common stock purchase warrants, net of issuance costs (in shares) | 950,000 | |||||
Issuance of common stock and common stock purchase warrants, net of issuance costs | 1,990 | $ 10 | 1,980 | |||
Issuance of common stock upon exercise of warrants (in shares) | 221,293 | |||||
Issuance of common stock upon exercise of warrants | 15 | $ 2 | 13 | |||
Issuance of common stock upon restricted stock unit settlement, net of shares withheld for taxes (in shares) | 19,643 | |||||
Issuance of common stock upon restricted stock unit settlement, net of shares withheld for taxes | (13) | (13) | ||||
Stock based compensation | 403 | 403 | ||||
Unrealized loss on available-for-sale marketable securities | 28 | 28 | ||||
Net income (loss) | (4,103) | (4,103) | ||||
Ending Balance (in shares) at Mar. 31, 2020 | 9,671,904 | |||||
Ending Balance at Mar. 31, 2020 | 5,894 | $ 97 | 94,880 | 0 | (89,083) | |
Beginning Balance (in shares) at Dec. 31, 2019 | 0 | |||||
Beginning Balance at Dec. 31, 2019 | $ 0 | |||||
Ending Balance (in shares) at Mar. 31, 2020 | 0 | |||||
Ending Balance at Mar. 31, 2020 | $ 0 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Issuance of common stock and common stock purchase warrants, issuance costs | $ 10 | |||||
Beginning Balance (in shares) at Dec. 31, 2019 | 8,480,968 | 8,480,968 | ||||
Beginning Balance at Dec. 31, 2019 | $ 7,574 | $ 85 | 92,497 | (28) | (84,980) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Unrealized loss on available-for-sale marketable securities | 28 | |||||
Net income (loss) | $ (9,222) | |||||
Ending Balance (in shares) at Jun. 30, 2020 | 26,671,573 | 26,671,573 | ||||
Ending Balance at Jun. 30, 2020 | $ 19,910 | $ 267 | 113,845 | 0 | (94,202) | |
Beginning Balance (in shares) at Dec. 31, 2019 | 0 | |||||
Beginning Balance at Dec. 31, 2019 | $ 0 | |||||
Ending Balance (in shares) at Jun. 30, 2020 | 0 | |||||
Ending Balance at Jun. 30, 2020 | $ 0 | |||||
Beginning Balance (in shares) at Mar. 31, 2020 | 9,671,904 | |||||
Beginning Balance at Mar. 31, 2020 | 5,894 | $ 97 | 94,880 | 0 | (89,083) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock and common stock purchase warrants, net of issuance costs (in shares) | 14,790,133 | |||||
Issuance of common stock and common stock purchase warrants, net of issuance costs | 18,679 | $ 148 | 18,531 | |||
Issuance of common stock upon exercise of warrants (in shares) | 2,202,863 | |||||
Issuance of common stock upon exercise of warrants | 7 | $ 22 | (15) | |||
Issuance of common stock upon restricted stock unit settlement, net of shares withheld for taxes (in shares) | 6,673 | |||||
Issuance of common stock upon restricted stock unit settlement, net of shares withheld for taxes | (4) | (4) | ||||
Stock based compensation | 453 | 453 | ||||
Unrealized loss on available-for-sale marketable securities | 0 | |||||
Net income (loss) | $ (5,119) | (5,119) | ||||
Ending Balance (in shares) at Jun. 30, 2020 | 26,671,573 | 26,671,573 | ||||
Ending Balance at Jun. 30, 2020 | $ 19,910 | $ 267 | $ 113,845 | $ 0 | $ (94,202) | |
Beginning Balance (in shares) at Mar. 31, 2020 | 0 | |||||
Beginning Balance at Mar. 31, 2020 | $ 0 | |||||
Ending Balance (in shares) at Jun. 30, 2020 | 0 | |||||
Ending Balance at Jun. 30, 2020 | $ 0 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Issuance of common stock and common stock purchase warrants, issuance costs | $ 1,443 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (9,222) | $ (8,234) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 6 | 21 |
Accretion of discount on marketable securities | 25 | 0 |
Change in fair value of derivative liability | 0 | 11 |
Change in fair value of warrant liability | 0 | (223) |
Amortization of discounts and financing costs | 0 | 551 |
Stock-based compensation | 856 | 683 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 512 | (165) |
Accounts payable | (1,679) | 3,053 |
Accrued liabilities | (135) | 865 |
Deferred revenue | (1,653) | (6,064) |
Net cash used in operating activities | (11,290) | (9,502) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Maturities of marketable securities | 4,500 | 0 |
Capital expenditures | 0 | (4) |
Net cash provided by (used in) investing activities | 4,500 | (4) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of common stock and warrants | 20,669 | 0 |
Proceeds from the issuance of note payable | 437 | 0 |
Proceeds from the exercise of warrants | 22 | 0 |
Proceeds from issuance of convertible promissory notes | 0 | 5,127 |
Payments of principal of note payable | 0 | (1,609) |
Net cash provided by financing activities | 21,128 | 3,518 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 14,338 | (5,988) |
CASH AND CASH EQUIVALENTS—BEGINNING | 7,232 | 8,067 |
CASH AND CASH EQUIVALENTS—ENDING | 21,570 | 2,079 |
Supplement Disclosure of Cash Flow Information: | ||
Interest paid | 0 | 234 |
Supplement Disclosure of Non-Cash Investing and Financing Activities: | ||
Reduction of redeemable convertible preferred stock to redemption value | 0 | (10,376) |
Warrants to purchase common stock issued with convertible promissory notes | 0 | 1,029 |
Derivative liability issued with convertible promissory notes | 0 | 996 |
Deferred financing costs included in accrued liabilities | 0 | 154 |
Accretion of redeemable convertible preferred stock issuance costs | $ 0 | $ 20 |
ORGANIZATION AND NATURE OF OPER
ORGANIZATION AND NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | ORGANIZATION AND NATURE OF OPERATIONS Brickell Biotech, Inc. (the “Company” or “Brickell”) is a clinical-stage pharmaceutical company focused on the development of innovative and differentiated prescription therapeutics for the treatment of debilitating skin diseases. The Company’s pipeline consists of potential novel therapeutics for hyperhidrosis and other prevalent dermatological conditions. The Company’s pivotal Phase 3-ready clinical-stage product candidate, sofpironium bromide, is a proprietary new molecular entity that belongs to a class of medications called anticholinergics. The Company intends to develop sofpironium bromide as a potential best-in-class, self-administered, once daily, topical therapy for the treatment of primary axillary hyperhidrosis. The Company’s operations to date have been limited to business planning, raising capital, developing its pipeline assets (in particular sofpironium bromide), identifying product candidates, and other research and development. On August 31, 2019, the Company, then known as Vical Incorporated (“Vical”), and Brickell Biotech, Inc., a then privately-held Delaware corporation that began activities in September 2009 (“Private Brickell”), completed a recapitalization in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated June 2, 2019, as further amended on August 20, 2019 and on August 30, 2019 (the “Merger Agreement”), by and among Vical, Victory Subsidiary, Inc., a wholly-owned subsidiary of Vical (“Merger Sub”), and Private Brickell. Pursuant to the Merger Agreement, Merger Sub merged with and into Private Brickell, with Private Brickell surviving as a wholly-owned subsidiary of Vical (the “Merger”). Additionally, on August 31, 2019, immediately after the completion of the Merger, the Company changed its name from “Vical Incorporated” to “Brickell Biotech, Inc.” and Private Brickell changed its name from “Brickell Biotech, Inc.” to “Brickell Subsidiary, Inc.” The accompanying condensed consolidated financial statements and related notes reflect the historical results of Private Brickell prior to the Merger and of the combined company following the Merger, and do not include the historical results of Vical prior to the completion of the Merger. These financial statements and related notes should be read in conjunction with the audited financial statements for the year ended December 31, 2019, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2020. Liquidity and Capital Resources The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The condensed consolidated financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. The Company has incurred significant operating losses and has an accumulated deficit as a result of ongoing efforts to develop product candidates, including conducting preclinical and clinical trials and providing general and administrative support for these operations. For the six months ended June 30, 2020, the Company had a net loss of $9.2 million and net cash used in operating activities of $11.3 million. As of June 30, 2020, the Company had cash and cash equivalents of $21.6 million and an accumulated deficit of $94.2 million. The Company believes that its cash and cash equivalents as of June 30, 2020 and periodic sales of the Company’s common stock under the Purchase Agreement (see Note 7. “Capital Stock”), are sufficient to fund its operations for at least the next 12 months from the issuance of these condensed consolidated financial statements. However, in order to sell additional shares of common stock under the Purchase Agreement, Lincoln Park Capital Fund, LLC (“Lincoln Park”) will need to purchase shares of common stock from the Company, subject to the conditions under the Purchase Agreement. Further, the Company will be significantly limited in its ability to sell shares of its common stock under the Purchase Agreement, or to utilize its common stock in any other capital raising transaction, if the Company’s stockholders do not approve an increase in the number of authorized shares of common stock of the Company, as further described in Note 7. “Capital Stock” and in Note 9. “Subsequent Events.” The Company expects to continue to incur additional substantial losses in the foreseeable future as a result of the Company’s research and development activities. Additional funding will be required in the future to proceed with the Company’s current and proposed research activities, including completing both pivotal U.S. Phase 3 clinical trials of sofpironium bromide. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Brickell Subsidiary, Inc., and are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and applicable rules and regulations of the SEC for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020, for any other interim period, or for any other future period. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date but does not include all of the information required by US GAAP for complete financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein. The Company’s management performed an evaluation of its activities through the date of filing of these financial statements and concluded that there are no subsequent events requiring disclosure, other than as disclosed. Use of Estimates The Company’s condensed consolidated financial statements are prepared in accordance with US GAAP, which requires it to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the Company’s knowledge of current events and actions it may take in the future, actual results may ultimately differ from these estimates and assumptions. Risks and Uncertainties The Company’s business is subject to significant risks common to early-stage companies in the pharmaceutical industry including, but not limited to, the ability to develop appropriate formulations, scale up and produce the compounds; dependence on collaborative parties; uncertainties associated with obtaining and enforcing patents and other intellectual property rights; clinical implementation and success; the lengthy and expensive regulatory approval process; compliance with regulatory and other legal requirements; competition from other products; uncertainty of broad adoption of its approved products, if any, by physicians and patients; significant competition; ability to manage third-party manufacturers, suppliers, contract research organizations, business partners and other alliance management; and obtaining additional financing to fund the Company’s efforts. The product candidates developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies prior to commercial sales in the United States or foreign jurisdictions, respectively. There can be no assurance that the Company’s current and future product candidates will receive the necessary approvals. If the Company is denied approval or approval is delayed, it may have a material adverse impact on the Company’s business and its financial condition. The Company expects to incur substantial operating losses for the next several years and will need to obtain additional financing in order to complete clinical studies and launch and commercialize any product candidates for which it receives regulatory approval. There can be no assurance that such financing will be available or will be at terms acceptable to the Company. Fair Value Measurements Fair value is the price that the Company would receive to sell an asset or pay to transfer a liability in a timely transaction with an independent counterparty in the principal market or in the absence of a principal market, the most advantageous market for the asset or liability. A three-tier hierarchy is established to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs), and establishes a classification of fair value measurements for disclosure purposes. The hierarchy is summarized in the three broad levels listed below: Level 1 —quoted prices in active markets for identical assets and liabilities Level 2 —other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.) Level 3 —significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities) The following table sets forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): Level 1 (1) June 30, December 31, 2019 Assets: Money market funds $ 21,570 $ 7,232 U.S. treasuries — 4,497 Total $ 21,570 $ 11,729 ____________ (1) No assets as of each respective date were identified as Level 2 or 3 based on the three-tier fair value hierarchy. The Company had no financial liabilities measured at fair value on a recurring basis as of each respective date. Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating the fair values of each class of financial instrument disclosed herein: Money Market Funds— The carrying amounts reported as cash and cash equivalents in the condensed consolidated balance sheets approximate their fair values due to their short-term nature and/or market rates of interest (Level 1 of the fair value hierarchy). U.S. Treasuries— The Company designated its investments in U.S. treasury securities as available-for-sale securities and accounted for them at their respective fair values. The securities were classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements. Securities that were readily available for use in current operations are classified as short-term available-for-sale marketable securities and are reported as a component of current assets in the condensed consolidated balance sheets (Level 1 of the fair value hierarchy). Securities classified as available-for-sale are measured at fair value, including accrued interest, with temporary unrealized gains and losses reported as a component of stockholders’ equity until their disposition. The Company reviews available-for-sale securities at the end of each period to determine whether they remain available-for-sale based on its then current intent. The cost of securities sold is based on the specific identification method. The securities are subject to a periodic impairment review. An impairment charge would occur when a decline in the fair value of the investments below the cost basis is judged to be other-than-temporary. Leases The Company accounts for leases under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”). Under ASC 842, the Company determines if an arrangement is a lease at inception. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected the practical expedient not to recognize on the balance sheet leases with terms of one year or less and not to separate lease components and non-lease components for long-term real estate leases. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company estimates the incremental borrowing rate based on industry peers in determining the present value of lease payments. The Company’s facility operating lease has one single component. The lease component results in a right-of-use asset being recorded on the balance sheet, which is amortized as lease expense on a straight-line basis in the Company’s condensed consolidated statements of operations. Revenue Recognition The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. At contract inception, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To date, the Company’s drug candidates have not been approved for sale by the FDA or any other country’s regulatory authority, and the Company has not generated or recognized any revenue from the sale of products. In March 2015, the Company entered into a license, development, and commercialization agreement (as amended, the “Kaken Agreement”) with Kaken Pharmaceutical Co., Ltd. (“Kaken”). Under the Kaken Agreement, the Company granted to Kaken an exclusive right to develop, manufacture, and commercialize the Company’s sofpironium bromide compound, a topical anticholinergic, in Japan and certain other Asian countries (the “Territory”). In exchange, Kaken paid the Company an upfront, non-refundable payment of $11.0 million (the “upfront fee”). In addition, the Company was entitled to receive aggregate payments of up to $10.0 million upon the achievement of specified development milestones, and $30.0 million upon the achievement of commercial milestones, as well as tiered royalties based on a percentage of net sales of licensed products in the Territory. The Kaken Agreement further provides that Kaken will be responsible for funding all development and commercial costs for the program in the Territory. Kaken is also required to enter into negotiations with the Company, to supply the Company, at cost, with clinical supplies to perform Phase 3 clinical trials in the United States. The Company evaluates collaboration arrangements to determine whether units of account within the collaboration arrangement exhibit the characteristics of a vendor and customer relationship. The Company determined that the licenses transferred to Kaken in exchange for the upfront fee were representative of this type of a relationship. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other performance obligations, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition on a prospective basis. Under Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), the Company evaluated the terms of the Kaken Agreement, and the transfer of intellectual property and manufacturing rights (the “license”) was identified as the only performance obligation as of the inception of the agreement. The Company concluded that the license for the intellectual property was distinct from its ongoing supply obligations. The Company further determined that the transaction price under the arrangement was comprised of the $11.0 million upfront payment, which was allocated to the license performance obligation. The future potential milestone amounts were not included in the transaction price, as they were all determined to be fully constrained. As part of its evaluation of the development and regulatory milestones constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals, each of which is uncertain at this time. The Company will re-evaluate the transaction price each quarter and as uncertain events are resolved or other changes in circumstances occur. Future potential milestone amounts would be recognized as revenue from collaboration arrangements, if unconstrained. The remainder of the arrangement, which largely consisted of both parties incurring costs in their respective territories, provides for the reimbursement of the ongoing supply costs. These costs were representative of a collaboration arrangement outside of the scope of Topic 606 as they do not have the characteristics of a vendor and customer relationship. Reimbursable program costs are recognized proportionately with the delivery of drug substance and are accounted for as reductions to research and development expense and are excluded from the transaction price. In May 2018, the Company entered into an amendment to the Kaken Agreement, pursuant to which the Company received an upfront non-refundable fee of $15.6 million (the “Kaken R&D Payment”), which was initially recorded as deferred revenue, to provide the Company with research and development funds for the sole purpose of conducting certain clinical trials and other such research and development activities required to support the submission of a new drug application for sofpironium bromide. These clinical trials have a benefit to Kaken and have the characteristics of a vendor and customer relationship. The Company has accounted for the Kaken R&D Payment under the provisions of Topic 606. This Kaken R&D Payment is being initially recognized using an input method over the average estimated performance period of 1.45 years in proportion to the cost incurred. Upon receipt of the Kaken R&D Payment, on May 31, 2018, a milestone payment originally due upon the first commercial sale in Japan was removed from the Kaken Agreement and all future royalties to the Company under the Kaken Agreement were reduced 150 basis points. Consequently, during the three months ended June 30, 2020 and 2019, the Company recognized revenue of $0.6 million and $2.6 million, respectively, related to the Kaken R&D Payment. During the six months ended June 30, 2020 and 2019, the Company recognized revenue of $1.7 million and $6.1 million, respectively, related to the Kaken R&D Payment. As of June 30, 2020 and December 31, 2019, the Company had a deferred revenue balance related to the Kaken R&D Payment of $0.1 million and $1.8 million, respectively, which is recorded in deferred revenue on the accompanying condensed consolidated balance sheets. Milestones At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company or the Company’s collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment. To date, Kaken has paid the Company $10.0 million in milestone payments under the Kaken Agreement. Royalties For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue from any collaborative arrangement. Net Income (Loss) per Common Share Basic and diluted net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. When the effects are not anti-dilutive, diluted earnings per share is computed by dividing the Company’s net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period, including stock options, restricted stock units, and warrants, using the treasury stock method, and redeemable convertible preferred stock and convertible promissory notes, using the if-converted method. In computing diluted earnings per share, the average stock price for the period is used in determining the number of shares assumed to be issued from the exercise of stock options, the vesting of restricted stock units, or the exercise of warrants. Potentially dilutive common share equivalents are excluded from the diluted earnings per share computation in net loss periods because their effect would be anti-dilutive. The following table sets forth the potential common shares excluded from the calculation of net income (loss) per common share, because their inclusion would be anti-dilutive: Three and Six Months Ended 2020 2019 Outstanding warrants 19,556,108 349,074 Outstanding options 1,578,231 625,428 Unvested restricted stock units 253,045 — Redeemable convertible preferred stock (as converted into common stock) — 1,256,466 Promissory notes (as converted into common stock) — 168,832 Total 21,387,384 2,399,800 Recent Accounting Pronouncements – Adopted |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): June 30, December 31, Accrued contracted research and development services $ 4,443 $ 4,532 Accrued license fee 1,000 — Accrued professional fees 365 1,788 Accrued compensation 453 59 Total $ 6,261 $ 6,379 |
CONVERTIBLE PROMISSORY NOTES
CONVERTIBLE PROMISSORY NOTES | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | CONVERTIBLE PROMISSORY NOTES In March 2019, the Company initiated a convertible promissory notes offering pursuant to which the Company issued unsecured convertible promissory notes (the “Prom Notes”), bearing interest at 12.00% with a maturity of one year. Through August 31, 2019, the Company had raised an aggregate principal amount of $7.4 million in Prom Notes, including $1.7 million from certain of the Company’s management and board of directors. On August 31, 2019, immediately prior to the Merger, the Prom Notes and related accrued interest converted into 1,069,740 shares of Private Brickell common stock at a conversion price of $7.54 per share (the “Conversion”). The Prom Notes also provided for the issuance of warrants at 50% coverage, to acquire 490,683 shares of common stock. The warrants are exercisable for a term of five years at an exercise price of $10.36. The Company evaluated the various financial instruments under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815, “Derivatives and Hedging” (“ASC 815”), and determined the warrants required fair value accounting. The fair value of the warrants was recorded as a warrant liability upon issuance. The fair value of the warrants on the dates of issuance of $1.5 million was determined with the assistance of a third-party valuation firm. The fair value of the warrants was recorded as a debt discount upon issuance and was amortized to interest expense over the term of the Prom Notes based on the effective interest method. At inception of the Prom Notes offering, the Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815 and determined that the embedded conversion features should be classified as a derivative, which was required to be bifurcated and recorded as a derivative liability. The embedded derivative for the Prom Notes was carried on the Company’s condensed consolidated balance sheets at fair value. The derivative liability was marked-to-market each measurement period and any change in fair value was recorded as a component of the statements of operations. The fair value of the derivative liabilities on the date of issuance of $1.4 million was determined with the assistance of a third-party valuation firm. The fair value of the conversion feature was recorded as a debt discount upon issuance and was amortized to interest expense over the term of the Prom Notes based on the effective interest method. During the three and six months ended June 30, 2019, the Company recognized $0.5 million of interest expense, including $0.4 million of accretion of discounts using an effective interest rate of 12.00%. During the three and six months ended June 30, 2020, no interest expense was recognized. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE Loan Agreement with Hercules Capital, Inc. On February 18, 2016, the Company entered into a loan and security agreement (the “Loan Agreement”) with Hercules Capital, Inc. (the “Lender”) under which the Company borrowed $7.5 million upon the execution of the Loan Agreement on February 18, 2016. The interest rate applicable to each tranche was variable based upon the greater of either (i) 9.2% and (ii) the sum of (a) the Prime Rate as reported in The Wall Street Journal minus 3.5%, plus (b) 9.2%. Payments under the Loan Agreement were interest only until June 1, 2017, followed by equal monthly payments of principal and interest through the maturity date of September 1, 2019. The Company paid the Lender aggregate facility fees of $0.2 million in connection with the Loan Agreement. In connection with the Loan Agreement, the Company issued warrants to the Lender, which are exercisable for 9,005 shares of common stock at a per share exercise price of $33.31 (the “Hercules Capital Warrants”). The Hercules Capital Warrants will terminate, if not earlier exercised, on February 18, 2026. The fair value of the Hercules Capital Warrants was recorded at inception as a redeemable convertible preferred stock warrant liability upon issuance. On September 3, 2019, the Company repaid the remaining outstanding loan balance of $2.6 million and an associated accrued interest and aggregate end-of-term payment of $0.6 million, and the Loan Agreement was terminated. At the effective time of the Merger, the warrant liability was reclassified to equity in the condensed consolidated balance sheets. As of June 30, 2020, there were no remaining unaccreted debt discounts and issuance costs. Paycheck Protection Program On April 15, 2020, the Company executed an unsecured promissory note (referred to in the condensed consolidated financial statements as of and for the six months ended June 30, 2020 as a “note payable”) to IberiaBank (the “PPP Loan”) pursuant to the U.S. Small Business Administration’s Paycheck Protection Program (the “PPP”) under Division A, Title I of the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. A PPP loan is for the purpose of helping businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. The Company is using the PPP Loan proceeds for covered payroll costs and certain other permitted costs in accordance with the relevant terms and conditions of the CARES Act. The PPP Loan is in the principal amount of $0.4 million, bears interest at a fixed rate of 1.00% per annum and matures on April 15, 2022. The PPP Loan requires equal monthly payments of principal and interest commencing on November 15, 2020. The PPP Loan may be prepaid by the Company at any time prior to maturity without penalty. Under the terms of the PPP Loan, the Company is evaluating whether it may apply for forgiveness of the amount due on the PPP Loan. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases In August 2016, the Company entered into a five-year lease for office space in Boulder, Colorado that expires on October 31, 2021 (the “Boulder Lease”) subject to the Company’s option to renew the Boulder Lease for two additional terms of three years each. Pursuant to the Boulder Lease, the Company leased 3,038 square feet of space in a multi-suite building. Rent payments under the Boulder Lease included base rent of $4,430 per month during the first year of the Boulder Lease with an annual increase of 3.5%, and additional monthly fees to cover the Company’s share of certain facility expenses, including utilities, property taxes, insurance, and maintenance, which were $2,160 per month during the first year of the Boulder Lease. The Company recognized a right-of-use asset and corresponding lease liability on January 1, 2019, by calculating the present value of lease payments, discounted at 12.0%, the Company’s estimated incremental borrowing rate, over the 2.8 years expected remaining term. As the Company’s lease does not provide an implicit rate, the Company estimated the incremental borrowing rate based on industry peers. Industry peers consist of several public companies in the biotechnology industry with comparable characteristics, including clinical trials progress and therapeutic indications. Amortization of the operating lease right-of-use asset for the Boulder Lease amounted to $19 thousand and $37 thousand for the three and six months ended June 30, 2020, respectively, which was included in operating expense. As of June 30, 2020, the remaining lease term was 1.3 years. The terms of the Boulder Lease provide for rental payments on a monthly basis on a graduated scale. Lease expense for the three months ended June 30, 2020 and 2019 was $18 thousand and $32 thousand, respectively. Lease expense for the six months ended June 30, 2020 and 2019 was $41 thousand and $60 thousand, respectively. The following is a summary of the contractual obligations related to operating lease commitments as of June 30, 2020 and the effect such obligations are expected to have on the Company’s liquidity and cash flows in future periods (in thousands): Less than 1 year $ 93 1-3 years 31 3-5 years — More than 5 years — Imputed interest (10) Total $ 114 Amended and Restated License Agreement with Bodor In February 2020, the Company, together with Brickell Subsidiary and Bodor Laboratories, Inc. and Dr. Nicholas S. Bodor (collectively, “Bodor”) entered into an amended and restated license agreement (the “Amended and Restated License Agreement”). The Amended and Restated License Agreement supersedes the License Agreement, dated December 15, 2012, entered into between Brickell Subsidiary and Bodor, as amended by Amendment No. 1 to License Agreement, effective as of October 21, 2013, and Amendment No. 2 to License Agreement, effective as of March 31, 2015. The Amended and Restated License Agreement retains with the Company a worldwide, exclusive license to develop, manufacture, market, sell and sublicense products containing the proprietary compound sofpironium bromide based upon the patents referenced in the Amended and Restated License Agreement for a defined field of use. In exchange for entering into the Amended and Restated License Agreement, settling the previously disclosed dispute, and resolving the associated litigation between the Company and Bodor, the Company made an upfront payment of $1.0 million in cash to Bodor following the execution of the Amended and Restated License Agreement and the settlement agreement by and among the Company, Brickell Subsidiary, Inc., and Bodor, dated February 17, 2020. Additionally, under the original License Agreement and the Amended and Restated License Agreement, the Company is required to pay Bodor (i) a royalty on sales of product outside Kaken’s territory, including a low single-digit royalty on sales of certain product not covered by the patent estate licensed from Bodor; (ii) a specified percentage of all royalties the Company receives from Kaken for sales of product within its territory; (iii) a percentage of non-royalty sublicensing income the Company receives from Kaken or other sublicensees; and (iv) up to an aggregate of $1.8 million (plus an additional $0.1 million for approvals of additional products) in cash |
CAPITAL STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK Common Stock Each share of the Company’s common stock is entitled to one vote, and the holders of the Company’s common stock are entitled to receive dividends when and as declared or paid by its board of directors. The Company has reserved authorized shares of common stock for future issuance at June 30, 2020 as follows: June 30, 2020 Shares available for grant under the Omnibus Plan — Common stock warrants 20,669,533 Common stock options outstanding 1,578,231 Unvested restricted stock units 253,045 Total 22,500,809 While 694,162 shares of common stock remained available for grant under the 2020 Omnibus Long-Term Incentive Plan (the “Omnibus Plan”) as of June 30, 2020, the Company’s board of directors, in connection with the public offering in June 2020 described below, utilized shares that were previously reserved for issuance under the Omnibus Plan and not subject to outstanding awards, to instead be reserved for issuance under the warrants issued in the June 2020 offering. As a result, the number of shares reserved for issuance as of June 30, 2020 under the Omnibus Plan was zero. As described in the Company’s definitive proxy statement filed with the SEC on July 15, 2020, the Company plans to hold a special meeting of stockholders on August 31, 2020, at which stockholders will be requested to approve an amendment to the Company’s restated certificate of incorporation to increase the number of authorized shares of common stock from 50,000,000 to 100,000,000. If stockholders approve that amendment, the Company’s board of directors plans to utilize a portion of those additional authorized shares to again reserve for issuance the number of shares available for grant under the Omnibus Plan. At the special meeting, the Company’s stockholders will also be requested to approve an amendment to the Omnibus Plan to increase the number of shares available for issuance thereunder by 4,500,000 shares. Public Offering of Common Stock and Warrants In June 2020, the Company entered into an underwriting agreement with Oppenheimer & Co. Inc. (“Oppenheimer”), as representative of several underwriters, relating to the public offering, issuance and sale of 14,790,133 shares of its common stock, and, to certain investors, pre-funded warrants to purchase 2,709,867 shares of its common stock, and accompanying common stock warrants to purchase up to an aggregate of 17,500,000 shares of its common stock (the “Offering”). Each share of common stock and pre-funded warrant to purchase one share of common stock was sold together with a common warrant to purchase one share of common stock. The public offering price of each share of common stock and accompanying common warrant was $1.15 and $1.149 for each pre-funded warrant and accompanying common warrant, respectively. The pre-funded warrants were immediately exercisable at a price of $0.001 per share of common stock. The common warrants were immediately exercisable at a price of $1.25 per share of common stock and will expire five years from the date of issuance. The shares of common stock and pre-funded warrants, and the accompanying common warrants, were issued separately and were immediately separable upon issuance. The Offering resulted in approximately $18.7 million of net proceeds to the Company after deducting underwriting commissions and discounts and other offering expenses of $1.4 million and excluding the proceeds, if any, from the exercise of the warrants. The Company anticipates using the net proceeds from the Offering for research and development, including clinical trials, working capital, and general corporate purposes. Certain officers of the Company participated in the Offering by purchasing an aggregate purchase price of $0.2 million of the Company's common stock and warrants. At Market Issuance Sales Agreement On April 14, 2020, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with Oppenheimer & Co. Inc. as the Company’s sales agent (the “Agent”). Pursuant to the terms of the ATM Agreement, the Company may sell from time to time through the Agent shares of the Company’s common stock having an aggregate offering price of up to $8.0 million (the “Shares”). Any Shares will be issued pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-236353). Sales of the Shares, if any, will be made by means of ordinary brokers’ transactions on the Nasdaq Capital Market at market prices or as otherwise agreed by the Company and the Agent. Under the terms of the ATM Agreement, the Company may also sell the Shares from time to time to the Agent as principal for its own account at a price to be agreed upon at the time of sale. Any sale of the Shares to the Agent as principal would be pursuant to the terms of a separate placement notice between the Company and the Agent. As of June 30, 2020, the Company had not yet sold any Shares under the ATM Agreement. Private Placement Offerings On February 17, 2020, the Company and Lincoln Park entered into (i) a securities purchase agreement (the “Securities Purchase Agreement”); (ii) a purchase agreement (the “Purchase Agreement”); and (iii) a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Securities Purchase Agreement, Lincoln Park purchased, and the Company sold, (i) an aggregate of 950,000 shares of common stock (the “Common Shares”); (ii) a warrant to initially purchase an aggregate of up to 606,420 shares of common stock at an exercise price of $0.01 per share (the “Series A Warrant”); and (iii) a warrant to initially purchase an aggregate of up to 1,556,420 shares of common stock at an exercise price of $1.16 per share (the “Series B Warrant” and together with the Series A Warrant, the “Warrants”). The aggregate gross purchase price for the Common Shares and the Warrants was $2.0 million. Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $28.0 million in the aggregate of shares of common stock. Sales of common stock by the Company, if any, will be subject to certain limitations, and may occur from time to time, at the Company’s sole discretion, over the 36-month period commencing on the date the conditions set forth in the Purchase Agreement are satisfied (such date on which all of such conditions are satisfied, the “Commencement Date”). Following the Commencement Date, under the Purchase Agreement, on any business day selected by the Company, the Company may direct Lincoln Park to purchase up to 100,000 shares of common stock on such business day (each, a “Regular Purchase”), provided, however, that (i) the Regular Purchase may be increased to up to 125,000 shares, provided that the closing sale price of the common stock is not below $3.00 on the purchase date; and (ii) the Regular Purchase may be increased to up to 150,000 shares, provided that the closing sale price of the common stock is not below $5.00 on the purchase date. In each case, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $1,000,000. The purchase price per share for each such Regular Purchase will be based off of prevailing market prices of common stock immediately preceding the time of sale. In addition to Regular Purchases, the Company may direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases if the closing sale price of the common stock exceeds certain threshold prices as set forth in the Purchase Agreement. In all instances, the Company may not sell shares of its common stock to Lincoln Park under the Purchase Agreement if it would result in Lincoln Park beneficially owning more than 9.99% of the outstanding shares of common stock. As of June 30, 2020, the Company has not made any sales of its common stock under the Purchase Agreement. The Company agreed with Lincoln Park that it will not enter into any “variable rate” transactions with any third party, subject to certain exceptions, for a period defined in the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. The Securities Purchase Agreement, the Purchase Agreement, and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Preferred Stock As of June 30, 2020, the Company had no shares of preferred stock outstanding and had not designated the rights, preferences, or privileges of any class or series of preferred stock. Under the Company’s restated certificate of incorporation, the Company’s board of directors has the authority to issue up to 5,000,000 shares of preferred stock with a par value of $0.01 per share, at its discretion, in one or more classes or series and to fix the powers, preferences and rights, and the qualifications, limitations, or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences, without further vote or action by the Company’s stockholders. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Incentive Plans 2020 Omnibus Plan On April 20, 2020, the Company’s stockholders approved the Omnibus Plan, which replaced, with respect to new award grants, the Company’s 2009 Equity Incentive Plan, as amended and restated (the “2009 Plan”), and the Vical Equity Incentive Plan (the “Vical Plan”) (collectively, the “Prior Plans”) that were previously in effect. The number of shares authorized for issuance under the Omnibus Plan includes 625,000 new shares and 54,389 shares that remained available for future grants pursuant to the Prior Plans, plus any shares that are forfeited pursuant to outstanding grants under the Prior Plans that would have again become available for grants pursuant to the terms of those plans. Following the approval of the Omnibus Plan on April 20, 2020, no additional grants will be made pursuant to the Prior Plans, but awards outstanding under those plans as of that date remain outstanding in accordance with their terms. At June 30, 2020, 92,436 shares were subject to outstanding awards under the Omnibus Plan, and while 694,162 shares remained available for grant under the Omnibus Plan, those shares were no longer reserved for issuance, as described above in Note 7. “Capital Stock.” 2009 Equity Incentive Plan The 2009 Plan was replaced by the Omnibus Plan on April 20, 2020 and, as a result, at June 30, 2020, there were no remaining shares available for new grants under the 2009 Plan. However, at June 30, 2020, 1,351,974 shares were subject to outstanding awards under the 2009 Plan, which awards remain outstanding in accordance with their terms. Vical Equity Incentive Plan In connection with the Merger, the Company adopted the Vical Plan, which was replaced by the Omnibus Plan on April 20, 2020. As a result, at June 30, 2020, there were no remaining shares available for new grants under the Vical Plan. However, at June 30, 2020, 386,866 shares were subject to outstanding awards under the Vical Plan, which awards remain outstanding in accordance with their terms. Stock-based Compensation Expense Total stock-based compensation expense reported in the condensed consolidated statements of operations was allocated as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Research and development $ 68 $ 78 $ 172 $ 156 General and administrative 385 221 684 527 Total stock-based compensation expense $ 453 $ 299 $ 856 $ 683 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Proposed Amendment of Certificate of Incorporation and Omnibus Plan On July 14, 2020, the Company’s board of directors adopted, subject to stockholder approval, an amendment to Article IV, Section A of the Company’s restated certificate of incorporation (the “Charter Amendment”) to increase the number of authorized shares of the Company’s common stock by 50,000,000 shares, or from 50,000,000 shares to 100,000,000 shares. Further, on July 14, 2020, the Company’s board of directors approved the following amendments to the Omnibus Plan, subject to stockholder approval: • an increase in the maximum number of shares that may be delivered under the Omnibus Plan by an additional 4,500,000 shares, from 679,389 shares to 5,179,389 shares (which amount is in addition to any shares granted previously under the Prior Plans that are forfeited, expire or are canceled after the effective date of the Omnibus Plan without delivery of shares or which result in the forfeiture of the shares back to the Company to the extent that such shares would have been added back to the reserve under the terms of the Prior Plans); and • a corresponding increase in the maximum number of shares that may be delivered with respect to incentive stock options granted under the Omnibus Plan by an additional 4,500,000 shares, from 679,389 shares to 5,179,389 shares; (collectively, the “Plan Amendments”). The Charter Amendment and the Plan Amendments are subject to stockholder approval. On July 27, 2020, the Company filed a definitive proxy statement with the SEC related to a special meeting of stockholders to be held on August 31, 2020, at which stockholders will be requested to approve the Charter Amendment and the Plan Amendments. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Brickell Subsidiary, Inc., and are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and applicable rules and regulations of the SEC for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the Company’s financial information. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year ending December 31, 2020, for any other interim period, or for any other future period. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements at that date but does not include all of the information required by US GAAP for complete financial statements. All intercompany balances and transactions have been eliminated in consolidation. The Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein. The Company’s management performed an evaluation of its activities through the date of filing of these financial statements and concluded that there are no subsequent events requiring disclosure, other than as disclosed. |
Use of Estimates | Use of Estimates The Company’s condensed consolidated financial statements are prepared in accordance with US GAAP, which requires it to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the Company’s knowledge of current events and actions it may take in the future, actual results may ultimately differ from these estimates and assumptions. |
Leases | Leases The Company accounts for leases under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”). Under ASC 842, the Company determines if an arrangement is a lease at inception. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected the practical expedient not to recognize on the balance |
Revenue Recognition | Revenue Recognition The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. At contract inception, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To date, the Company’s drug candidates have not been approved for sale by the FDA or any other country’s regulatory authority, and the Company has not generated or recognized any revenue from the sale of products. In March 2015, the Company entered into a license, development, and commercialization agreement (as amended, the “Kaken Agreement”) with Kaken Pharmaceutical Co., Ltd. (“Kaken”). Under the Kaken Agreement, the Company granted to Kaken an exclusive right to develop, manufacture, and commercialize the Company’s sofpironium bromide compound, a topical anticholinergic, in Japan and certain other Asian countries (the “Territory”). In exchange, Kaken paid the Company an upfront, non-refundable payment of $11.0 million (the “upfront fee”). In addition, the Company was entitled to receive aggregate payments of up to $10.0 million upon the achievement of specified development milestones, and $30.0 million upon the achievement of commercial milestones, as well as tiered royalties based on a percentage of net sales of licensed products in the Territory. The Kaken Agreement further provides that Kaken will be responsible for funding all development and commercial costs for the program in the Territory. Kaken is also required to enter into negotiations with the Company, to supply the Company, at cost, with clinical supplies to perform Phase 3 clinical trials in the United States. The Company evaluates collaboration arrangements to determine whether units of account within the collaboration arrangement exhibit the characteristics of a vendor and customer relationship. The Company determined that the licenses transferred to Kaken in exchange for the upfront fee were representative of this type of a relationship. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other performance obligations, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition on a prospective basis. Under Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), the Company evaluated the terms of the Kaken Agreement, and the transfer of intellectual property and manufacturing rights (the “license”) was identified as the only performance obligation as of the inception of the agreement. The Company concluded that the license for the intellectual property was distinct from its ongoing supply obligations. The Company further determined that the transaction price under the arrangement was comprised of the $11.0 million upfront payment, which was allocated to the license performance obligation. The future potential milestone amounts were not included in the transaction price, as they were all determined to be fully constrained. As part of its evaluation of the development and regulatory milestones constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals, each of which is uncertain at this time. The Company will re-evaluate the transaction price each quarter and as uncertain events are resolved or other changes in circumstances occur. Future potential milestone amounts would be recognized as revenue from collaboration arrangements, if unconstrained. The remainder of the arrangement, which largely consisted of both parties incurring costs in their respective territories, provides for the reimbursement of the ongoing supply costs. These costs were representative of a collaboration arrangement outside of the scope of Topic 606 as they do not have the characteristics of a vendor and customer relationship. Reimbursable program costs are recognized proportionately with the delivery of drug substance and are accounted for as reductions to research and development expense and are excluded from the transaction price. In May 2018, the Company entered into an amendment to the Kaken Agreement, pursuant to which the Company received an upfront non-refundable fee of $15.6 million (the “Kaken R&D Payment”), which was initially recorded as deferred revenue, to provide the Company with research and development funds for the sole purpose of conducting certain clinical trials and other such research and development activities required to support the submission of a new drug application for sofpironium bromide. These clinical trials have a benefit to Kaken and have the characteristics of a vendor and customer relationship. The Company has accounted for the Kaken R&D Payment under the provisions of Topic 606. This Kaken R&D Payment is being initially recognized using an input method over the average estimated performance period of 1.45 years in proportion to the cost incurred. Upon receipt of the Kaken R&D Payment, on May 31, 2018, a milestone payment originally due upon the first commercial sale in Japan was removed from the Kaken Agreement and all future royalties to the Company under the Kaken Agreement were reduced 150 basis points. Consequently, during the three months ended June 30, 2020 and 2019, the Company recognized revenue of $0.6 million and $2.6 million, respectively, related to the Kaken R&D Payment. During the six months ended June 30, 2020 and 2019, the Company recognized revenue of $1.7 million and $6.1 million, respectively, related to the Kaken R&D Payment. As of June 30, 2020 and December 31, 2019, the Company had a deferred revenue balance related to the Kaken R&D Payment of $0.1 million and $1.8 million, respectively, which is recorded in deferred revenue on the accompanying condensed consolidated balance sheets. Milestones At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company or the Company’s collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment. To date, Kaken has paid the Company $10.0 million in milestone payments under the Kaken Agreement. Royalties |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic and diluted net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding. When the effects are not anti-dilutive, diluted earnings per share is computed by dividing the Company’s net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding and the impact of all dilutive potential common shares. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period, including stock options, restricted stock units, and warrants, using the treasury stock method, and redeemable convertible preferred stock and |
Recent Accounting Pronouncements - Adopted | Recent Accounting Pronouncements – AdoptedIn August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends certain disclosure requirements over Level 1, Level 2, and Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company adopted ASU 2018-13 during the three months ended March 31, 2020, however, the effect of adoption did not have a material impact on its disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The following table sets forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): Level 1 (1) June 30, December 31, 2019 Assets: Money market funds $ 21,570 $ 7,232 U.S. treasuries — 4,497 Total $ 21,570 $ 11,729 ____________ (1) No assets as of each respective date were identified as Level 2 or 3 based on the three-tier fair value hierarchy. The Company had no financial liabilities measured at fair value on a recurring basis as of each respective date. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the potential common shares excluded from the calculation of net income (loss) per common share, because their inclusion would be anti-dilutive: Three and Six Months Ended 2020 2019 Outstanding warrants 19,556,108 349,074 Outstanding options 1,578,231 625,428 Unvested restricted stock units 253,045 — Redeemable convertible preferred stock (as converted into common stock) — 1,256,466 Promissory notes (as converted into common stock) — 168,832 Total 21,387,384 2,399,800 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): June 30, December 31, Accrued contracted research and development services $ 4,443 $ 4,532 Accrued license fee 1,000 — Accrued professional fees 365 1,788 Accrued compensation 453 59 Total $ 6,261 $ 6,379 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations | The following is a summary of the contractual obligations related to operating lease commitments as of June 30, 2020 and the effect such obligations are expected to have on the Company’s liquidity and cash flows in future periods (in thousands): Less than 1 year $ 93 1-3 years 31 3-5 years — More than 5 years — Imputed interest (10) Total $ 114 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Reserved Authorized Shares of Common Stock | The Company has reserved authorized shares of common stock for future issuance at June 30, 2020 as follows: June 30, 2020 Shares available for grant under the Omnibus Plan — Common stock warrants 20,669,533 Common stock options outstanding 1,578,231 Unvested restricted stock units 253,045 Total 22,500,809 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | Total stock-based compensation expense reported in the condensed consolidated statements of operations was allocated as follows (in thousands): Three Months Ended Six Months Ended 2020 2019 2020 2019 Research and development $ 68 $ 78 $ 172 $ 156 General and administrative 385 221 684 527 Total stock-based compensation expense $ 453 $ 299 $ 856 $ 683 |
ORGANIZATION AND NATURE OF OP_2
ORGANIZATION AND NATURE OF OPERATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net loss | $ (5,119) | $ (4,103) | $ (3,654) | $ (4,580) | $ (9,222) | $ (8,234) | |
Net cash used in operating activities | (11,290) | $ (9,502) | |||||
Cash and cash equivalents | 21,570 | 21,570 | $ 7,232 | ||||
Accumulated deficit | $ (94,202) | $ (94,202) | $ (84,980) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring - Fair Value, Inputs, Level 1 - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Money market funds | $ 21,570 | $ 7,232 |
U.S. treasuries | 0 | 4,497 |
Total | $ 21,570 | $ 11,729 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
May 31, 2018 | Mar. 31, 2015 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Revenue recognized | $ 607 | $ 2,573 | $ 1,653 | $ 6,065 | |||
Deferred revenue | 142 | $ 142 | $ 1,795 | ||||
Collaborative Arrangement | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Non-refundable upfront fees | $ 15,600 | $ 11,000 | |||||
Development milestone payments | 10,000 | ||||||
Commercialization milestone payments | $ 30,000 | ||||||
Expected performance period | 1 year 5 months 12 days | ||||||
Basis point reduction | 1.50% | ||||||
Revenue recognized | 600 | $ 2,600 | $ 1,700 | $ 6,100 | |||
Deferred revenue | $ 100 | 100 | $ 1,800 | ||||
Milestone payment received | $ 10,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Common Shares Excluded from EPS Calculations (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 21,387,384 | 2,399,800 | 21,387,384 | 2,399,800 |
Outstanding warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 19,556,108 | 349,074 | 19,556,108 | 349,074 |
Outstanding options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 1,578,231 | 625,428 | 1,578,231 | 625,428 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 253,045 | 0 | 253,045 | 0 |
Redeemable convertible preferred stock (as converted into common stock) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 0 | 1,256,466 | 0 | 1,256,466 |
Promissory notes (as converted into common stock) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 0 | 168,832 | 0 | 168,832 |
ACCRUED LIABILITIES - Summary o
ACCRUED LIABILITIES - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued contracted research and development services | $ 4,443 | $ 4,532 |
Accrued license fee | 1,000 | 0 |
Accrued professional fees | 365 | 1,788 |
Accrued compensation | 453 | 59 |
Total | $ 6,261 | $ 6,379 |
CONVERTIBLE PROMISSORY NOTES -
CONVERTIBLE PROMISSORY NOTES - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 31, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Aug. 31, 2019 | Jun. 30, 2019 |
Short-term Debt [Line Items] | ||||||
Proceeds from issuance of convertible promissory notes | $ 0 | $ 5,127 | ||||
Warrant liability | $ 1,500 | |||||
Derivative liability, fair value | $ 1,400 | |||||
Convertible Promissory Notes | ||||||
Short-term Debt [Line Items] | ||||||
Stated rate | 12.00% | |||||
Debt term | 1 year | |||||
Proceeds from issuance of convertible promissory notes | $ 7,400 | |||||
Conversion price (in usd per share) | $ 7.54 | $ 7.54 | ||||
Coverage percent | 50.00% | |||||
Stock issuable upon warrants (in shares) | 490,683 | |||||
Warrants term | 5 years | |||||
Exercise price (in usd per share) | $ 10.36 | |||||
Interest expense | $ (500) | (500) | ||||
Accretion of discounts | $ 400 | $ 400 | ||||
Effective rate | 12.00% | |||||
Convertible Promissory Notes | Common Stock | ||||||
Short-term Debt [Line Items] | ||||||
Shares issued in conversion (in shares) | 1,069,740 | |||||
Officers and Directors | Convertible Promissory Notes | ||||||
Short-term Debt [Line Items] | ||||||
Proceeds from issuance of convertible promissory notes | $ 1,700 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) - USD ($) | Sep. 03, 2019 | Jun. 02, 2018 | Feb. 18, 2016 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 31, 2018 | Apr. 15, 2020 |
Debt Instrument [Line Items] | |||||||
Payments of principal of note payable | $ (2,600,000) | $ 0 | $ (1,609,000) | ||||
Payment of associated accrued interest and aggregate end-of-term payment | $ 600,000 | ||||||
Paycheck Protection Program | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 400,000 | ||||||
Stated rate | 1.00% | ||||||
Note Payable | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 7,500,000 | ||||||
Facility fees | $ 200,000 | ||||||
Interest Rate Option 1 | Note Payable | |||||||
Debt Instrument [Line Items] | |||||||
Stated rate | 9.20% | ||||||
Interest Rate Option 2 | Note Payable | |||||||
Debt Instrument [Line Items] | |||||||
Stated rate | 9.20% | ||||||
Interest Rate Option 2 | Note Payable | Prime Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 3.50% | ||||||
Hercules Capital Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Warrants converted (in shares) | 9,005 | ||||||
Exercise price (in usd per share) | $ 33.31 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Feb. 17, 2020USD ($) | Jun. 30, 2020USD ($)ft²renewal_term | Jun. 30, 2020USD ($)ft²renewal_term | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)ft²renewal_term | Jun. 30, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||
Lease term | 5 years | 5 years | 5 years | |||
Number of additional terms | renewal_term | 2 | 2 | 2 | |||
Renewal term | 3 years | 3 years | 3 years | |||
Area of leased property | ft² | 3,038 | 3,038 | 3,038 | |||
Monthly payment, initial year | $ 4,430 | $ 4,430 | $ 4,430 | |||
Annual payment percentage increase | 3.50% | 3.50% | 3.50% | |||
Monthly fees | $ 2,160 | $ 2,160 | $ 2,160 | |||
Discount rate | 12.00% | 12.00% | 12.00% | |||
Expected remaining term | 2 years 9 months 18 days | 2 years 9 months 18 days | 2 years 9 months 18 days | |||
Amortization of operating lease right-of-use asset | $ 19,000 | $ 37,000 | ||||
Remaining lease term | 1 year 3 months 18 days | |||||
Lease expense | 18,000 | $ 32,000 | $ 41,000 | $ 60,000 | ||
Research and development | 2,712,000 | $ 4,229,000 | $ 5,376,000 | $ 10,248,000 | ||
Bodor Laboratories, Inc. | ||||||
Loss Contingencies [Line Items] | ||||||
Non-refundable upfront fees | $ 1,000,000 | |||||
Cash payment | 1,800,000 | |||||
Payments for additional product approval | 100,000 | |||||
Value of shares issued in agreement | 1,500,000 | |||||
Milestone payment | $ 500,000 | |||||
Research and development | $ 1,000,000 | $ 1,500,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Contractual Obligations (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Less than 1 year | $ 93 |
1-3 years | 31 |
3-5 years | 0 |
More than 5 years | 0 |
Imputed interest | (10) |
Total | $ 114 |
CAPITAL STOCK - Reserved Author
CAPITAL STOCK - Reserved Authorized Shares of Common Stock (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class of Stock [Line Items] | ||||
Shares of common stock reserved for future issuance (in shares) | 22,500,809 | 22,500,809 | ||
Shares excluded from the calculation of EPS (in shares) | 21,387,384 | 2,399,800 | 21,387,384 | 2,399,800 |
Common stock warrants | ||||
Class of Stock [Line Items] | ||||
Shares of common stock reserved for future issuance (in shares) | 20,669,533 | 20,669,533 | ||
Common stock options outstanding | ||||
Class of Stock [Line Items] | ||||
Shares of common stock reserved for future issuance (in shares) | 1,578,231 | 1,578,231 | ||
2020 Omnibus Plan | ||||
Class of Stock [Line Items] | ||||
Shares available for grant (in shares) | 0 | 0 | ||
Unvested restricted stock units | ||||
Class of Stock [Line Items] | ||||
Shares excluded from the calculation of EPS (in shares) | 253,045 | 0 | 253,045 | 0 |
CAPITAL STOCK - Narrative (Deta
CAPITAL STOCK - Narrative (Details) - USD ($) | Jul. 14, 2020 | Feb. 17, 2020 | Jun. 30, 2020 | Jul. 13, 2020 | Apr. 20, 2020 | Apr. 14, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||||||
Common stock, shares issued (in shares) | 26,671,573 | 8,480,968 | |||||
Aggregate purchase price for stock and warrants | $ 200,000 | ||||||
Aggregate offering price | $ 8,000,000 | ||||||
Preferred shares authorized (in shares) | 5,000,000 | ||||||
Par value (in dollars per share) | $ 0.01 | ||||||
2020 Omnibus Plan | |||||||
Class of Stock [Line Items] | |||||||
Shares available for grant (in shares) | 0 | ||||||
Outstanding options | 2020 Omnibus Plan | |||||||
Class of Stock [Line Items] | |||||||
Shares available for grant (in shares) | 694,162 | 54,389 | |||||
Subsequent Event | |||||||
Class of Stock [Line Items] | |||||||
Number of shares authorized to be repurchased | 100,000,000 | 50,000,000 | |||||
Increase (decrease) in number of authorized shares (in shares) | 50,000,000 | ||||||
Subsequent Event | 2020 Omnibus Plan | |||||||
Class of Stock [Line Items] | |||||||
Number of shares authorized to be repurchased | 5,179,389 | 679,389 | |||||
Increase (decrease) in number of authorized shares (in shares) | 4,500,000 | ||||||
Pre-Funded Warrant | |||||||
Class of Stock [Line Items] | |||||||
Exercise price (in usd per share) | $ 0.001 | ||||||
Common Stock Public Offering | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued (in shares) | 14,790,133 | ||||||
Exercise price (in usd per share) | $ 1.25 | ||||||
Net proceeds from common stock public offering | $ 18,700,000 | ||||||
Underwriting commissions, discounts, and other offering expenses | $ 1,400,000 | ||||||
Common Stock Public Offering | Pre-Funded Warrant | |||||||
Class of Stock [Line Items] | |||||||
Stock issuable upon warrants (in shares) | 2,709,867 | ||||||
Public offering price (in usd per share) | $ 1.15 | ||||||
Common Stock Public Offering | Accompanying Common Warrant | |||||||
Class of Stock [Line Items] | |||||||
Stock issuable upon warrants (in shares) | 17,500,000 | ||||||
Public offering price (in usd per share) | $ 1.149 | ||||||
Private Placement Offerings | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued (in shares) | 950,000 | ||||||
Aggregate gross purchase price | $ 2,000,000 | ||||||
Private Placement Offerings | Series A | |||||||
Class of Stock [Line Items] | |||||||
Stock issuable upon warrants (in shares) | 606,420 | ||||||
Exercise price (in usd per share) | $ 0.01 | ||||||
Private Placement Offerings | Series B | |||||||
Class of Stock [Line Items] | |||||||
Stock issuable upon warrants (in shares) | 1,556,420 | ||||||
Exercise price (in usd per share) | $ 1.16 | ||||||
Lincoln Park | |||||||
Class of Stock [Line Items] | |||||||
Purchase obligation | $ 28,000,000 | ||||||
Maximum commitment purchase amount | $ 1,000,000 | ||||||
Percentage of ownership after transaction | 9.99% | ||||||
Lincoln Park | Purchase Agreement | |||||||
Class of Stock [Line Items] | |||||||
Maximum shares allowed to be purchased | 100,000 | ||||||
Maximum share increase amount | 125,000 | ||||||
Closing sale price (in dollars per share) | $ 3 | ||||||
Lincoln Park | Regular Purchase | |||||||
Class of Stock [Line Items] | |||||||
Maximum share increase amount | 150,000 | ||||||
Closing sale price (in dollars per share) | $ 5 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - shares | Jun. 30, 2020 | Apr. 20, 2020 |
2020 Omnibus Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant (in shares) | 0 | |
Options | 2020 Omnibus Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized (in shares) | 625,000 | |
Shares available for grant (in shares) | 694,162 | 54,389 |
Options outstanding (in shares) | 92,436 | |
Options | 2009 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant (in shares) | 0 | |
Options outstanding (in shares) | 1,351,974 | |
Options | Vical Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant (in shares) | 0 | |
Options outstanding (in shares) | 386,866 |
STOCK-BASED COMPENSATION - Shar
STOCK-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 453 | $ 299 | $ 856 | $ 683 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 68 | 78 | 172 | 156 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 385 | $ 221 | $ 684 | $ 527 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - Subsequent Event - shares | Jul. 14, 2020 | Jul. 13, 2020 |
Subsequent Event [Line Items] | ||
Increase (decrease) in number of authorized shares (in shares) | 50,000,000 | |
Number of shares authorized to be repurchased | 100,000,000 | 50,000,000 |
2020 Omnibus Plan | ||
Subsequent Event [Line Items] | ||
Increase (decrease) in number of authorized shares (in shares) | 4,500,000 | |
Number of shares authorized to be repurchased | 5,179,389 | 679,389 |