Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 05, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Entity Registrant Name | Armata Pharmaceuticals, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 18,701,883 | |
Entity Central Index Key | 0000921114 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 15,885,000 | $ 6,033,000 |
Awards receivable | 335,000 | |
Prepaid expenses and other current assets | 804,000 | 622,000 |
Total current assets | 17,024,000 | 6,655,000 |
Restricted cash | 1,200,000 | 700,000 |
Property and equipment, net | 1,950,000 | 2,187,000 |
Operating lease right-of-use asset | 10,869,000 | 2,028,000 |
In-process research and development | 10,256,000 | 10,256,000 |
Goodwill | 3,490,000 | 3,490,000 |
Other assets | 886,000 | 135,000 |
Total assets | 45,675,000 | 25,451,000 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,871,000 | 1,278,000 |
Accrued compensation | 1,302,000 | 1,323,000 |
Deferred asset acquisition consideration | 1,771,000 | 970,000 |
Current portion of operating lease liabilities | 1,406,000 | 1,308,000 |
PPP Loan | 720,000 | |
Total current liabilities | 7,070,000 | 4,879,000 |
Operating lease liabilities, net of current portion | 10,909,000 | 1,555,000 |
Deferred asset acquisition consideration, net of current portion | 1,347,000 | |
Deferred tax liability | 3,077,000 | 3,077,000 |
Total liabilities | 21,056,000 | 10,858,000 |
Stockholders' equity | ||
Common stock, $0.01 par value; 217,000,000 shares authorized; 18,668,883 and 9,922,758 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 187,000 | 99,000 |
Additional paid-in capital | 197,510,000 | 172,015,000 |
Accumulated deficit | (173,078,000) | (157,521,000) |
Total stockholders' equity | 24,619,000 | 14,593,000 |
Total liabilities and stockholders' equity | $ 45,675,000 | $ 25,451,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 217,000,000 | 217,000,000 |
Common stock, shares issued | 18,668,883 | 9,922,758 |
Common stock, shares outstanding | 18,668,883 | 9,922,758 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||||
Grant revenue | $ 288,000 | $ 319,000 | ||
Operating expenses | ||||
Research and development | 4,066,000 | $ 3,019,000 | 9,464,000 | $ 8,156,000 |
General and administrative | 1,845,000 | 3,758,000 | 5,989,000 | 7,220,000 |
Total operating expenses | 5,911,000 | 6,777,000 | 15,453,000 | 15,376,000 |
Loss from operations | (5,623,000) | (6,777,000) | (15,134,000) | (15,376,000) |
Other income (expense) | ||||
Interest income | 4,000 | 13,000 | 28,000 | 89,000 |
Interest expense | (150,000) | (190,000) | (451,000) | (726,000) |
Other income (expense) | (1,000) | 3,000 | ||
Change in fair value of derivative liabilities | 1,117,000 | |||
Total other income (expense), net | (146,000) | (178,000) | (423,000) | 483,000 |
Net loss | $ (5,769,000) | $ (6,955,000) | $ (15,557,000) | $ (14,893,000) |
Per share information: | ||||
Net loss per share, basic | $ (0.31) | $ (0.73) | $ (0.99) | $ (2.05) |
Weighted average shares outstanding, basic | 18,394,614 | 9,552,688 | 15,740,858 | 7,254,803 |
Net loss per share, diluted | $ (0.31) | $ (0.73) | $ (0.99) | $ (2.11) |
Weighted average shares outstanding, diluted | 18,394,614 | 9,552,688 | 15,740,858 | 7,497,194 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balances at Dec. 31, 2018 | $ 51,000 | $ 145,685,000 | $ (138,042,000) | $ 7,694,000 |
Balances (in shares) at Dec. 31, 2018 | 5,069,633 | |||
Forfeiture of restricted stock awards | (39,000) | (39,000) | ||
Forfeiture of restricted stock awards (in shares) | (32,714) | |||
Issuance of common stock and conversion of deferred consideration for asset acquisition | $ 5,000 | 1,457,000 | 1,462,000 | |
Issuance of common stock and conversion of deferred consideration for asset acquisition (in shares) | 516,976 | |||
Issuance of common stock in connection with reverse merger | $ 23,000 | 10,686,000 | 10,709,000 | |
Issuance of common stock in connection with reverse merger (in shares) | 2,389,135 | |||
Sale of common stock, net of issuance costs | $ 20,000 | 9,955,000 | 9,975,000 | |
Sale of common stock, net of issuance costs (in shares) | 1,991,269 | |||
Stock-based compensation | 3,224,000 | 3,224,000 | ||
Net loss | (14,893,000) | (14,893,000) | ||
Balances at Sep. 30, 2019 | $ 99,000 | 170,968,000 | (152,935,000) | 18,132,000 |
Balances (in shares) at Sep. 30, 2019 | 9,934,299 | |||
Balances at Jun. 30, 2019 | $ 99,000 | 168,509,000 | (145,980,000) | 22,628,000 |
Balances (in shares) at Jun. 30, 2019 | 9,958,546 | |||
Forfeiture of restricted stock awards | (39,000) | (39,000) | ||
Forfeiture of restricted stock awards (in shares) | (24,247) | |||
Stock-based compensation | 2,498,000 | 2,498,000 | ||
Net loss | (6,955,000) | (6,955,000) | ||
Balances at Sep. 30, 2019 | $ 99,000 | 170,968,000 | (152,935,000) | 18,132,000 |
Balances (in shares) at Sep. 30, 2019 | 9,934,299 | |||
Balances at Dec. 31, 2019 | $ 99,000 | 172,015,000 | (157,521,000) | 14,593,000 |
Balances (in shares) at Dec. 31, 2019 | 9,922,758 | |||
Forfeiture of restricted stock awards (in shares) | (4,010) | |||
Sale of common stock, net of issuance costs | $ 87,000 | 22,723,000 | 22,810,000 | |
Sale of common stock, net of issuance costs (in shares) | 8,710,800 | |||
Exercise of warrants | 81,000 | 81,000 | ||
Exercise of warrants (in shares) | 14,464 | |||
Return of restricted stock awards for tax withholdings | (8,000) | (8,000) | ||
Return of restricted stock awards for tax withholdings, shares | (2,511) | |||
Exercise of employee stock options | $ 1,000 | 86,000 | $ 87,000 | |
Exercise of employee stock options (in shares) | 27,382 | 27,382 | ||
Stock-based compensation | 2,613,000 | $ 2,613,000 | ||
Net loss | (15,557,000) | (15,557,000) | ||
Balances at Sep. 30, 2020 | $ 187,000 | 197,510,000 | (173,078,000) | 24,619,000 |
Balances (in shares) at Sep. 30, 2020 | 18,668,883 | |||
Balances at Jun. 30, 2020 | $ 186,000 | 196,761,000 | (167,309,000) | 29,638,000 |
Balances (in shares) at Jun. 30, 2020 | 18,641,501 | |||
Exercise of employee stock options | $ 1,000 | 86,000 | 87,000 | |
Exercise of employee stock options (in shares) | 27,382 | |||
Stock-based compensation | 663,000 | 663,000 | ||
Net loss | (5,769,000) | (5,769,000) | ||
Balances at Sep. 30, 2020 | $ 187,000 | $ 197,510,000 | $ (173,078,000) | $ 24,619,000 |
Balances (in shares) at Sep. 30, 2020 | 18,668,883 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net loss | $ (15,557,000) | $ (14,893,000) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 840,000 | 1,049,000 |
Stock-based compensation | 2,613,000 | 3,224,000 |
Non-cash interest expense | 457,000 | 717,000 |
Change in fair value of derivative liability | (1,117,000) | |
Changes in operating assets and liabilities: | ||
Award receivable | (241,000) | |
Accounts payable and accrued liabilities | 492,000 | (1,171,000) |
Accrued compensation | (21,000) | (609,000) |
Operating lease right-of-use asset and liability, net | 611,000 | (252,000) |
Prepaid expenses and other current assets | (1,162,000) | 199,000 |
Net cash used in operating activities | (11,968,000) | (12,853,000) |
Investing activities: | ||
Purchases of property and equipment | (458,000) | (203,000) |
Cash acquired in reverse merger transaction | 3,008,000 | |
Net cash (used in) provided by investing activities | (458,000) | 2,805,000 |
Financing activities: | ||
Payment of deferred consideration for asset acquisition | (1,000,000) | (1,000,000) |
Proceeds from Paycheck Protection Program Loan | 717,000 | |
Proceeds from sale of common stock, net of offering costs | 22,893,000 | 9,975,000 |
Proceeds from exercise of employee stock options | 87,000 | |
Proceeds from exercise of warrants | 81,000 | |
Net cash provided by financing activities | 22,778,000 | 8,975,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 10,352,000 | (1,073,000) |
Cash, cash equivalents and restricted cash, beginning of period | 6,733,000 | 10,463,000 |
Cash, cash equivalents and restricted cash, end of period | 17,085,000 | 9,390,000 |
Supplemental schedule of non-cash investing and financing activities: | ||
Unpaid offering costs | 65,000 | |
Issuance of common stock in reverse merger transaction | 10,710,000 | |
Conversion of deferred asset acquisition consideration upon reverse merger | $ 1,463,000 | |
Property and equipment included in accounts payable | $ 145,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Reconciliation of cash, cash equivalents, and restricted cash | ||||
Cash and cash equivalents | $ 15,885,000 | $ 6,033,000 | $ 8,690,000 | |
Restricted cash | 1,200,000 | 700,000 | 700,000 | |
Cash, cash equivalents and restricted cash | $ 17,085,000 | $ 6,733,000 | $ 9,390,000 | $ 10,463,000 |
Organization and Description of
Organization and Description of the Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization and Description of the Business | |
Organization and Description of the Business | 1. Organization and Description of the Business Armata Pharmaceuticals, Inc. (“Armata”, and together with its subsidiaries referred to herein as, the “Company”) is a clinical-stage biotechnology company focused on the development of precisely targeted bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using its proprietary bacteriophage-based technology. The Company was created as a result of a business combination between C3J Therapeutics, Inc. (“C3J”), a Washington corporation, and AmpliPhi Biosciences Corporation (“AmpliPhi”) that closed on May 9, 2019, where Ceres Merger Sub, Inc., a wholly owned subsidiary of AmpliPhi, merged with and into C3J (the ”Merger”), with C3J surviving the Merger as a wholly owned subsidiary of AmpliPhi. In the Merger, each share of C3J common stock outstanding immediately prior to the Merger was converted into the right to receive approximately .6906 shares of AmpliPhi common stock. The shares were then adjusted further to account for a reverse split of AmpliPhi common stock at a reverse split ratio of 1‑for‑14. All share and per share amounts have been retrospectively adjusted to give effect to the exchange of C3J common stock and the reverse split of AmpliPhi common stock. Immediately prior to the closing of the Merger, AmpliPhi changed its name to Armata Pharmaceuticals, Inc. Armata’s common stock is traded on the NYSE American exchange under the ticker symbol “ARMP.” Immediately following the Merger, certain existing C3J shareholders purchased $10.0 million in Armata common stock. After the Merger and such concurrent private placement, the former C3J security holders owned approximately 76% of the aggregate number of shares of Armata’s common stock and the security holders of AmpliPhi as of immediately prior to the Merger owned approximately 24% of the aggregate number of shares of Armata’s common stock. In addition, upon closing of the Merger, five of the seven members of the board of directors were appointed by C3J. In connection with the Merger, C3J was considered the accounting acquirer of AmpliPhi because C3J’s shareholders retained a majority control of ownership of the Company subsequent to the Merger. In addition, the seven-member board of directors of the combined company include five members established by C3J. Therefore, the historical financial statements presented herein prior to the closing of the Merger are the historical financial statements of C3J. C3J’s predecessor, C3 Jian, Inc., was incorporated under the laws of the State of California on November 4, 2005. On February 26, 2016, as part of a reorganization transaction, C3 Jian, Inc. merged with a wholly owned subsidiary of C3J, and as part of this process, C3 Jian, Inc. was converted to a limited liability company organized under the laws of the State of California named C3 Jian, LLC. Prior to the Merger, C3J was privately held and was financed principally through a series of equity financings. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2020 | |
Liquidity | |
Liquidity | 2. Liquidity The Company has prepared its consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. However, the Company has incurred net losses since its inception and has negative operating cash flows. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern. On March 27, 2020, the Company completed a private placement transaction and sold to Innoviva Inc. (“Innoviva”) 8,710,800 newly issued shares of the Company’s common stock and warrants to purchase 8,710,800 shares of common stock, with an exercise price per share of $2.87 (the “Private Placement”). Each share of common stock was sold together with one common warrant granting the warrant holder the right to purchase an additional share of common stock at $2.87 per share. The Private Placement was closed in two tranches raising total gross proceeds of $25.0 million. As of September 30, 2020, the Company had cash and cash equivalents of $15.9 million. Considering the Company’s current cash resources, management believes the Company’s existing resources will be sufficient to fund the Company’s planned operations through the first half of 2021. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional capital. Management plans to raise additional capital through equity offerings, debt financings, or other capital sources, including potential collaborations, grants, licensing of intellectual property, and other similar arrangements. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, including the current recession, and the recent disruptions to, and volatility in, financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic, including the effects of the current increase in cases in the United States. The Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products on terms that are not favorable to the Company. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies | |
Significant Accounting Policies | 3. Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Armata and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2019 included in the Company’s Form 10-K, filed with the U.S. Securities and Exchange Commission on March 19, 2020. The accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements. Any reference in the Notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). In the opinion of management, the accompanying consolidated financial statements include all adjustments that are of a normal and recurring nature and that are necessary for the fair presentation of the Company’s financial position and the results of its operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year or any future period. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, which are based on historical and anticipated results and trends, and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates. Fair Value of Financial Instruments The carrying amounts of cash equivalents, other current assets, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of these instruments. In-Process Research and Development (“IPR&D”) IPR&D assets are intangible assets with indefinite lives and are not subject to amortization. The Company’s IPR&D assets represent capitalized incomplete research projects that the Company acquired through the Merger. Such assets are initially measured at their acquisition-date fair values and are subject to impairment testing at least annually until completion or abandonment of research and development efforts associated with the projects. Upon successful completion of each project, the Company makes a determination as to the then remaining useful life of the intangible asset and begins amortization. Goodwill Goodwill, which has an indefinite useful life, represents the excess of purchase consideration over fair value of net assets acquired. The Company’s goodwill as of September 30, 2020 is associated with AmpliPhi’s business prior to the Merger. Goodwill is not subject to amortization and is required to be tested for impairment at least on an annual basis. The Company tests goodwill for impairment as of December 31 of each year. The Company determines whether goodwill may be impaired by comparing the carrying value of the single reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value is less than the carrying amount, a more detailed analysis is performed to determine whether goodwill is impaired. The impairment loss, if any, is measured as the excess of the carrying value of the goodwill over the implied fair value of the goodwill and is recorded in the Company’s consolidated statements of operations. Derivative Liabilities Derivative liabilities are accounted for in accordance with the applicable accounting guidance provided in ASC 815 – Derivatives and Hedging based on the specific terms of the agreements. Derivative liabilities are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of asset acquisition derivative liability in the consolidated statements of operations. The Company has a zero derivative liability balance at September 30, 2020 as the liability of $1.1 million at December 31, 2018 was settled upon the Merger in May 2019. Basic and Diluted Net Loss per Share Net earnings or loss per share (“EPS”) is calculated in accordance with the applicable accounting guidance provided in ASC 260, Earnings per Share. The Company uses the two-class method for the computation and presentation of net income (loss) per common share attributable to common stockholders. The two-class method is an earnings allocation formula that calculates basic and diluted net income (loss) per common share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Under the two-class method, warrants issued to Innoviva in connection with the Private Placement (Note 2) is assumed to participate in undistributed earnings on an as-exercised basis, in accordance with the warrant agreement. Undistributed net losses are allocated entirely to common shareholders since the participating security has no contractual obligation to share in the losses. Accordingly, basic income or loss per share is calculated by dividing net income or loss by the weighted-average number of common shares outstanding, or using the two-class method, whichever is more dilutive. Diluted net income or loss per share is computed using the more dilutive of the treasury stock method which reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock, or the two-class method. The calculation of diluted loss per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of liability classified warrants, and the presumed exercise of such securities are dilutive to net loss per share for the period, an adjustment to net loss available to common stockholders used in the calculation is required to remove the change in fair value of the warrants from the numerator for the period. Likewise, an adjustment to the denominator is required to reflect the related dilutive shares, if any, under the treasury stock method . Grants and Awards In applying the provisions of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) , Armata has determined that grants and awards are out of the scope of ASC 606 because the funding entities do not meet the definition of a “customer”, as defined by ASC 606, as there is not considered to be a transfer of control of goods or services. With respect to each grant or award, the Company determines if it has a collaboration in accordance with ASC Topic 808, Collaborative Arrangements (“ASC 808”). To the extent the grant or award is within the scope of ASC 808, the Company recognizes amounts received as a contra-expense or grant revenue on the consolidated statement of operations when the related research and development expenses are incurred. For grant and awards outside the scope of ASC 808, the Company applies ASC 606 or International Accounting Standards No. 20, Accounting for Government Grants and Disclosure of Government Assistance , by analogy, and revenue is recognized when the Company incurs expenses related to the grants for the amount the Company is entitled to under the provisions of the contract. Armata also considers the guidance in ASC Topic 730, Research and Development (“ASC 730”), which requires an assessment, at the inception of the grant or award, of whether the agreement is a liability . If Armata is obligated to repay funds received regardless of the outcome of the related research and development activities, then Armata is required to estimate and recognize that liability. Alternatively, if Armata is not required to repay the funds, then payments received are recorded as revenue or contra-expense as the expenses are incurred. Deferred grant or award liability represents award funds received or receivable for which the allowable expenses have not yet been incurred as of the balance sheet date. Research and Development Expenses Research and development (“R&D”) costs consist primarily of direct and allocated salaries, incentive compensation, stock-based compensation and other personnel-related costs, facility costs, and third-party services. Third-party services include studies and clinical trials conducted by clinical research organizations. R&D activities are expensed as incurred. The Company records accruals for estimated ongoing clinical trial expenses. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of the reporting period. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction in carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective for calendar-year smaller reporting public entities in the first quarter of 2023. The Company is currently evaluating the impact of this ASU and does not expect that adoption of this standard will have a material impact on its consolidated financial statements or related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (“ASC 740”) , which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for calendar-year public business entities in 2021 and interim periods within that year. Early adoption is permitted. The Company does not expect adoption of this new guidance will have a material impact on its consolidated financial statements or related disclosures. In August 2020, the FASB issued ​ASU No. 2020-06​, ​ Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)​ (“ASU 2020-06”). ​ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 202-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements and does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements. Recently Adopted Accounting Standards In November 2018, FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 . The objective of the standard is to clarify the interaction between Topic 808, Collaborative Arrangements , and Topic 606, Revenue from Contracts with Customers . Currently, Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Similarly, aspects of Topic 606 have resulted in uncertainty in practice about the effect of the revenue standard and credit loss standard on the accounting for collaborative arrangements. The standard became effective for the Company for fiscal periods beginning on January 1, 2020. The adoption of this ASU did not have an impact on the Company’s financial condition, results of operations, cash flows, or financial statement disclosures. |
Fair Value Measurementss
Fair Value Measurementss | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements The guidance regarding fair value measurements prioritizes the inputs used in measuring fair value and establishes a three-tier value hierarchy that distinguishes among the following: · Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. · Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The Company estimates the fair values of derivative liabilities utilizing Level 3 inputs. No derivative liabilities have been transferred between the classification levels. Estimating the fair values of derivative liabilities requires the use of significant and subjective inputs that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. The following table sets forth a summary of changes in the fair value of the Company’s liabilities during the nine months ended September 30, 2019: Asset Acquisition Derivative Liability Balance, December 31, 2018 $ 1,117,000 Changes in estimated fair value (1,117,000) Balance, September 30, 2019 $ — We estimated the fair value of this derivative by forecasting the timing and likelihood of the events occurring and discounting the probability adjusted payments using an appropriate discount based on market interest rates and our own non-performance risk as required by ASC 820 – Fair Value Measurement . There is no longer a potential payment requirement associated with the derivative liability subsequent to the Merger. Accordingly, the fair value of the derivative liability was reduced to zero in the second quarter of 2019 with the associated change recorded in other income. |
The Merger
The Merger | 9 Months Ended |
Sep. 30, 2020 | |
The Merger | |
The Merger | 5. The Merger On May 9, 2019, the Company completed the Merger (see Note 1). On the date of the Merger, AmpliPhi had, and the Company currently has, IPR&D related to the development of AP-SA01, a phage combination for the treatment of Staphylococcus aureus infections, and had tested such product in patients through single-patient expanded access guidelines established by U.S. and Australian regulatory agencies. Further, AmpliPhi had, and the Company currently has, a workforce that is considered to have the necessary skills, knowledge, and experience to perform a process, that when applied to IPR&D is critical to the ability to convert it into outputs. Based on this evaluation, the Company determined that the Merger should be accounted for as a business combination pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). In connection with the Merger, the Company allocated the total purchase consideration of $10.7 million in stock to the net assets and liabilities acquired, including goodwill of $3.5 million, identifiable intangible assets of $10.3 million and related deferred tax liability of $3.1 million, based on their respective fair values at the acquisition date. The Company recognizes deferred tax liabilities for indefinite-lived intangible assets in accordance with ASC 740, Income Taxes. In addition, the Company incurred and expensed costs directly related to the Merger totaling approximately $1.1 million, of which approximately $0.0 million and $1.1 million was incurred in the three and nine months ended September 30, 2019, respectively, and is included in general and administrative expenses in the consolidated statement of operations. Since the closing date of the Merger, the results of AmpliPhi’s operations have been included in the Company’s consolidated financial statements. Selected amounts related to AmpliPhi’s business included in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2020, are as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Research and development expenses $ 292,000 $ 430,000 General and administrative expenses $ 499,000 $ 845,000 Net loss $ 791,000 $ 1,275,000 |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss per Share | |
Net Loss per Share | 6. Net Loss per Share The following outstanding securities at September 30, 2020 and 2019 have been excluded from the computation of diluted weighted average shares outstanding for the nine months ended September 30, 2020 and 2019, as they would have been anti-dilutive: Nine Months Ended September 30, 2020 2019 Options 1,446,614 1,311,496 Restricted stock awards 262,558 355,034 Warrants 10,547,618 1,854,262 Total 12,256,790 3,520,792 |
Balance Sheet Details
Balance Sheet Details | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Details | |
Balance Sheet Details | 7 . Balance Sheet Details Property and Equipment Property and equipment as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 December 31, 2019 Laboratory equipment $ 6,282,000 $ 6,047,000 Furniture and fixtures 689,000 646,000 Office and computer equipment 392,000 323,000 Leasehold improvements 3,367,000 3,329,000 Total 10,730,000 10,345,000 Less: accumulated depreciation (8,780,000) (8,158,000) Property and equipment, net $ 1,950,000 $ 2,187,000 Depreciation expense totaled $0.3 million and $0.4 million for the three months ended September 30, 2020 and 2019, respectively. Depreciation expense totaled $0.8 million and $1.0 million for the nine months ended September 30, 2020 and 2019, respectively. |
Paycheck Protection Program Loa
Paycheck Protection Program Loan | 9 Months Ended |
Sep. 30, 2020 | |
Paycheck Protection Program Loan. | |
Paycheck Protection Program Loan | 8. Paycheck Protection Program Loan In April 2020, the Company received loan proceeds of $717,000 (“PPP Loan”) under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act, provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business, calculated as provided under the PPP. The PPP provides a mechanism for forgiveness of up to the full amount borrowed after twenty-four weeks as long as the borrower uses the loan proceeds during the twenty-four week period after the loan origination for eligible purposes, including payroll costs, certain benefits costs, rent and utilities costs or other permitted purposes, and maintains its payroll levels, subject to certain other requirements and limitations. The amount of loan forgiveness is subject to reduction, among other reasons, if the borrower terminates employees or reduces salaries during the measurement period. The Company will submit its application for loan forgiveness in the fourth quarter of 2020 and anticipates that the loan will be forgiven based on the current guidelines. The Company cannot provide any assurance that it will be eligible for loan forgiveness or that any amount of the PPP loan will ultimately be forgiven. The PPP Loan is unsecured, evidenced by a promissory note (the “Note”) given by the Company as borrower through its bank, serving as the lender. The interest rate on the Note is 1.0% per annum. Payments of principal and interest are deferred until August 2021 (the “Deferral Period”). Any unforgiven portion of the PPP Loan is payable over the two-year term, with payments deferred during the Deferral Period. The Company is permitted to prepay the Note at any time without payment of any premium. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders’ Equity | |
Stockholders' Equity | 9 . Stockholders’ Equity Private Investment On January 27, 2020, the Company entered into the Securities Purchase Agreement with Innoviva, pursuant to which the Company agreed to issue and sell to Innoviva, in a Private Placement, 8,710,800 newly issued shares of the Company’s common stock and warrants to purchase 8,710,800 shares of common stock, with an exercise price per share of $2.87. Each share of common stock was sold together with one common warrant granting the warrant holder the right to purchase an additional share of common stock at $2.87 per share. The Private Placement occurred in two tranches. The first closing occurred on February 12, 2020, at which time Innoviva purchased 993,139 Common Units in exchange for an aggregate gross cash payment of approximately $2.8 million. On March 27, 2020, the second closing occurred subsequent to shareholder approval, at which time Innoviva purchased 7,717,661 Common Units in exchange for aggregate gross proceeds of $22.2 million. The warrants expire five years from the issuance date. The Company reviewed the authoritative accounting guidance and determined that the warrants meet the criteria to be accounted for as permanent equity. Warrants At September 30, 2020, outstanding warrants to purchase shares of common stock are as follows: Shares Underlying Outstanding Exercise Expiration Warrants Price Date 2,246 $ 567.00 March 31, 2021 597,881 $ 21.00 May 10, 2022 1,235,491 $ 5.60 October 16, 2023 993,139 $ 2.87 February 12, 2025 7,717,661 $ 2.87 March 27, 2025 1,200 $ 1,680.00 None 10,547,618 |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended |
Sep. 30, 2020 | |
Equity Incentive Plans | |
Equity Incentive Plans | 10. Equity Incentive Plans Stock Award Plans The Company maintains a 2016 Equity Incentive Plan (the “2016 Plan”), which provides for the issuance of incentive share awards in the form of non-qualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance-based stock awards. The awards may be granted by the Company’s Board of Directors to its employees, directors and officers and to consultants, agents, advisors and independent contractors who provide services to the Company or to a subsidiary of the Company. The exercise price for stock options must not be less than the fair market value of the underlying shares on the date of grant. Stock options expire no later than ten years from the date of grant and generally vest and typically become exercisable over a four-year period following the date of grant. Under the 2016 Plan, the number of shares authorized for issuance automatically increases annually beginning January 1, 2017 and through January 1, 2026. In connection with the Merger, the Company assumed the C3J Jian, Inc. Amended 2006 Stock Option Plan (the “Assumed 2006 Plan”) and the C3J Therapeutics, Inc. 2016 Stock Plan (the “Assumed 2016 Plan”). These plans provided for stock option and restricted stock awards (“RSAs”) to C3J employees in years prior to the merger with AmpliPhi. The number of shares subject to each outstanding stock option and RSA under those assumed plans, along with the exercise price of stock options, were equitably adjusted pursuant to the terms of the plans to reflect the impact of the Merger and the one-for-fourteen reverse stock split, in each case in a manner intended to preserved the then-current intrinsic value of the awards. No additional awards will be made under either plan. The assumed C3J stock options were substantially vested and expensed as of the merger date. Vesting of the assumed C3J RSAs is based on the occurrence of a public liquidity event, or a change in control. In the event of a public liquidity event, service or milestone based vesting schedules begins. Service periods are generally two to four years. In the event of a change in control, 100% vesting occurs upon the closing of such an event. The merger with AmpliPhi constituted a public liquidity event and triggered the start of vesting of RSAs. Stock-based Compensation The Company estimates the fair value of stock options with performance and service conditions using the Black-Scholes valuation model. Compensation expense related to stock options granted is measured at the grant date based on the estimated fair value of the award and is recognized on the accelerated attribution method over the requisite service period. The assumptions used in the Black-Scholes model are presented below: Nine Months Ended September 30, 2020 September 30, 2019 Risk-free interest rate 0.25% - 1.51% 1.71 to 2.23% Expected volatility 89.26 to 90.43% Expected term (in years) 5.50 to 7.00 5.75 to 6.25 Expected dividend yield The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatility is based on the historical volatility of Armata and peer companies’ common stock. The expected term represents the period that the Company expects its stock options to be outstanding. The expected term assumption is estimated using the simplified method set forth in the SEC Staff Accounting Bulletin 110, which is the mid-point between the option vesting date and the expiration date. For stock options granted to parties other than employees or directors, the Company elects, on a grant by grant basis, to use the expected term or the contractual term of the option award. The Company has never declared or paid dividends on its common stock and has no plans to do so in the foreseeable future. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur. The tables below summarize the total stock-based compensation expense included in the Company’s consolidated statements of operations for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 205,000 $ 358,000 $ 841,000 $ 609,000 General and administrative 458,000 2,140,000 1,772,000 2,615,000 Total stock-based compensation $ 663,000 $ 2,498,000 $ 2,613,000 $ 3,224,000 Stock option transactions during the nine months ended September 30, 2020 are presented below: Options Outstanding Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Shares Price (Years) Value Outstanding at December 31, 2019 1,275,380 $ 7.61 8.81 — Granted 301,066 3.57 — — Exercised (27,382) 3.15 — 14,000 Forfeited/Cancelled (102,450) 6.35 — — Outstanding at September 30, 2020 1,446,614 $ 6.79 8.30 $ 47,000 Vested and expected to vest at September 30, 2020 1,446,614 $ 6.79 8.30 $ 47,000 Exercisable at September 30, 2020 425,114 $ 15.18 6.94 $ 11,000 Restricted stock award transactions under the Assumed 2016 Plan during the nine months ended September 30, 2020 are presented below: Weighted Avg Grant Date Shares Fair Value Outstanding at December 31, 2019 343,493 $ 21.83 Forfeited/Cancelled (4,010) 16.02 Issued as Common Stock (76,925) 15.50 Outstanding at September 30, 2020 262,558 $ 23.76 The aggregate intrinsic value of options at September 30, 2020 is based on the Company’s closing stock price on that date of $3.19 per share. As of September 30, 2020, there was $3.4 million of total unrecognized compensation expense related to unvested stock options and RSAs, excluding unvested RSAs with performance factors deemed to be improbable for the period ended September 30, 2020, which the Company expects to recognize over the weighted average remaining period of approximately 1.84 years. Shares Reserved for Future Issuance As of September 30, 2020, the Company had reserved shares of its common stock for future issuance as follows: Shares Reserved Stock options outstanding 1,446,614 Employee stock purchase plan 7,605 Available for future grants under the 2016 Plan 361,132 Warrants outstanding 10,547,618 Total shares reserved 12,362,969 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11 . Commitments and Contingencies The Company leases office and research and development space under a noncancelable operating lease in Marina Del Rey, CA. The lease commenced January 1, 2012 and in April 2020, the Company amended the lease (“Lease Amendment”) which, among other things, extended the lease term through December 31, 2031. Base annual rent for calendar year 2022 under the Lease Amendment will be approximately $1.9 million, and base rent increases by 3% annually and will be $2.5 million by the end of the amended term. In addition, the Company received rent abatement for six months starting May 1, 2020, and allowance for tenant improvements of $0.8 million to be used during calendar year of 2021. In accordance with authoritative guidance, the Company remeasured the lea se liability to be $11.7 million and related right of use asset of $11.0 million as of the Lease Amendment date with an incremental borrowing rate of 12.89%. From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of business. Any of these claims could subject the Company to costly legal expenses and, while management generally believes that there is adequate insurance to cover many different types of liabilities, the Company’s insurance carriers may deny coverage or policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage the Company’s reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position. |
Grants and Awards Award
Grants and Awards Award | 9 Months Ended |
Sep. 30, 2020 | |
Grants and Awards | |
Grants and Awards | 12. Grants and Awards MTEC Grant On June 15, 2020, the Company entered into an Research Project Award agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which the Company will receive a $15.0 million grant and entered into a three-year program administered by the U.S. Department of Defense through MTEC with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. The Company plans to use the grant to partially fund a Phase 1b/2, randomized, double-blind, placebo-controlled, dose escalation clinical study of Armata's therapeutic phage-based candidate, AP-SA02, for the treatment of complicated Staphylococcus aureus bacteremia infections. The MTEC Agreement specifies that the grant will be paid to the Company through a cost reimbursable model, based on agreed upon cost share percentages, and the grant money received is not refundable to MTEC. Upon license or commercialization of intellectual property developed with the funding from the MTEC Agreement, additional fees will be due to MTEC. The Company will elect whether to (a) pay a fixed royalty amount, which is subject to a cap based upon total funding received, or (b) pay an additional assessment fee, which would also be subject to a cap based upon a percentage of total funding received. The MTEC Agreement will be effective through January 25, 2024. The MTEC Agreement may be terminated in whole or in part, 30 calendar days following the written notice from the Company to MTEC. In addition, MTEC has the right to terminate the MTEC Agreement upon material breach by the Company. The Company determined that the MTEC Agreement is not in the scope of ASC 808 or ASC 606. Applying ASC 606 by analogy the Company recognizes proceeds received under the MTEC Agreement as grant revenue on the statement of operations when related costs are incurred. The Company recognized $0.3 million in grant revenue from the MTEC Agreement during the three and nine months ended September 30, 2020. CFF Therapeutics Development Award On March 13, 2020, the Company entered into an award agreement (the “Agreement”) with Cystic Fibrosis Foundation (“CFF”), pursuant to which it received a Therapeutics Development Award of up to $5.0 million (the “Award”). The Award will be used to fund a portion of the Company’s Phase 1b/2 clinical trial of the Pseudomonas aeruginosa phage candidate, AP-PA02, as a treatment for Pseudomonas airway infections in people with cystic fibrosis (“CF”). The first payment under the Agreement, in the amount of $1.0 million, became due upon signing the Agreement and was received in April 2020. The remainder of the Award will be paid to the Company incrementally in installments upon the achievement of certain milestones related to the development program and progress of the Phase 1b/2 clinical trial of AP-PA02, as set forth in the Agreement. If the Company ceases to use commercially reasonable efforts directed to the development of AP-PA02, or any other Product (as defined in the Agreement), for a period of 360 days (an “Interruption”) and fails to resume the development of the Product after receiving from CFF notice of an Interruption, then the Company must either repay the amount of the Award actually received by the Company, plus interest, or grant to CFF (1) an exclusive (even as to the Company), worldwide, perpetual, sublicensable license under technology developed under the Agreement that covers the Product for use in treating infections in CF patients (the “CF Field”), and (2) a non-exclusive, worldwide, perpetual, sublicensable license under certain background intellectual property covering the Product, to the extent necessary to commercialize the Product in the CF Field. Upon commercialization by the Company of any Product, the Company will owe a fixed royalty amount to CFF, which is to be paid in installments determined, in part, based on commercial sales volumes of the Product. The Company will be obligated to make an additional fixed royalty payment upon achieving specified sales milestones. The Company may also be obligated to make a payment to CFF if the Company transfers, sells or licenses the Product in the CF Field, or if the Company enters into a change of control transaction. The Company concluded that the CFF award is in the scope of ASC 808. Accordingly, as discussed in Note 3, award amounts received from CFF upon achievement of certain milestones are recognized as credits to research and development expenses in the period the expenses are incurred. During the three and nine months ended September 30, 2020, the Company recognized $0.0 million and $1.0 million, respectively, as credits to research and development expenses related to the CFF award. In addition, the Company concluded under the guidance in ASC 730 that it does not have an obligation to repay funds received once related research and development expenses are incurred. |
Synthetic Genomics Asset Acquis
Synthetic Genomics Asset Acquisition | 9 Months Ended |
Sep. 30, 2020 | |
Synthetic Genomics Asset Acquisition | |
Synthetic Genomics Asset Acquisition | 13. Synthetic Genomics Asset Acquisition On February 28, 2018, C3J completed an acquisition of certain synthetic phage assets (the “synthetic phage assets”) from Synthetic Genomics, Inc. (“SGI”) for consideration consisting of $8.0 million in cash and $27.0 million in equity. The cash payments consisted of: $1.0 million paid at closing on February 28, 2018, $1.0 million at one year from closing, $1.0 million at two years from closing, and $5.0 million at three years from closing (the payments due on the one, two, three year anniversary are collectively the “time-based payment obligation”). The equity payment (the “equity payment” and, together with the time-based payment obligation, the “deferred purchase price arrangement”) was due upon the earlier of the initial public offering of shares of C3J’s common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, the sale of all or substantially all of C3J’s assets to a third party, or a consolidation or merger into a third party. On December 20, 2018, in contemplation of the Merger (see Note 5), the deferred purchase price arrangement was amended. Under the amended agreement, the purchase consideration consisted of (i) closing consideration of $1.0 million paid on February 28, 2018, (ii) cash payments of $1.0 million on January 31, 2019, $1.0 million on January 31, 2020, and $2.0 million on January 31, 2021, (iii) an issuance of that number of shares of C3J’s common stock equal to ten percent of C3J’s fully-diluted capitalization, excluding options and restricted stock awards, immediately prior to the closing of the Merger, and (iv) potential milestone payments of up to $39.5 million related to the development and relevant regulatory approval of products utilizing bacteriophage from the synthetic phage assets acquired from SGI (the “milestone payment obligation”). The equity payment was determined to be a derivative liability in accordance with ASC 815, Derivatives and Hedging and was initially recorded at its fair value of $2.8 million. Throughout 2018 and until May 9, 2019, the derivative liability was adjusted to its fair value based upon a payment probability assessment and marked-to-market at the end of each period (see Note 4). Following the December 20, 2018 amendment to the deferred purchase price arrangement, the Company considered the probability of the reduction to the share issuance consideration in estimating the fair value of the derivative liability. For the nine months ended September 30, 2019, the Company recognized $0.7 million of interest expense related to the time-based payment obligations. In connection with the Merger, the Company converted its equity payment obligation to SGI by issuing 516,976 shares of C3J’s common stock in connection with the amended agreement, after considering the Merger exchange ratio and reverse stock split in the manner described above. Through May 9, 2019, the derivative liability associated with the equity payment was updated for its estimated market value. Upon closing of the Merger, the fair value of the derivative liability was estimated at zero as the equity payment is no longer required to be made in the future. The change in fair value is reflected in other income. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Armata and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2019 included in the Company’s Form 10-K, filed with the U.S. Securities and Exchange Commission on March 19, 2020. The accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements. Any reference in the Notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). In the opinion of management, the accompanying consolidated financial statements include all adjustments that are of a normal and recurring nature and that are necessary for the fair presentation of the Company’s financial position and the results of its operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year or any future period. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, which are based on historical and anticipated results and trends, and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash equivalents, other current assets, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of these instruments. |
In-Process Research and Development (“IPR&D”) and Acquired IPR&D | In-Process Research and Development (“IPR&D”) IPR&D assets are intangible assets with indefinite lives and are not subject to amortization. The Company’s IPR&D assets represent capitalized incomplete research projects that the Company acquired through the Merger. Such assets are initially measured at their acquisition-date fair values and are subject to impairment testing at least annually until completion or abandonment of research and development efforts associated with the projects. Upon successful completion of each project, the Company makes a determination as to the then remaining useful life of the intangible asset and begins amortization. |
Goodwill | Goodwill Goodwill, which has an indefinite useful life, represents the excess of purchase consideration over fair value of net assets acquired. The Company’s goodwill as of September 30, 2020 is associated with AmpliPhi’s business prior to the Merger. Goodwill is not subject to amortization and is required to be tested for impairment at least on an annual basis. The Company tests goodwill for impairment as of December 31 of each year. The Company determines whether goodwill may be impaired by comparing the carrying value of the single reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value is less than the carrying amount, a more detailed analysis is performed to determine whether goodwill is impaired. The impairment loss, if any, is measured as the excess of the carrying value of the goodwill over the implied fair value of the goodwill and is recorded in the Company’s consolidated statements of operations. |
Derivative Liabilities | Derivative Liabilities Derivative liabilities are accounted for in accordance with the applicable accounting guidance provided in ASC 815 – Derivatives and Hedging based on the specific terms of the agreements. Derivative liabilities are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of asset acquisition derivative liability in the consolidated statements of operations. The Company has a zero derivative liability balance at September 30, 2020 as the liability of $1.1 million at December 31, 2018 was settled upon the Merger in May 2019. |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share Net earnings or loss per share (“EPS”) is calculated in accordance with the applicable accounting guidance provided in ASC 260, Earnings per Share. The Company uses the two-class method for the computation and presentation of net income (loss) per common share attributable to common stockholders. The two-class method is an earnings allocation formula that calculates basic and diluted net income (loss) per common share for each class of common stock separately based on dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Under the two-class method, warrants issued to Innoviva in connection with the Private Placement (Note 2) is assumed to participate in undistributed earnings on an as-exercised basis, in accordance with the warrant agreement. Undistributed net losses are allocated entirely to common shareholders since the participating security has no contractual obligation to share in the losses. Accordingly, basic income or loss per share is calculated by dividing net income or loss by the weighted-average number of common shares outstanding, or using the two-class method, whichever is more dilutive. Diluted net income or loss per share is computed using the more dilutive of the treasury stock method which reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock, or the two-class method. The calculation of diluted loss per share requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of liability classified warrants, and the presumed exercise of such securities are dilutive to net loss per share for the period, an adjustment to net loss available to common stockholders used in the calculation is required to remove the change in fair value of the warrants from the numerator for the period. Likewise, an adjustment to the denominator is required to reflect the related dilutive shares, if any, under the treasury stock method . |
Grants and Awards | Grants and Awards In applying the provisions of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) , Armata has determined that grants and awards are out of the scope of ASC 606 because the funding entities do not meet the definition of a “customer”, as defined by ASC 606, as there is not considered to be a transfer of control of goods or services. With respect to each grant or award, the Company determines if it has a collaboration in accordance with ASC Topic 808, Collaborative Arrangements (“ASC 808”). To the extent the grant or award is within the scope of ASC 808, the Company recognizes amounts received as a contra-expense or grant revenue on the consolidated statement of operations when the related research and development expenses are incurred. For grant and awards outside the scope of ASC 808, the Company applies ASC 606 or International Accounting Standards No. 20, Accounting for Government Grants and Disclosure of Government Assistance , by analogy, and revenue is recognized when the Company incurs expenses related to the grants for the amount the Company is entitled to under the provisions of the contract. Armata also considers the guidance in ASC Topic 730, Research and Development (“ASC 730”), which requires an assessment, at the inception of the grant or award, of whether the agreement is a liability . If Armata is obligated to repay funds received regardless of the outcome of the related research and development activities, then Armata is required to estimate and recognize that liability. Alternatively, if Armata is not required to repay the funds, then payments received are recorded as revenue or contra-expense as the expenses are incurred. Deferred grant or award liability represents award funds received or receivable for which the allowable expenses have not yet been incurred as of the balance sheet date. |
Research and Development Expenses | Research and Development Expenses Research and development (“R&D”) costs consist primarily of direct and allocated salaries, incentive compensation, stock-based compensation and other personnel-related costs, facility costs, and third-party services. Third-party services include studies and clinical trials conducted by clinical research organizations. R&D activities are expensed as incurred. The Company records accruals for estimated ongoing clinical trial expenses. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of the reporting period. |
Recent Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Standards | Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction in carrying value of the asset. Entities will no longer be permitted to consider the length of time that fair value has been less than amortized cost when evaluating when credit losses should be recognized. This new guidance is effective for calendar-year smaller reporting public entities in the first quarter of 2023. The Company is currently evaluating the impact of this ASU and does not expect that adoption of this standard will have a material impact on its consolidated financial statements or related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (“ASC 740”) , which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for calendar-year public business entities in 2021 and interim periods within that year. Early adoption is permitted. The Company does not expect adoption of this new guidance will have a material impact on its consolidated financial statements or related disclosures. In August 2020, the FASB issued ​ASU No. 2020-06​, ​ Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40)​ (“ASU 2020-06”). ​ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, ASU 202-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements and does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements. Recently Adopted Accounting Standards In November 2018, FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 . The objective of the standard is to clarify the interaction between Topic 808, Collaborative Arrangements , and Topic 606, Revenue from Contracts with Customers . Currently, Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Similarly, aspects of Topic 606 have resulted in uncertainty in practice about the effect of the revenue standard and credit loss standard on the accounting for collaborative arrangements. The standard became effective for the Company for fiscal periods beginning on January 1, 2020. The adoption of this ASU did not have an impact on the Company’s financial condition, results of operations, cash flows, or financial statement disclosures. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Measurements | |
Changes in Fair Value of Derivative Liabilities | The following table sets forth a summary of changes in the fair value of the Company’s liabilities during the nine months ended September 30, 2019: Asset Acquisition Derivative Liability Balance, December 31, 2018 $ 1,117,000 Changes in estimated fair value (1,117,000) Balance, September 30, 2019 $ — |
The Merger (Tables)
The Merger (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
The Merger | |
Schedule of company’s consolidated statement of operations | Selected amounts related to AmpliPhi’s business included in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2020, are as follows: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Research and development expenses $ 292,000 $ 430,000 General and administrative expenses $ 499,000 $ 845,000 Net loss $ 791,000 $ 1,275,000 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss per Share | |
Antidilutive Securities Excluded from Computation of Diluted Weighted Shares Outstanding | The following outstanding securities at September 30, 2020 and 2019 have been excluded from the computation of diluted weighted average shares outstanding for the nine months ended September 30, 2020 and 2019, as they would have been anti-dilutive: Nine Months Ended September 30, 2020 2019 Options 1,446,614 1,311,496 Restricted stock awards 262,558 355,034 Warrants 10,547,618 1,854,262 Total 12,256,790 3,520,792 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Balance Sheet Details | |
Property and Equipment | September 30, 2020 December 31, 2019 Laboratory equipment $ 6,282,000 $ 6,047,000 Furniture and fixtures 689,000 646,000 Office and computer equipment 392,000 323,000 Leasehold improvements 3,367,000 3,329,000 Total 10,730,000 10,345,000 Less: accumulated depreciation (8,780,000) (8,158,000) Property and equipment, net $ 1,950,000 $ 2,187,000 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders’ Equity | |
Summary of Warrant Information | At September 30, 2020, outstanding warrants to purchase shares of common stock are as follows: Shares Underlying Outstanding Exercise Expiration Warrants Price Date 2,246 $ 567.00 March 31, 2021 597,881 $ 21.00 May 10, 2022 1,235,491 $ 5.60 October 16, 2023 993,139 $ 2.87 February 12, 2025 7,717,661 $ 2.87 March 27, 2025 1,200 $ 1,680.00 None 10,547,618 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity Incentive Plans | |
Assumptions used in the black-Scholes model | The assumptions used in the Black-Scholes model are presented below: Nine Months Ended September 30, 2020 September 30, 2019 Risk-free interest rate 0.25% - 1.51% 1.71 to 2.23% Expected volatility 89.26 to 90.43% Expected term (in years) 5.50 to 7.00 5.75 to 6.25 Expected dividend yield |
Allocation of Stock-Based Compensation Expenses | The tables below summarize the total stock-based compensation expense included in the Company’s consolidated statements of operations for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Research and development $ 205,000 $ 358,000 $ 841,000 $ 609,000 General and administrative 458,000 2,140,000 1,772,000 2,615,000 Total stock-based compensation $ 663,000 $ 2,498,000 $ 2,613,000 $ 3,224,000 |
Summary of Stock Option Activity | Stock option transactions during the nine months ended September 30, 2020 are presented below: Options Outstanding Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Shares Price (Years) Value Outstanding at December 31, 2019 1,275,380 $ 7.61 8.81 — Granted 301,066 3.57 — — Exercised (27,382) 3.15 — 14,000 Forfeited/Cancelled (102,450) 6.35 — — Outstanding at September 30, 2020 1,446,614 $ 6.79 8.30 $ 47,000 Vested and expected to vest at September 30, 2020 1,446,614 $ 6.79 8.30 $ 47,000 Exercisable at September 30, 2020 425,114 $ 15.18 6.94 $ 11,000 |
Schedule of restricted stock awards | Restricted stock award transactions under the Assumed 2016 Plan during the nine months ended September 30, 2020 are presented below: Weighted Avg Grant Date Shares Fair Value Outstanding at December 31, 2019 343,493 $ 21.83 Forfeited/Cancelled (4,010) 16.02 Issued as Common Stock (76,925) 15.50 Outstanding at September 30, 2020 262,558 $ 23.76 |
Shares Reserved for Future Issuance | As of September 30, 2020, the Company had reserved shares of its common stock for future issuance as follows: Shares Reserved Stock options outstanding 1,446,614 Employee stock purchase plan 7,605 Available for future grants under the 2016 Plan 361,132 Warrants outstanding 10,547,618 Total shares reserved 12,362,969 |
Organization and Description _2
Organization and Description of the Business (Details) $ in Millions | May 09, 2019USD ($)itemshares |
Number of board of directors appointed by C3J | 5 |
Number of board of directors | 7 |
C3J [Member] | |
Number of shares issued per common stock outstanding | shares | 0.6906 |
Reverse stock split ratio | 0.0714 |
Anticipated purchase of common shares upon completion of merger | $ | $ 10 |
Percentage of ownership | 76.00% |
AmpliPhi Biosciences Corporation [Member] | |
Percentage of ownership | 24.00% |
Liquidity (Narrative) (Details)
Liquidity (Narrative) (Details) - USD ($) | Mar. 27, 2020 | Feb. 12, 2020 | Mar. 27, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Cash and cash equivalents | $ 15,885,000 | $ 6,033,000 | $ 8,690,000 | |||
Liquidity, management evaluation | The Company has prepared its consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. However, the Company has incurred net losses since its inception and has negative operating cash flows. These circumstances raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company's ability to continue as a going concern. | |||||
Securities Purchase Agreement [Member] | ||||||
Stock Issued During Period, Shares, New Issues | 7,717,661 | 993,139 | ||||
Proceeds from Issuance of Private Placement | $ 22,200,000 | $ 2,800,000 | $ 25,000,000 | |||
Securities Purchase Agreement [Member] | Common Stock Subject to Mandatory Redemption [Member] | ||||||
Shares Issued, Price Per Share | $ 2.87 | $ 2.87 | ||||
Stock Issued During Period, Shares, New Issues | 8,710,800 | |||||
Securities Purchase Agreement [Member] | Warrants and Rights Subject to Mandatory Redemption [Member] | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,710,800 | 8,710,800 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2020 | May 09, 2019 | May 08, 2019 | Dec. 31, 2018 |
Derivative liability, fair value | $ 0 | $ 1,100,000 | ||
Synthetic Genomics Inc [Member] | C3J [Member] | ||||
Derivative liability, fair value | $ 0 | $ 2,800,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value Measurements | |||
Transfer of Liabilities From Level 1 to Level 2 | $ 0 | ||
Transfer of Liabilities From Level 2 to Level 1 | 0 | ||
Transfer of Liabilities Into Level 3 | 0 | ||
Transfer of Liabilities Out of Level 3 | $ 0 | ||
Derivative liability | $ 0 | $ 1,117,000 |
Fair Value Measurements (Change
Fair Value Measurements (Change in Fair Value of Derivative Liabilities) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Fair Value Measurements | |
Balance, derivative liability | $ 1,117,000 |
Changes in estimated fair value | $ (1,117,000) |
The Merger (Narrative) (Details
The Merger (Narrative) (Details) - USD ($) | May 09, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill | $ 3,490,000 | $ 3,490,000 | |||
AmpliPhi Biosciences Corporation [Member] | |||||
Total purchase consideration | $ 10,700,000 | ||||
Goodwill | 3,500,000 | ||||
Intangible assets acquired | 10,300,000 | ||||
Deferred tax liability acquired | 3,100,000 | ||||
Business combination, acquisition related costs | $ 1,100,000 | $ 0 | $ 1,100,000 |
The Merger (Schedule of company
The Merger (Schedule of company’s consolidated statement of operations and unaudited proforma information) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | ||||
General and administrative expenses | $ 1,845,000 | $ 3,758,000 | $ 5,989,000 | $ 7,220,000 |
Net loss | (5,769,000) | $ (6,955,000) | (15,557,000) | $ (14,893,000) |
AmpliPhi Biosciences Corporation [Member] | ||||
Business Acquisition [Line Items] | ||||
Research and development expenses | 292,000 | 430,000 | ||
General and administrative expenses | 499,000 | 845,000 | ||
Net loss | $ 791,000 | $ 1,275,000 |
Net Loss Per Share (Antidilutiv
Net Loss Per Share (Antidilutive Shares Excluded from Computation of Diluted Shares Outstanding) (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted shares outstanding | 12,256,790 | 3,520,792 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted shares outstanding | 1,446,614 | 1,311,496 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted shares outstanding | 262,558 | 355,034 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted weighted shares outstanding | 10,547,618 | 1,854,262 |
Balance Sheet Details (Narrativ
Balance Sheet Details (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Balance Sheet Details | ||||
Depreciation | $ 300,000 | $ 400,000 | $ 840,000 | $ 1,049,000 |
Balance Sheet Details (Property
Balance Sheet Details (Property and Equipment) (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 10,730,000 | $ 10,345,000 |
Less: accumulated depreciation | (8,780,000) | (8,158,000) |
Property and equipment, net | 1,950,000 | 2,187,000 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 6,282,000 | 6,047,000 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 392,000 | 323,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 689,000 | 646,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,367,000 | $ 3,329,000 |
Paycheck Protection Program L_2
Paycheck Protection Program Loan (Narrative) (Details) - Unsecured Debt [Member] - Payment Protection Program Note [Member] | Apr. 20, 2020USD ($) |
Proceeds from unsecured notes payable | $ 717,000 |
Debt instrument, interest rate, stated percentage | 1.00% |
Stockholders_ Equity (Summary o
Stockholders’ Equity (Summary of Warrants Outstanding) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 27, 2020 | Feb. 12, 2020 | Mar. 27, 2020 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 10,547,618 | |||
Term of warrant | 5 years | |||
Exercise Price $567.00 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 2,246 | |||
Exercise Price | $ 567 | |||
Warrant Expiration Date | Mar. 31, 2021 | |||
Exercise Price $21.00 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 597,881 | |||
Exercise Price | $ 21 | |||
Warrant Expiration Date | May 10, 2022 | |||
Exercise Price $5.60 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 1,235,491 | |||
Exercise Price | $ 5.60 | |||
Warrant Expiration Date | Oct. 16, 2023 | |||
Exercise Price $2.87 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 993,139 | |||
Exercise Price | $ 2.87 | |||
Warrant Expiration Date | Feb. 12, 2025 | |||
Exercise Price $2.87 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 7,717,661 | |||
Exercise Price | $ 2.87 | |||
Warrant Expiration Date | Mar. 27, 2025 | |||
Exercise Price 1680.00 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Warrants | 1,200 | |||
Exercise Price | $ 1,680 | |||
Securities Purchase Agreement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Issued During Period, Shares, New Issues | 7,717,661 | 993,139 | ||
Proceeds from Issuance of Private Placement | $ 22.2 | $ 2.8 | $ 25 | |
Securities Purchase Agreement [Member] | Common Stock Subject to Mandatory Redemption [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares Issued, Price Per Share | $ 2.87 | $ 2.87 | ||
Stock Issued During Period, Shares, New Issues | 8,710,800 | |||
Securities Purchase Agreement [Member] | Warrants and Rights Subject to Mandatory Redemption [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,710,800 | 8,710,800 |
Equity Incentive Plans (Narrati
Equity Incentive Plans (Narrative) (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Vesting percentage | 100.00% |
Assumed 2006 and 2016 Plan [Member] | |
Reverse stock split ratio | 0.0714 |
Additional awards | shares | 0 |
Minimum [Member] | Assumed 2006 and 2016 Plan [Member] | |
Expiration period of share-based payment award | 2 years |
Maximum [Member] | Assumed 2006 and 2016 Plan [Member] | |
Expiration period of share-based payment award | 4 years |
Stock Option [Member] | |
Common stock closing price | $ / shares | $ 3.19 |
Unrecognized compensation cost related to unvested options | $ | $ 3.4 |
Weighted-average remaining period for recognition of compensation costs related to unvested options | 1 year 10 months 2 days |
Equity Incentive Plan 2016 [Member] | |
Vesting period of share-based compensation award | 4 years |
Equity Incentive Plan 2016 [Member] | Maximum [Member] | |
Expiration period of share-based payment award | 10 years |
Equity Incentive Plans (Assumpt
Equity Incentive Plans (Assumptions Used in the Black-Scholes Model) (Details) | Sep. 30, 2020 | Sep. 30, 2019USD ($) |
Measurement Input, Price Volatility [Member] | ||
Fair value input, equity securities | 90.43 | |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair value input, equity securities | 0 | 0 |
Minimum [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Fair value input, equity securities | 0.25 | 1.71 |
Minimum [Member] | Measurement Input, Price Volatility [Member] | ||
Fair value input, equity securities | 89.26 | |
Minimum [Member] | Measurement Input, Expected Term [Member] | ||
Fair value input, equity securities | 5.50 | 5.75 |
Maximum [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Fair value input, equity securities | 1.51 | 2.23 |
Maximum [Member] | Measurement Input, Price Volatility [Member] | ||
Fair value input, equity securities | 90.43 | |
Maximum [Member] | Measurement Input, Expected Term [Member] | ||
Fair value input, equity securities | 7 | 6.25 |
Equity Incentive Plans (Allocat
Equity Incentive Plans (Allocation of Stock-Based Compensation Expense) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 663,000 | $ 2,498,000 | $ 2,613,000 | $ 3,224,000 |
Research and development expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 205,000 | 358,000 | 841,000 | 609,000 |
General and administrative expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 458,000 | $ 2,140,000 | $ 1,772,000 | $ 2,615,000 |
Equity Incentive Plans (Summary
Equity Incentive Plans (Summary of Stock Option Activity) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Equity Incentive Plans | ||
Shares, Balance Beginning | shares | 1,275,380 | |
Shares, Granted | shares | 301,066 | |
Shares, Exercised | shares | (27,382) | |
Shares, Forfeited/Cancelled | shares | (102,450) | |
Shares, Balance Ending | shares | 1,446,614 | 1,275,380 |
Vested and expected to vest at September 30, 2020 | shares | 1,446,614 | |
Exercisable at September 30, 2020 | shares | 425,114 | |
Weighted Average Exercise Price, Outstanding Beginning | $ / shares | $ 7.61 | |
Weighted Average Exercise Price, Granted | $ / shares | 3.57 | |
Weighted Average Exercise Price, Exercised | $ / shares | 3.15 | |
Weighted Average Exercise Price, Forfeited/Cancelled | $ / shares | 6.35 | |
Weighted Average Exercise Price, Outstanding Ending | $ / shares | 6.79 | $ 7.61 |
Weighted Average Exercise Price, Vested or expected to vest at September 30, 2020 | $ / shares | 6.79 | |
Weighted Average Exercise Price, Exercisable at September 30, 2020 | $ / shares | $ 15.18 | |
Weighted Average Remaining Contractual Term (Years), Outstanding | 8 years 3 months 18 days | 8 years 9 months 22 days |
Weighted Average Remaining Contractual Term (Years), Vested or expected to vest at September 30, 2020 | 8 years 3 months 18 days | |
Weighted Average Remaining Contractual Term (Years), Exercisable at September 30, 2020 | 6 years 11 months 9 days | |
Aggregate Intrinsic Value, Exercised | $ | $ 14,000 | |
Aggregate Intrinsic Value, Outstanding Ending | $ | 47,000 | |
Aggregate Intrinsic Value, Vested or expected to vest at September 30, 2020 | $ | 47,000 | |
Aggregate Intrinsic Value, Exercisable at September 30, 2020 | $ | $ 11,000 |
Equity Incentive Plans (Restric
Equity Incentive Plans (Restricted stock award) (Details) - Restricted Stock [Member] - C3J Stock Plan 2016 [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 343,493 |
Forfeited/Cancelled (in shares) | shares | (4,010) |
Issued as Common Stock | shares | (76,925) |
Outstanding at end of period (in shares) | shares | 262,558 |
Weighted Avg Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 21.83 |
Forfeited/Cancelled (in dollars per share) | $ / shares | 16.02 |
Issued as Common Stock | $ / shares | 15.50 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 23.76 |
Equity Incentive Plans (Shares
Equity Incentive Plans (Shares Reserved for Future Issuance) (Details) - shares | Sep. 30, 2020 | Dec. 31, 2019 |
Stock options outstanding | 1,446,614 | 1,275,380 |
Employee stock purchase plan | 7,605 | |
Warrants outstanding | 10,547,618 | |
Total shares reserved | 12,362,969 | |
Equity Incentive Plan 2016 [Member] | ||
Available for future grants under the 2016 Plan | 361,132 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) | 1 Months Ended | ||
Apr. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies | |||
Operating lease base rent | $ 1,900,000 | ||
Annual increase in rent percentage | 3.00% | ||
Base rent at the end of lease term | $ 2,500,000 | ||
Period of lease and rental abatement credit | 6 months | ||
Lease and rental abatement credit | $ 800,000 | ||
Operating Lease, Liability | 11,700,000 | ||
Operating Lease, Right-of-Use Asset | $ 11,000,000 | $ 10,869,000 | $ 2,028,000 |
Lessee, Operating Lease, Discount Rate | 12.89% |
Grants and Awards (Details)
Grants and Awards (Details) - USD ($) | Jul. 15, 2020 | Mar. 13, 2020 | Sep. 30, 2020 | Sep. 30, 2020 |
Award [Line Items] | ||||
Revenue from grants | $ 288,000 | $ 319,000 | ||
Award receivable | 335,000 | 335,000 | ||
Medical Technology Enterprise Consortium [Member] | ||||
Award [Line Items] | ||||
Revenue from grants | $ 15,000,000 | |||
Cystic Fibrosis Foundation [Member] | ||||
Award [Line Items] | ||||
Research and development benefit | $ 0 | $ 1,000,000 | ||
Award receivable | $ 1,000,000 | |||
Award agreement interruption period | 360 days | |||
Maximum [Member] | Cystic Fibrosis Foundation [Member] | ||||
Award [Line Items] | ||||
Amount of threshold development award | $ 5,000,000 |
Synthetic Genomics Asset Acqu_2
Synthetic Genomics Asset Acquisition (Details) - USD ($) | Feb. 28, 2021 | Jan. 31, 2021 | Feb. 29, 2020 | Jan. 31, 2020 | Feb. 28, 2019 | Jan. 31, 2019 | Feb. 28, 2018 | Feb. 28, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 09, 2019 | May 08, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||
Derivative liability, fair value | $ 0 | $ 0 | $ 1,100,000 | ||||||||||||
Interest expense | $ 150,000 | $ 190,000 | $ 451,000 | $ 726,000 | |||||||||||
Synthetic Genomics Inc [Member] | C3J [Member] | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||
Cash paid for productive assets | $ 8,000,000 | $ 8,000,000 | |||||||||||||
Cash paid acquisition of assets | $ 5,000,000 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | 1,000,000 | |||||||||
Issuance of common stock and conversion of deferred consideration for asset acquisition | $ 27,000,000 | ||||||||||||||
Percentage of fully diluted capitalized for issuance of common stock | 10.00% | ||||||||||||||
Maximum potential milestone payments | $ 39,500,000 | ||||||||||||||
Derivative liability, fair value | $ 0 | $ 2,800,000 | |||||||||||||
Interest expense | $ 700,000 | ||||||||||||||
Equity payment obligation | 516,976 | ||||||||||||||
Synthetic Genomics Inc [Member] | C3J [Member] | Scenario, Plan [Member] | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||
Cash paid acquisition of assets | $ 2,000,000 |