Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | EVOK | |
Entity Registrant Name | Evoke Pharma Inc | |
Entity Central Index Key | 0001403708 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-36075 | |
Entity Tax Identification Number | 20-8447886 | |
Entity Address, Address Line One | 420 Stevens Avenue | |
Entity Address, Address Line Two | Suite 370 | |
Entity Address, City or Town | Solana Beach | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92075 | |
City Area Code | 858 | |
Local Phone Number | 345-1494 | |
Entity Incorporation, State or Country Code | DE | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,702,590 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 4,133,188 | $ 5,663,833 |
Prepaid expenses | 387,803 | 581,706 |
Other current assets | 11,551 | |
Total current assets | 4,532,542 | 6,245,539 |
Operating lease right-of-use asset | 105,352 | 138,538 |
Other assets | 11,551 | |
Total assets | 4,637,894 | 6,395,628 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 925,628 | 1,033,383 |
Accrued compensation | 685,266 | 843,162 |
Operating lease liability | 105,352 | 138,538 |
Total current liabilities | 1,716,246 | 2,015,083 |
Stockholders' equity: | ||
Common stock, $0.0001 par value; authorized shares - 50,000,000; issued and outstanding shares - 24,456,914 and 24,431,914 at March 31, 2020 and December 31, 2019, respectively | 2,446 | 2,443 |
Additional paid-in capital | 90,439,901 | 90,108,492 |
Accumulated deficit | (87,520,699) | (85,730,390) |
Total stockholders' equity | 2,921,648 | 4,380,545 |
Total liabilities and stockholders' equity | $ 4,637,894 | $ 6,395,628 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 24,456,914 | 24,431,914 |
Common stock, shares outstanding | 24,456,914 | 24,431,914 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating expenses: | ||
Research and development | $ 463,853 | $ 746,882 |
General and administrative | 1,329,834 | 1,223,013 |
Total operating expenses | 1,793,687 | 1,969,895 |
Loss from operations | (1,793,687) | (1,969,895) |
Other income: | ||
Interest income | 3,378 | 4,629 |
Total other income | 3,378 | 4,629 |
Net loss | $ (1,790,309) | $ (1,965,266) |
Net loss per share of common stock, basic and diluted | $ (0.07) | $ (0.11) |
Weighted-average shares used to compute basic and diluted net loss per share | 24,439,881 | 17,484,318 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2018 | $ 4,025,320 | $ 1,743 | $ 82,628,312 | $ (78,604,735) |
Beginning Balance, Shares at Dec. 31, 2018 | 17,427,533 | |||
Stock-based compensation expense | 378,959 | 378,959 | ||
Issuance of common stock, net | 636,432 | $ 45 | 636,387 | |
Issuance of common stock, shares net | 450,000 | |||
Net loss | (1,965,266) | (1,965,266) | ||
Ending Balance at Mar. 31, 2019 | 3,075,445 | $ 1,788 | 83,643,658 | (80,570,001) |
Ending Balance, Shares at Mar. 31, 2019 | 17,877,533 | |||
Beginning Balance at Dec. 31, 2019 | $ 4,380,545 | $ 2,443 | 90,108,492 | (85,730,390) |
Beginning Balance, Shares at Dec. 31, 2019 | 24,431,914 | 24,431,914 | ||
Stock-based compensation expense | $ 310,162 | 310,162 | ||
Issuance of common stock, net | 21,250 | $ 3 | 21,247 | |
Issuance of common stock, shares net | 25,000 | |||
Net loss | (1,790,309) | (1,790,309) | ||
Ending Balance at Mar. 31, 2020 | $ 2,921,648 | $ 2,446 | $ 90,439,901 | $ (87,520,699) |
Ending Balance, Shares at Mar. 31, 2020 | 24,456,914 | 24,456,914 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net loss | $ (1,790,309) | $ (1,965,266) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 310,162 | 378,959 |
Change in operating assets and liabilities: | ||
Prepaid expenses and other assets | 227,089 | 142,299 |
Accounts payable and other current liabilities | (298,837) | (482,878) |
Net cash used in operating activities | (1,551,895) | (1,926,886) |
Financing activities | ||
Proceeds from issuance of common stock, net | 21,250 | 636,432 |
Net cash provided by financing activities | 21,250 | 636,432 |
Net decrease in cash and cash equivalents | (1,530,645) | (1,290,454) |
Cash and cash equivalents at beginning of period | 5,663,833 | 5,319,004 |
Cash and cash equivalents at end of period | $ 4,133,188 | $ 4,028,550 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization And Basis Of Presentation [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Evoke Pharma, Inc. (the “Company”) was incorporated in the state of Delaware in January 2007. The Company is a specialty pharmaceutical company focused primarily on the development of drugs to treat gastroenterological disorders and disease. Since its inception, the Company has devoted substantially all of its efforts to developing its sole product candidate, Gimoti™, and has not realized revenues from its planned principal operations. On June 1, 2018, the Company filed a 505(b)(2) New Drug Application (“NDA”) for Gimoti with the U.S. Food and Drug Administration (“FDA”) and on April 1, 2019, the Company received a Complete Response Letter (“CRL”) from FDA for the NDA. The CRL stated that FDA has determined it cannot approve the NDA in its present form and provided recommendations to address the two remaining approvability issues in an NDA resubmission. The approvability issues are related to clinical pharmacology and product quality/device quality. FDA did not request any new clinical data and did not raise any safety concerns. On July 25, 2019, the Company completed a type A meeting with FDA to obtain FDA’s feedback and agreement on the Company’s plan to address deficiencies cited in the CRL in support of a resubmission of the Gimoti NDA. The focus of the discussion was on topics noted in the CRL, including the root cause analysis of low drug exposure in the comparative bioavailability study and additional product quality/device quality control testing. On December 19, 2019, based on FDA feedback received during the type A meeting, the Company resubmitted the Gimoti NDA to FDA. The resubmission provided the requested additional information intended to address the deficiencies cited in the CRL. To address the clinical pharmacology issues, the resubmission included an in-depth root cause analysis, as well as patient use and experience data from the Company’s clinical trials. To address product quality/device quality issues cited in the CRL, the resubmission included 3-month stability data from commercial scale registration batches that met all product specifications. The Company believes these data support the acceptance criteria for performance characteristics and device quality control it proposed in the Gimoti NDA. Additionally, as requested by FDA, the resubmission included data from an analysis of pump performance characteristics for the product used in the comparative bioavailability study and the product from commercial scale registration batches. The results of this testing showed all products performed within specifications. On January 17, 2020, the Company received a notice from FDA that it had accepted the Company’s NDA resubmission for review and set a target goal date for a decision under the Prescription Drug User Fee Act (“PDUFA”) of June 19, 2020. The Company does not anticipate realizing revenues until FDA approves the NDA and the Company begins commercializing Gimoti, which events may never occur. The Company’s activities are subject to the significant risks and uncertainties associated with any specialty pharmaceutical company that has substantial expenditures for research and development, including funding its operations. Going Concern The Company has incurred recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of Gimoti. Although the Company had approximately $4.1 million in cash and cash equivalents at March 31, 2020, the Company anticipates that it will continue to incur losses from operations due to pre-approval and pre-commercialization activities, including interactions with FDA on the Company’s NDA resubmission for Gimoti, potentially manufacturing commercial batches of Gimoti, and general and administrative costs to support operations. As a result, the Company believes that there is substantial doubt about its ability to continue as a going concern for one year after the date these financial statements are issued. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. The determination as to whether the Company can continue as a going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In its report on the Company’s financial statements for the year ended December 31, 2019, the Company’s independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s net losses may fluctuate significantly from quarter to quarter and year to year. The Company believes, based on its current operating plan, that its existing cash and cash equivalents will be sufficient to fund its operations through the target goal date for a decision under PDUFA and into the third quarter of 2020. If Gimoti is approved by FDA, additional funds will become available from the revolving credit facility (the “Eversana Credit Facility”) with Eversana Life Sciences Services, LLC (“Eversana”), as disclosed in Note 5, which the Company believes, based on its current operating plan, will provide sufficient cash to fund the Company’s operations into 2021, excluding any potential future Gimoti product revenue. This period could be shortened if there are any unanticipated increases in planned spending. Even with the Eversana Credit Facility, the Company will be required to raise additional funds through debt, equity or other forms of financing, such as potential collaboration arrangements, to fund future operations and continue as a going concern. There can be no assurance that additional financing will be available when needed or on acceptable terms. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, financial condition and future prospects. There can be no assurance that the Company, if required, will be able to further develop Gimoti, resubmit the Gimoti NDA or receive FDA approval of the Gimoti NDA. Because the Company’s business is entirely dependent on the success of Gimoti, if the Company is unable to secure additional financing or identify and execute on other development or strategic alternatives for Gimoti or the Company, the Company will be required to curtail all of its activities and may be required to liquidate, dissolve or otherwise wind down its operations. Impact of COVID-19 To date, the Company has not experienced material disruptions to its financial condition or operations from the novel coronavirus disease (“COVID-19”) pandemic. In anticipation of the PDUFA target goal date of June 19, 2020 for its Gimoti NDA, the Company has continued its pre-commercial activities, including refining the commercial manufacturing process, and with Eversana, has continued preparing for the potential commercialization of Gimoti, if FDA approval is obtained. However, there can be no assurance that the Company or Eversana will not be impacted by the COVID-19 pandemic. For example, FDA may delay the PDUFA target goal date due to FDA’s internal resource constraints as a result of disruptions or shifting of resources within FDA due to the COVID-19 pandemic, or other reasons. In addition, the COVID-19 pandemic may disrupt the operations of the Company’s third-party suppliers and manufacturers and delay the Company’s manufacturing timelines and commercial launch of Gimoti, if approved, and may negatively impact the Company’s ability to successfully commercialize Gimoti and generate product sales, if Gimoti is approved. Further, t he COVID-19 pandemic and mitigation measures have also had an adverse impact on global economic conditions which could have an adverse effect on the Company’s business and financial condition, including impairing its ability to raise capital when needed. In April 2020, the Company applied for and was approved for a Small Business Administration loan under the Paycheck Protection Program, established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. On May 1, 2020, the Company received the loan proceeds in the amount of approximately $104,000. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accompanying condensed balance sheet as of December 31, 2019, which has been derived from audited financial statements, and the unaudited interim condensed financial statements, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and follow the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and its cash flows for the periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the year ended December 31, 2019, which are contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 12, 2020. The results for interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates. Contract Research Organizations and Consultants The Company relies on contract research organizations (“CROs”) and consultants to assist with ongoing regulatory discussions and submissions supporting the NDA. If these CROs and consultants are unable to continue their support, this could adversely affect FDA’s review of the NDA. In addition, the Company relies on third-party manufacturers for the production of Gimoti. If the third-party manufacturers are unable to continue manufacturing Gimoti, or if the Company loses one of its sole source suppliers used in its manufacturing processes, the Company may not be able to meet any development needs or commercial supply demand for Gimoti, if approved by FDA, and the development and/or commercialization of Gimoti could be materially and adversely affected. The Company also relies on third-party sales and marketing organizations for the management of the pre-commercial launch preparation for Gimoti, as well as for a dedicated sales team to sell Gimoti, if approved by FDA. If such third-party organizations are unable to continue managing the launch preparation, or serving as a dedicated sales team, the commercialization of Gimoti could be materially and adversely affected. Stock-Based Compensation Stock-based compensation expense for stock option grants and employee stock purchases under the Company’s Employee Stock Purchase Plan (the “ESPP”) is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the employee’s requisite service period, except awards with a performance condition. Awards with performance conditions commence vesting when the satisfaction of the performance condition is probable. The estimation of stock option and ESPP fair value requires management to make estimates and judgments about, among other things, employee exercise behavior, forfeiture rates and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized. The Company grants stock options to purchase common stock to employees and members of the board of directors with exercise prices equal to the Company’s closing market price on the date the stock options are granted. The risk-free interest rate assumption was based on the yield of an applicable rate for U.S. Treasury instruments with maturities similar to those of the expected term of the award being valued. The weighted-average expected term of options and employee stock purchases was calculated using the simplified method as prescribed by accounting guidance for stock-based compensation. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility was calculated based upon the Company’s historical volatility, supplemented, as necessary, with historical volatility of comparable companies in the biotechnology industry whose share prices are publicly available for a sufficient period of time. The assumed dividend yield was based on the Company never paying cash dividends and having no expectation of paying cash dividends in the foreseeable future. Research and Development Expenses Research and development costs are expensed as incurred and primarily include compensation and related benefits, stock-based compensation expense and costs paid to third-party contractors for product development activities and drug product materials. The Company expenses costs relating to the purchase and production of pre-approval inventories as research and development expense in the period incurred until FDA approval is received. The Company does not own or operate manufacturing facilities for the production of Gimoti, nor does it plan to develop its own manufacturing operations in the foreseeable future. The Company currently depends on third-party contract manufacturers for all of its required raw materials, drug substance and finished product for its pre-commercial product development. The Company has agreements with Cosma S.p.A. to supply metoclopramide for the manufacture of Gimoti, and with Thermo Fisher Scientific Inc., who acquired Patheon UK Limited, for product development and manufacturing of Gimoti. The Company currently utilizes third-party consultants, which it engages on an as-needed, hourly basis, to manage product development and manufacturing contractors. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common stock outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of warrants to purchase common stock, options to purchase common stock under the Company’s equity incentive plans and potential shares to be purchased under the ESPP. For the periods presented, the following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive: Three Months Ended March 31, 2020 2019 Warrants to purchase common stock 2,713,561 2,713,561 Common stock options 3,989,371 3,672,624 Employee stock purchase plan 24,714 6,126 Total excluded securities 6,727,646 6,392,311 |
Technology Acquisition Agreemen
Technology Acquisition Agreement | 3 Months Ended |
Mar. 31, 2020 | |
Technology Acquisition Agreement [Abstract] | |
Technology Acquisition Agreement | 3. Technology Acquisition Agreement In June 2007, the Company acquired all worldwide rights, data, patents and other related assets associated with Gimoti from Questcor Pharmaceuticals, Inc. (“Questcor”) pursuant to an Asset Purchase Agreement. The Company paid Questcor $650,000 in the form of an upfront payment and $500,000 in May 2014 as a milestone payment based upon the initiation of the first patient dosing in the Company’s Phase 3 clinical trial for Gimoti. In August 2014, Mallinckrodt, plc (“Mallinckrodt”) acquired Questcor. As a result of that acquisition, Questcor transferred its rights included in the Asset Purchase Agreement with the Company to Mallinckrodt. In addition to the payments previously made to Questcor, the Company may also be required to make additional milestone payments totaling up to $52 million. In March 2018, the Company and Mallinckrodt amended the Asset Purchase Agreement to defer development and approval milestone payments, such that, rather than paying two milestone payments based on FDA acceptance for review of the NDA and final product marketing approval, the Company would be required to make a single $5 million payment on the one-year anniversary after the Company receives FDA approval to market Gimoti. The remaining $47 million in milestone payments depend on Gimoti’s commercial success and will only apply if Gimoti receives regulatory approval. In addition, the Company will be required to pay Mallinckrodt a low single digit royalty on net sales of Gimoti. The Company’s obligation to pay such royalties will terminate upon the expiration of the last patent right covering Gimoti, which is expected to occur in 2032, subject to possible extension should any additional, later expiring, patents be granted. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | At the Market Equity Offering Program In November 2017, the Company filed a shelf registration with the SEC on Form S-3. The shelf registration statement includes a prospectus for the at-the-market offering to sell up to an aggregate of $16.0 million of shares of the Company’s common stock through B. Riley FBR, Inc. (“FBR”) as a sales agent (the “FBR Sales Agreement”). During the three months ended March 31, 2019, the Company sold 450,000 shares of common stock at a weighted-average price per share of $1.44 pursuant to the FBR Sales Agreement and received proceeds of approximately $636,000, net of commissions and fees. There were no shares sold under the FBR Sales Agreement during the three months ended March 31, 2020. From April 1, 2020 through May 7, 2020, the Company sold 245,676 shares of common stock at a weighted-average price per share of $1.31 pursuant to the FBR Sales Agreement and received proceeds of approximately $316,000, net of commissions and fees. Future sales will depend on a variety of factors including, but not limited to, market conditions, the trading price of the Company’s common stock and the Company’s capital needs. There can be no assurance that FBR will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that the Company deems appropriate. In addition, the Company will not be able to make future sales of common stock pursuant to the FBR Sales Agreement unless certain conditions are met, which include the accuracy of representations and warranties made to FBR under the FBR Sales Agreement. Furthermore, FBR is permitted to terminate the FBR Sales Agreement in its sole discretion upon ten days’ notice, or at any time in certain circumstances, including the occurrence of an event that would be reasonably likely to have a material adverse effect on the Company’s assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity or results of operations. The Company has no obligation to sell the remaining shares available for sale pursuant to the FBR Sales Agreement. Stock-Based Compensation Stock-based compensation expense includes charges related to employee stock purchases under the ESPP and stock option grants. The Company measures stock-based compensation expense based on the grant date fair value of any awards granted to its employees. Such expense is recognized over the period of time that employees provide service and earn rights to the awards. During the three months ended March 31, 2020, the Company granted stock options to purchase 875,000 shares of the Company’s common stock. Of such options, 50% do not begin vesting until the date, if any, that FDA approves the Gimoti NDA. The estimated fair value of each stock option award granted was determined on the date of grant using the Black Scholes option-pricing valuation model with the following weighted-average assumptions for option grants during the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Common Stock Options Risk free interest rate 0.96% 2.55% Expected option term 6.0 years 6.0 years Expected volatility of common stock 99.73% 90.34% Expected dividend yield 0.0% 0.0% The estimated fair value of the shares to be acquired under the ESPP was determined on the initiation date of each six-month purchase period using the Black-Scholes option-pricing valuation model with the following weighted-average assumptions for ESPP shares to be purchased during the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Employee Stock Purchase Plan Risk free interest rate 1.11% 2.52% Expected term 6.0 months 6.0 months Expected volatility of common stock 69.72% 130.36% Expected dividend yield 0.0% 0.0% The Company recognized non-cash stock-based compensation expense to employees and directors in its research and development and its general and administrative functions during the three months ended March 31, 2020 and 2019 as follows: Three Months Ended March 31, 2020 2019 Research and development $ 120,562 $ 152,174 General and administrative 189,600 226,785 Total stock-based compensation expense $ 310,162 $ 378,959 As of March 31, 2020, there was approximately $2.2 million of unrecognized compensation costs related to outstanding employee and board of director options, which are expected to be recognized over a weighted-average period of 1.29 years. Should the Gimoti NDA be approved by FDA, there will be approximately $423,000 of additional compensation costs to be recognized. |
Commercial Services and Loan Ag
Commercial Services and Loan Agreements with Eversana | 3 Months Ended |
Mar. 31, 2020 | |
Commercial Services And Loan Agreements [Abstract] | |
Commercial Services and Loan Agreements with Eversana | 5. Commercial Services and Loan Agreements with Eversana On January 21, 2020, the Company entered into a commercial services agreement (the “Eversana Agreement”) with Eversana for the commercialization of Gimoti. Pursuant to the Eversana Agreement, Eversana will commercialize and distribute Gimoti in the United States, if approved by FDA. Eversana will manage the marketing of Gimoti to gastroenterologists and other targeted health care providers, as well as the sales and distribution of Gimoti to wholesalers, pharmacies and other customers within the United States. Under the terms of the Eversana Agreement, the Company maintains ownership of the Gimoti NDA, as well as legal, regulatory, and manufacturing responsibilities for Gimoti. Eversana will utilize its internal sales organization, along with other commercial functions, for market access, marketing, distribution and other related patient support services. The Company will record sales for Gimoti and retain more than 80% of net product profits once the parties’ costs are reimbursed. Eversana will receive reimbursement of its commercialization costs pursuant to an agreed upon budget and a percentage of product profits in the mid-to-high teens. Net product profits are the net sales (as defined in the Eversana Agreement) of Gimoti, less (i) reimbursed commercialization costs, (ii) manufacturing and administrative costs set at a fixed percentage of net sales, and (iii) third party royalties. During the term of the Eversana Agreement, Eversana agreed to not market, promote, or sell a competing product in the United States. The term of the Eversana Agreement is from January 21, 2020 until five years from the date, if any, that FDA approves the Gimoti NDA. Upon expiration or termination of the agreement, the Company will retain all profits from product sales and assume all corresponding commercialization responsibilities. Within 30 days after each of the first three annual anniversaries of commercial launch, either party may terminate the agreement if net sales of Gimoti do not meet certain annual thresholds. Either party may terminate the agreement: for the material breach of the other party, subject to a 60-day cure period; in the event an insolvency, petition of the other party is pending for more than 60 days; upon 30 days written notice to the other party if Gimoti is subject to a safety recall; the other party is in breach of certain regulatory compliance representations under the agreement; the Company discontinues the development or production of Gimoti; Gimoti is not commercially launched within nine months of FDA approval, if any, or the net profit is negative for any two consecutive calendar quarters beginning with the first full calendar quarter 24 months following commercial launch; or if there is a change in applicable laws that makes operation of the services as contemplated under the agreement illegal or commercially impractical. Either party may also terminate the Eversana Agreement upon a change of control of the Company’s ownership, subject, in the event that the Company initiates such termination, to a one-time payment equal to between two times and one times annualized service fees paid by the Company under the Eversana Agreement, with such amount based on which year after commercial launch the change of control occurs. Such payment amount would be reduced by the amount of previously reimbursed commercialization costs and profit split paid for the related prior twelve-month period and any revenue which occurred prior to the termination yet to be collected. In addition, Eversana may terminate the Eversana Agreement if Gimoti is not approved by FDA by December 31, 2020 (provided Eversana gives the Company notice of such termination no later than March 1, 2021), or if the Company withdraws Gimoti from the market for more than 90 days. In addition, in connection with the Eversana Agreement, the Company and Eversana entered into the Eversana Credit Facility, pursuant to which Eversana agreed to provide a revolving Credit Facility of up to $5.0 million to the Company upon FDA approval of the Gimoti NDA, if any, as well as certain other customary conditions. The Eversana Credit Facility is secured by all of the Company’s personal property other than its intellectual property. Under the terms of the Eversana Credit Facility, the Company cannot grant an interest in its intellectual property to any other person. Each loan under the Eversana Credit Facility will bear interest at an annual rate equal to 10.0%. The Company may prepay any amounts borrowed under the Eversana Credit Facility at any time without penalty or premium. The maturity date of all amounts, including interest, borrowed under the Eversana Credit Facility will be 90 days after the expiration or earlier termination of the Eversana Agreement. The Eversana Credit Facility also includes events of default, the occurrence and continuation of which provide Eversana with the right to exercise remedies against the Company and the collateral securing the loans under the Eversana Credit Facility, including the Company’s cash. These events of default include, among other things, the Company’s failure to pay any amounts due under the Eversana Credit Facility, an uncured material breach of the representations, warranties and other obligations under the Eversana Credit Facility, the occurrence of insolvency events and the occurrence of a change in control. On January 23, 2020, the Company and Novos Growth, LLC mutually agreed to terminate, effective immediately, a commercialization agreement entered into in January 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ materially from those estimates. |
Contract Research Organizations and Consultants | Contract Research Organizations and Consultants The Company relies on contract research organizations (“CROs”) and consultants to assist with ongoing regulatory discussions and submissions supporting the NDA. If these CROs and consultants are unable to continue their support, this could adversely affect FDA’s review of the NDA. In addition, the Company relies on third-party manufacturers for the production of Gimoti. If the third-party manufacturers are unable to continue manufacturing Gimoti, or if the Company loses one of its sole source suppliers used in its manufacturing processes, the Company may not be able to meet any development needs or commercial supply demand for Gimoti, if approved by FDA, and the development and/or commercialization of Gimoti could be materially and adversely affected. The Company also relies on third-party sales and marketing organizations for the management of the pre-commercial launch preparation for Gimoti, as well as for a dedicated sales team to sell Gimoti, if approved by FDA. If such third-party organizations are unable to continue managing the launch preparation, or serving as a dedicated sales team, the commercialization of Gimoti could be materially and adversely affected. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for stock option grants and employee stock purchases under the Company’s Employee Stock Purchase Plan (the “ESPP”) is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the employee’s requisite service period, except awards with a performance condition. Awards with performance conditions commence vesting when the satisfaction of the performance condition is probable. The estimation of stock option and ESPP fair value requires management to make estimates and judgments about, among other things, employee exercise behavior, forfeiture rates and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized. The Company grants stock options to purchase common stock to employees and members of the board of directors with exercise prices equal to the Company’s closing market price on the date the stock options are granted. The risk-free interest rate assumption was based on the yield of an applicable rate for U.S. Treasury instruments with maturities similar to those of the expected term of the award being valued. The weighted-average expected term of options and employee stock purchases was calculated using the simplified method as prescribed by accounting guidance for stock-based compensation. This decision was based on the lack of relevant historical data due to the Company’s limited historical experience. In addition, due to the Company’s limited historical data, the estimated volatility was calculated based upon the Company’s historical volatility, supplemented, as necessary, with historical volatility of comparable companies in the biotechnology industry whose share prices are publicly available for a sufficient period of time. The assumed dividend yield was based on the Company never paying cash dividends and having no expectation of paying cash dividends in the foreseeable future. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred and primarily include compensation and related benefits, stock-based compensation expense and costs paid to third-party contractors for product development activities and drug product materials. The Company expenses costs relating to the purchase and production of pre-approval inventories as research and development expense in the period incurred until FDA approval is received. The Company does not own or operate manufacturing facilities for the production of Gimoti, nor does it plan to develop its own manufacturing operations in the foreseeable future. The Company currently depends on third-party contract manufacturers for all of its required raw materials, drug substance and finished product for its pre-commercial product development. The Company has agreements with Cosma S.p.A. to supply metoclopramide for the manufacture of Gimoti, and with Thermo Fisher Scientific Inc., who acquired Patheon UK Limited, for product development and manufacturing of Gimoti. The Company currently utilizes third-party consultants, which it engages on an as-needed, hourly basis, to manage product development and manufacturing contractors. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common stock outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of warrants to purchase common stock, options to purchase common stock under the Company’s equity incentive plans and potential shares to be purchased under the ESPP. For the periods presented, the following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive: Three Months Ended March 31, 2020 2019 Warrants to purchase common stock 2,713,561 2,713,561 Common stock options 3,989,371 3,672,624 Employee stock purchase plan 24,714 6,126 Total excluded securities 6,727,646 6,392,311 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Outstanding Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | For the periods presented, the following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to do so would be anti-dilutive: Three Months Ended March 31, 2020 2019 Warrants to purchase common stock 2,713,561 2,713,561 Common stock options 3,989,371 3,672,624 Employee stock purchase plan 24,714 6,126 Total excluded securities 6,727,646 6,392,311 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Estimated Fair Value of Stock Option Award | During the three months ended March 31, 2020, the Company granted stock options to purchase 875,000 shares of the Company’s common stock. Of such options, 50% do not begin vesting until the date, if any, that FDA approves the Gimoti NDA. The estimated fair value of each stock option award granted was determined on the date of grant using the Black Scholes option-pricing valuation model with the following weighted-average assumptions for option grants during the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Common Stock Options Risk free interest rate 0.96% 2.55% Expected option term 6.0 years 6.0 years Expected volatility of common stock 99.73% 90.34% Expected dividend yield 0.0% 0.0% |
Summary of Estimated Fair Value of Shares to be Acquired under Employee Stock Purchase Plan | The estimated fair value of the shares to be acquired under the ESPP was determined on the initiation date of each six-month purchase period using the Black-Scholes option-pricing valuation model with the following weighted-average assumptions for ESPP shares to be purchased during the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Employee Stock Purchase Plan Risk free interest rate 1.11% 2.52% Expected term 6.0 months 6.0 months Expected volatility of common stock 69.72% 130.36% Expected dividend yield 0.0% 0.0% |
Summary of Recognized Non-Cash Stock-Based Compensation Expense | The Company recognized non-cash stock-based compensation expense to employees and directors in its research and development and its general and administrative functions during the three months ended March 31, 2020 and 2019 as follows: Three Months Ended March 31, 2020 2019 Research and development $ 120,562 $ 152,174 General and administrative 189,600 226,785 Total stock-based compensation expense $ 310,162 $ 378,959 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Detail) - USD ($) | May 01, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Organization And Basis Of Presentation [Line Items] | |||||
Month and year of incorporation | 2007-01 | ||||
Cash and cash equivalents | $ 4,133,188 | $ 5,663,833 | $ 4,028,550 | $ 5,319,004 | |
Paycheck Protection Program [Member] | Subsequent Event [Member] | COVID-19 [Member] | |||||
Organization And Basis Of Presentation [Line Items] | |||||
Proceeds from loan | $ 104,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Outstanding Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share | 6,727,646 | 6,392,311 |
Warrants to purchase common stock [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share | 2,713,561 | 2,713,561 |
Common stock options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share | 3,989,371 | 3,672,624 |
Employee stock purchase plan [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the calculation of diluted net loss per share | 24,714 | 6,126 |
Technology Acquisition Agreem_2
Technology Acquisition Agreement - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | |
May 31, 2014USD ($) | Jun. 30, 2007USD ($) | Mar. 31, 2020USD ($)Milestone | |
Technology Acquisition Agreement [Line Items] | |||
Payment expensed as in-process research and development | $ 650,000 | ||
Mallinckrodt Plc [Member] | |||
Technology Acquisition Agreement [Line Items] | |||
Milestone payments contingent amount | $ 5,000,000 | ||
Number of milestone payments | Milestone | 1 | ||
Mallinckrodt Plc [Member] | Rights and Patents Acquired from Questcor Pharmaceuticals Inc [Member] | Maximum [Member] | |||
Technology Acquisition Agreement [Line Items] | |||
Milestone payments contingent amount | $ 52,000,000 | ||
Development Target One [Member] | Rights and Patents Acquired from Questcor Pharmaceuticals Inc [Member] | |||
Technology Acquisition Agreement [Line Items] | |||
Milestone payment | $ 500,000 | ||
Development targets description | Upon the initiation of the first patient dosing in the Company's Phase 3 clinical trial for Gimoti. | ||
Development Target Four [Member] | Mallinckrodt Plc [Member] | Patented Technology [Member] | |||
Technology Acquisition Agreement [Line Items] | |||
Development targets description | Depend on Gimoti's commercial success and will only apply if Gimoti receives regulatory approval. In addition, the Company will be required to pay to Mallinckrodt a low single digit royalty on net sales of Gimoti. | ||
Milestone payments contingent amount | $ 47,000,000 | ||
Expected expiration of patent right | 2032 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | |||
May 07, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Nov. 30, 2017 | |
Options Granted [Line Items] | |||||
Common stock, shares issued | 24,456,914 | 24,431,914 | |||
Proceeds from issuance of common stock, net | $ 21,250 | $ 636,432 | |||
Options Granted [Member] | |||||
Options Granted [Line Items] | |||||
Number of stock options granted | 875,000 | ||||
Options Granted [Member] | Gimoti [Member] | |||||
Options Granted [Line Items] | |||||
Percentage of options began vesting | 50.00% | ||||
FBR Sales Agreement [Member] | |||||
Options Granted [Line Items] | |||||
Common stock, shares issued | 0 | 450,000 | |||
Common stock , weighted average price per share | $ 1.44 | ||||
Proceeds from issuance of common stock, net | $ 636,000 | ||||
FBR Sales Agreement [Member] | Subsequent Event [Member] | |||||
Options Granted [Line Items] | |||||
Common stock, shares issued | 245,676 | ||||
Common stock , weighted average price per share | $ 1.31 | ||||
Proceeds from issuance of common stock, net | $ 316,000 | ||||
FBR Sales Agreement [Member] | Maximum [Member] | |||||
Options Granted [Line Items] | |||||
Common stock, value of shares issuable | $ 16,000,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Estimated Fair Value of Stock Option Award (Detail) - Common stock options [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 0.96% | 2.55% |
Expected option term | 6 years | 6 years |
Expected volatility of common stock | 99.73% | 90.34% |
Expected dividend yield | 0.00% | 0.00% |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Estimated Fair Value of Shares to be Acquired Under Employee Stock Purchase Plan (Detail) - Employee stock purchase plan [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 1.11% | 2.52% |
Expected term | 6 months | 6 months |
Expected volatility of common stock | 69.72% | 130.36% |
Expected dividend yield | 0.00% | 0.00% |
Stockholders' Equity - Summar_3
Stockholders' Equity - Summary of Recognized Non-Cash Stock-Based Compensation Expense (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 310,162 | $ 378,959 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 120,562 | 152,174 |
General and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 189,600 | $ 226,785 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs | $ 2,200,000 |
Weighted average period | 1 year 3 months 14 days |
Gimoti [Member] | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Additional compensation cost | $ 423,000 |
Commercial Services and Loan _2
Commercial Services and Loan Agreements with Eversana - Additional Information (Detail) - Eversana Agreement [Member] | Jan. 21, 2020USD ($) |
Commercial Services And Loan Agreements [Line Items] | |
Term of agreement | 5 years |
Revolving Credit Facility [Member] | |
Commercial Services And Loan Agreements [Line Items] | |
Line of credit | $ 5,000,000 |
Line of credit facility, Interest rate | 10.00% |
Gimoti [Member] | Minimum [Member] | |
Commercial Services And Loan Agreements [Line Items] | |
Percentage Of Product Profits | 80.00% |