Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | FATE THERAPEUTICS INC | |
Entity Central Index Key | 1,434,316 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | FATE | |
Entity Common Stock, Shares Outstanding | 41,685,695 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 43,231 | $ 88,609 |
Short-term investments and related maturity receivables | 25,983 | 3,503 |
Prepaid expenses and other current assets | 825 | 1,211 |
Total current assets | 70,039 | 93,323 |
Property and equipment, net | 2,490 | 1,579 |
Restricted cash | 122 | 122 |
Other assets | 24 | 24 |
Total assets | 72,675 | 95,048 |
Current liabilities: | ||
Accounts payable | 2,198 | 934 |
Accrued expenses | 5,413 | 3,957 |
Current portion of deferred rent | 4 | |
Current portion of deferred revenue | 2,105 | 2,105 |
Long-term debt, current portion | 8,187 | |
Total current liabilities | 9,716 | 15,187 |
Deferred rent | 1,090 | 101 |
Deferred revenue | 1,250 | 2,829 |
Accrued expenses | 81 | 1,276 |
Long-term debt, net of current portion | 14,789 | 2,501 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; authorized shares—5,000,000 at September 30, 2017 and December 31, 2016; 2,819,549 Class A Convertible Preferred shares issued and outstanding at September 30, 2017 and December 31, 2016 | 3 | 3 |
Common stock, $0.001 par value; authorized shares—150,000,000 at September 30, 2017 and December 31, 2016; issued and outstanding—41,457,155 at September 30, 2017 and 41,386,506 at December 31, 2016 | 41 | 41 |
Additional paid-in capital | 252,019 | 248,957 |
Accumulated other comprehensive loss | (13) | (1) |
Accumulated deficit | (206,301) | (175,846) |
Total stockholders’ equity | 45,749 | 73,154 |
Total liabilities and stockholders’ equity | $ 72,675 | $ 95,048 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 150,000,000 | 150,000,000 |
Common stock issued | 41,457,155 | 41,386,506 |
Common stock, outstanding shares | 41,457,155 | 41,386,506 |
Class A Convertible Preferred Shares | ||
Preferred stock, issued shares | 2,819,549 | 2,819,549 |
Preferred stock, outstanding shares | 2,819,549 | 2,819,549 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Collaboration revenue | $ 1,026 | $ 1,026 | $ 3,079 | $ 3,375 |
Operating expenses: | ||||
Research and development | 8,578 | 6,804 | 24,471 | 20,222 |
General and administrative | 2,788 | 2,611 | 8,489 | 7,462 |
Total operating expenses | 11,366 | 9,415 | 32,960 | 27,684 |
Loss from operations | (10,340) | (8,389) | (29,881) | (24,309) |
Other income (expense): | ||||
Interest income | 152 | 37 | 400 | 95 |
Interest expense | (378) | (385) | (856) | (1,308) |
Loss on extinguishment of debt | (118) | (118) | ||
Total other expense, net | (344) | (348) | (574) | (1,213) |
Net loss | (10,684) | (8,737) | (30,455) | (25,522) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale securities, net | 26 | (8) | (12) | 3 |
Comprehensive loss | $ (10,658) | $ (8,745) | $ (30,467) | $ (25,519) |
Net loss per common share, basic and diluted | $ (0.26) | $ (0.27) | $ (0.74) | $ (0.85) |
Weighted-average common shares used to compute basic and diluted net loss per share | 41,428,845 | 32,090,174 | 41,407,995 | 29,920,075 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net loss | $ (30,455) | $ (25,522) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 681 | 678 |
Stock-based compensation | 2,711 | 2,365 |
Amortization of debt discounts and debt issuance costs | 62 | 111 |
Amortization of premiums and discounts on investments, net | (21) | 158 |
Noncash interest expense | 227 | 396 |
Deferred rent | 816 | (8) |
Deferred revenue | (1,579) | (1,875) |
Loss on extinguishment of debt | 30 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 387 | 81 |
Accounts payable and accrued expenses | 957 | 1,344 |
Net cash used in operating activities | (26,184) | (22,272) |
Investing activities | ||
Purchase of property and equipment | (928) | (417) |
Purchases of short-term investments | (39,971) | (19,675) |
Maturities of short-term investments | 17,500 | 10,000 |
Net cash used in investing activities | (23,399) | (10,092) |
Financing activities | ||
Issuance of common stock from equity incentive plans, net of issuance costs | 172 | 167 |
Proceeds from private placement issuance of common stock, net of issuance costs | 10,201 | |
Proceeds from long-term debt | 15,000 | |
Payments on long-term debt | (10,764) | (5,714) |
Payments of debt issuance costs | (10) | |
Net cash provided by financing activities | 4,205 | 4,654 |
Net change in cash, cash equivalents and restricted cash | (45,378) | (27,710) |
Cash, cash equivalents and restricted cash at beginning of the period | 88,731 | 64,931 |
Cash, cash equivalents and restricted cash at end of the period | 43,353 | $ 37,221 |
Common Stock | Private Placement | ||
Financing activities | ||
Issuance costs from private placement | (65) | |
Preferred Stock | Private Placement | ||
Financing activities | ||
Issuance costs from private placement | $ (128) |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Organization Fate Therapeutics, Inc. (the “Company”) was incorporated in the state of Delaware on April 27, 2007 and has its principal operations in San Diego, California. The Company is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders. The Company’s hematopoietic cell therapy pipeline is comprised of NK- and T-cell immuno-oncology programs, including off-the-shelf product candidates derived from engineered induced pluripotent cell lines, and immuno-regulatory programs, including product candidates to prevent life-threatening complications in patients undergoing hematopoietic cell transplantation and to promote immune tolerance in patients with autoimmune disease. Its adoptive cell therapy programs are based on the Company’s novel ex vivo As of September 30, 2017, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure and has not generated any revenues from any sales of its therapeutic products. To date, the Company’s revenues have been derived from collaboration agreements and government grants. Private Placements of Common Stock and Convertible Preferred Stock In August 2016, the Company completed a private placement of common stock in which investors purchased 5,250,000 shares of the Company’s common stock at a price of $1.96 per share. Gross proceeds from the private placement were $10.3 million. After giving effect to costs related to the private placement, net proceeds were $10.2 million. The Company also registered all shares issued in this private placement transaction for resale on a Form S-3 filed with the United States Securities and Exchange Commission (the “SEC”), as required under a registration rights agreement entered into by the Company with the purchasers of the common stock, and the registration statement was declared effective in September 2016. In November 2016, the Company completed a private placement of common and preferred stock in which investors, including investors affiliated with the Company’s directors and officers, purchased convertible preferred stock and common stock of the Company. The Company issued 2,819,549 shares of non-voting Class A Preferred Stock at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions. The Company also issued 7,236,837 shares of common stock at $2.66 per share. Gross proceeds from the private placement were $56.7 million. After giving effect to costs related to the private placement, net proceeds were $54.9 million. The Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with certain of the purchasers in the November 2016 private placement, excluding those purchasers affiliated with the Company’s directors and officers, requiring the Company to register for the resale of the relevant shares. The Company registered all of the relevant shares issued in this placement for resale on a Form S-3 filed with the SEC, as required under the Registration Rights Agreement, and the registration statement was declared effective in January 2017. See Note 6 to the Consolidated Financial Statements for additional information related to this offering. Use of Estimates The Company’s consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to accrued expenses. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, Fate Therapeutics (Canada), Inc. or “Fate Canada”, incorporated in Canada and which was dissolved in November 2016, Fate Therapeutics Ltd., incorporated in the United Kingdom, and Tfinity Therapeutics, Inc., incorporated in the United States. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in readily available checking and savings accounts, money market accounts and money market funds. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash flows as of September 30, 2017 (in thousands): September 30, 2017 Cash and cash equivalents $ 43,231 Restricted cash 122 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 43,353 Amounts included in restricted cash represent security deposits required to secure the Company’s credit card limit and its facilities lease. Short-Term Investments Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in comprehensive income. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for the periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2016, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed by the Company with the SEC on March 16, 2017. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. Revenue Recognition The Company recognizes revenues when all four of the following criteria are met: (i) persuasive evidence that an agreement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue arrangements with multiple elements are analyzed to determine whether the elements can be divided into separate units of accounting or whether the elements must be accounted for as a single unit of accounting. The Company divides the elements into separate units of accounting and applies the applicable revenue recognition criteria to each of the elements, if the delivered elements have value to the customer on a stand-alone basis, if the arrangement includes a general right of return relative to the delivered elements, and if the delivery or performance of the undelivered elements is considered probable and substantially within the Company’s control. Revenue has been allocated to each element at the inception of the arrangement using the relative selling price method that is based on a three-tier hierarchy. The relative selling price method requires that the estimated selling price for each element be based on vendor-specific objective evidence (“VSOE”) of fair value, which represents the price charged for each element when it is sold separately or, for an element not yet being sold separately, the price established by management. When VSOE of fair value is not available, third-party evidence (“TPE”) of fair value is acceptable, or a best estimate of selling price is used if neither VSOE nor TPE is available. A best estimate of selling price should be consistent with the objective of determining the price at which the Company would transact if the element were sold regularly on a stand-alone basis and should also take into account market conditions and company-specific factors. Revenue arrangements with multiple elements may include license fees, research and development payments, milestone payments, other contingent payments, and royalties on any product sales derived from collaborations. The Company recognizes nonrefundable license fees with stand-alone value as revenue at the time that the Company has satisfied all performance obligations, and recognizes license fees without stand-alone value as revenue in combination with any undelivered performance obligations. The Company recognizes a research and development payment as revenue over the term of the collaboration agreement as contracted amounts are earned, or reimbursable costs are incurred, under the agreement, where contracted amounts are considered to be earned in relative proportion to the performance required under the applicable agreement. The Company recognizes a milestone payment, which is contingent upon the achievement of a milestone in its entirety, as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. These criteria include the following: (i) the consideration being earned should be commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (ii) the consideration being earned should relate solely to past performance; (iii) the consideration being earned should be reasonable relative to all deliverables and payment terms in the arrangement; and (iv) the milestone should be considered in its entirety and cannot be bifurcated into substantive and nonsubstantive components. Any amounts received pursuant to revenue arrangements with multiple elements prior to satisfying the Company’s revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheets . Revenue from government grants is recorded when reimbursable expenses are incurred under the grant in accordance with the terms of the grant award. Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of employee stock option and restricted stock unit grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis, net of estimated forfeitures. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants for which vesting is subject to both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, with the exception of option grants for which vesting is subject to both performance-based milestones and market conditions, which are valued using a lattice-based model. The fair value of restricted stock units is based on the closing price of the Company’s common stock as reported on The NASDAQ Global Market on the date of grant. The Company accounts for stock options and restricted stock awards to non-employees using the fair value approach. Stock options and restricted stock awards to non-employees are subject to periodic revaluation over their vesting terms. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the performance condition is determined to be probable of achievement or when it has been achieved. Convertible Preferred Stock The Company applies the relevant accounting standards to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. The Company applies the relevant accounting standards for derivatives and hedging (in addition to distinguishing liabilities from equity) when accounting for hybrid contracts that contain conversion options. Conversion options must be bifurcated from the host instruments and accounted for as free standing financial instruments according to certain criteria. These criteria include circumstances when (i) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable accounting principles with changes in fair value reported in earnings as they occurred, and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently measured at fair value at each reporting date, with the changes in fair value reported in earnings. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non‑owner sources. Other comprehensive income includes unrealized gains and losses on available-for-sale securities, which was the only difference between net loss and comprehensive loss for the applicable periods. Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Excluded from the weighted-average number of shares outstanding are shares which were issued upon the early exercise of stock options and were subject to future vesting totaling zero and 4,378 shares for the three and nine months ended September 30, 2016, respectively. No such shares were outstanding during the three and nine months ended September 30, 2017. Dilutive common stock equivalents for the periods presented include convertible preferred stock, warrants for the purchase of common stock, and common stock options and restricted stock units outstanding under the Company’s stock option and incentive plan. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. For the three and nine months ended September 30, 2017, the Company realized a net loss of $10.7 million and $30.5 million, respectively. Shares of potentially dilutive securities totaled 20.5 million for the three and nine months ended September 30, 2017, including 14.1 million shares associated with a hypothetical conversion of all outstanding shares of the Company’s Class A convertible preferred stock, and an aggregate of 6.2 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. For the three and nine months ended September 30, 2016, the Company realized a net loss of $8.7 million and $25.5 million, respectively. Shares of potentially dilutive securities totaled 4.6 million for the three and nine months ended September 30, 2016, including an aggregate of 4.5 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18 “ASU 2016-18”. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017. As early adoption of this amendment is permitted, the Company has adopted the update retrospectively to each period presented during the interim period ended September 30, 2017. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. In November 2015, the FASB issued ASU 2015-17, which requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet, instead of separating deferred taxes into current and noncurrent amounts. The update is effective for financial statements issued for fiscal years beginning after December 15, 2016. The Company early adopted the update prospectively during the year ended December 31, 2015. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09, which created a single, principle-based revenue recognition model that will supersede and replace nearly all existing U.S. GAAP revenue recognition guidance. Entities will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The model provides that entities follow five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue. For public business entities, ASU 2014-09 is effective beginning in the first quarter of 2018 using one of two prescribed transition methods: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company will adopt ASU 2014-09 in the first quarter of 2018. The Company is currently evaluating the effect that the updated standard and transition method will have on its internal processes, financial statements and related disclosures. Going Concern Assessment Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern as of the date of the issuance of these financial statements. |
Juno Collaboration and License
Juno Collaboration and License Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Collaboration And License Agreements Disclosure [Abstract] | |
Juno Collaboration and License Agreement | 2. Juno Collaboration and License Agreement On May 4, 2015, the Company entered into a strategic research collaboration and license agreement (the “Agreement”) with Juno Therapeutics, Inc. (“Juno”) to screen for and identify small molecules that enhance the therapeutic properties of Juno’s genetically-engineered T-cell immunotherapies. Pursuant to the terms of the Agreement, Juno paid the Company a non-refundable upfront payment of $5.0 million and purchased 1,000,000 shares of the Company’s common stock at a price of $8.00 per share. Additionally, Juno agreed to fund all of the Company’s collaboration research activities for an initial four-year research term beginning on the effective date of the Agreement, with minimum annual research payments of $2.0 million to the Company. Juno has the option to extend the exclusive research term for an additional two years beyond the initial four-year term, subject to the payment of an extension fee of $3.0 million and the continued funding of the Company’s activities under the collaboration during the extended term, with minimum annual research payments of $4.0 million to the Company during the two-year extension period. Upon exercise of the research term extension, the Company has the option to require Juno to purchase up to $10.0 million of the Company’s common stock at a premium equal to 120% of the then thirty-day trailing volume weighted average trading price of the Company’s common stock. The Company applied Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition — Multiple Element Arrangements, Pursuant to the collaboration’s research plan under the Agreement, the Company is responsible for screening and identifying small molecule modulators of immunological cells, while Juno will be responsible for the development and commercialization of engineered T-cell immunotherapies incorporating the Company’s modulators. As the Company is principally responsible for the performance of the research services under the Agreement, revenue is recognized on a gross basis for such services when earned. Billings for research services will be recognized as deferred revenue until earned. Total revenue recognized under the Agreement for the three and nine months ended September 30, 2017 was $1.0 million and $3.1 million, respectively. Total revenue recognized under the Agreement for the three and nine months ended September 30, 2016 was $1.0 million and $3.4 million, respectively. As of September 30, 2017, aggregate deferred revenue related to the Agreement was $3.4 million. Under the Agreement, the Company has granted Juno an exclusive worldwide license to certain of its intellectual property, including its intellectual property arising under the collaboration, to make, use, sell and otherwise exploit genetically-engineered T-cell immunotherapies using or incorporating small molecule modulators directed against certain designated tumor-associated antigen targets, subject to the selection of a target by Juno. The Company has retained exclusive rights to such intellectual property, including its intellectual property arising under the collaboration, for all other purposes, including its use outside of those targets selected by Juno. The Company is eligible under the Agreement to receive selection fees for each tumor-associated antigen target selected by Juno and bonus selection fees based on the aggregate number of tumor-associated antigen targets selected by Juno. In accordance with ASC 605-28, Revenue Recognition — Milestone Method, In connection with each Juno therapy that uses or incorporates the Company’s small molecule modulators, Juno has agreed to pay the Company non-refundable, non-creditable milestone payments totaling up to approximately $51.0 million in the aggregate per therapy upon the achievement of various clinical, regulatory and commercial milestones. Additionally, in connection with the third Juno therapy and the fifth Juno therapy that uses or incorporates the Company’s small molecule modulators, Juno has agreed to pay the Company additional non-refundable, non-creditable bonus milestone payments totaling up to approximately $116.0 million and $137.5 million, respectively, in the aggregate, per therapy upon the achievement of various clinical, regulatory, and commercial milestones. In accordance with ASU 2010-17, the Company determined that these contingent payments meet the definition of a milestone under ASU 2010-17, and that the milestones are substantive given that the milestones are commensurate with the Company’s performance, relate solely to the Company’s past performance, and are reasonable relative to other deliverables and payments under the Agreement. Accordingly, the milestones under the Agreement will be accounted for as revenue on the achievement date, if any. Beginning on the date of the first commercial sale (in each country) for each Juno therapy that uses or incorporates the Company’s small molecule modulators, and continuing until the later of: i) the expiration of the last valid patent claim, ii) ten years after such first commercial sale, or iii) the expiration of all data and other regulatory exclusivity periods afforded each therapy, Juno has agreed to pay the Company royalties in the low single-digits on net sales of each Juno therapy that uses or incorporates the Company’s small molecule modulators. The Agreement will end on the date that no further payments are due under the Agreement. |
Short-term Investments
Short-term Investments | 9 Months Ended |
Sep. 30, 2017 | |
Short Term Investments [Abstract] | |
Short-term Investments | 3. Short-term Investments The Company invests portions of excess cash in United States treasuries with maturities ranging from six to twelve months from the purchase date. These debt securities are classified as short-term investments in the accompanying consolidated balance sheets and are accounted for as available-for-sale securities. The following table summarizes the Company’s short-term investments accounted for as available-for-sale securities as of September 30, 2017, and December 31, 2016 (in thousands): Maturity (in years) Amortized Cost Unrealized Losses Unrealized Gains Estimated Fair Value September 30, 2017 U.S. Treasury debt securities 1 or less 25,996 (13 ) — 25,983 Total $ 25,996 $ (13 ) $ — $ 25,983 December 31, 2016 U.S. Treasury debt securities 1 or less 3,504 (1 ) — 3,503 Total $ 3,504 $ (1 ) $ — $ 3,503 The Company reviewed its investment holdings as of September 30, 2017 and determined that the unrealized losses were not other-than-temporary unrealized losses because the Company does not intend to sell the underlying securities prior to maturity and it is not more likely than not that the Company will be required to sell these securities before the recovery of their amortized cost basis. During each of the three and nine months ended September 30, 2017 and 2016, respectively, the Company did not recognize any impairment or gains or losses on sales of available-for-sale securities. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The carrying amounts of accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Based on the borrowing rates available to the Company for loans with similar terms, which is considered a Level 2 input as described below, the Company believes that the fair value of long-term debt approximates its carrying value. The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and short-term investments. Cash equivalents consisted of money market funds and short-term investments consisted of U.S. treasuries. The following table presents the Company’s assets which were measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of September 30, 2017: Cash equivalents $ 43,231 $ 43,231 $ — $ — U.S. Treasury debt securities 25,983 25,983 — — Total assets $ 69,214 $ 69,214 $ — $ — As of December 31, 2016: Cash equivalents $ 88,609 $ 88,609 $ — $ — U.S. Treasury debt securities 3,503 3,503 — — Total assets $ 92,112 $ 92,112 $ — $ — The Company obtains pricing information from quoted market prices from our investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. None of the Company’s non-financial assets or liabilities is recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented. As of September 30, 2017, and December 31, 2016, the Company had no material liabilities measured at fair value on a recurring basis. |
Accrued Expenses, Long-Term Deb
Accrued Expenses, Long-Term Debt, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses Long Term Debt Commitments And Contingencies Disclosure [Abstract] | |
Accrued Expenses, Long-Term Debt, Commitments and Contingencies | 5. Accrued Expenses, Long-Term Debt, Commitments and Contingencies Accrued Expenses Current accrued expenses consist of the following (in thousands): September 30, 2017 December 31, 2016 Accrued payroll and other employee benefits $ 1,597 $ 1,505 Accrued clinical trial related costs 2,287 1,043 Accrued other 1,529 1,409 Current accrued expenses $ 5,413 $ 3,957 Long-term accrued expenses consist primarily of accruals for the final payment fees associated with our long-term debt. Long-Term Debt Long-term debt and unamortized discount balances are as follows (in thousands): September 30, 2017 December 31, 2016 Long-term debt $ 15,000 $ 10,765 Less debt issuance costs and discount, net of current portion (211 ) (7 ) Long-term debt, net of long-term portion of debt issuance costs and discount 14,789 10,758 Less current portion of long-term debt — (8,257 ) Long-term debt, net $ 14,789 $ 2,501 Current portion of long-term debt $ — $ 8,257 Less current portion of debt issuance costs and discount — (70 ) Current portion of long-term debt, net $ — $ 8,187 SVB Loan Amendment On July 14, 2017 (the “First Amendment Effective Date”), the Company entered into the First Pursuant to the SVB Loan Amendment, the Bank extended an additional term loan to the Company on July 14, 2017 in the principal amount of $15.0 million (the “2017 Term Loan”), a portion of which was applied to repay in full the Company’s existing outstanding debt with the Bank under the Restated LSA, which included outstanding principal, accrued interest, and final payment fees. Following such repayment in full of the Company’s existing outstanding debt with the Bank under the Restated LSA, cash proceeds to the Company from the remaining portion of the 2017 Term Loan were $7.5 million. The net proceeds of the 2017 Term Loan are expected to be used for working capital purposes, including the advancement of the Company’s clinical and research programs. The 2017 Term Loan matures on January 1, 2022 (the “Term Loan Maturity Date”) and bears interest at a floating per annum rate equal to the greater of (i) 3.50% above the Prime Rate (as defined in the SVB Loan Amendment) or (ii) 7.25%; provided, however, that in no event shall such interest rate exceed 8.25%. Interest is payable on a monthly basis on the first day of each month . From August 1, 2017 through January 1, 2019 (the “Interest-only Period”), the Company is required to make monthly payments of interest only. Thereafter, the Company is required to repay the principal, plus monthly payments of accrued interest, in 36 equal monthly installments based on a 36-month amortization schedule. Notwithstanding the foregoing, subject to the achievement of a product development milestone by the Company before the expiration of the above-described Interest-only Period, at the Company’s election (i) the Interest-only Period shall be extended from January 1, 2019 through and including to July 1, 2019 and (ii) the Company shall thereafter repay the principal, plus monthly payments of accrued interest, in 30 equal monthly installments based on a 30-month amortization schedule. The Company’s final payment, due on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the 2017 Term Loan, plus a 7.5%, or $1.1 million, final payment fee. This final payment fee is accrued as interest expense over the term of the 2017 Term Loan and recorded in accrued expenses. In connection with the SVB Loan Amendment, the Company issued to the Bank on the First Amendment Effective Date a fully exercisable warrant (the “2017 Warrant”) to purchase up to an aggregate of 91,463 shares of the Company’s common stock, subject to adjustment, at an exercise price equal to $3.28 per share. The 2017 Warrant expires in July 2024. The aggregate fair value of the 2017 Warrant was determined to be $0.2 million using the Black-Scholes option pricing model and was recorded as a debt discount on the 2017 Term Loan. This debt discount is amortized to interest expense over the term of the 2017 Term Loan using the effective interest method. The Company determined the effective interest rate of the 2017 Term Loan to be 10.2% as of the First Amendment Effective Date. The Company determined the repayment of the Restated LSA and issuance of the 2017 Term Loan was a debt extinguishment, and accounted for the 2017 Term Loan at fair value as of the First Amendment Effective Date, accordingly. During the three months ended September 30, 2017, the Company recorded a loss on debt extinguishment of $0.1 million, which was primarily related to the unaccrued amount of the final payment fee under the Restated LSA that was paid in connection with the 2017 Term Loan. The Company is required under its loan agreement with the Bank to maintain its deposit and securities accounts with the Bank and to comply with various operating covenants and default clauses. A breach of any of these covenants or clauses could result in a default under the agreement, which would cause all of the outstanding indebtedness under the facility to become immediately due and payable. The Company is in compliance with all such covenants and clauses. For each of the three and nine months ended September 30, 2017, the Company recorded $0.4 million in aggregate interest expense related to the 2017 Term Loan. Restated LSA On July 30, 2014, the Company entered into the Restated LSA with the Bank, collateralized by substantially all of the Company’s assets, excluding certain intellectual property. Pursuant to the Restated LSA, the Bank agreed to make loans to the Company in an aggregate principal amount of up to $20.0 million, comprised of (i) a $10.0 million term loan, funded at the closing date (the “Term A Loan”) and (ii) subject to the achievement of a specified clinical milestone, additional term loans totaling up to $10.0 million in the aggregate, which were available until December 31, 2014 (each, a “Term B Loan”). On December 24, 2014, the Company elected to draw on the full $10.0 million under a Term B Loan. The Term A Loan and the Term B Loan were scheduled to mature on January 1, 2018 and June 1, 2018, respectively. The Company was required to make a final payment fee of 7.5%, equaling $0.8 million, of the funded amount for each of the Term A Loan and Term B Loan on the respective maturity dates. These final payment fees were accrued as interest expense over the terms of the loans and recorded in accrued expenses. In connection with the funding of the Term B Loan, the Company issued the Bank and one of its affiliates fully-exercisable warrants to purchase an aggregate of 98,039 shares of the Company’s common stock (the “2014 Warrants”) at an exercise price of $4.08 per share. The 2014 Warrants expire in December 2021 and remain outstanding as of September 30, 2017. For the three and nine months ended September 30, 2017, the Company recorded $0.1 million and $0.5 million, respectively, in aggregate interest expense related to the Term A and Term B Loans. For the three and nine months ended September 30, 2016, the Company recorded $0.4 million and $1.3 million, respectively, in aggregate interest expense related to the Term A and Term B Loans. Warrants to purchase 36,074 shares of the Company’s common stock at a weighted average exercise price of $7.21 per share issued in connection with a prior debt agreement between the Company and the Bank in 2009 remain outstanding as of September 30, 2017, with 5,305 and 30,769 of such warrants having expiration dates in January 2019 and August 2021, respectively. Facility Leases The Company leases certain office and laboratory space, comprising approximately 48,000 square feet, under a non-cancelable operating lease through June 2023. The lease is subject to additional charges for common area maintenance and other costs. In connection with the lease, the Company entered into a cash-collateralized irrevocable standby letter of credit in the amount of $0.1 million. As of September 30, 2017, future minimum payments under the operating lease are $13.2 million. In January 2015, the Company entered into a sublease for additional laboratory space. The sublease was accounted for as an operating lease and expired in September 2017. No future payments remain under the sublease. |
Convertible Preferred Stock and
Convertible Preferred Stock and Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Preferred Stock And Stockholders Deficit Disclosure [Abstract] | |
Convertible Preferred Stock and Stockholders' Equity | 6. Convertible Preferred Stock and Stockholders’ Equity Convertible Preferred Stock In November 2016, the Company completed a private placement of stock in which investors, certain of which are affiliated with the directors and officers of the Company, purchased convertible preferred stock and common stock of the Company (the “November 2016 Placement”). The Company issued 2,819,549 shares of non-voting Class A Convertible Preferred Stock (the “Class A Preferred”) at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions defined in the Certificate of Designation of Preferences, Rights and Limitations of the Class A Preferred filed with the Delaware Secretary of State on November 22, 2016 (the “CoD”). The Class A Preferred were purchased exclusively by entities affiliated with Redmile Group, LLC (collectively, “Redmile”). The terms of the CoD prohibited Redmile from converting the Class A Preferred into shares of the Company’s common stock if, as a result of conversion, Redmile, together with its affiliates, would own more than 9.99% of the Company’s common stock then issued and outstanding (the “Redmile Percentage Limitation”), which percentage could change at Redmile’s election upon 61 days’ notice to the Company to i) any other number less than or equal to 19.99% or (ii) subject to approval of the Company’s stockholders to the extent required in accordance with the NASDAQ Global Market rules, any number in excess of 19.99%. On May 2, 2017, the Company’s stockholders approved the issuance of up to an aggregate of 14,097,745 shares of common stock upon the conversion of the outstanding shares of Class A Preferred. As a result, Redmile has the right to increase the Redmile Percentage Limitation to any percentage in excess of 19.99% at its election. The Company also issued 7,236,837 shares of common stock at $2.66 per share as part of the November 2016 Placement. Gross proceeds from the November 2016 Placement were $56.7 million, and after giving effect to costs related to placement, net proceeds were $54.9 million. The rights of the Class A Preferred issued in November 2016 are set forth in the CoD. The Class A Preferred are non-voting shares and have a stated par value of $0.001 per share and are convertible into five shares of the Company’s common stock at a conversion price of $2.66 per share, which was the fair value of the Company’s common stock on the date of issuance. Holders of the Class A Preferred have the same dividend rights as holders of the Company’s common stock. Additionally, the liquidation preferences of the Class A Preferred are pari passu The Company evaluated the Class A Preferred for liability or equity classification under ASC 480, Distinguishing Liabilities from Equity, The Company has also evaluated the Class A Preferred in accordance with the provisions of ASC 815, Derivatives and Hedging, The issuance of convertible preferred stock could generate a beneficial conversion feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor (or in-the-money) at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock on the commitment date. The Class A Preferred have an effective conversion price of $2.66 per common share, which was equal to the market price of the Company’s stock on the commitment date. Therefore, no BCF is present. The Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with certain of the purchasers in the November 2016 Placement, excluding those purchasers affiliated with the Company’s directors and officers, requiring the Company to register for the resale of the relevant shares. The Company registered all of the relevant shares issued in the November 2016 Placement for resale on a Form S-3 filed with the SEC, as required under the Registration Rights Agreement, and the registration statement was declared effective in January 2017. Stock Options and Restricted Stock Units Stock option activity under all equity and stock option plans is summarized as follows: Number of Options Weighted- Average Price Balance at December 31, 2016 3,910,350 $ 3.77 Granted 2,438,980 3.04 Canceled (559,571 ) 3.59 Exercised (70,649 ) 2.74 Balance at September 30, 2017 5,719,110 $ 3.49 Restricted stock unit activity under all equity and stock option plans is summarized as follows: Number of Restricted Stock Units Weighted- Average Grant Date Fair Value per Share Balance at December 31, 2016 525,250 $ 4.89 Granted — — Canceled (75,000 ) 4.89 Vested — — Balance at September 30, 2017 450,250 $ 4.89 In October 2017, 225,125 shares of common stock underlying restricted stock units vested and were issued to certain employees. The allocation of stock-based compensation for all stock awards is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Research and development $ 450 $ 461 $ 1,599 $ 1,352 General and administrative 421 322 1,112 1,013 $ 871 $ 783 $ 2,711 $ 2,365 As of September 30, 2017, the outstanding options included 303,600 performance-based options for which the achievement of the performance-based vesting provisions was determined not to be probable. The aggregate grant date fair value of these unvested options at September 30, 2017 was $0.6 million. As of September 30, 2017, the unrecognized compensation cost related to outstanding options (excluding those with performance-based conditions determined not to be probable) was $6.5 million and is expected to be recognized as expense over a weighted average period of approximately 2.8 years. As of September 30, 2017, the unrecognized compensation cost related to restricted stock units was $1.1 million which is expected to be recognized as expense over approximately 2.0 years. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Nine Months Ended September 30, 2017 2016 Risk-free interest rate 2.0 % 1.6 % Expected volatility 90.4 % 79.8 % Expected term (in years) 5.9 6.0 Expected dividend yield 0.0 % 0.0 % The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the non-employee stock option grants were as follows: Nine Months Ended September 30, 2017 2016 Risk-free interest rate 2.0 % 1.4 % Expected volatility 90.8 % 81.3 % Remaining contractual term (in years) 8.6 6.9 Expected dividend yield 0.0 % 0.0 % |
Organization and Summary of S12
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Private Placement of Common Stock and Convertible Preferred Stock | Private Placements of Common Stock and Convertible Preferred Stock In August 2016, the Company completed a private placement of common stock in which investors purchased 5,250,000 shares of the Company’s common stock at a price of $1.96 per share. Gross proceeds from the private placement were $10.3 million. After giving effect to costs related to the private placement, net proceeds were $10.2 million. The Company also registered all shares issued in this private placement transaction for resale on a Form S-3 filed with the United States Securities and Exchange Commission (the “SEC”), as required under a registration rights agreement entered into by the Company with the purchasers of the common stock, and the registration statement was declared effective in September 2016. In November 2016, the Company completed a private placement of common and preferred stock in which investors, including investors affiliated with the Company’s directors and officers, purchased convertible preferred stock and common stock of the Company. The Company issued 2,819,549 shares of non-voting Class A Preferred Stock at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions. The Company also issued 7,236,837 shares of common stock at $2.66 per share. Gross proceeds from the private placement were $56.7 million. After giving effect to costs related to the private placement, net proceeds were $54.9 million. The Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with certain of the purchasers in the November 2016 private placement, excluding those purchasers affiliated with the Company’s directors and officers, requiring the Company to register for the resale of the relevant shares. The Company registered all of the relevant shares issued in this placement for resale on a Form S-3 filed with the SEC, as required under the Registration Rights Agreement, and the registration statement was declared effective in January 2017. See Note 6 to the Consolidated Financial Statements for additional information related to this offering. |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of the Company’s consolidated financial statements requires it to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to accrued expenses. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, Fate Therapeutics (Canada), Inc. or “Fate Canada”, incorporated in Canada and which was dissolved in November 2016, Fate Therapeutics Ltd., incorporated in the United Kingdom, and Tfinity Therapeutics, Inc., incorporated in the United States. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in readily available checking and savings accounts, money market accounts and money market funds. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash flows as of September 30, 2017 (in thousands): September 30, 2017 Cash and cash equivalents $ 43,231 Restricted cash 122 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 43,353 Amounts included in restricted cash represent security deposits required to secure the Company’s credit card limit and its facilities lease. |
Short Term Investments | Short-Term Investments Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in comprehensive income. The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for the periods presented. These statements do not include all disclosures required by GAAP and should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2016, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed by the Company with the SEC on March 16, 2017. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. |
Revenue Recognition | Revenue Recognition The Company recognizes revenues when all four of the following criteria are met: (i) persuasive evidence that an agreement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue arrangements with multiple elements are analyzed to determine whether the elements can be divided into separate units of accounting or whether the elements must be accounted for as a single unit of accounting. The Company divides the elements into separate units of accounting and applies the applicable revenue recognition criteria to each of the elements, if the delivered elements have value to the customer on a stand-alone basis, if the arrangement includes a general right of return relative to the delivered elements, and if the delivery or performance of the undelivered elements is considered probable and substantially within the Company’s control. Revenue has been allocated to each element at the inception of the arrangement using the relative selling price method that is based on a three-tier hierarchy. The relative selling price method requires that the estimated selling price for each element be based on vendor-specific objective evidence (“VSOE”) of fair value, which represents the price charged for each element when it is sold separately or, for an element not yet being sold separately, the price established by management. When VSOE of fair value is not available, third-party evidence (“TPE”) of fair value is acceptable, or a best estimate of selling price is used if neither VSOE nor TPE is available. A best estimate of selling price should be consistent with the objective of determining the price at which the Company would transact if the element were sold regularly on a stand-alone basis and should also take into account market conditions and company-specific factors. Revenue arrangements with multiple elements may include license fees, research and development payments, milestone payments, other contingent payments, and royalties on any product sales derived from collaborations. The Company recognizes nonrefundable license fees with stand-alone value as revenue at the time that the Company has satisfied all performance obligations, and recognizes license fees without stand-alone value as revenue in combination with any undelivered performance obligations. The Company recognizes a research and development payment as revenue over the term of the collaboration agreement as contracted amounts are earned, or reimbursable costs are incurred, under the agreement, where contracted amounts are considered to be earned in relative proportion to the performance required under the applicable agreement. The Company recognizes a milestone payment, which is contingent upon the achievement of a milestone in its entirety, as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. These criteria include the following: (i) the consideration being earned should be commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from the Company’s performance to achieve the milestone; (ii) the consideration being earned should relate solely to past performance; (iii) the consideration being earned should be reasonable relative to all deliverables and payment terms in the arrangement; and (iv) the milestone should be considered in its entirety and cannot be bifurcated into substantive and nonsubstantive components. Any amounts received pursuant to revenue arrangements with multiple elements prior to satisfying the Company’s revenue recognition criteria are recorded as deferred revenue on the Company’s consolidated balance sheets . Revenue from government grants is recorded when reimbursable expenses are incurred under the grant in accordance with the terms of the grant award. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of employee stock option and restricted stock unit grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis, net of estimated forfeitures. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants for which vesting is subject to both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, with the exception of option grants for which vesting is subject to both performance-based milestones and market conditions, which are valued using a lattice-based model. The fair value of restricted stock units is based on the closing price of the Company’s common stock as reported on The NASDAQ Global Market on the date of grant. The Company accounts for stock options and restricted stock awards to non-employees using the fair value approach. Stock options and restricted stock awards to non-employees are subject to periodic revaluation over their vesting terms. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the performance condition is determined to be probable of achievement or when it has been achieved. |
Convertible Preferred Stock | Convertible Preferred Stock The Company applies the relevant accounting standards to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. The Company applies the relevant accounting standards for derivatives and hedging (in addition to distinguishing liabilities from equity) when accounting for hybrid contracts that contain conversion options. Conversion options must be bifurcated from the host instruments and accounted for as free standing financial instruments according to certain criteria. These criteria include circumstances when (i) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable accounting principles with changes in fair value reported in earnings as they occurred, and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently measured at fair value at each reporting date, with the changes in fair value reported in earnings. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non‑owner sources. Other comprehensive income includes unrealized gains and losses on available-for-sale securities, which was the only difference between net loss and comprehensive loss for the applicable periods. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Excluded from the weighted-average number of shares outstanding are shares which were issued upon the early exercise of stock options and were subject to future vesting totaling zero and 4,378 shares for the three and nine months ended September 30, 2016, respectively. No such shares were outstanding during the three and nine months ended September 30, 2017. Dilutive common stock equivalents for the periods presented include convertible preferred stock, warrants for the purchase of common stock, and common stock options and restricted stock units outstanding under the Company’s stock option and incentive plan. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. For the three and nine months ended September 30, 2017, the Company realized a net loss of $10.7 million and $30.5 million, respectively. Shares of potentially dilutive securities totaled 20.5 million for the three and nine months ended September 30, 2017, including 14.1 million shares associated with a hypothetical conversion of all outstanding shares of the Company’s Class A convertible preferred stock, and an aggregate of 6.2 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. For the three and nine months ended September 30, 2016, the Company realized a net loss of $8.7 million and $25.5 million, respectively. Shares of potentially dilutive securities totaled 4.6 million for the three and nine months ended September 30, 2016, including an aggregate of 4.5 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18 “ASU 2016-18”. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017. As early adoption of this amendment is permitted, the Company has adopted the update retrospectively to each period presented during the interim period ended September 30, 2017. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 became effective for the Company on January 1, 2017. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. In November 2015, the FASB issued ASU 2015-17, which requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet, instead of separating deferred taxes into current and noncurrent amounts. The update is effective for financial statements issued for fiscal years beginning after December 15, 2016. The Company early adopted the update prospectively during the year ended December 31, 2015. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09, which created a single, principle-based revenue recognition model that will supersede and replace nearly all existing U.S. GAAP revenue recognition guidance. Entities will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The model provides that entities follow five steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue. For public business entities, ASU 2014-09 is effective beginning in the first quarter of 2018 using one of two prescribed transition methods: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company will adopt ASU 2014-09 in the first quarter of 2018. The Company is currently evaluating the effect that the updated standard and transition method will have on its internal processes, financial statements and related disclosures. |
Going Concern Assessment | Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern as of the date of the issuance of these financial statements. |
Organization and Summary of S13
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheet that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash flows as of September 30, 2017 (in thousands): September 30, 2017 Cash and cash equivalents $ 43,231 Restricted cash 122 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 43,353 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Short Term Investments [Abstract] | |
Summary of Short-term Investments | The following table summarizes the Company’s short-term investments accounted for as available-for-sale securities as of September 30, 2017, and December 31, 2016 (in thousands): Maturity (in years) Amortized Cost Unrealized Losses Unrealized Gains Estimated Fair Value September 30, 2017 U.S. Treasury debt securities 1 or less 25,996 (13 ) — 25,983 Total $ 25,996 $ (13 ) $ — $ 25,983 December 31, 2016 U.S. Treasury debt securities 1 or less 3,504 (1 ) — 3,503 Total $ 3,504 $ (1 ) $ — $ 3,503 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on Recurring Basis | The following table presents the Company’s assets which were measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of September 30, 2017: Cash equivalents $ 43,231 $ 43,231 $ — $ — U.S. Treasury debt securities 25,983 25,983 — — Total assets $ 69,214 $ 69,214 $ — $ — As of December 31, 2016: Cash equivalents $ 88,609 $ 88,609 $ — $ — U.S. Treasury debt securities 3,503 3,503 — — Total assets $ 92,112 $ 92,112 $ — $ — |
Accrued Expenses, Long-Term D16
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses Long Term Debt Commitments And Contingencies Disclosure [Abstract] | |
Schedule of accrued expenses | Current accrued expenses consist of the following (in thousands): September 30, 2017 December 31, 2016 Accrued payroll and other employee benefits $ 1,597 $ 1,505 Accrued clinical trial related costs 2,287 1,043 Accrued other 1,529 1,409 Current accrued expenses $ 5,413 $ 3,957 |
Schedule of long-term debt and unamortized discount balances | Long-term debt and unamortized discount balances are as follows (in thousands): September 30, 2017 December 31, 2016 Long-term debt $ 15,000 $ 10,765 Less debt issuance costs and discount, net of current portion (211 ) (7 ) Long-term debt, net of long-term portion of debt issuance costs and discount 14,789 10,758 Less current portion of long-term debt — (8,257 ) Long-term debt, net $ 14,789 $ 2,501 Current portion of long-term debt $ — $ 8,257 Less current portion of debt issuance costs and discount — (70 ) Current portion of long-term debt, net $ — $ 8,187 |
Convertible Preferred Stock a17
Convertible Preferred Stock and Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity | |
Summary of stock option activity under the Plan | Stock option activity under all equity and stock option plans is summarized as follows: Number of Options Weighted- Average Price Balance at December 31, 2016 3,910,350 $ 3.77 Granted 2,438,980 3.04 Canceled (559,571 ) 3.59 Exercised (70,649 ) 2.74 Balance at September 30, 2017 5,719,110 $ 3.49 |
Summary of restricted stock unit activity under the Plan | Restricted stock unit activity under all equity and stock option plans is summarized as follows: Number of Restricted Stock Units Weighted- Average Grant Date Fair Value per Share Balance at December 31, 2016 525,250 $ 4.89 Granted — — Canceled (75,000 ) 4.89 Vested — — Balance at September 30, 2017 450,250 $ 4.89 |
Summary of outstanding restricted stock awards granted under the plan | The allocation of stock-based compensation for all stock awards is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Research and development $ 450 $ 461 $ 1,599 $ 1,352 General and administrative 421 322 1,112 1,013 $ 871 $ 783 $ 2,711 $ 2,365 |
Employee Stock Option | |
Stockholders' Equity | |
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows: Nine Months Ended September 30, 2017 2016 Risk-free interest rate 2.0 % 1.6 % Expected volatility 90.4 % 79.8 % Expected term (in years) 5.9 6.0 Expected dividend yield 0.0 % 0.0 % |
Non Employee Stock Option | |
Stockholders' Equity | |
Schedule of weighted-average assumptions used to determine the fair value of stock option grants | The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the non-employee stock option grants were as follows: Nine Months Ended September 30, 2017 2016 Risk-free interest rate 2.0 % 1.4 % Expected volatility 90.8 % 81.3 % Remaining contractual term (in years) 8.6 6.9 Expected dividend yield 0.0 % 0.0 % |
Organization and Summary of S18
Organization and Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Nov. 30, 2016 | Aug. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity transactions | ||||
Net proceeds from issuance of shares after related cash costs | $ 172 | $ 167 | ||
Private Placement | Non-Voting Class A Preferred Stock | ||||
Equity transactions | ||||
Share issue price (in dollars per share) | $ 13.30 | |||
Preferred stock, issued shares | 2,819,549 | |||
Preferred stock convertible into common stock, shares | 5 | |||
Private Placement | Common Stock | ||||
Equity transactions | ||||
Shares sold | 7,236,837 | 5,250,000 | ||
Share issue price (in dollars per share) | $ 2.66 | $ 1.96 | ||
Gross proceeds from issuance of shares | $ 10,300 | |||
Net proceeds from issuance of shares after related cash costs | $ 54,900 | $ 10,200 | ||
Gross proceeds from issuance of shares | $ 56,700 |
Organization and Summary of S19
Organization and Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 43,231 | $ 88,609 | ||
Restricted cash | 122 | 122 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 43,353 | $ 88,731 | $ 37,221 | $ 64,931 |
Organization and Summary of S20
Organization and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue Recognition [Abstract] | ||||
Four criteria needed for Company to recognize revenue | (i) persuasive evidence that an agreement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured. | |||
Net loss | $ (10,684) | $ (8,737) | $ (30,455) | $ (25,522) |
Potentially dilutive securities (in shares) | 20,500,000 | 4,600,000 | 20,500,000 | 4,600,000 |
Common stock issuable upon the exercise of outstanding options | 6,200,000 | 4,500,000 | 6,200,000 | 4,500,000 |
Class A Convertible Preferred Stock | ||||
Revenue Recognition [Abstract] | ||||
Shares associated with a hypothetical conversion of convertible preferred stock | 14,100,000 | 14,100,000 | ||
Employee Stock Option | ||||
Revenue Recognition [Abstract] | ||||
Anti-dilutive securities (in shares) | 0 | 0 | 0 | 4,378 |
Juno Collaboration and Licens21
Juno Collaboration and License Agreement (Details) - Juno Therapeutics, Inc - USD ($) | May 04, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Collaboration agreement | |||||
Common stock issued | 1,000,000 | ||||
Research term | 4 years | ||||
Minimum annual research payments receivable | $ 2,000,000 | ||||
Extended term of research | 2 years | ||||
Extension fee | $ 3,000,000 | ||||
Minimum annual payments receivable for extended term of research | $ 4,000,000 | ||||
Common stock premium percentage on trading price upon exercise of extension | 120.00% | ||||
Trailing trading period considered for premium | 30 days | ||||
Upfront payments recorded as deferred revenue | $ 5,000,000 | ||||
Recognition period of deferred revenue | 4 years | ||||
Proceeds from sale of common stock | $ 8,000,000 | ||||
Premium on share price (in dollars per share) | $ 3.40 | ||||
Aggregate premium on shares issued recorded as deferred revenue | $ 3,400,000 | ||||
Issuance of common stock | $ 4,600,000 | ||||
Term of royalties payable after first commercial sale | 10 years | ||||
Maximum | |||||
Collaboration agreement | |||||
Common stock issued upon exercise of extension | $ 10,000,000 | ||||
Aggregate milestone payments | 51,000,000 | ||||
Maximum | Third Juno Product | |||||
Collaboration agreement | |||||
Additional aggregate milestone payments | 116,000,000 | ||||
Maximum | Fifth Juno Product | |||||
Collaboration agreement | |||||
Additional aggregate milestone payments | 137,500,000 | ||||
Collaborative Arrangement | |||||
Collaboration agreement | |||||
Proceeds from non refundable upfront fee | $ 5,000,000 | ||||
Share Price | $ 8 | ||||
Revenue recognized | $ 1,000,000 | $ 1,000,000 | $ 3,100,000 | $ 3,400,000 | |
Aggregate deferred revenue | $ 3,400,000 | $ 3,400,000 |
Short-term Investments (Details
Short-term Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule Of Available For Sale Securities [Line Items] | ||||
Available-for-sale securities, impairment | $ 0 | |||
Available-for-sale securities, gains (losses) on sales | $ 0 | $ 0 | $ 0 | $ 0 |
U.S. Treasury debt securities | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Short term investments, maturity start range | 6 months | |||
Short term investments, maturity end range | 12 months |
Short-term Investments (Detai23
Short-term Investments (Details 2) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 25,996 | $ 3,504 |
Unrealized Losses | (13) | (1) |
Estimated Fair Value | $ 25,983 | $ 3,503 |
U.S. Treasury debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Maturity (in years) | 1 or less | 1 or less |
Amortized Cost | $ 25,996 | $ 3,504 |
Unrealized Losses | (13) | (1) |
Estimated Fair Value | $ 25,983 | $ 3,503 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 43,231 | $ 88,609 |
Total assets | 69,214 | 92,112 |
U.S. Treasury debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
U.S. Treasury debt securities | 25,983 | 3,503 |
Quoted prices in Active Market for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 43,231 | 88,609 |
Total assets | 69,214 | 92,112 |
Quoted prices in Active Market for Identical Assets (Level 1) | U.S. Treasury debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
U.S. Treasury debt securities | $ 25,983 | $ 3,503 |
Fair Value Measurements (Deta25
Fair Value Measurements (Details 2) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfer of assets from level 1 to level 2 | $ 0 | |
Transfer of assets from level 2 to level 1 | 0 | |
Transfer of liabilities from level 1 to level 2 | 0 | |
Transfer of liabilities from level 2 to level 1 | 0 | |
Fair Value Measurements Nonrecurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Non-financial assets | 0 | |
Non-financial liabilities | 0 | |
Fair Value Measurements Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | $ 0 | $ 0 |
Accrued Expenses, Long-Term D26
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current accrued expenses | ||
Accrued payroll and other employee benefits | $ 1,597 | $ 1,505 |
Accrued clinical trial related costs | 2,287 | 1,043 |
Accrued other | 1,529 | 1,409 |
Current accrued expenses | $ 5,413 | $ 3,957 |
Accrued Expenses, Long-Term D27
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Long-term debt | $ 15,000 | $ 10,765 |
Less debt issuance costs and discount, net of current portion | (211) | (7) |
Long-term debt, net of long-term portion of debt issuance costs and discount | 14,789 | 10,758 |
Less current portion of long-term debt | (8,257) | |
Long-term debt, net | $ 14,789 | 2,501 |
Current portion of long-term debt | 8,257 | |
Less current portion of debt issuance costs and discount | (70) | |
Current portion of long-term debt, net | $ 8,187 |
Accrued Expenses, Long-Term D28
Accrued Expenses, Long-Term Debt, Commitments and Contingencies (Details 3) | Jul. 14, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)ft²$ / shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)ft²$ / sharesshares | Sep. 30, 2016USD ($) | Dec. 24, 2014USD ($) | Jul. 30, 2014USD ($) |
Current accrued expenses | |||||||
Loss on extinguishment of debt | $ (118,000) | $ (118,000) | |||||
Cash-collateralized irrevocable standby letter of credit | $ 100,000 | $ 100,000 | |||||
Non-Cancelable Operating Lease | |||||||
Current accrued expenses | |||||||
Lease expiration period | 2023-06 | ||||||
Leased space of office and laboratory | ft² | 48,000 | 48,000 | |||||
Future minimum payments | $ 13,200,000 | $ 13,200,000 | |||||
Sublease Lease | |||||||
Current accrued expenses | |||||||
Future minimum payments | $ 0 | $ 0 | |||||
Sublease expiration date | 2017-09 | ||||||
SVB Loan Amendment | |||||||
Current accrued expenses | |||||||
First amendment effective date | Jul. 14, 2017 | ||||||
SVB Loan Amendment | 2017 Term Loan | |||||||
Current accrued expenses | |||||||
Principal amount | $ 15,000,000 | ||||||
Cash proceeds from remaining portion of debt | $ 7,500,000 | ||||||
Debt instrument, maturity date | Jan. 1, 2022 | ||||||
Debt instrument, variable rate description | The 2017 Term Loan matures on January 1, 2022 (the “Term Loan Maturity Date”) and bears interest at a floating per annum rate equal to the greater of (i) 3.50% above the Prime Rate (as defined in the SVB Loan Amendment) or (ii) 7.25%; provided, however, that in no event shall such interest rate exceed 8.25%. | ||||||
Debt instrument, interest payment terms | Interest is payable on a monthly basis on the first day of each month. | ||||||
Debt instrument, frequency of periodic payment | monthly | ||||||
Interest rate (as a percent) | 7.75% | 7.75% | |||||
Debt instrument interest only payment period | August 1, 2017 through January 1, 2019 | ||||||
Number of equal monthly installments to repay principal and accrued interest | 36 months | ||||||
Debt instrument extended interest only payment period | January 1, 2019 through and including to July 1, 2019 | ||||||
Final payment fee | 7.50% | ||||||
Final payment fee (amounts in dollars) | $ 1,100,000 | ||||||
Effective interest rate | 10.20% | ||||||
Loss on extinguishment of debt | $ (100,000) | ||||||
Aggregate interest expense | 400,000 | 400,000 | |||||
SVB Loan Amendment | 2017 Term Loan | 2017 Warrant | |||||||
Current accrued expenses | |||||||
Exercise price (in dollars per share) | $ / shares | $ 3.28 | ||||||
Warrants expiration date | 2024-07 | ||||||
Fair values of warrants issued | $ 200,000 | ||||||
SVB Loan Amendment | 2017 Term Loan | Product Development Milestone Achievement | |||||||
Current accrued expenses | |||||||
Number of equal monthly installments to repay principal and accrued interest | 30 months | ||||||
SVB Loan Amendment | 2017 Term Loan | Minimum | Greater of 7.25% | |||||||
Current accrued expenses | |||||||
Debt instrument, floating rate | 7.25% | ||||||
SVB Loan Amendment | 2017 Term Loan | Minimum | Prime Rate | Greater of 3.50% Above Prime Rate | |||||||
Current accrued expenses | |||||||
Debt instrument, floating rate | 3.50% | ||||||
SVB Loan Amendment | 2017 Term Loan | Maximum | |||||||
Current accrued expenses | |||||||
Debt instrument, floating rate | 8.25% | ||||||
SVB Loan Amendment | 2017 Term Loan | Maximum | 2017 Warrant | |||||||
Current accrued expenses | |||||||
Warrants to purchase shares of common stock issued on conversion | shares | 91,463 | ||||||
Amended And Restated Loan And Security Agreement | |||||||
Current accrued expenses | |||||||
Aggregate interest expense | $ 100,000 | $ 400,000 | $ 500,000 | $ 1,300,000 | |||
Amended And Restated Loan And Security Agreement | Warrants Expiration Period January 2019 | |||||||
Current accrued expenses | |||||||
Warrants to purchase shares of common stock issued on conversion | shares | 5,305 | ||||||
Warrants expiration date | 2019-01 | ||||||
Amended And Restated Loan And Security Agreement | Warrants Expiration Period August 2021 | |||||||
Current accrued expenses | |||||||
Warrants to purchase shares of common stock issued on conversion | shares | 30,769 | ||||||
Warrants expiration date | 2021-08 | ||||||
Amended And Restated Loan And Security Agreement | Warrant | |||||||
Current accrued expenses | |||||||
Warrants to purchase shares of common stock issued on conversion | shares | 36,074 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 7.21 | $ 7.21 | |||||
Amended And Restated Loan And Security Agreement | Maximum | |||||||
Current accrued expenses | |||||||
Principal amount | $ 20,000,000 | ||||||
Amended And Restated Loan And Security Agreement | Term A Loan | |||||||
Current accrued expenses | |||||||
Principal amount | 10,000,000 | ||||||
Debt instrument, maturity date | Jan. 1, 2018 | ||||||
Final payment fee | 7.50% | ||||||
Final payment fee (amounts in dollars) | $ 800,000 | ||||||
Amended And Restated Loan And Security Agreement | Term B Loan | |||||||
Current accrued expenses | |||||||
Debt instrument, maturity date | Jun. 1, 2018 | ||||||
Final payment fee | 7.50% | ||||||
Final payment fee (amounts in dollars) | $ 800,000 | ||||||
Amended And Restated Loan And Security Agreement | Term B Loan | 2014 Warrants | |||||||
Current accrued expenses | |||||||
Warrants to purchase shares of common stock issued on conversion | shares | 98,039 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 4.08 | $ 4.08 | |||||
Warrants expiration date | 2021-12 | ||||||
Amended And Restated Loan And Security Agreement | Term B Loan | Maximum | |||||||
Current accrued expenses | |||||||
Principal amount | $ 10,000,000 | ||||||
Amended And Restated Loan And Security Agreement | Term B Loan Tranche 1 | Minimum | |||||||
Current accrued expenses | |||||||
Principal amount | $ 10,000,000 |
Convertible Preferred Stock a29
Convertible Preferred Stock and Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |||||
Oct. 31, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | May 02, 2017 | Dec. 31, 2016 | |
Convertible preferred stock | |||||||
Net proceeds from issuance of shares after related cash costs | $ 172 | $ 167 | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Restricted Stock Units (RSUs) | |||||||
Convertible preferred stock | |||||||
Expected recognition weighted average period of unrecognized compensation cost | 2 years | ||||||
Unrecognized compensation cost related to unvested restricted shares | $ 1,100 | ||||||
Employee And Non Employee Stock Option | |||||||
Convertible preferred stock | |||||||
Outstanding options | 5,719,110 | 3,910,350 | |||||
Unrecognized compensation cost related to outstanding options | $ 6,500 | ||||||
Expected recognition weighted average period of unrecognized compensation cost | 2 years 9 months 19 days | ||||||
Employee And Non Employee Stock Option | Vesting Based On Performance | |||||||
Convertible preferred stock | |||||||
Outstanding options | 303,600 | ||||||
Aggregate grant date fair value | $ 600 | ||||||
Subsequent Event | Restricted Stock Units (RSUs) | Certain Employees | |||||||
Convertible preferred stock | |||||||
Restricted stock units, vested | 225,125 | ||||||
Restricted stock units, issued | 225,125 | ||||||
Non-Voting Class A Preferred Stock | |||||||
Convertible preferred stock | |||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||
Conversion price | $ 2.66 | ||||||
Non-Voting Class A Preferred Stock | Redmile Group, LLC and Affiliates | |||||||
Convertible preferred stock | |||||||
Terms of conversion | The Class A Preferred were purchased exclusively by entities affiliated with Redmile Group, LLC (collectively, “Redmile”). The terms of the CoD prohibited Redmile from converting the Class A Preferred into shares of the Company’s common stock if, as a result of conversion, Redmile, together with its affiliates, would own more than 9.99% of the Company’s common stock then issued and outstanding (the “Redmile Percentage Limitation”), which percentage could change at Redmile’s election upon 61 days’ notice to the Company to i) any other number less than or equal to 19.99% or (ii) subject to approval of the Company’s stockholders to the extent required in accordance with the NASDAQ Global Market rules, any number in excess of 19.99%. On May 2, 2017, the Company’s stockholders approved the issuance of up to an aggregate of 14,097,745 shares of common stock upon the conversion of the outstanding shares of Class A Preferred. As a result, Redmile has the right to increase the Redmile Percentage Limitation to any percentage in excess of 19.99% at its election. | ||||||
Non-Voting Class A Preferred Stock | Maximum | |||||||
Convertible preferred stock | |||||||
Number of shares to be issued upon conversion | 14,097,745 | ||||||
Non-Voting Class A Preferred Stock | Maximum | Redmile Group, LLC and Affiliates | |||||||
Convertible preferred stock | |||||||
Percentage of common stock ownership upon preferred stock conversion | 9.99% | ||||||
Preferred shares converted into common stock percentage of ownership change upon notice | 19.99% | ||||||
Private Placement | Common Stock | |||||||
Convertible preferred stock | |||||||
Share issue price (in dollars per share) | $ 2.66 | $ 1.96 | |||||
Common stock issued | 7,236,837 | 5,250,000 | |||||
Net proceeds from issuance of shares after related cash costs | $ 54,900 | $ 10,200 | |||||
Gross proceeds from issuance of shares | $ 56,700 | ||||||
Private Placement | Non-Voting Class A Preferred Stock | |||||||
Convertible preferred stock | |||||||
Preferred stock, issued shares | 2,819,549 | ||||||
Share issue price (in dollars per share) | $ 13.30 | ||||||
Number of shares to be issued upon conversion | 5 |
Convertible Preferred Stock a30
Convertible Preferred Stock and Stockholders' Equity (Details 2) - Employee And Non Employee Stock Option | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Options | |
Balance at the beginning of the period | shares | 3,910,350 |
Granted | shares | 2,438,980 |
Canceled | shares | (559,571) |
Exercised | shares | (70,649) |
Balance at the end of the period | shares | 5,719,110 |
Weighted-Average Price | |
Balance at the beginning of the period | $ / shares | $ 3.77 |
Granted | $ / shares | 3.04 |
Canceled | $ / shares | 3.59 |
Exercised | $ / shares | 2.74 |
Balance at the end of the period | $ / shares | $ 3.49 |
Convertible Preferred Stock a31
Convertible Preferred Stock and Stockholders' Equity (Details 3) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Restricted Stock Units | |
Balance at the beginning of the period | shares | 525,250 |
Canceled | shares | (75,000) |
Balance at the end of the period | shares | 450,250 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at the beginning of the period | $ / shares | $ 4.89 |
Canceled | $ / shares | 4.89 |
Balance at the end of the period | $ / shares | $ 4.89 |
Convertible Preferred Stock a32
Convertible Preferred Stock and Stockholders' Equity (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Convertible preferred stock | ||||
Total stock-based compensation expense | $ 871 | $ 783 | $ 2,711 | $ 2,365 |
Research And Development | ||||
Convertible preferred stock | ||||
Total stock-based compensation expense | 450 | 461 | 1,599 | 1,352 |
General And Administrative | ||||
Convertible preferred stock | ||||
Total stock-based compensation expense | $ 421 | $ 322 | $ 1,112 | $ 1,013 |
Convertible Preferred Stock a33
Convertible Preferred Stock and Stockholders' Equity (Details 5) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Stock Option | ||
Weighted-average assumptions to determine fair value of stock options | ||
Risk-free interest rate | 2.00% | 1.60% |
Expected volatility | 90.40% | 79.80% |
Expected term (in years) | 5 years 10 months 25 days | 6 years |
Expected dividend yield | 0.00% | 0.00% |
Non Employee Stock Option | ||
Weighted-average assumptions to determine fair value of stock options | ||
Risk-free interest rate | 2.00% | 1.40% |
Expected volatility | 90.80% | 81.30% |
Remaining contractual term (in years) | 8 years 7 months 6 days | 6 years 10 months 25 days |
Expected dividend yield | 0.00% | 0.00% |