Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 18, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-33451 | ||
Entity Registrant Name | Albireo Pharma, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 90-0136863 | ||
Entity Address, Address Line One | 10 Post Office Square | ||
Entity Address, Address Line Two | Suite 1000 | ||
Entity Address, City or Town | Boston | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02109 | ||
City Area Code | 857 | ||
Local Phone Number | 254-5555 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | ALBO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 394.2 | ||
Entity Common Stock, Shares Outstanding | 19,113,603 | ||
Entity Central Index Key | 0001322505 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 251,272 | $ 131,843 |
Prepaid expenses and other current assets | 10,593 | 9,956 |
Total current assets | 261,865 | 141,799 |
Property and equipment, net | 478 | 597 |
Goodwill | 17,260 | 17,260 |
Other assets | 6,004 | 5,413 |
Total assets | 285,607 | 165,069 |
Current liabilities: | ||
Accounts payable | 5,283 | 4,785 |
Accrued expenses | 19,051 | 13,486 |
Other current liabilities | 948 | 653 |
Total current liabilities | 25,282 | 18,924 |
Liability related to sale of future royalties | 65,894 | 48,714 |
Note payable, net of discount | 9,621 | |
Other long-term liabilities | 3,579 | 4,270 |
Total liabilities | 104,376 | 71,908 |
Stockholders' Equity: | ||
Preferred stock, $0.01 par value per share - 50,000,000 authorized at December 31, 2020 and December 31, 2019; 0 and 0 issued and outstanding at December 31, 2020 and December 31, 2019, respectively | ||
Common stock, $0.01 par value per share - 30,000,000 authorized at December 31, 2020 and December 31, 2019; 19,107,040 and 12,749,443 issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 191 | 127 |
Additional paid-in capital | 456,472 | 245,769 |
Accumulated other comprehensive (loss) income | (8,612) | 6,452 |
Accumulated deficit | (266,820) | (159,187) |
Total stockholders' equity | 181,231 | 93,161 |
Total liabilities and stockholders' equity | $ 285,607 | $ 165,069 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 19,107,040 | 12,749,443 |
Common stock, shares outstanding | 19,107,040 | 12,749,443 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 8,308 | $ 9,636 |
Operating expenses: | ||
Research and development | 76,777 | 45,575 |
General and administrative | 42,448 | 22,963 |
Other operating (income) expense, net | (14,646) | 2,210 |
Total operating expenses | 104,579 | 70,748 |
Operating loss | (96,271) | (61,112) |
Interest expense, net | (11,362) | (5,296) |
Other non-operating income | 3,691 | |
Net loss | $ (107,633) | $ (62,717) |
Net loss per common share - basic and diluted | $ (6.73) | $ (5.04) |
Weighted-average common shares used to compute basic and diluted net loss per common share | 15,983,058 | 12,437,742 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Income and Comprehensive Income [Abstract] | ||
Net loss | $ (107,633) | $ (62,717) |
Other comprehensive (loss) income: | ||
Foreign currency translation adjustment | (15,064) | 2,159 |
Total other comprehensive (loss) income | (15,064) | 2,159 |
Total comprehensive loss | $ (122,697) | $ (60,558) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2018 | $ 120 | $ 214,694 | $ 4,293 | $ (96,470) | $ 122,637 |
Balance (in shares) at Dec. 31, 2018 | 11,969,928 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share based compensation expense | 7,578 | 7,578 | |||
Exercise of options and vesting of RSUs and ESPP | $ 1 | 2,728 | 2,729 | ||
Exercise of options and vesting of RSUs and ESPP (in shares) | 142,148 | ||||
Issuance of common stock, net of costs | $ 6 | 20,769 | 20,775 | ||
Issuance of common stock (in shares) | 637,367 | ||||
Other comprehensive income (loss) | 2,159 | 2,159 | |||
Net loss | (62,717) | (62,717) | |||
Balance at end of period at Dec. 31, 2019 | $ 127 | 245,769 | 6,452 | (159,187) | 93,161 |
Balance (in shares) at Dec. 31, 2019 | 12,749,443 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share based compensation expense | 14,615 | 14,615 | |||
Exercise of options and vesting of RSUs and ESPP | $ 2 | 2,772 | 2,774 | ||
Exercise of options and vesting of RSUs and ESPP (in shares) | 166,847 | ||||
Issuance of warrants | 113 | 113 | |||
Issuance of common stock, net of costs | $ 62 | 193,203 | 193,265 | ||
Issuance of common stock (in shares) | 6,190,750 | ||||
Other comprehensive income (loss) | (15,064) | (15,064) | |||
Net loss | (107,633) | (107,633) | |||
Balance at end of period at Dec. 31, 2020 | $ 191 | $ 456,472 | $ (8,612) | $ (266,820) | $ 181,231 |
Balance (in shares) at Dec. 31, 2020 | 19,107,040 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (107,633) | $ (62,717) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accretion of liability related to sale of future royalties | 10,778 | 8,360 |
Accretion of debt discount and amortization of issuance costs | 248 | |
Depreciation and amortization | 192 | 127 |
Share based compensation expense | 14,615 | 7,578 |
Foreign currency adjustments | (14,573) | 4,006 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (508) | (6,331) |
Other assets | 575 | (360) |
Accounts payable | 275 | 577 |
Accrued expenses | (4,774) | (4,095) |
Other current and long-term liabilities | (224) | (64) |
Net cash used in operating activities | (101,029) | (52,919) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (78) | (540) |
Net cash used in investing activities | (78) | (540) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 193,265 | 20,775 |
Proceeds from royalty agreement, net of issuance costs | 14,750 | |
Proceeds from issuance of debt, net of issuance costs | 9,487 | |
Proceeds from exercise of options and vesting of RSUs | 2,774 | 2,729 |
Net cash provided by financing activities | 220,276 | 23,504 |
Effect of exchange rate changes on cash and cash equivalents | 260 | (2,087) |
Net increase (decrease) in cash and cash equivalents | 119,429 | (32,042) |
Cash and cash equivalents - beginning of period | 131,843 | 163,885 |
Cash and cash equivalents - end of period | 251,272 | 131,843 |
Supplemental disclosures of cash and non-cash activities: | ||
Warrants issued with long-term debt | $ 113 | |
Cash paid for income taxes | 20 | |
Right of use assets and lease obligations recorded upon amended lease agreements | $ 4,747 |
Summary of significant accounti
Summary of significant accounting policies and basis of presentation | 12 Months Ended |
Dec. 31, 2020 | |
Summary of significant accounting policies and basis of presentation | |
Summary of significant accounting policies and basis of presentation | 1. Summary of significant accounting policies and basis of presentation Organization Albireo Pharma, Inc. (the Company), is a clinical-stage biopharmaceutical company focused on the development and commercialization of novel bile acid modulators to treat orphan pediatric liver diseases and other liver and gastrointestinal diseases and disorders. The Company’s clinical pipeline includes a Phase 3 product candidate, a Phase 2 product candidate, and elobixibat, which is approved in Japan for the treatment of chronic constipation. Odevixibat, the Company’s Phase 3 lead product candidate, is in development initially for the treatment of patients with progressive familial intrahepatic cholestasis (PFIC), a rare, life-threatening genetic disorder affecting young children. Basis of presentation These Consolidated Financial Statements have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). Principles of consolidation The accompanying Consolidated Financial Statements include the accounts of the Company including its direct or indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Foreign currency translation Functional and presentation currency Items included in the financial statements of each entity comprising the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). Transactions and balances Foreign currency transactions in each entity comprising the Company are remeasured into the functional currency of the entity using the exchange rates prevailing at the respective transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized within Other operating (income) expense, net except for changes in the liability related to the sale of future royalties which are recorded in Other non-operating (income) expense, net in the Consolidated Statements of Operations. The results and financial position of the Company’s subsidiaries’ that have a functional currency different from the USD are translated as follows: a. assets and liabilities presented are translated at the closing exchange rate as of December 31, 2020 and 2019; b. income and expenses for the statements of operations and comprehensive loss are translated at average exchange rates that are relevant for the respective periods for which the income and expenses occurred; and c. significant transactions use the exchange rate on the date of the transaction; All resulting exchange differences arising from such translations are recognized directly in other comprehensive income (loss) and presented as a separate component of equity. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes. Management must apply significant judgment in this process. On an ongoing basis, the Company evaluates its estimates and assumptions, including but not limited to accruals, realizability of deferred tax assets and the accretion of interest on the monetization liability. Actual results could materially differ from these estimates. Segment information The Company’s entire business is managed by a single management team, which reports to the chief executive officer. The chief executive officer is the chief operating decision maker. The Company has determined it has one operating segment as its chief operating decision maker allocates resources and assesses the performance of the business at this level. Accordingly, the Company has one reporting segment, which is the research and development of novel treatments for liver and gastrointestinal diseases and disorders. Cash and cash equivalents The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. For banks and financial institutions, only independent financial institutions with a high credit rating are utilized. The Company’s current license agreement is with an established and reputable pharmaceutical company and, historically, the Company has not had any material collection risk related to its accounts receivable. Concentration of revenue The Company generally does not require collateral or other security in support of accounts receivable. All revenue and receivables relate to one licensee . Property and equipment, net Property and equipment, including leasehold improvements, are recorded at cost and depreciated when placed into service using the straight-line method, based on their estimated useful lives as follows: Estimated Useful Life Asset Classification (in years) IT Equipment 3-5 Vehicles 5 Leaseholds improvements Lesser of useful life or lease term Furniture and fixtures 5-7 Property and equipment purchased for less than $10,000 are expensed immediately. Costs for repairs and maintenance are expensed as incurred. Gains and losses on disposals of equipment are determined by comparing the proceeds with the carrying amount and are recognized within Other operating (income) expense, net in the Consolidated Statements of Operations. Impairment of long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In such instances, the recoverability of assets to be held and used is measured first by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, an impairment loss would be recognized if the carrying amount of the asset exceeds the fair value of the asset. There were no impairments recorded for the years ended December 31, 2020 and 2019. Research and development expenses Research and development costs are expensed as incurred and include primarily salaries, benefits and other staff-related costs; clinical trial and related clinical manufacturing costs; contract services and other outside costs. The Company’s nonclinical studies and clinical trials are performed by third-party contract research organizations (CROs). Some of these expenses are billed monthly for services performed, while others are billed based upon milestones achieved. For nonclinical studies, the significant factors used in estimating accruals include the percentage of work completed to date and contract milestones achieved. For clinical trial expenses, the significant factors used in estimating accruals include the number of patients enrolled and percentage of work completed to date and contract milestones achieved. The Company’s estimates are highly dependent upon the timeliness and accuracy of the data provided by the respective CROs regarding the status of the contracted activity, with adjustments made when deemed necessary. Revenue recognition Milestone Payments At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). In 2012, the Company entered into a license agreement (the Agreement) with EA Pharma Co., Ltd. (EA Pharma) to develop a select product candidate (elobixibat) for registration and subsequent commercialization in select markets. In conjunction with the Agreement, the Company granted EA Pharma an exclusive license to its intellectual property for development and commercialization activities in the designated field and territories. The Company has completed all of its performance obligations. As of December 31, 2020, the Company is eligible to receive an additional regulatory-based milestone payment under the Agreement of $5.3 million if a specified regulatory event is achieved for elobixibat. The cash payments and any other payments for milestones and royalties from EA Pharma are non-refundable, non-creditable and not subject to set-off. The Agreement will continue until the last royalty period for any product in the territory, which is defined as the period when there are no remaining patent rights or regulatory exclusivity in place for any products subject to royalties. EA Pharma may terminate the Agreement at will upon 180 days’ prior written notice to the Company. Either party may terminate the Agreement for the other party’s uncured material breach or insolvency and in certain other circumstances agreed to by the parties. Monetization of Future Royalties In December 2017, the Company entered into a royalty interest acquisition agreement (RIAA) with HealthCare Royalty Partners III, L.P. (HCR) pursuant to which it sold to HCR the right to receive all royalties from sales in Japan and sales milestones achieved from any covered territory potentially payable to the Company under the Agreement, up to a specified maximum “cap” amount of $78.8 million, based on the funds the Company received from HCR. In January 2018, the Company received $44.5 million from HCR, net of certain transaction expenses, under the RIAA. On June 8, 2020, the parties entered into an amendment to the RIAA pursuant to which HCR agreed to pay the Company an additional $14.8 million, net of certain transactions expenses, in exchange for the elimination of the (i) $78.8 million cap amount on HCR’s rights to receive royalties on sales in Japan and sales milestones for elobixibat in certain other territories that may become payable by EA Pharma and (ii) the $15.0 million payable to the Company if a specified sales milestone is achieved for elobixibat in Japan. The Company is obligated to make royalty interest payments to HCR under the RIAA only to the extent it receives future Japanese royalties, sales milestones or other specified payments from EA Pharma. Although the Company sold its rights to receive royalties from the sales of elobixibat in Japan, as a result of its ongoing involvement in the cash flows related to these royalties, the Company will continue to account for these royalties as revenue. Upon receipt of the payments from HCR the Company recorded net cash totaling $59.3 million as a liability related to sale of future royalties (royalty obligation). The royalty obligation will be amortized using the effective interest rate method. The following table shows the activity within the liability account for the year ended December 31, 2020: December 31, 2020 (in thousands) Liability related to sale of future royalties—beginning balance $ 55,144 Accretion of interest expense on liability related to royalty monetization 10,778 Proceeds from sale of future royalties, net 14,750 Repayment of the liability (12,078) Liability related to sale of future royalties—ending balance $ 68,594 Less current portion classified within accrued expenses (2,700) Net ending liability related to sale of future royalties $ 65,894 The Company records estimated royalties due for the current period in accrued other expenses until the payment is received from EA Pharma at which time the Company then remits payment to HCR. In order to determine the accretion of the royalty obligation, the Company is required to estimate the total amount of future royalty payments to be received and submitted to HCR. The sum of these amounts less the $59.3 million proceeds the Company received will be recorded as interest expense over the life of the royalty obligation. At December 31, 2020, the Company’s estimate of its total interest expense resulted in an annual effective interest rate of approximately 19.0%. The Company periodically assesses the estimated royalty payments to HCR and to the extent such payments are greater or less than its initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the accretion of interest on the royalty obligation. There are a number of factors that could materially affect the amount and the timing of royalty payments, most of which are not within the Company’s control. Such factors include, but are not limited to, the rate of elobixibat prescriptions, the number of doses administered, the introduction of competing products, manufacturing or other delays, patent protection, adverse events that result in governmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates as the royalties remitted to HCR are in U.S. dollars while sales of elobixibat are in Japanese yen, and sales never achieving forecasted numbers, which would result in reduced royalty payments and reduced non-cash interest expense over the life of the royalty obligation. To the extent future royalties result in an amount less than the liability, the Company is not obligated to fund any such shortfall. Stock-based compensation The Company accounts for stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation The fair value of the Company’s stock options has been determined using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. For the years ended December 31, 2020 and December 31, 2019, due to the lack of historical and implied volatility data of the Company’s common stock and equivalents, the expected volatility has been estimated based on the historical volatilities of peer companies in the Company’s industry that are publicly traded. The Company selected companies that it considers to have comparable characteristics to the Company, including enterprise value, risk profiles and position within the industry and with historical share price information sufficient to meet the expected term of the stock options. The historical volatility data has been computed using the daily closing prices for the selected companies. Due to the lack of sufficient historical data, the Company used the “simplified” method, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the award, to determine the expected term of stock options. The Company records compensation expense for service-based awards over the vesting period of the award on a straight-line basis. For awards with service and performance based conditions, compensation related to the performance-based vesting conditions is recognized when achievement of the performance condition is considered probable and the compensation expense related to the service condition is recorded using the accelerated method. Modifications to stock-based awards are treated as an exchange of the original award for a new award with total compensation equal to the grant-date fair value of the original award plus any incremental value of the modification. The incremental value is based on the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Employee benefits Pension obligations The Company has a defined contribution pension plan for its Sweden-based employees whereby the Company pays contributions to employee benefit or insurance plans on a mandatory, contractual or voluntary basis. The Company paid $0.7 million and $0.4 million to the plans for the years ended December 31, 2020 and 2019, respectively. 401(k) The Company has a 401(k) retirement plan in which all U.S.-based employees are eligible to participate. The Company contributed $0.5 million and $0.2 million to the plan for the years ended December 31, 2020 and 2019, respectively. The Company matches employee contributions to the plan, on a per employee basis, up to 4% of each employee’s wages for the years ended December 31, 2020 and 2019. Loss contingencies Loss contingencies are recorded as liabilities when it is probable that a liability has occurred and the amount of loss is reasonably estimable. Disclosure is required when there is a reasonable possibility that an ultimate loss will be material. Contingent liabilities are often resolved over long periods of time. Estimating probable losses requires analysis that often depends on judgments about potential actions by third parties, such as regulators. Income taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. A deferred tax asset is recognized only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made. The amount of deferred tax provided is calculated using tax rates in effect at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. A two-step approach is applied pursuant to ASC 740 in the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company’s policy is to recognize interest and penalty expenses associated with uncertain tax positions as a component of income tax expense in the Consolidated Statements of Operations. As of the years ended December 31, 2020 and 2019, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Consolidated Statements of Operations. Net loss per share Basic net loss per share is calculated by dividing the net loss attributable to holders of common stock by the weighted average number of shares of common stock outstanding. Diluted net loss per share is calculated by dividing the net loss attributable to holders of common stock by the weighted-average number of shares of common stock outstanding. If the Company were in a net income position, diluted net income per share would be calculated by dividing the net income attributable to holders of common stock by the weighted-average number of shares of common stock plus dilutive common stock equivalents outstanding. Goodwill Goodwill is the excess of the purchase price in a business combination over the fair value of identifiable net assets acquired. Goodwill has an indefinite life and is subject to periodic testing for impairment. Goodwill is assessed at least annually, but also whenever events or changes in circumstances indicate the carrying value may not be recoverable. Factors that could trigger an impairment review, include: (a) significant underperformance relative to historical or projected future operating results; (b) significant changes in the manner of or use of the acquired assets or the strategy for the Company’s overall business; (c) significant negative industry or economic trends; (d) significant decline in the Company’s stock price for a sustained period; and (e) a decline in the Company’s market capitalization below net book value. The Company conducts an impairment assessment on October 1 each year taking a quantitative test which compares the fair value to the net carrying value, and records an impairment of goodwill to the extent that the net carrying value exceeds the fair value. During the fourth quarter of 2020 and 2019, we completed our annual impairment assessment and concluded that goodwill was not impaired in any of those years. Recently adopted accounting pronouncements In August 2018, the FASB issued ASU “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain software (and hosting arrangements that include an software license). The guidance also requires the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. The Company adopted this guidance in the first quarter of 2020 on a prospective basis and there was no material impact on its consolidated financial statements. |
Fair value of financial instrum
Fair value of financial instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair value of financial instruments | |
Fair value of financial instruments | 2. Fair value of financial instruments In measuring fair value, the Company evaluates valuation techniques such as the market approach, the income approach and the cost approach. A three-level valuation hierarchy, which prioritizes the inputs to valuation techniques that are used to measure fair value, is based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1—Observable inputs such as quoted prices (unadjusted) for identical Level 2—Observable inputs such as quoted prices for similar Level 3—Unobservable inputs that reflect the reporting entity’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property and equipment, net | |
Property and equipment, net | 3. Property and equipment, net Property and equipment, net consisted of the following (in thousands): Year Ended December 31, 2020 2019 IT equipment $ 318 $ 306 Vehicles - 81 Leasehold improvements 58 58 Furniture and fixtures 453 378 Total property and equipment, gross 829 823 Less: Accumulated depreciation (351) (226) Total property and equipment, net $ 478 $ 597 Depreciation expense for the years ended December 31, 2020 and 2019 was $0.2 million and $0.1 million, respectively. |
Accrued expenses
Accrued expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued expenses | |
Accrued expenses | 4. Accrued expenses Accrued expenses consisted of the following (in thousands): Year Ended December 31, 2020 2019 Accrued payroll and benefits $ 8,492 $ 2,990 Accrued professional fees 649 359 Accrued development costs 5,968 2,887 Accrued liability related to monetization of future royalties 2,700 6,430 Accrued other 1,242 820 Total accrued expenses $ 19,051 $ 13,486 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | 5. Commitments and contingencies Operating lease commitments The Company’s portfolio of commercial real estate leases consists of office space for its corporate headquarters in Boston, Massachusetts and for administrative space in Göteborg, Sweden, both of which are accounted for as operating leases. These leases include renewal rights and, as for the corporate headquarters lease, escalating payments. On March 28, 2019, the Company entered into an amendment to the Boston, Massachusetts lease to (i) replace the Company’s prior office space with a new office space that is being leased from the same landlord and (ii) extend the term of the lease through October 31, 2026. The new leased space contains monthly lease payments subject to annual escalations of $1.00 per square foot for the remaining term of the lease with the Company obligated to make approximately $4.2 million of aggregate lease payments over the term of the lease, or approximately $900,000 annually. The Company’s lease in Göteborg, Sweden includes the rental of office space. This lease includes annual rent escalations based on the changes in the Swedish Consumer Price Index. This lease renews automatically for consecutive three year terms unless notice of non-renewal is given by either party at least nine months prior to the end of the current term of February 2022. As of December 31, 2020 the net balance of ROU assets totaled $4.1 million and was classified within other non-current assets. Operating lease expense was $1.2 million and $0.7 million for the years ended December 31, 2020 and 2019, respectively. There were no short-term lease or variable lease costs incurred for the either of the years ended December 31, 2020 and 2019. As of December 31, 2020, the weighted average remaining lease term for the Company’s operating leases was 5.68 years. As of December 31, 2020, the weighted- average discount rate was 9.95%. The following table summarizes the Company’s significant contractual obligations under operating leases as of payment due date by period at December 31, 2020: Total Minimum Lease Payments (in thousands) 2021 1,028 2022 906 2023 921 2024 936 2025 and beyond 1,756 Total minimum lease payments $ 5,547 Less imputed interest (1,344) Total lease liability $ 4,203 Reported as: Other current liabilities $ (640) Other long-term liabilities (3,563) Total lease liabilities $ (4,203) As of December 31, 2020, future minimum commitments under facility operating leases were $4.2 million. For the years ended December 31, 2020 and 2019, the Company paid $1.0 million and $0.4 million in cash related to operating leases, respectively. Agreements with CROs As of December 31, 2020, the Company had various agreements with CROs for the conduct of specified research and development activities and, based on the terms of the respective agreements, the Company is contractually obligated to make future payments of up to $7.2 million upon the completion of contracted work. Legal Contingency On November 18, 2019 we entered into a settlement agreement with Ferring resolving to the parties’ mutual satisfaction a litigation we brought in New York State Supreme Court concerning the License Agreement, dated July 2, 2012, between us and Ferring. The parties have exchanged mutual releases and filed a stipulation voluntarily discontinuing the case with prejudice. Albireo received net proceeds of $3.7 million included in other non-operating income in the consolidated statements of operations. |
Note Payable
Note Payable | 12 Months Ended |
Dec. 31, 2020 | |
Note Payable | |
Note Payable | 6. Note Payable 2020 Loan and Security Agreement On June 8, 2020, the Company entered into a Loan and Security Agreement (the Loan and Security Agreement) with the several banks and other financial institutions or entities from time to time parties to the Loan and Security Agreement, as lenders (collectively, referred to as the “Lender”), and Hercules Capital, Inc., in its capacity as administrative agent and collateral agent for itself and Lender (in such capacity, the “Agent” or “Hercules”) pursuant to which term loans of up to an aggregate principal amount of up to $80.0 million (the “Term Loans”) are available to the Company. The Loan Agreement provides for (i) an initial term loan advance of $10.0 million, which closed on June 8, 2020, (ii) subject to the achievement of certain initial performance milestones (“Performance Milestone I”), a right of the Company to request that the Lender make additional term loan advances to the Company in an aggregate principal amount of up to $20.0 million from January 1, 2021 through December 15, 2021 in minimum increments of $10.0 million, and (iii) subject to the Lender’s investment committee’s sole discretion, a right of the Company to request that the Lender make additional term loan advances in an aggregate principal amount of up to $45.0 million through March 31, 2022 in minimum increments of $5.0 million. The Company is required to pay an end of term fee (“End of Term Charge”) equal to 6.95% of the aggregate principal amount of the Term Loans advances upon repayment. The Term Loans mature on January 1, 2024, which is extendable to June 1, 2024 upon achievement of Performance Milestone I (the “Maturity Date”). The Term Loan bears interest at an annual rate equal to the greater of 9.15% and 9.15% plus the prime rate of interest minus 3.25%. Borrowings under the Loan and Security Agreement are repayable in monthly interest-only payments through January 1, 2022 and extendable to (i) July 1, 2022 upon achievement of Performance Milestone I and (ii) July 1, 2023 upon achievement of certain additional performance milestones. After the interest-only payment period, borrowings under the Loan and Security Agreement are repayable in equal monthly payments of principal and accrued interest until the Maturity Date. At the Company’s option, the Company may elect to prepay all, but not less than all, of the outstanding term loan by paying the entire principal balance and all accrued and unpaid interest thereon plus a prepayment charge equal to the following percentage of the principal amount being prepaid: 2.0% of the principal amount outstanding if the prepayment occurs after the first nine months following the Closing Date, but on or prior to 24 months following the Closing Date, and 1.0% of the principal amount outstanding at any time thereafter but prior to the Maturity Date. In connection with the Loan Agreement, the Company granted Agent a security interest The Loan Agreement also contains certain events of default, representations, warranties and non-financial covenants of the Company. The debt discount and issuance costs are being accreted to the principal amount of debt and being amortized from the date of issuance through the Maturity Date to interest expense using the effective-interest rate method. The effective interest rate of the outstanding debt under the Loan Agreement is approximately 15.3%. As of December 31, 2020 the carrying value of the note payable consists of the following: December 31, 2020 (in thousands) Note payable, including End of Term Charge 10,695 Debt discount, net of accretion (1,074) Note payable net of discount, long-term $ 9,621 During the year ended December 31, 2020, the Company recognized $0.8 million, of interest expense related to the Loan Agreement. No interest expense was associated with the Loan Agreement for the year ended December 31, 2019. Through December 31, 2020, the Company borrowed $10.0 million under the Loan Agreement and incurred $1.3 million of debt discount and issuance costs inclusive of facility fees, legal fees, End of Term Charge and fair value of the warrant. Estimated future principal payments due under the Loan Agreement, including the contractual End of Term Charge are as follows as of December 31, 2020: Note Principal Payments (in thousands) 2021 $ — 2022 4,553 2023 4,994 2024 1,148 As of December 31, 2020, based on Level 3 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs, approximates fair value. Warrants Under the Loan and Security Agreement, the Company agreed to issue to Hercules warrants (the “Warrants”) to purchase a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) equal to 1% of the aggregate amount of the Term Loans that are funded, as such amounts are funded. On the Closing Date, the Company issued a Warrant for 5,311 shares of Common Stock. The Warrants will be exercisable for a period of seven years from the date of the issuance of each Warrant at a per-share exercise price equal to $18.83, subject to certain adjustments as specified in the Warrants. In addition, the Company has granted to the holders of the Warrants certain registration rights. Specifically, the Company has agreed to use its commercially reasonable efforts to (i) file registration statements with the U.S. Securities and Exchange Commission within 60 days following the date of the issuance of each Warrant for purposes of registering the shares of Common Stock issuable upon exercise of the Warrants for resale by Hercules, and (ii) cause the registration statement to be declared effective as soon as practicable after filing, and in any event no later than 180 days after the date of the issuance of each Warrant. The Company accounted for the Warrants as equity instruments since they were indexed to the Company’s common stock and met the criteria for classification in stockholders’ equity. The relative fair value of the Warrants related to the first tranche funding was approximately $0.1 million, and was treated as a discount to the Term Loans. This amount is being amortized to interest expense using the effective interest method over the life of the Term Loans. The Company estimated the fair value of the Warrants using the Black-Scholes option-pricing model. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill | |
Goodwill | 7. Goodwill There was |
Net loss per share
Net loss per share | 12 Months Ended |
Dec. 31, 2020 | |
Net loss per share | |
Net loss per share | 8. Net loss per share The following table sets forth the computation of Basic loss per share and Diluted loss per share (in thousands, except for share and per share data): Year Ended 2020 2019 Basic and Diluted loss per share: Numerator Net loss $ (107,633) $ (62,717) Denominator Weighted average number of shares outstanding 15,983,058 12,437,742 Basic and Diluted loss per share: $ (6.73) $ (5.04) The following outstanding common stock equivalents were excluded from the computation of Diluted loss per share for the periods presented because including them would have been anti-dilutive: Year Ended 2020 2019 Options to purchase common stock, RSUs and warrants 2,413,037 1,833,920 |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Income taxes | 9. Income taxes Effects of the Tax Cuts and Job Act The Company has had an overall net operating loss position since its inception. There was no current or deferred tax provision for the years ended December 31, 2020 and 2019, respectively. For the years ended December 31, 2020 and 2019, the components of loss before income taxes were as follows (in thousands): Year Ended December 31, 2020 2019 U.S. $ (86,041) $ (29,337) Foreign (21,592) (33,380) Total $ (107,633) $ (62,717) A reconciliation of the U.S. statutory income tax rate to the consolidated effective income tax rate was as follows: Year Ended December 31, 2020 2019 U.S. statutory income tax rate 21 % 21 % Stock compensation — (1) State taxes, net of federal tax effect 5 3 Change in valuation allowance (26) (20) Change in deferred tax rate — (2) Other items — (1) Effective income tax rate 0.0 % 0.0 % Deferred taxes are recognized for temporary differences between the bases of assets and liabilities for financial statement and income tax purposes. The tax effect of temporary differences that give rise to significant portions of the deferred tax assets are as follows (in thousands): Year Ended December 31, 2020 2019 Deferred tax assets: Tax loss carryforwards $ 59,790 $ 35,120 Research and development credits 130 130 Accrued expenses 1,870 530 Stock compensation 4,750 2,090 Interest carryforwards 4,420 1,910 Other 1,220 1,410 Total gross deferred tax assets 72,180 41,190 Valuation allowance (71,040) (39,910) Total deferred tax assets $ 1,140 $ 1,280 Deferred tax liabilities: Intangible assets $ (20) $ (30) Right of use asset (1,120) (1,250) Total deferred tax liabilities (1,140) (1,280) Net deferred tax assets $ — $ — A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Due to the uncertainty surrounding the realization of the favorable tax attributes in future returns, the Company has recorded a valuation allowance of $71.0 million and $39.9 million at December 31, 2020 and 2019, respectively. The change in valuation allowance for the years ended December 31, 2020 and 2019, were $31.1 million and $12.6 million, respectively. As of December 31, 2020, deferred tax assets related to net operating loss (NOL) carryforwards were $59.8 million, which may be used subject to certain limitations to offset future taxable income, if any. The NOL includes approximately $1.5 million for U.S. federal tax purposes that are subject to expire in 2036 and approximately $94.2 million of federal net operating losses which have no expiration date and can be carried forward indefinitely. The Company has state NOLs of approximately $244.4 million which may be available to offset future income tax liabilities and that expire at various dates through 2039. Additional NOLs of approximately $120.5 million were generated in various non-U.S. jurisdictions and will not expire. A valuation allowance has been established on the NOL carryforwards as it is uncertain as to whether future taxable income will be generated to utilize such NOLs. Utilization of the NOL and credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future as provided by Section 382 of the Code and similar state and foreign provisions. These ownership changes may limit the amount of NOL and credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Code Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. During 2016, the Company completed an analysis to assess and concluded that an ownership change within the meaning of Code Section 382 occurred. The analysis has not yet been updated beyond 2016. The Company’s policy is for any earnings of non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings, if any. Uncertain tax positions The Company accounts for uncertain tax positions under the recognition and measurement criteria of ASC 740-10. For those tax positions for which it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. If the Company does not believe that it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized. As of December 31, 2020 and 2019, no uncertain tax positions have been recorded. Interest and penalties related to the settlement of uncertain tax positions, if any, will be reflected in income tax expense. The Company did not recognize any interest or penalties associated with unrecognized tax benefits in the accompanying consolidated financial statements. The Company does not expect any material changes to the unrecognized benefits within 12 months of the reporting date. Due to existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate. The Company files U.S. federal and state tax returns and has determined that its major tax jurisdictions are the United States and Massachusetts, as well as the United Kingdom and Sweden. The Company’s tax returns may be examined for certain tax jurisdictions back to December 31, 2016. The Company is subject to a territorial tax system under the Act, in which the Company is required to provide for tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. The Company has adopted an accounting policy to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' equity | |
Stockholders? equity | 10. Stockholders’ equity Preferred Stock As of December 31, 2020, the Company has 50,000,000 shares of preferred stock authorized. There are no shares of preferred stock issued or outstanding Financing 2019 Sales Agreement In May 2019, we sold 637,367 shares of our common stock for net proceeds of approximately $20.8 million pursuant to an at the market offering. In February 2020, we completed an underwritten public offering of 2,190,750 shares of our common stock under a universal shelf registration statement for net proceeds of approximately $43.0 million. In May 2020, we filed a new universal shelf registration on Form S-3 with the SEC, pursuant to which we registered for sale up to $200.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine. As of December 31, 2020, $40.0 million of securities remain available for issuance under the shelf registration statement. In September 2020, the Company completed an underwritten public offering of 4,000,000 shares of its common stock. The Company received net proceeds from this offering of approximately $150.4 million, after deducting underwriting discounts and, commissions but before deducting offering expenses. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based Compensation | |
Stock-based Compensation | 11. Stock-based Compensation The Company recognized stock-based compensation expense in the accompanying Consolidated Statements of Operations as follows (in thousands): Year Ended December 31, 2020 2019 General and administrative $ 8,646 $ 4,600 Research and development 5,969 2,978 Total stock-based compensation $ 14,615 $ 7,578 A summary of the outstanding stock options as of December 31, 2020 is as follows: Stock Options Outstanding Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Number of Price Per Term Value (in Shares Share (Years) thousands) Outstanding—December 31, 2019 1,768,170 $ 22.34 8.06 $ 8,421 Granted 864,725 $ 26.18 Expirations/forfeitures (133,992) $ 23.88 Exercises (127,080) $ 19.86 Outstanding—December 31, 2020 2,371,823 $ 23.89 7.75 $ 32,764 Exercisable—December 31, 2020 1,024,923 $ 20.97 6.39 $ 17,109 Vested or expected to vest at—December 31, 2020 2,371,823 $ 23.89 7.75 $ 32,764 Aggregate intrinsic value represents the difference between the fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. As of December 31, 2020, the total unrecognized compensation expense related to unvested options was $17.4 million, which the Company expects to recognize over a weighted average vesting period of 2.57 years. In determining the estimated fair value of the stock-based awards, the Company uses the Black-Scholes option pricing model and assumptions discussed below. The fair value of share option awards was estimated with the following assumptions: As of December 31, As of December 31, 2020 2019 Price per share of common stock $ 15.62 - 43.65 $ 16.92 - 37.86 Expected term (in years) 6.1 - 6.1 5.6 - 6.1 Risk-free interest rate 0.35 - 1.7 % 1.37 - 2.6 % Expected volatility 79.41 - 92.9 % 81.04 - 144.9 % Dividend rate 0 % 0 % Restricted Stock Units Each Restricted Stock Units “RSU” award represents one share of common stock and each award vests 25% on the first anniversary and in equal quarterly installments thereafter. The costs of the awards, determined as the fair market value of the shares on the grant date, are expensed on a straight line basis over the length of the award. A summary of outstanding RSU as of December 31, 2020 is as follows: Weighted Average Grant-Date Shares Fair Value Non-vested and outstanding RSU balance at December 31, 2019 65,750 $ 24.67 Changes during the period: Granted — — Expirations/forfeitures (7,188) 20.93 Vested (25,497) 25.36 Non-vested and outstanding RSU balance at December 31, 2020 33,065 $ 24.95 Employee Stock Purchase Plan In June of 2018, the Company’s Board of Directors adopted the 2018 Employee Stock Purchase Plan (the Plan) that allows eligible employees to purchase shares of its common stock at a discount through payroll deductions. The Plan was subsequently approved by shareholders, with The Employee Stock Purchase Plan “ESPP” terms state implementation will be by a series of six-month offering periods, with a new offering period commencing on June 1 and December 1 of each year or the first business day thereafter. The initial Offering Period under the Plan began on December 1, 2018. During the years ended December 31, 2020 and 2019, |
Summary of significant accoun_2
Summary of significant accounting policies and basis of presentation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of significant accounting policies and basis of presentation | |
Basis of presentation | Basis of presentation These Consolidated Financial Statements have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). |
Principles of consolidation | Principles of consolidation The accompanying Consolidated Financial Statements include the accounts of the Company including its direct or indirect wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Foreign currency translation | Foreign currency translation Functional and presentation currency Items included in the financial statements of each entity comprising the Company are measured using the currency of the primary economic environment in which the entity operates (the functional currency). Transactions and balances Foreign currency transactions in each entity comprising the Company are remeasured into the functional currency of the entity using the exchange rates prevailing at the respective transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized within Other operating (income) expense, net except for changes in the liability related to the sale of future royalties which are recorded in Other non-operating (income) expense, net in the Consolidated Statements of Operations. The results and financial position of the Company’s subsidiaries’ that have a functional currency different from the USD are translated as follows: a. assets and liabilities presented are translated at the closing exchange rate as of December 31, 2020 and 2019; b. income and expenses for the statements of operations and comprehensive loss are translated at average exchange rates that are relevant for the respective periods for which the income and expenses occurred; and c. significant transactions use the exchange rate on the date of the transaction; All resulting exchange differences arising from such translations are recognized directly in other comprehensive income (loss) and presented as a separate component of equity. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the financial statements and accompanying notes. Management must apply significant judgment in this process. On an ongoing basis, the Company evaluates its estimates and assumptions, including but not limited to accruals, realizability of deferred tax assets and the accretion of interest on the monetization liability. Actual results could materially differ from these estimates. |
Segment information | Segment information The Company’s entire business is managed by a single management team, which reports to the chief executive officer. The chief executive officer is the chief operating decision maker. The Company has determined it has one operating segment as its chief operating decision maker allocates resources and assesses the performance of the business at this level. Accordingly, the Company has one reporting segment, which is the research and development of novel treatments for liver and gastrointestinal diseases and disorders. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. |
Concentration of risk | Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents. For banks and financial institutions, only independent financial institutions with a high credit rating are utilized. The Company’s current license agreement is with an established and reputable pharmaceutical company and, historically, the Company has not had any material collection risk related to its accounts receivable. Concentration of revenue The Company generally does not require collateral or other security in support of accounts receivable. All revenue and receivables relate to one licensee . |
Property and equipment, net | Property and equipment, net Property and equipment, including leasehold improvements, are recorded at cost and depreciated when placed into service using the straight-line method, based on their estimated useful lives as follows: Estimated Useful Life Asset Classification (in years) IT Equipment 3-5 Vehicles 5 Leaseholds improvements Lesser of useful life or lease term Furniture and fixtures 5-7 Property and equipment purchased for less than $10,000 are expensed immediately. Costs for repairs and maintenance are expensed as incurred. Gains and losses on disposals of equipment are determined by comparing the proceeds with the carrying amount and are recognized within Other operating (income) expense, net in the Consolidated Statements of Operations. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In such instances, the recoverability of assets to be held and used is measured first by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, an impairment loss would be recognized if the carrying amount of the asset exceeds the fair value of the asset. There were no impairments recorded for the years ended December 31, 2020 and 2019. |
Research and development expenses | Research and development expenses Research and development costs are expensed as incurred and include primarily salaries, benefits and other staff-related costs; clinical trial and related clinical manufacturing costs; contract services and other outside costs. The Company’s nonclinical studies and clinical trials are performed by third-party contract research organizations (CROs). Some of these expenses are billed monthly for services performed, while others are billed based upon milestones achieved. For nonclinical studies, the significant factors used in estimating accruals include the percentage of work completed to date and contract milestones achieved. For clinical trial expenses, the significant factors used in estimating accruals include the number of patients enrolled and percentage of work completed to date and contract milestones achieved. The Company’s estimates are highly dependent upon the timeliness and accuracy of the data provided by the respective CROs regarding the status of the contracted activity, with adjustments made when deemed necessary. |
Revenue recognition | Revenue recognition Milestone Payments At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). In 2012, the Company entered into a license agreement (the Agreement) with EA Pharma Co., Ltd. (EA Pharma) to develop a select product candidate (elobixibat) for registration and subsequent commercialization in select markets. In conjunction with the Agreement, the Company granted EA Pharma an exclusive license to its intellectual property for development and commercialization activities in the designated field and territories. The Company has completed all of its performance obligations. As of December 31, 2020, the Company is eligible to receive an additional regulatory-based milestone payment under the Agreement of $5.3 million if a specified regulatory event is achieved for elobixibat. The cash payments and any other payments for milestones and royalties from EA Pharma are non-refundable, non-creditable and not subject to set-off. The Agreement will continue until the last royalty period for any product in the territory, which is defined as the period when there are no remaining patent rights or regulatory exclusivity in place for any products subject to royalties. EA Pharma may terminate the Agreement at will upon 180 days’ prior written notice to the Company. Either party may terminate the Agreement for the other party’s uncured material breach or insolvency and in certain other circumstances agreed to by the parties. |
Monetization of Future Royalties | Monetization of Future Royalties In December 2017, the Company entered into a royalty interest acquisition agreement (RIAA) with HealthCare Royalty Partners III, L.P. (HCR) pursuant to which it sold to HCR the right to receive all royalties from sales in Japan and sales milestones achieved from any covered territory potentially payable to the Company under the Agreement, up to a specified maximum “cap” amount of $78.8 million, based on the funds the Company received from HCR. In January 2018, the Company received $44.5 million from HCR, net of certain transaction expenses, under the RIAA. On June 8, 2020, the parties entered into an amendment to the RIAA pursuant to which HCR agreed to pay the Company an additional $14.8 million, net of certain transactions expenses, in exchange for the elimination of the (i) $78.8 million cap amount on HCR’s rights to receive royalties on sales in Japan and sales milestones for elobixibat in certain other territories that may become payable by EA Pharma and (ii) the $15.0 million payable to the Company if a specified sales milestone is achieved for elobixibat in Japan. The Company is obligated to make royalty interest payments to HCR under the RIAA only to the extent it receives future Japanese royalties, sales milestones or other specified payments from EA Pharma. Although the Company sold its rights to receive royalties from the sales of elobixibat in Japan, as a result of its ongoing involvement in the cash flows related to these royalties, the Company will continue to account for these royalties as revenue. Upon receipt of the payments from HCR the Company recorded net cash totaling $59.3 million as a liability related to sale of future royalties (royalty obligation). The royalty obligation will be amortized using the effective interest rate method. The following table shows the activity within the liability account for the year ended December 31, 2020: December 31, 2020 (in thousands) Liability related to sale of future royalties—beginning balance $ 55,144 Accretion of interest expense on liability related to royalty monetization 10,778 Proceeds from sale of future royalties, net 14,750 Repayment of the liability (12,078) Liability related to sale of future royalties—ending balance $ 68,594 Less current portion classified within accrued expenses (2,700) Net ending liability related to sale of future royalties $ 65,894 The Company records estimated royalties due for the current period in accrued other expenses until the payment is received from EA Pharma at which time the Company then remits payment to HCR. In order to determine the accretion of the royalty obligation, the Company is required to estimate the total amount of future royalty payments to be received and submitted to HCR. The sum of these amounts less the $59.3 million proceeds the Company received will be recorded as interest expense over the life of the royalty obligation. At December 31, 2020, the Company’s estimate of its total interest expense resulted in an annual effective interest rate of approximately 19.0%. The Company periodically assesses the estimated royalty payments to HCR and to the extent such payments are greater or less than its initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the accretion of interest on the royalty obligation. There are a number of factors that could materially affect the amount and the timing of royalty payments, most of which are not within the Company’s control. Such factors include, but are not limited to, the rate of elobixibat prescriptions, the number of doses administered, the introduction of competing products, manufacturing or other delays, patent protection, adverse events that result in governmental health authority imposed restrictions on the use of the drug products, significant changes in foreign exchange rates as the royalties remitted to HCR are in U.S. dollars while sales of elobixibat are in Japanese yen, and sales never achieving forecasted numbers, which would result in reduced royalty payments and reduced non-cash interest expense over the life of the royalty obligation. To the extent future royalties result in an amount less than the liability, the Company is not obligated to fund any such shortfall. |
Stock-based compensation | Stock-based compensation The Company accounts for stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation The fair value of the Company’s stock options has been determined using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate and (iv) expected dividends. For the years ended December 31, 2020 and December 31, 2019, due to the lack of historical and implied volatility data of the Company’s common stock and equivalents, the expected volatility has been estimated based on the historical volatilities of peer companies in the Company’s industry that are publicly traded. The Company selected companies that it considers to have comparable characteristics to the Company, including enterprise value, risk profiles and position within the industry and with historical share price information sufficient to meet the expected term of the stock options. The historical volatility data has been computed using the daily closing prices for the selected companies. Due to the lack of sufficient historical data, the Company used the “simplified” method, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the award, to determine the expected term of stock options. The Company records compensation expense for service-based awards over the vesting period of the award on a straight-line basis. For awards with service and performance based conditions, compensation related to the performance-based vesting conditions is recognized when achievement of the performance condition is considered probable and the compensation expense related to the service condition is recorded using the accelerated method. Modifications to stock-based awards are treated as an exchange of the original award for a new award with total compensation equal to the grant-date fair value of the original award plus any incremental value of the modification. The incremental value is based on the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. |
Employee benefits | Employee benefits Pension obligations The Company has a defined contribution pension plan for its Sweden-based employees whereby the Company pays contributions to employee benefit or insurance plans on a mandatory, contractual or voluntary basis. The Company paid $0.7 million and $0.4 million to the plans for the years ended December 31, 2020 and 2019, respectively. 401(k) The Company has a 401(k) retirement plan in which all U.S.-based employees are eligible to participate. The Company contributed $0.5 million and $0.2 million to the plan for the years ended December 31, 2020 and 2019, respectively. The Company matches employee contributions to the plan, on a per employee basis, up to 4% of each employee’s wages for the years ended December 31, 2020 and 2019. |
Loss contingencies | Loss contingencies Loss contingencies are recorded as liabilities when it is probable that a liability has occurred and the amount of loss is reasonably estimable. Disclosure is required when there is a reasonable possibility that an ultimate loss will be material. Contingent liabilities are often resolved over long periods of time. Estimating probable losses requires analysis that often depends on judgments about potential actions by third parties, such as regulators. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. A deferred tax asset is recognized only to the extent that it is more likely than not that future taxable profits will be available against which the asset can be utilized. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made. The amount of deferred tax provided is calculated using tax rates in effect at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. A two-step approach is applied pursuant to ASC 740 in the recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company’s policy is to recognize interest and penalty expenses associated with uncertain tax positions as a component of income tax expense in the Consolidated Statements of Operations. As of the years ended December 31, 2020 and 2019, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Consolidated Statements of Operations. |
Net loss per share | Net loss per share Basic net loss per share is calculated by dividing the net loss attributable to holders of common stock by the weighted average number of shares of common stock outstanding. Diluted net loss per share is calculated by dividing the net loss attributable to holders of common stock by the weighted-average number of shares of common stock outstanding. If the Company were in a net income position, diluted net income per share would be calculated by dividing the net income attributable to holders of common stock by the weighted-average number of shares of common stock plus dilutive common stock equivalents outstanding. |
Goodwill | Goodwill Goodwill is the excess of the purchase price in a business combination over the fair value of identifiable net assets acquired. Goodwill has an indefinite life and is subject to periodic testing for impairment. Goodwill is assessed at least annually, but also whenever events or changes in circumstances indicate the carrying value may not be recoverable. Factors that could trigger an impairment review, include: (a) significant underperformance relative to historical or projected future operating results; (b) significant changes in the manner of or use of the acquired assets or the strategy for the Company’s overall business; (c) significant negative industry or economic trends; (d) significant decline in the Company’s stock price for a sustained period; and (e) a decline in the Company’s market capitalization below net book value. The Company conducts an impairment assessment on October 1 each year taking a quantitative test which compares the fair value to the net carrying value, and records an impairment of goodwill to the extent that the net carrying value exceeds the fair value. During the fourth quarter of 2020 and 2019, we completed our annual impairment assessment and concluded that goodwill was not impaired in any of those years. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In August 2018, the FASB issued ASU “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain software (and hosting arrangements that include an software license). The guidance also requires the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. The Company adopted this guidance in the first quarter of 2020 on a prospective basis and there was no material impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of significant accounting policies and basis of presentation | |
Schedule of property and equipment, Useful lives | Estimated Useful Life Asset Classification (in years) IT Equipment 3-5 Vehicles 5 Leaseholds improvements Lesser of useful life or lease term Furniture and fixtures 5-7 |
Schedule of Activity within Liability Account from Inception of Royalty Transaction | December 31, 2020 (in thousands) Liability related to sale of future royalties—beginning balance $ 55,144 Accretion of interest expense on liability related to royalty monetization 10,778 Proceeds from sale of future royalties, net 14,750 Repayment of the liability (12,078) Liability related to sale of future royalties—ending balance $ 68,594 Less current portion classified within accrued expenses (2,700) Net ending liability related to sale of future royalties $ 65,894 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and equipment, net | |
Summary of property and equipment, net | Property and equipment, net consisted of the following (in thousands): Year Ended December 31, 2020 2019 IT equipment $ 318 $ 306 Vehicles - 81 Leasehold improvements 58 58 Furniture and fixtures 453 378 Total property and equipment, gross 829 823 Less: Accumulated depreciation (351) (226) Total property and equipment, net $ 478 $ 597 |
Accrued expenses (Tables)
Accrued expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued expenses | |
Summary of accrued expenses | Accrued expenses consisted of the following (in thousands): Year Ended December 31, 2020 2019 Accrued payroll and benefits $ 8,492 $ 2,990 Accrued professional fees 649 359 Accrued development costs 5,968 2,887 Accrued liability related to monetization of future royalties 2,700 6,430 Accrued other 1,242 820 Total accrued expenses $ 19,051 $ 13,486 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies | |
Schedule of contractual obligations under operating leases by period | Total Minimum Lease Payments (in thousands) 2021 1,028 2022 906 2023 921 2024 936 2025 and beyond 1,756 Total minimum lease payments $ 5,547 Less imputed interest (1,344) Total lease liability $ 4,203 Reported as: Other current liabilities $ (640) Other long-term liabilities (3,563) Total lease liabilities $ (4,203) |
Note Payable (Tables)
Note Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Note Payable | |
Schedule of the carrying value of notes payable | December 31, 2020 (in thousands) Note payable, including End of Term Charge 10,695 Debt discount, net of accretion (1,074) Note payable net of discount, long-term $ 9,621 |
Schedule of the estimated future principal payments due under the Loan Agreement | Note Principal Payments (in thousands) 2021 $ — 2022 4,553 2023 4,994 2024 1,148 |
Net loss per share (Tables)
Net loss per share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Net loss per share | |
Summary of Computation of Basic EPS and Diluted EPS | The following table sets forth the computation of Basic loss per share and Diluted loss per share (in thousands, except for share and per share data): Year Ended 2020 2019 Basic and Diluted loss per share: Numerator Net loss $ (107,633) $ (62,717) Denominator Weighted average number of shares outstanding 15,983,058 12,437,742 Basic and Diluted loss per share: $ (6.73) $ (5.04) |
Summary of Outstanding Shares Excluded from Computation of Diluted EPS | Year Ended 2020 2019 Options to purchase common stock, RSUs and warrants 2,413,037 1,833,920 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income taxes | |
Schedule of components of loss before income taxes | For the years ended December 31, 2020 and 2019, the components of loss before income taxes were as follows (in thousands): Year Ended December 31, 2020 2019 U.S. $ (86,041) $ (29,337) Foreign (21,592) (33,380) Total $ (107,633) $ (62,717) |
Schedule of reconciliation of the U.S. statutory income tax rate to the consolidated effective income tax rate | Year Ended December 31, 2020 2019 U.S. statutory income tax rate 21 % 21 % Stock compensation — (1) State taxes, net of federal tax effect 5 3 Change in valuation allowance (26) (20) Change in deferred tax rate — (2) Other items — (1) Effective income tax rate 0.0 % 0.0 % |
Schedule of tax effect of temporary differences that give rise to significant portions of deferred tax assets | The tax effect of temporary differences that give rise to significant portions of the deferred tax assets are as follows (in thousands): Year Ended December 31, 2020 2019 Deferred tax assets: Tax loss carryforwards $ 59,790 $ 35,120 Research and development credits 130 130 Accrued expenses 1,870 530 Stock compensation 4,750 2,090 Interest carryforwards 4,420 1,910 Other 1,220 1,410 Total gross deferred tax assets 72,180 41,190 Valuation allowance (71,040) (39,910) Total deferred tax assets $ 1,140 $ 1,280 Deferred tax liabilities: Intangible assets $ (20) $ (30) Right of use asset (1,120) (1,250) Total deferred tax liabilities (1,140) (1,280) Net deferred tax assets $ — $ — |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock-based Compensation | |
Summary of stock-based compensation expense | The Company recognized stock-based compensation expense in the accompanying Consolidated Statements of Operations as follows (in thousands): Year Ended December 31, 2020 2019 General and administrative $ 8,646 $ 4,600 Research and development 5,969 2,978 Total stock-based compensation $ 14,615 $ 7,578 |
Summary of outstanding stock options | Stock Options Outstanding Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Number of Price Per Term Value (in Shares Share (Years) thousands) Outstanding—December 31, 2019 1,768,170 $ 22.34 8.06 $ 8,421 Granted 864,725 $ 26.18 Expirations/forfeitures (133,992) $ 23.88 Exercises (127,080) $ 19.86 Outstanding—December 31, 2020 2,371,823 $ 23.89 7.75 $ 32,764 Exercisable—December 31, 2020 1,024,923 $ 20.97 6.39 $ 17,109 Vested or expected to vest at—December 31, 2020 2,371,823 $ 23.89 7.75 $ 32,764 |
Schedule of fair value assumptions of share option awards | As of December 31, As of December 31, 2020 2019 Price per share of common stock $ 15.62 - 43.65 $ 16.92 - 37.86 Expected term (in years) 6.1 - 6.1 5.6 - 6.1 Risk-free interest rate 0.35 - 1.7 % 1.37 - 2.6 % Expected volatility 79.41 - 92.9 % 81.04 - 144.9 % Dividend rate 0 % 0 % |
Summary of outstanding RSUs | Weighted Average Grant-Date Shares Fair Value Non-vested and outstanding RSU balance at December 31, 2019 65,750 $ 24.67 Changes during the period: Granted — — Expirations/forfeitures (7,188) 20.93 Vested (25,497) 25.36 Non-vested and outstanding RSU balance at December 31, 2020 33,065 $ 24.95 |
Summary of significant accoun_4
Summary of significant accounting policies and basis of presentation - Segments (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Segment information | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Summary of significant accoun_5
Summary of significant accounting policies and basis of presentation - Concentration of risk (Details) - Customer Concentration Risk | 12 Months Ended |
Dec. 31, 2020customer | |
Revenue from Contract with Customer Benchmark | |
Concentration of risk | |
Number of licensees | 1 |
Accounts Receivable | |
Concentration of risk | |
Number of licensees | 1 |
Summary of significant accoun_6
Summary of significant accounting policies and basis of presentation - Property and equipment (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Property and equipment, net | |
Maximum value of computers and other equipment expensed at purchase and not capitalized | $ 10,000 |
Vehicles | |
Property and equipment, net | |
Estimated Useful Life | 5 years |
Summary of significant accoun_7
Summary of significant accounting policies and basis of presentation - Impairment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment of long-lived assets | ||
Impairment of long-lived assets | $ 0 | $ 0 |
Summary of significant accoun_8
Summary of significant accounting policies and basis of presentation - Royalties (Details) - EA Pharma - License Agreement $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Disaggregation of revenue | |
Milestone payment receivable | $ 5.3 |
Period of written notice required prior to termination of agreement | 180 days |
Summary of significant accoun_9
Summary of significant accounting policies and basis of presentation - Monetization of future royalties (Details) - USD ($) $ in Thousands | Jun. 08, 2020 | Jan. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2020 |
Liability related to sale of future royalties activity | ||||||
Accretion of interest expense on liability related to royalty monetization | $ 10,778 | $ 8,360 | ||||
Proceeds from sale of future royalties, net | 14,750 | |||||
Less current portion classified within accrued expenses | (6,430) | $ (2,700) | ||||
Net ending liability related to sale of future royalties | 48,714 | 65,894 | ||||
HCR | Royalty Interest Acquisition Agreement | ||||||
Summary Of Significant Accounting Policies | ||||||
Maximum royalties under monetization agreement | $ 78,800 | |||||
Milestone payment receivable | $ 15,000 | |||||
Liability related to sale of future royalties activity | ||||||
Liability related to the sale of future royalties - beginning balance | 55,144 | |||||
Accretion of interest expense on liability related to royalty monetization | 10,778 | |||||
Proceeds from sale of future royalties, net | $ 14,800 | $ 44,500 | 14,750 | 59,300 | ||
Repayment of the liability | (12,078) | |||||
Liability related to sale of future royalties - ending balance | $ 55,144 | $ 55,144 | 68,594 | |||
Less current portion classified within accrued expenses | (2,700) | |||||
Net ending liability related to sale of future royalties | $ 65,894 | |||||
Annual effective interest rate (as a percent) | 19.00% |
Summary of significant accou_10
Summary of significant accounting policies and basis of presentation - Employee benefits, Income taxes and Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||||
Accrued interest or penalties | $ 0 | $ 0 | $ 0 | $ 0 |
Interest and penalties recognized | 0 | 0 | ||
Goodwill impairment | $ 0 | $ 0 | ||
US-based Plan | ||||
Employee benefits | ||||
Employer contributions | $ 0.5 | $ 0.2 | ||
Maximum employer matching contribution to 401(k) plan, percent | 4.00% | 4.00% | ||
Sweden-based Plan | ||||
Employee benefits | ||||
Employer contributions | $ 0.7 | $ 0.4 |
Summary of significant accou_11
Summary of significant accounting policies and basis of presentation - Recently adopted accounting pronouncements (Details) | Mar. 31, 2020 |
ASU 2018-15 | |
Recently adopted accounting pronouncements | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Property and equipment, net (De
Property and equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment, net | ||
Total property and equipment, gross | $ 829 | $ 823 |
Less: Accumulated depreciation | (351) | (226) |
Total property and equipment, net | 478 | 597 |
Depreciation expense | 200 | 100 |
IT equipment | ||
Property and equipment, net | ||
Total property and equipment, gross | 318 | 306 |
Vehicles | ||
Property and equipment, net | ||
Total property and equipment, gross | 81 | |
Leasehold improvements | ||
Property and equipment, net | ||
Total property and equipment, gross | 58 | 58 |
Furniture and fixtures | ||
Property and equipment, net | ||
Total property and equipment, gross | $ 453 | $ 378 |
Accrued expenses - Summary of A
Accrued expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued expenses | ||
Accrued payroll and benefits | $ 8,492 | $ 2,990 |
Accrued professional fees | 649 | 359 |
Accrued development costs | 5,968 | 2,887 |
Accrued liability related to monetization of future royalties | 2,700 | 6,430 |
Accrued other | 1,242 | 820 |
Total accrued expenses | $ 19,051 | $ 13,486 |
Commitments and contingencies -
Commitments and contingencies - Operating leases (Details) | Mar. 28, 2019USD ($)$ / ft² | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Commercial real estate leases | |||
Aggregated payments over the term of the lease | $ 5,547,000 | ||
Right of use asset | 4,100,000 | ||
Lease cost | |||
Operating lease expense | 1,200,000 | $ 700,000 | |
Short term lease costs | 0 | 0 | |
Variable lease costs | $ 0 | $ 0 | |
Weighted average remaining lease term for operating leases | 5 years 8 months 4 days | ||
Weighted average discount rate (as a percent) | 9.95% | ||
Operating lease liability, current | $ 640,000 | ||
Operating Lease, Liability, Current, Statement of Financial Position | us-gaap:OtherLiabilitiesCurrent | ||
Operating lease liability, noncurrent | $ 3,563,000 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position | us-gaap:OtherLiabilitiesNoncurrent | ||
Boston, MA - Corporate headquarters | |||
Commercial real estate leases | |||
Annual rent escalation (in dollars per square foot) | $ / ft² | 1 | ||
Aggregated payments over the term of the lease | $ 4,200,000 | ||
Approximate annual lease payment | $ 900,000 | ||
Goteborg, Sweden - Administrative space | |||
Commercial real estate leases | |||
Lease renewal term | 3 years | ||
Non-renewal notification period | 9 months |
Commitments and contingencies_2
Commitments and contingencies - Lease maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating lease payments due | ||
2021 | $ 1,028 | |
2022 | 906 | |
2023 | 921 | |
2024 | 936 | |
2025 and beyond | 1,756 | |
Total minimum lease payments | 5,547 | |
Less imputed interest | (1,344) | |
Total lease liability | 4,203 | |
Reported as: | ||
Operating lease liability, current | $ (640) | |
Operating Lease, Liability, Current, Statement of Financial Position | us-gaap:OtherLiabilitiesCurrent | |
Operating lease liability, noncurrent | $ (3,563) | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position | us-gaap:OtherLiabilitiesNoncurrent | |
Total lease liabilities | $ (4,203) | |
Operating Lease, Liability, Statement of Financial Position | us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent | |
Operating lease payments | $ 1,000 | $ 400 |
Commitments and contingencies_3
Commitments and contingencies - Agreements with CROs (Details) $ in Millions | Dec. 31, 2020USD ($) |
Commitments and contingencies | |
Maximum future payable under agreements with CROs | $ 7.2 |
Commitments and contingencies_4
Commitments and contingencies - Legal contingency (Details) $ in Millions | Nov. 18, 2019USD ($) |
Ferring International Center S.A. breach complaint | |
Gain Contingencies [Line Items] | |
Settlement, Amount received | $ 3.7 |
Note Payable - Loan and Securit
Note Payable - Loan and Security Agreement (Details) - USD ($) $ in Millions | Jun. 08, 2020 | Dec. 31, 2020 |
Loan and Security Agreement, Term Loans | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 80 | |
End of term charge as a percent of principal amount | 6.95% | |
Prepayment premium, as a percent of principal, between 9 months and 24 months following closing date | 2.00% | |
Prepayment premium, as a percent of principal, 24 months following closing date and before maturity date | 1.00% | |
Amount borrowed | $ 10 | |
Debt discount and issuance costs | $ 1.3 | |
Effective interest rate (as a percent) | 15.30% | |
Loan and Security Agreement, Term Loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate percentage added to variable rate to determine minimum annual interest rate | 9.15% | |
Loan and Security Agreement, Term Loans | Prime Rate | ||
Debt Instrument [Line Items] | ||
Interest rate percentage added to variable rate to determine minimum annual interest rate | 9.15% | |
Spread on rate (as a percent) | 3.25% | |
Loan and Security Agreement, Term Loan, First/Initial Tranche | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 10 | |
Loan and Security Agreement, Term Loan, Second Tranche | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 20 | |
Minimum borrowing increments | 10 | |
Loan and Security Agreement, Term Loan, Third Tranche | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity, term loan advance | 45 | |
Minimum borrowing increments | $ 5 |
Note Payable - Carrying Value (
Note Payable - Carrying Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Note payable net of discount, long-term | $ 9,621 | |
Loan and Security Agreement, Term Loans | ||
Debt Instrument [Line Items] | ||
Note payable, including End of Term Charge | 10,695 | |
Debt discount, net of accretion | (1,074) | |
Note payable net of discount, long-term | 9,621 | |
Interest expense | $ 800 | $ 0 |
Note Payable - Estimated future
Note Payable - Estimated future principal payments (Details) - Loan and Security Agreement, Term Loans $ in Thousands | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
2022 | $ 4,553 |
2023 | 4,994 |
2024 | $ 1,148 |
Note Payable - Warrants (Detail
Note Payable - Warrants (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 08, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Warrant or Right [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Loan and Security Agreement, Term Loans | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (as a percent) | 1.00% | ||
Number of warrants issued (in shares) | 5,311 | ||
Warrant exercise period | 7 years | ||
Warrants exercise price (in dollars per share) | $ 18.83 | ||
Warrant registration period | 60 days | ||
Loan and Security Agreement, Term Loans | Maximum | |||
Class of Warrant or Right [Line Items] | |||
Warrant registration period | 180 days | ||
Loan and Security Agreement, Term Loan, First/Initial Tranche | |||
Class of Warrant or Right [Line Items] | |||
Fair value of warrants | $ 0.1 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill | ||
Change in goodwill | $ 0 | $ 0 |
Net loss per share - Basic EPS
Net loss per share - Basic EPS and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Basic and Diluted loss per share: | ||
Net loss | $ (107,633) | $ (62,717) |
Net loss, Basic | (107,633) | (62,717) |
Net loss, Diluted | $ (107,633) | $ (62,717) |
Denominator | ||
Weighted average number of shares outstanding | 15,983,058 | 12,437,742 |
Basic and Diluted loss per share | $ (6.73) | $ (5.04) |
Net loss per share - Anti-dilut
Net loss per share - Anti-dilutive shares (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Options to purchase common stock and RSUs | ||
Antidilutive Securities | ||
Anti-dilutive securities excluded from computation of diluted net loss per share | 2,413,037 | 1,833,920 |
Income taxes - Components of lo
Income taxes - Components of loss before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||
Current tax provision | $ 0 | $ 0 |
Defereed tax provision | 0 | 0 |
U.S. loss before income taxes | (86,041) | (29,337) |
Foreign loss before income taxes | (21,592) | (33,380) |
Net loss before income taxes | $ (107,633) | $ (62,717) |
Income taxes - Reconciliation o
Income taxes - Reconciliation of statutory income tax rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||
U.S. statutory income tax rate | 21.00% | 21.00% |
Stock compensation | (1.00%) | |
State taxes, net of federal tax effect | 5.00% | 3.00% |
Change in valuation allowance | (26.00%) | (20.00%) |
Change in deferred tax rate | (2.00%) | |
Other items | (1.00%) | |
Effective income tax rate | 0.00% | 0.00% |
Income taxes - Deferred tax ass
Income taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets: | ||
Tax loss carryforwards | $ 59,790 | $ 35,120 |
Research and development credits | 130 | 130 |
Accrued expenses | 1,870 | 530 |
Stock compensation | 4,750 | 2,090 |
Interest carryforwards | 4,420 | 1,910 |
Other | 1,220 | 1,410 |
Total gross deferred tax assets | 72,180 | 41,190 |
Valuation allowance | (71,040) | (39,910) |
Total deferred tax assets | 1,140 | 1,280 |
Deferred tax liabilities: | ||
Intangible assets | (20) | (30) |
Right of use asset | (1,120) | (1,250) |
Total deferred tax liabilities | (1,140) | (1,280) |
Net deferred tax assets | ||
Valuation allowance | ||
Change in valuation allowance | $ 31,100 | $ 12,600 |
Income taxes - Operating Losses
Income taxes - Operating Losses and Uncertain tax positions (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Net operating loss carryforwards | ||
Tax loss carryforwards | $ 59,790 | $ 35,120 |
Federal | ||
Net operating loss carryforwards | ||
Tax loss carryforwards subject to expiration | 1,500 | |
Tax loss carryforwards with no expiration date | 94,200 | |
State | ||
Net operating loss carryforwards | ||
Net operating loss | 244,400 | |
Non-U.S. jurisdictions | ||
Net operating loss carryforwards | ||
Net operating loss | $ 120,500 |
Income taxes - Uncertain tax be
Income taxes - Uncertain tax benefits (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Uncertain tax positions | ||
Uncertain tax benefits recognized | $ 0 | $ 0 |
Stockholders' equity - Preferre
Stockholders' equity - Preferred Stock (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred Stock | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Stockholders' equity - Financin
Stockholders' equity - Financing (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Feb. 29, 2020 | May 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | May 31, 2020 | |
Equity | ||||||
Proceeds from issuance of common stock, net of issuance costs | $ 193,265 | $ 20,775 | ||||
2019 Sales Agreement | ||||||
Equity | ||||||
Issuance of common stock (in shares) | 637,367 | |||||
Proceeds from issuance of common stock, net of issuance costs | $ 20,800 | |||||
Underwritten Public Offering, February 2020 | ||||||
Equity | ||||||
Issuance of common stock (in shares) | 2,190,750 | |||||
Proceeds from issuance of common stock, net of issuance costs | $ 43,000 | |||||
Universal Shelf Registration, May 2020 | ||||||
Equity | ||||||
Aggregate offering price | $ 200,000 | |||||
Number of securities available for issuance | 40,000,000 | |||||
Underwritten Public Offering, September 2020 | ||||||
Equity | ||||||
Issuance of common stock (in shares) | 4,000,000 | |||||
Proceeds from issuance of common stock, before deducting offering costs | $ 150,400 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-based compensation | ||
Stock-based compensation expense | $ 14,615 | $ 7,578 |
General and Administrative | ||
Stock-based compensation | ||
Stock-based compensation expense | 8,646 | 4,600 |
Research and Development | ||
Stock-based compensation | ||
Stock-based compensation expense | $ 5,969 | $ 2,978 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Outstanding Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Outstanding - Beginning balance (in shares) | 1,768,170 | |
Granted (in shares) | 864,725 | |
Expirations/forfeitures (in shares) | (133,992) | |
Exercises (in shares) | (127,080) | |
Outstanding - Ending balance (in shares) | 2,371,823 | 1,768,170 |
Exercisable (in shares) | 1,024,923 | |
Vested or expected to vest (in shares) | 2,371,823 | |
Weighted-Average Exercise Price Per Share | ||
Outstanding - Beginning balance (in dollars per share) | $ 22.34 | |
Granted (in dollars per share) | 26.18 | |
Expirations/forfeitures (in dollars per share) | 23.88 | |
Exercises (in dollars per share) | 19.86 | |
Outstanding - Ending balance (in dollars per share) | 23.89 | $ 22.34 |
Exercisable (in dollars per share) | 20.97 | |
Vested or expected to vest (in dollars per share) | $ 23.89 | |
Weighted- Average Remaining Contractual Term | ||
Outstanding (Years) | 7 years 9 months | 8 years 21 days |
Exercisable (Years) | 6 years 4 months 20 days | |
Vested or expected to vest (Years) | 7 years 9 months | |
Aggregate Intrinsic Value | ||
Outstanding (in dollars) | $ 32,764 | $ 8,421 |
Exercisable options (in dollars) | 17,109 | |
Vested or expected to vest (in dollars) | $ 32,764 |
Stock-based Compensation - St_2
Stock-based Compensation - Stock Options - Additional information (Details) - Employee Stock Option $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Stock-based Compensation | |
Total unrecognized compensation expense related to unvested options | $ 17.4 |
Weighted average vesting period for unvested options | 2 years 6 months 25 days |
Stock-based Compensation - Fair
Stock-based Compensation - Fair value assumptions of stock option awards (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value assumptions | ||
Dividend rate (as a percent) | 0.00% | 0.00% |
Minimum | ||
Fair value assumptions | ||
Price per share of common stock (in dollars per share) | $ 15.62 | $ 16.92 |
Maximum | ||
Fair value assumptions | ||
Price per share of common stock (in dollars per share) | $ 43.65 | $ 37.86 |
Employee Stock Option | Minimum | ||
Fair value assumptions | ||
Expected term (in years) | 6 years 1 month 6 days | 5 years 7 months 6 days |
Risk-free interest rate (as a percent) | 0.35% | 1.37% |
Expected volatility (as a percent) | 79.41% | 81.04% |
Employee Stock Option | Maximum | ||
Fair value assumptions | ||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Risk-free interest rate (as a percent) | 1.70% | 2.60% |
Expected volatility (as a percent) | 92.90% | 144.90% |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Units (Details) - RSUs | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of share of common stock represented by each RSU | 1 |
Vesting percentage on first anniversary | 25.00% |
Shares | |
Non-vested and outstanding balance, beginning of period (in shares) | 65,750 |
Expirations/forfeitures (in shares) | (7,188) |
Vested (in shares) | (25,497) |
Non-vested and outstanding balance, end of period (in shares) | 33,065 |
Weighted Average Grant-Date Fair Value | |
Non-vested and outstanding balance, beginning of period (in dollars per share) | $ / shares | $ 24.67 |
Expirations/forfeitures (in dollars per share) | $ / shares | 20.93 |
Vested (in dollars per share) | $ / shares | 25.36 |
Non-vested and outstanding balance, end of period (in dollars per share) | $ / shares | $ 24.95 |
Stock-based Compensation - Empl
Stock-based Compensation - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2018 | |
Employee Stock Purchase Plan | |||
Stock-based compensation expense | $ 14,615 | $ 7,578 | |
2018 Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Offering period | 6 months | ||
Shares purchased (in shares) | 14,270 | 8,354 | |
Shares available to be issued under the ESPP | 277,376 | 300,000 | |
Stock-based compensation expense | $ 100 | $ 100 |