Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | OTIC | |
Entity Registrant Name | Otonomy, Inc. | |
Entity Central Index Key | 1,493,566 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,630,125 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 19,024 | $ 18,456 |
Short-term investments | 80,984 | 101,548 |
Accounts receivable, net | 14 | 107 |
Prepaid and other current assets | 2,398 | 2,334 |
Total current assets | 102,420 | 122,445 |
Restricted cash | 1,160 | 1,158 |
Property and equipment, net | 4,529 | 4,679 |
Other long-term assets | 82 | 82 |
Total assets | 108,191 | 128,364 |
Current liabilities: | ||
Accounts payable | 877 | 961 |
Accrued expenses | 2,645 | 3,881 |
Accrued compensation | 1,943 | 3,307 |
Current portion of deferred rent | 39 | 42 |
Total current liabilities | 5,504 | 8,191 |
Deferred rent, net of current portion | 2,951 | 2,894 |
Total liabilities | 8,455 | 11,085 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized at June 30, 2018 and December 31, 2017; no shares issued or outstanding at June 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.001 par value; 200,000,000 shares authorized at June 30, 2018 and December 31, 2017; 30,630,125 and 30,558,726 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 31 | 31 |
Additional paid-in capital | 489,578 | 482,198 |
Accumulated other comprehensive loss | (46) | (100) |
Accumulated deficit | (389,827) | (364,850) |
Total stockholders' equity | 99,736 | 117,279 |
Total liabilities and stockholders' equity | $ 108,191 | $ 128,364 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares Issued | 30,630,125 | 30,558,726 |
Common stock, Shares outstanding | 30,630,125 | 30,558,726 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Product sales, net | $ 123 | $ 326 | $ 424 | $ 684 |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Costs and operating expenses: | ||||
Cost of product sales | $ 241 | $ 397 | $ 513 | $ 860 |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 8,225 | $ 12,714 | $ 13,875 | $ 25,899 |
Selling, general and administrative | 5,619 | 10,747 | 11,776 | 24,839 |
Total costs and operating expenses | 14,085 | 23,858 | 26,164 | 51,598 |
Loss from operations | (13,962) | (23,532) | (25,740) | (50,914) |
Interest income | 409 | 311 | 763 | 615 |
Net loss | $ (13,553) | $ (23,221) | $ (24,977) | $ (50,299) |
Net loss per share, basic and diluted | $ (0.44) | $ (0.77) | $ (0.82) | $ (1.66) |
Weighted-average shares used to compute net loss per share, basic and diluted | 30,594,288 | 30,269,190 | 30,581,481 | 30,263,042 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (13,553) | $ (23,221) | $ (24,977) | $ (50,299) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available for sale securities | 50 | (9) | 54 | (78) |
Comprehensive loss | $ (13,503) | $ (23,230) | $ (24,923) | $ (50,377) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (24,977) | $ (50,299) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 594 | 592 |
Stock-based compensation | 7,151 | 7,217 |
Amortization of discount or premium on short-term investments | (169) | 307 |
Deferred rent | 54 | 1,488 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 93 | 15 |
Inventory | 0 | 244 |
Prepaid and other assets | (64) | 930 |
Accounts payable | (184) | 0 |
Accrued expenses | (1,237) | (4,258) |
Accrued compensation | (1,364) | (1,501) |
Net cash used in operating activities | (20,103) | (45,265) |
Cash flows from investing activities: | ||
Purchases of short-term investments | (54,213) | (73,662) |
Maturities of short-term investments | 75,000 | 117,299 |
Purchases of property and equipment | (343) | (681) |
Net cash provided by investing activities | 20,444 | 42,956 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 32 | 58 |
Proceeds from issuance of common stock | 197 | 427 |
Net cash provided by financing activities | 229 | 485 |
Net change in cash, cash equivalents and restricted cash | 570 | (1,824) |
Cash, cash equivalents and restricted cash at beginning of period | 19,614 | 24,853 |
Cash, cash equivalents and restricted cash at end of period | 20,184 | 23,029 |
Cash and cash equivalents at end of period | 19,024 | 22,332 |
Restricted cash at end of period | 1,160 | 697 |
Supplemental disclosure of non-cash investing activities: | ||
Purchase of property and equipment in accounts payable and accrued expenses | $ 166 | $ 36 |
Description of Business and Bas
Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Description of Business Otonomy, Inc. (Otonomy or the Company) was incorporated in the state of Delaware on May 6, 2008. Otonomy is a biopharmaceutical company dedicated to the development of innovative therapeutics for otology. The Company pioneered the application of drug delivery technology to the ear in order to develop products that achieve sustained drug exposure from a single local administration. OTIVIDEX TM In addition, the Company developed, received U.S. Food and Drug Administration (FDA) approval and commercially launched OTIPRIO ® Basis of Presentation The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses and negative cash flows from operating activities since inception. As of June 30, 2018, the Company had cash, cash equivalents and short-term investments of $100.0 million and an accumulated deficit of $389.8 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it: (i) develops and seeks regulatory approvals for OTIVIDEX and its other potential product candidates; and (ii) works to develop additional product candidates through research and development programs. When additional financing is required, the Company anticipates that it will seek additional funding through future debt and/or equity financings or other sources, such as potential collaboration agreements. If the Company is not able to secure adequate additional funding, if or when necessary, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, and future prospects. Unaudited Interim Financial Information The accompanying interim condensed financial statements are unaudited. These unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and following the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In the Company’s opinion, the unaudited interim condensed 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, results of operations and 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 audited financial statements and accompanying notes for the year ended December 31, 2017 included in the Company’s Form 10-K, as filed with the SEC on March 8, 2018. The results presented in these unaudited condensed financial statements are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of product sales and expense during the reporting period. 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. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held. Additionally, the Company established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash in readily available checking, savings and money market accounts, and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. The Company’s restricted cash consists of cash maintained in separate deposit accounts to secure a letter of credit issued by a bank to the landlord under a lease agreement for the Company’s corporate headquarters and to secure the Company’s credit cards. Short-term Investments The Company carries short-term investments classified as available-for-sale debt securities at fair value as determined by prices for identical or similar securities at the balance sheet date. Short-term investments consist of both Level 1 and Level 2 financial instruments in the fair value hierarchy (see Note 7 – Fair Value Realized gains or losses of available-for-sale debt securities are determined using the specific identification method and net realized gains and losses are included in interest income. The Company periodically reviews available-for-sale debt securities for other-than temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company records unrealized gains and losses on available-for-sale debt securities as a component of other comprehensive loss within the statements of comprehensive loss and as a separate component of stockholders’ equity on the condensed balance sheets. Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, short-term investments, prepaid expenses and other current assets, other assets, accounts payable, accrued liabilities, and accrued compensation approximate fair value due to the short-term nature of these items. Accounts Receivable Accounts receivable are recorded net of customer allowances for chargebacks, distributor fees and any allowance for doubtful accounts. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. To date, the Company has determined that an allowance for doubtful accounts is not required. Property and Equipment Property and equipment generally consist of manufacturing equipment, furniture and fixtures, computers, and scientific and office equipment and are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally two to ten years). Leasehold improvements are stated at cost and are depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Repairs and maintenance costs are charged to expense as incurred. Impairment of Long-Lived Assets The Company assesses the value of its long-lived assets, which consist of property and equipment, for impairment on an annual basis and whenever events or changes in circumstances and the undiscounted cash flows generated by those assets indicate that the carrying amount of such assets may not be recoverable. While the Company’s current and historical operating losses and negative cash flows are indicators of impairment, the Company believes that future cash flows to be received support the carrying value of its long-lived assets . The Company had no impairments or disposals of long-lived assets during the six months ended June 30, 2018. Clinical Trial Expense Accruals As part of the process of preparing the Company’s financial statements, the Company is required to estimate expenses resulting from the Company’s obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through financial models taking into account discussion with applicable personnel and outside service providers as to the progress or state of its trials. During the course of a clinical trial, the Company adjusts its clinical expense if actual results differ from its estimates. Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Concepts (ASC) 606 , Revenue from Contracts with Customers Revenue Recognition To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract with a customer under ASC 606 and when it is probable the Company will collect the consideration exchanged for the goods or services transferred to the customer. OTIPRIO is sold to a limited number of specialty wholesale distributors. The Company recognizes revenue when its customers obtain control of OTIPRIO, typically upon delivery by the Company to these distributors. The Company has determined the delivery of OTIPRIO to its customers constitutes a single performance obligation and no other performance obligations are present. Hospitals, ambulatory surgery centers and physician offices order OTIPRIO from the Company’s distributors and are the end users of OTIPRIO. The Company permits product returns from the distributors only if the product is damaged or is shipped or ordered in error. Product returns based on expiry are not permitted. To date, product returns have been immaterial. Sales commissions and other incremental costs of obtaining customer contracts are expensed as incurred as the amortization periods would be less than one year or the amount is immaterial. Transaction Price and Reserves for Variable Consideration Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, government chargebacks, discounts and rebates and other fee for service amounts that are detailed within customer contracts relating to the sale of OTIPRIO. These reserves, as detailed below, are based on the amounts earned or accrued on our sales. Variable consideration is estimated using the most likely method, which is the single most likely outcome under the Company’s contracts and takes into consideration contractual fees, historical chargeback activity and historical Medicaid rebates. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which the Company is entitled based on the terms of the respective underlying contracts. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. The Company’s analyses also contemplate application of the constraint in accordance with the guidance, under which the Company determined a material reversal of revenue would not occur in a future period. Reserves are established for these discounts and allowances upon delivery of OTIPRIO by the distributor and are classified as: (i) an allowance against accounts receivable if the amount is payable to the distributor or (ii) an accrued liability if the amount is payable to a party other than the distributor. Allowances against accounts receivable relate to chargebacks and distributor fees and accruals relate primarily to government rebates. Trade Discounts and Allowances . The Company’s customers are specialty wholesale distributors with whom the Company has contracted to pay a fee based on a percentage of wholesale acquisition cost for sales order management, data, and distribution services . The Company determined such services received to date are not distinct from the sale of products to customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations. This fee for service is recorded as an allowance against accounts receivable at the time of sale based on the contracted percentage. Chargebacks . The Company estimates allowances against accounts receivable for chargebacks related to agreements with group purchasing organizations and federal contracts. Under these agreements, the Company credits distributors a chargeback amount which represents the difference between the wholesale acquisition cost and the discounted price at which eligible purchasers purchased from the distributors. At the time of sale, estimated chargebacks are recorded based on historical chargeback activity, the projected payer mix, patient population industry data and the identification of entities purchasing OTIPRIO that are eligible for discounted pricing. Government . The Company estimates a rebate liability in connection with a Medicaid Drug Rebate Agreement with the Centers for Medicare & Medicaid Services, which provides a rebate to participating states based on covered purchases of OTIPRIO. At the time of sale, estimated Medicaid rebates are recorded based on historical government rebate activity, the projected payer mix and Medicaid patient population industry data. Concentration of Major Customers The Company sells OTIPRIO to specialty wholesale distributor customers. The following table summarizes the Company’s sales to its largest customers for each of the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 First largest 69 % 40 % 47 % 33 % Second largest 27 % 31 % 31 % 33 % Third largest * 26 % 21 % 32 % * represents less than 10% Research and Development Research and development expenses include the costs associated with the Company’s research and development activities, including salaries, benefits and occupancy costs. Also included in research and development expenses are third-party costs incurred in conjunction with contract manufacturing for the Company’s research and development programs and clinical trials, including the cost of clinical trial drug supply, costs incurred by contract research organizations and regulatory expenses. Research and development costs are expensed as incurred. Patent Expenses The Company expenses all costs as incurred in connection with patent applications (including direct application fees and the legal and consulting expenses related to making such applications) and such costs are included in selling, general and administrative expenses in the accompanying condensed statements of operations. Stock-Based Compensation The Company accounts for stock-based compensation expense related to stock options and employee stock purchase plan (ESPP) rights by estimating the fair value on the date of grant using the Black-Scholes-Merton option pricing model. Forfeitures are recognized as incurred. For awards subject to time-based vesting conditions, stock-based compensation expense is recognized using the straight-line method. For performance-based awards to employees, (i) the fair value of the award is determined on the grant date, (ii) we assess the probability of the individual performance milestones under the award being achieved and (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met. Income Taxes The accounting guidance for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position. The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. Potentially dilutive securities excluded from the calculation of diluted net loss per share are as follows: Three and Six Months Ended June 30, 2018 2017 Warrants to purchase common stock — 141,060 Options to purchase common stock 5,146,089 5,537,575 5,146,089 5,678,635 Recent Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases will be adopted by recognizing a cumulative effect adjustment to the opening balance of retained earnings as of that date The effect of adoption on the Company's financial statements will depend on the leases in effect and the Company's borrowing rates at that time, but based on the Company's existing leases, adoption is expected to result in a significant increase in assets and liabilities on the balance sheet, and no significant change to operating expenses. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07) . The amendments in ASU 2018-07 expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards for specific guidance on inputs to an option pricing model, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contracted accounted for under Topic 606, Revenue from Contracts with Customers . ASU 2018-07 is effective for the Company in January 2020, with early adoptions permitted, but no earlier than the Company’s adoption date of Topic 606. The Company does not expect the adoption of ASU 2018-07 to have a material impact on its financial position, results of operations or cash flows. |
Available-for-Sale Securities
Available-for-Sale Securities | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Available-for-Sale Securities | 3. Available-for-Sale Securities The Company invests in available-for-sale debt securities consisting of money market funds, certificates of deposit, U.S. Treasury securities and U.S. government sponsored enterprise securities. Available-for-sale debt securities are classified as part of either cash and cash equivalents or short-term investments in the condensed balance sheets. Available-for-sale debt securities with maturities of three months or less from the date of purchase have been classified as cash equivalents, and were $15.8 million and $10.5 million as of June 30, 2018 and December 31, 2017 respectively. Available-for-sale debt securities with maturities of more than three months from the date of purchase have been classified as short-term investments, and were as follows (in thousands): Amortized Cost Unrealized Gain Unrealized Loss Market Value June 30, 2018: U.S. Treasury securities $ 61,050 $ — $ (30 ) $ 61,020 U.S. government sponsored enterprise securities 19,980 — (16 ) 19,964 $ 81,030 $ — $ (46 ) $ 80,984 December 31, 2017: U.S. Treasury securities $ 39,209 $ — $ (44 ) $ 39,165 U.S. government sponsored enterprise securities 62,439 — (56 ) 62,383 $ 101,648 $ — $ (100 ) $ 101,548 As of June 30, 2018, the Company had 38 securities in a gross unrealized loss position, all which have been in such position for less than twelve months At each reporting date, the Company performs an evaluation of impairment to determine if the unrealized losses are other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, and the Company’s intent and ability to hold the investment until recovery of its amortized cost basis. Otonomy intends and has the ability, to hold its investments in unrealized loss positions until their amortized cost basis has been recovered. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Details | 4. Balance Sheet Details Prepaid and Other Current Assets Prepaid and other current assets are comprised of the following (in thousands): June 30, December 31, 2018 2017 Prepaid clinical trial costs $ 313 $ 729 Other 2,085 1,605 Total $ 2,398 $ 2,334 Property and Equipment, Net Property and equipment, net is comprised of the following (in thousands): June 30, December 31, 2018 2017 Laboratory equipment $ 3,760 $ 3,457 Manufacturing equipment 1,002 871 Computer equipment and software 737 731 Leasehold improvements 736 733 Office furniture 1,548 1,581 7,783 7,373 Less: accumulated depreciation (3,254 ) (2,694 ) Total $ 4,529 $ 4,679 Accrued Expenses Accrued expenses are comprised of the following (in thousands): June 30, December 31, 2018 2017 Accrued clinical trial costs $ 330 $ 1,112 Accrued other 2,315 2,769 Total $ 2,645 $ 3,881 |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges | 5. Restructuring Charges In November 2017, the Company initiated a restructuring plan to focus resources on its development programs and eliminate the cash burn associated with OTIPRIO promotional support. The actions associated with the restructuring were substantially completed in December 2017 and, as a result, the Company recorded a restructuring charge of $3.8 million to selling, general and administrative expense. Restructuring costs primarily include severance costs, including severance payments and outplacement services, health insurance coverage and $1.0 million in stock-based compensation expense associated with accelerated vesting pursuant to the original terms of the Company’s employment agreement with its Chief Medical Officer. As of June 30, 2018 and December 31, 2017, accrued and unpaid severance costs totaled approximately $0.1 million and $1.5 million, respectively. During the six months ended June 30, 2018, the Company paid approximately $1.4 million in severance costs. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Intellectual Property Licenses The Company has acquired exclusive rights to develop patented rights, information rights and related know-how for OTIPRIO, OTIVIDEX and OTO-311 and potential future product candidates under licensing agreements with third parties. The licensing rights obligate the Company to make payments to the licensors for license fees, milestones and royalties. The Company is also responsible for patent prosecution costs, in the event such costs are incurred. Under one of these agreements, the Company has achieved six development milestones and one regulatory milestone, totaling $2.8 million, related to its clinical trials for OTIPRIO, OTIVIDEX and OTO-311. The Company may be obligated to make additional milestone payments under the Company’s intellectual property license agreements as follows (in thousands): Development $ 1,600 Regulatory 10,275 Commercialization 1,000 Total $ 12,875 In addition, the Company is obligated to pay royalties of less than five percent on net sales of OTIPRIO and on sales of any other commercial products developed using these licensed technologies. Such royalty expense for OTIPRIO is recorded to cost of product sales. The Company may also be obligated to pay to the licensors a percentage of fees received if and when the Company sublicenses the technology. As of June 30, 2018, the Company has not entered into any sublicense agreements for the licensed technologies. Other Royalty Arrangements The Company entered into an agreement related to OTIPRIO under which the Company is obligated to pay a one-time milestone payment of $0.5 million upon the first commercial sale of OTIPRIO and to pay royalties of less than one percent on net product sales of OTIPRIO. This milestone payment was paid during March 2016 and both this milestone payment and the royalties are recorded as selling, general and administrative expense. The royalties are payable until the later of: (i) the expiration of the last to expire patent owned by the Company in such country covering OTIPRIO; or (ii) 10 years after the first commercial sale of OTIPRIO after receipt of regulatory approval for OTIPRIO in such country. During October 2014, the Company entered into an exclusive license agreement with Ipsen that enables the Company to use clinical and non-clinical gacyclidine data generated by Ipsen to support worldwide development and regulatory filings for OTO-313. Under this license agreement, the Company is obligated to pay Ipsen low single-digit royalties on annual net sales of OTO-313 by the Company or its affiliates or sublicensees, up to a maximum cumulative royalty totaling $10.0 million. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 7. Fair Value The accounting guidance defines fair value, establishes a consistency framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring basis or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance establishes a three-tier fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These tiers are based on the source of the inputs and are as follows: Level : Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level : Inputs other than quoted prices in active markets that are observable either directly or indirectly. Level : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. As of June 30, 2018 and December 31, 2017 the Company held no assets or liabilities measured at fair value on a nonrecurring basis and no liabilities measured at fair value on a recurring basis. The following fair value hierarchy table presents the Company’s assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using Total Level 1 Level 2 Level 3 June 30, 2018: Assets Money market funds $ 15,845 $ 15,845 $ — $ — U.S. Treasury securities 61,020 61,020 — — U.S. government sponsored enterprise securities 19,964 — 19,964 — $ 96,829 $ 76,865 $ 19,964 $ — December 31, 2017: Assets Money market funds $ 10,494 $ 10,494 $ — $ — U.S. Treasury securities 39,165 39,165 — — U.S. government sponsored enterprise securities 62,383 — 62,383 — $ 112,042 $ 49,659 $ 62,383 $ — |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Common Stock Reserved for Future Issuance Shares of common stock reserved for future issuance are as follows: June 30, December 31, 2018 2017 Common stock options issued and outstanding 5,146,089 4,599,252 Common stock options available for future grant 4,365,896 3,403,597 Common stock reserved for issuance under ESPP 1,698,108 1,292,327 Total common stock reserved for future issuance 11,210,093 9,295,176 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation The 2014 Plan permits the grant of incentive stock options to the Company’s employees and the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares to the Company’s employees, directors and consultants. Options granted under the 2014 Plan are generally scheduled to vest over four years, subject to continued service, and subject to certain acceleration of vesting provisions, expire no later than 10 years from the date of grant. Options granted under the 2014 Plan must have a per share exercise price equal to at least 100% of the fair market value of a shares of the common stock as of the date of grant. The following table summarizes stock option activity for the six months ended June 30, 2018 (share amounts in thousands): Options Weighted- Average Exercise Price Outstanding as of December 31, 2017 4,599 $ 14.28 Granted 3,634 $ 5.69 Exercised (19 ) $ 1.69 Forfeited (3,068 ) $ 18.42 Outstanding as of June 30, 2018 5,146 $ 5.79 Performance-based Awards In February 2018, the Company granted its chief executive officer a stock option for the purchase of 250,000 shares of the Company’s common stock which is subject to time-based vesting and certain performance-based conditions. Specifically, subject to continued service the option will vest upon achievement of a clinical development milestone. On the grant date, the Company determined the fair value of the award and determined achievement of the milestone was probable of occurrence. The Company is recognizing stock-based compensation expense, based upon the grant date fair value, over the implicit service period. If the Company determines the achievement of the milestone is not probable, it will reverse all previously recognized expense. Option Exchange On December 20, 2017, the Company commenced an option exchange program (Option Exchange) which allowed eligible employees to exchange certain outstanding stock options (Eligible Options), whether vested or unvested, with an exercise price greater than $12.00 per share (Exchange Offer), for new stock options. Non-employee members of our Board of Directors were not eligible to participate in the Option Exchange. The Program expired on January 19, 2018, with a closing price of $5.675 per share. Pursuant to the terms and condition of the Exchange Offer, the Company accepted for exchange Eligible Options to purchase a total of 1,992,000 shares of the Company’s common stock, representing approximately 81.51% of the total shares of common stock underlying the Eligible Options. All surrendered options were canceled effective as of the expiration of the Exchange Offer and in exchange the Company granted new options to purchase an aggregate of 1,570,328 shares of the Company’s common stock pursuant to the terms of the Exchange Offer and the Company’s 2014 Equity Incentive Plan. These new options vest over one to three years, subject to the terms of the Option Exchange and expire eight years from the date of grant. The Company determined this option exchange was an option modification. The exchange of these stock options was treated as a modification for accounting purposes. The difference in the fair value of the canceled options immediately prior to the cancellation and the fair value of the modified options resulted in incremental value, of approximately $0.6 million, which was calculated using the Black-Scholes-Merton option pricing model. T otal stock-based compensation expense to be recognized over the requisite service period is equal to remaining unrecognized expense for the exchanged option, as of the exchange date, plus the incremental value of the modification to the award. During the financial statement close process for the three and six months ended June 30, 2018 the Company identified and corrected an immaterial error related to the first quarter of 2018. The adjustment related to an error in the timing of recognition of the stock-based compensation associated with the Option Exchange and had the impact of understating stock-based compensation, additional paid in capital and net loss in the first quarter of 2018 by $1.2 million. Management evaluated the effect of the adjustment on the previously issued interim financial statements in accordance with SAB No. 99 and SAB No. 108 and concluded that it was qualitatively and quantitatively immaterial to the interim period and the trend of earnings. Management also concluded that correcting the error in the second quarter of 2018 would not have a material impact on the second quarter results for 2018. As a result, we corrected the error in our condensed statement of operations for the three months ended June 30, 2018. There was no impact to the condensed balance sheet as of June 30, 2018 or our condensed statement of operations for the six months ended June 30, 2018. Total non-cash stock-based compensation expense recognized in the accompanying condensed statements of operations is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of product sales $ 2 $ 6 $ 6 $ 12 Research and development 1,698 1,359 2,335 2,344 Selling, general and administrative 2,738 2,126 4,810 4,861 Total stock-based compensation $ 4,438 $ 3,491 $ 7,151 $ 7,217 |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 10. Subsequent Event On August 2, 2018, the Company entered into a co-promotion agreement (the "Co-Promotion Agreement”) with privately held Mission Pharmacal Company (“Mission”), pursuant to which Mission will exclusively promote OTIPRIO for AOE in the United States to pediatrician and primary care physician offices and urgent care clinics. In partial consideration of the OTIPRIO support activities provided by the Company, and as reimbursement for certain expenses incurred by the Company to obtain and maintain FDA approval for use of OTIPRIO in AOE, Mission will make non-refundable, non-creditable payments to the Company during each of the first five years of the Co-Promotion Agreement. In addition, Mission will reimburse the Company for a proportion of product support expenses as agreed upon by both parties and the Company will retain a share of gross profits from the sale of OTIPRIO to Mission’s accounts. The Company retains all commercial rights for other customer segments for AOE and for use of OTIPRIO in all other indications. The initial term of the Co-Promotion Agreement is five years with provisions for extension and early termination. |
Description of Business and B17
Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses and negative cash flows from operating activities since inception. As of June 30, 2018, the Company had cash, cash equivalents and short-term investments of $100.0 million and an accumulated deficit of $389.8 million. The Company anticipates that it will continue to incur net losses into the foreseeable future as it: (i) develops and seeks regulatory approvals for OTIVIDEX and its other potential product candidates; and (ii) works to develop additional product candidates through research and development programs. When additional financing is required, the Company anticipates that it will seek additional funding through future debt and/or equity financings or other sources, such as potential collaboration agreements. If the Company is not able to secure adequate additional funding, if or when necessary, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, and future prospects. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying interim condensed financial statements are unaudited. These unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and following the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In the Company’s opinion, the unaudited interim condensed 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, results of operations and 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 audited financial statements and accompanying notes for the year ended December 31, 2017 included in the Company’s Form 10-K, as filed with the SEC on March 8, 2018. The results presented in these unaudited condensed financial statements are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of product sales and expense during the reporting period. 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. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held. Additionally, the Company established guidelines regarding approved investments and maturities of investments, which are designed to maintain safety and liquidity. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash in readily available checking, savings and money market accounts, and highly liquid investments with original maturities of three months or less at the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. The Company’s restricted cash consists of cash maintained in separate deposit accounts to secure a letter of credit issued by a bank to the landlord under a lease agreement for the Company’s corporate headquarters and to secure the Company’s credit cards. |
Short-term Investments | Short-term Investments The Company carries short-term investments classified as available-for-sale debt securities at fair value as determined by prices for identical or similar securities at the balance sheet date. Short-term investments consist of both Level 1 and Level 2 financial instruments in the fair value hierarchy (see Note 7 – Fair Value Realized gains or losses of available-for-sale debt securities are determined using the specific identification method and net realized gains and losses are included in interest income. The Company periodically reviews available-for-sale debt securities for other-than temporary declines in fair value below the cost basis, and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company records unrealized gains and losses on available-for-sale debt securities as a component of other comprehensive loss within the statements of comprehensive loss and as a separate component of stockholders’ equity on the condensed balance sheets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, short-term investments, prepaid expenses and other current assets, other assets, accounts payable, accrued liabilities, and accrued compensation approximate fair value due to the short-term nature of these items. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of customer allowances for chargebacks, distributor fees and any allowance for doubtful accounts. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. To date, the Company has determined that an allowance for doubtful accounts is not required. |
Property and Equipment | Property and Equipment Property and equipment generally consist of manufacturing equipment, furniture and fixtures, computers, and scientific and office equipment and are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally two to ten years). Leasehold improvements are stated at cost and are depreciated on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Repairs and maintenance costs are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses the value of its long-lived assets, which consist of property and equipment, for impairment on an annual basis and whenever events or changes in circumstances and the undiscounted cash flows generated by those assets indicate that the carrying amount of such assets may not be recoverable. While the Company’s current and historical operating losses and negative cash flows are indicators of impairment, the Company believes that future cash flows to be received support the carrying value of its long-lived assets . The Company had no impairments or disposals of long-lived assets during the six months ended June 30, 2018. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals As part of the process of preparing the Company’s financial statements, the Company is required to estimate expenses resulting from the Company’s obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in its financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. The Company determines accrual estimates through financial models taking into account discussion with applicable personnel and outside service providers as to the progress or state of its trials. During the course of a clinical trial, the Company adjusts its clinical expense if actual results differ from its estimates. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Concepts (ASC) 606 , Revenue from Contracts with Customers Revenue Recognition To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract with a customer under ASC 606 and when it is probable the Company will collect the consideration exchanged for the goods or services transferred to the customer. OTIPRIO is sold to a limited number of specialty wholesale distributors. The Company recognizes revenue when its customers obtain control of OTIPRIO, typically upon delivery by the Company to these distributors. The Company has determined the delivery of OTIPRIO to its customers constitutes a single performance obligation and no other performance obligations are present. Hospitals, ambulatory surgery centers and physician offices order OTIPRIO from the Company’s distributors and are the end users of OTIPRIO. The Company permits product returns from the distributors only if the product is damaged or is shipped or ordered in error. Product returns based on expiry are not permitted. To date, product returns have been immaterial. Sales commissions and other incremental costs of obtaining customer contracts are expensed as incurred as the amortization periods would be less than one year or the amount is immaterial. Transaction Price and Reserves for Variable Consideration Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, government chargebacks, discounts and rebates and other fee for service amounts that are detailed within customer contracts relating to the sale of OTIPRIO. These reserves, as detailed below, are based on the amounts earned or accrued on our sales. Variable consideration is estimated using the most likely method, which is the single most likely outcome under the Company’s contracts and takes into consideration contractual fees, historical chargeback activity and historical Medicaid rebates. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which the Company is entitled based on the terms of the respective underlying contracts. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. The Company’s analyses also contemplate application of the constraint in accordance with the guidance, under which the Company determined a material reversal of revenue would not occur in a future period. Reserves are established for these discounts and allowances upon delivery of OTIPRIO by the distributor and are classified as: (i) an allowance against accounts receivable if the amount is payable to the distributor or (ii) an accrued liability if the amount is payable to a party other than the distributor. Allowances against accounts receivable relate to chargebacks and distributor fees and accruals relate primarily to government rebates. Trade Discounts and Allowances . The Company’s customers are specialty wholesale distributors with whom the Company has contracted to pay a fee based on a percentage of wholesale acquisition cost for sales order management, data, and distribution services . The Company determined such services received to date are not distinct from the sale of products to customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations. This fee for service is recorded as an allowance against accounts receivable at the time of sale based on the contracted percentage. Chargebacks . The Company estimates allowances against accounts receivable for chargebacks related to agreements with group purchasing organizations and federal contracts. Under these agreements, the Company credits distributors a chargeback amount which represents the difference between the wholesale acquisition cost and the discounted price at which eligible purchasers purchased from the distributors. At the time of sale, estimated chargebacks are recorded based on historical chargeback activity, the projected payer mix, patient population industry data and the identification of entities purchasing OTIPRIO that are eligible for discounted pricing. Government . The Company estimates a rebate liability in connection with a Medicaid Drug Rebate Agreement with the Centers for Medicare & Medicaid Services, which provides a rebate to participating states based on covered purchases of OTIPRIO. At the time of sale, estimated Medicaid rebates are recorded based on historical government rebate activity, the projected payer mix and Medicaid patient population industry data. Concentration of Major Customers The Company sells OTIPRIO to specialty wholesale distributor customers. The following table summarizes the Company’s sales to its largest customers for each of the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 First largest 69 % 40 % 47 % 33 % Second largest 27 % 31 % 31 % 33 % Third largest * 26 % 21 % 32 % * represents less than 10% |
Concentration of Major Customers | Concentration of Major Customers The Company sells OTIPRIO to specialty wholesale distributor customers. The following table summarizes the Company’s sales to its largest customers for each of the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 First largest 69 % 40 % 47 % 33 % Second largest 27 % 31 % 31 % 33 % Third largest * 26 % 21 % 32 % * represents less than 10% |
Research and Development | Research and Development Research and development expenses include the costs associated with the Company’s research and development activities, including salaries, benefits and occupancy costs. Also included in research and development expenses are third-party costs incurred in conjunction with contract manufacturing for the Company’s research and development programs and clinical trials, including the cost of clinical trial drug supply, costs incurred by contract research organizations and regulatory expenses. Research and development costs are expensed as incurred. |
Patent Expenses | Patent Expenses The Company expenses all costs as incurred in connection with patent applications (including direct application fees and the legal and consulting expenses related to making such applications) and such costs are included in selling, general and administrative expenses in the accompanying condensed statements of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation expense related to stock options and employee stock purchase plan (ESPP) rights by estimating the fair value on the date of grant using the Black-Scholes-Merton option pricing model. Forfeitures are recognized as incurred. For awards subject to time-based vesting conditions, stock-based compensation expense is recognized using the straight-line method. For performance-based awards to employees, (i) the fair value of the award is determined on the grant date, (ii) we assess the probability of the individual performance milestones under the award being achieved and (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met. |
Income Taxes | Income Taxes The accounting guidance for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position. The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. Potentially dilutive securities excluded from the calculation of diluted net loss per share are as follows: Three and Six Months Ended June 30, 2018 2017 Warrants to purchase common stock — 141,060 Options to purchase common stock 5,146,089 5,537,575 5,146,089 5,678,635 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases will be adopted by recognizing a cumulative effect adjustment to the opening balance of retained earnings as of that date The effect of adoption on the Company's financial statements will depend on the leases in effect and the Company's borrowing rates at that time, but based on the Company's existing leases, adoption is expected to result in a significant increase in assets and liabilities on the balance sheet, and no significant change to operating expenses. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting (ASU 2018-07) . The amendments in ASU 2018-07 expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards for specific guidance on inputs to an option pricing model, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contracted accounted for under Topic 606, Revenue from Contracts with Customers . ASU 2018-07 is effective for the Company in January 2020, with early adoptions permitted, but no earlier than the Company’s adoption date of Topic 606. The Company does not expect the adoption of ASU 2018-07 to have a material impact on its financial position, results of operations or cash flows. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Sales to Largest Customers | The Company sells OTIPRIO to specialty wholesale distributor customers. The following table summarizes the Company’s sales to its largest customers for each of the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 First largest 69 % 40 % 47 % 33 % Second largest 27 % 31 % 31 % 33 % Third largest * 26 % 21 % 32 % * represents less than 10% |
Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | Potentially dilutive securities excluded from the calculation of diluted net loss per share are as follows: Three and Six Months Ended June 30, 2018 2017 Warrants to purchase common stock — 141,060 Options to purchase common stock 5,146,089 5,537,575 5,146,089 5,678,635 |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Available-for-Sale Debt Securities | Available-for-sale debt securities with maturities of more than three months from the date of purchase have been classified as short-term investments, and were as follows (in thousands): Amortized Cost Unrealized Gain Unrealized Loss Market Value June 30, 2018: U.S. Treasury securities $ 61,050 $ — $ (30 ) $ 61,020 U.S. government sponsored enterprise securities 19,980 — (16 ) 19,964 $ 81,030 $ — $ (46 ) $ 80,984 December 31, 2017: U.S. Treasury securities $ 39,209 $ — $ (44 ) $ 39,165 U.S. government sponsored enterprise securities 62,439 — (56 ) 62,383 $ 101,648 $ — $ (100 ) $ 101,548 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Prepaid and Other Current Assets | Prepaid and other current assets are comprised of the following (in thousands): June 30, December 31, 2018 2017 Prepaid clinical trial costs $ 313 $ 729 Other 2,085 1,605 Total $ 2,398 $ 2,334 |
Property and Equipment, Net | Property and equipment, net is comprised of the following (in thousands): June 30, December 31, 2018 2017 Laboratory equipment $ 3,760 $ 3,457 Manufacturing equipment 1,002 871 Computer equipment and software 737 731 Leasehold improvements 736 733 Office furniture 1,548 1,581 7,783 7,373 Less: accumulated depreciation (3,254 ) (2,694 ) Total $ 4,529 $ 4,679 |
Accrued Expenses | Accrued expenses are comprised of the following (in thousands): June 30, December 31, 2018 2017 Accrued clinical trial costs $ 330 $ 1,112 Accrued other 2,315 2,769 Total $ 2,645 $ 3,881 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Additional Milestone Payments under Intellectual Property License Agreements | The Company may be obligated to make additional milestone payments under the Company’s intellectual property license agreements as follows (in thousands): Development $ 1,600 Regulatory 10,275 Commercialization 1,000 Total $ 12,875 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets Measured on a Recurring Basis | The following fair value hierarchy table presents the Company’s assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using Total Level 1 Level 2 Level 3 June 30, 2018: Assets Money market funds $ 15,845 $ 15,845 $ — $ — U.S. Treasury securities 61,020 61,020 — — U.S. government sponsored enterprise securities 19,964 — 19,964 — $ 96,829 $ 76,865 $ 19,964 $ — December 31, 2017: Assets Money market funds $ 10,494 $ 10,494 $ — $ — U.S. Treasury securities 39,165 39,165 — — U.S. government sponsored enterprise securities 62,383 — 62,383 — $ 112,042 $ 49,659 $ 62,383 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance are as follows: June 30, December 31, 2018 2017 Common stock options issued and outstanding 5,146,089 4,599,252 Common stock options available for future grant 4,365,896 3,403,597 Common stock reserved for issuance under ESPP 1,698,108 1,292,327 Total common stock reserved for future issuance 11,210,093 9,295,176 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Activity | The following table summarizes stock option activity for the six months ended June 30, 2018 (share amounts in thousands): Options Weighted- Average Exercise Price Outstanding as of December 31, 2017 4,599 $ 14.28 Granted 3,634 $ 5.69 Exercised (19 ) $ 1.69 Forfeited (3,068 ) $ 18.42 Outstanding as of June 30, 2018 5,146 $ 5.79 |
Summary of Non-cash Stock Based Compensation Expense | Total non-cash stock-based compensation expense recognized in the accompanying condensed statements of operations is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of product sales $ 2 $ 6 $ 6 $ 12 Research and development 1,698 1,359 2,335 2,344 Selling, general and administrative 2,738 2,126 4,810 4,861 Total stock-based compensation $ 4,438 $ 3,491 $ 7,151 $ 7,217 |
Description of Business and B25
Description of Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Cash, cash equivalents and short-term investments | $ 100,000 | |
Accumulated deficit | $ (389,827) | $ (364,850) |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2018USD ($)Segment | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of operating segments | Segment | 1 |
Impairment loss of long lived assets | $ | $ 0 |
Minimum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Property and equipment useful lives | 2 years |
Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Property and equipment useful lives | 10 years |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Summary of Sales to Largest Customers (Detail) - Customer Concentration Risk [Member] - Sales Revenue, Net [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Customer One [Member] | ||||
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk percentage | 69.00% | 40.00% | 47.00% | 33.00% |
Customer Two [Member] | ||||
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk percentage | 27.00% | 31.00% | 31.00% | 33.00% |
Customer Three [Member] | ||||
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk percentage | 26.00% | 21.00% | 32.00% |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Summary of Sales to Largest Customers (Parenthetical) (Detail) - Customer Concentration Risk [Member] - Sales Revenue, Net [Member] - Customer Three [Member] | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk percentage | 26.00% | 21.00% | 32.00% | |
Maximum [Member] | ||||
Entity Wide Revenue Major Customer [Line Items] | ||||
Concentration risk percentage | 10.00% |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from the calculation of diluted net loss per share | 5,146,089 | 5,678,635 | 5,146,089 | 5,678,635 |
Warrants to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from the calculation of diluted net loss per share | 0 | 141,060 | 0 | 141,060 |
Options to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from the calculation of diluted net loss per share | 5,146,089 | 5,537,575 | 5,146,089 | 5,537,575 |
Available-for-Sale Securities -
Available-for-Sale Securities - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2018USD ($)Security | Dec. 31, 2017USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of available-for-sale securities in unrealized loss positions for less than twelve months | Security | 38 | |
Other-than-temporary declines in the value of any available-for-sale securities | $ 0 | |
Maximum maturity of available-for-sale debt securities | 1 year | |
Available-for-sale Securities [Member] | Money Market Funds and Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cash equivalents | $ 15,800,000 | $ 10,500,000 |
Available-for-Sale Securities31
Available-for-Sale Securities - Schedule of Available-for-Sale Debt Securities (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 81,030 | $ 101,648 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (46) | (100) |
Market Value | 80,984 | 101,548 |
U.S. Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 61,050 | 39,209 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (30) | (44) |
Market Value | 61,020 | 39,165 |
U.S. Government Sponsored Enterprise Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 19,980 | 62,439 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (16) | (56) |
Market Value | $ 19,964 | $ 62,383 |
Balance Sheet Details - Prepaid
Balance Sheet Details - Prepaid and Other Current Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Prepaid clinical trial costs | $ 313 | $ 729 |
Other | 2,085 | 1,605 |
Total | $ 2,398 | $ 2,334 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,783 | $ 7,373 |
Less: accumulated depreciation | (3,254) | (2,694) |
Total | 4,529 | 4,679 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,760 | 3,457 |
Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,002 | 871 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 737 | 731 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 736 | 733 |
Office Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,548 | $ 1,581 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Expenses (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Accrued clinical trial costs | $ 330 | $ 1,112 |
Accrued other | 2,315 | 2,769 |
Total | $ 2,645 | $ 3,881 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Detail) - USD ($) $ in Millions | 2 Months Ended | 6 Months Ended |
Dec. 31, 2017 | Jun. 30, 2018 | |
Restructuring Cost And Reserve [Line Items] | ||
Accrued and unpaid severance costs | $ 1.5 | $ 0.1 |
Stock-Based Compensation Expense [Member] | Chief Medical Officer [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring costs | 1 | |
Selling, General and Administrative Expense [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Restructuring charge | $ 3.8 | |
Severance Costs [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Severance costs paid | $ 1.4 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 6 Months Ended | |
Jun. 30, 2018USD ($)Milestone | Oct. 31, 2014USD ($) | |
Intellectual Property [Member] | ||
Other Commitments [Line Items] | ||
Milestone fees | $ 2,800,000 | |
Maximum percentage of royalties on sales | 5.00% | |
Intellectual Property [Member] | Regulatory [Member] | ||
Other Commitments [Line Items] | ||
Number of milestones achieved | Milestone | 1 | |
Intellectual Property [Member] | Development [Member] | ||
Other Commitments [Line Items] | ||
Number of milestones achieved | Milestone | 6 | |
Royalty Agreements [Member] | ||
Other Commitments [Line Items] | ||
Milestone fees | $ 500,000 | |
Maximum percentage of royalties on sales | 1.00% | |
Royalty period | 10 years | |
Data License Agreement [Member] | ||
Other Commitments [Line Items] | ||
Description of royalties payable | The Company is obligated to pay Ipsen low single-digit royalties on annual net sales of OTO-313 by the Company or its affiliates or sublicensees | |
Maximum cumulative royalties paid under license agreement | $ 10,000,000 |
Commitments and Contingencies37
Commitments and Contingencies - Schedule of Additional Milestone Payments under Intellectual Property License Agreements (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Other Commitments [Line Items] | |
Cash Payments | $ 12,875 |
Development [Member] | |
Other Commitments [Line Items] | |
Cash Payments | 1,600 |
Regulatory [Member] | |
Other Commitments [Line Items] | |
Cash Payments | 10,275 |
Commercialization [Member] | |
Other Commitments [Line Items] | |
Cash Payments | $ 1,000 |
Fair Value - Additional informa
Fair Value - Additional information (Detail) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value Measurements Nonrecurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 0 | $ 0 |
Liabilities measured at fair value | 0 | 0 |
Fair Value Measurements, Recurring [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 96,829,000 | 112,042,000 |
Liabilities measured at fair value | $ 0 | $ 0 |
Fair Value - Fair Value Assets
Fair Value - Fair Value Assets Measured on a Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Short-term investments | $ 80,984 | $ 101,548 |
U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 61,020 | 39,165 |
U.S. Government Sponsored Enterprise Securities [Member] | ||
Assets | ||
Short-term investments | 19,964 | 62,383 |
Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 96,829 | 112,042 |
Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 15,845 | 10,494 |
Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 61,020 | 39,165 |
Fair Value Measurements, Recurring [Member] | U.S. Government Sponsored Enterprise Securities [Member] | ||
Assets | ||
Short-term investments | 19,964 | 62,383 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 76,865 | 49,659 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 15,845 | 10,494 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 61,020 | 39,165 |
Level 1 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Government Sponsored Enterprise Securities [Member] | ||
Assets | ||
Short-term investments | 0 | 0 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 19,964 | 62,383 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 0 | 0 |
Level 2 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Government Sponsored Enterprise Securities [Member] | ||
Assets | ||
Short-term investments | 19,964 | 62,383 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | ||
Assets | ||
Total assets | 0 | 0 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | Money Market Funds [Member] | ||
Assets | ||
Money market funds | 0 | 0 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Assets | ||
Short-term investments | 0 | 0 |
Level 3 [Member] | Fair Value Measurements, Recurring [Member] | U.S. Government Sponsored Enterprise Securities [Member] | ||
Assets | ||
Short-term investments | $ 0 | $ 0 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares of Common Stock Reserved for Future Issuance (Detail) - shares | Jun. 30, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 11,210,093 | 9,295,176 |
Options to Purchase Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 5,146,089 | 4,599,252 |
Available Future Grant Year [Member] | Options to Purchase Common Stock [Member] | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 4,365,896 | 3,403,597 |
2014 Employee Stock Purchase Plan [Member] | ||
Class of Stock [Line Items] | ||
Total common stock reserved for future issuance | 1,698,108 | 1,292,327 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Dec. 20, 2017 | Feb. 28, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 3,634,000 | ||||
Exchange of outstanding stock options, exercise price | $ 5.79 | $ 14.28 | |||
Prior period reclassification adjustment related to stock-based compensation, additional paid in capital and net loss | $ 1.2 | ||||
Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual term of options | 8 years | ||||
Incremental fair value options | $ 0.6 | ||||
Performance-based Awards [Member] | Common Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 250,000 | ||||
Options to Purchase Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Option exchange program, expiration date | Jan. 19, 2018 | ||||
Exchange of outstanding stock options under option exchange program, closing price per share | $ 5.675 | ||||
Options to Purchase Common Stock [Member] | Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares purchased | 1,992,000 | ||||
Percentage of number of common stock purchased | 81.51% | ||||
Equity Incentive Plan 2014 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting period | 4 years | ||||
Contractual term of options | 10 years | ||||
Equity Incentive Plan 2014 [Member] | Options to Purchase Common Stock [Member] | Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted | 1,570,328 | ||||
Minimum [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting period | 1 year | ||||
Minimum [Member] | Options to Purchase Common Stock [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exchange of outstanding stock options, exercise price | $ 12 | ||||
Minimum [Member] | Equity Incentive Plan 2014 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercise price, percentage of fair market value | 100.00% | ||||
Maximum [Member] | Option Exchange [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation vesting period | 3 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Detail) shares in Thousands | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Options | |
Outstanding as of beginning of period | shares | 4,599 |
Granted | shares | 3,634 |
Exercised | shares | (19) |
Forfeited | shares | (3,068) |
Outstanding as of end of period | shares | 5,146 |
Weighted- Average Exercise Price | |
Outstanding as of beginning of period | $ / shares | $ 14.28 |
Granted | $ / shares | 5.69 |
Exercised | $ / shares | 1.69 |
Forfeited | $ / shares | 18.42 |
Outstanding as of end of period | $ / shares | $ 5.79 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Non-cash Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 4,438 | $ 3,491 | $ 7,151 | $ 7,217 |
Cost of Product Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 2 | 6 | 6 | 12 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 1,698 | 1,359 | 2,335 | 2,344 |
Selling, General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 2,738 | $ 2,126 | $ 4,810 | $ 4,861 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) | Aug. 02, 2018 |
Mission Pharmacal Company [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Co-Promotion agreement term | 5 years |