Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'DISCOVERY LABORATORIES INC /DE/ | ' |
Entity Central Index Key | '0000946486 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 80,749,022 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $21,177 | $26,892 |
Inventory | 117 | 195 |
Prepaid expenses and other current assets | 418 | 719 |
Total Current Assets | 21,712 | 27,806 |
Property and equipment, net | 1,417 | 1,737 |
Restricted cash | 400 | 400 |
Other assets | 102 | 0 |
Total Assets | 23,631 | 29,943 |
Current Liabilities: | ' | ' |
Accounts payable | 1,489 | 1,166 |
Accrued expenses | 5,071 | 4,159 |
Common stock warrant liability | 4,678 | 6,305 |
Equipment loans and capitalized leases, current portion | 72 | 69 |
Total Current Liabilities | 11,310 | 11,699 |
Long-term debt, net of discount of $3,674 at September 30, 2013 and $0 at December 31, 2012 | 6,326 | 0 |
Equipment loans and capitalized leases, non-current portion | 89 | 148 |
Other liabilities | 431 | 443 |
Total Liabilities | 18,156 | 12,290 |
Stockholders' Equity: | ' | ' |
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 150,000,000 shares authorized at September 30, 2013, 100,000,000 shares authorized at December 31, 2012; 54,946,327 and 43,673,636 shares issued, 54,925,435 and 43,652,744 shares outstanding at September 30, 2013 and December 31, 2012, respectively | 55 | 44 |
Additional paid-in capital | 476,695 | 455,398 |
Accumulated deficit | -468,221 | -434,735 |
Treasury stock (at cost); 20,892 shares | -3,054 | -3,054 |
Total Stockholders' Equity | 5,475 | 17,653 |
Total Liabilities & Stockholders' Equity | $23,631 | $29,943 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
LIABILITIES & STOCKHOLDERS' EQUITY | ' | ' |
Unamortized discount | $3,674 | $0 |
Stockholders' Equity: | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 150,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 54,946,327 | 43,673,636 |
Common stock, shares outstanding (in shares) | 54,925,435 | 43,652,744 |
Treasury stock (at cost) (in shares) | 20,892 | 20,892 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Statements of Operations (Unaudited) [Abstract] | ' | ' | ' | ' |
Grant revenue | $60 | $0 | $315 | $0 |
Expenses: | ' | ' | ' | ' |
Research and development | 6,574 | 5,743 | 21,909 | 15,482 |
Selling, general and administrative | 4,299 | 4,255 | 12,648 | 9,912 |
Total expenses | 10,873 | 9,998 | 34,557 | 25,394 |
Operating loss | -10,813 | -9,998 | -34,242 | -25,394 |
Change in fair value of common stock warrant liability | -1,059 | -3,309 | 1,627 | -5,063 |
Interest income | 1 | 1 | 2 | 5 |
Interest expense | -353 | -4 | -873 | -12 |
Other expense | 0 | -36 | 0 | -36 |
Net loss | ($12,224) | ($13,346) | ($33,486) | ($30,500) |
Net loss per common share | ' | ' | ' | ' |
Basic (in dollars per share) | ($0.22) | ($0.31) | ($0.68) | ($0.80) |
Diluted (in dollars per share) | ($0.22) | ($0.31) | ($0.69) | ($0.80) |
Weighted average number of common shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 54,792 | 43,444 | 49,235 | 38,061 |
Diluted (in shares) | 54,792 | 43,444 | 50,377 | 38,061 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flow from operating activities: | ' | ' |
Net loss | ($33,486) | ($30,500) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 537 | 855 |
Stock-based compensation and 401(k) match | 2,367 | 1,805 |
Fair value adjustment of common stock warrants | -1,627 | 5,063 |
Loss on sale or disposal of equipment | 0 | 36 |
Amortization of discount on long-term debt | 302 | 0 |
Changes in: | ' | ' |
Inventory | 78 | -128 |
Prepaid expenses and other current assets | 301 | -723 |
Accounts payable | 323 | -903 |
Accrued expenses | 912 | 693 |
Other assets | -115 | 0 |
Other liabilities | -12 | -19 |
Net cash used in operating activities | -30,420 | -23,821 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -204 | -593 |
Net cash used in investing activities | -204 | -593 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of securities, net of expenses | 15,114 | 43,605 |
Proceeds from issuance of long-term debt, net of expenses | 9,850 | 0 |
Proceeds from exercise of common stock warrants and options | 1 | 6,741 |
Repayment of equipment loans and capital lease obligations | -56 | -57 |
Net cash provided by financing activities | 24,909 | 50,289 |
Net (decrease) / increase in cash and cash equivalents | -5,715 | 25,875 |
Cash and cash equivalents - beginning of period | 26,892 | 10,189 |
Cash and cash equivalents - end of period | 21,177 | 36,064 |
Supplementary disclosure of cash flows information: | ' | ' |
Interest paid | $559 | $10 |
Organization_and_Business
Organization and Business | 9 Months Ended |
Sep. 30, 2013 | |
Organization and Business [Abstract] | ' |
Organization and Business | ' |
Note 1 – Organization and Business | |
Discovery Laboratories, Inc. (referred to as “we,” “us,” or the “Company”) is a specialty biotechnology company focused on creating life-saving products for critical care patients with respiratory disease and improving the standard of care in pulmonary medicine. Our proprietary drug technology produces a synthetic, peptide-containing surfactant (KL4 surfactant) that is structurally similar to pulmonary surfactant, a substance produced naturally in the lung and essential for normal respiratory function and survival. We are developing our KL4 surfactant in liquid, lyophilized and aerosolized dosage forms. We are also developing novel drug delivery technologies potentially to enable the efficient delivery of our aerosolized KL4 surfactant, and potentially other aerosolized drugs and inhaled therapies. We believe that our proprietary technologies make it possible, for the first time, to develop a significant pipeline of products to address a variety of respiratory diseases for which there frequently are few or no approved therapies. | |
Our near-term focus is to develop our KL4 surfactant and drug delivery technologies to improve the management of respiratory distress syndrome (RDS) in premature infants. RDS is a serious respiratory condition caused by insufficient surfactant production in underdeveloped lungs of premature infants, and the most prevalent respiratory disease in the neonatal intensive care unit (NICU). RDS can result in long-term respiratory problems, developmental delay and death. Currently, premature infants with RDS are treated with surfactants that can only be administered by endotracheal intubation supported with mechanical ventilation, both invasive procedures that may result in serious respiratory conditions and complications. To avoid such adverse results, neonatologists generally provide surfactants as initial therapy only to premature infants with severe RDS where the potential benefits of surfactant therapy outweigh the risks associated with endotracheal intubation and mechanical ventilation. For infants with less severe RDS, neonatologists first attempt to provide respiratory support using a less invasive means, such as nasal continuous positive airway pressure (nCPAP). Unfortunately, a significant number of these infants do not respond adequately to nCPAP, an outcome referred to as nCPAP failure, and require subsequent surfactant administration via intubation and mechanical ventilation. Since it is not possible to ascertain which patients will experience nCPAP failure, neonatologists treating less severe RDS are faced with a dilemma, because the outcome for those infants who experience nCPAP failure and receive delayed surfactant therapy may not be as favorable as the outcome for those infants who receive surfactant therapy as initial therapy. | |
With mortality and morbidity rates that have not meaningfully improved over the last decade, we believe that the RDS market is presently underserved. We also believe that our RDS programs, including SURFAXIN® and, if approved, AEROSURF®, have the potential to greatly improve the management of RDS and, over time, become a new standard of care for premature infants with RDS. Moreover, we believe that the neonatal community is increasingly recognizing the potential benefits of (i) a synthetic, peptide-containing surfactant, and more importantly, (ii) a less-invasive method of delivering aerosolized surfactant to treat premature infants at risk of suffering from respiratory disorders. | |
In 2012, the U.S. Food and Drug Administration (FDA) approved our first KL4 surfactant drug product, SURFAXIN (lucinactant) Intratracheal Suspension for the prevention of RDS in premature infants at high risk for RDS. SURFAXIN is the first synthetic, peptide-containing surfactant approved by the FDA and the only alternative to animal-derived surfactants currently used in the U.S. On October 4, 2013, we announced that the FDA agreed to updated product specifications that we previously submitted for SURFAXIN. On November 8, 2013, we announced that we have initiated the commercial introduction of SURFAXIN. Our commercial and medical affairs organizations currently are advancing initiatives to communicate that SURFAXIN is available and to secure formulary acceptance from our target hospitals. We are also preparing to support hospitals that order SURFAXIN with in-service training, medical information and other activities intended to promote and enable a deliberate and orderly introduction of SURFAXIN to the neonatal community. | |
AEROSURF is an investigational combination drug-device product that combines our KL4 surfactant with our proprietary capillary aerosol generator (CAG). We are developing AEROSURF to deliver our KL4 surfactant in aerosolized form to premature infants with RDS. AEROSURF potentially will provide neonatologists with the ability to avoid the invasive procedures currently required to administer surfactant therapy and deliver our KL4 surfactant in aerosolized form to premature infants supported with nCPAP. For this reason, we believe that AEROSURF, if approved, may enable the treatment of a significantly greater number of premature infants with RDS who could benefit from surfactant therapy but are currently not treated. | |
On October 17, 2013, we announced that we have submitted an Investigational New Drug (IND) Application to the FDA for our initial AEROSURF phase 2 clinical trial. The FDA has completed its review and cleared IND and we expect to initiate our phase 2 clinical program in the fourth quarter of 2013. | |
We are developing a lyophilized (freeze-dried) dosage form of our KL4 surfactant, which is stored as a powder and resuspended to liquid form prior to use, and is being developed with the objective of improving ease of use for healthcare practitioners, as well as potentially prolonging shelf life and eliminating the need for cold-chain storage. We are planning initially to use lyophilized KL4 surfactant in our AEROSURF development program. We are also assessing a potential development plan intended to gain regulatory approval for SURFAXIN LS™, a lyophilized dosage form of SURFAXIN, in the U.S. and potentially in other markets. | |
With the assistance of Battelle Memorial Institute (Battelle), we have completed development of a clinic-ready CAG device, which has passed a rigorous design verification testing program, and have manufactured a sufficient number of clinic-ready CAGs to support the initial phase of our AEROSURF phase 2 clinical program. We plan to continue development of our CAG and expect to manufacture additional devices to support completion of our phase 2 clinical program and potentially our phase 3 clinical program. The CAG has been designed to produce aerosolized KL4 surfactant in volumes up to 10 times the output produced by currently available aerosol devices. | |
AFECTAIR® aerosol-conducting airway connector is our novel disposable device intended to simplify the delivery of our aerosolized KL4 surfactant, and other aerosolized medications and inhaled therapies, to infants in NICUs and pediatric intensive care units (PICUs) who require ventilatory support by introducing the aerosolized medication directly at the patient interface and minimizing the number of connections in the ventilator circuit. To gain information and assess the use of this device in different clinical settings, we are continuing a national user experience program at a number of institutions, including leading neonatal thought centers, across the U.S. | |
We have established our own specialty commercial and medical affairs organizations to focus on neonatal/pediatric respiratory critical care in hospitals across the U.S. These organizations are primarily responsible for the commercial introduction of SURFAXIN and the AFECTAIR device. In the future, we expect that these teams will be able to leverage the experience and relationships gained from the introduction of SURFAXIN to support the potential introductions of our own future pipeline products, beginning with, if approved, AEROSURF and potentially SURFAXIN LS. In addition, we will consider opportunities to leverage our experience and relationships to market and support other synergistic products that could be of benefit in the NICU/PICU. | |
Our objectives for 2013 include initiating the commercial introduction of SURFAXIN and advancing the AEROSURF phase 2 clinical program. In the future, we expect that we will be able to apply the knowledge and experience gained from these activities to develop a pipeline of innovative products based on our technologies and intended to address other critical care respiratory conditions in the NICU, PICU and intensive care units (ICUs). | |
An important priority for us is to secure strategic and financial resources to advance our KL4 surfactant and aerosol device development programs and the commercial introduction of our approved RDS products in markets outside the U.S. See, Note 2, “Liquidity Risks and Management’s Plans.” While we currently intend to retain all rights and commercialize our approved products in the U.S., we are focused on identifying potential strategic alliances to assist us with our development programs in markets outside the U.S. We seek strategic partners that have broad experience in the designated markets, including regulatory and product development expertise as well as an ability to commercialize our products. In addition to development and commercial support, such alliances typically also would provide us with financial resources to support our activities, potentially in the form of upfront payments, milestone payments, commercialization royalties and a sharing of research and development expenses. We are focused on securing a significant strategic alliance predominantly to support our activities in the European Union (EU). To date, the primary focus of our discussions has been on AEROSURF. In the future, we may also seek strategic alliances and/or collaboration arrangements to support the potential commercial introduction of SURFAXIN and, if approved, SURFAXIN LS, in countries where regulatory approval is facilitated by the information contained in our SURFAXIN new drug application (NDA) approved by the FDA. | |
There can be no assurance that we will be successful in securing the necessary capital, or concluding any strategic alliance, collaboration arrangement or other similar transaction. See, Note 2, “Liquidity Risks and Management’s Plans.” |
Liquidity_Risks_and_Management
Liquidity Risks and Management's Plans | 9 Months Ended |
Sep. 30, 2013 | |
Liquidity Risks and Management's Plans [Abstract] | ' |
Liquidity Risks and Management's Plans | ' |
Note 2 – Liquidity Risks and Management’s Plans | |
We have incurred substantial losses since inception, due to investments in research and development, manufacturing and potential commercialization activities, and we expect to continue to incur substantial losses over the next several years. Historically, we have funded our business operations through various sources, including public and private securities offerings, debt facilities, strategic alliances, the use of Committed Equity Financing Facilities (CEFFs) and at-the-market equity programs, and capital equipment financings. | |
As of September 30, 2013, we had cash and cash equivalents of $21.2 million, approximately $6.6 million of accounts payable and accrued expenses, and $10 million of long-term debt under our Deerfield Facility with Deerfield Management Company, L.P. (Deerfield). | |
On October 15, 2013, we completed an offering under our At-the-Market Program (ATM Program) (see, Note 4, “Stockholders’ Equity – Common Stock Offerings – At-the-Market Program”) with Stifel, Nicolaus & Company, Incorporated (Stifel) and issued 713,920 shares of our common stock resulting in net proceeds to us (after deducting commissions due to Stifel) of approximately $1.9 million. Through our ATM Program, subject to market conditions, we have the ability to sell up to approximately $23 million of common stock at such times and in such amounts that we deem appropriate. However, use of the ATM Program is subject to market and other conditions and the ATM Program can be cancelled at any time by either party. There can be no assurance that the ATM Program will be available when needed, if at all. | |
On November 5, 2013, we completed a public offering of 25 million shares of common stock, at a price of $2.00 per share resulting in gross proceeds of $50.0 million ($46.8 million net after commissions, discounts and expenses). In addition, we also granted the underwriters a 30-day option to purchase up to an additional 3.75 million shares of common stock (over-allotment) at an offering price of $2.00 per share. On November 8, 2013, we received notification that the underwriters have exercised the full over-allotment and will purchase an additional 3.75 million shares. This transaction is expected to close on or about November 14, 2013 and result in additional net proceeds to us of approximately $7.1 million. | |
We also have met the conditions for, and expect in early December to receive, an additional advance of $20 million under the Deerfield Facility, which became due upon the first commercial sale of SURFAXIN drug product. See, Note 6, “Long-Term Debt – Loan Facility with Deerfield.” | |
Before any additional financings, including under our ATM Program and taking into account the additional approximately $7.1 million expected from the underwriters’ exercise of the over-allotment in our November public offering and the expected $20 million advance under the Deerfield Facility, we anticipate that we will have sufficient cash available to support our operations and debt service obligations through 2015. | |
Our future capital requirements depend upon many factors, primarily the success of our efforts to (i) execute the commercial introduction of SURFAXIN and AFECTAIR in the U.S., as planned; (ii) advance the AEROSURF development program to completion of the phase 2 clinical program in mid-2015; and (iii) secure one or more strategic alliances or other collaboration arrangements to support the development and, if approved, the commercial introduction of SURFAXIN, AEROSURF, AFECTAIR and potentially SURFAXIN LS, in markets outside the U.S. We believe that, if we are successful with the commercial introduction of SURFAXIN and if we are able to complete the AEROSURF phase 2 clinical program on a timely basis and obtain encouraging results, our ability to enter into a significant strategic alliance will be enhanced. There can be no assurance, however, that our efforts will be successful, or that we will be able to obtain additional capital to support our activities when needed on acceptable terms, if at all. | |
Even if we succeed with the commercial introduction of SURFAXIN and the AFECTAIR device as planned, given the time required to secure formulary acceptance of SURFAXIN at our target hospitals, we expect our revenues from SURFAXIN and AFECTAIR to be modest in the first 12-18 months and then increase over time as our products gain hospital acceptance. As a result, our cash outflows for operations, debt service and development programs are expected to outpace the rate at which we may generate revenues for several years. To execute our business strategy and fund our operations over the long term, we will require significant additional infusions of capital until such time as the net revenues from SURFAXIN, AFECTAIR and, if approved, AEROSURF, from potential strategic alliances and from other sources are sufficient to offset our cash flow requirements. To secure the necessary capital, we would prefer to enter into strategic alliances or collaboration agreements with partners that could provide development and commercial expertise as well as financial resources (potentially in the form of upfront payments, milestone payments, commercialization royalties and a sharing of research and development expenses) and introduce our approved products in various markets outside the U.S. We also plan to consider other public and private equity offerings, including under our ATM Program, as well as other financing transactions, such as secured equipment financing facilities or other similar transactions. | |
As of September 30, 2013, we had outstanding warrants to purchase approximately 10.3 million shares of our common stock at various prices, exercisable on different dates through 2019. Of these warrants, approximately 2.3 million warrants were issued to Deerfield in connection with the first advance under the Deerfield Facility. Upon receipt of the final $20 million advance under the Deerfield Facility, which is anticipated on or about December 3, 2013, we will issue warrants to purchase an additional 4.66 million shares of our common stock at an exercise price of $2.81 per share (we refer to these warrants and the warrants previously issued to Deerfield as the Deerfield Warrants). The Deerfield Warrants may be exercised for cash or on a cashless basis. In lieu of paying cash upon exercise, the holders also may elect to reduce the principal amount of the Deerfield loan in an amount sufficient to satisfy the exercise price of the Deerfield Warrants. In addition to the Deerfield Warrants, we have outstanding warrants to purchase approximately 4.9 million shares of common stock that were issued in February 2011, are exercisable for five-years, and contain anti-dilution provisions that adjust the exercise price if we issue any common stock, securities convertible into common stock, or other securities (subject to certain exceptions) at a value below the then-existing exercise price of the warrants. These warrants were originally issued with an exercise price of $3.20 per share and thereafter adjusted downward, first to $2.80 per share following a public offering in March 2012 and then to $1.50 per share following a public offering in May 2013. Although we believe that, in the future, we will secure additional capital from the exercise of at least a portion of our outstanding warrants, there can be no assurance that the market price of our common stock will equal or exceed price levels that make exercise of outstanding warrants likely, or, even if the price levels are sufficient, that holders of our warrants will choose to exercise any or all of their warrants prior to the warrant expiration date. Moreover, if our outstanding warrants are exercised, such exercises likely will be at a discount to the then-market value of our common stock and have a dilutive effect on the value of our shares of common stock at the time of exercise. | |
As of September 30, 2013, 150 million shares of common stock were authorized under our Amended and Restated Certificate of Incorporation, and approximately 71.7 million shares of common stock were available for issuance and not otherwise reserved. As of November 8, 2013, following the financings under our ATM Program, our public offering, and establishment of additional reserves for the shares expected to be issued in connection with the underwriters’ exercise of the over-allotment in our November public offering and with respect to the warrants expected to be issued to Deerfield upon receipt of the $20 million advance in early December, approximately 42 million shares of common stock were available for issuance and not otherwise reserved. | |
Although we currently believe that we will be able to execute our business plan and accomplish our objectives, there can be no assurance that we will be successful. There can be no assurance that we will be successful in securing the needed capital, through strategic alliances, collaboration arrangements, financings, debt arrangements and other transactions. Failure to secure the necessary additional capital would have a material adverse effect on our business, financial condition and results of operations. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
Note 3 – Summary of Significant Accounting Policies | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information in accordance with the instructions to Form 10‑Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normally recurring accruals) considered for fair presentation have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. There have been no changes to our critical accounting policies since December 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012 that we filed with the Securities and Exchange Commission (SEC) on March 15, 2013 (2012 Form 10-K). Readers are encouraged to review those disclosures in conjunction with this Quarterly Report on Form 10-Q. | |||||||||||||||||
Inventory | |||||||||||||||||
Inventories are determined at the lower of cost or market value with cost determined under the specific identification method. We assess the potential capitalization of inventory and the timing of when the related costs are expected to be recoverable through the commercialization of our products. Costs incurred prior to FDA approval of SURFAXIN drug product and registration of our initial AFECTAIR device have been recorded in our statement of operations as research and development expense. Due to a delay in commercial availability of SURFAXIN drug product, previously capitalized raw material costs of $195,072 were charged to research and development expense in the first quarter of 2013, as these raw materials were no longer expected to be used for commercial production. | |||||||||||||||||
Inventory as of September 30, 2013 consists of AFECTAIR devices available for commercial sale. Inventory costs for our AFECTAIR device consist primarily of third-party manufacturing fees, freight, and indirect personnel overhead costs. | |||||||||||||||||
Research and development expense | |||||||||||||||||
We track research and development expense by activity, as follows: (a) product development and manufacturing, (b) medical and regulatory operations, and (c) direct preclinical and clinical programs. Research and development expense includes personnel, facilities, manufacturing and quality operations, pharmaceutical and device development, research, clinical, regulatory, other preclinical and clinical activities and medical affairs. Research and development costs are charged to operations as incurred. For the nine months ended September 30, 2012, research and development expense includes a $0.5 million charge related to a milestone payment that became payable to Johnson & Johnson (J&J) upon FDA approval of SURFAXIN, in accordance with terms of our license agreement with J&J. | |||||||||||||||||
Net loss per common share | |||||||||||||||||
Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per common share is computed by giving effect to all potentially dilutive securities outstanding for the period. | |||||||||||||||||
In accordance with Accounting Standards Codification (ASC) Topic 260, “Earnings per Share,” when calculating diluted net loss per common share, a gain associated with the decrease in the fair value of certain warrants classified as derivative liabilities results in an adjustment to the net loss; and the dilutive impact of the assumed exercise of the warrants results in an adjustment to the weighted average common shares outstanding. We utilize the treasury stock method to calculate the dilutive impact of the assumed exercise of the warrants. For the nine months ended September 30, 2013, the effect of the adjustments for warrants issued in February 2011 was dilutive. For the three months ended September 30, 2013 and for the three and nine months ended September 30, 2012, the effect of the adjustments for all warrants classified as derivative liabilities was non-dilutive. | |||||||||||||||||
The table below provides information pertaining to the calculation of diluted net loss per common share for the periods presented: | |||||||||||||||||
(in thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net loss as reported | $ | (12,224 | ) | $ | (13,346 | ) | $ | (33,486 | ) | $ | (30,500 | ) | |||||
Less: income from change in fair value of warrant liability | – | – | (1,525 | ) | – | ||||||||||||
Numerator for diluted net loss per common share | $ | (12,224 | ) | $ | (13,346 | ) | $ | (35,011 | ) | $ | (30,500 | ) | |||||
Denominator: | |||||||||||||||||
Basic weighted average common shares outstanding | 54,792 | 43,444 | 49,235 | 38,061 | |||||||||||||
Dilutive common shares from assumed warrant exercises | – | – | 1,142 | – | |||||||||||||
Diluted weighted average common shares outstanding | 54,792 | 43,444 | 50,377 | 38,061 | |||||||||||||
As of September 30, 2013 and 2012, 10.7 million and 12.0 million shares of common stock potentially issuable upon the exercise of certain stock options and warrants were excluded from the computation of diluted net loss per common share because their impact would have been anti-dilutive. | |||||||||||||||||
Recent accounting pronouncements | |||||||||||||||||
There were no new accounting pronouncements issued during the nine months ended September 30, 2013 that are expected to have a material impact on the Company’s financial position, operating results, cash flows or disclosures. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity [Abstract] | ' |
Stockholders' Equity | ' |
Note 4 – Stockholders’ Equity | |
Registered Public Offerings | |
On May 15, 2013, we completed a registered public offering of 9.5 million shares of our common stock, at a price of $1.50 per share resulting in gross proceeds of $14.3 million ($13.2 million net). We also granted the underwriter a 30-day option to purchase up to an additional 1.425 million shares of common stock at an offering price of $1.50 per share. On May 31, 2013, the underwriter exercised its option and purchased 1.347 million additional shares of common stock for net proceeds to us (after underwriter fees) of $1.9 million. In connection with this offering, we agreed not to issue or sell (with certain limited exceptions) securities for a period of 90 days after the date of the prospectus supplement ending August 8, 2013. Regarding our ATM Program, we agreed not to issue or sell securities for a period of 30 days after the date of the underwriting agreement ending on June 9, 2013. | |
At-the-Market Program | |
In February 2013, we entered into an At-the-Market Equity Offering Sales Agreement with Stifel, under which Stifel, as our exclusive agent, at our discretion and at such times that we may determine from time to time, may sell up to a maximum of $25 million of our common stock over a three-year period. We are not required to sell any shares at any time during the term of the ATM Program. We have agreed to pay Stifel a commission of 3% of gross proceeds of any sales of shares. See, Note 17, “Subsequent Events – ATM Program,” to the consolidated financial statements in our 2012 Form 10-K. | |
Committed Equity Financing Facility (CEFF) | |
We had a CEFF dated June 11, 2010 with Kingsbridge Capital Limited (Kingsbridge), under which, for a period of up to three years, Kingsbridge was committed to purchase, subject to certain conditions, newly issued shares of our common stock. Our ability to access the CEFF was subject to certain covenants and conditions, including stock price and volume limitations. For a detailed description of our CEFF, see, Note 10, “Stockholders’ Equity – Registered Public Offerings – Committed Equity Financing Facility (CEFF),” to the consolidated financial statements in our 2012 Form 10-K. | |
The CEFF expired on June 11, 2013 with approximately 1.1 million available shares not issued. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value of Financial Instruments [Abstract] | ' | ||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Note 5 – Fair Value of Financial Instruments | |||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | |||||||||||||||||
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: | |||||||||||||||||
· | Level 1 – Quoted prices in active markets for identical assets and liabilities. | ||||||||||||||||
· | Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||
· | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||
Fair Value on a Recurring Basis | |||||||||||||||||
The table below categorizes assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012: | |||||||||||||||||
Fair Value | Fair value measurement using | ||||||||||||||||
30-Sep-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Money Market | $ | 19,877 | $ | 19,877 | $ | – | $ | – | |||||||||
Certificate of Deposit | 400 | 400 | – | – | |||||||||||||
Total Assets | $ | 20,277 | $ | 20,277 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Common stock warrant liability | $ | 4,678 | $ | – | $ | – | $ | 4,678 | |||||||||
Fair Value | Fair value measurement using | ||||||||||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Money Market | $ | 23,377 | $ | 23,377 | $ | – | $ | – | |||||||||
Certificate of Deposit | 400 | 400 | – | – | |||||||||||||
Total Assets | $ | 23,777 | $ | 23,777 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Common stock warrant liability | $ | 6,305 | $ | – | $ | – | $ | 6,305 | |||||||||
The tables below summarizes the activity of Level 3 inputs measured on a recurring basis for the nine months ended September 30, 2013 and 2012: | |||||||||||||||||
(in thousands) | Fair Value Measurements of | ||||||||||||||||
Common Stock Warrants Using | |||||||||||||||||
Significant Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
Balance at December 31, 2012 | $ | 6,305 | |||||||||||||||
Change in fair value of common stock warrant liability | (1,627 | ) | |||||||||||||||
Balance at September 30, 2013 | $ | 4,678 | |||||||||||||||
(in thousands) | Fair Value Measurements of | ||||||||||||||||
Common Stock Warrants Using | |||||||||||||||||
Significant Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
Balance at December 31, 2011 | $ | 6,996 | |||||||||||||||
Exercise of warrants | (136 | ) | |||||||||||||||
Change in fair value of common stock warrant liability | 5,063 | ||||||||||||||||
Balance at September 30, 2012 | $ | 11,923 | |||||||||||||||
The significant unobservable inputs used in the fair value measurement of common stock warrants are the historical volatility of our common stock market price, expected term of the applicable warrants, and the risk-free interest rate based on the U.S. Treasury yield curve in effect at the measurement date. In addition to the significant unobservable inputs noted above, the fair value measurement of certain five-year warrants issued in February 2011 also takes into account an assumption of the likelihood and timing of the occurrence of an event that would result in an adjustment to the exercise price in accordance with the anti-dilutive pricing provisions in the warrant. Any significant increases or decreases in the unobservable inputs, with the exception of the risk-free interest rate, would result in significantly higher or lower fair value measurements. | |||||||||||||||||
Significant Unobservable Input | 30-Sep-13 | 31-Dec-12 | |||||||||||||||
Assumptions of Level 3 Valuations | |||||||||||||||||
Historical Volatility | 55% - 61 | % | 56% -80 | % | |||||||||||||
Expected Term (in years) | 0.6 – 2.4 | 1.4 – 3.2 | |||||||||||||||
Risk-free interest rate | 0.05% - 0.45 | % | 0.16% - 0.36 | % | |||||||||||||
Fair Value of Long-Term Debt | |||||||||||||||||
As of September 30, 2013, the carrying value of our long-term debt, net of discounts, approximates fair value. We had no long-term debt as of December 31, 2012. We estimate the fair value of the Deerfield Facility using a discounted cash flow analysis. This analysis utilizes certain Level 3 unobservable inputs, including the effective interest rate and current cost of capital. Considerable judgment is required to interpret market data and to develop estimates of fair value. The estimates presented are not necessarily indicative of amounts we could realize in a current market exchange. The use of alternative market assumptions and estimation methodologies could have a material effect on these estimates of fair value. |
Longterm_Debt
Long-term Debt | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Long-term Debt [Abstract] | ' | ||||||||||||||||
Long-term Debt | ' | ||||||||||||||||
Note 6 – Long-term Debt | |||||||||||||||||
Loan Facility with Deerfield | |||||||||||||||||
On February 13, 2013, we entered into a secured loan facility (Deerfield Facility) with affiliates of Deerfield Management Company, L.P. (Deerfield) for up to $30 million in secured financing in 2013. Deerfield advanced to us $10 million upon execution of the agreement and agreed to advance an additional $20 million, subject to certain conditions, on or about the date of the first commercial sale of SURFAXIN drug product (Milestone Date), if the Milestone Date occurs on or before December 31, 2013. On November 8, 2013, we notified Deerfield that the first commercial sale of SURFAXIN has occurred, and anticipate receipt of the $20 million advance on or about December 3, 2013. | |||||||||||||||||
The loan may be prepaid in whole or in part without penalty at any time. In addition, the principal amount of the loan may be reduced to the extent that holders of the notes elect to apply all or a portion of the principal amount outstanding under the loan to satisfy the exercise price of all or a portion of the Deerfield Warrants upon exercise. The principal amount of the loan is payable in equal annual installments on the fourth, fifth and sixth anniversaries of the Deerfield Facility agreement, provided that the amount payable on the fourth anniversary shall be deferred for one year if either (i) our “Net Sales” (defined below) for the immediately preceding 12-month period are at least $20 million, or (ii) our “Equity Value” (defined below) is at least $200 million; and provided further, that the amount payable on the fifth anniversary (together with any amount deferred on the fourth anniversary) shall be deferred until the sixth anniversary if either (i) our “Net Sales” for the immediately preceding 12 month period are at least $30 million, or (ii) our “Equity Value” is at least $250 million. For the purposes of the foregoing deferrals of principal, “Net Sales” means, without duplication, the gross amount invoiced by us or on our behalf, any of our subsidiaries or any direct or indirect assignee or licensee for products, sold globally in bona fide, arm’s length transactions, less customary deductions determined without duplication in accordance with generally accepted accounting principles; and “Equity Value” means, with respect to each measurement date, the product of (x) the number of issued and outstanding shares of our common stock on such measurement date multiplied by (y) the per share closing price of our common stock on such measurement date. Accordingly, if the milestones are achieved in each year, payment of the principal amount could be deferred until the sixth anniversary date of the loan on February 13, 2019. | |||||||||||||||||
Any amounts received and outstanding under the Deerfield Facility will accrue interest at a rate of 8.75%, payable quarterly in cash. The Deerfield Facility agreement contains customary terms and conditions but does not require us to meet minimum financial and revenue performance covenants. In connection with each advance, Deerfield has received and, upon advance of the additional $20 million, will receive, a transaction fee equal to 1.5% of the amount disbursed. The facility agreement also contains various representations and warranties and affirmative and negative covenants customary for financings of this type, including restrictions on our ability to incur additional indebtedness and grant additional liens on our assets. In addition, all amounts outstanding under the Deerfield Facility may become immediately due and payable upon (i) an “Event of Default,” as defined in the Deerfield Facility agreement, in which case Deerfield would have the right to require us to repay the outstanding principal amount of the loan, plus any accrued and unpaid interest thereon, or (ii) the occurrence of certain events as defined in the facility agreement, including, among other things, the consummation of a change of control transaction or the sale of more than 50% of our assets (a Major Transaction). | |||||||||||||||||
In connection with the execution of the Deerfield Facility and receipt of the initial disbursement of $10 million, we issued to Deerfield warrants to purchase approximately 2.3 million shares of our common stock at an exercise price of $2.81. Upon disbursement of the additional $20 million loan under the facility agreement, we will issue additional warrants to Deerfield to purchase an additional 4.66 million shares of our common stock at an exercise price of $2.81 per share of common stock. The number of shares of common stock into which the Deerfield Warrants are exercisable and the exercise price of any Deerfield Warrant will be adjusted to reflect any stock splits, recapitalizations or similar adjustments in the number of outstanding shares of common stock. | |||||||||||||||||
The Deerfield Warrants will expire on the sixth anniversary of the facility agreement and contain certain limitations that generally prevent the holder from acquiring shares upon exercise of a Deerfield Warrant that would result in the number of shares beneficially owned by it to exceed 9.985% of the total number of shares of common stock then issued and outstanding. The holder of a Deerfield Warrant may exercise all or a portion of such Deerfield Warrant either for cash or on a cashless basis. In connection with a Major Transaction, as defined in the Deerfield Warrants, to the extent of consideration payable to stockholders in cash in connection with such Major Transaction, the holder may have the option to redeem the Deerfield Warrant or that portion of the Deerfield Warrant for cash in an amount equal to the Black-Scholes value (as defined in the Deerfield Warrant) of the Deerfield Warrant or that portion of the Deerfield Warrant redeemed. In addition, in connection with a Major Transaction, to the extent of any consideration payable to stockholders in securities, or in the event of an Event of Default, the holder may have the option to exercise the Deerfield Warrant and receive therefor that number of shares of Common Stock that equals the Black-Scholes value of the Deerfield Warrant or that portion of the Deerfield Warrant exercised. Prior to the holder exercising the Deerfield Warrant for shares in such transactions, the Company may elect to terminate the Deerfield Warrant or that portion of the Deerfield Warrant and pay the holder cash in an amount equal to the Black-Scholes value of the Deerfield Warrant. | |||||||||||||||||
We have recorded the loan as long-term debt at its face value of $10.0 million less debt discounts and issuance costs consisting of (i) $3.8 million fair value of the Deerfield Warrants issued upon the advance of the $10 million initial disbursement, and (ii) a $150,000 transaction fee. The discount is being accreted to the $10 million loan over its term using the effective interest method. The Deerfield Warrants are derivatives that qualify for an exemption from liability accounting as provided for in ASC Topic 815 “Derivatives and Hedging – Contracts in Entity’s Own Equity” (ASC 815) and have been classified as equity. | |||||||||||||||||
The fair value of the Deerfield Warrants at issuance was calculated using the Black-Scholes option-pricing model. The significant Level 3 unobservable inputs used in valuing the Deerfield Warrants are the historical volatility of our common stock market price, expected term of the warrants, and the risk-free interest rate based on the U.S. Treasury yield curve in effect at the measurement date. Any significant increases or decreases in the unobservable inputs, with the exception of the risk-free interest rate, would have resulted in a significantly higher or lower fair value measurement. | |||||||||||||||||
Significant Unobservable Input | |||||||||||||||||
Assumptions of Level 3 Valuations | |||||||||||||||||
Historical Volatility | 101 | % | |||||||||||||||
Expected Term (in years) | 6 | ||||||||||||||||
Risk-free interest rate | 1.175 | % | |||||||||||||||
Long-term debt as of September 30, 2013 consists solely of amounts due under the Deerfield Facility as follows: | |||||||||||||||||
Note Payable | $ | 10,000 | |||||||||||||||
Unamortized discount | (3,674 | ) | |||||||||||||||
Long-term debt, net of discount | $ | 6,326 | |||||||||||||||
The following amounts comprise the Deerfield Facility interest expense for the periods presented: | |||||||||||||||||
(in thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cash interest expense | $ | 221 | $ | – | $ | 551 | $ | – | |||||||||
Non-cash amortization of debt discounts | 125 | – | 302 | – | |||||||||||||
Amortization of debt costs | 5 | – | 13 | – | |||||||||||||
Total Deerfield Facility interest expenses | $ | 351 | $ | – | $ | 866 | $ | – | |||||||||
Cash interest expense represents interest of 8.75% on the outstanding principal amount for the period, paid in cash on a quarterly basis. Non-cash amortization of debt discount represents the amortization of transaction fees and the fair value of the warrants issued in connection with the Deerfield Facility. The amortization of debt costs represents legal costs incurred in connection with the Deerfield Facility. |
Common_Stock_Warrant_Liability
Common Stock Warrant Liability | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Common Stock Warrant Liability [Abstract] | ' | ||||||||||||||||
Common Stock Warrant Liability | ' | ||||||||||||||||
Note 7 – Common Stock Warrant Liability | |||||||||||||||||
We account for common stock warrants in accordance with applicable accounting guidance provided in ASC 815, either as derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. | |||||||||||||||||
The registered warrants that we issued in May 2009 and February 2010 have been classified as derivative liabilities and reported, at each balance sheet date, at estimated fair value determined using the Black-Scholes option-pricing model. The February 2011 five-year warrants have been classified as derivative liabilities and reported, at each balance sheet date, at estimated fair value determined using a trinomial pricing model. See, Note 8, “Common Stock Warrant Liability,” to the consolidated financial statements in our 2012 Form 10-K for a discussion of common stock warrant liability. | |||||||||||||||||
Selected terms and estimated fair value of warrants accounted for as derivative liabilities at September 30, 2013 are as follows: | |||||||||||||||||
Fair Value of Warrants | |||||||||||||||||
(in thousands) | |||||||||||||||||
Number of | Warrant | ||||||||||||||||
Issuance | Warrant | Exercise | Expiration | Issuance | September 30, | ||||||||||||
Date | Shares | Price | Date | Date | 2013 | ||||||||||||
5/13/09 | 466,667 | $ | 17.25 | 5/13/14 | $ | 3,360 | $ | – | |||||||||
2/23/10 | 916,669 | 12.75 | 2/23/15 | 5,701 | 2 | ||||||||||||
2/22/11 | 4,948,750 | 1.5 | 2/22/16 | 8,004 | 4,676 | ||||||||||||
Changes in the estimated fair value of warrants classified as derivative liabilities are reported in the accompanying Consolidated Statement of Operations as the “Change in fair value of common stock warrants.” |
Stock_Options_and_Stockbased_E
Stock Options and Stock-based Employee Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stock Options and Stock-based Employee Compensation [Abstract] | ' | ||||||||||||||||
Stock Options and Stock-based Employee Compensation | ' | ||||||||||||||||
Note 8 – Stock Options and Stock-Based Employee Compensation | |||||||||||||||||
We recognize in our financial statements all stock-based awards to employees and non-employee directors based on their fair value on the date of grant, calculated using the Black-Scholes option-pricing model. Compensation expense related to stock-based awards is recognized ratably over the vesting period, which for employees is typically three years. | |||||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses weighted-average assumptions noted in the following table: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Weighted-average expected volatility | 110 | % | 110 | % | |||||||||||||
Weighted-average expected term (in years) | 4.7 | 4.8 | |||||||||||||||
Weighted-average risk-free interest rate | 0.74 | % | 0.79 | % | |||||||||||||
Expected dividends | – | – | |||||||||||||||
The table below summarizes the total stock-based compensation expense included in the statements of operations for the periods presented: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research & Development | $ | 210 | $ | 150 | $ | 551 | $ | 388 | |||||||||
Selling, General & Administrative | 431 | 324 | 1,053 | 889 | |||||||||||||
Total | $ | 641 | $ | 474 | $ | 1,604 | $ | 1,277 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information in accordance with the instructions to Form 10‑Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normally recurring accruals) considered for fair presentation have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. There have been no changes to our critical accounting policies since December 31, 2012. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012 that we filed with the Securities and Exchange Commission (SEC) on March 15, 2013 (2012 Form 10-K). Readers are encouraged to review those disclosures in conjunction with this Quarterly Report on Form 10-Q. | |||||||||||||||||
Inventory | ' | ||||||||||||||||
Inventory | |||||||||||||||||
Inventories are determined at the lower of cost or market value with cost determined under the specific identification method. We assess the potential capitalization of inventory and the timing of when the related costs are expected to be recoverable through the commercialization of our products. Costs incurred prior to FDA approval of SURFAXIN drug product and registration of our initial AFECTAIR device have been recorded in our statement of operations as research and development expense. Due to a delay in commercial availability of SURFAXIN drug product, previously capitalized raw material costs of $195,072 were charged to research and development expense in the first quarter of 2013, as these raw materials were no longer expected to be used for commercial production. | |||||||||||||||||
Inventory as of September 30, 2013 consists of AFECTAIR devices available for commercial sale. Inventory costs for our AFECTAIR device consist primarily of third-party manufacturing fees, freight, and indirect personnel overhead costs. | |||||||||||||||||
Research and development expense | ' | ||||||||||||||||
Research and development expense | |||||||||||||||||
We track research and development expense by activity, as follows: (a) product development and manufacturing, (b) medical and regulatory operations, and (c) direct preclinical and clinical programs. Research and development expense includes personnel, facilities, manufacturing and quality operations, pharmaceutical and device development, research, clinical, regulatory, other preclinical and clinical activities and medical affairs. Research and development costs are charged to operations as incurred. For the nine months ended September 30, 2012, research and development expense includes a $0.5 million charge related to a milestone payment that became payable to Johnson & Johnson (J&J) upon FDA approval of SURFAXIN, in accordance with terms of our license agreement with J&J. | |||||||||||||||||
Net loss per common share | ' | ||||||||||||||||
Net loss per common share | |||||||||||||||||
Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per common share is computed by giving effect to all potentially dilutive securities outstanding for the period. | |||||||||||||||||
In accordance with Accounting Standards Codification (ASC) Topic 260, “Earnings per Share,” when calculating diluted net loss per common share, a gain associated with the decrease in the fair value of certain warrants classified as derivative liabilities results in an adjustment to the net loss; and the dilutive impact of the assumed exercise of the warrants results in an adjustment to the weighted average common shares outstanding. We utilize the treasury stock method to calculate the dilutive impact of the assumed exercise of the warrants. For the nine months ended September 30, 2013, the effect of the adjustments for warrants issued in February 2011 was dilutive. For the three months ended September 30, 2013 and for the three and nine months ended September 30, 2012, the effect of the adjustments for all warrants classified as derivative liabilities was non-dilutive. | |||||||||||||||||
The table below provides information pertaining to the calculation of diluted net loss per common share for the periods presented: | |||||||||||||||||
(in thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net loss as reported | $ | (12,224 | ) | $ | (13,346 | ) | $ | (33,486 | ) | $ | (30,500 | ) | |||||
Less: income from change in fair value of warrant liability | – | – | (1,525 | ) | – | ||||||||||||
Numerator for diluted net loss per common share | $ | (12,224 | ) | $ | (13,346 | ) | $ | (35,011 | ) | $ | (30,500 | ) | |||||
Denominator: | |||||||||||||||||
Basic weighted average common shares outstanding | 54,792 | 43,444 | 49,235 | 38,061 | |||||||||||||
Dilutive common shares from assumed warrant exercises | – | – | 1,142 | – | |||||||||||||
Diluted weighted average common shares outstanding | 54,792 | 43,444 | 50,377 | 38,061 | |||||||||||||
As of September 30, 2013 and 2012, 10.7 million and 12.0 million shares of common stock potentially issuable upon the exercise of certain stock options and warrants were excluded from the computation of diluted net loss per common share because their impact would have been anti-dilutive. | |||||||||||||||||
Recent accounting pronouncements | ' | ||||||||||||||||
Recent accounting pronouncements | |||||||||||||||||
There were no new accounting pronouncements issued during the nine months ended September 30, 2013 that are expected to have a material impact on the Company’s financial position, operating results, cash flows or disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Calculation of diluted net loss per common share | ' | ||||||||||||||||
The table below provides information pertaining to the calculation of diluted net loss per common share for the periods presented: | |||||||||||||||||
(in thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net loss as reported | $ | (12,224 | ) | $ | (13,346 | ) | $ | (33,486 | ) | $ | (30,500 | ) | |||||
Less: income from change in fair value of warrant liability | – | – | (1,525 | ) | – | ||||||||||||
Numerator for diluted net loss per common share | $ | (12,224 | ) | $ | (13,346 | ) | $ | (35,011 | ) | $ | (30,500 | ) | |||||
Denominator: | |||||||||||||||||
Basic weighted average common shares outstanding | 54,792 | 43,444 | 49,235 | 38,061 | |||||||||||||
Dilutive common shares from assumed warrant exercises | – | – | 1,142 | – | |||||||||||||
Diluted weighted average common shares outstanding | 54,792 | 43,444 | 50,377 | 38,061 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value of Financial Instruments [Abstract] | ' | ||||||||||||||||
Assets and liabilities measured at fair value | ' | ||||||||||||||||
The table below categorizes assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012: | |||||||||||||||||
Fair Value | Fair value measurement using | ||||||||||||||||
30-Sep-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Money Market | $ | 19,877 | $ | 19,877 | $ | – | $ | – | |||||||||
Certificate of Deposit | 400 | 400 | – | – | |||||||||||||
Total Assets | $ | 20,277 | $ | 20,277 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Common stock warrant liability | $ | 4,678 | $ | – | $ | – | $ | 4,678 | |||||||||
Fair Value | Fair value measurement using | ||||||||||||||||
31-Dec-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | |||||||||||||||||
Money Market | $ | 23,377 | $ | 23,377 | $ | – | $ | – | |||||||||
Certificate of Deposit | 400 | 400 | – | – | |||||||||||||
Total Assets | $ | 23,777 | $ | 23,777 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||||
Common stock warrant liability | $ | 6,305 | $ | – | $ | – | $ | 6,305 | |||||||||
Common stock warrants measured at Level 3 inputs on recurring basis | ' | ||||||||||||||||
The tables below summarizes the activity of Level 3 inputs measured on a recurring basis for the nine months ended September 30, 2013 and 2012: | |||||||||||||||||
(in thousands) | Fair Value Measurements of | ||||||||||||||||
Common Stock Warrants Using | |||||||||||||||||
Significant Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
Balance at December 31, 2012 | $ | 6,305 | |||||||||||||||
Change in fair value of common stock warrant liability | (1,627 | ) | |||||||||||||||
Balance at September 30, 2013 | $ | 4,678 | |||||||||||||||
(in thousands) | Fair Value Measurements of | ||||||||||||||||
Common Stock Warrants Using | |||||||||||||||||
Significant Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
Balance at December 31, 2011 | $ | 6,996 | |||||||||||||||
Exercise of warrants | (136 | ) | |||||||||||||||
Change in fair value of common stock warrant liability | 5,063 | ||||||||||||||||
Balance at September 30, 2012 | $ | 11,923 | |||||||||||||||
Significant unobservable input assumption used for valuation | ' | ||||||||||||||||
Any significant increases or decreases in the unobservable inputs, with the exception of the risk-free interest rate, would result in significantly higher or lower fair value measurements. | |||||||||||||||||
Significant Unobservable Input | 30-Sep-13 | 31-Dec-12 | |||||||||||||||
Assumptions of Level 3 Valuations | |||||||||||||||||
Historical Volatility | 55% - 61 | % | 56% -80 | % | |||||||||||||
Expected Term (in years) | 0.6 – 2.4 | 1.4 – 3.2 | |||||||||||||||
Risk-free interest rate | 0.05% - 0.45 | % | 0.16% - 0.36 | % |
Longterm_Debt_Tables
Long-term Debt (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Long-term Debt [Abstract] | ' | ||||||||||||||||
Significant unobservable input assumptions of Level 3 valuations | ' | ||||||||||||||||
Any significant increases or decreases in the unobservable inputs, with the exception of the risk-free interest rate, would have resulted in a significantly higher or lower fair value measurement. | |||||||||||||||||
Significant Unobservable Input | |||||||||||||||||
Assumptions of Level 3 Valuations | |||||||||||||||||
Historical Volatility | 101 | % | |||||||||||||||
Expected Term (in years) | 6 | ||||||||||||||||
Risk-free interest rate | 1.175 | % | |||||||||||||||
Long term debt included in balance sheet | ' | ||||||||||||||||
Long-term debt as of September 30, 2013 consists solely of amounts due under the Deerfield Facility as follows: | |||||||||||||||||
Note Payable | $ | 10,000 | |||||||||||||||
Unamortized discount | (3,674 | ) | |||||||||||||||
Long-term debt, net of discount | $ | 6,326 | |||||||||||||||
Interest expense included in statement of operations | ' | ||||||||||||||||
The following amounts comprise the Deerfield Facility interest expense for the periods presented: | |||||||||||||||||
(in thousands) | Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cash interest expense | $ | 221 | $ | – | $ | 551 | $ | – | |||||||||
Non-cash amortization of debt discounts | 125 | – | 302 | – | |||||||||||||
Amortization of debt costs | 5 | – | 13 | – | |||||||||||||
Total Deerfield Facility interest expenses | $ | 351 | $ | – | $ | 866 | $ | – |
Common_Stock_Warrant_Liability1
Common Stock Warrant Liability (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Common Stock Warrant Liability [Abstract] | ' | ||||||||||||||||
Estimated fair value of warrants accounted for derivative liabilities | ' | ||||||||||||||||
Selected terms and estimated fair value of warrants accounted for as derivative liabilities at September 30, 2013 are as follows: | |||||||||||||||||
Fair Value of Warrants | |||||||||||||||||
(in thousands) | |||||||||||||||||
Number of | Warrant | ||||||||||||||||
Issuance | Warrant | Exercise | Expiration | Issuance | September 30, | ||||||||||||
Date | Shares | Price | Date | Date | 2013 | ||||||||||||
5/13/09 | 466,667 | $ | 17.25 | 5/13/14 | $ | 3,360 | $ | – | |||||||||
2/23/10 | 916,669 | 12.75 | 2/23/15 | 5,701 | 2 | ||||||||||||
2/22/11 | 4,948,750 | 1.5 | 2/22/16 | 8,004 | 4,676 | ||||||||||||
Stock_Options_and_Stockbased_E1
Stock Options and Stock-based Employee Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stock Options and Stock-based Employee Compensation [Abstract] | ' | ||||||||||||||||
Weighted-average assumptions in estimating fair value of options | ' | ||||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses weighted-average assumptions noted in the following table: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Weighted-average expected volatility | 110 | % | 110 | % | |||||||||||||
Weighted-average expected term (in years) | 4.7 | 4.8 | |||||||||||||||
Weighted-average risk-free interest rate | 0.74 | % | 0.79 | % | |||||||||||||
Expected dividends | – | – | |||||||||||||||
Employee stock-based compensation | ' | ||||||||||||||||
The table below summarizes the total stock-based compensation expense included in the statements of operations for the periods presented: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research & Development | $ | 210 | $ | 150 | $ | 551 | $ | 388 | |||||||||
Selling, General & Administrative | 431 | 324 | 1,053 | 889 | |||||||||||||
Total | $ | 641 | $ | 474 | $ | 1,604 | $ | 1,277 |
Liquidity_Risks_and_Management1
Liquidity Risks and Management's Plans (Details) (USD $) | 9 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2012 | Feb. 28, 2011 | Sep. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Nov. 05, 2013 | 31-May-13 | 15-May-13 | Nov. 30, 2013 | Nov. 08, 2013 | |
Deerfield Management Company [Member] | Five Year Warrant [Member] | Five Year Warrant [Member] | Five Year Warrant [Member] | Deerfield Warrants [Member] | ATM Program [Member] | ATM Program [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | |||||
Liquidity Risks and Management's Plans [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $21,177,000 | $36,064,000 | $26,892,000 | $10,189,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and accrued expenses | 6,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock issued in public offering (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 713,920 | ' | 25,000,000 | ' | 9,500,000 | ' | ' |
Per share price of common stock issuance (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2 | ' | $1.50 | ' | ' |
Gross proceeds from issuance of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' |
Net proceeds from issuance of common stock | 15,114,000 | 43,605,000 | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | ' | 46,800,000 | ' | ' | ' | ' |
Over Allotment Exercise Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | '30 days | ' | ' |
Number of additional shares of common stock that may be issued upon exercise of over allotment (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,750,000 | ' | 1,425,000 | ' | ' |
Number of shares of common stock issued upon exercise of overallotment (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,347,000 | ' | 3,750,000 | ' |
Net proceeds from over allotment exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,100,000 | ' |
Maximum value of potential common stock available for issue | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000,000 | 25,000,000 | ' | ' | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Second disbursement under loan facility | 20,000,000 | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrant shares issuable (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 4,660,000 | ' | ' | ' | ' | ' | ' | ' |
Number of warrant shares outstanding (in shares) | 10,300,000 | ' | ' | ' | 2,300,000 | 4,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized (in shares) | 150,000,000 | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock available for future issuance (in shares) | 71,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,000,000 |
First disbursement under loan facility | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from secured loan upon execution of the agreement | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants (in dollars per share) | $2.81 | ' | ' | ' | $2.81 | $1.50 | $2.80 | $3.20 | $2.81 | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2013 | |
Inventory [Abstract] | ' | ' | ' | ' | ' |
Capitalized raw material now charged to research and development account | ' | ' | ' | ' | $195,072 |
Research and development expense [Abstract] | ' | ' | ' | ' | ' |
Milestone payment as required by licensing agreement | ' | ' | ' | 500,000 | ' |
Numerator: | ' | ' | ' | ' | ' |
Net loss as reported | -12,224,000 | -13,346,000 | -33,486,000 | -30,500,000 | ' |
Less: income from change in fair value of warrant liability | 0 | 0 | -1,525,000 | 0 | ' |
Numerator for diluted net loss per common share | ($12,224,000) | ($13,346,000) | ($35,011,000) | ($30,500,000) | ' |
Denominator: | ' | ' | ' | ' | ' |
Basic weighted average common shares outstanding (in shares) | 54,792,000 | 43,444,000 | 49,235,000 | 38,061,000 | ' |
Dilutive common shares from assumed warrant exercises (in shares) | 0 | 0 | 1,142,000 | 0 | ' |
Diluted weighted average common shares outstanding (in shares) | 54,792,000 | 43,444,000 | 50,377,000 | 38,061,000 | ' |
Potential common stock issuable upon exercise of stock options and warrants (in shares) | ' | ' | 10,700,000 | 12,000,000 | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Oct. 31, 2013 | Sep. 30, 2013 | Nov. 05, 2013 | 31-May-13 | 15-May-13 | Nov. 30, 2013 | Sep. 30, 2013 | 31-May-13 | Sep. 30, 2013 | Jun. 11, 2013 |
ATM Program [Member] | ATM Program [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | Registered Public Offerings [Member] | June 2010 CEFF [Member] | June 2010 CEFF [Member] | |
Subsequent Event [Member] | ||||||||||
Stockholders' Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares of common stock issued in public offering (in shares) | 713,920 | ' | 25,000,000 | ' | 9,500,000 | ' | ' | ' | ' | ' |
Per share price of common stock issuance (in dollars per share) | ' | ' | $2 | ' | $1.50 | ' | ' | ' | ' | ' |
Gross proceeds from offering | ' | ' | ' | ' | $14.30 | ' | ' | ' | ' | ' |
Net proceeds from issuance of common stock | ' | ' | ' | ' | 13.2 | ' | ' | ' | ' | ' |
Over allotment exercise period | ' | ' | '30 days | ' | '30 days | ' | ' | ' | ' | ' |
Number of additional shares of common stock that may be issued upon exercise of over allotment (in shares) | ' | ' | 3,750,000 | ' | 1,425,000 | ' | ' | ' | ' | ' |
Number of shares of common stock issued upon exercise of over allotment (in shares) | ' | ' | ' | 1,347,000 | ' | 3,750,000 | ' | ' | ' | ' |
Net proceeds from over allotment exercised | ' | ' | ' | ' | ' | 7.1 | ' | 1.9 | ' | ' |
Restriction period for issuing or selling securities | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' |
Period of agency agreement | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum value of potential common stock available for issue | $23 | $25 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage sales commission on shares (in hundredths) | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Life of agreement to purchase shares | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' |
Number of shares expired under the agreement (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (Recurring [Member], USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets [Abstract] | ' | ' |
Fair Value | $20,277 | $23,777 |
Level 1 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 20,277 | 23,777 |
Level 2 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Level 3 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Money Markets [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 19,877 | 23,377 |
Money Markets [Member] | Level 1 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 19,877 | 23,377 |
Money Markets [Member] | Level 2 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Money Markets [Member] | Level 3 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Certificate of Deposit [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 400 | 400 |
Certificate of Deposit [Member] | Level 1 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 400 | 400 |
Certificate of Deposit [Member] | Level 2 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Certificate of Deposit [Member] | Level 3 [Member] | ' | ' |
Assets [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Common Stock Warrant Liability [Member] | ' | ' |
Liabilities [Abstract] | ' | ' |
Fair Value | 4,678 | 6,305 |
Common Stock Warrant Liability [Member] | Level 1 [Member] | ' | ' |
Liabilities [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Common Stock Warrant Liability [Member] | Level 2 [Member] | ' | ' |
Liabilities [Abstract] | ' | ' |
Fair Value | 0 | 0 |
Common Stock Warrant Liability [Member] | Level 3 [Member] | ' | ' |
Liabilities [Abstract] | ' | ' |
Fair Value | $4,678 | $6,305 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments, Level 3 Rollforward (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Fair value measurements of common stock warrants using significant unobservable inputs (level 3) | ' | ' |
Balance at beginning of period | $6,305 | ' |
Balance at end of period | 4,678 | ' |
Exercisable period of warrants | '5 years | ' |
Level 3 [Member] | ' | ' |
Fair value measurements of common stock warrants using significant unobservable inputs (level 3) | ' | ' |
Balance at beginning of period | 6,305 | 6,996 |
Exercise of warrants | ' | -136 |
Change in fair value of common stock warrant liability | -1,627 | 5,063 |
Balance at end of period | $4,678 | $11,923 |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments, Significant Unobsesrvable input assumptions of Level 3 valuations (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Historical Volatility (in hundredths) | 101.00% | ' |
Expected Term (in years) | '6 years | ' |
Risk-free interest rate (in hundredths) | 1.18% | ' |
Minimum [Member] | Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Historical Volatility (in hundredths) | 55.00% | 56.00% |
Expected Term (in years) | '7 months 6 days | '1 year 4 months 24 days |
Risk-free interest rate (in hundredths) | 0.05% | 0.16% |
Maximum [Member] | Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Historical Volatility (in hundredths) | 61.00% | 80.00% |
Expected Term (in years) | '2 years 4 months 24 days | '3 years 2 months 12 days |
Risk-free interest rate (in hundredths) | 0.45% | 0.36% |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Share data in Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Long-term Debt [Abstract] | ' | ' | ' | ' | ' |
Date facility agreement entered | ' | ' | 13-Feb-13 | ' | ' |
Loan facility, maximum amount | $30,000,000 | ' | $30,000,000 | ' | ' |
First disbursement under loan facility | 10,000,000 | ' | 10,000,000 | ' | ' |
Second disbursement under loan facility | 20,000,000 | ' | 20,000,000 | ' | ' |
Loan facility payment terms | ' | ' | 'The principal amount of the loan is payable in equal annual installments on the fourth, fifth and sixth anniversaries of the Deerfield Facility agreement, provided that the amount payable on the fourth anniversary shall be deferred for one year if either (i) our bNet Salesb (defined below) for the immediately preceding 12-month period are at least $20 million, or (ii) our bEquity Valueb (defined below) is at least $200 million; and provided further, that the amount payable on the fifth anniversary (together with any amount deferred on the fourth anniversary) shall be deferred until the sixth anniversary if either (x) our bNet Salesb for the immediately preceding 12 month period are at least $30 million, or (ii) our bEquity Valueb is at least $250 million. | ' | ' |
Transaction fee, percentage (in hundredths) | ' | ' | 1.50% | ' | ' |
Cash interest rate under loan facility (in hundredths) | 8.75% | ' | 8.75% | ' | ' |
Percentage sale of assets (in hundredths) | ' | ' | 50.00% | ' | ' |
Number of shares under issued warrants (in shares) | 2.3 | ' | 2.3 | ' | ' |
Exercise price of warrants (in dollars per share) | $2.81 | ' | $2.81 | ' | ' |
Number of shares under unissued warrants (in shares) | 4.66 | ' | 4.66 | ' | ' |
Percentage of common stock to single holder, maximum (in hundredths) | ' | ' | 9.99% | ' | ' |
Fair value of warrants issued upon advance of initial disbursement | 3,800,000 | ' | 3,800,000 | ' | ' |
Transaction fee | 150,000 | ' | 150,000 | ' | ' |
Significant unobservable input assumptions of Level 3 valuations [Abstract] | ' | ' | ' | ' | ' |
Historical Volatility | ' | ' | 101.00% | ' | ' |
Expected Term (in years) | ' | ' | '6 years | ' | ' |
Risk-free interest rate | ' | ' | 1.18% | ' | ' |
Carrying value of Facility Agreement [Abstract] | ' | ' | ' | ' | ' |
Note Payable | 10,000,000 | ' | 10,000,000 | ' | ' |
Unamortized discount | -3,674,000 | ' | -3,674,000 | ' | 0 |
Long-term debt, net of discount | 6,326,000 | ' | 6,326,000 | ' | ' |
Interest expense [Abstract] | ' | ' | ' | ' | ' |
Cash interest expense | 221,000 | 0 | 551,000 | 0 | ' |
Non-cash amortization of debt discount | 125,000 | 0 | 302,000 | 0 | ' |
Amortization of debt costs | 5,000 | 0 | 13,000 | 0 | ' |
Total interest expense | $351,000 | $0 | $866,000 | $0 | ' |
Common_Stock_Warrant_Liability2
Common Stock Warrant Liability (Details) (USD $) | 0 Months Ended | 0 Months Ended | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | 13-May-09 | Sep. 30, 2013 | Feb. 23, 2010 | Sep. 30, 2013 | Feb. 22, 2011 | Sep. 30, 2013 |
Five Year Warrant 1 [Member] | Five Year Warrant 1 [Member] | Five Year Warrant 2 [Member] | Five Year Warrant 2 [Member] | Five Year Warrant 3 [Member] | Five Year Warrant 3 [Member] | |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' |
Exercisable period of warrants | '5 years | ' | '5 years | ' | '5 years | ' |
Estimated fair value of warrants accounted for as derivative liabilities [Abstract] | ' | ' | ' | ' | ' | ' |
Issuance Date | 13-May-09 | ' | 23-Feb-10 | ' | 22-Feb-11 | ' |
Number of Warrant Shares Issuable (in shares) | 466,667 | ' | 916,669 | ' | 4,948,750 | ' |
Exercise Price (in dollars per share) | $17.25 | ' | $12.75 | ' | $1.50 | ' |
Warrant Expiration Date | 13-May-14 | ' | 23-Feb-15 | ' | 22-Feb-16 | ' |
Fair Value of Warrants | $3,360 | $0 | $5,701 | $2 | $8,004 | $4,676 |
Stock_Options_and_Stockbased_E2
Stock Options and Stock-based Employee Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stock Options and Stock-based Employee Compensation [Abstract] | ' | ' | ' | ' |
Weighted-average vesting period of stock options | ' | ' | '3 years | ' |
Weighted-average assumptions used in estimating fair value of stock options [Abstract] | ' | ' | ' | ' |
Weighted average expected volatility (in hundredths) | ' | ' | 110.00% | 110.00% |
Weighted average expected term (in years) | ' | ' | '4 years 8 months 12 days | '4 years 9 months 18 days |
Weighted average risk-free interest rate (in hundredths) | ' | ' | 0.74% | 0.79% |
Expected dividends (in hundredths) | ' | ' | 0.00% | 0.00% |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Employee stock-based compensation | $641 | $474 | $1,604 | $1,277 |
Research and Development [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Employee stock-based compensation | 210 | 150 | 551 | 388 |
Selling, General & Administrative [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Employee stock-based compensation | $431 | $324 | $1,053 | $889 |