Aceragen (ACGN) 10-Q 9 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document and Entity Information
Entity Registrant Name	IDERA PHARMACEUTICALS, INC.
Trading Symbol	IDRA
Entity Central Index Key	861,838
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		217,310,991
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 107,459	$ 112,629
Prepaid expenses and other current assets	2,651	3,992
Total current assets	110,110	116,621
Property and equipment, net	1,320	1,472
Restricted cash and other assets	321	324
Total assets	111,751	118,417
Current liabilities:
Accounts payable	1,668	1,334
Accrued expenses	10,224	8,000
Current portion of note payable	131	209
Current portion of deferred revenue	376	566
Total current liabilities	12,399	10,109
Other liabilities	468	613
Total liabilities	12,867	10,722
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, Authorized — 280,000 shares; Issued and outstanding — 216,095 and 195,625 shares at March 31, 2018 and December 31, 2017, respectively	216	196
Additional paid-in capital	723,257	711,993
Accumulated deficit	(624,589)	(604,494)
Total stockholders' equity	98,884	107,695
Total liabilities and stockholders' equity	111,751	118,417
Series A Preferred Stock
Stockholders' equity:
Preferred stock, $0.01 par value, Authorized — 5,000 shares: Series A convertible preferred stock; Designated — 1,500 shares, Issued and outstanding — 1 share

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	280,000,000	280,000,000
Common stock, shares issued	216,095,000	195,625,000
Common stock, shares outstanding	216,095,000	195,625,000
Series A Preferred Stock
Preferred stock, shares designated	1,500,000	1,500,000
Preferred stock, shares issued	1,000	1,000
Preferred stock, shares outstanding	1,000	1,000

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Alliance revenue	$ 255	$ 378
Operating expenses:
Research and development	13,556	11,485
General and administrative	6,979	4,081
Total operating expenses	20,535	15,566
Loss from operations	(20,280)	(15,188)
Other income (expense):
Interest income	211	153
Interest expense	(7)	(16)
Foreign currency exchange loss	(19)	(6)
Net loss	$ (20,095)	$ (15,057)
Net loss per share applicable to common stockholders - basic and diluted (Note 12)	$ (0.10)	$ (0.10)
Weighted-average number of common shares used in computing net loss per share applicable to common stockholders - basic and diluted	199,037	149,100
Net loss	$ (20,095)	$ (15,057)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities		16
Total other comprehensive income		16
Comprehensive loss	$ (20,095)	$ (15,041)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash Flows from Operating Activities:
Net loss	$ (20,095)	$ (15,057)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,589	1,784
Issuance of common stock for services rendered	23	43
Accretion of discounts and premiums on investments		74
Depreciation and amortization expense	169	176
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,341	(2,205)
Accounts payable, accrued expenses, and other liabilities	2,416	(2,183)
Deferred revenue	(190)	(278)
Net cash used in operating activities	(14,747)	(17,646)
Cash Flows from Investing Activities:
Proceeds from maturity of available-for-sale securities		16,720
Purchases of property and equipment	(14)	(30)
Net cash (used in) provided by investing activities	(14)	16,690
Cash Flows from Financing Activities:
Proceeds from employee stock purchases	81	57
Proceeds from exercise of common stock warrants	9,591
Payments on note payable	(78)	(70)
Payments on capital lease	(3)	(4)
Net cash provided by (used in) financing activities	9,591	(17)
Net decrease in cash, cash equivalents and restricted cash	(5,170)	(973)
Cash, cash equivalents and restricted cash, beginning of period	112,940	80,978
Cash, cash equivalents and restricted cash, end of period	$ 107,770	$ 80,005

CONDENSED STATEMENT OF STOCKHOL

CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2017	$ 196	$ 711,993	$ (604,494)	$ 107,695
Beginning balance, shares at Dec. 31, 2017	195,625			195,625,000
Issuance of common stock under stock purchase plan		81		$ 81
Issuance of common stock under stock purchase plan, shares	53
Issuance of common stock upon exercise of common stock warrants	$ 20	9,571		9,591
Issuance of common stock upon exercise of common stock warrants, shares	20,406
Issuance of common stock for services rendered		23		23
Issuance of common stock for services rendered, shares	11
Stock-based compensation		1,589		1,589
Net loss			(20,095)	(20,095)
Ending balance at Mar. 31, 2018	$ 216	$ 723,257	$ (624,589)	$ 98,884
Ending balance, shares at Mar. 31, 2018	216,095			216,095,000

Business and Organization

Business and Organization	3 Months Ended
	Mar. 31, 2018
Business and Organization
Business and Organization	Note 1. Business and Organization Business Overview Idera Pharmaceuticals, Inc. (“Idera” or the “Company”), a Delaware corporation, is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel oligonucleotide therapeutics for oncology and rare diseases. The Company uses two distinct proprietary drug discovery technology platforms to design and develop drug candidates: its Toll-like receptor (“TLR”) targeting technology and its nucleic acid chemistry technology. The Company developed these platforms based on its scientific expertise and pioneering work with synthetic oligonucleotides as therapeutic agents. Using its TLR targeting technology, the Company designs synthetic oligonucleotide-based drug candidates to modulate the activity of specific TLRs. In addition, using its nucleic acid chemistry technology, the Company is developing drug candidates to turn off the messenger RNA (“mRNA”) associated with disease causing genes. Idera is focused on the clinical development of drug candidates for oncology and rare diseases characterized by small, well-defined patient populations with serious unmet medical needs. The Company believes it can develop and commercialize these targeted therapies on its own. To the extent the Company seeks to develop drug candidates for broader disease indications, it has entered into and may explore additional collaborative alliances to support development and commercialization. Agreement and Plan of Merger As further described in Note 2, in January 2018, the Company entered into an Agreement and Plan of Merger with BioCryst Pharmaceuticals, Inc. and affiliated entities. However, as the merger has not yet been completed, the Company has prepared these financial statements as if the Company will remain an independent reporting company, and accordingly, these financial statements do not include any of the potential accounting impacts that may result from the Agreement and Plan of Merger. Liquidity and Financial Condition As of March 31, 2018, the Company had an accumulated deficit of $624.6 million. The Company expects to incur substantial operating losses in future periods and will require additional capital as it seeks to advance its drug candidates through development to commercialization. The Company does not expect to generate product revenue, sales-based milestones or royalties until the Company successfully completes development and obtains marketing approval for The Company believes, based on its current operating plan, that its existing cash and cash equivalents will enable the Company to fund its operations into the third quarter of 2019. The Company has and plans to continue to evaluate available alternatives to extend its operations beyond the third quarter of 2019.

Agreement and Plan of Merger

Agreement and Plan of Merger	3 Months Ended
	Mar. 31, 2018
Agreement and Plan of Merger
Agreement and Plan of Merger	Note 2. Agreement and Plan of Merger On January 21, 2018, the Company, BioCryst Pharmaceuticals, Inc., a Delaware corporation (“BioCryst”), Nautilus Holdco, Inc., a Delaware corporation and a direct, wholly owned subsidiary of BioCryst (“Holdco”), Island Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Holdco (“Merger Sub A”), and Boat Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Holdco (“Merger Sub B”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, (a) Merger Sub A will be merged with and into Idera (the “Idera Merger”), with Idera surviving as a wholly owned subsidiary of Holdco, and (b) Merger Sub B will be merged with and into BioCryst (the “BioCryst Merger”, and, together with the Idera Merger, the “Mergers”), with BioCryst surviving as a wholly owned subsidiary of Holdco. Upon completion of the Mergers, Holdco will operate as a combined company under the name Valenscion Incorporated. Under the terms of the Merger Agreement, each share of BioCryst common stock will be exchanged for 0.50 shares of Holdco stock and each share of Idera common stock will be exchanged for 0.20 shares of Holdco stock. The exchange ratio reflects an “at market” combination based upon the approximate 30-day average volume weighted trading prices for each company. On a proforma, fully diluted basis, giving effect to all dilutive stock options, units and warrants, BioCryst stockholders will own 51.6 percent of the stock of the combined company and Idera stockholders will own 48.4 percent. The board of directors of each of Idera and BioCryst has unanimously approved the Merger Agreement and the transactions contemplated thereby and the required regulatory approvals have been received. However, the Mergers are subject to approval by the stockholders of both companies and satisfaction of other customary closing conditions, as specified in the Merger Agreement. A special meeting of Idera stockholders and a special meeting of BioCryst stockholders to vote on the proposal to adopt the Merger Agreement and the transactions contemplated thereby, including the Mergers, are expected to occur on July 10, 2018. Simultaneously with the execution of the Merger Agreement, Baker Brothers, a significant stockholder of each company, entered into a voting and support agreement and agreed to vote in favor of the transactions contemplated by the Merger Agreement. Baker Brothers owns approximately 18% of the issued and outstanding Idera common stock and approximately 14% of the issued and outstanding BioCryst common stock. The foregoing description of the Merger Agreement is not a complete description of all the parties’ rights and obligations under the Merger Agreement and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 22, 2018.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited financial statements included herein have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring adjustments, and disclosures considered necessary for a fair presentation of interim period results have been included. Interim results for the three months ended March 31, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2018. For further information, refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (“2017 Form 10-K”), which was filed with the SEC on March 7, 2018. Note 3. Summary of Significant Accounting Policies (Continued) Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of 90 days or less when purchased to be “cash equivalents.” Cash and cash equivalents at March 31, 2018 and December 31, 2017 consisted of cash and money market funds. Restricted Cash As part of the Company’s lease arrangement for its office and laboratory facility in Cambridge, Massachusetts, the Company is required to restrict cash held in a certificate of deposit securing a line of credit for the lessor. As of March 31, 2018 and December 31, 2017, the restricted cash amounted to $0.3 million and is recorded in “Restricted cash and other assets” in the accompanying balance sheets. The lease expires in August 2022. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows: March 31, December 31, (In thousands) 2018 2017 Cash and cash equivalents $ 107,459 $ 112,629 Restricted cash 311 311 Cash, cash equivalents and restricted cash $ 107,770 $ 112,940 Financial Instruments The fair value of the Company’s financial instruments is determined and disclosed in accordance with the three-tier fair value hierarchy specified in Note 4. The Company is required to disclose the estimated fair values of its financial instruments. The Company’s financial instruments consist of cash, cash equivalents, receivables and a note payable. The estimated fair values of these financial instruments approximate their carrying values as of March 31, 2018 and December 31, 2017. As of March 31, 2018 and December 31, 2017, the Company did not have any derivatives, hedging instruments or other similar financial instruments except for the note issued under the Company’s loan and security agreement, which is discussed in Note 7 to the financial statements included in the 2017 Form 10-K. The note includes put and call features, which the Company determined are clearly and closely associated with the debt host and do not require bifurcation as a derivative liability, or the fair value of the feature is immaterial. Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , using the modified retrospective transition method. Under this method, the Company recognizes the cumulative effect of initially adopting ASC Topic 606, if any, as an adjustment to the opening balance of retained earnings. Additionally, under this method of adoption, the Company applies the guidance to all incomplete contracts in scope as of the date of initial application. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Note 3. Summary of Significant Accounting Policies (Continued) In accordance with ASC Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, it 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 entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. 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. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as Current portion of deferred revenue . Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as Deferred revenue, net of current portion. Alliance Revenues The Company’s revenues have primarily been generated through collaborative research, development and/or commercialization agreements. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable, up-front license fees; research, development and commercial milestone payments; and other contingent payments due based on the activities of the counterparty or the reimbursement by licensees of costs associated with patent maintenance. Each of these types of revenue are recorded as Alliance revenues in the Company’s statement of operations. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. See Note 9, “Collaboration and License Agreements” for additional details surrounding the Company’s collaboration arrangements. Note 3. Summary of Significant Accounting Policies (Continued) As part of the accounting for these arrangements, the Company allocates the transaction price to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling price may be, but is not presumed to be, the contract price. In determining the allocation, the Company maximizes the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, the Company estimates the stand-alone selling price for each performance obligation using assumptions that require judgment. Acceptable estimation methods include, but are not limited to: (i) the adjusted market assessment approach, (ii) the expected cost plus margin approach, and (iii) the residual approach (when the stand-alone selling price is not directly observable and is either highly variable or uncertain). In order for the residual approach to be used, the Company must demonstrate that (a) there are observable stand-alone selling prices for one or more of the performance obligations and (b) one of the two criteria in ASC 606-10- 32-34(c)(1) and (2) is met. The residual approach cannot be used if it would result in a stand-alone selling price of zero for a performance obligation as a perf ormance obligation, by definition, has value on a stand-alone basis. An option in a contract to acquire additional goods or services gives rise to a performance obligation only if the option provides a material right to the customer that it would not receive without entering into that contract. Factors that the Company considers in evaluating whether an option represents a material right include, but are not limited to: (i) the overall objective of the arrangement, (ii) the benefit the collaborator might obtain from the arrangement without exercising the option, (iii) the cost to exercise the option (e.g. priced at a significant and incremental discount) and (iv) the likelihood that the option will be exercised. With respect to options determined to be performance obligations, the Company recognizes revenue when those future goods or services are transferred or when the options expire. The Company’s revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front 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 promises, 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 from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates whether each milestone is considered probable of being achieved 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 control of the Company or the licensee, such as regulatory approvals, are 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 its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect Alliance revenues and earnings in the period of adjustment. Research and Development Activities: If the Company is entitled to reimbursement from its collaborators for specified research and development activities or the reimbursement of costs associated with patent maintenance, the Company determines whether such funding would result in Alliance revenues or an offset to research and development expenses. Reimbursement of patent maintenance costs are recognized during the period in which the related expenses are incurred as Alliance revenues in the Company’s statement of operations. Note 3. Summary of Significant Accounting Policies (Continued) Royalties: If the Company is entitled to receive sales-based royalties from its collaborator, including milestone payments based on the level of sales, and 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, provided the reported sales are reliably measurable, 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 resulting from any of its collaboration and license arrangements. Manufacturing Supply and Research Services: Arrangements that include a promise for future supply of drug substance, drug product or research services at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the licensee exercises these options, any additional payments are recorded in Alliance revenues when the licensee obtains control of the goods, which is upon delivery, or as the services are performed. The Company receives payments from its licensees based on schedules established in each contract. Upfront payments and fees are recorded as deferred revenue upon receipt, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less. Income Taxes In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three months ended March 31, 2018 and 2017, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. The Company has not recorded its net deferred tax asset as of either March 31, 2018 or December 31, 2017 because it maintained a full valuation allowance against all deferred tax assets as of these dates as management has determined that it is not more likely than not that the Company will realize these future tax benefits. As of March 31, 2018 and December 31, 2017, the Company had no uncertain tax positions. In December 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law. Among other things, the TCJA permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $27.6 million to income tax expense in and a corresponding reduction in the valuation allowance in the fourth quarter of 2017. As a result, there was no impact to the Company’s statement of operations and comprehensive loss as a result of reduction in tax rates. The Company’s preliminary estimate of the TCJA and the remeasurement of its deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of the Company’s tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require further adjustments and changes in the Company’s estimates. The final determination of the TCJA and the remeasurement of the Company’s deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA. Note 3. Summary of Significant Accounting Policies (Continued) New Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which was subsequently amended by several other ASU’s related to Topic 606 to, among other things, defer the effective date and clarify various aspects of the new revenue guidance including principal versus agent considerations, identifying performance obligations, and licensing, and include other improvements and practical expedients (as amended, “ASU 2014-09”). The Company adopted ASU 2014-09 in the first quarter of 2018 using the modified retrospective transition method. See “Revenue Recognition” above. To date, the Company has derived its revenues from a limited number of license and collaboration agreements. The consideration the Company is eligible to receive under these agreements includes upfront payments, research and development funding, contingent revenues in the form of commercial and development milestones and option payments and royalties. Each of the Company’s license and collaboration agreements has unique terms and was evaluated separately under Topic 606. With respect to its license and collaboration agreements with Vivelix In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted ASU 2016-01 in the first quarter of 2018. The adoption of this new standard did not have a material impact on the Company’s financial position or results of operations. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) — Restricted Cash (“ASU 2016-18”) . The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. Accordingly, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 in the first quarter of 2018, and the guidance has been retrospectively applied to all periods presented. The total of cash, cash equivalents and restricted cash is described earlier in this Note 3. Recently Issued (Not Yet Adopted) Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets, with lease terms of more than 12 months, to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Consistent with GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. This guidance is applicable to the Company's fiscal year beginning January 1, 2019. The Company is currently evaluating the effect that the adoption of ASU 2016-02 will have on its financial statements.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Fair Value Measurements	Note 4. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company applies the guidance in ASC 820, Fair Value Measurement , to account for financial assets and liabilities measured on a recurring basis. Fair value is measured at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following three categories: · Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; · Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and · Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2 and 3 during the three months ended March 31, 2018. The table below presents the assets and liabilities measured and recorded in the financial statements at fair value on a recurring basis at March 31, 2018 and December 31, 2017 categorized by the level of inputs used in the valuation of each asset and liability: The table below presents the assets and liabilities measured and recorded in the financial statements at fair value on a recurring basis at March 31, 2018 and December 31, 2017 categorized by the level of inputs used in the valuation of each asset and liability. March 31, 2018 (In thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 66,372 $ 66,372 $ — $ — Total Assets $ 66,372 $ 66,372 $ — $ — Total Liabilities $ — $ — $ — $ — December 31, 2017 (In thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 66,183 $ 66,183 $ — $ — Total Assets $ 66,183 $ 66,183 $ — $ — Total Liabilities $ — $ — $ — $ — The Level 1 assets consist of money market funds, which are actively traded daily.

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2018
Property and Equipment
Property and Equipment	Note 5. Property and Equipment At March 31, 2018 and December 31, 2017, property and equipment, net, consisted of the following: March 31, December 31, (In thousands) 2018 2017 Leasehold improvements $ 671 $ 671 Laboratory equipment and other 5,265 5,261 Total property and equipment, at cost 5,936 5,932 Less: Accumulated depreciation and amortization 4,616 4,460 Property and equipment, net $ 1,320 $ 1,472 Depreciation and amortization expense on property and equipment was approximately $0.2 million in each of the three months ended March 31, 2018 and 2017. There were no non-cash property additions during the three months ended March 31, 2018 and less than $0.1 million in non-cash property additions during the three months ended March 31, 2017.

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2018
Accrued Expenses
Accrued Expenses	Note 6. Accrued Expenses At March 31, 2018 and December 31, 2017, accrued expenses consisted of the following: March 31, December 31, (In thousands) 2018 2017 Payroll and related costs $ 1,569 $ 3,108 Clinical and nonclinical trial expenses 5,177 3,495 Professional and consulting fees 3,328 1,317 Other 150 80 Total Accrued expenses $ 10,224 $ 8,000

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Stockholders' Equity	Note 7. Stockholders’ Equity Common Stock Warrants In connection with various financing transactions, the Company has issued warrants to purchase shares of the Company’s common stock. The Company accounts for warrants as equity instruments, derivative liabilities, or liabilities, depending on the specific terms of the warrant. As of March 31, 2018 and December 31, 2017, all of the Company’s outstanding warrants were equity-classified. The following table summarizes outstanding warrants to purchase shares of the Company’s common stock as of March 31, 2018 and December 31, 2017: Number of Shares March 31, December 31, Weighted-Average Description 2018 2017 Exercise Price Expiration Date Issued in May 2013 financing (1) 1,200,000 21,606,327 0.47 May 2018 Issued in May 2013 financing (pre-funded) 15,816,327 15,816,327 0.01 May 2020 Issued in September 2013 financing 4,175,975 4,175,975 0.01 Sep 2020 Issued in February 2014 financing 2,158,750 2,158,750 0.01 Feb 2021 Total 23,351,052 43,757,379 (1) Subsequent to March 31, 2018, the holder of the remaining May 2013 financing warrants, a related party, exercised these warrants as more fully described in Note 13. Note 7. Stockholders’ Equity (Continued) The table below is a summary of the Company's warrant activity for the three months ended March 31, 2018: Number of Weighted-Average Warrants Exercise Price Outstanding at December 31, 2017 43,757,379 $ 0.24 Issued — — Exercised (1) (20,406,327) 0.47 Expired — — Outstanding at March 31, 2018 23,351,052 $ 0.03 (1) During the three months ended March 31, 2018, a related party exercised certain of these warrants as more fully described in Note 11.

Alliance Revenue

Alliance Revenue	3 Months Ended
	Mar. 31, 2018
Alliance Revenue
Alliance Revenue	Note 8. Alliance Revenue Alliance revenue for the three months ended March 31, 2018 and 2017 represents revenue from contracts with customers accounted for in accordance with ASC Topic 606, which the Company adopted in the first quarter of 2018, as more fully described in Note 3. There was no impact to Alliance revenue previously recognized by the Company as a result of the adoption of ASC Topic 606. For the three months ended March 31, 2018 and 2017, Alliance revenue in the accompanying statements of operations and comprehensive loss is comprised of the following: Three months ended March 31, (In thousands) 2018 2017 GSK collaboration (1) $ 142 $ 371 Vivelix collaboration (2) 56 — Other (3) 57 7 Total Alliance revenue $ 255 $ 378 (1) For the three months ended March 31, 2018, revenue recognized primarily relates to the amortization of the deferred up-front payment received at inception of the GSK Agreement, as more fully described in Note 9. For the three months ended March 31, 2017, revenue recognized includes $0.3 million related to the amortization of the deferred up-front payment and $0.1 million related to additional research services provided in connection with the arrangement. (2) For the three months ended March 31, 2018, revenue recognized relates to services provided under the research program provided for under the Vivelix Agreement, as more fully described in Note 9. (3) For each of the three months ended March 31, 2018 and 2017, revenue recognized relates to collaborations which are not material to our current operations nor expected to be material in the future, including reimbursements by licensees of costs associated with patent maintenance. Note 8. Alliance Revenue (Continued) The following table presents changes in the Company’s contract assets and liabilities during the three months ended March 31, 2018 and 2017: Three months ended March 31, 2018 (In thousands) Beginning Additions Deductions Ending Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 566 $ — $ (190) $ 376 Three months ended March 31, 2017 (In thousands) Beginning Additions Deductions Ending Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 1,263 $ — $ (278) $ 985 During the three months ended March 31, 2018 and 2017, the Company recognized Alliance revenues of $0.2 million and $0.3 million, respectively, as a result of changes in the contract liability balances associated with its contracts with customers. Revenue recognized during both the three months ended March 31, 2018 and 2017 were included in the contract liability at the beginning of each respective period. As of March 31, 2018, contract liabilities consisted of deferred revenue related entirely to the GSK Agreement and were included in Current portion of deferred revenue in the accompanying condensed balance sheet. See Note 9 for additional details regarding the Company’s material collaboration arrangements.

Collaboration and License Agree

Collaboration and License Agreements	3 Months Ended
	Mar. 31, 2018
Collaboration and License Agreements
Collaboration and License Agreements	Note 9. Collaboration and License Agreements Collaboration with Vivelix In November 2016, the Company entered into an exclusive license and collaboration agreement with Vivelix pursuant to which the Company granted Vivelix worldwide rights to develop and market IMO-9200, an antagonist of TLR7, TLR8, and TLR9, for non-malignant gastrointestinal disorders (the “GI Field” or “Field” as defined in the Vivelix Agreement), and certain back-up compounds to IMO-9200 (the “Vivelix Agreement”). The Company was previously developing IMO-9200 for potential use in selected autoimmune disease indications. However, the Company determined not to proceed with internal development of IMO-9200 because the large autoimmune disease indications for which IMO-9200 had been developed did not fit within the strategic focus of the Company. Under the terms of the Vivelix Agreement, Vivelix is solely responsible for the development and commercialization of IMO-9200 and any designated back-up compounds. In connection with the Vivelix Agreement, Idera also transferred certain drug material to Vivelix for Vivelix’s use in its development activities. In accordance with the Vivelix Agreement, a Joint Research Committee (“JRC”) was formed with equal representation from Idera and Vivelix. The responsibilities of the JRC, include, but are not limited to, monitoring the progress of the research program, advising on the designation of back-up compounds, sharing information between the parties and dealing with disputes that may arise between the parties. If a dispute cannot be resolved by the JRC, Vivelix has final decision making authority. If requested by Vivelix pursuant to the Vivelix Agreement, Idera will create, characterize and perform research on back-up compounds (the “Research Program”). Such activity is to be mutually agreed upon and moderated by the JRC. The research period commenced with the execution of the agreement and may last for up to three years. During the research period, the parties will agree on the number of full time equivalents to work on the program. Vivelix will reimburse Idera at an annual market rate for the services rendered. Additionally, Vivelix has the option to license back-up compounds that were the subject of the Research Program (“Designated Back-up Compound License Option”). Note 9. Collaboration and License Agreements (Continued) Vivelix has certain rights under the agreement whereby it may exercise (i) the right of first refusal to develop and commercialize products in any available field (“Right of First Refusal”), (ii) the right of first negotiation to obtain an exclusive license for any compound controlled by Idera that has activity in the field of inflammatory bowel disease (“Right of First Negotiation”) and (iii) the right to request an expanded Field beyond the GI Field (“Expanded Field Option”). Under the terms of the Vivelix Agreement, the Company received an upfront, non-refundable fee of $15 million. In addition, the Company will be eligible for future IMO-9200 related development, regulatory and sales milestone payments totaling up to $140 million, including development and regulatory milestones totaling up to $65 million and sales milestones totaling up to $75 million, and escalating royalties ranging from the mid single-digits to low double-digits of global net sales, which percentages are subject to reduction under agreed upon circumstances. As it relates to back-up compounds, the Company will be eligible for related designation payments and development, regulatory and sales milestone payments totaling up to $52.5 million, including development and regulatory milestones totaling up to $35 million and sales milestones totaling up to $17.5 million and escalating royalties ranging from the mid single-digits to low double-digits of global net sales, which percentages are subject to reduction under agreed upon circumstances. Under the terms of the agreement and if requested by and at Vivelix’s expense, the Company is responsible for performing research services related to the back-up compounds. At the effective date of the Vivelix Agreement, Baker Bros. Advisors LP and certain of its affiliated funds (collectively, “Baker Brothers”) beneficially owned approximately 7.0% of the Company’s outstanding common stock. Baker Brothers also owned a controlling financial interest of Vivelix at the effective date of the Vivelix Agreement and as of December 31, 2017. Affiliates of Baker Brothers constitute two of the four directors on the board of directors of Vivelix and two of the seven directors on the board of directors of the Company. However, the boards of the Company and Vivelix share no common board members. Accounting Analysis under ASC 606 In evaluating the Vivelix Agreement in accordance with ASC Topic 606, the Company concluded that the contract counterparty, Vivelix, is a customer. The Company identified the following performance obligations as of the inception of agreement: (i) a research and commercialization license for IMO-9200 and back-up compounds to IMO-9200 (the “IMO-9200 License”) and (ii) drug materials transferred, which were both deemed to be distinct. The Company determined that participation in the JRC was deemed immaterial in the context of the contract. Consistent with the guidance under ASC 606-10-25-16A, the Company disregarded immaterial promised goods and services when determining performance obligations. The Company concluded that the IMO-9200 License was distinct within the context of the contract (i.e. separately identifiable) because it has stand-alone value from other promised goods and services as Vivelix could benefit from the IMO-9200 License on a stand-alone basis and sell the compound in the market without any additional involvement or participation from Idera. Additionally, Idera has no further obligations related to the IMO-9200 License. In the event that Vivelix does not make a designated compound payment, the license to back-up compounds reverts back to Idera at the end of the research term at no cost or payment by either party. The services provided under the Research Program relate to the back-up compounds and Vivelix would be able to conduct research and development activities with external third parties, as IMO-9200 is at an advanced enough stage where Idera’s expertise would not be required. Accordingly, the IMO-9200 License is a separate performance obligation. The Company concluded that the drug materials transferred identified at the inception are also distinct within the context of the contract (i.e. separately identifiable) because they have standalone value from other promised goods and services based on their nature. Accordingly, the drug materials transferred are a separate performance obligation. Note 9. Collaboration and License Agreements (Continued) Allocable arrangement consideration at inception of the Vivelix Agreement was comprised of the up-front payment of $15 million. The $15 million was allocated based on the relative stand-alone selling prices of each performance obligation. Allocated revenue associated with the IMO-9200 License was recognized at the inception of the Vivelix Agreement in the fourth quarter of 2016 as Vivelix was granted an exclusive, perpetual license to develop and commercialize IMO-9200 and certain back-up compounds to IMO-9200, subject to certain designation milestone and royalty payments, and the performance obligations of Idera under the agreement were extinguished at that point. Allocable revenue associated with drug materials transferred shortly after the inception of the agreement was recognized upon delivery, also in the fourth quarter of 2016. At inception of the contract, the transaction price included only the $15.0 million up-front consideration received. None of the development and commercialization milestones were included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Similarly, other variable consideration related to services that may be provided under the Research Program and back-up compound designation payments were fully constrained. Any consideration related to sales-based royalties will be recognized when the related sales occur, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, as such sales were determined to relate predominantly to the license granted to Vivelix and therefore have also been excluded from the transaction price. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. Revenue associated with goods and services provided to Vivelix under the Research Program have been immaterial to date and such revenue is recognized as the related performance obligations under each research project are satisfied. See Note 8 for details on revenue recognized in connection with the Company’s collaboration with Vivelix for both the three months ended March 31, 2018 and 2017. Collaboration with GSK In November 2015, the Company entered into a collaboration and license agreement with GSK to license, research, develop and commercialize pharmaceutical compounds from the Company’s nucleic acid chemistry technology for the treatment of selected targets in renal disease (the “GSK Agreement”). The initial collaboration term is currently anticipated to last between two and four years. In connection with the GSK Agreement, GSK identified an initial target for the Company to attempt to identify a potential population of development candidates to address such target under a mutually agreed upon research plan, which is estimated to take 36 months to complete. From the population of identified development candidates, GSK may designate one development candidate in its sole discretion to move forward into clinical development. Once GSK designates a development candidate, GSK would be solely responsible for the development and commercialization activities for that designated development candidate. The GSK Agreement also provided GSK with the option to select up to two additional targets at any time during the first two years of the GSK Agreement for further research under mutually agreed upon research plans. Upon selecting additional targets, GSK then had the option to designate one development candidate for each additional target, at which time GSK would have sole responsibility to develop and commercialize each such designated development candidate. GSK did not select any additional targets for research through expiry of the option period. In accordance with the GSK Agreement, a Joint Steering Committee (“JSC”) was formed with equal representation from Idera and GSK. The responsibilities of the JSC, include, but are not limited to monitoring the progress of the collaboration, reviewing research plans and dealing with disputes that may arise between the parties. If a dispute cannot be resolved by the JSC, GSK has final decision making authority. Note 9. Collaboration and License Agreements (Continued) Under the terms of the GSK Agreement, the Company received a $2.5 million upfront, non-refundable, non-creditable cash payment upon the execution of the GSK Agreement. Additionally, the Company was eligible to receive a total of up to approximately $100 million in license, research, clinical development and commercialization milestone payments, of which $9 million of these milestone payments would have been payable by GSK upon the identification of the additional targets, the completion of current and future research plans and the designation of development candidates and $89 million would have been payable by GSK upon the achievement of clinical milestones and commercial milestones. As a result of GSK not selecting additional targets during the two-year option period, the Company is now only eligible to receive a total of up to approximately $20 million in license, research, clinical development and commercialization milestone payments, of which $1 million of these milestone payments would be payable by GSK upon the designation of a development candidate from the initial target and $17 million would be payable by GSK upon the achievement of clinical milestones and commercial milestones. In addition, the Company is eligible to receive royalty payments on sales upon commercialization at varying rates of up to 5% on annual net sales, as defined in the GSK Agreement. Accounting Analysis under ASC 606 In evaluating the GSK Agreement in accordance with ASC Topic 606, the Company concluded that the contract counterparty, GSK, is a customer. The Company identified the following performance obligations as of the inception of the agreement: (i) research services, combined with the license for Idera’s proprietary technology related to the initial target (collectively, the “Collaboration License and Research Services”) and (ii) daily options to extend the Collaboration License and Research Services. The Company determined that participation in the JSC and materials transferred were deemed immaterial in the context of the contract. Consistent with the guidance under ASC 606-10-25-16A, the Company disregarded immaterial promised goods and services when determining performance obligations. The Company concluded that the research services related to the initial target and collaboration license to the Company’s proprietary technology related to the initial target were not capable of being distinct as the collaboration license related to the initial target is highly interdependent upon the research services to be provided related to the initial target. As it relates to the assessment of standalone value, the Company determined that GSK cannot fully exploit the value of the collaboration license without receipt of the research services from the Company. The research services involve unique skills and specialized expertise, particularly as it relates to the Company’s proprietary technology, which is not available in the marketplace. Accordingly, GSK must obtain the research services from the Company which significantly limits the ability for GSK to utilize the collaboration license for its intended purpose on a standalone basis. Similarly, the Company concluded that the daily option to extend the collaboration license and the daily option to extend the research services were also highly interdependent as the license has no value to GSK without the accompanying research services using the Company’s proprietary technology. Accordingly, the Collaboration License and Research Services were determined to represent a single performance obligation and the daily options to extend the Collaboration License and Research Services were determined to represent a single performance obligation. Factors considered in this determination included, among other things, the capabilities of the collaborator, whether any other vendor sells the item separately, whether the value of the deliverable is dependent on the other elements in the arrangement, whether there are other vendors that can provide the items and if the customer could use the item for its intended purpose without the other deliverables in the arrangement. Allocable arrangement consideration at inception of the GSK Agreement was comprised of the up-front payment of $2.5 million. The $2.5 million was allocated based on the relative stand-alone selling prices of each performance obligation, calculated based on the expected period of time over which the initial license term will be in place, as well as the expected period of time over which the optional renewals occur. The consideration allocated to the Collaboration License and Research Services will be recognized over time as GSK is receiving the benefit of the Company’s expertise and know-how on an on-going basis as the research progresses towards the goal of the development candidate designation for the initial target. The exercise of the daily options to extend the Collaboration License and Research Services are treated as a continuation of the contract and allocated consideration is recognized point-in-time upon commencement of each daily exercise. Note 9. Collaboration and License Agreements (Continued) At inception of the contract, the transaction price included only the $2.5 million up-front consideration received. None of the development and commercialization milestones were included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Any consideration related to sales-based royalties will be recognized when the related sales occur, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, as such sales were determined to relate predominantly to the license granted to GSK and therefore have also been excluded from the transaction price. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The up-front payment of $2.5 million was recorded as deferred revenue in the Company’s balance sheet upon receipt and is currently being recognized as revenue on a straight line basis over the estimated 36 month research plan period, which approximates the timing in which performance obligations are satisfied. See Note 8 for details on revenue recognized in connection with the Company’s collaboration with GSK for both the three months ended March 31, 2018 and 2017.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2018
Stock-Based Compensation
Stock-Based Compensation	Note 10. Stock-Based Compensation Equity Compensation Plans 2013 Stock Incentive Plan The Company's board of dire As of March 31, 2018, options to purchase a total of 16,756,736 shares of common stock were outstanding and up to 10,114,740 shares of common stock remained available for grant under the 2013 Plan. The Company has not made any awards pursuant to other equity incentive plans, including the Existing Plans, since the Company’s stockholders approved the 2013 Plan. As of March 31, 2018, options to purchase a total of 4,138,937 shares of common stock were outstanding under these earlier plans. In addition, as of March 31, 2018, non-statutory stock options to purchase an aggregate of 3,321,875 shares of common stock were outstanding that were issued outside of the 2013 Plan to certain employees in 2017, 2015 and 2014 pursuant to the Nasdaq inducement grant exception as a material component of new hires’ employment compensation. 2017 Employee Stock Purchase Plan The Company’s board of directors adopted the 2017 Employee Stock Purchase Plan (the “2017 ESPP”) which was approved by the Company’s stockholders and became effective on June 7, 2017. The 2017 ESPP provides for the issuance of up to 500,000 shares of common stock to participating employees of the Company or its subsidiaries. Participation is limited to employees that would not own 5% or more of the total combined voting power or value of the stock of the Company after the grant. As of March 31, 2018, 403,342 shares remained available for issuance under the 2017 ESPP. Note 10. Stock-Based Compensation (Continued) For the three months ended March 31, 2018 and 2017, the Company issued 53,619 and 41,847 shares of common stock, respectively, under the 2017 ESPP and the Company’s 1995 Employee Stock Purchase Plan and received proceeds of approximately $0.1 million during each period, as a result of employee stock purchases. Accounting for Stock-based Compensation The Company recognizes non-cash compensation expense for stock-based awards under the Company’s equity incentive plans over an award’s requisite service period, or vesting period, using the straight-line attribution method, based on their grant date fair value determined using the Black-Scholes option-pricing model. The Company also recognizes non-cash compensation for stock purchases made under the 2017 ESPP. T he fair value of the discounted purchases made under the Company’s 2017 ESPP is calculated using the Black-Scholes option-pricing model. The fair value of the look-back provision plus the 15% discount is recognized as compensation expense over each plan period. Total stock-based compensation expense attributable to stock-based payments made to employees and directors and employee stock purchases included in operating expenses in the Company's statements of operations for the three months March 31, 2018 and 2017 was as follows: Three Months Ended March 31, (in thousands) 2018 2017 Stock-based compensation: Research and development Employee Stock Purchase Plans $ 22 $ 22 Equity Incentive Plans 556 714 $ 578 $ 736 General and administrative Employee Stock Purchase Plans $ 14 $ 19 Equity Incentive Plans 997 1,029 $ 1,011 $ 1,048 Total stock-based compensation expense $ 1,589 $ 1,784 During the three months ended March 31, 2018 and 2017, the weighted average fair market value of stock options granted was $1.24 and $0.99, respectively. The following weighted average assumptions apply to the options to purchase 4,116,800 and 3,422,000 shares of common stock granted to employees and directors during the three months ended March 31, 2018 and 2017, respectively: Three Months Ended March 31, 2018 2017 Average risk free interest rate Expected dividend yield — — Expected lives (years) 3.8 3.9 Expected volatility Weighted average exercise price (per share) $ 2.24 $ 1.59 All options granted during three months ended March 31, 2018 were granted at exercise prices equal to the fair market value of the common stock on the dates of grant . Note 10. Stock-Based Compensation (Continued) Stock Option Activity The following table summarizes stock option activity for the three months ended March 31, 2018: ($ in thousands, except per share data) Stock Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2017 21,402,200 $ 2.94 6.5 $ 5,805 Granted 4,116,800 2.24 Exercised — — Forfeited (894,377) 2.46 Expired (407,075) 11.09 Outstanding at March 31, 2018 (1) 24,217,548 $ 2.70 6.7 $ 3,716 Exercisable at March 31, 2018 14,734,826 $ 2.95 5.4 $ 2,998 (1) Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. The fair value of options that vested during the three months ended March 31, 2018 was $2.1 million. As of March 31, 2018, there was $11.1 million of unrecognized compensation cost related to unvested options, which the Company expects to recognize over a weighted average period of 2.6 years.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2018
Related Party Transactions
Related Party Transactions	Note 11. Related Party Transactions Overview of Related Parties Youssef El Zein, a member of the Company’s Board until his resignation in October 2017, is a director and controlling stockholder of Pillar Invest Corporation (“Pillar Invest”), which is the general partner of Pillar Pharmaceuticals I, L.P. (“Pillar I”), Pillar Pharmaceuticals II, L.P. (“Pillar II”), Pillar Pharmaceuticals III, L.P. (“Pillar III”), Pillar Pharmaceuticals IV, L.P. (“Pillar IV”) and Pillar Pharmaceuticals V, L.P. (“Pillar V”) and limited partner of Pillar I, Pillar II, Pillar III, Pillar IV and Pillar V. Entities affiliated with Pillar Invest and Participations Besancon (“Besancon”), an investment fund advised by Pillar Invest having no affiliation with Mr. El Zein, Pillar I, Pillar II, Pillar III, Pillar IV, Pillar V or Pillar Invest (collectively, the “Pillar Investment Entities”), owned approximately 12% of the Company's common stock as of March 31, 2018. Julian C. Baker, a member of the Company’s Board, is a principal of Baker Bros. Advisors, LP. Baker Bros. Advisors, LP and certain of its affiliated funds (collectively, “Baker Brothers”) owned approximately 18% of the Company's common stock as of March 31, 2018. Additionally, one of the Company’s directors, Kelvin M. Neu, is an employee of Baker Bros. Advisors, LP as of March 31, 2018. Pillar Investment Entities As of March 31, 2018, Besancon held warrants to purchase up to 1,200,000 shares of the Company’s common stock at an exercise price of $0.47 per share. In April 2018, Besancon exercised these warrants for a total exercise price of approximately $0.6 million. Baker Brothers During the three months ended March 31, 2018, Baker Brothers exercised warrants to purchase 20,316,327 shares of the Company’s common stock at an exercise price of $0.47 per share for a total exercise price of approximately $9.5 million. As of March 31, 2018, Baker Brothers held pre-funded warrants to purchase up to 22,151,052 shares of the Company’s common stock at an exercise price of $0.01 per share. Note 11. Related Party Transactions (Continued) Board Fees Paid in Stock Pursuant to the Company’s director compensation program, in lieu of director board and committee fees incurred of less than $0.1 million during both the three months ended March 31, 2018 and 2017, the Company issued 13,349 and 12,917 shares of common stock, respectively, to certain of its directors. Director board and committee fees are paid in arrears (including fees paid in stock) and the number of shares issued was calculated based on the market closing price of the Company’s common stock on the issuance date.

Net Loss per Common Share

Net Loss per Common Share	3 Months Ended
	Mar. 31, 2018
Net Loss per Common Share
Net Loss per Common Share	Note 12. Net Loss per Common Share Basic and diluted net loss per common share applicable to common stockholders is calculated by dividing net loss applicable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock option awards, common stock warrants and convertible preferred stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. For the three months ended March 31, 2018 and 2017, diluted net loss per common share applicable to common stockholders was the same as basic net loss per common share applicable to common stockholders as the effects of the Company’s potential common stock equivalents are antidilutive. Total antidilutive securities that were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect, were 47,570,526 and 72,913,781 as of March 31, 2018 and 2017, respectively, and consisted of stock options, preferred stock and warrants.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events
Subsequent Events	Note 13. Subsequent Events The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Common Stock Warrants In April 2018, Besancon exercised warrants to purchase 1,200,000 shares of the Company’s common stock at an exercise price of $0.47 per share for a total exercise price of approximately $0.6 million.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited financial statements included herein have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments, consisting of normal recurring adjustments, and disclosures considered necessary for a fair presentation of interim period results have been included. Interim results for the three months ended March 31, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2018. For further information, refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (“2017 Form 10-K”), which was filed with the SEC on March 7, 2018.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of 90 days or less when purchased to be “cash equivalents.” Cash and cash equivalents at March 31, 2018 and December 31, 2017 consisted of cash and money market funds.
Restricted Cash	Restricted Cash As part of the Company’s lease arrangement for its office and laboratory facility in Cambridge, Massachusetts, the Company is required to restrict cash held in a certificate of deposit securing a line of credit for the lessor. As of March 31, 2018 and December 31, 2017, the restricted cash amounted to $0.3 million and is recorded in “Restricted cash and other assets” in the accompanying balance sheets. The lease expires in August 2022. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows: March 31, December 31, (In thousands) 2018 2017 Cash and cash equivalents $ 107,459 $ 112,629 Restricted cash 311 311 Cash, cash equivalents and restricted cash $ 107,770 $ 112,940
Financial Instruments	Financial Instruments The fair value of the Company’s financial instruments is determined and disclosed in accordance with the three-tier fair value hierarchy specified in Note 4. The Company is required to disclose the estimated fair values of its financial instruments. The Company’s financial instruments consist of cash, cash equivalents, receivables and a note payable. The estimated fair values of these financial instruments approximate their carrying values as of March 31, 2018 and December 31, 2017. As of March 31, 2018 and December 31, 2017, the Company did not have any derivatives, hedging instruments or other similar financial instruments except for the note issued under the Company’s loan and security agreement, which is discussed in Note 7 to the financial statements included in the 2017 Form 10-K. The note includes put and call features, which the Company determined are clearly and closely associated with the debt host and do not require bifurcation as a derivative liability, or the fair value of the feature is immaterial.
Revenue Recognition	Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , using the modified retrospective transition method. Under this method, the Company recognizes the cumulative effect of initially adopting ASC Topic 606, if any, as an adjustment to the opening balance of retained earnings. Additionally, under this method of adoption, the Company applies the guidance to all incomplete contracts in scope as of the date of initial application. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Note 3. Summary of Significant Accounting Policies (Continued) In accordance with ASC Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, it 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 entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. 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. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as Current portion of deferred revenue . Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as Deferred revenue, net of current portion. Alliance Revenues The Company’s revenues have primarily been generated through collaborative research, development and/or commercialization agreements. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable, up-front license fees; research, development and commercial milestone payments; and other contingent payments due based on the activities of the counterparty or the reimbursement by licensees of costs associated with patent maintenance. Each of these types of revenue are recorded as Alliance revenues in the Company’s statement of operations. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. See Note 9, “Collaboration and License Agreements” for additional details surrounding the Company’s collaboration arrangements. Note 3. Summary of Significant Accounting Policies (Continued) As part of the accounting for these arrangements, the Company allocates the transaction price to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling price may be, but is not presumed to be, the contract price. In determining the allocation, the Company maximizes the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, the Company estimates the stand-alone selling price for each performance obligation using assumptions that require judgment. Acceptable estimation methods include, but are not limited to: (i) the adjusted market assessment approach, (ii) the expected cost plus margin approach, and (iii) the residual approach (when the stand-alone selling price is not directly observable and is either highly variable or uncertain). In order for the residual approach to be used, the Company must demonstrate that (a) there are observable stand-alone selling prices for one or more of the performance obligations and (b) one of the two criteria in ASC 606-10- 32-34(c)(1) and (2) is met. The residual approach cannot be used if it would result in a stand-alone selling price of zero for a performance obligation as a perf ormance obligation, by definition, has value on a stand-alone basis. An option in a contract to acquire additional goods or services gives rise to a performance obligation only if the option provides a material right to the customer that it would not receive without entering into that contract. Factors that the Company considers in evaluating whether an option represents a material right include, but are not limited to: (i) the overall objective of the arrangement, (ii) the benefit the collaborator might obtain from the arrangement without exercising the option, (iii) the cost to exercise the option (e.g. priced at a significant and incremental discount) and (iv) the likelihood that the option will be exercised. With respect to options determined to be performance obligations, the Company recognizes revenue when those future goods or services are transferred or when the options expire. The Company’s revenue arrangements may include the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front 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 promises, 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 from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates whether each milestone is considered probable of being achieved 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 control of the Company or the licensee, such as regulatory approvals, are 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 its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect Alliance revenues and earnings in the period of adjustment. Research and Development Activities: If the Company is entitled to reimbursement from its collaborators for specified research and development activities or the reimbursement of costs associated with patent maintenance, the Company determines whether such funding would result in Alliance revenues or an offset to research and development expenses. Reimbursement of patent maintenance costs are recognized during the period in which the related expenses are incurred as Alliance revenues in the Company’s statement of operations. Note 3. Summary of Significant Accounting Policies (Continued) Royalties: If the Company is entitled to receive sales-based royalties from its collaborator, including milestone payments based on the level of sales, and 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, provided the reported sales are reliably measurable, 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 resulting from any of its collaboration and license arrangements. Manufacturing Supply and Research Services: Arrangements that include a promise for future supply of drug substance, drug product or research services at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the licensee exercises these options, any additional payments are recorded in Alliance revenues when the licensee obtains control of the goods, which is upon delivery, or as the services are performed. The Company receives payments from its licensees based on schedules established in each contract. Upfront payments and fees are recorded as deferred revenue upon receipt, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.
Income Taxes	Income Taxes In accordance with ASC 270, Interim Reporting , and ASC 740, Income Taxes , the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three months ended March 31, 2018 and 2017, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. The Company has not recorded its net deferred tax asset as of either March 31, 2018 or December 31, 2017 because it maintained a full valuation allowance against all deferred tax assets as of these dates as management has determined that it is not more likely than not that the Company will realize these future tax benefits. As of March 31, 2018 and December 31, 2017, the Company had no uncertain tax positions. In December 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law. Among other things, the TCJA permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, GAAP requires companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $27.6 million to income tax expense in and a corresponding reduction in the valuation allowance in the fourth quarter of 2017. As a result, there was no impact to the Company’s statement of operations and comprehensive loss as a result of reduction in tax rates. The Company’s preliminary estimate of the TCJA and the remeasurement of its deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of the Company’s tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the TCJA may require further adjustments and changes in the Company’s estimates. The final determination of the TCJA and the remeasurement of the Company’s deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the TCJA.
New Accounting Pronouncements	New Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which was subsequently amended by several other ASU’s related to Topic 606 to, among other things, defer the effective date and clarify various aspects of the new revenue guidance including principal versus agent considerations, identifying performance obligations, and licensing, and include other improvements and practical expedients (as amended, “ASU 2014-09”). The Company adopted ASU 2014-09 in the first quarter of 2018 using the modified retrospective transition method. See “Revenue Recognition” above. To date, the Company has derived its revenues from a limited number of license and collaboration agreements. The consideration the Company is eligible to receive under these agreements includes upfront payments, research and development funding, contingent revenues in the form of commercial and development milestones and option payments and royalties. Each of the Company’s license and collaboration agreements has unique terms and was evaluated separately under Topic 606. With respect to its license and collaboration agreements with Vivelix In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted ASU 2016-01 in the first quarter of 2018. The adoption of this new standard did not have a material impact on the Company’s financial position or results of operations. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) — Restricted Cash (“ASU 2016-18”) . The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. Accordingly, amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 in the first quarter of 2018, and the guidance has been retrospectively applied to all periods presented. The total of cash, cash equivalents and restricted cash is described earlier in this Note 3. Recently Issued (Not Yet Adopted) Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets, with lease terms of more than 12 months, to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Consistent with GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, ASU 2016-02 will require both types of leases to be recognized on the balance sheet. This guidance is applicable to the Company's fiscal year beginning January 1, 2019. The Company is currently evaluating the effect that the adoption of ASU 2016-02 will have on its financial statements.

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Schedule of reconciliation of cash, cash equivalents, and restricted cash	March 31, December 31, (In thousands) 2018 2017 Cash and cash equivalents $ 107,459 $ 112,629 Restricted cash 311 311 Cash, cash equivalents and restricted cash $ 107,770 $ 112,940

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements
Schedule of assets and liabilities measured and recorded in financial statements at fair value on a recurring basis	The table below presents the assets and liabilities measured and recorded in the financial statements at fair value on a recurring basis at March 31, 2018 and December 31, 2017 categorized by the level of inputs used in the valuation of each asset and liability. March 31, 2018 (In thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 66,372 $ 66,372 $ — $ — Total Assets $ 66,372 $ 66,372 $ — $ — Total Liabilities $ — $ — $ — $ — December 31, 2017 (In thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 66,183 $ 66,183 $ — $ — Total Assets $ 66,183 $ 66,183 $ — $ — Total Liabilities $ — $ — $ — $ —

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2018
Property and Equipment
Schedule of net property and equipment at cost	March 31, December 31, (In thousands) 2018 2017 Leasehold improvements $ 671 $ 671 Laboratory equipment and other 5,265 5,261 Total property and equipment, at cost 5,936 5,932 Less: Accumulated depreciation and amortization 4,616 4,460 Property and equipment, net $ 1,320 $ 1,472

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2018
Accrued Expenses
Schedule of accrued expenses	March 31, December 31, (In thousands) 2018 2017 Payroll and related costs $ 1,569 $ 3,108 Clinical and nonclinical trial expenses 5,177 3,495 Professional and consulting fees 3,328 1,317 Other 150 80 Total Accrued expenses $ 10,224 $ 8,000

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Schedule of warrants outstanding and exercisable for purchase of common stock	Number of Shares March 31, December 31, Weighted-Average Description 2018 2017 Exercise Price Expiration Date Issued in May 2013 financing (1) 1,200,000 21,606,327 0.47 May 2018 Issued in May 2013 financing (pre-funded) 15,816,327 15,816,327 0.01 May 2020 Issued in September 2013 financing 4,175,975 4,175,975 0.01 Sep 2020 Issued in February 2014 financing 2,158,750 2,158,750 0.01 Feb 2021 Total 23,351,052 43,757,379 (1) Subsequent to March 31, 2018, the holder of the remaining May 2013 financing warrants, a related party, exercised these warrants as more fully described in Note 13.
Summary of warrant activity	The table below is a summary of the Company's warrant activity for the three months ended March 31, 2018: Number of Weighted-Average Warrants Exercise Price Outstanding at December 31, 2017 43,757,379 $ 0.24 Issued — — Exercised (1) (20,406,327) 0.47 Expired — — Outstanding at March 31, 2018 23,351,052 $ 0.03 During the three months ended March 31, 2018, a related party exercised certain of these warrants as more fully described in Note 11.

Alliance Revenue (Tables)

Alliance Revenue (Tables)	3 Months Ended
	Mar. 31, 2018
Alliance Revenue
Schedule of accompanying statements of operations and comprehensive loss	Three months ended March 31, (In thousands) 2018 2017 GSK collaboration (1) $ 142 $ 371 Vivelix collaboration (2) 56 — Other (3) 57 7 Total Alliance revenue $ 255 $ 378 (1) For the three months ended March 31, 2018, revenue recognized primarily relates to the amortization of the deferred up-front payment received at inception of the GSK Agreement, as more fully described in Note 9. For the three months ended March 31, 2017, revenue recognized includes $0.3 million related to the amortization of the deferred up-front payment and $0.1 million related to additional research services provided in connection with the arrangement. (2) For the three months ended March 31, 2018, revenue recognized relates to services provided under the research program provided for under the Vivelix Agreement, as more fully described in Note 9. (3) For each of the three months ended March 31, 2018 and 2017, revenue recognized relates to collaborations which are not material to our current operations nor expected to be material in the future, including reimbursements by licensees of costs associated with patent maintenance.
Schedule of changes in the Company’s contract assets and liabilities	Three months ended March 31, 2018 (In thousands) Beginning Additions Deductions Ending Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 566 $ — $ (190) $ 376 Three months ended March 31, 2017 (In thousands) Beginning Additions Deductions Ending Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 1,263 $ — $ (278) $ 985

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Stock-Based Compensation
Schedule of stock-based compensation expense attributable to share-based payments made to employees and directors and included in operating expenses	Three Months Ended March 31, (in thousands) 2018 2017 Stock-based compensation: Research and development Employee Stock Purchase Plans $ 22 $ 22 Equity Incentive Plans 556 714 $ 578 $ 736 General and administrative Employee Stock Purchase Plans $ 14 $ 19 Equity Incentive Plans 997 1,029 $ 1,011 $ 1,048 Total stock-based compensation expense $ 1,589 $ 1,784
Schedule of weighted average assumptions applied to options	Three Months Ended March 31, 2018 2017 Average risk free interest rate Expected dividend yield — — Expected lives (years) 3.8 3.9 Expected volatility Weighted average exercise price (per share) $ 2.24 $ 1.59
Schedule of information related to outstanding and exercisable options	($ in thousands, except per share data) Stock Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2017 21,402,200 $ 2.94 6.5 $ 5,805 Granted 4,116,800 2.24 Exercised — — Forfeited (894,377) 2.46 Expired (407,075) 11.09 Outstanding at March 31, 2018 (1) 24,217,548 $ 2.70 6.7 $ 3,716 Exercisable at March 31, 2018 14,734,826 $ 2.95 5.4 $ 2,998 (1) Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition.

Business and Organization (Deta

Business and Organization (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)item	Dec. 31, 2017USD ($)
Business and Organization
Number of technology platforms to develop drug candidates | item	2
Accumulated deficit | $	$ 624,589	$ 604,494

Agreement and Plan of Merger (D

Agreement and Plan of Merger (Details)	Jan. 21, 2018shares
Agreement and Plan of Merger
Number of shares received from new company	0.20
Number of days in average volume weighted trading prices	30 days
Ownership percentage of new company	48.40%
Investor
Agreement and Plan of Merger
Ownership percentage of new company	18.00%
BioCryst
Agreement and Plan of Merger
Number of shares received from new company	0.50
Ownership percentage of new company	51.60%
BioCryst | Investor
Agreement and Plan of Merger
Ownership percentage of new company	14.00%

Summary of Significant Accoun30

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Restricted cash and other assets	$ 321		$ 324
Cash and cash equivalents	107,459		112,629
Restricted Cash	311		311
Cash, cash equivalents and restricted cash	107,770	$ 80,005	112,940	$ 80,978
Tax expense (benefit)	0	$ 0
Uncertain tax positions	$ 0		$ 0
Practical Expedient, Financing Component	true

Summary of Significant Accoun31

Summary of Significant Accounting Policies - Tax Cuts and Jobs Act (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Corporate federal income tax rate		21.00%
TCJA of 2017 provisional income tax expense	$ 27.6
Maximum
Corporate federal income tax rate			35.00%

Fair Value Measurements - Trans

Fair Value Measurements - Transfers Between Levels (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)
Fair Value Measurements
Fair value of assets transfers from level 1 to level 2	$ 0
Fair value of assets transfers from level 2 to level 1	0
Fair value of liabilities transfers from level 1 to level 2	0
Fair value of liabilities transfers from level 2 to level 1	0
Fair value of assets transfers into level 3	0
Fair value of assets transfers out of level 3	0
Fair value of liabilities transfers into level 3	0
Fair value of liabilities transfers out of level 3	$ 0

Fair Value Measurements - Asset

Fair Value Measurements - Assets and Liabilities at Fair Value on Recurring Basis (Details) - Fair value on a recurring basis - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Assets	$ 66,372	$ 66,183
Money market funds
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Money market funds	66,372	66,183
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Assets	66,372	66,183
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Money market funds
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Money market funds	$ 66,372	$ 66,183

Property and Equipment - Net Pr

Property and Equipment - Net Property and Equipment at Cost (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment
Total property and equipment, at cost	$ 5,936	$ 5,932
Less: accumulated depreciation and amortization	4,616	4,460
Property and equipment, net	1,320	1,472
Leasehold improvements
Property, Plant and Equipment
Total property and equipment, at cost	671	671
Laboratory equipment and other
Property, Plant and Equipment
Total property and equipment, at cost	$ 5,265	$ 5,261

Property and Equipment - Deprec

Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Depreciation and amortization expense on property and equipment	$ 200	$ 200
Non-cash property additions	$ 0
Maximum
Non-cash property additions		$ 100

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued Expenses
Payroll and related costs	$ 1,569	$ 3,108
Clinical and nonclinical trial expenses	5,177	3,495
Professional and consulting fees	3,328	1,317
Other	150	80
Total accrued expenses	$ 10,224	$ 8,000

Stockholders_ Equity - Common S

Stockholders’ Equity - Common Stock Warrants (Details) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Class of Warrant or Right
Number of Warrants	23,351,052	43,757,379
Warrant exercise price per share	$ 0.03	$ 0.24
Expiration Date - May 2018
Class of Warrant or Right
Number of Warrants	1,200,000	21,606,327
Warrant exercise price per share	$ 0.47	$ 0.47
Expiration Date - May 2020
Class of Warrant or Right
Number of Warrants	15,816,327	15,816,327
Warrant exercise price per share	$ 0.01	$ 0.01
Expiration Date - September 2020
Class of Warrant or Right
Number of Warrants	4,175,975	4,175,975
Warrant exercise price per share	$ 0.01	$ 0.01
Expiration Date - February 2021
Class of Warrant or Right
Number of Warrants	2,158,750	2,158,750
Warrant exercise price per share	$ 0.01	$ 0.01

Stockholders_ Equity - Common38

Stockholders’ Equity - Common Stock Warrant Activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Class of Warrant or Right
Outstanding warrants, beginning of period	43,757,379
Outstanding warrants, end of period	23,351,052
Warrant exercise price per share	$ 0.03	$ 0.24
Expiration Date - November 2017
Class of Warrant or Right
Exercised (1)	(20,406,327)
Warrant exercise price per share	$ 0.47

Alliance Revenue (Details)

Alliance Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Alliance Revenue
Alliance revenue	$ 255	$ 378
Deferred revenue recognized during the period	200	300
Gsk Collaboration
Alliance Revenue
Alliance revenue	142	371
Vivelix Collaboration
Alliance Revenue
Alliance revenue	56
Other
Alliance Revenue
Alliance revenue	$ 57	7
Additional Research Services
Alliance Revenue
Deferred revenue recognized during the period		$ 100

Alliance Revenue - Contract Ass

Alliance Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Alliance Revenue
Contract liabilities, beginning of period	$ 566	$ 1,263
Deductions	(190)	(278)
Contract liabilities, end of period	376	985
Deferred revenue recognized during the period	$ 200	$ 300

Collaboration and License Agr41

Collaboration and License Agreements (Details) $ in Millions	1 Months Ended		3 Months Ended
	Nov. 30, 2016USD ($)director	Nov. 30, 2015USD ($)person	Mar. 31, 2018USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Total number of board of director seats | director	7
Number of common board of directors | director	0
Baker Bros. Advisors LP
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Common stock ownership percentage under the collaboration agreement	7.00%
Number of board director seats held | director	2
Vivelix
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Remaining performance obligation			$ 0
Total number of board of director seats | director	4
Number of common board of directors | director	0
Vivelix | Up-front Payment Arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Upfront payment received under collaboration agreement	$ 15
Vivelix | Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	$ 140
Vivelix | Maximum | Back-up compounds
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Anticipated initial collaboration term	3 years
Milestone payments	$ 52.5
Vivelix | Maximum | Development and Regulatory Milestones
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	65
Vivelix | Maximum | Development and Regulatory Milestones | Back-up compounds
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	35
Vivelix | Maximum | Sales Milestones
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	75
Vivelix | Maximum | Sales Milestones | Back-up compounds
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	$ 17.5
GSK Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Deferred revenue recognition period		36 months
Number of optional additional targets | person		2
Number of development candidates | person		1
Remaining performance obligation			$ 0
Revised, increased research period			36 years
GSK Agreement | Up-front Payment Arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Upfront payment received under collaboration agreement		$ 2.5
GSK Agreement | License, Research, Clinical Development and Commercialization
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments			$ 20
GSK Agreement | Research and Development Plans and Designation of Development Candidates
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments			1
GSK Agreement | Clinical and Commercial Milestones
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments		$ 89	$ 17
GSK Agreement | Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Anticipated initial collaboration term		4 years
Maximum royalty percentage on net sales			5.00%
GSK Agreement | Maximum | License, Research, Clinical Development and Commercialization
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments		$ 100
GSK Agreement | Maximum | Research and Development Plans and Designation of Development Candidates
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments		$ 9
GSK Agreement | Minimum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Anticipated initial collaboration term		2 years
R&D Services Unit of Accounting | GSK Agreement | Up-front Payment Arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Upfront payment received under collaboration agreement		$ 2.5

Stock-Based Compensation - Equi

Stock-Based Compensation - Equity Incentive Plans (Details) - shares	Jul. 26, 2013	Mar. 31, 2018	Dec. 31, 2017
Class of Stock
Common stock options outstanding		24,217,548	21,402,200
Options outstanding under earlier plans		4,138,937
Grant of inducement stock option		3,321,875
2013 Stock Incentive Plan
Class of Stock
Maximum number of additional common shares.	6,946,978
Common stock options outstanding		16,756,736
Common shares available for grant	25,224,460	10,114,740

Stock-Based Compensation - Empl

Stock-Based Compensation - Employee Stock Purchase Plans (Details) - USD ($) $ in Millions	Jun. 07, 2017	Mar. 31, 2018	Mar. 31, 2017
2017 Employee Stock Purchase Plan
Class of Stock
Maximum percentage of total combined voting power or value of the stock of the Company after the grant	5.00%
Common shares available for grant	403,342
2017 Employee Stock Purchase Plan | Maximum
Class of Stock
Common stock shares authorized for issuance under stock purchase plan	500,000
Employee Stock Purchase Plans
Class of Stock
Common stock share issued		53,619	41,847
Proceeds from employee stock purchase plan		$ 0.1	$ 0.1

Stock-Based Compensation - Acco

Stock-Based Compensation - Accounting for Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of share-based compensation expense	15.00%
Weighted average grant date fair value of options granted during the period (per share)	$ 1.24	$ 0.99
Stock-based compensation	$ 1,589	$ 1,784
Research and development
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	578	736
Research and development | Employee Stock Purchase Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	22	22
Research and development | Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	556	714
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	1,011	1,048
General and administrative | Employee Stock Purchase Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	14	19
General and administrative | Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	$ 997	$ 1,029

Stock-Based Compensation - Assu

Stock-Based Compensation - Assumptions Used in Determining Fair Value of Stock Options (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Summary of Significant Accounting Policies
Options to purchase common stock granted to employees and directors	4,116,800	3,422,000
Average risk free interest rate	2.10%	1.70%
Dividend rate	0.00%	0.00%
Expected lives (years)	3 years 9 months 18 days	3 years 10 months 24 days
Expected volatility	74.90%	86.90%
Weighted average exercise price of options granted during the period (per share)	$ 2.24	$ 1.59

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Stockholders' Equity
Options, Outstanding, Beginning Balance	21,402,200
Granted	4,116,800
Forfeited	(894,377)
Expired	(407,075)
Options, Outstanding, Ending Balance	24,217,548		21,402,200
Exercisable, Ending Balance	14,734,826
Weighted Average Exercise Price, Beginning Balance	$ 2.94
Granted, Weighted Average Exercise Price	2.24	$ 1.59
Forfeited, Weighted Average Exercise Price	2.46
Expired, Weighted Average Exercise Price	11.09
Weighted Average Exercise Price, Ending Balance	2.70		$ 2.94
Exercisable, Weighted Average Exercise Price	$ 2.95
Outstanding, Ending balance, Weighted Average Remaining Contractual Term	6 years 8 months 12 days		6 years 6 months
Exercisable Ending Balance, Weighted Average Remaining Contractual Term	5 years 4 months 24 days
Outstanding, Intrinsic Value, Ending Balance	$ 3,716		$ 5,805
Exercisable, Ending Balance, Intrinsic Value	2,998
Fair value of options, vested	2,100
Unrecognized compensation cost related to nonvested stock-based compensation	$ 11,100
Weighted average remaining period over which unrecognized compensation expense will be recognized	2 years 7 months 6 days

Related Party Transactions - Ov

Related Party Transactions - Overview of Related Parties (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jan. 21, 2018	Dec. 31, 2017
Related Party Transactions
Ownership percentage			48.40%
Number of Warrants	23,351,052			43,757,379
Exercise price of warrants	$ 0.03			$ 0.24
Common stock issued in lieu of board fees	13,349	12,917
Maximum
Related Party Transactions
Proceeds from issuance of common stock in lieu of director board and committee fees	$ 0.1	$ 0.1
Common Stock | Board of Director
Related Party Transactions
Ownership percentage	18.00%
Pillar Investment Entities | Common Stock
Related Party Transactions
Ownership percentage	12.00%
Besancon
Related Party Transactions
Number of Warrants	1,200,000
Exercise price of warrants	$ 0.47
Baker Bros. Advisors LP
Related Party Transactions
Number of warrants exercised	20,316,327
Proceeds from exercise of warrants	$ 9.5
Exercise price of warrants	$ 0.47
Baker Bros. Advisors LP | Pre-funded Warrants
Related Party Transactions
Number of Warrants	22,151,052
Exercise price of warrants	$ 0.01

Net Loss per Common Share (Deta

Net Loss per Common Share (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net Loss per Common Share
Total antidilutive securities	47,570,526	72,913,781

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended
	Apr. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Subsequent Events
Exercise price of warrants		$ 0.03	$ 0.24
Besancon
Subsequent Events
Exercise price of warrants		$ 0.47
Subsequent Events | Besancon
Subsequent Events
Number of warrants exercised	1,200,000
Exercise price of warrants	$ 0.47
Proceeds from exercise of warrants	$ 0.6