☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
355 Alhambra Circle , Suite 801 Coral Gables , Florida | 33134 | |
(Address of principal executive offices) | (Zip Code) |
value $0.001 per share Nasdaq Capital Market(Title of each class) (Name of exchange on which registered) (§Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. ☐, and “smaller reporting company” and “emerging growth company” in RuleLarge accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒☐ Emerging Growth Company ☐
$444,887,344.
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EXHIBITS FILED WITH FORM 10-K |
EXHIBITS FILED WITH FORM10-K
EX 4.5 | Description of the | |||||
EX 23.1 | Consent of Independent Registered Public Accounting Firm | |||||
EX 31.1 | Section 302 Certification of CEO | |||||
EX 31.2 | Section 302 Certification of CFO | |||||
EX 32.1 | Section 906 Certification of CEO | |||||
EX 32.2 | Section 906 Certification of CFO |
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whether
whether
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whether
changes inproduct at the healthcare industry andprice that we charge for the effect of political pressure from President Trump, Congress and/or medical professionals seeking to reduce prescription drug costs;
changes to the healthcare industry occasioned by any future repeal and replacement of the Affordable Care Act, in laws relating to the pricing of drug products, or changes in the healthcare industry generally;
the scope, rate of progress and expense of our clinical trials and studies,pre-clinical studies,proof-of-concept studies, and our other drug development activities, and whether our trials and studies will be successful;
our ability to complete our trials and studies on a timely basis and within the budgets we establish for such trials and studies;
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the result of our currently ongoing arbitration action with Northwestern University regarding our license forCPP-115;
whether our version of generic vigabatrin tablets will ever be approved by the United States Food and Drug Administration (FDA);
even if vigabatrin tablets are approved for commercialization, whether Endo Ventures/Par Pharmaceutical will be successful in marketing the product;
whether Catalyst will earn milestone payments on approval of an Abbreviated New Drug Application (ANDA) for generic vigabatrin tablets and royalties on sales of generic vigabatrin tablets; and
theThe ability of our third-party suppliers and contract manufacturers to maintain compliance with current Good Manufacturing Practices (cGMP).
Item 1. | Business |
patients (ages 17 and above). In January 2019, we launched Firdapsepayerpayor reimbursement (National Account Managers) personnel.. We also have a field-based force of six medical science liaisons who are helping educate the medical communities and patients about LEMS and about our ongoing clinical trial activities evaluating FirdapseCMS and MuSKAnti-MuSK antibody positive myasthenia gravis, or
We are currently conducting a Phase 3Serbia), double-blind, placebo-controlled, clinical trial evaluating Firdapse® for the treatment ofMuSK-MGbeing conducted under a Special Protocol Assessment (SPA) with the FDA. The Unfortunately, the
Becausesymptom variability during the FDA has granted Orphan Drug Designation for Firdapse®double-blind withdrawal period. We believe that sources of such variability can be addressed in a redesigned study that may better demonstrate the efficacy of our drug for the treatment of patients
We are conductingassurance that the FDA will either grant aproof-of-concept meeting, agree with our protocol design or, even if the study is successful, accept the results of a single study of a different trial design as sufficient evidence for approval of the
HNPP patients. There can be no assurance that our currently ongoingthis
Finally, we intend to take steps to seek approval
Recent Developments Regarding PricingJapan or obtain orphan drug designation.
The pricing of pharmaceutical products, in general, and of specialty drugs, in particular, has been a topic of concern in
patent rights.
In early February 2019, we received a letter from Senator Bernie Sanders asking us to justify our pricing decision for Firdapse®. In the letter, Senator Sanders accuses us of “fleecing” Americans and “immoral exploitation” because of our decision regarding the pricing of Firdapse®. We have responded to Senator Sanders, who has issued a public statement in response asking FDA Commissioner Scott Gottlieb to allow pharmacies and manufacturers who were previously making this drug to be permitted to resume providing it.
In our response to Senator Sanders, we noted the following:
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We respectfully question the notion that the use of an experimental product not approved by the FDA is an acceptable standard of care for LEMS patients – or indeed for any patients. The distribution of products under compassionate use programs is only intended to allow dispensing of unapproved drugs for a limited period of time while companies undertake the necessary steps to obtain FDA review and approval of their product. This means of “distribution” was never intended to be a final or even a long term mechanism for making drugs available to patients under the law, and such a notion represents a dangerous precedent that runs counter to the entire FDA regulatory structure.
There can be no assurance as to how these matters will affectthe impact that future patent claims against us may have on our business, orfinancial condition, results of operations.
We are also aware that the vocal group of neuromuscular physicians and some LEMS patients who have raised these issues in the past are continuing to raise concerns with the pricing of our product and with the appropriateness of the provisions in the Orphan Drug Act under which we were granted exclusivity for Firdapse®. A few of these patients continue to say negative things about us to the media, to the FDA and to politicians. We cannot assess the impact of these activities on our business.
operations, or prospects.
On December 18, 2018, we announced that we had signedentered into a definitive agreement with Endo International PLC’splc’s subsidiary, Endo Ventures Limited (“Endo”), for the further development and commercialization of generic Sabril have received anandof $500,000. We will be entitled to receive a milestone payment of $2.0 million on the commercial launch of the product. Further, we will receive milestone payments based on achievement of regulatory approvals, and a sharing of defined net profits upon commercialization and we are obligated to share the costs of certain expenses for development.
development expenses.
Commercialize Firdapse ® for the treatment of LEMS and other potential neuromuscular diseases and improve disease awareness . We are currently commercializing Firdapse® in the United States and Canada. A cornerstone of our strategy |
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Firdapse® product overview
Firdapse® is Catalyst’sour continuing development of Catalyst Pathways
Congenital Myasthenic Syndromes (CMS)
Congenital Myasthenic Syndromes, or CMS, are rare neuromuscular disorders comprising a spectrum of genetic defects and are characterized by fatigable weakness of skeletal muscles with onset at or shortly after birth or early childhood; in rare cases symptoms may not manifest themselves until later in childhood. Certain types of CMS are thought to be hereditary (autosomal recessive), while others have no known cause. The severity and course of the genetic disease types are variable, ranging from minor symptoms to progressive disabling weakness; symptoms may be mild, but sudden severe exacerbations of weakness or even sudden episodes of respiratory insufficiency also occur.
Patients with CMS may respond to unapproved pharmacologic intervention, including cholinesterase inhibitors, amifampridine (i.e.3,4-DAP), ephedrine, fluoxetine or quinidine, and albuterol, alone or in combinations. The particular therapy is generally dictated by the diagnosed CMS type, as drugs beneficial in treating one type of CMS can be detrimental in patients with another type of CMS.
CMS is rare, and based on currently available information, we estimate that there are between 1,000 and 1,500 CMS patients in the United States. There is currently no drug therapy approved by the FDA for the treatment of CMS.
Spinal Muscular Atrophy
Spinal Muscular Atrophy (SMA)
SMA Type 3 (sometimes called Kugelberg-Welander disease) includes clinically heterogeneous patients. They typically reach all major motor milestones in childhood and independent walking by adulthood. However, during infancy they typically have proximal muscular weakness. Some might need wheelchair assistance in childhood, whereas others might continue to walk and live productive adult lives with minor muscular weakness. Patients who lose ambulation often develop scoliosis and other medical problems related to poor mobility and muscle tone, such as obesity and osteoporosis. Two subgroups of severity have been suggested based on the probability of being able to walk by age 10 and on the subsequent probability of losing the ability to walk by age 40. Significant differences in losing the ability to walk have been observed in relation to those with an onset of weakness before (SMA 3a) and after (SMA 3b) age 3.
Due to the heterogeneity of the disease and the variations in life expectancy, prevalence is difficult to determine and not well defined for the different types of SMA. Current estimates place the prevalence of SMA Types 2 and 3 at about 1.5 per 100,000 people, with the majority of these being SMA Type 3 due to the longer life span of SMA Type 3 patients.expectancy. Based on currently available data, we estimate the prevalence of SMA Type 3HNPP in the United States to be between 2,5002,300 and 3,5005,200 patients.
with BioMarin for Firdapse
Under the BioMarin License Agreement, we agreed to make the following payments:
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Our first and approval of our NDA
As part of the BioMarin License Agreement, we took over a Phase 3 clinical trial that BioMarin had previously begun in the United States and Europe evaluating Firdapse®
On September 29, 2014, we reportedtop-line results from this trial. The primary endpoint of change2016 in quantitative myasthenia gravis score, or QMG, at day 14 reached statistical significance (p=0.0452), with a worsening of 2.2 points observed in the placebo group and a worsening of 0.4 points observed in the treatment group. Further, the primary endpoint of change in subject global impression, or SGI, at day 14 was highly statistically significant (p=0.0028), with a worsening of 2.6 points observed in the placebo group and a worsening of 0.8 points observed in the treatment group.
First NDA submission andRefuse-to-File Letter
On July 22, 2015, we announced that we had initiated a rolling submission of an NDA for Firdapse® for the treatment of LEMS and CMS, and on December 17, 2015, we announced the completion of that submission. On February 17, 2016, we announced that we had received aRefuse-to-File (RTF) letter from the FDA regarding our NDA submission. The RTF letter stated that after a preliminary review, the FDA has found that our application was not sufficiently complete and requested additional supporting information, including the requirement that we perform three abuse liability studies for Firdapse®. The letter did not comment on the acceptability of the submitted clinical data, and no judgment was made in the letter on the efficacy or safety of Firdapse®.
On April 26, 2016, we announced that we met with the FDA to discuss the RTF letter. During that meeting, the FDA advised us that in addition to the results of our first Phase 3 trial, we would need to submit positive results from a second adequate and well-controlled study in patients with LEMS.
Our second Phase 3 clinical trial(LMS-003)
Our second Phase 3 trial evaluating Firdapse®for the treatment of LEMS (designatedas LMS-003) was conducted at sites in Miami, Florida and Los Angeles, California. The double-blind, placebo-controlled withdrawal trial had thesame co-primary endpoints as our first Phase 3 trial evaluating Firdapse®for the treatment of LEMS. Further, the FDA allowed us to enroll patients from our Expanded Access Program (EAP) as study subjects in this second trial. This second Phase 3 trial was conducted under a Special Protocol Assessment (SPA) with the FDA for the protocol design, clinical endpoints, and statistical analysis approach to be taken in the trial. Details of theLMS-003 trial are available onwww.clinicaltrials.gov (NCT02970162). Enrollment in this trial, which included 26 subjects, was completed in October 2017.
On November 27, 2017, we reported positivetop-line results from this trial. This trial had two prospectively definedco-primary endpoints. The first of these, quantitative myasthenia gravis score (QMG), reached statistical significance (p=0.0004), and the second subject global impression (SGI), reached statistical significance (p=0.0003). More importantly, a clinically significant difference of 6.4 points was observed between the Firdapse® and placebo groups for the QMG endpoint. Firdapse® was well tolerated and showed a similar safety profile to that seen in earlier studies. Allp-values reported are based on the entire intent to treat (ITT) population of patients that enrolled in this trial.
The prospectively defined secondary endpoint for the physician’s clinical global impression of improvement(CGI-I) achieved statistical significance (p=0.0020). Further, the exploratory endpoints of triple timed up and go (3TUG, p=0.0112) and the evaluation of theQMG-Limb domains endpoint (p=0.0010) were also statistically significant. The exploratory endpoint of most bothersome symptom (MBS) (p=0.0572) was not significant, but shows a trend.
The results of this trial were published in March 2019 in the Journal of Clinical Neuromuscular Disease (J.(
Approval of Firdapse® for the treatment of LEMS in the United States
Finally, the FDA required us to perform a second carcinogenicity study of amifampridine phosphate in mice, which we expect to complete on a timely basis.
were previously enrolled in our EAP.
Pathways
In early 2020, we expanded our field sales group by almost one hundred percent and established a partnership with an experienced inside sales agency generating leads through telemarketing to targeted physicians. Through this expansion of our sales team, we are working to expand our sales efforts beyond the neuromuscular specialists who regularly treat LEMS patients to reach roughly 9,000 neurology and neuromuscular healthcare providers that might be treating an adult LEMS patient who can benefit from Firdapse
The cornerstone of our initial sales efforts is to transition patients who have been in our EAP program and patients who have been taking investigational or compounded3,4-DAP to our approved product. The level of effort to generate awareness to these patients and their physicians is low, given that they
Pricing of and access
We have established pricing for Firdapse® at an annual list price of $375,000 for a typical LEMS patient who remains 100% persistent and compliant with therapy for an entire year. We believe that the pricing of our product is in line with the pricing of other products that provide significant clinical benefits in treating an ultra-orphan disease of similar severity and in order to properly compensate companies for the costs associated with developing, manufacturing, and marketing an orphan drug in compliance with regulatory requirements. We believe that our drug will be widely covered and reimbursed by private and public payors for the indicated small population of adult LEMS patients, as part of their mission to assure that rare disease patients receive timely treatment for proven medicines. Furthermore, forecasted rebates, discounts, patient commercialco-pay support, Medicare coverage gap subsidies, statutory Medicaid discounts and other governmental discounts will result in our net sale price being15-20% lower than our annual list price for the product.
Further,
On March 15, 2017, wereportedCMS, andMuSK-MG, we anticipateour experience has been that securing coverage and appropriate reimbursement from third-party payors will requirerequires targeted education and highly skilled insurance navigation experts that have experience with rare disease launches and medical exception processes at insurance companies to provide patient coverage for important rare disease therapies. To that end, we have engaged a dedicated team of field-based market access account managers and reimbursement experts as well as a patient service center staffed with experienced personnel focused on ensuring that clinically-qualified patients have access to our product.agreecontinue to cover our product, and if so, at what level of paymentreimbursement. Further, there can be no assurance as to whether payors will in the future require that patients try Ruzurgimake forare treated with Firdapsenow thatwhen necessary, we have launched our product, we are providingprovide patients with access to therapy at no charge while those patients are awaiting coverage decisions.of additional indicationsWe are currently evaluating Firdapse®for the treatment of three additional neuromuscular indications CMS,MuSK-MG, and SMA Type 3. these additional indications is as follows:Ongoing phase 3 clinical trial evaluating Firdapse® for the treatment of CMSWe are currently conducting a Phase 3 clinical trial evaluating Firdapse® for the treatment of certain types of CMS. This trial, which will include approximately 23 adult and pediatric subjects, is being conducted at trial sites around the United States and Canada. Details of this trial are available onwww.clinicaltrials.gov (NCT02562066). Based on currently available information, we expect to reporttop-line results from this trial in the second half of 2019. There can be no assurance that any trial we conduct evaluating Firdapse® for the treatment of CMS will be successful or whether any NDA or NDA supplement that we may submit for Firdapse® for the treatment of CMS in the future will be filed by the FDA for review and approved.Previously completedproof-of-concept studyannounced the initiation ofinitiated an investigator-sponsored, randomized, double-blind, placebo-controlled, crossover We provided study drug, placebo, and financial support for this study. recently published in SAGE Open Medicine and can be accessed atOngoing phase 3 clinical trial evaluating Firdapse® for the treatment ofMuSK-MGWe are currently conductingMuSK-MG adults withSPASpecial Protocol Assessment (SPA) with the FDA. The trial is a multi-site, international (United States and Italy), double-blind, placebo-controlled, clinical trial that is targeted to enroll approximatelyenrolled more than 60 subjects diagnosedwith MuSK-MG. The trial willMuSK antibody positive patients. It also enroll up toenrolled more than 10 generalized myasthenia gravis patients who will bewere assessed with the same clinical endpoints butendpoints. However, achieving statistical significance in this subgroup of patients iswas not required and only summary statistics will be provided. Therequired. will employ aof Myasthenia Gravis Activities of DailyLiving (MG-ADL) and aor its secondary endpoint, even though clinical improvement was observed by patients and investigators during the initial dose-titration period of Quantitative Myasthenia Gravis Score (QMG).We initiated thisthe trial and in January 2018 and are currently enrolling subjects. We currently expect toreport top-line resultsthe company’s previousseconddouble-blind withdrawal period. We believe that sources of such variability can be addressed in a redesigned study that may better demonstrate the efficacy of our drug for the treatment of2019. Details2021. However, there can be no assurance that the FDA will either grant a meeting, agree with our protocol design or, even if the study is successful, accept the results of thisa single study of a different trial are available on www.clinicaltrials.gov (NCT03304054).design as sufficient evidence for approval of the
Other potential indications
We are continuing to identify additional neuromuscular diseases for whichus that Firdapse may
Intellectualissued which provide additional intellectual property and regulatory exclusivity protectionsprotection for Firdapse®
Under the BioMarin License Agreement, we licensed two pending patents and certain trademarks for Firdapse®. One of the licensed patents is a pending composition of matter patent that, if issued, will protect Firdapse® until February 2027, which includes five years of patent term extension that is expected under the Patent Term Restoration Act. This application was initially rejected following an appeal to the Patent Trial and Appeal Board. The application was refiled with new claims. The new claims were the subject of an office action in which the claims were rejected. A response to the rejection was filed and a final rejection was issued. The application was refiled and we are awaiting an office action. Thereour drug product.
operations, or prospects.
We believeindications and in the absence of an Orange Book listed patent, precludes a generic from submitting an abbreviated new drug application (ANDA) until that five year period has expired. Further, when Firdapse for commercialization, Jacobus Pharmaceutical may have had a pending NDA filed with the FDA seeking approval of their version of3,4-DAP for the treatment of CMS. We do not controlLEMS patients, we received seven-year orphan drug exclusivity for our product for the treatment of LEMS.
We are in the early stages of developing a sustained release formulation of Firdapse®. If we are successful, we will seek to add additional patent protections for that sustained release product, to the extent available.market. There can be no assurance that we will be successful in those efforts.
On December 18, 2018, we announced that we had signed a definitive agreement with Endo International plc’s subsidiary, Endo Ventures Limited, for the further development and commercialization of generic Sabril® tablets through Endo’s United States Generic Pharmaceuticals segment, Par Pharmaceutical. Pursuant to the agreement, we have received anup-front payment, and we will receive milestone payments based on achievement of regulatory approvals, and a sharing of defined net profits upon commercialization and certain expenses for development.
Vigabatrin comes in two dosage forms – a powder sachet and a tablet. Par Pharmaceutical brought the first generic version of the powder sachet to market, and since then several additional generic versions of this product have been approved. However, there is only one approved generic version of the tablets at this time.
CPP-115
For the last few years, we had been developingCPP-115, a GABA aminotransferase inhibitor. We licensed this product from Northwestern University (Northwestern) in 2009, under which we acquired worldwide rights to commercialize new GABA aminotransferase inhibitors and derivatives of vigabatrin which had been discovered and patented by Northwestern. Under the terms of the license agreement, Northwestern granted us an exclusive worldwide license to United States composition of matter patents related to the new class of inhibitors and a patent application relating to derivatives of vigabatrin. This included United States patent number 6,794,413 covering the composition of matter forCPP-115.
During 2018, we became aware that certain patents granted to Northwestern in 2018 (which patents have been licensed by Northwestern to an unaffiliated pharmaceutical company for a new GABA aminotransferase inhibitor) were derived fromCPP-115. As a result, it is our position that Northwestern has violated the license agreement based on its failure to transfer these new patent rights to us as part of the existing license agreement. It is also our position that Northwestern’s publication of information about the new patents in violation of the license agreement has damaged us. On October 26, 2018, we notified Northwestern that we were terminating the license agreement and seeking damages for Northwestern’s breach of the license agreement. Further, on the same date, we filed a claim for damages in arbitration against Northwestern for Northwestern’s breaches of the license agreement.
On November 5, 2018, Northwestern advised us that in its view, Northwestern has a right to terminate the license agreement with us because we allegedly breached the license agreement by failing to pay certain milestones and by allegedly failing to use commercially reasonable efforts to develop and commercialize any products. Northwestern has also advised us that, in its view, we have engaged in wrongful conduct and communications with the unrelated pharmaceutical company that licensed the new patents from Northwestern,successful and that such communications have damaged Northwestern’s relationship with that party. We dispute Northwestern’s allegations and intend to vigorously defend ourselves against claims that Northwestern has brought against usif an abbreviated new drug application (ANDA) is approved for vigabatrin tablets in the arbitration proceeding.
The arbitration is currently pending and there canfuture, that it will be no assurance asprofitable to the outcome of this matter. See Item 3.Legal Proceedings.
us.
Further,
business, financial condition or results of operations.
Recently, Senator Bernie Sanders issued a public statement asking FDA Commissioner Scott Gottlieb to allow pharmacies and manufacturers who were previously making3,4-DAP to be permitted to resume providing it. We cannot assess the impact of this statement on our business.
We are taking all available steps to try to enforce our exclusivity rights. However, we cannot determine with certainty what impact these factors will have on the market for our product. While there can be no assurance, we expect that, despite these factors, we will be able to successfully market our product.
An
An
Beginning in 2022, applicable manufacturers also will be required to report such information regarding their relationships with physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants and certified nurse midwives during the previous year.
Prescription drug advertising is subject to federal, state and foreign regulations. In the United States, the FDA regulates prescription drug promotion, includingThese requirements are being phased in over aten-year period. The DSCSA ultimately will requirerequires product identifiers (i.e., serialization) on prescription drug products in order to eventually establish an electronic interoperable prescription product to system to identify and trace certain prescription drugs distributed in the United States. The DSCSA replaced the prior drug “pedigree” requirements under the PDMA,States and preempts existing state drug pedigree laws and regulations.regulations on this topic. The DSCSA also establishes new requirements for the licensing of wholesale distributors and third-party logistic providers, although FDA regulations addressing wholesale distributors and third party logistic providers. These licensing requirements preempt states from imposing licensing requirementslogistics providers have not yet been promulgated. We serialize our product at both the package and homogeneous case level, pass serialization and required transaction information to our customers, and believe that are inconsistentwe comply with less stringent than, directly related to, or otherwise encompassed by standards established by FDA pursuant to the DSCSA. Until FDA promulgates regulations to address the DSCSA’s new national licensing standard, current state licensing requirements typically remain in effect.
all such requirements.
We previously had
company to develop and commercialize innovative therapies for people with rare, debilitating, chronic neuromuscular and neurological diseases and who are willing to work hard and in a collaborative manner to further that mission.
Item 1A. | Risk Factors |
Summary
Until recently,launched Firdapse
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ensure that our entire supply chain efficiently and consistently delivers Firdapse ® to our customers;29 provide co-pay assistance to help qualified patients without-of-pocket ® prescription, and/or other programs to ensure patient access to our products, educate physicians and patients about |
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the qualitybenefits, administration and use of Firdapse
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Included in our strategy in the United States is a direct sales force to commercialize Firdapse®. These efforts will continue to be expensive and time-consuming, and we cannot be certain that we will be able to successfully develop this capability. Firdapse® is a newly marketed drug and, therefore, while many of our sales force members have promoted other orphan and/or neuromuscular drugs, none of the members of our sales force has ever promoted Firdapse® prior to its commercial launch. In addition, we must train our sales force to ensure that a consistent and appropriate message about Firdapse® is being delivered to our potential customers. If we are unable to effectively train our sales force and equip them with effective materials, including medical and sales literature to help them inform and educate potential customers about the benefits of Firdapse® and its proper administration, all while maintaining compliance with regulatory requirements, our efforts to successfully commercialize Firdapse® could be harmed, which would negatively impact our ability to generate product revenue. Additionally, we will need to maintain and further develop our sales force to achieve commercial success, and we will be competing with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel. In the event we are unable to continue to develop and effectively maintain our commercial team, our ability to successfully commercialize Firdapse® would be limited, and we would not be able to generate product revenue successfully.
For example, amifampridine, the active ingredient in Firdapse®, despite not being previously FDA approved, has been available from compounding pharmacies, and from Jacobus Pharmaceutical under compassionate use INDs, for many years. Amifampridine from these sources can be expected to be substantially less expensive than Firdapse®.
The obligations incident to being a public company place significant demands on
As a public reporting company,development efforts and increase our costs and expenses.
We are highly dependent on our small number of key personnel and advisors.
We are highly dependent on our officers and key employeesmanner and on our Board of Directors. The loss of the services of any of these individualstimelines presently planned could significantly impedebe materially and negatively impacted. It is also possible that global health concerns such as the achievement of our scientific
We have relationships with collaborators at academicoperation and other institutions. Such individuals are employed by entities other than us and may have commitments to, or consulting advisory contracts with, such entities that may limit their availability to us. As a result, conflicts may arise from the work in which our collaborators are involved.
financial condition.
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the treatment of adults with
We have recently hired employees for the commercialization of Firdapse®.
it.
Both
recent change in administration.
Even though ourMuSK-MG trial is being conducted under a Special Protocol Assessment (SPA) agreed to with the FDA, we
Further, there can be no assurance that the FDA will not require an additional adequate and well controlled clinical trial to approve Firdapse® for CMS orMuSK-MG, even if the clinical trials we are currently undertaking are successful.
our intellectual property.
While we are not currently aware of any third-party patents which we may infringe,
a court may prohibit us from selling or licensing our product withoutallegedly infringing product(s) absent a license from the patent holder, which may not be available on commercially acceptable terms or at all, or which may require us to pay substantial royalties or grant cross-licenses to our patents; and
Risks Related
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rights are earlier redeemed or exchanged.
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
In 2018, During May 2020 we amended our office lease to increase our leased space to approximately 10,700 square feet. The amended lease commenced in early 2021 when construction of the asset was completed and the space became awareavailable for use. Consequently, we will record the effects of the amended lease in Q1 2021.
Item 3. | Legal Proceedings |
On November 5, 2018, Northwestern advised us that in its view, Northwestern has a right to terminate the license agreement with us because we allegedly breached the license agreement by failing to pay certain milestones and by allegedly failing to use commercially reasonable effortsdollars necessary to develop and commercialize any products. Northwestern has also advised us that, in its view,an orphan drug. As a result, we have engaged in wrongful conduct and communications withappealed the unrelated pharmaceutical company that licenseddecision to the new patents from Northwestern, and that such communications have damaged Northwestern’s relationship with that party. We dispute Northwestern’s allegations and intend to vigorously defend ourselves against claims that Northwestern has brought against us in the arbitration proceedings.
The arbitration is currently pending and thereEleventh Circuit Court of Appeals. There can be no assurance of the result of such proceeding.
Additionally,patent. Generic drug product labels would necessarily have to do this, and we intend to take all appropriate actions to protect our intellectual property.
Item 4. | Mine Safety Disclosure |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2015 to 12/31/2020.
12/15 | 12/16 | 12/17 | 12/18 | 12/19 | 12/20 | |||||||||||||||||||
Catalyst Pharmaceuticals, Inc. | 100.00 | 42.86 | 159.59 | 78.37 | 153.06 | 136.33 | ||||||||||||||||||
NASDAQ Composite | 100.00 | 108.87 | 141.13 | 137.12 | 187.44 | 271.64 | ||||||||||||||||||
Russell MicroCap | 100.00 | 120.37 | 136.22 | 118.40 | 144.96 | 175.34 | ||||||||||||||||||
NASDAQ Biotechnology | 100.00 | 78.65 | 95.67 | 87.19 | 109.08 | 137.90 |
The closing sale price for the common stock on March 14, 201911, 2021 was $2.99.$3.77. As of March 14, 2019,11, 2021, there were 3931 holders of record of our common stock, which includes custodians who hold our securities for the benefit of others. We estimate that there are approximately 11,500 beneficial holders of our common stock.
Performance Graph
Not applicable.
Equity Compensation Plan Information | ||||||||||||
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights | Weighted-average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for equity compensation plans | |||||||||
Equity compensation plans approved by security holders (1) | 13,393,669 | $ | 3.10 | 1,856,008 | (2) | |||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 13,393,669 | $ | 3.10 | 1,856,008 |
(1) | Includes our 2014 Stock Incentive Plan and our 2018 Stock Incentive Plan |
(2) | Remaining shares are only under our 2018 Stock Incentive Plan |
Year Ended December 31, | ||||||||||||||||||||
Statement of Operations Data: | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Revenues from collaborative arrangement | $ | 500,000 | $ | — | $ | — | $ | — | $ | — | ||||||||||
Operating costs and expenses: | ||||||||||||||||||||
Research and development | 19,919,204 | 11,375,237 | 11,369,941 | 11,801,342 | 10,117,774 | |||||||||||||||
General and administrative | 15,875,961 | 7,304,399 | 7,910,260 | 8,597,010 | 4,473,654 | |||||||||||||||
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|
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| |||||||||||
Total operating cost and expenses | 35,795,165 | 18,679,636 | 19,280,201 | 20,398,352 | 14,591,428 | |||||||||||||||
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| |||||||||||
Loss from operations | (35,295,165 | ) | (18,679,636 | ) | (19,280,201 | ) | (20,398,352 | ) | (14,591,428 | ) | ||||||||||
Other income, net | 1,291,651 | 454,163 | 321,612 | 100,389 | 76,233 | |||||||||||||||
Change in fair value of warrants liability | — | (186,904 | ) | 886,137 | 65,005 | (993,866 | ) | |||||||||||||
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|
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|
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|
| |||||||||||
Loss before income taxes | (34,003,514 | ) | (18,412,377 | ) | (18,072,452 | ) | (20,232,958 | ) | (15,509,061 | ) | ||||||||||
Provision for income taxes | — | — | — | — | — | |||||||||||||||
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| |||||||||||
Net loss | $ | (34,003,514 | ) | $ | (18,412,377 | ) | $ | (18,072,452 | ) | $ | (20,232,958 | ) | $ | (15,509,061 | ) | |||||
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| |||||||||||
Net loss per share – basic and diluted | $ | (0.33 | ) | $ | (0.21 | ) | $ | (0.22 | ) | $ | (0.25 | ) | $ | (0.24 | ) | |||||
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| |||||||||||
Weighted average shares outstanding – basic and diluted | 102,633,884 | 85,802,487 | 82,875,281 | 80,858,393 | 64,142,534 | |||||||||||||||
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| |||||||||||
As of December 31, | ||||||||||||||||||||
Balance Sheet Data: | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Cash and cash equivalents, certificates of deposit and investments | $ | 58,489,856 | $ | 84,013,413 | $ | 40,405,817 | $ | 58,396,395 | $ | 39,275,123 | ||||||||||
Working capital | 45,676,052 | 80,920,995 | 39,359,226 | 56,460,530 | 37,972,795 | |||||||||||||||
Total assets | 60,449,962 | 85,387,430 | 41,706,853 | 60,101,570 | 43,908,086 | |||||||||||||||
Warrants liability, at fair value | — | — | 122,226 | 1,008,363 | 2,794,891 | |||||||||||||||
Total liabilities | 9,666,153 | 4,423,618 | 2,397,923 | 4,625,259 | 8,665,756 | |||||||||||||||
Stockholders’ equity | 50,783,809 | 80,963,812 | 39,308,930 | 55,476,311 | 35,242,330 |
Item 6. | Selected Financial Data |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
report.
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patients (ages 17 and above). In January 2019, we launched Firdapsepayerpayor reimbursement (National Account Managers) personnel.. We also have a field-based force of six medical science liaisons who are helping educate the medical communities and patients about LEMS and about our ongoing clinical trial activities evaluating FirdapseCMS and MuSKAnti-MuSK antibody positive myasthenia gravis, or
We are currently conducting a Phase 3Serbia), double-blind, placebo-controlled, clinical trial evaluating Firdapse® for the treatment ofMuSK-MGbeing conducted under a Special Protocol Assessment (SPA) with the FDA. The Unfortunately, the
Becausesymptom variability during the FDA has granted Orphan Drug Designation for Firdapse®double-blind withdrawal period. We believe that sources of such variability can be addressed in a redesigned study that may better demonstrate the efficacy of our drug for the treatment of patients
We are conductingassurance that the FDA will either grant aproof-of-concept meeting, agree with our protocol design or, even if the study is successful, accept the results of a single study of a different trial design as sufficient evidence for approval of the
HNPP patients. There can be no assurance that our currently ongoingthis
Finally, we intend to take steps to seek approvalOur NDS filing for Firdapse
Generic SabrilJapan or obtain orphan drug designation.
Onunderlying patent dispute is resolved. For example, there may be patents or patent applications held by others that contain claims that our products or operations might be determined to infringe or that may be broader than we believe them to be. Given the complexities and uncertainties of patent laws, there can be no assurance as to the impact that future patent claims against us may have on our business, financial condition, results of operations, or prospects.
development expenses.
Revenues
In 2018
agreement. At December 31, 2020, we generated revenues of $332,186 from our collaborative agreement with KYE Pharmaceuticals. We expect our revenue from the KYE collaborative agreement to fluctuate in future periods based on our collaborator’s ability to market and sell Firdapse
Expenses.
We had no selling expenses in 2018. Administrative Expenses.
General and Administrative Expenses
Compensation.
Warrants Liability
We issued warrants to purchase shares
Income Taxes
(loss) before income taxes.
As required by ASC 740, Income Taxes,
valuation allowance accordingly.
Standards.
Measures.
Preclinical Study
Researchallowances, product returns, provider chargebacks and development expendituresdiscounts, government rebates, and other incentives, such as voluntary patient assistance, and other allowances that are chargedoffered within contracts with our Customer, payors, and other indirect customers relating to operations as incurred. Our expenses related to preclinical and clinical trialsthe sale of our products. These reserves are based on actual and estimated costs of the services received and efforts expended pursuant to contracts with multiple research institutions and any CRO that conducts and manages our clinical trials. The financial terms of these agreements are subject to negotiation and will vary from contract to contract and may result in uneven payment flows. Generally, these agreements will set forth the scope of the workamounts earned, or to be performed atclaimed on the related sales, and are classified as reductions of accounts receivable (if the amount is payable to the Customer) or a fixed fee or unit price. Payments under these contracts will depend oncurrent liability (if the amount is payable to a party other than a customer). These estimates take into consideration a range of possible outcomes which are probability-weighted in accordance with the expected value method in Topic 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the successful enrollmentamount of patients or the completion of clinical trial milestones. Expenses relatedconsideration to clinical trials generallywhich we are accruedentitled based on contracted amounts appliedthe terms of the respective underlying contracts.
revenue recognition.
Compensation.
Revenues
2019
total operating costs and expenses, respectively. Research and Development Expenses
Year | Amount | Change from Prior Year | Percentage of Total Operating Costs and Expenses | |||||||||||
2018 | $ | 19,919,204 | 75.1 | % | 55.6 | % | ||||||||
2017 | $ | 11,375,237 | 0.0 | % | 61.0 | % |
Ourdevelopment expenses including stock-based compensation, for researchthe years ended December 31, 2020 and development for2019 were as follows:
For the year ended December 31, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
Research and development expenses | $ | 14,911,513 | $ | 17,705,156 | (2,793,643 | ) | (15.8 | ) | ||||||||
Employee stock-based compensation | 1,585,202 | 1,137,596 | 447,606 | 39.3 | ||||||||||||
Total research and development expenses | $ | 16,496,715 | $ | 18,842,752 | (2,346,037 | ) | (12.5 | ) | ||||||||
For the year ended December 31, | Change | |||||||||||||||
2020 | 2019 | $ | % | |||||||||||||
Selling | $ | 23,567,221 | $ | 19,947,916 | 3,619,305 | 18.1 | ||||||||||
General and administrative | 15,990,812 | 14,246,052 | 1,744,760 | 12.2 | ||||||||||||
Employee stock-based compensation | 4,675,721 | 2,687,219 | 1,988,502 | 74.0 | ||||||||||||
Total selling, general and administrative expenses | $ | 44,233,754 | $ | 36,881,187 | 7,352,567 | 19.9 | ||||||||||
Researchemployees and development expenses in the 2018 fiscal year primarily included consulting expenses as we prepareddirectors and stock option awards due to submit our NDA for Firdapse® during the first quarter of 2018, milestone expenses relating to the acceptance and approval of our NDA submission, expenses from our medical affairs program, compensation and related personnel costs as we expanded our headcount to support our ongoing trials evaluating Firdapse® for the treatment of CMS,MuSK-MG and SMA Type 3, costs of operating our Expanded Access Program, and costs incurred to build up inventory to launch Firdapse® in early 2019. Research and development expenses in the 2017 fiscal year primarily included, among other items, costs associated with our ongoing second Phase 3 trial evaluating Firdapse® for the treatment of LEMS, our ongoing clinical trial evaluating Firdapse® for the treatment of CMS, and our Expanded Access Program for Firdapse®.
increases.
Our research and development expenses for 2018 and 2017, include stock-based compensation relating to the value of stock options granted to certain employees and consultants. The amount of stock-based compensation recorded in 2018 and 2017 relating to our research and development activities was $1,079,230 and $785,899, respectively. The weighted-average grant-date fair value of the stock options granted in 2018 and 2017 was $1.99 and $0.84, respectively.
Selling and Marketing Expenses
We had no selling expenses during 2018 and 2017. As we moved closer to the approval of Firdapse® for the treatment of LEMS, we actively committed funds to building a commercial team and developing our commercialization program for Firdapse® so that we would be in a position to launch the product in early 2019, including our marketingefforts. Pre-commercialization costs are included in general and administrative expenses.
General and Administrative Expenses
Year | Amount | Change from Prior Year | Percentage of Total Operating Costs and Expenses | |||||||||||
2018 | $ | 15,875,961 | 117.3 | % | 44.4 | % | ||||||||
2017 | $ | 7,304,399 | (7.7 | )% | 39.0 | % |
General and administrative expenses include, among other expenses, corporate and office expenses, legal, accounting and consulting fees,pre-commercialization costs, and travel expenses for our administrative employees, consultants and members of our Board of Directors. Included in general and administrative expenses in the years 2018 and 2017 was (i) stock-based compensation of $2,471,414 and $1,622,062, respectively, and(ii) pre-commercialization costs of $6,897,483 and $809,584, respectively.
The 117.3% increase in general and administrative expenses for the year ended December 31, 2018 when compared to the same period in 2017 was primarily due to our efforts to expand our operations and headcount in order to prepare for the commercialization of Firdapse®. We expect that general and administrative costs, excludingpre-commercialization costs (which, going forward, will be included in sales and marketing expenses), will increase in 2019 compared with the general and administrative costs incurred in 2018, as we expand our operations and headcount to support the commercialization of Firdapse®.
business.
We issued stock options and other share-based payments to several of our employees, directors, and consultants in 2018 and 2017. Compensation.
Change in Fair Value of Warrants Liability
In connection with the October 2011 equity offering, we issued warrants to purchase an aggregate of 1,523,370 shares of common stock. As of May 2, 2017, all of the 2011 warrants were either exercised or had expired. During the period that the 2011 warrants were outstanding, the fair value of the warrants liability was determined at the end of each reporting period with the resulting gains or losses recorded as the change in fair value of warrants liability in the consolidated statements of operations.
No gain or loss was recognized for the year ended December 31, 2018, as all 2011 warrants that were not exercised expired on May 2, 2017. For the year ended December 31, 2017, we recognized a loss of $186,904hired in connection with the change in the fair valuelaunch of the warrants liability. The loss during 2017 was principally a result of fluctuations in our common stock price and the warrants liability expiration date on May 2, 2017.
Firdapse
Net.
For the year ended December 31, | Change | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
Research and development expenses | $ | 17,705,156 | $ | 18,839,974 | (1,134,818 | ) | (6.0 | ) | ||||||||
Employee stock-based compensation | 1,137,596 | 1,079,230 | 58,366 | 5.4 | ||||||||||||
Total research and development expenses | $ | 18,842,752 | $ | 19,919,204 | (1,076,452 | ) | (5.4 | ) | ||||||||
For the year ended December 31, | Change | |||||||||||||||
2019 | 2018 | $ | % | |||||||||||||
Selling | $ | 19,947,916 | $ | — | 19,947,916 | 100.0 | ||||||||||
General and administrative | 14,246,052 | 13,404,547 | 841,505 | 6.3 | ||||||||||||
Employee stock-based compensation | 2,687,219 | 2,471,414 | 215,805 | 8.7 | ||||||||||||
Total selling, general and administrative expenses | $ | 36,881,187 | $ | 15,875,961 | 21,005,226 | 132.3 | ||||||||||
Income Taxes
the statutory federal income tax rate of 21% is driven by state income taxes and anticipated annual permanent differences, including orphan drug credit expense limitations and other items.
assets at December 31, 2019 and December 31, 2018.
Income (Loss).
Non-GAAP Net Loss
Ourthe same as our GAAP net loss, as there were nonon-GAAP adjustments. Ournon-GAAP net loss, which excludes for 2017 a $186,904 loss associated with the change in the fair value of liability classified warrants was $18,225,473$30,452,870 ($0.210.30 per basic and diluted share).
, which excludes
Further, as of such date, substantially all such funds were invested in money market accounts, short-term interest bearing obligations and U.S. Treasuries.
We
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On December 23, 2016, we filed a shelf registration statement with the SEC to sell up to $33.8 million of common stock (the “2016 Shelf Registration Statement”). This shelf registration statement was declared effective by the SEC on January 9, 2017. We have made no sales under the 2016 Shelf Registration Statement.
31, 2020. As of the date of this Form10-K,report, no offerings have been completed under the full amount of our 20162020 Shelf Registration StatementStatement.
the year ended December 31, 2020, consisting primarily of purchases of investments of $10,000,000 and partially offset by proceeds from sales/maturities of investments of $5,000,000. Net cash provided by investing activities was $37,224,595 for the year ended December 31, 2019, consisting primarily of proceeds from sales/maturities of investments of $71,969,365, partially offset by purchases of investments of $34,725,401.
Arrangements.
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o | Royalties to the third-party licensor of the rights sublicensed to us ® equal to 7% of net sales (as defined in the |
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Arrangements.
Cash Flows
Net cash used in operating activities was $25,704,406 and $13,742,572, respectively, for the years ended December 31, 2018 and 2017.
During the year ended December 31, 2018, net cash used in operating activities was primarily attributable to our net loss of $34,003,514 and increases of $476,037 in prepaid expenses and other current assets and deposits and $56,012 in inventory, which was partially offset by increases of $391,792 in accounts payable and $4,850,743 in accrued expenses. The loss included an additional $3,588,622 ofnon-cash expenses, consisting of stock-based compensation expense and depreciation.
During the year ended December 31, 2017, net cash used in operating activities was primarily attributable to our net loss of $18,412,377 and an increase of $125,800 in prepaid expenses and other current assets and deposits, which was partially offset by increases of $1,012,399 in accounts payable and $1,142,652 in accrued expenses, and a loss of $186,904 ofnon-cash change in fair value of warrants liability. The loss included an additional $2,453,650 ofnon-cash expenses, consisting of stock-based compensation expense and depreciation.
Net cash used in investing activities was $15,526,011 and $3,958, respectively, for 2018 and 2017. During 2018, net cash used in investing activities was primarily attributable to purchases of investments of $36,802,418. This was partially offset by $21,368,425 proceeds from maturities of investments. During 2017, net cash used in investing activities consisted of purchases of investments.
Net cash provided by financing activities was $293,115 and $57,350,168, respectively, for 2018 and 2017. During 2018, net cash from financing activities consisted primarily of proceeds from the exercise of stock options. During 2017, net cash from financing activities consisted of the net proceeds from the sale of shares of common stock in an underwritten direct public offering under the 2017 Shelf Registration Statement, as well as proceeds from exercise of stock options and warrants. Such funds are being used to fund our research and development costs, our general and administrative costs, and our commercialization costs associated with the launch of Firdapse®.
Some of the statements in this Form10-K are
The successfulthe development of our product candidates additional indications for Firdapse
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whether
whether
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whether
changes inproduct at the healthcare industry andprice that we charge for the effect of political pressure from President Trump, Congress and/or medical professionals seeking to reduce prescription drug costs;
changes to the healthcare industry occasioned by any future repeal and replacement of the Affordable Care Act, in laws relating to the pricing of drug products, or changes in the healthcare industry generally;
the scope, rate of progress and expense of our clinical trials and studies,pre-clinical studies,proof-of-concept studies, and our other drug development activities, and whether our trials and studies will be successful;
our ability to complete our trials and studies on a timely basis and within the budgets we establish for such trials and studies;
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the result of our currently ongoing arbitration action with Northwestern University regarding our license forCPP-115;
whether our version of generic vigabatrin tablets will ever be approved by the United States Food and Drug Administration (FDA);
even if vigabatrin tablets are approved for commercialization, whether Endo Ventures/Par Pharmaceutical will be successful in marketing the product;
whether Catalyst will earn milestone payments on approval of an Abbreviated New Drug Application (ANDA) for generic vigabatrin tablets and royalties on sales of generic vigabatrin tablets; and
the
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
Not applicable.
Item 8. Financial Statementscommodity prices. Changes in these factors could cause fluctuations in our results of operations and Supplementary Data
cash flows.
Item 8. | Financial Statements and Supplementary Data |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
2020.
Item 9B. | Other Information |
Item 10. | Directors and Executive Officers of the Registrant |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management |
Item 13. | Certain Relationships and Related Transactions |
Item 14. | Principal Accounting Fees and Services |
Item 15. |
Exhibits and Financial Statement Schedules |
1.
2.
3.
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Incorporated by Reference | ||||||||||||||||||||||
Exhibit Number | Description of Exhibit | Form | File Number | Date of Filing | Exhibit Number | Filed Herewith | ||||||||||||||||
2.1 | Agreement and Plan of Merger, dated August 14, 2006, between the Company and Catalyst Pharmaceutical Partners, Inc., a Florida corporation | S-1 | 333-136039 | 9/1/2006 | 10.9 | |||||||||||||||||
3.1 | Certificate of Incorporation | S-1 | 333-136039 | 7/25/2006 | 3.1 | |||||||||||||||||
3.2 | Amendment to Certificate of Incorporation | S-1 | 333-136039 | 7/25/2006 | 3.2 | |||||||||||||||||
3.3 | Amendment to Certificate of Incorporation | DEF 14A | 001-33057 | 3/30/2015 | Annex A | |||||||||||||||||
3.4 | Amendment to Certificate of Incorporation | 8-K | 001-33057 | 8/21/2020 | 3.1 | |||||||||||||||||
3.5 | By-Laws | S-1 | 333-136039 | 9/1/2006 | 3.3 | |||||||||||||||||
3.6 | Amendment to By-Laws | 8-K | 001-33057 | 11/27/2019 | 3.1 | |||||||||||||||||
4.1 | Specimen Stock Certificate for Common Stock | S-1 | 333-136039 | 9/1/2006 | 4.1 | |||||||||||||||||
4.2 | Rights Agreement between the Company and Continental Stock Transfer and Trust Company | 8-K | 001-33057 | 9/23/2011 | 4.1 |
Incorporated by Reference | ||||||||||||||||||||||
Exhibit Number | Description of Exhibit | Form | File Number | Date of Filing | Exhibit Number | Filed Herewith | ||||||||||||||||
21.1 | Subsidiaries of the registrant | 10-K | 001-33057 | 3/16/2020 | 21.1 | |||||||||||||||||
23.1 | Consent of Independent Registered Public Accounting Firm | X | ||||||||||||||||||||
31.1 | Section 302 CEO Certification | X | ||||||||||||||||||||
31.2 | Section 302 CFO Certification | X | ||||||||||||||||||||
32.1 | Section 906 CEO Certification | X | ||||||||||||||||||||
32.2 | Section 906 CFO Certification | X | ||||||||||||||||||||
101.INS | XBRL Instance Document | |||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema | |||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
CATALYST PHARMACEUTICALS, INC. | ||
By: | /s/ Patrick J. McEnany | |
Patrick J. McEnany, Chairman, | ||
President and CEO |
Signature | Title | Date | ||
/s/ Patrick J. McEnany Patrick J. McEnany | Chairman of the Board of Directors, President and Chief Executive Officer
| March | ||
/s/ Alicia Grande Alicia Grande | Vice President, Treasurer, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March | ||
/s/ Charles B. O’Keeffe Charles B. O’Keeffe | Director | March | ||
/s/ Philip H. Coelho Philip H. Coelho | Director | March | ||
/s/ David S. Tierney, M.D. David S. Tierney, M.D. | Director | March | ||
/s/ Donald A. Denkhaus Donald A. Denkhaus | Director | March | ||
/s/ Richard Daly Richard Daly | Director | March |
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 |
Stockholders
Stockholders
December 31, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 16,559,400 | $ | 57,496,702 | ||||
Short-term investments | 36,922,213 | 26,516,711 | ||||||
Inventory | 56,012 | — | ||||||
Prepaid expenses and other current assets | 1,649,781 | 1,173,744 | ||||||
|
|
|
| |||||
Total current assets | 55,187,406 | 85,187,157 | ||||||
Investments | 5,008,243 | — | ||||||
Property and equipment, net | 245,425 | 191,385 | ||||||
Deposits | 8,888 | 8,888 | ||||||
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|
| |||||
Total assets | $ | 60,449,962 | $ | 85,387,430 | ||||
|
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|
| |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 2,337,367 | $ | 1,945,575 | ||||
Accrued expenses and other liabilities | 7,173,987 | 2,320,587 | ||||||
|
|
|
| |||||
Total current liabilities | 9,511,354 | 4,266,162 | ||||||
Accrued expenses and other liabilities,non-current | 154,799 | 157,456 | ||||||
|
|
|
| |||||
Total liabilities | 9,666,153 | 4,423,618 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized: none issued and outstanding at December 31, 2018 and 2017 | — | — | ||||||
Common stock, $0.001 par value, 150,000,000 shares authorized; 102,739,257 shares and 102,549,498 shares issued and outstanding at December 31, 2018 and 2017, respectively | 102,739 | 102,549 | ||||||
Additionalpaid-in capital | 211,265,279 | 207,421,710 | ||||||
Accumulated deficit | (160,563,961 | ) | (126,560,447 | ) | ||||
Accumulated other comprehensive loss | (20,248 | ) | — | |||||
|
|
|
| |||||
Total stockholders’ equity | 50,783,809 | 80,963,812 | ||||||
|
|
|
| |||||
Total liabilities and stockholders’ equity | $ | 60,449,962 | $ | 85,387,430 | ||||
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|
|
December 31, 2020 | December 31, 2019 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 130,237,109 | $ | 89,511,710 | ||||
Short-term investments | 10,041,068 | 5,007,050 | ||||||
Accounts receivable, net | 5,987,426 | 10,536,997 | ||||||
Inventory | 4,650,600 | 1,956,792 | ||||||
Prepaid expenses and other current assets | 8,327,771 | 4,351,074 | ||||||
Total current assets | 159,243,974 | 111,363,623 | ||||||
Operating lease right-of-use | — | 793,252 | ||||||
Property and equipment, net | 129,800 | 210,467 | ||||||
Deferred tax assets | 32,971,264 | — | ||||||
Deposits | 8,888 | 8,888 | ||||||
Total assets | $ | 192,353,926 | $ | 112,376,230 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 4,256,020 | $ | 4,117,447 | ||||
Accrued expenses and other liabilities | 18,500,267 | 19,981,295 | ||||||
Total current liabilities | 22,756,287 | 24,098,742 | ||||||
Operating lease liability, net of current portion | — | 647,532 | ||||||
Total liabilities | 22,756,287 | 24,746,274 | ||||||
Commitments and contingencies (Note 8) | 0 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized: NaN issued and outstanding at December 31, 2020 and 2019 | 0 | — | ||||||
Common stock, $0.001 par value, 200,000,000 and 150,000,000 shares authorized; 103,781,641 shares and 103,397,033 shares issued and outstanding at December 31, 2020 and 2019, respectively | 103,782 | 103,397 | ||||||
Additional paid-in capital | 223,168,149 | 216,205,678 | ||||||
Accumulated deficit | (53,705,624 | ) | (128,688,624 | ) | ||||
Accumulated other comprehensive income (loss) | 31,332 | 9,505 | ||||||
Total stockholders’ equity | 169,597,639 | 87,629,956 | ||||||
Total liabilities and stockholders’ equity | $ | 192,353,926 | $ | 112,376,230 | ||||
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
Revenues from collaborative arrangement | $ | 500,000 | $ | — | ||||
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|
| |||||
Operating costs and expenses: | ||||||||
Research and development | 19,919,204 | 11,375,237 | ||||||
General and administrative | 15,875,961 | 7,304,399 | ||||||
|
|
|
| |||||
Total operating costs and expenses | 35,795,165 | 18,679,636 | ||||||
|
|
|
| |||||
Loss from operations | (35,295,165 | ) | (18,679,636 | ) | ||||
Other income, net | 1,291,651 | 454,163 | ||||||
Change in fair value of warrants liability | — | (186,904 | ) | |||||
|
|
|
| |||||
Loss before income taxes | (34,003,514 | ) | (18,412,377 | ) | ||||
Provision for income taxes | — | — | ||||||
|
|
|
| |||||
Net loss | $ | (34,003,514 | ) | $ | (18,412,377 | ) | ||
|
|
|
| |||||
Net loss per share – basic and diluted | $ | (0.33 | ) | $ | (0.21 | ) | ||
|
|
|
| |||||
Weighted average shares outstanding – basic and diluted | 102,633,884 | 85,802,487 | ||||||
|
|
|
| |||||
Net loss | $ | (34,003,514 | ) | $ | (18,412,377 | ) | ||
Other comprehensive loss: | ||||||||
Unrealized gain (loss) onavailable-for-sale securities | (20,248 | ) | — | |||||
|
|
|
| |||||
Comprehensive loss | $ | (34,023,762 | ) | $ | (18,412,377 | ) | ||
|
|
|
|
INCOME (LOSS)
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenues: | ||||||||||||
Product revenue, net | $ | 118,740,617 | $ | 102,306,337 | $ | — | ||||||
Revenues from collaborative arrangements | 332,186 | — | 500,000 | |||||||||
Total revenues | 119,072,803 | 102,306,337 | 500,000 | |||||||||
Operating costs and expenses: | ||||||||||||
Cost of sales | 17,039,157 | 14,759,139 | — | |||||||||
Research and development | 16,496,715 | 18,842,752 | 19,919,204 | |||||||||
Selling, general and administrative | 44,233,754 | 36,881,187 | 15,875,961 | |||||||||
Total operating costs and expenses | 77,769,626 | 70,483,078 | 35,795,165 | |||||||||
Operating income (loss) | 41,303,177 | 31,823,259 | (35,295,165 | ) | ||||||||
Other income, net | 586,897 | 1,585,774 | 1,291,651 | |||||||||
Net income (loss) before income taxes | 41,890,074 | 33,409,033 | (34,003,514 | ) | ||||||||
Income tax provision (benefit) | (33,092,926 | ) | 1,533,696 | — | ||||||||
Net income (loss) | $ | 74,983,000 | $ | 31,875,337 | $ | (34,003,514 | ) | |||||
Net income (loss) per share: | ||||||||||||
Basic | $ | 0.72 | $ | 0.31 | $ | (0.33 | ) | |||||
Diluted | $ | 0.71 | $ | 0.30 | $ | (0.33 | ) | |||||
Weighted average shares outstanding: | ||||||||||||
Basic | 103,512,913 | 102,944,316 | 102,633,884 | |||||||||
Diluted | 106,242,273 | 106,020,936 | 102,633,884 | |||||||||
Net income (loss) | $ | 74,983,000 | $ | 31,875,337 | $ | (34,003,514 | ) | |||||
Other comprehensive income (loss): | ||||||||||||
Unrealized gain (loss) on available-for-sale | 21,827 | 29,753 | (20,248 | ) | ||||||||
Comprehensive income (loss) | $ | 75,004,827 | $ | 31,905,090 | $ | (34,023,762 | ) | |||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||
Balance at December 31, 2016 | $ | — | $ | 82,972 | $ | 147,374,028 | $ | (108,148,070 | ) | $ | — | $ | 39,308,930 | |||||||||||
Issuance of common stock, net | — | 16,455 | 53,756,105 | — | — | 53,772,560 | ||||||||||||||||||
Issuance of stock options for services | — | — | 2,342,625 | — | — | 2,342,625 | ||||||||||||||||||
Amortization of restricted stock for services | — | — | 65,336 | — | — | 65,336 | ||||||||||||||||||
Exercise of warrants for common stock | — | 2,258 | 3,516,295 | — | — | 3,518,553 | ||||||||||||||||||
Exercise of stock options for common stock | — | 864 | 367,321 | — | — | 368,185 | ||||||||||||||||||
Net loss | — | — | — | (18,412,377 | ) | — | (18,412,377 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Balance at December 31, 2017 | — | 102,549 | 207,421,710 | (126,560,447 | ) | — | 80,963,812 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Issuance of common stock, net | — | 3 | 10,546 | — | — | 10,549 | ||||||||||||||||||
Issuance of stock options for services | — | — | 3,535,647 | — | — | 3,535,647 | ||||||||||||||||||
Exercise of stock options for common stock | — | 187 | 297,376 | — | — | 297,563 | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | (20,248 | ) | (20,248 | ) | ||||||||||||||||
Net loss | — | — | — | (34,003,514 | ) | — | (34,003,514 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Balance at December 31, 2018 | $ | — | $ | 102,739 | $ | 211,265,279 | $ | (160,563,961 | ) | $ | (20,248 | ) | $ | 50,783,809 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2018
Preferred | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
Stock | Shares | Amount | Capital | Deficit | Gain (Loss) | Total | ||||||||||||||||||||||
Balance at December 31, 2017 | $ | — | 102,549,498 | $ | 102,549 | $ | 207,421,710 | $ | (126,560,447 | ) | $ | — | $ | 80,963,812 | ||||||||||||||
Issuance of common stock, net | — | 3,094 | 3 | 10,546 | — | — | 10,549 | |||||||||||||||||||||
Issuance of stock options for services | — | — | — | 3,535,647 | — | — | 3,535,647 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 186,665 | 187 | 297,376 | — | — | 297,563 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (20,248 | ) | (20,248 | ) | |||||||||||||||||||
Net income (loss) | — | — | — | — | (34,003,514 | ) | — | (34,003,514 | ) | |||||||||||||||||||
Balance at December 31, 2018 | — | 102,739,257 | 102,739 | 211,265,279 | (160,563,961 | ) | (20,248 | ) | 50,783,809 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 3,780,086 | — | — | 3,780,086 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 657,776 | 658 | 1,115,584 | — | — | 1,116,242 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 44,729 | — | — | 44,729 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 29,753 | 29,753 | |||||||||||||||||||||
Net income (loss) | — | — | — | — | 31,875,337 | — | 31,875,337 | |||||||||||||||||||||
Balance at December 31, 2019 | — | 103,397,033 | 103,397 | 216,205,678 | (128,688,624 | ) | 9,505 | 87,629,956 | ||||||||||||||||||||
Issuance of stock options for services | — | — | — | 5,694,120 | — | — | 5,694,120 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 281,762 | 282 | 757,848 | — | — | 758,130 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 566,803 | — | — | 566,803 | |||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net | — | 102,846 | 103 | (56,300 | ) | — | — | (56,197 | ) | |||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 21,827 | 21,827 | |||||||||||||||||||||
Net income (loss) | — | — | — | — | 74,983,000 | — | 74,983,000 | |||||||||||||||||||||
Balance at December 31, 2020 | $ | — | 103,781,641 | $ | 103,782 | $ | 223,168,149 | $ | (53,705,624 | ) | $ | 31,332 | $ | 169,597,639 | ||||||||||||||
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
Operating Activities: | ||||||||
Net loss | $ | (34,003,514 | ) | $ | (18,412,377 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 37,978 | 45,689 | ||||||
Stock-based compensation | 3,550,644 | 2,407,961 | ||||||
Change in fair value of warrants liability | — | 186,904 | ||||||
(Increase) decrease in: | ||||||||
Inventory | (56,012 | ) | — | |||||
Prepaid expenses and other current assets and deposits | (476,037 | ) | (125,800 | ) | ||||
Increase (decrease) in: | ||||||||
Accounts payable | 391,792 | 1,012,399 | ||||||
Accrued expenses and other liabilities | 4,850,743 | 1,142,652 | ||||||
|
|
|
| |||||
Net cash used in operating activities | (25,704,406 | ) | (13,742,572 | ) | ||||
|
|
|
| |||||
Investing Activities: | ||||||||
Purchases of property and equipment | (92,018 | ) | — | |||||
Purchases of investments | (36,802,418 | ) | (3,958 | ) | ||||
Proceeds from maturities of investments | 21,368,425 | — | ||||||
|
|
|
| |||||
Net cash provided by (used in) investing activities | (15,526,011 | ) | (3,958 | ) | ||||
|
|
|
| |||||
Financing Activities: | ||||||||
Proceeds from issuance of common stock, net | — | 53,772,560 | ||||||
Payment of employee withholding tax related to stock-based compensation | (4,448 | ) | — | |||||
Proceeds from exercise of warrants | — | 3,209,423 | ||||||
Proceeds from exercise of stock options | 297,563 | 368,185 | ||||||
|
|
|
| |||||
Net cash provided by (used in) financing activities | 293,115 | 57,350,168 | ||||||
|
|
|
| |||||
Net increase (decrease) in cash and cash equivalents | (40,937,302 | ) | 43,603,638 | |||||
Cash and cash equivalents – beginning of period | 57,496,702 | 13,893,064 | ||||||
|
|
|
| |||||
Cash and cash equivalents – end of period | $ | 16,559,400 | $ | 57,496,702 | ||||
|
|
|
| |||||
Non-cash investing and financing activities: | ||||||||
Unrealized gain (loss) onavailable-for-sale securities | $ | (20,248 | ) | $ | — | |||
Exercise of liability classified warrants for common stock | $ | — | $ | 309,130 |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Operating Activities: | ||||||||||||
Net income (loss) | $ | 74,983,000 | $ | 31,875,337 | $ | (34,003,514 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation | 92,065 | 54,327 | 37,978 | |||||||||
Amortization of right-of-use | 793,252 | 243,399 | — | |||||||||
Stock-based compensation | 6,260,923 | 3,824,815 | 3,550,644 | |||||||||
Deferred taxes | (32,971,264 | ) | — | — | ||||||||
Change in accrued interest and accretion of discount on investments | (12,191 | ) | (290,805 | ) | (443,139 | ) | ||||||
(Increase) decrease in: | ||||||||||||
Accounts receivable, net | 4,549,571 | (10,536,997 | ) | — | ||||||||
Inventory | (2,693,808 | ) | (1,900,780 | ) | (56,012 | ) | ||||||
Prepaid expenses and other current assets and deposits | (3,976,697 | ) | (2,701,293 | ) | (476,037 | ) | ||||||
Increase (decrease) in: | ||||||||||||
Accounts payable | 138,573 | 1,780,080 | 391,792 | |||||||||
Accrued expenses and other liabilities | (1,209,280 | ) | 12,540,197 | 4,850,743 | ||||||||
Operating lease liability | (919,280 | ) | (276,807 | ) | — | |||||||
Net cash provided by (used in) operating activities | 45,034,864 | 34,611,473 | (26,147,545 | ) | ||||||||
Investing Activities: | ||||||||||||
Purchases of property and equipment | (11,398 | ) | (19,369 | ) | (92,018 | ) | ||||||
Purchases of investments | (10,000,000 | ) | (34,725,401 | ) | (36,790,854 | ) | ||||||
Proceeds from maturities and sales of investments | 5,000,000 | 71,969,365 | 21,800,000 | |||||||||
Net cash provided by (used in) investing activities | (5,011,398 | ) | 37,224,595 | (15,082,872 | ) | |||||||
Financing Activities: | ||||||||||||
Payment of employee withholding tax related to stock-based compensation | (56,197 | ) | — | (4,448 | ) | |||||||
Proceeds from exercise of stock options | 758,130 | 1,116,242 | 297,563 | |||||||||
Net cash provided by (used in) financing activities | 701,933 | 1,116,242 | 293,115 | |||||||||
Net increase (decrease) in cash and cash equivalents | 40,725,399 | 72,952,310 | (40,937,302 | ) | ||||||||
Cash and cash equivalents – beginning of period | 89,511,710 | 16,559,400 | 57,496,702 | |||||||||
Cash and cash equivalents – end of period | $ | 130,237,109 | $ | 89,511,710 | $ | 16,559,400 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for income taxes | $ | 2,785,497 | $ | — | $ | — | ||||||
Non-cash investing and financing activities: | ||||||||||||
Unrealized gain (loss) on available-for-sale | $ | 21,827 | $ | 29,753 | $ | (20,248 | ) |
1. | Organization and i on of Business. |
11 (Stockholders’ Equity).
2. | Basis of Presentation and Significant Accounting Policies. |
a. |
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
b. |
|
c. |
|
d. |
|
|
Short-term bond fund
The short-term bond fund is classified as trading securities. Trading securities are recordedfunds and U.S. Treasuries held at fair value based on the closing market price of the security. For trading securities, the Company recognizes realized gains and losses and unrealized gains and losses to earnings. At December 31, 2018 and 2017, the only investment classified as trading securities was the short-term bond fund. Unrealized gain (loss) on trading securities was ($29,430) and $29,430, respectively, for the years ended December 31, 2018, and 2017 and is included in other income, net in the accompanying consolidated statements of operations.
U.S. Treasuries
U.S. Treasuries3
e. |
ACCOUNTS RECEIVABLE, NET. Accounts receivable are recorded net of customer allowance for distribution fees, trade discounts, prompt payment discounts, chargebacks and expected credit losses. Allowances for distribution fees, trade discounts, prompt payment discounts and chargebacks are based on contractual terms. The Company estimates the allowance for expected credit losses based on existing contractual payment terms, actual payment patterns of its customer and customer circumstances. At December 31, 2020 and 2019, the Company determined that an allowance for expected credit losses was not required. No accounts were written off during the periods presented. |
f. | INVENTORY . Inventories consist of raw materials,work-in-process Cost is determined using a standard cost method, which approximates actual cost, and assumes a first-in, first out (FIFO) flow of goods. The Company began capitalizing inventories post FDA approval of Firdapse ® on November 28, 2018 as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to the FDA approval of Firdapse ® were recorded as research and development expenses in work-in-process and finished goods. |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
g. |
|
|
h. |
|
i. |
|
|
j. |
|
2. | Basis of Presentation and Significant Accounting Policies(continued). |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Balances as of December 31, 2020 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 15,673,626 | $ | 15,673,626 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 104,994,400 | $ | — | $ | 104,994,400 | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
Short-term bond funds | $ | 10,041,068 | $ | 10,041,068 | $ | — | $ | — | ||||||||
Balances as of December 31, 2019 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 23,963,617 | $ | 23,963,617 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 59,932,200 | $ | — | $ | 59,932,200 | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
U.S. Treasuries | $ | 5,007,050 | $ | — | $ | 5,007,050 | $ | — | ||||||||
k. | OPERATING LEASES. right-of-use non-lease components, which are generally accounted for separately. |
l. | REVENUE RECOGNITION. ® in November 2018. Subsequent to receiving FDA approval, the Company entered into an arrangement with one distributor (the “Customer”), which is the exclusive distributor of Firdapse® in the United States. The Customer subsequently resells Firdapse® to a small group of exclusive specialty pharmacies (“SPs”) whose dispensing activities for patients with specific payors may result in government-mandated or privately negotiated rebate obligations for the Company with respect to the purchase of Firdapse® . |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Balances as of December 31, 2018 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 14,462,087 | $ | 14,462,087 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
Short-term investments: | ||||||||||||||||
Short-term bond fund | $ | 26,541,349 | $ | 26,541,349 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
U.S. Treasuries | $ | 10,380,864 | $ | — | $ | 10,380,864 | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
Investments: | ||||||||||||||||
U.S. Treasuries | $ | 5,008,243 | $ | — | $ | 5,008,243 | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
Balances as of December 31, 2017 | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 56,820,688 | $ | 56,820,688 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
| |||||||||
Short-term investments: | ||||||||||||||||
Short-term bond fund | $ | 26,516,711 | $ | 26,516,711 | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
To determine revenue recognition for arrangements that are within the scope of Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“Topic 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for product revenue, see Product Revenue, Net below. The Company also may generate revenues from payments received under a collaborative agreement. Collaborative agreement payments may include nonrefundable fees at the inception of the agreements, contingent payments for specific achievements designated in the collaborative agreements, and/or net profit-sharing payments on sales of products resulting from a collaborative arrangement. For a complete discussion of accounting for collaborative arrangements, see Revenues from Collaborative Arrangements below. Product Revenue, Net: ® to the Customer (its exclusive distributor) who subsequently resells Firdapse® to both a small group of SPs who have exclusive contracts with the Company to distribute the Company’s products to patients and potentially to medical centers or hospitals on an emergency basis. In addition to the distribution agreement with its Customer, the Company enters into arrangements with health care providers and payors that provide for government-mandated and/or privately negotiated rebates, chargebacks, and discounts with respect to the |
The following table rolls forward the fair value of the Company’s warrants liability activityproducts.
2017 | ||||
Fair value, beginning of period | $ | 122,226 | ||
Issuance of warrants | — | |||
Exercise of warrants | (309,130 | ) | ||
Change in fair value | 186,904 | |||
|
| |||
Fair value, end of period | $ | — | ||
|
|
2019.
2. | Basis of Presentation and Significant Accounting Policies (continued). |
2. |
Basis of Presentation and |
product in Canada. For the years ended December
2. | Basis of Presentation and Significant Accounting Policies (continued). |
m. |
|
n. |
|
o. |
|
|
p. |
|
q. | INCOME |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
r. |
|
s. |
|
2018 | 2017 | |||||||
Options to purchase common stock | 10,532,500 | 5,191,666 | ||||||
|
|
|
| |||||
Potential equivalent common stock excluded | 10,532,500 | 5,191,666 | ||||||
|
|
|
|
For the Years Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Basic weighted average common shares outstanding | 103,512,913 | 102,944,316 | 102,633,884 | |||||||||
Effect of dilutive securities | 2,729,360 | 3,076,620 | — | |||||||||
Diluted weighted average common shares outstanding | 106,242,273 | 106,020,936 | 102,633,884 | |||||||||
t. |
|
u. |
|
2. | Basis of Presentation and Significant Accounting Policies (continued). |
v. |
|
In June 2018,statements, as Endo does not meet the FASB issued ASUNo. 2018-07,Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting that largely aligns the accounting for share-based payment awards issued to employees and nonemployees. Under this ASU, mostdefinition of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. ASU2018-07 is effective for all entities for annual reporting periods beginning after December 15, 2018, including interim reporting periods within each annual reporting period, with early adoption permitted. The Company has adopted this standard in the first quarter of 2019. The adoption of this standard will not have a material impact on the Company’s consolidated financial statements.
customer.
3. | Investments. |
At December 31, 2018: U.S. Treasuries – ST U.S. Treasuries – LT Total Amortized
cost Gross
Unrealized
Gains Gross
Unrealized
Losses Estimated
Fair Value $ 10,382,699 $ — $ (1,835 ) $ 10,380,864 5,026,656 — (18,413 ) 5,008,243 $ 15,409,355 $ — $ (20,248 ) $ 15,389,107 At December 31, 2017, the Company did not have anyavailable-for-sale securities.
|
In accordance with FASB ASCTopic 320, “Investments – Debt and Equity Securities”, or ASC 320, the Company has classified its U.S. Treasuries asavailable-for-sale securities with secondary or resale markets, and, as such, they are reported at fair value with unrealized gains and losses included in comprehensive loss in stockholders’ equity and realized gain and losses, included in other income, net.
Estimated Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Amortized Cost | |||||||||||||
At December 31, 2020: | ||||||||||||||||
U.S. Treasuries - Cash equivalents | $ | 104,994,400 | $ | 2,709 | $ | — | $ | 104,991,691 | ||||||||
Bond Funds - ST | 10,041,068 | 28,623 | — | 10,012,445 | ||||||||||||
Total | $ | 115,035,468 | $ | 31,332 | $ | 0— | $ | 115,004,136 | ||||||||
At December 31, 2019: | ||||||||||||||||
U.S. Treasuries - Cash equivalents | $ | 59,932,200 | $ | 2,042 | $ | — | $ | 59,930,158 | ||||||||
U.S. Treasuries - ST | 5,007,050 | 7,463 | — | 4,999,587 | ||||||||||||
Total | $ | 64,939,250 | $ | 9,505 | $ | — | $ | 64,929,745 | ||||||||
Certain U.S. Treasuries at December 31, 2018 had fair values less2018.
2020.
2018 | ||||
Due in one year or less | $ | 10,380,864 | ||
Due after one year but within two years | 5,008,243 | |||
|
| |||
$ | 15,389,107 | |||
|
|
2020 | ||||
Due in one year or less | $ | 115,035,468 | ||
4. | Prepaid Expenses and Other Current Assets. |
2018 | 2017 | |||||||
Prepaid research fees | $ | 358,209 | $ | 388,977 | ||||
Prepaid insurance | 800,261 | 638,139 | ||||||
Prepaidpre-commercialization fees | 17,030 | 65,000 | ||||||
Prepaid subscriptions fees | 170,552 | 23,347 | ||||||
Prepaid rent | 31,561 | — | ||||||
Other | 272,168 | 58,281 | ||||||
|
|
|
| |||||
Total prepaid expenses and other current assets | $ | 1,649,781 | $ | 1,173,744 | ||||
|
|
|
|
2020 | 2019 | |||||||
Prepaid manufacturing costs | $ | 3,327,610 | $ | 1,526,013 | ||||
Prepaid tax | 1,368,464 | — | ||||||
Prepaid insurance | 1,285,104 | 1,263,129 | ||||||
Prepaid subscriptions fees | 729,065 | 501,251 | ||||||
Prepaid research fees | 453,034 | 481,057 | ||||||
Prepaid commercialization expenses | 199,095 | 62,959 | ||||||
Due from collaborative arrangements | 436,784 | 0 | ||||||
Other | 528,615 | 516,665 | ||||||
Total prepaid expenses and other current assets | $ | 8,327,771 | $ | 4,351,074 | ||||
5. |
Operating Leases. |
Property
For the Year Ended December 31, 2020 | ||||
Operating lease cost | $ | 261,736 |
December 31, 2020 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows | $ | 339,605 | ||
Right-of-use | ||||
Operating leases | $ | 55,801 |
December 31, 2020 | ||||
Operating lease right-of-use | $ | 0— | ||
Other current liabilities | $ | 28,772 | ||
Operating lease liabilities, net of current portion | 0— | |||
Total operating lease liabilities | $ | 28,772 | ||
Weighted average remaining lease term | 0.1 years | |||
Weighted average discount rate | 3.68 | % |
2018 | 2017 | |||||||
Computer equipment | $ | 52,704 | $ | 27,915 | ||||
Furniture and equipment | 212,451 | 169,931 | ||||||
Leasehold improvements | 177,417 | 152,708 | ||||||
|
|
|
| |||||
442,572 | 350,554 | |||||||
Less: Accumulated depreciation | (197,147 | ) | (159,169 | ) | ||||
|
|
|
| |||||
Total property and equipment, net | $ | 245,425 | $ | 191,385 | ||||
|
|
|
|
Depreciation31, 2020 were as follows:
2021 | $ | 28,860 | ||
2022 | 0— | |||
Total lease payments | 28,860 | |||
Less imputed interest | (88 | ) | ||
Total | $ | 28,772 | ||
6. | Accrued Expenses and Other Liabilities. |
2018 | 2017 | |||||||
Accrued preclinical and clinical trial expenses | $ | 821,633 | $ | 970,649 | ||||
Accrued professional fees | 1,311,061 | 227,457 | ||||||
Accrued compensation and benefits | 1,941,449 | 821,935 | ||||||
Accrued license fees | 3,000,000 | 252,500 | ||||||
Deferred rent and lease incentive | 33,408 | 24,011 | ||||||
Other | 66,436 | 24,035 | ||||||
|
|
|
| |||||
Current accrued expenses and other liabilities | 7,173,987 | 2,320,587 | ||||||
Deferred rent and lease incentive –non-current | 154,799 | 157,456 | ||||||
|
|
|
| |||||
Non-current accrued expenses and other liabilities | 154,799 | 157,456 | ||||||
|
|
|
| |||||
Total accrued expenses and other liabilities | $ | 7,328,786 | $ | 2,478,043 | ||||
|
|
|
|
2020 | 2019 | |||||||
Accrued preclinical and clinical trial expenses | $ | 584,502 | $ | 1,183,513 | ||||
Accrued professional fees | 1,883,880 | 1,241,526 | ||||||
Accrued compensation and benefits | 3,991,056 | 3,064,645 | ||||||
Accrued license fees | 10,372,642 | 8,751,991 | ||||||
Accrued purchases | 258,067 | 1,313,310 | ||||||
Accrued contributions | 310,000 | 1,535,000 | ||||||
Operating lease liability | 28,772 | 300,518 | ||||||
Accrued variable consideration | 964,316 | 884,764 | ||||||
Accrued income tax | — | 1,533,696 | ||||||
Other | 107,032 | 172,332 | ||||||
Current accrued expenses and other liabilities | 18,500,267 | 19,981,295 | ||||||
Lease liability – non-current | — | 647,532 | ||||||
Non-current accrued expenses and other liabilities | — | 647,532 | ||||||
Total accrued expenses and other liabilities | $ | 18,500,267 | $ | 20,628,827 | ||||
7. | Collaborative Arrangements . |
EVL
|
The Company has contractedfees). Total expenses incurred, net, in connection with drug manufacturersthe collaborative agreement with Endo for years ended December 31, 2020, 2019, and other vendors, including clinical2018 were approximately
7. | Collaborative Arrangements (continued). |
8. | Commitments and |
There are no obligations under capital leases.
On August 27, 2009, the Company entered into a license agreement with Northwestern University (Northwestern), under which it acquired worldwide rights toCPP-115. As of December 31, 2018, the Company had paid $424,885 in connection with the license and had accrued license fees of $0 in the accompanying December 31, 2018 consolidated balance sheet for expenses, maintenance fees and milestones.
8. | Commitments and Contingencies (continued). |
On November 5, 2018, Northwestern advisedMagistrate Judge, granted the Company that in its view, Northwestern has a right to terminateFDA’s and Jacobus’s motions for summary judgment, and dismissed the license agreement with the Company because theCompany’s case. The Company has allegedly breachedappealed the license agreement by failingdecision to pay certain milestones and by allegedly failing to use commercially reasonable efforts to develop and commercialize any products. Northwestern has also advised the Company that, in its view, the Company has engaged in wrongful conduct and communications with the third party that licensed the new patents from Northwestern, and that such communications have damaged Northwestern’s relationship with that third party. The Company disputes Northwestern’s allegations and is vigorously defending itself against claims that Northwestern has brought against it in the arbitration proceeding.
Eleventh Circuit Court of Appeals. There can be no assurance as to the outcome of this matter.
lawsuit.
9. | Agreements. |
a. |
|
Under the Company’s license agreement with BioMarin, the Company agreed to pay certain milestone payments that BioMarin was obligated to pay to both a third-party licensor of the rights that have been sublicensed to us and to the former stockholders of Huxley Pharmaceuticals (“Huxley”) under an earlier stock purchase agreement between BioMarin and the former Huxley stockholders.
In full satisfaction of the milestone obligations, the Company has paid (i) $3,150,000 in milestone payments to the third party licensor of the rights that have been sublicensed to the Company ($3.0 million of which was paid in February 2019 and the balance of which was paid in 2018) and (ii) $2.0 million in milestone payments to the former Huxley Stockholders (all of which was paid in 2018).
In the BioMarin License Agreement, the Company agreed to share in the cost of certain post-marketing studies of Firdapse® that were being conducted by BioMarin, and the Company fulfilled its commitment to BioMarin regarding all such payments several years ago.
|
b. |
|
10. | Income Taxes. |
Due
income using an effective tax rate.
2020 | 2019 | 2018 | ||||||||||
Current | $ | (121,662 | ) | $ | 1,533,696 | $ | 0 | |||||
Deferred | (32,971,264 | ) | 0 | 0 | ||||||||
$ | (33,092,926 | ) | $ | 1,533,696 | $ | 0 | ||||||
2018 | 2017 | |||||||
Statutory rate | 21.0 | % | 34.0 | % | ||||
State tax | 4.2 | % | 3.5 | % | ||||
Valuation allowance | (25.9 | )% | 26.5 | % | ||||
Federal rate change | 0.0 | % | (73.2 | )% | ||||
Tax credit | 1.4 | % | 6.8 | % | ||||
Other | (0.7 | )% | 2.4 | % | ||||
|
|
|
| |||||
0.0 | % | 0.0 | % | |||||
|
|
|
|
2020 | 2019 | 2018 | ||||||||||
Statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | ||||||
State tax | 2.2 | % | 6.5 | % | 4.2 | % | ||||||
Valuation allowanc e | (99.4 | )% | (20.9 | )% | (25.9 | )% | ||||||
Tax credit | (2.4 | )% | (2.5 | )% | 1.4 | % | ||||||
Othe r | (0.4 | )% | 0.5 | % | (0.7 | )% | ||||||
(79.0 | )% | 4.6 | % | 0.0 | % | |||||||
2018 | 2017 | |||||||
Net operating loss | $ | 19,867,591 | $ | 15,718,570 | ||||
Start-up cost | 13,861,147 | 10,508,487 | ||||||
Tax credits | 12,625,275 | 11,582,134 | ||||||
Deferred compensation | 1,919,434 | 1,326,189 | ||||||
Other | 109,779 | 72,395 | ||||||
|
|
|
| |||||
Gross deferred tax asset | 48,383,226 | 39,207,775 | ||||||
|
|
|
| |||||
Valuation allowance | (48,383,226 | ) | (39,207,775 | ) | ||||
|
|
|
| |||||
Net deferred tax assets | $ | — | $ | — | ||||
|
|
|
|
2020 | 2019 | |||||||
Net operating loss | $ | 2,319,848 | $ | 10,645,128 | ||||
Start-up costs | 11,203,034 | 12,894,926 | ||||||
Tax credits | 15,615,681 | 14,320,860 | ||||||
Deferred compensation | 3,889,133 | 3,183,767 | ||||||
Inventory | 212,045 | 229,050 | ||||||
Prepaid expenses | (398,979 | ) | 0 | |||||
Other | 130,502 | 355,023 | ||||||
Gross deferred tax asset | 32,971,264 | 41,628,754 | ||||||
Valuation allowance | 0 | (41,628,754 | ) | |||||
Net deferred tax assets | $ | 32,971,264 | $ | 0 | ||||
10. | Income Taxes (continued). |
2020 was
determined that the total net operating loss and orphan drug tax credit carryforwards are fully utilizable. Thus, the deferred tax assets were adjusted accordingly.
|
No
11. | Stockholders’ Equity. |
2019.20182020 and 2017. No2019. NaN shares of preferred stock were outstanding at December 31, 20182020 and 2017.The Company has 150,000,000 shares ofshare.share, from 150,000,000 shares to 200,000,000 shares. At December 31, 20182020 and 2017, 102,739,2572019, 103,781,641 and 102,549,498103,397,033 shares, respectively, of common stock were issued and outstanding. Each holder of common stock is entitled to one1 vote of each share of common stock held of record on all matters on which stockholders generally are entitled to vote.2016
2017 Shelf Registration Statement
On July 12, 2017, the Company filed a universal shelf Registration Statement on FormS-3 (the 2017 Shelf Registration Statement) with the SEC to sell up to $150$200 million of common stock, preferred stock, warrants to purchase common stock, or debt securities (including debtand units consisting of one or more of such securities that may be convertible or exchangeable for common stock or other securities), which securities may be offered separately or together in units or multiple series.(the “2020 Shelf Registration Statement”). The 20172020 Shelf Registration Statement (fileNo. 333-219259) no.
On November 28, 2017,31, 2020. As of the Company filed a prospectus supplement and offered for sale 16,428,572 sharesdate of its common stock at a price of $3.50 per share in an underwritten public offeringthis report, no offerings have been completed under the 2017 Shelf Registration. The Company received gross proceeds in the public offering of approximately $57.5 million before underwriting commission and incurred expenses of approximately $3.7 million.
At December 31, 2018, there is approximately $92.5 million available for future sale under the 2017Company’s 2020 Shelf Registration Statement.
Warrant Exercises
All unexercised warrants expired in 2017. For the year ended December 31, 2017, the Company issued 2,257,663 shares of its authorized but unissued common stock upon the exercise of previously issued common stock purchase warrants, with net proceeds to the Company of $3,209,423.
11. | Stockholders’ Equity (continued). |
12. | Stock |
2018 | 2017 | |||||||
Research and development | $ | 1,079,230 | $ | 785,899 | ||||
General and administrative | 2,471,414 | 1,622,062 | ||||||
|
|
|
| |||||
Total stock-based compensation | $ | 3,550,644 | $ | 2,407,961 | ||||
|
|
|
|
2020 | 2019 | 2018 | ||||||||||
Research and development | $ | 1,585,202 | $ | 1,137,596 | $ | 1,079,230 | ||||||
Selling, general and administrative | 4,675,721 | 2,687,219 | 2,471,414 | |||||||||
Total stock-based compensation | $ | 6,260,923 | $ | 3,824,815 | $ | 3,550,644 | ||||||
12. | Stock Compensation (continued). |
stock.
|
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
Outstanding at beginning of year | 5,191,666 | $ | 1.96 | |||||||||||||
Granted | 5,822,500 | 3.04 | ||||||||||||||
Exercised or released | (186,665 | ) | 1.59 | |||||||||||||
Forfeited or cancelled | (270,001 | ) | 2.94 | |||||||||||||
Expired | (25,000 | ) | 0.47 | |||||||||||||
|
|
|
| |||||||||||||
Outstanding at end of year | 10,532,500 | $ | 2.54 | 5.39 | $ | 2,239,500 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Exercisable at end of year | 4,349,996 | $ | 2.16 | 4.00 | $ | 1,679,297 | ||||||||||
|
|
|
|
|
|
|
|
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
Outstanding at beginning of year | 11,478,334 | $ | 2.95 | |||||||||||||
Granted | 2,715,000 | 3.75 | ||||||||||||||
Exercised or released | (281,762 | ) | 2.69 | |||||||||||||
Forfeited or cancelled | (160,668 | ) | 3.84 | |||||||||||||
Expired | (357,235 | ) | 3.38 | |||||||||||||
Outstanding at end of year | 13,393,669 | $ | 3.10 | 4.42 | $ | 8,237,645 | ||||||||||
Exercisable at end of year | 7,926,136 | $ | 2.64 | 3.38 | $ | 7,381,601 | ||||||||||
2018 | 2017 | |||||||
Weighted–average fair value of granted stock options | $ | 1.93 | $ | 0.91 | ||||
Total fair value of vested stock options | $ | 2,193,294 | $ | 2,016,992 | ||||
Total intrinsic value of exercised stock options | $ | 274,864 | $ | 2,296,100 |
The following table summarizes information about the Company’s options outstanding at December 31, 2018:
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Range of Exercise Prices | Number Outstanding | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Number Exercisable | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | ||||||||||||||||||
$0.79 to $1.13 | 2,385,000 | 4.78 | $ | 0.99 | 1,686,664 | 4.69 | $ | 0.93 | ||||||||||||||||
$1.14 to $2.28 | 2,440,000 | 6.87 | $ | 2.22 | 209,999 | 6.22 | $ | 2.07 | ||||||||||||||||
$2.29 to $3.07 | 1,765,000 | 4.84 | $ | 2.60 | 1,098,333 | 3.72 | $ | 2.53 | ||||||||||||||||
$3.08 to $3.75 | 2,005,000 | 4.59 | $ | 3.30 | 995,000 | 2.71 | $ | 3.14 | ||||||||||||||||
$3.76 to $4.64 | 1,937,500 | 5.62 | $ | 4.03 | 360,000 | 3.92 | $ | 4.11 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
10,532,500 | 5.39 | $ | 2.54 | 4,349,996 | 4.00 | $ | 2.16 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2020 | 2019 | 2018 | ||||||||||
Weighted–average fair value of granted stock options | $ | 2.33 | $ | 2.69 | $ | 1.93 | ||||||
Total fair value of vested stock options | $ | 5,311,616 | $ | 3,864,995 | $ | 2,193,294 | ||||||
Total intrinsic value of exercised stock options | $ | 325,102 | $ | 1,899,862 | $ | 274,864 |
12. | Stock Compensation |
December 31, | December 31, | |||
Risk free interest rate | 2.09% to 2.88% | 1.66% to 2.25% | ||
Expected term | 0 to 7 years | 4 to 7 years | ||
Expected volatility | 82% | 104% | ||
Expected dividend yield | — % | — % | ||
Expected forfeiture rate | — % | — % |
December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||
Risk free interest rate | 0.24% to 1.64 | % | 1.51% to 2.53 | % | 2.09% to 2.88 | % | ||||||
Expected term | 4.5 years | 4.5 years | 0 to 7 years | |||||||||
Expected volatility | 80.5% to 83.7 | % | 75.5 | % | 82 | % | ||||||
Expected dividend yield | 0 | % | — | % | — | % | ||||||
Expected forfeiture rate | 0 | % | — | % | — | % |
2017 | ||||||||
Number of Restricted Stock Units | Weighted Average Grant Date Fair Value | |||||||
Nonvested balance at beginning of year | 26,667 | $ | 2.83 | |||||
Granted | — | — | ||||||
Vested | (26,667 | ) | 2.83 | |||||
Forfeited | — | — | ||||||
|
|
|
| |||||
Nonvested balance at end of year | — | $ | — | |||||
|
|
|
|
2020 | |||||||||
Number of Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||
Nonvested balance at beginning of year | 352,500 | $ | 4.64 | ||||||
Granted | 30,000 | 4.70 | |||||||
Vested | (117,495 | ) | 4.64 | ||||||
Forfeited | (29,334 | ) | 4.64 | ||||||
Nonvested balance at end of year | 235,671 | $ | 4.65 | ||||||
Common Stock
2020 or 2019. During the year ended December 31, 2018, the Company granted 3,094 net shares of common stock to an employee as compensation. The Company recorded stock-based compensation related to common stock issued to an employee totaling approximately $15,000, during the year ended December 31, 2018. No shares of common stock were granted during the year ended December 31, 2017.
13. | Benefit Plan. |
|
The following table presents unaudited supplemental quarterly financial information for the years ended December 31, 2018 and 2017:
Quarter Ended | ||||||||||||||||
March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | |||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | 500,000 | ||||||||
Loss from operations | $ | (5,933,440 | ) | $ | (6,335,855 | ) | $ | (8,182,603 | ) | $ | (14,843,267 | ) | ||||
Net loss | $ | (5,699,892 | ) | $ | (5,965,140 | ) | $ | (7,838,873 | ) | $ | (14,499,609 | ) | ||||
Net loss per share – basic and diluted | $ | (0.06 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.14 | ) |
Quarter Ended | ||||||||||||||||
March 31, 2017 | June 30, 2017 | September 30, 2017 | December 31, 2017 | |||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | — | ||||||||
Loss from operations | $ | (4,679,871 | ) | $ | (4,181,271 | ) | $ | (4,306,708 | ) | $ | (5,511,786 | ) | ||||
Change in fair value of warrants liability | $ | (397,235 | ) | $ | 210,331 | $ | — | $ | — | |||||||
Net loss | $ | (4,967,129 | ) | $ | (3,879,901 | ) | $ | (4,177,649 | ) | $ | (5,387,698 | ) | ||||
Net loss per share – basic and diluted | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.06 | ) |
Quarterly basic and diluted net loss per common share were computed independently for each quarter and do not necessarily total to the full year basic and diluted net loss per common share.
|
On January 15, 2019, the Company launched its first product, Firdapse®, in the United States for the treatment of adults with LEMS.
F-23