Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 06, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ARPO | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Registrant Name | Aerpio Pharmaceuticals, Inc. | |
Entity Central Index Key | 0001422142 | |
Entity Common Stock, Shares Outstanding | 40,588,004 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity File Number | 001-38560 | |
Entity Tax Identification Number | 61-1547850 | |
Entity Address, Address Line One | 9987 Carver Road | |
Entity Address, City or Town | Cincinnati | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45242 | |
City Area Code | 513 | |
Local Phone Number | 985-1920 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 43,389,603 | $ 62,614,010 |
Prepaid research and development contracts | 538,300 | 754,392 |
Other current assets | 876,492 | 615,681 |
Total current assets | 44,804,395 | 63,984,083 |
Furniture and equipment, net | 281,710 | 98,449 |
Operating lease right-of-use assets, net | 424,751 | |
Deposits | 40,960 | 40,960 |
Total assets | 45,551,816 | 64,123,492 |
Current liabilities: | ||
Accounts payable and accrued expenses | 3,403,960 | 5,456,917 |
Current portion of operating lease liability | 197,184 | |
Total current liabilities | 3,601,144 | 5,456,917 |
Operating lease liability, net of current portion | 236,223 | |
Total liabilities | 3,837,367 | 5,456,917 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value per share; 300,000,000 shares authorized and 40,588,004 shares issued and outstanding at September 30, 2019 and December 31, 2018. | 4,059 | 4,059 |
Additional paid-in capital | 179,499,769 | 177,621,807 |
Accumulated deficit | (137,789,379) | (118,959,291) |
Total stockholders’ equity | 41,714,449 | 58,666,575 |
Total liabilities and stockholders’ equity | $ 45,551,816 | $ 64,123,492 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 40,588,004 | 40,588,004 |
Common stock, shares outstanding | 40,588,004 | 40,588,004 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
License revenue, and other | $ 18,821,953 | $ 20,155,286 | ||
Type of Revenue [Extensible List] | arpo:LicenseRevenueAndOtherMember | arpo:LicenseRevenueAndOtherMember | ||
Operating expenses | ||||
Research and development | $ 2,844,603 | $ 4,346,381 | $ 10,695,109 | $ 12,604,125 |
General and administrative | 2,160,845 | 3,277,535 | 8,215,456 | 9,866,227 |
Restructuring (benefit) expense | (38,810) | 876,284 | ||
Total operating expenses | 4,966,638 | 7,623,916 | 19,786,849 | 22,470,352 |
(Loss) income from operations | (4,966,638) | 11,198,037 | (19,786,849) | (2,315,066) |
Grant income | 79,303 | 6,394 | 99,574 | 6,394 |
Interest income | 239,405 | 333,047 | 862,904 | 430,626 |
Total other income | 318,708 | 339,441 | 962,478 | 437,020 |
Net and comprehensive (loss) income | $ (4,647,930) | $ 11,537,478 | $ (18,824,371) | $ (1,878,046) |
Net and comprehensive (loss) income per share | ||||
Basic and diluted | $ (0.11) | $ 0.28 | $ (0.46) | $ (0.06) |
Weighted average number of common shares used in computing net and comprehensive (loss) income per share | ||||
Basic | 40,588,004 | 40,527,722 | 40,588,004 | 31,687,434 |
Diluted | 40,588,004 | 40,961,620 | 40,588,004 | 31,687,434 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2017 | $ 17,435,489 | $ 2,707 | $ 125,995,438 | $ (108,562,656) |
Balance, Shares at Dec. 31, 2017 | 27,070,038 | |||
Issuance of restricted stock | $ 6 | (6) | ||
Issuance of restricted stock, Shares | 60,000 | |||
Issuance of common stock upon exercise of stock options | 21,992 | $ 2 | 21,990 | |
Issuance of common stock upon exercise of stock options, Shares | 16,802 | |||
Forfeiture of restricted stock, Shares | (741) | |||
Stock-based compensation expense | 1,079,721 | 1,079,721 | ||
Net and comprehensive loss | (7,425,532) | (7,425,532) | ||
Balance at Mar. 31, 2018 | 11,111,670 | $ 2,715 | 127,097,143 | (115,988,188) |
Balance, Shares at Mar. 31, 2018 | 27,146,099 | |||
Balance at Dec. 31, 2017 | 17,435,489 | $ 2,707 | 125,995,438 | (108,562,656) |
Balance, Shares at Dec. 31, 2017 | 27,070,038 | |||
Net and comprehensive loss | (1,878,046) | |||
Balance at Sep. 30, 2018 | 66,517,116 | $ 4,059 | 176,953,759 | (110,440,702) |
Balance, Shares at Sep. 30, 2018 | 40,588,004 | |||
Balance at Mar. 31, 2018 | 11,111,670 | $ 2,715 | 127,097,143 | (115,988,188) |
Balance, Shares at Mar. 31, 2018 | 27,146,099 | |||
Issuance of common stock upon exercise of stock options | 1,660 | 1,660 | ||
Issuance of common stock upon exercise of stock options, Shares | 1,000 | |||
Issuance of common stock,net of issuance costs | 41,905,312 | $ 1,169 | 41,904,143 | |
Issuance of common stock, net of issuance costs, Shares | 11,688,000 | |||
Forfeiture of restricted stock, Shares | (1,592) | |||
Stock-based compensation expense | 877,757 | 877,757 | ||
Net and comprehensive loss | (5,989,992) | (5,989,992) | ||
Balance at Jun. 30, 2018 | 47,906,407 | $ 3,884 | 169,880,703 | (121,978,180) |
Balance, Shares at Jun. 30, 2018 | 38,833,507 | |||
Issuance of common stock upon exercise of stock options | 53,104 | $ 3 | 53,101 | |
Issuance of common stock upon exercise of stock options, Shares | 34,297 | |||
Issuance of common stock,net of issuance costs | 6,213,715 | $ 172 | 6,213,543 | |
Issuance of common stock, net of issuance costs, Shares | 1,720,200 | |||
Stock-based compensation expense | 806,412 | 806,412 | ||
Net and comprehensive loss | 11,537,478 | 11,537,478 | ||
Balance at Sep. 30, 2018 | 66,517,116 | $ 4,059 | 176,953,759 | (110,440,702) |
Balance, Shares at Sep. 30, 2018 | 40,588,004 | |||
Balance at Dec. 31, 2018 | 58,666,575 | $ 4,059 | 177,621,807 | (118,959,291) |
Balance, Shares at Dec. 31, 2018 | 40,588,004 | |||
Cumulative effect of change in accounting principle | 5,717 | (5,717) | ||
Stock-based compensation expense | 621,685 | 621,685 | ||
Net and comprehensive loss | (8,492,825) | (8,492,825) | ||
Balance at Mar. 31, 2019 | 50,795,435 | $ 4,059 | 178,249,209 | (127,457,833) |
Balance, Shares at Mar. 31, 2019 | 40,588,004 | |||
Balance at Dec. 31, 2018 | 58,666,575 | $ 4,059 | 177,621,807 | (118,959,291) |
Balance, Shares at Dec. 31, 2018 | 40,588,004 | |||
Net and comprehensive loss | (18,824,371) | |||
Balance at Sep. 30, 2019 | 41,714,449 | $ 4,059 | 179,499,769 | (137,789,379) |
Balance, Shares at Sep. 30, 2019 | 40,588,004 | |||
Balance at Mar. 31, 2019 | 50,795,435 | $ 4,059 | 178,249,209 | (127,457,833) |
Balance, Shares at Mar. 31, 2019 | 40,588,004 | |||
Stock-based compensation expense | 604,661 | 604,661 | ||
Net and comprehensive loss | (5,683,616) | (5,683,616) | ||
Balance at Jun. 30, 2019 | 45,716,480 | $ 4,059 | 178,853,870 | (133,141,449) |
Balance, Shares at Jun. 30, 2019 | 40,588,004 | |||
Stock-based compensation expense | 645,899 | 645,899 | ||
Net and comprehensive loss | (4,647,930) | (4,647,930) | ||
Balance at Sep. 30, 2019 | $ 41,714,449 | $ 4,059 | $ 179,499,769 | $ (137,789,379) |
Balance, Shares at Sep. 30, 2019 | 40,588,004 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | |
Statement Of Stockholders Equity [Abstract] | |||
Payments of stock issuance cost | $ 409,054 | $ 3,093,489 | $ 3,502,543 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities: | ||||
Net and comprehensive loss | $ (4,647,930) | $ 11,537,478 | $ (18,824,371) | $ (1,878,046) |
Adjustments to reconcile net and comprehensive loss to net cash (used in) provided by operating activities: | ||||
Depreciation | 53,692 | 35,312 | ||
Stock-based compensation | 645,899 | 806,411 | 1,872,245 | 2,763,890 |
Changes in operating assets and liabilities: | ||||
Prepaid research and development contracts | 216,092 | (24,052) | ||
Other current assets | (260,811) | (572,870) | ||
Accounts payable and other current liabilities | (2,044,301) | 52,521 | ||
Net cash (used in) provided by operating activities | (18,987,454) | 376,755 | ||
Investing activities: | ||||
Purchase of furniture and equipment | (236,953) | (29,380) | ||
Net cash used in investing activities | (236,953) | (29,380) | ||
Financing activities: | ||||
Proceeds from exercise of stock options | 76,756 | |||
Proceeds from issuance of common stock | 51,621,570 | |||
Cash paid in connection with the sale of common stock | (409,054) | (3,502,543) | ||
Net cash provided by financing activities | 48,195,783 | |||
Net (decrease) increase in cash and cash equivalents | (19,224,407) | 48,543,158 | ||
Cash and cash equivalents at beginning of year | 62,614,010 | 20,264,109 | ||
Cash and cash equivalents, nine months ended | $ 43,389,603 | $ 68,807,267 | $ 43,389,603 | $ 68,807,267 |
Nature of Organization and Oper
Nature of Organization and Operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Organization and Operations | 1. Nature of Organization and Operations Aerpio Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company focused on developing compounds that activate Tie2 to treat ocular diseases and complications of diabetes. In March 2019, the Company announced the top line results of its AKB-9778 Phase 2b (TIME-2b) clinical trial initiated in June 2017 for the treatment of non-proliferative diabetic retinopathy, or NPDR, a disease characterized by progressive compromise of blood vessels in the back of the eye. While the Company believed AKB-9778 had the potential to slow down or possibly reverse retinal vascular changes caused by diabetes, the subcutaneous administration of AKB-9778 twice daily did not meet the study’s primary endpoint of increasing the percentage of patients with an improvement of two or more steps in diabetic retinopathy severity score in the study eye, compared to placebo. However, the Company did see encouraging data in a number of prespecified, key secondary endpoints related to the changes in the Urine Albumin-Creatinine Ratio, a measure of kidney function, and in reducing intraocular pressure. As a result, the Company plans to advance a topical drop formulation of AKB-9778 into clinical development as a potential treatment for open-angle glaucoma and initiated a Phase 1b clinical trial in the second quarter of 2019 with results anticipated in the first quarter of 2020. In addition, the Company’s pipeline program, ARP-1536, a humanized monoclonal antibody directed at the same target as AKB-9778 is in preclinical development. The Company is evaluating development options for ARP-1536, including subcutaneous injection for the treatment of diabetic vascular complications. The Company was incorporated as Zeta Acquisition Corp. II (“Zeta”) in the State of Delaware on November 16, 2007. Zeta was a “shell company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). On March 3, 2017, the Company’s Board of Directors, and on March 10, 2017, the Company’s pre-Merger (as defined below) stockholders, approved an amended and restated certificate of incorporation, which, among other things, increased authorized capital stock from 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share, to 300,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. On March 15, 2017, Zeta changed its name to Aerpio Pharmaceuticals Inc. and its wholly-owned subsidiary, Aerpio Acquisition Corp., a corporation formed in the State of Delaware on March 3, 2017, merged with and into Aerpio Therapeutics, Inc. (“Aerpio”), (the “Merger”), a corporation incorporated on November 17, 2011 in the State of Delaware. Pursuant to the Merger, Aerpio remained as the surviving corporation and became the Company’s wholly owned subsidiary. At the effective time of the Merger, the shares of Aerpio’s (i) common stock issued and outstanding immediately prior to the closing of the Merger (including restricted common stock, whether vested or unvested, issued under the Aerpio’s 2011 Equity Incentive Plan), and (ii) redeemable convertible preferred stock issued and outstanding immediately prior to the closing of the Merger, were converted into shares of the Company’s common stock. In addition, immediately prior to the Merger, the outstanding amounts under certain senior secured convertible notes issued by Aerpio to its pre-Merger noteholders were converted into shares of Aerpio’s preferred stock, which were then converted to shares of Aerpio’s common stock and subsequently were converted into shares of the Company’s common stock, together with the other shares of the Aerpio’s common stock described above. In addition, pursuant to the Merger Agreement options to purchase shares of Aerpio’s common stock issued and outstanding immediately prior to the closing of the Merger were assumed and converted into options to purchase shares of the Company’s common stock. All the outstanding capital stock of Aerpio was converted into shares of the Company’s common stock on a 2.3336572:1 basis. As a result of the Merger, the Company acquired the business of Aerpio and continued the existing business operations of Aerpio as a public reporting company under the name Aerpio Pharmaceuticals, Inc. Immediately after the Merger, on March 15, 2017, Aerpio converted into a Delaware limited liability company (the “Conversion”). Immediately following the Conversion, the pre-Merger stockholders of Zeta surrendered for cancellation 4,000,000 of the 5,000,000 shares of the outstanding common stock of Zeta, (the “Share Cancellation”). Following the Share Cancellation, on March 15, 2017, the Company closed a private placement offering (the “2017 Offering”) of 8,049,555 shares of the Company’s common stock, at a purchase price of $5.00 per share, for net proceeds of $37.2 million and the issuance of warrants with a term of three years, to purchase 317,562 shares of the Company’s common stock at an exercise price of $5.00 per share. The Merger was treated as a recapitalization and reverse acquisition for financial reporting purposes. The Company is the legal acquirer of Aerpio in the transaction. However, Aerpio is considered the acquiring company for accounting purposes since (i) former Aerpio stockholders own in excess of 50% of the combined enterprise on a fully diluted basis immediately following the Merger and 2017 Offering, and (ii) all members of the Company’s executive management and Board of Directors are from Aerpio. In accordance with “reverse merger” or “reverse acquisition” accounting treatment, the unaudited condensed consolidated financial statements for the periods ended September 30, 2019 and 2018, include the accounts of the Company and its wholly owned subsidiary, Aerpio Therapeutics, LLC. The Company’s operations to date have been limited to organizing and staffing the Company, business planning, raising capital, acquiring and developing its technology, identifying potential product candidates, and undertaking preclinical and clinical studies. The Company’s revenue to date has been primarily limited to license revenue from Gossamer Bio., Inc, during 2018. Future revenue is dependent on the terms of the license agreement with Gossamer Bio., Inc as further described in Note 11 The Company is subject to a number of risks similar to other life science companies in the current stage of its life cycle including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of any of the Company’s products that are approved, and protection of proprietary technology. If the Company does not successfully commercialize any of its products or mitigate any of these other risks, it will be unable to generate revenue or achieve profitability. The Company’s inability to obtain required funding in the near future could have a material adverse effect on its operations and strategic development plan for future growth. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected, and the Company may have to cease operations. Based on the Company’s current cash reserves of $43.4 million at September 30, 2019 and financial condition as of this Quarterly Report on Form 10-Q, w e believe our existing cash and cash equivalent will be sufficient to fund currently planned operations at least through the second quarter of 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (“SEC”) regulations and include all of the information and disclosures required by U.S. generally accepted accounting principles ("U.S. GAAP" or "GAAP") for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows for each period presented. All adjustments are of a normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2018, included in the Annual Report on Form 10-K filed with the SEC on March 7, 2019. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. The Company’s condensed consolidated financial statements are stated in U.S. Dollars. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating segment are located in the United States. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: grant date fair value of the Company’s stock-based awards, accrued expenses, revenue recognition and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits and funds invested in short-term investments with original maturities of three months or less at the time of purchase. The Company does maintain balances with its banks in excess of federally insured limits. Revenue Recognition At the inception of an arrangement, the Company evaluates if a counterparty to a contract is a customer, if the arrangement is within the scope of revenue from contracts with customers guidance and the term of the contract. The Company recognizes revenue when its customer obtains control of promised goods or services in a contract for an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For contracts with customers, the Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. As part of the accounting for contracts with customers, the Company must develop assumptions that require judgment to determine the standalone selling price of each performance obligation identified in the contract. The Company then allocates the total transaction price to each performance obligation based on the estimated standalone selling prices of each performance obligation. The Company recognizes the amount of the transaction price as revenue that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. The Company enters into collaboration arrangements, under which it licenses certain rights to its intellectual property to third parties. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable upfront license fees; development, sale and commercial milestone payments and royalties on net sales of licensed products. Each of these types of payments are classified as license revenue except for revenue from royalties on net sales of licensed products, which are classified as royalty revenue. For each collaboration agreement that results in revenues, the Company identifies all material promised goods and services, which may include a license to intellectual property, research and development activities and/or transition activities. Promised goods or services are considered to be separate performance obligations if they are distinct. In order to determine the transaction price to be allocated to each performance obligation, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. The Company must develop assumptions that require judgment to determine the standalone selling price (SSP) in order to account for these agreements. To determine the standalone selling price the Company’s assumptions may include (i) assumptions regarding the probability of obtaining marketing approval for the drug candidate; (ii) estimates regarding the timing of and the expected costs to develop and commercialize the drug candidate; (iii) estimates of future cash flows from potential product sales with respect to the drug candidate; and (iv) appropriate discount and tax rates. Standalone selling prices used to perform the initial allocation are not updated after contract inception. The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Upfront License Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, upfront license fees based on the relative value prescribed to the license compared to the total value of the arrangement. The revenue is recognized when the license is transferred to the collaborator and the collaborator is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Development Milestone Payments : Depending on facts and circumstances, the Company may conclude it is appropriate to include the milestone in the estimated transaction price using the most likely amount method or it is appropriate to fully constrain the milestone. A milestone payment is included in the transaction price in the reporting period the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. The Company may record revenues from certain milestones in a reporting period before the milestone is achieved if the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company records a corresponding contract asset when this conclusion is reached. Milestone payments that have not been included in the transaction price to date are fully constrained. These milestones remain fully constrained until the Company concludes that achievement of the milestone is probable and recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company re-evaluates the probability of achievement of such development milestones and any related constraint each reporting period. The Company adjusts its estimate of the overall transaction price, including the amount of collaborative revenue that it has recorded, if necessary. Sales-based Milestone and Royalty Payments: The Company’s collaborators may be required to pay the Company sales-based milestone payments or royalties on future sales of commercial products. The Company recognizes revenues related to sales-based milestone and royalty payments upon the later to occur of (i) achievement of the collaborator’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to the Company’s intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate. Grant Income Grant income is recognized as earned based on contract work performed. Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel and stock-based compensation expense, (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants, (iii) the cost of acquiring, developing and manufacturing clinical study materials, and (iv) costs associated with preclinical activities and regulatory operations. The Company enters into consulting, research and other agreements with commercial firms, researchers, universities, and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project, or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. Income Taxes Income taxes are recorded in accordance with Accounting Standards Codification (ASC) Topic 740, Income Taxes, The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of September 30, 2019 and December 31, 2018, the Company does not have any uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions, if any exist, in income tax expense. Net and Comprehensive (Loss) Income per Share The Company’s basic net and comprehensive (loss) income per share is calculated by dividing the net and comprehensive (loss) income by the weighted average number of shares of common stock outstanding for the period. The diluted net and comprehensive (loss) income per share attributable to common stockholders is computed by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation, Due to the historical lack of significant trading on a public market of the Company’s common stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award which is generally the vesting term. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses. The Company values cash equivalents using quoted market prices. The fair value of accounts payable and accrued expenses approximates its carrying value because of its short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures, Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy during the nine months ended September 30, 2019 or 2018. The assets of the Company measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total September 30, 2019 Assets: Cash and cash equivalents $ 43,389,603 $ — $ — $ 43,389,603 Total assets $ 43,389,603 $ — $ — $ 43,389,603 December 31, 2018 Assets: Cash and cash equivalents $ 62,614,010 $ — $ — $ 62,614,010 Total assets $ 62,614,010 $ — $ — $ 62,614,010 Concentrations of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents are the only financial instruments that potentially subject the Company to concentrations of credit risk. At September 30, 2019 and December 31, 2018, the Company maintains its cash and cash equivalents with high-quality, accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements. Comprehensive (Loss) Income Comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, if any. Comprehensive (loss) income equaled net (loss) income for all periods presented. Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of furniture and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). Leases At the inception of an arrangement the Company determines whether the arrangement is or contains a lease based on the circumstances present. All leases with a term greater than one year are recognized on the condensed consolidated balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the condensed consolidated balance sheet leases with terms of one-year or less if entered into. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases The Company adopted the new guidance on January 1, 2019. See additional discussion in Note 9. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements Leases. The Company adopted the new guidance on January 1, 2019. See additional discussion in Note 9 In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the Company’s condensed consolidated financial statements. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 3. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are as follows: September 30, December 31, 2019 2018 Accounts payable $ 750,994 $ 595,680 Restructuring accrual (see Note 12) 139,000 — Professional fees 221,344 487,923 Accrued bonus 516,186 1,877,455 Accrued retention bonus 313,417 — Accrued vacation 74,763 90,663 Accrued project costs 1,359,150 2,232,014 Other 29,106 173,182 Total accounts payable and accrued expenses $ 3,403,960 $ 5,456,917 |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Common Stock | 4. Common Stock As of September 30, 2019 and December 31, 2018, the Company had 300,000,000 shares of authorized common stock with par value of $0.0001 per share. The common stock has the following characteristics: Voting The holders of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. Dividends The holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors. Since the Company’s inception, no dividends have been declared or paid to the holders of common stock. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, the holders of common stock are entitled to share ratably in the Company’s assets. Warrants to Purchase Common Stock At September 30, 2019 and December 31, 2018, the Company had warrants outstanding for the purchase of 317,562 shares of the Company’s common stock at an exercise price of $5.00 per share. The warrants have a three-year term and expire on March 15, 2020. At the expiration date of the warrant, if the fair value of the Company’s common stock exceeds the exercise price, the warrant will be automatically exercised and the exercise price will be fulfilled through the net share settlement provisions. The number of shares and the exercise price shall be adjusted for standard anti-dilution events such as stock splits, combinations, reorganizations, or issue shares as part of a stock dividend. Upon a change of control, the warrant holder will have the right to receive securities, cash or other properties it would have been entitled to receive had the warrant been exercised. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Preferred Stock | 5. Preferred Stock As of September 30, 2019 and December 31, 2018, the Company had 10,000,000 shares of preferred stock, par value $0.0001 per share, in authorized capital. No preferred stock was issued and outstanding at September 30, 2019 and December 31, 2018. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 6. Stock-Based Compensation In March 2017, the Company’s Board of Directors adopted, and the stockholders approved, the 2017 Stock Option and Incentive Plan (the “2017 Plan”), that became effective in April 2017. The 2017 Plan provides for the issuance of incentive awards up to 4,600,000 shares of common stock to officers, employees, consultants and directors, less the number of shares subject to issued and outstanding awards under the 2011 Plan that were assumed in the Merger. The 2017 Plan also provides that the number of shares reserved for issuance thereunder will be increased annually on the first day of each year beginning in 2018 by four percent (4%) of the shares of our common stock outstanding on the last day of the immediately preceding year or such smaller increase as determined by our Board of Directors. In March 2019, the Company’s Board of Directors approved a 4% increase, adding 1,623,520 shares to the 2017 Plan, which was effective as of January 1, 2019. Stock Options The options granted generally vest over 48 months. Under the 2017 Plan, options vest in installments of 25% at the one-year anniversary and thereafter in 36 equal monthly installments beginning on the 1 st As of September 30, 2019 and December 31, 2018, 990,154 and 2,959,562 shares are reserved for issuance under the 2017 Plan, respectively. The following table summarizes the stock option activity during the nine months ended September 30, 2019: Stock Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2019 3,351,132 $ 3.73 8.24 $ 142,788 Granted 4,622,428 1.86 Exercised — — Expired/cancelled (1,247,463 ) 2.77 Outstanding, September 30, 2019 6,726,097 $ 2.62 8.42 $ — Expected to vest, September 30, 2019 5,049,655 $ 2.32 2.40 Options exercisable, September 30, 2019 1,676,442 $ 3.55 6.31 Aggregate intrinsic value represents the estimated fair value of the Company’s common stock at in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. Compensation expense for stock options was $645,899 and $759,978 for the three months ended September 30, 2019 and 2018, respectively, and $1,872,245 and $2,314,201 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, there was $5,308,760 of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 2.4 years. Restricted Stock The Company recognized compensation expense for restricted stock of $0 and $46,433 for the three months ended September 30, 2019 and 2018, respectively, and $0 and $449,689 for the nine months ended September 30, 2019 and 2018. All restricted stock vested in October 2018. Compensation Expense Summary The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 153,997 $ 139,492 $ 386,791 $ 313,505 General and administrative 491,902 666,919 1,485,454 2,450,385 Total $ 645,899 $ 806,411 $ 1,872,245 $ 2,763,890 The Company uses the Black-Scholes option pricing model to determine the estimated fair value for stock-based awards. Option pricing and models require the input of various assumptions, including the option’s expected life, expected dividend yield, price volatility and risk-free interest rate of the underlying stock. Accordingly, the weighted-average fair value of the options granted during the nine months ended September 30, 2019 was $1.11 per share. No options were granted during the three months ended September 30, 2019. The calculation was based on the following assumptions. Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Expected term (years) — 5.77 Risk-free interest rate — 2.32% Expected volatility — 65.83% Expected dividend yield — 0.00% |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The Company did not record a current or deferred income tax expense or benefit for the three and nine months ended September 30, 2019 and 2018, due to the Company’s net losses and increases in its deferred tax asset valuation allowance. |
Net and Comprehensive (Loss) In
Net and Comprehensive (Loss) Income Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net and Comprehensive (Loss) Income Per Share | 8. Net and Comprehensive (Loss) Income per Share The following table sets forth the computation of the Company’s basic and diluted net (loss) income per share (“EPS”) attributable to common stockholders for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net and comprehensive (loss) income attributable to common stockholders $ (4,647,930 ) $ 11,537,478 $ (18,824,371 ) $ (1,878,046 ) Denominator: Denominator for basic EPS - weighted-average common shares 40,588,004 40,527,722 40,588,004 31,687,434 Dilutive effect of options to purchase common shares — 426,860 — — Dilutive effect of unvested restricted stock — 7,038 — — Denominator for diluted EPS - adjusted weighted- average common shares 40,588,004 40,961,620 40,588,004 31,687,434 Basic and diluted EPS $ (0.11 ) $ 0.28 $ (0.46 ) $ (0.06 ) The diluted EPS calculation for the three months ended September 30, 2018 excludes 2.4 million options to purchase common stock that was outstanding but unvested and the effect of weighted average common stock share equivalents of 0.1 million for options to purchase common stock and 0.3 million for warrants to purchase common stock as their effect is anti-dilutive. Holders of non-vested stock-based compensation awards do not have voting rights. The following weighted average common stock equivalents were excluded from the calculation of basic and diluted net and comprehensive (loss) income per share attributable to common stockholders for the periods presented because including them would have had an anti-dilutive effect: Nine Months Ended September 30, 2019 2018 Options to purchase common stock 6,726,097 3,348,632 Unvested restricted stock — 7,038 Warrants to purchase common stock 317,562 317,562 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 9. Leases The Company leases certain properties and buildings under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. Many of the property and building lease agreements obligate the Company to pay real estate taxes, insurance and certain maintenance costs (hereinafter referred to as non-lease components). Certain of the Company’s lease arrangements contain renewal provisions from 1 to 3 years, exercisable at the Company's option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheet. All other leases are recorded on the balance sheet with a corresponding operating lease asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and are recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive (loss) income. The following table presents the lease cost and information related to the right-of-use assets and operating lease liabilities: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Lease cost Average rent expense $ 62,086 $ 186,226 Other information Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 62,634 $ 186,942 The weighted average remaining lease term and discount rate at September 30, 2019 Weighted-average remaining lease term - operating leases 2.06 Weighted-average discount rate - operating leases 13.22 % As of September 30, 2019, future payments related to operating leases activities are presented in the table below: 2019 2020 2021 and Thereafter Total Lease Payments Operating leases $ 60,721 $ 239,781 $ 191,685 $ 492,187 Less interest 58,780 Present value of lease liabilities $ 433,407 |
Employee Stock Purchase Plan
Employee Stock Purchase Plan | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Employee Stock Purchase Plan | 10. Employee Stock Purchase Plan In March 2017, the Board of Directors adopted and the stockholders approved the Employee Stock Purchase Plan that became effective in April 2017. On June 20, 2018, the Company’s shareholders approved the Amended and Restated 2017 Employee Stock Purchase Plan ("ESPP") at the Annual Meeting of Shareholders. Pursuant to the terms of the ESPP, the Company will reserve for issuance 300,000 shares of the Company's common stock in the aggregate, plus, on January 1, 2019 and each January 1 thereafter through January 1, 2028, the number of shares of the Company's common stock reserved and available for issuance under the ESPP will be cumulatively increased by the least of (i) one percent of the number of shares of the Company’s common stock issued and outstanding on the immediately preceding December 31; (ii) 350,000 shares; or (iii) such lesser number of shares of the Company’s common stock as determined by the Board of Directors, in each case subject to adjustment in accordance with the terms of the ESPP. In March 2019, the Company’s Board of Directors approved an increase of 350,000 shares to the ESPP, which was effective as of January 1, 2019. No shares under the ESPP are outstanding at September 30, 2019 and December 31, 2018. |
License Agreement
License Agreement | 9 Months Ended |
Sep. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
License Agreement | 11. License Agreement On June 24, 2018, the Company entered into a License Agreement (the “Agreement”) with a wholly-owned subsidiary of Gossamer Bio, Inc., GB004, Inc. (collectively “Gossamer”), under which the Company granted Gossamer an exclusive, sublicensable license to develop and commercialize AKB-4924 and other structurally related products worldwide, with initial development expected in the indications of induction and maintenance in ulcerative colitis and Crohn’s Disease (collectively “initial indications”). Gossamer is responsible for the development and commercialization of the licensed products, and a joint development committee has been formed to oversee the development and manufacturing activities related to the licensed products. Under the terms of the Agreement, Gossamer is obligated to use its commercially reasonable efforts to develop and commercialize licensed products in the United States, two major European countries and Japan for at least one of the initial indications. The Agreement includes an exclusivity provision that prohibits the Company from developing, manufacturing or commercializing, and prohibits Gossamer from clinically developing or commercializing certain HIF stabilizing compounds other than as permitted in the Agreement. Pursuant to the terms of the Agreement, Gossamer made an upfront payment to the Company of $20.0 million on June 28, 2018, of which $18.7 million and $20.0 million was recognized in the three and nine months ended September 30, 2018, respectively (in accordance with ASC 606). The Company is also eligible to receive development, commercial and sales milestone payments, with such payments contingent on the achievement of specified milestones with respect to the first licensed product for each of the first two initial indications. The Company is also eligible to receive tiered royalties on sales of licensed products at percentages ranging from a high-single-digit to mid-teens, subject to certain customary reductions. In addition, under certain circumstances, in lieu of receiving the foregoing milestone payments and royalties, the Company may elect to receive a specified percentage of payments received by Gossamer and its stockholders (with some exclusions) in connection with Gossamer’s grant of a sublicense or other rights to the licensed products or if Gossamer undergoes a change of control and the value of the transaction exceeds a certain value (provided that Gossamer can prevent the Company from exercising this option if the parent company of Gossamer is the entity undergoing the change of control). Conversely, the Company could be required to accept such a specified percentage of those payments if Gossamer agrees to pay the Company a certain minimum upon Gossamer and its stockholders being paid. Such amount may be reduced if the subject transaction includes pharmaceutical candidates or products or other named asset categories in addition to the licensed products. The Agreement expires on a licensed-product-by-licensed-product and country-by-country basis on the later of fifteen years from the date of first commercial sale or when there is no longer a valid patent claim covering such licensed product in such country. Either party may terminate the Agreement for an uncured material breach by the other party or upon the bankruptcy or insolvency of the other party. Gossamer may terminate the Agreement in the event Gossamer determines there is a potential safety or efficacy issue with the licensed products. The Company may terminate the Agreement if Gossamer institutes certain actions related to the licensed patents. Under certain termination circumstances, the Company would have worldwide rights to the terminated program. As of September 30, 2019, all development milestones, sales-based milestones and royalty payments within the Agreement are constrained to the point where no transaction price has been allocated to the future milestones or royalty payments. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 12. Restructuring In April 2019, the Company adopted a realignment plan to reduce operating costs and better align its workforce with the needs of its ongoing business. The realignment plan reduced the Company’s workforce by 11 employees, representing approximately 41% of its workforce. As a result of this realignment plan, |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. Subsequent Event On October 15, 2019, our Chief Executive Officer and our Chief Financial and Business Officer departed from their positions. Our Chief Executive Officer also resigned as a director. In connection with these departures, we estimate that we will i ncur one-time aggregate expenses of approximately $1.0 million for employee related costs, including severance benefits and payment of healthcare insurance premiums |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (“SEC”) regulations and include all of the information and disclosures required by U.S. generally accepted accounting principles ("U.S. GAAP" or "GAAP") for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position, changes in stockholders’ equity and cash flows for each period presented. All adjustments are of a normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2018, included in the Annual Report on Form 10-K filed with the SEC on March 7, 2019. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. The Company’s condensed consolidated financial statements are stated in U.S. Dollars. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating segment are located in the United States. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions used in the preparation of these condensed consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: grant date fair value of the Company’s stock-based awards, accrued expenses, revenue recognition and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits and funds invested in short-term investments with original maturities of three months or less at the time of purchase. The Company does maintain balances with its banks in excess of federally insured limits. |
Revenue Recognition | Revenue Recognition At the inception of an arrangement, the Company evaluates if a counterparty to a contract is a customer, if the arrangement is within the scope of revenue from contracts with customers guidance and the term of the contract. The Company recognizes revenue when its customer obtains control of promised goods or services in a contract for an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For contracts with customers, the Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. As part of the accounting for contracts with customers, the Company must develop assumptions that require judgment to determine the standalone selling price of each performance obligation identified in the contract. The Company then allocates the total transaction price to each performance obligation based on the estimated standalone selling prices of each performance obligation. The Company recognizes the amount of the transaction price as revenue that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. The Company enters into collaboration arrangements, under which it licenses certain rights to its intellectual property to third parties. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable upfront license fees; development, sale and commercial milestone payments and royalties on net sales of licensed products. Each of these types of payments are classified as license revenue except for revenue from royalties on net sales of licensed products, which are classified as royalty revenue. For each collaboration agreement that results in revenues, the Company identifies all material promised goods and services, which may include a license to intellectual property, research and development activities and/or transition activities. Promised goods or services are considered to be separate performance obligations if they are distinct. In order to determine the transaction price to be allocated to each performance obligation, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. The Company must develop assumptions that require judgment to determine the standalone selling price (SSP) in order to account for these agreements. To determine the standalone selling price the Company’s assumptions may include (i) assumptions regarding the probability of obtaining marketing approval for the drug candidate; (ii) estimates regarding the timing of and the expected costs to develop and commercialize the drug candidate; (iii) estimates of future cash flows from potential product sales with respect to the drug candidate; and (iv) appropriate discount and tax rates. Standalone selling prices used to perform the initial allocation are not updated after contract inception. The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Upfront License Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, upfront license fees based on the relative value prescribed to the license compared to the total value of the arrangement. The revenue is recognized when the license is transferred to the collaborator and the collaborator is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Development Milestone Payments : Depending on facts and circumstances, the Company may conclude it is appropriate to include the milestone in the estimated transaction price using the most likely amount method or it is appropriate to fully constrain the milestone. A milestone payment is included in the transaction price in the reporting period the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. The Company may record revenues from certain milestones in a reporting period before the milestone is achieved if the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company records a corresponding contract asset when this conclusion is reached. Milestone payments that have not been included in the transaction price to date are fully constrained. These milestones remain fully constrained until the Company concludes that achievement of the milestone is probable and recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company re-evaluates the probability of achievement of such development milestones and any related constraint each reporting period. The Company adjusts its estimate of the overall transaction price, including the amount of collaborative revenue that it has recorded, if necessary. Sales-based Milestone and Royalty Payments: The Company’s collaborators may be required to pay the Company sales-based milestone payments or royalties on future sales of commercial products. The Company recognizes revenues related to sales-based milestone and royalty payments upon the later to occur of (i) achievement of the collaborator’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to the Company’s intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate. |
Grant Income | Grant Income Grant income is recognized as earned based on contract work performed. |
Research and Development | Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel and stock-based compensation expense, (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants, (iii) the cost of acquiring, developing and manufacturing clinical study materials, and (iv) costs associated with preclinical activities and regulatory operations. The Company enters into consulting, research and other agreements with commercial firms, researchers, universities, and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project, or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. |
Patents | Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. |
Income Taxes | Income Taxes Income taxes are recorded in accordance with Accounting Standards Codification (ASC) Topic 740, Income Taxes, The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of September 30, 2019 and December 31, 2018, the Company does not have any uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions, if any exist, in income tax expense. |
Net and Comprehensive (Loss) Income per Share | Net and Comprehensive (Loss) Income per Share The Company’s basic net and comprehensive (loss) income per share is calculated by dividing the net and comprehensive (loss) income by the weighted average number of shares of common stock outstanding for the period. The diluted net and comprehensive (loss) income per share attributable to common stockholders is computed by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with ASC Topic 718, Compensation – Stock Compensation, Due to the historical lack of significant trading on a public market of the Company’s common stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award which is generally the vesting term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses. The Company values cash equivalents using quoted market prices. The fair value of accounts payable and accrued expenses approximates its carrying value because of its short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. ASC Topic 820, Fair Value Measurements and Disclosures, Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy during the nine months ended September 30, 2019 or 2018. The assets of the Company measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total September 30, 2019 Assets: Cash and cash equivalents $ 43,389,603 $ — $ — $ 43,389,603 Total assets $ 43,389,603 $ — $ — $ 43,389,603 December 31, 2018 Assets: Cash and cash equivalents $ 62,614,010 $ — $ — $ 62,614,010 Total assets $ 62,614,010 $ — $ — $ 62,614,010 |
Concentrations of Credit Risk and Off-Balance Sheet Risk | Concentrations of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents are the only financial instruments that potentially subject the Company to concentrations of credit risk. At September 30, 2019 and December 31, 2018, the Company maintains its cash and cash equivalents with high-quality, accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, if any. Comprehensive (loss) income equaled net (loss) income for all periods presented. |
Furniture and Equipment | Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of furniture and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). |
Leases | Leases At the inception of an arrangement the Company determines whether the arrangement is or contains a lease based on the circumstances present. All leases with a term greater than one year are recognized on the condensed consolidated balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the condensed consolidated balance sheet leases with terms of one-year or less if entered into. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases The Company adopted the new guidance on January 1, 2019. See additional discussion in Note 9. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements Leases. The Company adopted the new guidance on January 1, 2019. See additional discussion in Note 9 In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the Company’s condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Assets Measured on Recurring Basis | The assets of the Company measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total September 30, 2019 Assets: Cash and cash equivalents $ 43,389,603 $ — $ — $ 43,389,603 Total assets $ 43,389,603 $ — $ — $ 43,389,603 December 31, 2018 Assets: Cash and cash equivalents $ 62,614,010 $ — $ — $ 62,614,010 Total assets $ 62,614,010 $ — $ — $ 62,614,010 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are as follows: September 30, December 31, 2019 2018 Accounts payable $ 750,994 $ 595,680 Restructuring accrual (see Note 12) 139,000 — Professional fees 221,344 487,923 Accrued bonus 516,186 1,877,455 Accrued retention bonus 313,417 — Accrued vacation 74,763 90,663 Accrued project costs 1,359,150 2,232,014 Other 29,106 173,182 Total accounts payable and accrued expenses $ 3,403,960 $ 5,456,917 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the stock option activity during the nine months ended September 30, 2019: Stock Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2019 3,351,132 $ 3.73 8.24 $ 142,788 Granted 4,622,428 1.86 Exercised — — Expired/cancelled (1,247,463 ) 2.77 Outstanding, September 30, 2019 6,726,097 $ 2.62 8.42 $ — Expected to vest, September 30, 2019 5,049,655 $ 2.32 2.40 Options exercisable, September 30, 2019 1,676,442 $ 3.55 6.31 |
Summary of Recognized Compensation Cost Related to Employee and Non-employee Stock-Based Compensation Activity | The Company recognized the following compensation cost related to employee and non-employee stock-based compensation activity: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 153,997 $ 139,492 $ 386,791 $ 313,505 General and administrative 491,902 666,919 1,485,454 2,450,385 Total $ 645,899 $ 806,411 $ 1,872,245 $ 2,763,890 |
Stock Options Valuation Assumptions | The calculation was based on the following assumptions. Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Expected term (years) — 5.77 Risk-free interest rate — 2.32% Expected volatility — 65.83% Expected dividend yield — 0.00% |
Net and Comprehensive (Loss) _2
Net and Comprehensive (Loss) Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net (Loss) Income per Share | The following table sets forth the computation of the Company’s basic and diluted net (loss) income per share (“EPS”) attributable to common stockholders for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net and comprehensive (loss) income attributable to common stockholders $ (4,647,930 ) $ 11,537,478 $ (18,824,371 ) $ (1,878,046 ) Denominator: Denominator for basic EPS - weighted-average common shares 40,588,004 40,527,722 40,588,004 31,687,434 Dilutive effect of options to purchase common shares — 426,860 — — Dilutive effect of unvested restricted stock — 7,038 — — Denominator for diluted EPS - adjusted weighted- average common shares 40,588,004 40,961,620 40,588,004 31,687,434 Basic and diluted EPS $ (0.11 ) $ 0.28 $ (0.46 ) $ (0.06 ) |
Schedule of Weighted Average Common Stock Equivalents Excluded from Calculation of Basic and Diluted Net and Comprehensive (Loss) Income per Share | The following weighted average common stock equivalents were excluded from the calculation of basic and diluted net and comprehensive (loss) income per share attributable to common stockholders for the periods presented because including them would have had an anti-dilutive effect: Nine Months Ended September 30, 2019 2018 Options to purchase common stock 6,726,097 3,348,632 Unvested restricted stock — 7,038 Warrants to purchase common stock 317,562 317,562 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of Lease Cost and Information Related to the Right-of-Use Assets and Operating Lease Liabilities | The following table presents the lease cost and information related to the right-of-use assets and operating lease liabilities: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Lease cost Average rent expense $ 62,086 $ 186,226 Other information Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 62,634 $ 186,942 The weighted average remaining lease term and discount rate at September 30, 2019 Weighted-average remaining lease term - operating leases 2.06 Weighted-average discount rate - operating leases 13.22 % |
Schedule of Future Payments Related to Operating Leases Activities | As of September 30, 2019, future payments related to operating leases activities are presented in the table below: 2019 2020 2021 and Thereafter Total Lease Payments Operating leases $ 60,721 $ 239,781 $ 191,685 $ 492,187 Less interest 58,780 Present value of lease liabilities $ 433,407 |
Nature of Organization and Op_2
Nature of Organization and Operations - Additional Information (Detail) | Mar. 15, 2017USD ($)$ / sharesshares | Sep. 30, 2018shares | Jun. 30, 2018shares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Mar. 14, 2017shares | Mar. 09, 2017$ / sharesshares |
Class Of Stock [Line Items] | |||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 100,000,000 | ||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Capital stock conversion basis ratio | 2.3336572 | ||||||
Common stock, shares outstanding | 40,588,004 | 40,588,004 | |||||
Warrants issued to purchase common stock, exercise price | $ / shares | $ 5 | $ 5 | |||||
Cash and cash equivalents | $ | $ 43,389,603 | $ 62,614,010 | |||||
Minimum [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Percentage of Interest owned in the combined enterprise | 50.00% | ||||||
Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock sold in offering | 1,720,200 | 11,688,000 | |||||
Zeta Acquisition Corp. II [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Number of shares surrendered for cancellation | 4,000,000 | ||||||
Common stock, shares outstanding | 5,000,000 | ||||||
Issuance of warrants term | 3 years | ||||||
Number of warrants issued to purchase common stock | 317,562 | ||||||
Warrants issued to purchase common stock, exercise price | $ / shares | $ 5 | ||||||
Zeta Acquisition Corp. II [Member] | Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Net proceeds from issuance of common stock in private placement | $ | $ 37,200,000 | ||||||
Zeta Acquisition Corp. II [Member] | Common Stock [Member] | Private Placement [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock sold in offering | 8,049,555 | ||||||
Common stock issued to private placement, price per share | $ / shares | $ 5 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended | ||
Sep. 30, 2019USD ($)Segment | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of operating segment | Segment | 1 | ||
Uncertain tax positions | $ 0 | $ 0 | |
ASU 2018-07 [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
One-time cumulative adjustment upon adoption | $ 5,717 | ||
Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 3 years | ||
Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 7 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Assets Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and cash equivalents | $ 43,389,603 | $ 62,614,010 |
Total assets | 43,389,603 | 62,614,010 |
Level 1 [Member] | ||
Assets: | ||
Cash and cash equivalents | 43,389,603 | 62,614,010 |
Total assets | $ 43,389,603 | $ 62,614,010 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 750,994 | $ 595,680 |
Restructuring accrual (see Note 12) | 139,000 | |
Professional fees | 221,344 | 487,923 |
Accrued bonus | 516,186 | 1,877,455 |
Accrued retention bonus | 313,417 | |
Accrued vacation | 74,763 | 90,663 |
Accrued project costs | 1,359,150 | 2,232,014 |
Other | 29,106 | 173,182 |
Total accounts payable and accrued expenses | $ 3,403,960 | $ 5,456,917 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Mar. 09, 2017 | |
Equity [Abstract] | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 100,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Dividends common stock declared or paid | $ 0 | ||
Warrants outstanding | 317,562 | 317,562 | |
Warrants exercise price per share | $ 5 | $ 5 | |
Warrants term | 3 years | 3 years | |
Warrants expiration date | Mar. 15, 2020 | Mar. 15, 2020 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 09, 2017 |
Temporary Equity Disclosure [Abstract] | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
May 31, 2019 | Mar. 31, 2019 | Mar. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Options to purchase common stock, granted | 0 | 4,622,428 | ||||||
Unrecognized compensation cost related to stock options | $ 5,308,760 | $ 5,308,760 | ||||||
Weighted-average fair value of options granted | $ 1.11 | |||||||
Stock Option [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 48 months | |||||||
Compensation expense | 645,899 | $ 759,978 | $ 1,872,245 | $ 2,314,201 | ||||
Weighted average period expected to be recognized | 2 years 4 months 24 days | |||||||
Restricted Stock [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Compensation expense | $ 0 | $ 46,433 | $ 0 | $ 449,689 | ||||
2017 Stock Option and Incentive Plan [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock shares available for issuance | 1,623,520 | 4,600,000 | ||||||
Percentage applied to the outstanding shares as annual increase in number of shares authorized for issuance | 4.00% | 4.00% | ||||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock shares available for issuance | 990,154 | 990,154 | 2,959,562 | |||||
Term of options to be granted | 10 years | |||||||
Shares issued for special retention grant | 2,419,050 | |||||||
Options to purchase common stock, granted | 0 | 97,500 | 4,622,428 | 1,612,700 | ||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | One-year Anniversary [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting percentage | 25.00% | |||||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | First Installment [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting percentage | 50.00% | |||||||
Option, vesting date | Jun. 30, 2020 | |||||||
2017 Stock Option and Incentive Plan [Member] | Stock Option [Member] | Second Installment [Member] | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting percentage | 50.00% | |||||||
Option, vesting date | Jun. 30, 2021 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Shares, Outstanding at beginning balance | 3,351,132 | ||
Shares, Granted | 0 | 4,622,428 | |
Shares, Expired/cancelled | (1,247,463) | ||
Shares, Outstanding at ending balance | 6,726,097 | 6,726,097 | 3,351,132 |
Shares, Expected to vest | 5,049,655 | 5,049,655 | |
Shares, Options exercisable | 1,676,442 | 1,676,442 | |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 3.73 | ||
Weighted Average Exercise Price, Granted | 1.86 | ||
Weighted Average Exercise Price, Expired/cancelled | 2.77 | ||
Weighted Average Exercise Price, Outstanding at ending balance | $ 2.62 | 2.62 | $ 3.73 |
Weighted Average Exercise Price, Expected to vest | 2.32 | 2.32 | |
Weighted Average Exercise Price, Options exercisable | $ 3.55 | $ 3.55 | |
Weighted Average Remaining Contractual Term, Outstanding | 8 years 5 months 1 day | 8 years 2 months 26 days | |
Weighted Average Remaining Contractual Term, Expected to vest | 2 years 4 months 24 days | ||
Weighted Average Remaining Contractual Term, Options exercisable | 6 years 3 months 21 days | ||
Aggregate Intrinsic Value, Outstanding | $ 142,788 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Recognized Compensation Cost Related to Employee and Non-employee Stock-Based Compensation Activity (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 645,899 | $ 806,411 | $ 1,872,245 | $ 2,763,890 |
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 153,997 | 139,492 | 386,791 | 313,505 |
General and administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 491,902 | $ 666,919 | $ 1,485,454 | $ 2,450,385 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Valuation Assumptions (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected term (years) | 0 years | 5 years 9 months 7 days |
Risk-free interest rate | 2.32% | |
Expected volatility | 65.83% | |
Expected dividend yield | 0.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expense or benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred income tax expense or benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Net and Comprehensive (Loss) _3
Net and Comprehensive (Loss) Income Per Share - Schedule of Computation of Basic and Diluted Net (Loss) Income Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net and comprehensive (loss) income attributable to common stockholders | $ (4,647,930) | $ 11,537,478 | $ (18,824,371) | $ (1,878,046) |
Denominator: | ||||
Denominator for basic EPS - weighted-average common shares | 40,588,004 | 40,527,722 | 40,588,004 | 31,687,434 |
Denominator for diluted EPS - adjusted weighted- average common shares | 40,588,004 | 40,961,620 | 40,588,004 | 31,687,434 |
Basic and diluted | $ (0.11) | $ 0.28 | $ (0.46) | $ (0.06) |
Stock Option [Member] | ||||
Denominator: | ||||
Dilutive effect of shares | 426,860 | |||
Restricted Stock [Member] | ||||
Denominator: | ||||
Dilutive effect of shares | 7,038 |
Net and Comprehensive (Loss) _4
Net and Comprehensive (Loss) Income Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Option [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of anti-dilutive securities excluded from computation of earnings per share | 2,400,000 | ||
Weighted Average [Member] | Stock Option [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of anti-dilutive securities excluded from computation of earnings per share | 100,000 | 6,726,097 | 3,348,632 |
Weighted Average [Member] | Warrants to Purchase Common Stock [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Number of anti-dilutive securities excluded from computation of earnings per share | 300,000 | 317,562 | 317,562 |
Net and Comprehensive (Loss) _5
Net and Comprehensive (Loss) Income Per Share - Schedule of Weighted Average Common Stock Equivalents Excluded from Calculation of Basic and Diluted Net and Comprehensive (Loss) Income per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Options to Purchase Common Stock [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 2,400,000 | ||
Options to Purchase Common Stock [Member] | Weighted Average [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 100,000 | 6,726,097 | 3,348,632 |
Unvested Restricted Stock [Member] | Weighted Average [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 7,038 | ||
Warrants to Purchase Common Stock [Member] | Weighted Average [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 300,000 | 317,562 | 317,562 |
Leases - Additional Information
Leases - Additional Information (Detail) | Sep. 30, 2019 |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Lease arrangements renewal provisions | 1 year |
Leases initial term | 12 months |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Lease arrangements renewal provisions | 3 years |
Leases - Summary of Lease Cost
Leases - Summary of Lease Cost and Information Related to the Right-of-Use Assets and Operating Lease Liabilities (Detail) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lease cost | ||
Average rent expense | $ 62,086 | $ 186,226 |
Cash paid for amounts included in the measurement of operating lease liabilities | ||
Operating cash flows from operating leases | $ 62,634 | $ 186,942 |
The weighted average remaining lease term and discount rate | ||
Weighted-average remaining lease term - operating leases | 2 years 21 days | 2 years 21 days |
Weighted-average discount rate - operating leases | 13.22% | 13.22% |
Leases - Schedule of Future Pay
Leases - Schedule of Future Payments Related to Operating Leases Activities (Detail) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating leases, 2019 | $ 60,721 |
Operating leases, 2020 | 239,781 |
Operating leases, 2021 and thereafter | 191,685 |
Total Lease Payments | 492,187 |
Less interest | 58,780 |
Present value of lease liabilities | $ 433,407 |
Employee Stock Purchase Plan -
Employee Stock Purchase Plan - Additional Information (Detail) - shares | Jun. 20, 2018 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares outstanding | 6,726,097 | 3,351,132 | ||
Employee Stock Purchase Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares outstanding | 0 | 0 | ||
Common Stock [Member] | Employee Stock Purchase Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock shares available for issuance | 300,000 | |||
Maximum number of shares provided for issuance | 350,000 | 350,000 | ||
Percentage of annual increase in number of shares reserved for issuance | 1.00% |
License Agreement - Additional
License Agreement - Additional Information (Detail) - USD ($) | Jun. 28, 2018 | Sep. 30, 2018 | Sep. 30, 2018 |
License Agreement [Line Items] | |||
Cash received from license agreement | $ 20,000,000 | ||
License revenue | $ 18,821,953 | $ 20,155,286 | |
License [Member] | |||
License Agreement [Line Items] | |||
License revenue | $ 18,700,000 | $ 20,000,000 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Apr. 30, 2019Employee | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Restructuring Cost And Reserve [Line Items] | |||
Remaining liability related to severance | $ 139,000 | ||
Accounts Payable and Accrued Expenses [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Remaining liability related to severance | 100,000 | ||
Workforce Reduction [Member] | |||
Restructuring Cost And Reserve [Line Items] | |||
Realignment plan, number of current workforce reduced | Employee | 11 | ||
Realignment plan, number of workforce reduced, period percent | 41.00% | ||
Realignment plan, employee severance expense | $ 900,000 | ||
Cash payments against severance liability | $ 800,000 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) $ in Millions | Oct. 15, 2019USD ($) |
Workforce Reduction [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Estimated employee related costs | $ 1 |