Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 04, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37590 | ||
Entity Registrant Name | Cerecor Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-0705648 | ||
Entity Address, Address Line One | 540 Gaither Road | ||
Entity Address, Address Line Two | Suite 400 | ||
Entity Address, City or Town | Rockville | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 20850 | ||
City Area Code | 410 | ||
Local Phone Number | 522-8707 | ||
Title of 12(b) Security | Common Stock, $0.001 Par Value | ||
Trading Symbol | CERC | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 112.1 | ||
Entity Common Stock, Shares Outstanding | 89,104,816 | ||
Entity Central Index Key | 0001534120 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 18,919,448 | $ 3,609,438 |
Accounts receivable, net | 2,177,323 | 1,001,645 |
Other receivables | 2,207,995 | 4,240,572 |
Inventory, net | 3,136 | 21,334 |
Prepaid expenses and other current assets | 2,659,520 | 706,968 |
Restricted cash, current portion | 37,922 | 17,535 |
Investment in Aytu | 0 | 7,628,947 |
Current assets of discontinued operations | 0 | 497,577 |
Total current assets | 26,005,344 | 17,724,016 |
Property and equipment, net | 1,607,070 | 1,447,663 |
Intangible assets, net | 1,585,175 | 2,426,258 |
Goodwill | 14,409,088 | 14,409,088 |
Restricted cash, net of current portion | 148,642 | 101,945 |
Total assets | 43,755,319 | 36,108,970 |
Current liabilities: | ||
Accounts payable | 2,573,548 | 2,077,524 |
Accrued expenses and other current liabilities | 11,309,721 | 5,640,252 |
Income taxes payable | 0 | 551,671 |
Current liabilities of discontinued operations | 1,341,667 | 3,891,012 |
Total current liabilities | 15,224,936 | 12,160,459 |
Royalty obligation | 2,000,000 | 0 |
Deferred tax liability, net | 90,395 | 85,981 |
Other long-term liabilities | 1,878,395 | 1,111,965 |
Long-term liabilities of discontinued operations | 0 | 1,755,000 |
Total liabilities | 19,193,726 | 15,113,405 |
Stockholders’ equity: | ||
Common stock—$0.001 par value; 200,000,000 shares authorized at December 31, 2020 and 2019; 75,004,127 and 44,384,222 shares issued and outstanding at December 31, 2020 and 2019, respectively | 75,003 | 44,384 |
Preferred stock—$0.001 par value; 5,000,000 shares authorized at December 31, 2020 and 2019; 1,257,143 and 2,857,143 shares issued and outstanding at December 31, 2020 and 2019, respectively | 1,257 | 2,857 |
Additional paid-in capital | 202,275,722 | 135,238,941 |
Accumulated deficit | (177,790,389) | (114,290,617) |
Total stockholders’ equity | 24,561,593 | 20,995,565 |
Total liabilities and stockholders’ equity | $ 43,755,319 | $ 36,108,970 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 75,004,127 | 44,384,222 |
Common stock, shares outstanding (in shares) | 75,004,127 | 44,384,222 |
Preferred stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 1,257,143 | 2,857,143 |
Preferred stock, shares outstanding (in shares) | 1,257,143 | 2,857,143 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||
Revenues | $ 6,698,615 | $ 6,750,351 |
Operating expenses: | ||
Cost of product sales | 300,199 | |
Cost of product sales | (566,523) | |
Research and development | 32,192,335 | 11,764,133 |
Acquired in-process research and development | 25,549,344 | 0 |
General and administrative | 17,417,450 | 10,123,320 |
Sales and marketing | 2,341,231 | 1,484,044 |
Amortization expense | 1,741,083 | 1,338,996 |
Change in fair value of contingent consideration | 0 | (1,256,211) |
Total operating expenses | 79,541,642 | 22,887,759 |
Loss from continuing operations | (72,843,027) | (16,137,408) |
Other income: | ||
Change in fair value of Investment in Aytu | 5,207,789 | 53,932 |
Other income (expense), net | 409,853 | (28,287) |
Interest income, net | 48,873 | 121,326 |
Total other income, net from continuing operations | 5,666,515 | 146,971 |
Loss from continuing operations before taxes | (67,176,512) | (15,990,437) |
Income tax (benefit) expense | (2,792,961) | 280,316 |
Loss from continuing operations | (64,383,551) | (16,270,753) |
Income from discontinued operations, net of tax | 883,779 | 198,206 |
Net loss | (63,499,772) | (16,072,547) |
Product revenue, net | ||
Revenues: | ||
Revenues | 6,698,615 | 6,650,351 |
License and other revenue | ||
Revenues: | ||
Revenues | $ 0 | $ 100,000 |
Common stock | ||
Net (loss) income per share of common stock, basic and diluted: | ||
Continuing operations (in dollars per share) | $ (0.87) | $ (0.28) |
Discontinued operations (in dollars per share) | 0.01 | 0 |
Net loss per share, basic and diluted (in dollars per share) | (0.86) | (0.28) |
Preferred Stock | ||
Net (loss) income per share of common stock, basic and diluted: | ||
Continuing operations (in dollars per share) | (4.38) | (1.42) |
Discontinued operations (in dollars per share) | 0.06 | 0.01 |
Net loss per share, basic and diluted (in dollars per share) | $ (4.32) | $ (1.41) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | ||
Net loss | $ (63,499,772) | $ (16,072,547) |
Adjustments to reconcile net loss used in operating activities: | ||
Depreciation and amortization | 1,843,178 | 3,883,567 |
Impairment of intangible assets | 0 | 1,449,121 |
Stock-based compensation | 6,785,686 | 2,532,257 |
Acquired in-process research and development | 25,549,344 | 0 |
Deferred taxes | 195,585 | 16,743 |
Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel's pediatric products | 0 | 107,271 |
Gain on Aytu Divestiture | 0 | (7,964,924) |
Change in fair value of Investment in Aytu | (5,207,789) | (53,932) |
Change in fair value of Guarantee | (1,755,000) | 0 |
Change in fair value of contingent consideration liability | 0 | (1,009,169) |
Change in fair value of warrant liability and unit purchase option liability | (14,054) | 3,888 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (678,101) | 1,658,333 |
Other receivables | (2,106,828) | 5,120,247 |
Inventory, net | 18,198 | 532,947 |
Prepaid expenses and other assets | (1,859,402) | (917,016) |
Accounts payable | 98,520 | 1,019,358 |
Income taxes payable | 288,329 | (1,480,587) |
Accrued expenses and other liabilities | (195,712) | (6,835,395) |
License obligations | 0 | (1,250,000) |
Lease liability, net | (1,882) | 125,506 |
Net cash used in operating activities | (40,539,700) | (19,134,332) |
Investing activities | ||
Proceeds from sale of Investment in Aytu, net | 12,836,736 | 0 |
Net cash paid in merger with Aevi | (1,641,819) | 0 |
Loan to Aevi | 0 | (4,139,401) |
Net cash received from Aytu Divestiture | 0 | 3,958,412 |
Purchase of property and equipment | (62,659) | (262,013) |
Net cash provided by (used in) investing activities | 11,132,258 | (443,002) |
Financing activities | ||
Proceeds from underwritten public offering, net | 35,427,963 | 8,975,960 |
Proceeds from registered direct offering, net | 5,136,184 | 0 |
Proceeds from private placement, net | 3,887,991 | 3,708,602 |
Proceeds from exercise of stock options and warrants | 114,092 | 836,188 |
Proceeds from shares purchased through employee stock purchase plan | 312,175 | 210,777 |
Restricted stock units withheld for taxes | (93,869) | (33,959) |
Payment of contingent consideration | 0 | (881,932) |
Payment of long-term debt | 0 | (256,140) |
Net cash provided by financing activities | 44,784,536 | 12,559,496 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 15,377,094 | (7,017,838) |
Cash, cash equivalents, and restricted cash at beginning of period | 3,728,918 | 10,746,756 |
Cash, cash equivalents, and restricted cash at end of period | 19,106,012 | 3,728,918 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 0 | 1,050,000 |
Cash paid for taxes | 474,000 | 1,803,665 |
Supplemental disclosures of non-cash activities | ||
Issuance of common stock in Aevi Merger | 15,495,578 | 0 |
Leased asset obtained in exchange for new operating lease liability | 376,448 | 743,025 |
Cash and cash equivalents | 18,919,448 | 3,609,438 |
Restricted cash, current portion | 37,922 | 17,535 |
Restricted cash, net of current portion | 148,642 | 101,945 |
Total cash, cash equivalents and restricted cash | $ 3,728,918 | $ 3,728,918 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common stock | Preferred Stock | Additional paid-in capital | Accumulated deficit |
Balance at the beginning (in shares) at Dec. 31, 2018 | 40,804,189 | 2,857,143 | |||
Balance at the beginning at Dec. 31, 2018 | $ 20,907,748 | $ 40,804 | $ 2,857 | $ 119,082,157 | $ (98,218,070) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,200,000 | ||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,708,602 | $ 1,200 | 3,707,402 | ||
Issuance of shares of common stock in underwritten public offering, net of offering costs (in shares) | 1,818,182 | ||||
Issuance of shares of common stock in underwritten public offering, net of offering costs | 8,975,960 | $ 1,818 | 8,974,142 | ||
Exercise of stock options and warrants (in shares) | 323,177 | ||||
Exercise of stock options and warrants | 836,188 | $ 323 | 835,865 | ||
Restricted Stock Units vested during the period (in shares) | 172,500 | ||||
Restricted stock units vested during period | 0 | $ 173 | (173) | ||
Restricted Stock Units withheld for taxes (in shares) | (6,969) | ||||
Restricted stock units withheld for taxes | (33,959) | $ (7) | (33,952) | ||
Shares purchased through employee stock purchase plan (in shares) | 73,143 | ||||
Shares purchased through employee stock purchase plan | 210,777 | $ 73 | 210,704 | ||
Stock-based compensation | 2,462,796 | 2,462,796 | |||
Net loss | (16,072,547) | (16,072,547) | |||
Balance at the end (in shares) at Dec. 31, 2019 | 44,384,222 | 2,857,143 | |||
Balance at the end at Dec. 31, 2019 | 20,995,565 | $ 44,384 | $ 2,857 | 135,238,941 | (114,290,617) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | (1,600,000) | |||
Conversion of preferred stock to common stock | 0 | $ 8,000 | $ (1,600) | (6,400) | |
Issuance of shares related to Aevi Merger (in shares) | 3,893,361 | ||||
Issuance of shares related to Aevi Merger | 15,495,578 | $ 3,894 | 15,491,684 | ||
Issuance of shares pursuant to registered direct offering, net of offering costs (in shares) | 1,306,282 | ||||
Issuance of shares pursuant to registered direct offering, net of offering costs | 5,136,184 | $ 1,306 | 5,134,878 | ||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,951,219 | ||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,887,991 | $ 1,951 | 3,886,040 | ||
Issuance of shares of common stock in underwritten public offering, net of offering costs (in shares) | 15,180,000 | ||||
Issuance of shares of common stock in underwritten public offering, net of offering costs | 35,427,963 | $ 15,180 | 35,412,783 | ||
Exercise of stock options and warrants (in shares) | 75,239 | ||||
Exercise of stock options and warrants | 114,092 | $ 75 | 114,017 | ||
Restricted Stock Units vested during the period (in shares) | 111,667 | ||||
Restricted stock units vested during period | 0 | $ 111 | (111) | ||
Restricted Stock Units withheld for taxes (in shares) | (35,279) | ||||
Restricted stock units withheld for taxes | (93,869) | $ (35) | (93,834) | ||
Shares purchased through employee stock purchase plan (in shares) | 137,416 | ||||
Shares purchased through employee stock purchase plan | 312,175 | $ 137 | 312,038 | ||
Stock-based compensation | 6,785,686 | 6,785,686 | |||
Net loss | (63,499,772) | (63,499,772) | |||
Balance at the end (in shares) at Dec. 31, 2020 | 75,004,127 | 1,257,143 | |||
Balance at the end at Dec. 31, 2020 | $ 24,561,593 | $ 75,003 | $ 1,257 | $ 202,275,722 | $ (177,790,389) |
Business
Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Cerecor Inc. (the “Company” or “Cerecor”) is a biopharmaceutical company focused on becoming a leader in development and commercialization of treatments for rare and orphan diseases. The Company is advancing its clinical-stage pipeline of innovative therapies that address unmet patient needs within rare and orphan diseases. The Company's rare disease pipeline includes CERC-801, CERC-802 and CERC-803 (“CERC-800 compounds”), which are in development for therapies for congenital disorders of glycosylation and CERC-006, an oral mTORC1/2 inhibitor in development for the treatment of complex lymphatic malformations. The Company is also developing two monoclonal antibodies, CERC-002 and CERC-007. CERC-002 targets the cytokine LIGHT (TNFSF14) and is in clinical development for the treatment of severe pediatric-onset Crohn's disease and COVID-19 acute respiratory distress syndrome (“ARDS”). CERC-007 targets the cytokine IL-18 and is in clinical development for the treatment of Still’s disease (adult onset Still’s disease (“AOSD”) and systemic juvenile idiopathic arthritis (“sJIA”)) and multiple myeloma (“MM”). CERC-006, 801, 802 and 803 have all received Orphan Drug Designation (“ODD”) and Rare Pediatric Disease Designation (“RPDD”), which makes all four eligible for a priority review voucher (“PRV”) upon approval from the U.S. Food and Drug Administration (“FDA”). The Company continues to explore strategic alternatives for its non-core assets, including its commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions, and for its neurology pipeline assets. On February 3, 2020, the Company consummated its merger with Aevi Genomic Medicine, Inc. (“Aevi”), in which Cerecor acquired the rights to CERC-002, CERC-006 and CERC-007 (the “Merger” or the “Aevi Merger”). Cerecor also entered into an employment agreement with Aevi's Chief Executive Officer, Mike Cola, for him to serve as Cerecor's Chief Executive Officer and an employment agreement with Aevi's Chief Scientific Officer, Dr. Garry Neil, for him to serve as Cerecor's Chief Medical Officer (shortly thereafter promoted to Chief Scientific Officer). Additionally, Mr. Cola and Dr. Sol Barer, the former Chairman of the Board of Aevi, were appointed to the Company's Board of Directors. Dr. Barer serves as the Chairman of the Company’s Board. See Note 5 for more information. Cerecor was incorporated and commenced operation in 2011 and completed its initial public offering in October 2015. Liquidity In 2020, the Company closed three equity offerings for net proceeds of approximately $44.4 million (see Note 10 for more information regarding these financings) and in April 2020, the Company sold an investment for net proceeds of $12.8 million (see Note 6 for more information). The Company also closed an underwritten public offering in January 2021 for net proceeds of approximately $37.6 million (see Note 10 for more information). As of December 31, 2020, Cerecor had $18.9 million in cash and cash equivalents. In order to meet its cash flow needs, the Company applies a disciplined decision-making methodology as it evaluates the optimal allocation of the Company's resources between investing in the Company's existing pipeline assets and acquisitions or in-licensing of new assets. For the year ended December 31, 2020, Cerecor generated a net loss of $63.5 million and negative cash flows from operations of $40.5 million. As of December 31, 2020, Cerecor had an accumulated deficit of $177.8 million. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern; however, losses are expected to continue as the Company continues to invest in its core research and development pipeline assets. The Company will require additional financing to fund its operations and to continue to execute its business strategy at least one year after the date the financial statements included herein were issued. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. To mitigate these conditions and to meet the Company’s capital requirements, management plans to use its current cash on hand along with some combination of the following: (i) equity and/or debt financings, (ii) federal and/or private grants, (iii) other out-licensing or strategic alliances/collaborations of its current pipeline assets, and (iv) out-licensing or sale of its non-core assets. If the Company raises additional funds through collaborations, strategic alliances or licensing arrangements with third parties, the Company might have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates. If the Company requires but is unable to obtain additional funding, the Company may be forced to make reductions in spending, delay, suspend, reduce or eliminate some or all of its planned research and development programs, or liquidate assets where possible. Due to the uncertainty regarding future financings and other potential options to raise additional funds, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern within one year after the date that the financial statements in this Annual Report on Form 10-K were issued. Over the long term, the Company's ultimate ability to achieve and maintain profitability will depend on, among other things, the development, regulatory approval, and commercialization of its pipeline assets, and the potential receipt and sale of any PRVs it receives. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern (see Note 1). Principles of Consolidation The consolidated financial statements include the accounts of Cerecor Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. Discontinued Operations On October 10, 2019, the Company entered into an asset purchase agreement with Aytu (the “Aytu Purchase Agreement”) to sell the Company’s rights, title and interest in assets relating to its pediatric portfolio, namely Aciphex ® Sprinkle™, Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™, Poly-Vi-Flor ® and Tri-Vi-Flor™ (the “Pediatric Portfolio”), as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts (the “Aytu Divestiture”). The Aytu Divestiture closed on November 1, 2019. Upon the sale of the Pediatric Portfolio during the fourth quarter of 2019, the Pediatric Portfolio met all conditions required to be classified as discontinued operations. Therefore, the operating results of the Pediatric Portfolio are reported as income from discontinued operations, net of tax in the accompanying consolidated financial statements for the years ended December 31, 2020 (due to our continued involvement) and 2019. Additionally, the gain recognized as a result of the sale of the Pediatric Portfolio is reported within income from discontinued operations, net of tax for the year ended December 31, 2019. The assets and liabilities related to the Pediatric Portfolio are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets as of December 31, 2020 and 2019. For additional information, see Note 3. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements, cash flows used in management's going concern assessment, income taxes, goodwill and other intangible assets, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the “ESPP”) deposits, credit card deposits, and security deposits for our leased corporate offices. Accounts Receivable, net Accounts receivable, net is comprised of amounts due from customers in the ordinary course of business. Management considers all accounts receivable to be fully collectible at December 31, 2020, and accordingly, no allowance for doubtful accounts has been recorded. Bad debt expense is charged to operations as amounts are determined to be uncollectible. Accounts receivable are written off when deemed uncollectible and recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than the payment terms negotiated with the customer. The Company generally negotiates payment terms of 30 days. The Company offers wholesale distributors a prompt payment discount, which is typically 2% as an incentive to remit payment within this timeframe. Accounts receivable are stated net of the estimated prompt pay discount. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified two operating leases, which both serve as administrative office space. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company's consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the consolidated balance sheets and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within general and administrative expenses. Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, deprecation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement's useful life. The Company uses the lesser of the lease term or ten years for leasehold improvements. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. Acquisitions For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. As of December 31, 2020, the Company’s chief operating decision makers was the Chief Executive Officer. The Chief Executive Officer views the Company’s operations and manages the business as one operating segment. All long‑lived assets of the Company reside in the United States. Goodwill The Company's goodwill relates to the amount that arose in connection with the Company's historical acquisitions which were accounted for as business combinations. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. Goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. The Company consists of one reporting unit. Upon disposal of a portion of a reporting unit that constitutes a business, the Company assigns goodwill based on the relative fair values of the portion of the reporting unit being disposed and the portion of the reporting unit remaining. This approach requires a determination of the fair value of both the business to be disposed of and the business (or businesses) within the reporting unit that will be retained. As a result of the Aytu Divestiture, goodwill was assigned to the Pediatric Portfolio using the relative fair value approach discussed above. Intangible Assets Intangible assets with definite useful lives are amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. Product Revenues, net The Company generates substantially all of its revenue from sales of prescription drugs to its customers. Revenue from sales of prescription drugs was $6.7 million for the years ended December 31, 2020 and 2019. The Company has identified a single product delivery performance obligation, which is the provision of prescription drugs to its customers based upon master service agreements in place with wholesaler distributors, purchase orders from retail pharmacies or other direct customers and a contractual arrangement with a specialty pharmacy. The performance obligation is satisfied at a point in time, when control of the product has been transferred to the customer, either at the time the product has been received by the customer or to a lesser extent when the product is shipped. The Company determines the transaction price based on fixed consideration in its contractual agreements and the transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. In determining the transaction price, a significant financing component does not exist because the timing from when the Company delivers product to when the customers pay for the product is less than one year and the customers do not pay for product in advance of the transfer of the product. Revenues from sales of products are recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. The Company recognizes revenue only to the extent that it is probable that a significant revenue reversal will not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, our expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates and judgments each reporting period to adjust accordingly. Pursuant to a transition services agreement entered into between Aytu and Cerecor, Aytu manages Millipred ® commercial operations for a monthly fee of $12,000 for up to 18 months (post November 1, 2019) or until the Company establishes an independent commercial infrastructure for the product. As a result of the Aytu Divestiture in the fourth quarter of 2019, all product revenues for the year ended December 31, 2020 and 2019 related to the Pediatric Portfolio are included within net income from discontinued operations, net of tax. Concentration with Customer As is typical in the pharmaceutical industry, the Company sells its prescription drugs in the United States primarily through wholesale distributors and a specialty contracted pharmacy. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. In addition, the Company earns revenue from sales of its prescription pharmaceutical products directly to retail pharmacies. For the year ended December 31, 2020, the Company's three largest customers accounted for approximately 46%, 25% and 27%, respectively, of the Company's total net product revenues of prescription drugs. For the year ended December 31, 2019, the Company's three largest customers accounted for approximately 41%, 30% and 28%, respectively, of the Company's total net product revenues of prescription drugs. Returns and Allowances Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product's expiration date. The Company’s return policy generally allows customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. The Company’s estimate for returns and allowances may be impacted by a number of factors noted above. Rebates The Company is subject to rebates on sales made under governmental pricing programs. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Medicaid reserves are based on expected payments, which are driven by patient usage, contract performance and field inventory that will be subject to a Medicaid rebate. Medicaid rebates are typically billed up to 180 days after the product is shipped, however this can be as much as 270 days after the quarter in which the product is dispensed to the Medicaid participant. In addition to the estimates mentioned above, the Company’s calculation also requires other estimates, such as estimates of sales mix, to determine which sales are subject to rebates and the amount of such rebates. Periodically, the Company adjusts the Medicaid rebate provision based on actual claims paid. Due to the delay in billing, adjustments to actual claims paid may incorporate revisions of this provision for several periods. Because Medicaid pricing programs involve particularly difficult interpretations of complex statutes and regulatory guidance, the Company's estimates could differ from actual experience. In determining estimates for these rebates, the Company considers the terms of the contracts, relevant statutes, historical relationships of rebates to revenues, past payment experience, estimated inventory levels and estimated future trends. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will reassess the milestones each reporting period to determine the probability of achievement. Cost of Product Sales Cost of product sales is comprised of (i) costs to acquire products sold to customers, (ii) license payments and other agreements granting the Company rights to sell related products, and (iii) the value of any write-offs of obsolete or damaged inventory that cannot be sold. The Company acquired the rights to sell certain of its commercial products through license and assignment agreements with the original developers or other parties with interests in these products. These agreements obligate the Company to make payments under varying payment structures based on its net revenue from related products. Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; costs associated with preclinical activities and regulatory operations, pharmacovigilance, quality and travel; and employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. Clinical Trial Expense Accruals As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its 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 trial expenses in its financial statements by matching those expenses with 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 subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed might vary and might result in it reporting amounts that are too high or too low for any particular period. Acquired In-Process Research and Development Expenses Acquired in-process research and development (“IPR&D”) expense includes the initial costs of IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use. Amortization Expense Amortization expense includes the amortization of the Company's acquired intangible assets. There is no amortization expense included in cost of product sales or sales and marketing expense as all amortization expense is included within its own standalone line in operating expenses in the Company's consolidated statements of operations and comprehensive loss. Estimated Fair Value and Change in Fair Value of Contingent Consideration The Company's historical business acquisition of TRx Pharmaceuticals, LLC (“TRx”) in November 2017 (the “TRx Acquisition”) involved the potential for future payment of consideration that is contingent upon the achievement of operational and commercial milestones. The fair value of contingent consideration was determined at the acquisition date utilizing unobservable inputs such as the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability was remeasured at the current fair value with changes recorded in the consolidated statement of operations and comprehensive loss. As part of a settlement the Company entered into in the second quarter of 2019, the Company was released from its contingent consideration liability related to the TRx Acquisition. Therefore, the Company's contingent consideration liability was $0 as of December 31, 2020 and 2019. The change in fair value of contingent consideration was included within its own standalone line in operating expenses from continuing operations in the Company's consolidated statements of operations and comprehensive loss. Estimated Fair Value of Investment in Aytu and Change in Fair Value of Investment in Aytu As consideration for the sale of the Pediatric Portfolio to Aytu in the fourth quarter of 2019, the Company received 9,805,845 shares of Aytu Series G Convertible Preferred Stock (the “Investment in Aytu”). Pursuant to ASC 323, the Company accounted for this investment as a financial instrument because Cerecor's investment does not result in a controlling financial interest, as the preferred stock received is in-substance common stock and Cerecor does not have the ability to exercise significant influence or joint control of Aytu. Therefore, the fair value of the Investment in Aytu was determined at the divestiture date utilizing quoted prices for Aytu's common stock price with a discount for lack of marketability due to the Company’s shares being restricted as of December 31, 2019 and subject to a lockup period. Subsequent to the divestiture date, at each reporting period prior to the sale of the underlying common stock, the Investment in Aytu was remeasured at its current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations and comprehensive loss. In April 2020, Cerecor was permitted to convert the Aytu Series G Preferred Stock into 9,805,845 shares of Aytu’s common stock (the “Aytu Common Shares”), and subsequently sold all of the Aytu Common Shares in a series of transactions. The sale resulted in a realized gain, calculated as the difference between the net proceeds received and the fair value of the Investment in Aytu at the divestiture date, which was recognized in change in fair value of Investment in Aytu within the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. Estimated Fair Value of Guarantee and Change in Fair Value of Guarantee As of the closing date of the Aytu Divestiture on November 1, 2019, Aytu assumed the Company's debt obligation to Deerfield CSF, LLC (“Deerfield”) and the contingent consideration liability related to future royalties on Avadel Pharmaceuticals PLC’s (“Avadel”) pediatric products. In conjunction with the closing of this transaction, the Company entered into a Guarantee in favor of Deerfield, which guarantees the payment of the assumed liabilities to Deerfield, which included the debt obligation and the contingent consideration related to future potential royalties on Avadel's pediatric products (collectively referred to as the “Guarantee”). Aytu publicly reported that it had paid the $15.0 million balloon payment to Deerfield before it came due in June 2020, thus satisfying that portion of the debt obligation assumed as part of the divestiture. The remaining minimum commitments payable related to the future potential royalties on Avadel’s pediatric products was $7.3 million as of June 30, 2020 (as most recently publicly reported by Aytu), which represents Cerecor's estimated maximum potential future payments under the Guarantee. The fair value of the Guarantee, which relates to the Company's obligation to make future payments if Aytu defaults, was determined at the time of the divestiture as the difference between (i) the estimated fair value of the debt and contingent payments, respectively, using Cerecor's estimated cost of debt and (ii) the estimated fair value of the debt and contingent payments, respectively, using Aytu's estimated cost of debt. Subsequent to the close of the Aytu Divestiture, at each reporting period, the value of the Guarantee is determined based on the expected credit loss of the Guarantee with changes recorded in income from discontinued operations, net of tax within the consolidated statements of operations and comprehensive loss. Refer to Note 3 for more information. Paycheck Protection Program Loan The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provides stimulus measures, including the Paycheck Protection Program (“PPP”), to provide certain small businesses with liquidity to support their operations (such as to retain employees and maintain payroll and lease payments) during the COVID-19 pandemic. Cerecor received a $0.4 million PPP Loan during the second quarter of 2020 (the “PPP Loan”). PPP loans have a 1% fixed annual interest rate and mature in two years, and are eligible for forgiveness under certain conditions. If there is reasonable assurance that the PPP Loan will be forgiven, the Company may elect to account for the PPP Loan either as debt under ASC 470 or as a government grant. If accounted for as a government grant, the Company may elect to present the PPP Loan as either a credit in the income statement within other income or as a reduction to the related expense. As of December 31, 2020, the Company believes it meets the criteria for forgiveness and submitted an application for forgiveness with its lender in 2020. Once approved by the lender, the lender will submit the forgiveness application to the Small Business Administration (the “SBA”) for ultimate approval. The SBA has 90 days from receipt to approve or reject the forgiveness application. Because the Company believes it meets the criteria for forgiveness and incurred the related expenses during the year, the Company elected to recognized the PPP Loan as other income within the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations and comprehensive loss. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. For stock option grants with market-based conditions, compensation expense is recognized ratably over the attribution period. The Company estimates the fair value of the market-based stock option grants using a Monte-Carlo simulation. The Company generally estimates fair value using assumptions, including the expected term of the option, the expected volatility of peer group of similar companies, risk free interest rate and the expected dividend yield. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred |
Aytu Divestiture
Aytu Divestiture | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Aytu Divestiture | Aytu Divestiture Overview of Sale of Pediatric Portfolio and Related Commercial Infrastructure to Aytu BioScience On October 10, 2019, the Company entered into the Aytu Purchase Agreement to sell the Company’s rights, titles and interest in, assets relating to certain commercialized products, as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts (the “Aytu Divestiture”). The Aytu Divestiture closed on November 1, 2019. Aytu paid consideration of $4.5 million in cash and approximately 9.8 million shares of Aytu convertible preferred stock, and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield of $15.1 million and certain other liabilities of $11.0 million primarily related to contingent consideration, Medicaid rebates and sales returns. The Company recognized a gain of $8.0 million upon the closing of the Aytu Divestiture for the year ended December 31, 2019. In addition, Aytu assumed future contractual obligations under existing license agreements associated with the Pediatric Portfolio. Armistice Capital Master Fund Ltd. (“Armistice”) is a significant stockholder of the Company and Armistice's Chief Investment Officer, Steve Boyd, serves on each company's board of directors. Upon closing the Aytu Divestiture, Cerecor terminated all of its sales force personnel, which included both those offered employment by Aytu, as well as any remaining sales force personnel. Additionally, Cerecor retained all rights to Millipred ® . Pursuant to a transition services agreement entered into between Aytu and Cerecor, Aytu is managing Millipred ® commercial operations for a monthly fee of $12,000 for up to 18 months (post November 1, 2019) or until the Company establishes an independent commercial infrastructure for the product. Upon the sale of the Pediatric Portfolio to Aytu, the Pediatric Portfolio met all conditions to be classified as discontinued operations. Therefore, the accompanying consolidated financial statements for the year ended December 31, 2020 and 2019 and as of December 31, 2020 and 2019 reflect the operations, net of taxes, and related assets and liabilities of the Pediatric Portfolio as discontinued operations. Refer to the “Discontinued Operations” section below for more information, including Cerecor's continuing involvement. Deerfield Guarantee On November 1, 2019, in conjunction with the closing of the Aytu Divestiture, the Company entered into a Guarantee in favor of Deerfield, which guarantees the payment of the assumed liabilities to Deerfield, which includes both the debt obligation (“Fixed Payment Guarantee”) and the contingent consideration related to future potential royalties on Avadel's pediatric products (“Deferred Payment Guarantee”). Additionally, on November 1, 2019, the Company entered into a Contribution Agreement with Armistice and Avadel that governs contribution rights and obligations of the Company, Armistice and Avadel with respect to amounts that are paid by Armistice and Avadel to Deerfield under certain guarantees made by Armistice and Avadel to Deerfield. The debt obligation assumed by Aytu consists of fixed monthly payments to Deerfield of $0.1 million until January 2021 and an additional balloon payment of $15.0 million to Deerfield on January 31, 2021. Aytu publicly reported that it had paid the $15.0 million balloon payment to Deerfield before it came due in June 2020, thus satisfying that portion of the debt obligation assumed as part of the divestiture. The contingent consideration assumed by Aytu consists of quarterly deferred payments equal to 15% of net sales of certain Pediatric Portfolio products or at least $0.3 million paid in arrears each quarter until the earlier of (i) February 5, 2026, or (ii) upon $12.5 million in aggregate deferred payments has been paid to Deerfield. Of the contingent consideration, $3.2 million was paid to Deerfield prior to the Aytu Divestiture and therefore as of November 1, 2019, Aytu was responsible for the remaining $9.3 million. Aytu is required to pay an amount equal to at least $0.1 million per month. Cerecor's Deferred Payment Guarantee will end upon the earlier of (i) February 5, 2026, or (ii) upon $12.5 million in aggregate deferred payments has been paid to Deerfield. Cerecor is required to make payment under the Guarantee upon demand by Deerfield, which Deerfield can demand at any time if all or any part of the fixed payments and/or deferred payments are not paid by Aytu when due or upon breach of a covenant. The remaining minimum commitments payable as most recently publicly reported by Aytu was $7.3 million as of June 30, 2020, which represents Cerecor's estimated maximum potential future payments under the Guarantee. The fair value of the Guarantee, which relates to the Company's obligation to make future payments if Aytu defaults, was determined at the time of the Aytu Divestiture as the difference between (i) the estimated fair value of the debt and contingent payments, respectively, using Cerecor's estimated cost of debt and (ii) the estimated fair value of the debt and contingent payments, respectively, using Aytu's estimated cost of debt. Subsequent to the close of the Aytu Divestiture, at each reporting period, the value of the Guarantee is determined based on the expected credit loss of the Guarantee with changes recorded in (loss) income from discontinued operations, net of tax within the consolidated statements of operations and comprehensive loss. In 2020, Aytu's credit rating significantly improved as a result of recent developments to Aytu's business, including but not limited to, recent financings and expansion of its revenue products that substantially enhanced Aytu's cash position and its ability to meet its financial commitments. Based on these facts, the Company concluded that the expected credit loss of the Guarantee was de minimis as of December 31, 2020, thus recognizing a $1.8 million gain on the change in value in income from discontinued operations, net of tax within the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. Discontinued Operations The following tables summarizes the assets and liabilities of the discontinued operations as of December 31, 2020 and 2019: December 31, 2020 2019 Assets Current assets: Accounts receivable, net $ — $ 497,577 Total current assets of discontinued operations — 497,577 Liabilities Current liabilities: Accounts payable — 387,975 Accrued expenses and other current liabilities 1,341,667 3,503,037 Total current liabilities of discontinued operations 1,341,667 3,891,012 Other long-term liabilities — 1,755,000 Total long-term liabilities of discontinued operations — 1,755,000 Cerecor retains continuing involvement with the divested Pediatric Portfolio related to future sales returns made after November 1, 2019 for sales of the Pediatric Portfolio prior to the close date of the Aytu Divestiture and the Deerfield Guarantee. Pursuant to the Aytu Purchase Agreement, Aytu assumed sales returns of the Pediatric Portfolio made after the closing date of November 1, 2019 and primarily relating to sales prior to November 1, 2019 only to the extent such post-closing sales returns exceed $2.0 million and are less than $2.8 million (in other words, Aytu will only assume $0.8 million of such returns). Therefore, Cerecor is liable for future sales returns of the Pediatric Portfolio sold prior to November 1, 2019 in excess of the $0.8 million assumed by Aytu. Additionally, from November 1, 2019 through the second quarter of 2020, Cerecor collected cash on behalf of Aytu for post-divestiture sales of the Pediatric Portfolio. The collection of accounts receivable was fully transitioned to Aytu during the second quarter of 2020. As a result of this transition, beginning in the second quarter of 2020, Aytu collects cash on the sales of the Pediatric Portfolio and also on sales of Millipred ® (on behalf of Cerecor). As of December 31, 2020, the Company estimated its net liability, which includes cash collected on Aytu’s behalf, actual returns on sales of the Pediatric Portfolio made prior to the transaction close date and the Company's estimate of future returns on sales of the Pediatric Portfolio made prior to the transaction close date netted with the cash receipts Aytu owes Cerecor related to Aytu's collection of cash for sales of Millipred ® , to be $1.0 million, which is included above in accrued expenses and other current liabilities of discontinued operations. Changes in the Company's estimate of sales returns related to the Pediatric Portfolio is included within discontinued operations on the statement of operations and comprehensive loss and is shown within product sales, net in the table summarizing the results of discontinued operations below. In future periods, as additional information becomes available to the Company, the Company expects to recognize expense (or a benefit) related to actual sales returns of the Pediatric Portfolio in excess (or less than) the returns reserve recorded, which will be recognized within discontinued operations. The Company expects this involvement to continue until sales returns are no longer accepted on sales of the Pediatric Portfolio made prior to November 1, 2019. In line with the products' return policies, returns on these products may be accepted through the second quarter of 2022. The following table summarizes the results of discontinued operations for the year ended December 31, 2020 and 2019: Year Ended December 31, 2020 2019 Product revenue, net $ (871,221) $ 10,166,611 Operating expenses: Cost of product sales — 4,288,234 General and administrative — 137,911 Sales and marketing — 8,521,190 Amortization expense — 2,425,083 Impairment of intangible assets — 1,449,121 Change in fair value of contingent consideration — 247,042 Total operating expenses — 17,068,581 Other income (expense): Change in value of Guarantee 1,755,000 — Interest expense, net — (793,860) Total other income (expense) 1,755,000 (793,860) Gain on sale of Pediatric Portfolio — 7,964,924 Income from discontinued operations before tax 883,779 269,094 Income tax expense — 70,888 Income from discontinued operations, net of tax $ 883,779 $ 198,206 The Company recognized a gain of $8.0 million upon the close of the transaction, which is included in income from discontinued operations, net of tax within the accompanying consolidated statement of operation and comprehensive loss for the year ended December 31, 2019. The gain was comprised of $4.5 million of cash consideration received, $7.6 million of Aytu preferred stock consideration received (which represents its fair value on November 1, 2019 (see Note 6 for more information), $18.8 million of net assets transferred as of November 1, 2019 (excluding debt assumed), $15.1 million of debt assumed as of November 1, 2019, and $0.6 million of transaction expenses incurred. The significant non-cash operating items from the discontinued operations for the years ended December 31, 2020 and 2019 are contained below. There were no non-cash investing items from the discontinued operations for the years ended December 31, 2020 and 2019. Year Ended December 31, 2020 2019 Operating activities Amortization $ — $ 2,425,083 Impairment of intangible assets — 1,449,121 Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio — 327,180 Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel pediatric product — 107,271 Change in fair value of contingent consideration liability — 247,042 Change in fair value of Guarantee (1,755,000) — Gain on Aytu Divestiture — (7,964,924) |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes earnings per share (“EPS”) using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. The Company has two classes of stock outstanding, common stock and preferred stock. The preferred stock was issued in December 2018, upon Armistice exercising warrants to acquire an aggregate of 2,857,143 shares of the Company’s Series B Convertible Preferred Stock. Such convertible preferred stock has the same rights and preferences as the Company’s common stock, other than being non-voting, and is convertible into shares of common stock on a 1-for-5 ratio. During the first quarter of 2020, Armistice converted 1.6 million shares of Series B Convertible Preferred Stock into 8.0 million shares of Cerecor's common stock. Under the two-class method, the convertible preferred stock is considered a separate class of stock for EPS purposes and therefore basic and diluted EPS is provided below for both common stock and preferred stock. EPS for common stock and EPS for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class of stock by the weighted average number of shares outstanding for each class of stock for the period. In applying the two-class method, undistributed earnings are allocated to common stock and preferred stock based on the weighted average shares outstanding during the period, which assumes the convertible preferred stock has been converted to common stock. Diluted net (loss) income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units, which are included under the “treasury stock method” when dilutive; and (ii) common stock to be issued upon the exercise of outstanding warrants, which are included under the “treasury stock method” when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In periods of net loss, losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company's losses. The following table sets forth the computation of basic and diluted net loss per share of common stock for continuing and discontinued operations for the years ended December 31, 2020 and 2019, which includes both classes of participating securities: Year Ended December 31, 2020 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (58,439,575) $ 802,188 $ (5,943,976) $ 81,591 Denominator: Weighted average shares 66,688,464 66,688,464 1,356,597 1,356,597 Basic and diluted net (loss) income per share $ (0.87) $ 0.01 $ (4.38) $ 0.06 Year Ended December 31, 2019 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (12,204,552) $ 148,673 $ (4,066,201) $ 49,533 Denominator: Weighted average shares 42,878,040 42,878,040 2,857,143 2,857,143 Basic and diluted net (loss) income per share $ (0.28) $ 0.00 $ (1.42) $ 0.01 The following outstanding securities at December 31, 2020 and 2019 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2020 2019 Stock options 9,830,674 4,480,606 Warrants on common stock 4,002,380 4,024,708 Restricted Stock Units 155,833 267,500 Underwriters' unit purchase option — 40,000 |
Asset Acquisition
Asset Acquisition | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations and Asset Acquisitions [Abstract] [Abstract] | |
Asset Acquisition | Asset Acquisition Aevi Merger On February 3, 2020, the Company consummated its two-step merger with Aevi, in accordance with the terms of the Merger Agreement dated December 5, 2019, by and between Cerecor, Genie Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Cerecor (“Merger Sub”), Second Genie Merger Sub, LLC (“Second Merger Sub”), a Delaware limited liability company and wholly owned subsidiary of Cerecor, and Aevi. On February 3, 2020, Merger Sub merged with and into Aevi, with Aevi as the surviving corporation, and as part of the same transaction, Aevi then merged with and into Second Merger Sub, with Second Merger Sub as the surviving entity. The surviving entity from the second merger was renamed Aevi Genomic Medicine, LLC and is disregarded as an entity separate from Cerecor for U.S. federal income tax purposes. Cerecor retained its public reporting and current NASDAQ listing status. Effective upon the close of the Merger, Cerecor entered into an employment agreement with Aevi's Chief Executive Officer, Mike Cola, for him to serve as Cerecor's Chief Executive Officer and an employment agreement with Aevi's Chief Scientific Officer, Dr. Garry Neil, for him to serve as Cerecor's Chief Medical Officer, and appointed Mr. Cola and Dr. Sol Barer, the former Chairman of the Board of Aevi, to the Company's Board of Directors. Dr. Barer serves as the Chairman of the Company’s Board. Dr. Neil was promoted to Cerecor's Chief Scientific Officer in March 2020. Additionally, the Company extended employment agreements to seven other individuals who were previously employed by Aevi. Upon entering into the Merger Agreement on December 5, 2019, Cerecor agreed to loan Aevi $4.1 million related to the exercise of an exclusive license from MedImmune Limited to develop and commercialize a Phase 2‑ready fully human monoclonal antibody that targets IL‑18 (the “Aevi Loan”). All unpaid principal and accrued interest on the Aevi Loan was due and payable in full on the one year anniversary of the loan date (unless the Merger Agreement was terminated or upon consummation of the Merger). If the Merger Agreement was terminated for any reason, Aevi would be required to repay the amount borrowed under the Aevi Loan in full and if the Merger was consummated, the Aevi Loan was to be forgiven. As of December 31, 2019, it was unknown if the Merger would be consummated, and therefore, the Company recognized the $4.1 million loaned to Aevi as an other receivable within its accompanying consolidated balance sheet as of December 31, 2019. On February 3, 2020, the Merger was consummated in accordance with the terms of the Merger Agreement. The Merger consideration included stock valued at approximately $15.5 million, resulting in the issuance of approximately 3.9 million shares of Cerecor common stock to Aevi stockholders, forgiveness of the $4.1 million Aevi Loan, contingent value rights for up to an additional $6.5 million in subsequent payments based on certain development milestones, payable in either shares of the Company's common stock or in cash at the election of the Company, and transaction costs of $1.5 million. The fair value of the common stock transferred at closing was approximately $15.5 million using the Company's closing stock price on February 3, 2020. The assets acquired consisted primarily of $24.0 million of acquired in-process research and development, $0.3 million of cash and $0.9 million of assembled workforce. Refer to Note 6 for information regarding the valuation of the assembled workforce asset. The Company assumed net liabilities of $5.1 million. The Company recorded this transaction as an asset purchase as opposed to a business combination because management concluded that substantially all the value received was related to one group of similar identifiable assets, which was the IPR&D for two early phase therapies. The Company considered these assets similar due to similarities in the risks of development, stage of development, regulatory pathway, patient populations and economics of commercialization. The fair value of the IPR&D was immediately recognized as acquired in-process research and development expense in the Company's consolidated statement of operations and comprehensive loss for the year ended December 31, 2020 because the IPR&D asset has no alternate use due to the stage of development. The $1.5 million of transaction costs incurred were recorded to acquired IPR&D expense. The assembled workforce asset was recorded to intangible assets and will be amortized over an estimated useful life of two years. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC No. 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model‑derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. The following tables present, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities from continuing operations that are measured at fair value on a recurring basis: December 31, 2020 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 17,503,371 $ — $ — December 31, 2019 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 2,240,230 $ — $ — Investment in Aytu $ — $ 7,628,947 $ — *Investments in money market funds are reflected in cash and cash equivalents on the accompanying consolidated balance sheets. As of December 31, 2020 and 2019, the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts receivable, other receivables, prepaid and other current assets, accounts payable, and accrued expenses and other current liabilities. The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, and other current liabilities approximate their respective fair values because of the short-term nature of these accounts. Level 2 Valuation As part of the consideration for the Aytu Divestiture, Aytu issued to Cerecor 9,805,845 shares of Aytu Series G Convertible Preferred Stock at a price of $1.2747 per share, which comprised the Investment in Aytu. Upon the close of the Aytu Divestiture on November 1, 2019, the Company recognized $7.6 million as the estimated fair value of the Investment in Aytu on that date, which was calculated using Aytu's stock price close on November 1, 2019 of $1.03 per share and offset by an estimated discount for lack of marketability of 25% calculated using guideline public company volatility for comparable companies. Subsequent to the initial measurement, at each reporting period, the Investment in Aytu was remeasured at the current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations and comprehensive loss. As of December 31, 2019, the Investment of Aytu was $7.6 million, which was calculated using Aytu's closing stock price on December 31, 2019 of $0.9725 per share and offset by an estimated discount for lack of marketability of 20%. In April 2020, Cerecor was permitted to convert the Investment in Aytu into 9,805,845 shares of Aytu’s common stock, and subsequently sold all of these Aytu Common Shares in a series of transactions in April, pursuant to an effective registration statement, which generated net proceeds of approximately $12.8 million. The sale resulted in a realized gain of $5.2 million, which was recognized in change in fair value of Investment in Aytu within the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. Level 3 Valuation The Company's historical business acquisition of TRx involved the potential for future payment of consideration that was contingent upon the achievement of operational and commercial milestones related to the Ulesfia product. The fair value of contingent consideration was $1.3 million as of December 31, 2018. During the second quarter of 2019, the Company entered into a settlement agreement related to the Ulesfia product, which released the Company from the potential contingent payments related to the TRx Acquisition, reducing the fair value down to $0 as of December 31, 2019. This represented a gain on the change of fair value of contingent consideration of $1.3 million for the year ended December 31, 2019. There was no contingent consideration as of December 31, 2020 and no change in contingent consideration for the year ended December 31, 2020. Effective upon the consummation of the Aevi Merger during the first quarter of 2020, Cerecor entered into an employment agreement with Aevi's Chief Executive Officer, Mike Cola, for him to serve as Cerecor's Chief Executive Officer and an employment agreement with Aevi's Chief Scientific Officer, Dr. Garry Neil, for him to serve as Cerecor's Chief Medical Officer and as Chief Scientific Officer in connection with a subsequent promotion. Additionally, the Company extended employment to seven other individuals who were previously employed by Aevi. As a result, the Company recognized an assembled workforce intangible asset of $0.9 million which is a Level 3 non-recurring fair value measurement. The Company utilized the replacement cost method to estimate the fair value of the assembled workforce, which considers the costs Cerecor would have incurred to replace a comparable workforce to the workforce acquired from Aevi. Such costs include, but are not limited to, recruiting costs, training costs and cost of lost productivity. The replacement costs were estimated based on a percentage of each employee's salary. The assembled workforce intangible asset will be amortized over a useful life of two years. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of December 31, 2020 and 2019 consisted of the following: December 31, 2020 2019 Furniture and equipment $ 152,940 $ 143,168 Computers and software 56,240 6,708 Right-of-use assets 917,472 718,628 Leasehold improvements 657,328 657,328 Total property and equipment 1,783,980 1,525,832 Less accumulated depreciation (176,910) (78,169) Property and equipment, net $ 1,607,070 $ 1,447,663 Depreciation expense was $102,095 and $119,488 for the years ended December 31, 2020 and December 31, 2019, respectively. Leases The Company currently occupies two leased properties, both of which serve as administrative office space. The Company determined that both leases are operating leases based on the lease classification test performed at lease commencement. The annual base rent for the Company's office located in Rockville, Maryland is $161,671, subject to annual 2.5% increases over the term of the lease. The lease provided for a rent abatement for a period of 12 months following the Company's date of occupancy. The lease has an initial term of 10 years from the date the Company makes its first annual fixed rent payment, which occurred in January 2020. The Company has the option to extend the lease two times, each for a period of five years, and may terminate the lease as of the sixth anniversary of the first annual fixed rent payment, upon the payment of a termination fee. As of the lease commencement date, it was not reasonably certain that the Company will exercise the renewal periods or early terminate the lease and therefore, the end date of the lease for accounting purposes is January 31, 2030. The Company entered into a sublease for additional administrative office space in Chesterbrook, Pennsylvania in May 2020 (the “Chesterbrook Lease”"). The annual base rent under the Chesterbrook Lease is $280,185. The lease expires in November 2021. The weighted average remaining term of the operating leases at December 31, 2020 was 7.7 years. Supplemental balance sheet information related to the leased properties include: As of December 31, 2020 December 31, 2019 Property and equipment, net $ 917,472 $ 718,626 Accrued expenses and other current liabilities $ 426,346 $ 155,815 Other long-term liabilities 1,038,395 1,111,965 Total operating lease liabilities $ 1,464,741 $ 1,267,780 The operating lease ROU assets are included in property and equipment and the lease liabilities are included in accrued expenses and other current liabilities and other long-term liabilities in our consolidated balance sheets. The Company utilized a weighted average discount rate of 7.4% to determine the present value of the lease payments. The components of lease expense for the years ended December 31, 2020 and 2019 were as follows: Year Ended December 31, 2020 2019 Operating lease cost* $ 344,625 $ 160,767 *Includes short-term leases, which are immaterial. The following table shows a maturity analysis of the operating lease liability as of December 31, 2020: Undiscounted Cash Flows 2021 $ 426,346 2022 173,748 2023 178,092 2024 182,544 2025 187,108 Thereafter 813,638 Total lease payments $ 1,961,476 Less implied interest (496,735) Total $ 1,464,741 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible AssetsThere were no changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019. The changes in intangible assets for the years ended December 31, 2020 and 2019 were as follows: Balance as of December 31, 2018 $ 3,765,254 Amortization (1,338,996) Balance as of December 31, 2019 $ 2,426,258 Additions $ 900,000 Amortization $ (1,741,083) Balance as of December 31, 2020 $ 1,585,175 As a result of the asset acquisition accounting treatment of the Aevi Merger, the Company recognized an assembled workforce intangible asset of $0.9 million during the first quarter of 2020, which was assigned a two-year useful life. Refer to Notes 5 and 6 for more information. The following is a summary of intangible assets held by the Company at December 31, 2020 and 2019, respectively: December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (3,949,988) $ 1,106,012 0.9 Acquired Assembled Workforce 1,050,000 (570,837) 479,163 1.1 Total Intangible Assets $ 6,106,000 $ (4,520,825) $ 1,585,175 0.9 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (2,685,992) $ 2,370,008 1.9 Acquired Assembled Workforce 150,000 (93,750) 56,250 0.8 Total Intangible Assets $ 5,206,000 $ (2,779,742) $ 2,426,258 1.9 Amortization of intangibles for the next five years and thereafter is expected to be as follows: Estimated Amortization For the Years Ending December 31, Expense 2021 1,556,016 2022 29,159 2023 — 2024 — 2025 — Thereafter — Total future amortization expense $ 1,585,175 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 31, 2020 and 2019 consisted of the following: December 31, 2020 2019 Research and development expenses $ 4,939,095 $ 920,901 Compensation and benefits 3,119,399 1,591,964 General and administrative 771,381 360,016 Sales and marketing 30,795 120,056 Sales returns and allowances 1,793,811 2,284,175 Medicaid rebates 118,655 118,271 Lease liability, current 426,346 155,815 Other 110,239 89,054 Accrued expenses and other current liabilities $ 11,309,721 $ 5,640,252 The increase in accrued research and development expenses to $4.9 million as of December 31, 2020 was driven by an increase in manufacturing, regulatory and clinical activities to support the advancement of our expanded and maturing pipeline. |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Capital Structure | Capital Structure Pursuant to the Company's amended and restated certificate of incorporation, the Company is authorized to issue two classes of stock; common stock and preferred stock. At December 31, 2020, the total number of shares of capital stock the Company was authorized to issue was 205,000,000 of which 200,000,000 was common stock and 5,000,000 was preferred stock. All shares of common and preferred stock have a par value of $0.001 per share. On December 26, 2018, the Company filed a Certificate of Designation of Preferences of Series B Non-Voting Convertible Preferred Stock (“Series B Convertible Preferred Stock”) of Cerecor Inc. (the “Certificate of Designation of the Series B Preferred Stock”) classifying and designating the rights, preferences and privileges of the Series B Convertible Preferred Stock. The Certificate of Designation of the Series B Preferred Stock authorized the issuance of 2,857,143 shares of convertible preferred stock to Armistice with a par value of $0.001 per share. The Series B Convertible Preferred Stock is convertible into shares of common stock on a 1-for-5 ratio and has the same rights, preferences, and privileges as common stock other than it holds no voting rights. Common Stock Q1 2021 Financing In January 2021, the Company closed an underwritten public offering of 13,971,889 shares of its common stock and 1,676,923 pre-funded warrants for net proceeds of approximately $37.6 million. Armistice participated in the offering by purchasing 2,500,000 shares of common stock, on the same terms as all other investors. Certain affiliates of Nantahala Capital Management LLC (collectively, “Nantahala”), which beneficially owned greater than 5% of the Company’s outstanding common stock at the time of the offering and, therefore, were considered a related party pursuant to the Company’s written related person transaction policy, purchased 1,400,000 shares of common stock, on the same terms as all other investors. Nantahala also purchased the pre-funded warrants. Refer to the “Common Stock Warrants” section below for more information regarding the pre-funded warrants. Q2 2020 Financing On June 11, 2020, the Company closed an underwritten public offering of 15,180,000 shares of its common stock for net proceeds of approximately $35.4 million. Armistice participated in the offering by purchasing 2,000,000 shares of common stock on the same terms as all other investors. Additionally, certain of the Company's officers participated in the offering by purchasing an aggregate of 110,000 shares of common stock, on the same terms as all other investors. Q1 2020 Financings On March 17, 2020, the Company entered into a securities purchase agreement with Armistice pursuant to which the Company sold 1,951,219 shares of its common stock for net proceeds of approximately $3.9 million. On February 6, 2020, the Company closed a registered direct offering with certain institutional investors for the sale by the Company of 1,306,282 shares of its common stock for net proceeds of approximately $5.1 million. Armistice participated in the offering by purchasing 1,256,282 shares of common stock from the Company. Aevi Merger On February 3, 2020, under the terms of the Aevi Merger discussed in Note 5, the Company issued 3.9 million shares of its common stock. Q3 2019 Armistice Private Placement On September 4, 2019, the Company entered into a securities purchase agreement with Armistice, pursuant to which the Company sold 1,200,000 shares of its common stock for net proceeds of approximately $3.7 million. Q1 2019 Common Stock Offering On March 8, 2019, the Company closed on an underwritten public offering of common stock for 1,818,182 shares of common stock of the Company for net proceeds of approximately $9.0 million. Armistice participated in the offering by purchasing 363,637 shares of common stock of the Company from the underwriter at the public price. Description of Common Stock Voting Common stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and does not have cumulative voting rights. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election. Dividends The holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. Liquidation In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders, including any preferred stock outstanding, after the payment of all debts and other liabilities. Rights and Preferences Holders of the Company’s common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the Company’s common stock. Common Stock Warrants At December 31, 2020, the following common stock warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 2,380 $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 4,002,380 As mentioned above in the section “Q1 2021 Financing,” in January 2021, as part of an underwritten public offering, the Company sold Pre-Funded warrants to Nantahala to purchase 1,676,923 shares of Cerecor’s common stock at a public offering price of $2.599 per Pre-Funded Warrant. The Pre-Funded Warrants have an initial exercise price of $0.001 per share and are exercisable at any time after their original issuance at the option of each holder, in such holder’s discretion. Convertible Preferred Stock December 2018 Armistice Private Placement On December 27, 2018, the Company entered into a series of transactions as part of a private placement with its largest stockholder, Armistice, whose Chief Investment Officer, Steve Boyd, is a Cerecor director, in order to generate cash to continue to develop its pipeline assets and for general corporate purposes. The transactions are considered one transaction for accounting purposes. As part of the transaction, the Company exchanged common stock warrants issued on April 27, 2017 to Armistice for the purchase of up to 14,285,714 shares of the Company’s common stock at an exercise price of $0.40 per share for like-kind warrants to purchase up to 2,857,143 shares of the Company's newly designated Series B Convertible Preferred Stock with an exercise price of $2.00 per share (the “Exchanged Warrants”). Armistice immediately exercised the Exchanged Warrants and acquired an aggregate of 2,857,143 shares of the convertible preferred stock. Net proceeds of the transaction were approximately $5.7 million for the year ended December 31, 2018. In order to provide Armistice an incentive to exercise the Exchanged Warrants, the Company also entered into a securities purchase agreement with Armistice in December 2018 pursuant to which the Company issued warrants for 4,000,000 shares of common stock of the Company with a term of 5.5 years and an exercise price of $12.50 per share. During the first quarter of 2020, Armistice converted 1.6 million of Series B Convertible Preferred Stock (of its approximate 2.9 million shares of convertible preferred stock) into 8.0 million shares of Cerecor's common stock. Description of Preferred Stock Voting Holders of the Company's convertible preferred stock are not entitled to vote. Dividends The holders of convertible preferred stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. Liquidation In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s convertible preferred stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities. Rights and Preferences Each share of convertible preferred stock is convertible to shares of common stock on a 1-for-5 ratio. There are no other preemptive or subscription rights and there are no redemption or sinking fund provisions applicable to the Company’s common stock. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan On April 5, 2016, the Company’s board of directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) as the successor to the 2015 Omnibus Plan (the “2015 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on May 18, 2016 (the “2016 Plan Effective Date”). Upon the 2016 Plan Effective Date, the 2016 Plan reserved and authorized up to 600,000 additional shares of common stock for issuance, as well as 464,476 unallocated shares remaining available for grant of new awards under the 2015 Plan. An Amended and Restated 2016 Equity Incentive Plan (the “2016 Amended Plan”) was approved by the Company's stockholders in May 2018, which increased the share reserve by an additional 1.4 million shares. A Second Amended and Restated 2016 Equity Incentive Plan (the “2016 Second Amended Plan”) was approved by the Company's stockholders in August 2019, which increased the share reserve by an additional 850,000 shares. A Third Amended and Restated Equity Incentive Plan (the “2016 Third Amended Plan”) was approved by the Company's stockholders in June 2020 which increased the share reserve by an additional 2,014,400 shares. During the term of the 2016 Third Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year, by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. As of December 31, 2020, there were 2,971,623 shares available for future issuance under the 2016 Third Amended Plan. On January 1, 2021, pursuant to the terms of the 2016 Third Amended Plan an additional 3,000,165 shares were made available for issuance. Option grants expire after ten years. Employee options typically vest over three one Year Ended December 31, 2020 2019 Research and development $ 1,338,916 $ 464,382 General and administrative 5,131,380 1,549,844 Sales and marketing 315,390 190,851 Total stock-based compensation, continuing operations 6,785,686 2,205,077 Total stock-based compensation, discontinued operations — 257,719 Total stock-based compensation $ 6,785,686 $ 2,462,796 Stock options with service-based vesting conditions The Company has granted stock options that contain service-based vesting conditions. The compensation cost for these options is recognized on a straight-line basis over the vesting periods. The following table summarizes the Company's service-based option activity for the year ended December 31, 2020: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2019 4,180,606 $ 4.80 $ 2.67 7.9 Granted 5,938,365 $ 3.38 $ 2.16 Exercised (75,239) $ 1.52 $ 1.34 Forfeited (629,300) $ 3.26 $ 1.95 Expired (583,758) $ 5.42 $ 3.02 Balance at December 31, 2020 8,830,674 $ 3.95 $ 2.36 7.7 Exercisable at December 31, 2020 2,906,450 $ 4.42 $ 2.46 5.0 In February 2020, the Company granted options to purchase 2.4 million shares of common stock as inducement option grants, pursuant to NASDAQ Listing Rule 5635(c)(4), to certain executives who joined the Company in connection with the Aevi Merger. In March 2020, our Chief Executive Officer entered into an amended employment agreement in which his base salary in cash was reduced from an annual rate of $450,000 to an annual rate of $35,568 (the “Reduction”). In consideration for the Reduction, on a quarterly basis, the Company grants stock options, which vest immediately (the “Salary Options”), for the purchase of a number of shares of the Company’s common stock with a total value (based on the Black-Scholes valuation methodology) based on a pro rata total annual value of $414,432 of the foregone salary. In April 2020, the Company granted options with service-based vesting conditions as part of its annual grant to employees. Throughout 2020, the Company granted options with service-based vesting conditions to new employees who started with the Company during the year. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of December 31, 2020, the aggregate intrinsic value of options outstanding and options currently exercisable was $0.9 million and $0.6 million, respectively. The aggregate intrinsic value of options exercised for the years ended December 31, 2020 and 2019 was $0.1 million and $0.9 million, respectively. There were 1,336,699 options that vested during the year ended December 31, 2020 with a weighted average exercise price of $4.43 per share. The total grant date fair value of shares which vested during the year ended December 31, 2020 and 2019 was $3.3 million and $2.2 million, respectively. The Company recognized stock-based compensation expense of $4.6 million related to stock options with service-based vesting conditions for the year ended December 31, 2020. At December 31, 2020, there was $10.2 million of total unrecognized compensation cost related to unvested service-based vesting conditions awards. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.9 years. Stock options with market-based vesting conditions The Company has granted stock options that contain market-based vesting conditions. The following table summarizes the Company's market-based option activity for the year ended December 31, 2020: Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2019 300,000 $ 4.98 9.4 Granted 1,000,000 $ 3.29 Forfeited (300,000) $ 4.98 Balance at December 31, 2020 1,000,000 $ 3.29 9.5 $ — Exercisable at December 31, 2020 500,000 $ 2.51 9.5 $ 65,000 (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. During the second quarter of 2020, 300,000 unvested market-based stock options were forfeited as a result of the resignation of an executive during that quarter. The forfeiture resulted in the reversal of the full expense previously recognized to date on this award of $0.4 million, which was recorded to general and administrative expense for the year ended December 31, 2020. On June 18, 2020, the Company granted its Chairman of the Board an option to purchase 1,000,000 shares of Company common stock with market-based vesting conditions. 500,000 of the shares vested immediately on the date of grant with an exercise price of the closing stock price on the date of grant of $2.51 per share. 250,000 of the shares vest upon the Company's common stock reaching a 50% premium to the stock price on June 18, 2020 and will have an exercise price of the stock at that time and 250,000 of the shares vest upon the Company's common stock reaching a 75% premium to the stock price on June 18, 2020 and will have an exercise price of stock at that time. Each vesting tranche represents a unique requisite service period and therefore the compensation cost for each vesting tranche is recognized on a straight-line basis over its respective vesting period. The weighted-average grant date fair value of stock options with market-based vesting conditions granted during 2020 was $1.50 per share or $1.5 million. The total fair value of stock options with market-based vesting conditions that vested during 2020 was $0.8 million. Subsequent to December 31, 2020, in the first quarter of 2021, the second tranche of 250,000 shares and the third tranche of 250,000 shares both vested upon the Company’s stock price reaching a 50% and 75% premium to the stock price on June 18, 2020, respectively. The Company recognized stock-based compensation expense of $1.1 million related to stock options with market-based vesting conditions for the year ended December 31, 2020, which is recorded in general and administrative expenses within the consolidated statement of operations and comprehensive loss. At December 31, 2020, there was $0.1 million of total unrecognized compensation cost related to the market-based vesting conditions awards. This compensation cost is expected to be recognized over a weighted-average period of 0.3 years. Stock-based compensation assumptions The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model, and the assumptions used to compute stock-based compensation expense for market-based stock option grants under a Monte Carlo simulation: Year Ended December 31, Service-based options 2020 2019 Risk-free interest rate 0.19% — 1.48% 1.47% — 2.59% Expected term of options (in years) 1.75 — 6.25 5.0 — 6.25 Expected stock price volatility 70 % 79 % 55% Expected annual dividend yield 0% 0% Market-based options Risk-free interest rate 0.30% 0.34% 2.32% Expected term of options (in years) 4.3 — 5.0 10 Expected stock price volatility 80% 60% Expected annual dividend yield 0% 0% The valuation assumptions were determined as follows: • Risk‑free interest rate: The Company bases the risk‑free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. • Expected term of options: Due to lack of sufficient historical data, the Company estimates the expected life of its stock options with service-based vesting granted to employees and members of the board of directors as the arithmetic average of the vesting term and the original contractual term of the option for service-based options. • Expected stock price volatility: The Company estimated the expected volatility based on a blend of Cerecor's actual historical volatility of its stock price and the historical volatility of other similar publicly-traded biotechnology companies. The Company calculated the historical volatility of the selected companies by using weekly closing prices over a period of the expected term of the associated award. The companies were selected based on their enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected term of the associated award. A decrease in the selected volatility would decrease the fair value of the underlying instrument. • Expected annual dividend yield: The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has not historically declared or paid dividends to stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in the continued growth of the business. Accordingly, the Company assumed an expected dividend yield of 0%. Restricted Stock Units The Company measures the fair value of the restricted stock units using the stock price on the date of the grant. The restricted shares typically vest annually over a four-year period beginning on the first anniversary of the award. The following table summarizes the Company's RSU activity for the year ended December 31, 2020: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2019 267,500 $ 4.92 Vested (111,667) $ 4.93 Unvested RSUs at December 31, 2020 155,833 $ 4.91 The Company recognized expense of $0.8 million related to RSUs for the year ended December 31, 2020. The total fair value of restricted stock units that vested for the year ended December 31, 2020 and 2019 was $0.6 million and $0.8 million, respectively. Employee Stock Purchase Plan On April 5, 2016, the Company’s board of directors approved the ESPP. The ESPP was approved by the Company’s stockholders and became effective on May 18, 2016 (the “ESPP Effective Date”). Under the ESPP, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The ESPP is administered by the compensation committee of the Company’s board of directors. Under the ESPP, eligible employees may purchase stock at 85% of the lower of the fair market value of a share of the Company’s common stock (i) on the first day of an offering period or (ii) on the purchase date. Eligible employees may contribute up to 15% of their earnings during the offering period. The Company’s board of directors may establish a maximum number of shares of the Company’s common stock that may be purchased by any participant, or all participants in the aggregate, during each offering or offering period. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 of the fair market value of the Company’s common stock for each calendar year in which such right is outstanding. Upon the ESPP Effective Date, the Company reserved and authorized up to 500,000 shares of common stock for issuance under the ESPP. On January 1 of each calendar year, the aggregate number of shares that may be issued under the ESPP automatically increases by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 500,000 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock as determined by the Company’s board of directors or compensation committee. As of December 31, 2020, 1,425,308 shares remained available for issuance. On January 1, 2020, the number of shares available for issuance under the ESPP increased by 500,000. In accordance with the guidance in ASC 718-50, Employee Share Purchase Plans , the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company used the Black-Scholes valuation model and recognized stock-based compensation expense of $0.3 million for the year ended December 31, 2020. Subsequent Equity Grants In January 2021, the Company granted 2.7 million options with service-based vesting conditions at an exercise price of $3.32 per share to its employees as part of its annual stock option award. The options were granted under the 2016 Third Amended Plan and will vest over four years, with one-quarter of such options vesting on the first anniversary of the grant date and the remaining three-quarters of the options vesting in equal monthly installments over the following 36 months. On March 1, 2021, the Company granted its newly appointed Chief Financial Officer, Schond L. Greenway, options to purchase 0.5 million shares of common stock at an exercise price of $3.73 per share as an inducement option grant, pursuant to NASDAQ Listing Rule 5635(c)(4). The options will vest over four years, with one-quarter of such options vesting on the first anniversary of the grant date and the remaining three-quarters of the options vesting in equal monthly installments over the following 36 months. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740 (Topic 740, Income Taxes). ASC 740 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected tax consequences or events that have been recognized in our financial statement or tax returns. ASC Topic 740 also clarifies the accounting for uncertainty in income taxes recognized in the financial statement. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. There were no significant matters determined to be unrecognized tax benefits taken or expected to be taken in a tax return that have been recorded in our financial statement for the year ended December 31, 2020. Tax years beginning in 2017 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. ASC Topic 740 provides guidance on the recognition of interest and penalties related to income taxes. It is the Company's policy to treat interest and penalties, to the extent they arise, as a component of income taxes. There was no interest or penalties related to uncertain tax positions arising in the years ended December 31, 2020 and 2019. The income tax provision from continuing operations consisted of the following for the years ending December 31, 2020 and 2019: December 31, 2020 2019 Current: Federal $ (2,158,004) $ 209,001 State (439,372) 54,572 Total Current (2,597,376) 263,573 Deferred: Federal (146,655) 24,458 State (48,930) (7,715) Total Deferred (195,585) 16,743 Net income tax (benefit) expense $ (2,792,961) $ 280,316 The net deferred tax liabilities consisted of the following for the years ending December 31, 2020 and 2019: December 31, 2020 2019 Deferred tax assets (liabilities): Net operating losses $ 14,935,387 $ 7,596,955 Accrued compensation 893,098 321,748 Investment in Aytu — 577,490 Tax credits 2,748,480 1,070,738 Stock-based compensation 2,848,797 1,872,442 Installment sale 461,593 441,305 Other reserves 542,852 399,885 Prepaid expenses (246,771) (120,863) Right-of-use asset (224,271) (167,943) Lease liability 358,025 296,259 Basis difference in tangible and intangible assets, net 1,935,389 1,968,008 Total deferred tax assets, net 24,252,579 14,256,024 Less valuation allowance (24,342,973) (14,342,005) Net deferred taxes $ (90,394) $ (85,981) As of December 31, 2020, the Company has roughly $61.1 million of gross NOLs for federal and state tax purposes that will begin to expire in 2031, including $55.4 million of gross NOLs for federal and state tax purposes that carry forward indefinitely. As of December 31, 2020, the Company has research and experimental tax credits of $2.7 million that will begin to expire in 2038. The income tax benefit (expense) for the years ended December 31, 2020 and 2019 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2020 2019 Federal statutory rate 21.00 % 21.00 % Stock compensation (0.47) (0.47) State taxes 0.60 (0.13) Research and development credit 2.53 5.13 Acquired in-process research and development (8.09) — Fair value adjustment to contingent consideration — 1.65 NOL carryback due to CARES Act 3.26 — Other (0.16) (1.86) Valuation allowance (14.46) (27.07) Effective income tax rate 4.21 % (1.75) % The valuation allowance recorded by the Company as of December 31, 2020 and December 31, 2019 resulted from the uncertainties of the future utilization of deferred tax assets mainly resulting from net operating loss carry forwards for federal and state income tax purposes as well as the federal research and experimental and orphan drug tax credits. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities, as well as whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences are expected to reverse. The Company has established deferred tax liabilities for indefinite lived intangible assets consisting of goodwill that are not amortized for financial reporting purposes but are tax deductible and therefore amortized over 15 years for tax purposes. The Company has concluded that the resulting deferred tax liability will also have an indefinite life unless there is an impairment of the related assets (for financial reporting purposes), or the disposal of the business to which the assets relate. Losses generated in years after 2017 will also have an indefinite life and will be available to offset 80 percent of any federal tax liability and will be available to offset many of the state deferred tax liabilities subject to utilization limits. A portion of existing deferred tax assets will reverse in the future, potentially generating net operating losses that will also be available to offset a portion of the indefinite lived deferred tax liability. Based on the consideration of these facts, the Company concluded it is more likely than not that a significant portion of its remaining gross deferred tax assets less the reversal of deferred tax liabilities will not be realized in the future, accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax asset as of December 31, 2020 and December 31, 2019. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately as such time when it is determined that the “more likely than not” criteria is satisfied. Sections 382 and 383 of the Internal Revenue Code of 1986 subject the future utilization of net operating losses and certain other tax attributes, such as research and experimental tax credits, to an annual limitation in the event of certain ownership changes, as defined. The Company has undergone an ownership change study through June 2020 and has determined that a "change in ownership" as defined by IRC Section 382 of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, did occur in February 2012, July 2014, and April 2017. Based on the Company having undergone multiple ownership changes throughout their history these NOLs will free up at varying rates each year. Subsequent to the changes in ownership previously listed, the NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three‑year period. This could limit the amount of NOLs and research and development credits that the Company can utilize annually to offset future taxable income or tax liabilities. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership after June 30, 2020 and therefore no determination has been made whether the entire NOL carryforward balance are subject to any additional Internal Revenue Code Section 382 limitation. To the extent there is a limitation, which could be significant, there would be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. Subsequent ownership changes may further affect the limitation in future years. All of the Company’s tax years are currently open to examination by each tax jurisdiction in which the Company is subject to taxation. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Litigation – General The Company may become party to various contractual disputes, litigation, and potential claims arising in the ordinary course of business. The Company currently does not believe that the resolution of such matters will have a material adverse effect on its financial position or results of operations except as otherwise disclosed in this report. Karbinal Royalty Make-Whole Provision On February 16, 2018, in connection with the acquisition of Avadel's pediatric products, the Company entered into a supply and distribution agreement with TRIS Pharma Inc. (“TRIS”) (the “Karbinal Agreement”). As part of this agreement, the Company had an annual minimum sales commitment, which is based on a commercial year that spans from August 1 through July 31, of 70,000 units through 2033. The Company was required to pay TRIS a royalty make whole payment (“Make-Whole Payments”) of $30 for each unit under the 70,000 units annual minimum sales commitment through 2033. As a part of the Aytu Divestiture, which closed on November 1, 2019, the Company assigned all payment obligations, including the Make-Whole Payments, under the Karbinal Agreement (collectively, the “TRIS Obligations”) to Aytu. However, under the original license agreement, the Company could ultimately be liable for TRIS Obligations to the extent Aytu fails to make the required payments. The future Make-Whole Payments to be made by Aytu are unknown as the amount owed to TRIS is dependent on the number of units sold. Millipred License and Supply Agreement The Company has a License and Supply Agreement for Millipred with Watson Laboratories, Inc., which is now part of Teva Pharmaceutical Industries Ltd. (“Teva”). Pursuant to the License and Supply Agreement, the Company is required to make license payments of $75,000 in February and August of each year through April 2021 and purchases inventory on an ad-hoc basis. Dr. Sol Barer is the Chairman of Cerecor's board of directors and he also serves as the Chairman of Teva's board of directors. In the fourth quarter of 2020, the parties entered into an amendment (the “Amended License and Supply Agreement”), which extends the agreement for a period of thirty months (from April 1, 2021 through September 30, 2023). In lieu of the previous license payments, beginning April 1, 2021, Cerecor will pay Teva fifty percent of the net profit of the Millipred product following each calendar quarter, subject to a $0.5 million quarterly minimum payment. Possible Future Milestone Proceeds for Out-Licensed Compounds CERC-611 License Assignment In August 2019, the Company entered into an assignment of license agreement (the “Assignment Agreement”) with ES Therapeutics, LLC (“ES Therapeutics”), a wholly-owned subsidiary of Armistice, a significant stockholder of the Company. Pursuant to the Assignment Agreement, the Company assigned and transferred its rights, title, interest, and obligations with respect to CERC-611 to ES Therapeutics. The Company initially licensed the compound from Eli Lilly and Company (“Lilly”) in September 2016. Under the Assignment Agreement, Armistice paid the Company an upfront payment of $0.1 million. The Company recognized the payment as license and other revenue for the year ended December 31, 2019. The Assignment Agreement also provides for: (a) a $7.5 million milestone payment to the Company upon cumulative net sales of licensed products reaching $750.0 million; and (b) a $12.5 million milestone payment to the Company upon cumulative net sales of licensed products reaching $1.3 billion. The Assignment Agreement also releases the Company of obligations related to CERC-611, including the $1.3 million contingent payment to Lilly upon the first subject dosage of CERC-611 in a multiple ascending dose study and from additional potential future payments due to Lilly upon achievement of certain development and commercialization milestones. CERC-501 Sale to Janssen In August 2017, the Company sold its worldwide rights to CERC-501 to Janssen Pharmaceuticals, Inc. (“Janssen”) in exchange for initial gross proceeds of $25.0 million. There is a potential future $20.0 million regulatory milestone payment to the Company upon acceptance of an NDA for any indication. The terms of the agreement provide that Janssen will assume ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. Related Party and Acquisition Related Contingent Liabilities CERC-006 Royalty Agreement with Certain Related Parties Prior to Cerecor entering into the Merger Agreement with Aevi, in July 2019, Aevi entered into a royalty agreement with Mike Cola, Cerecor's current Chief Executive Officer, Joseph J. Grano, Jr., Kathleen Jane Grano, Joseph C. Grano, The Grano Children's Trust, Joseph C. Grano, trustee and LeoGroup Private Investment Access, LLC on behalf of Dr. Garry Neil, Cerecor's current Chief Scientific Officer (collectively, the “Investors”) in exchange for a one-time aggregate payment of $2 million (the “Royalty Agreement”). Collectively, the Investors will be entitled to an aggregate amount equal to a low-single digit percentage of the aggregate net sales of Astellas Pharma Inc.'s second generation mTORC1/2 inhibitor, CERC-006. At any time beginning three years after the date of the first public launch of CERC-006, Cerecor may exercise, at its sole discretion, a buyout option that terminates any further obligations under the Royalty Agreement in exchange for a payment to Investors of an aggregate of 75% of the net present value of the royalty payments. A majority of the independent members of the board of directors and the audit committee of Aevi approved the Royalty Agreement. Cerecor assumed this Royalty Agreement upon closing of the Merger with Aevi and it is recorded as a royalty obligation within the Company's accompanying consolidated balance sheet as of December 31, 2020. Because there is a significant related party relationship between the Company and the Investors, the Company treated its obligation to make royalty payments under the Royalty Agreement as an implicit obligation to repay the funds advanced by the Investors. As the Company makes royalty payments in accordance with the Royalty Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates, which would result in a corresponding increase in the liability balance. Aevi Merger possible future milestone payments A portion of the consideration for the Aevi Merger, which closed on February 3, 2020, includes two future contingent development milestones worth up to an additional $6.5 million. The first milestone is the enrollment of a patient in a Phase II study related to CERC-002 for use in pediatric onset Crohn's disease, CERC-006 (any indication), or CERC-007 (any indication) prior to February 3, 2022. If this milestone is met, the Company is required to make a milestone payment of $2.0 million. The second milestone is the receipt of a NDA approval for either CERC-006 or CERC-007 from the FDA on or prior to February 3, 2025. If this milestone is met, the Company is required to make a milestone payment of $4.5 million. All milestones are payable in either shares of the Company's common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of the consummation of the Merger on February 3, 2020 and as of December 31, 2020, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. Ichorion Acquisition possible future milestone payments In September 2018, the Company acquired Ichorion Therapeutics, Inc. including acquiring three compounds for inherited metabolic disorders known as CDG (CERC-801, CERC-802 and CERC-803) and one other preclinical compound. Consideration for the transaction included shares of Cerecor common stock and three future contingent development milestones for the acquired compounds worth up to an additional $15.0 million. The first milestone is the first product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $6.0 million. The second milestone is the second product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $5.0 million. The third milestone is a protide molecule being approved by the FDA on or prior to December 31, 2023. If this milestone is met, the Company is required to make a milestone payment of $4.0 million. All milestones are payable in either shares of the Company's common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of December 31, 2020, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern (see Note 1). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cerecor Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. |
Discontinued Operations | Discontinued Operations On October 10, 2019, the Company entered into an asset purchase agreement with Aytu (the “Aytu Purchase Agreement”) to sell the Company’s rights, title and interest in assets relating to its pediatric portfolio, namely Aciphex ® Sprinkle™, Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™, Poly-Vi-Flor ® and Tri-Vi-Flor™ (the “Pediatric Portfolio”), as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts (the “Aytu Divestiture”). The Aytu Divestiture closed on November 1, 2019. Upon the sale of the Pediatric Portfolio during the fourth quarter of 2019, the Pediatric Portfolio met all conditions required to be classified as discontinued operations. Therefore, the operating results of the Pediatric Portfolio are reported as income from discontinued operations, net of tax in the accompanying consolidated financial statements for the years ended December 31, 2020 (due to our continued involvement) and 2019. Additionally, the gain recognized as a result of the sale of the Pediatric Portfolio is reported within income from discontinued operations, net of tax for the year ended December 31, 2019. The assets and liabilities related to the Pediatric Portfolio are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets as of December 31, 2020 and 2019. For additional information, see Note 3. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements, cash flows used in management's going concern assessment, income taxes, goodwill and other intangible assets, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash | Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the “ESPP”) deposits, credit card deposits, and security deposits for our leased corporate offices. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net is comprised of amounts due from customers in the ordinary course of business. Management considers all accounts receivable to be fully collectible at December 31, 2020, and accordingly, no allowance for doubtful accounts has been recorded. Bad debt expense is charged to operations as amounts are determined to be uncollectible. Accounts receivable are written off when deemed uncollectible and recoveries of receivables previously written off are recorded when received. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. |
Leases | LeasesThe Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified two operating leases, which both serve as administrative office space. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company's consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the consolidated balance sheets and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within general and administrative expenses. |
Property and Equipment | Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, deprecation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement's useful life. The Company uses the lesser of the lease term or ten years |
Acquisitions | AcquisitionsFor acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. |
Segment Information | Segment Information |
Goodwill | Goodwill The Company's goodwill relates to the amount that arose in connection with the Company's historical acquisitions which were accounted for as business combinations. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. Goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. The Company consists of one reporting unit. |
Intangible Assets and Amortization Expense | Intangible Assets Intangible assets with definite useful lives are amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. Amortization Expense Amortization expense includes the amortization of the Company's acquired intangible assets. There is no amortization expense included in cost of product sales or sales and marketing expense as all amortization expense is included within its own standalone line in operating expenses in the Company's consolidated statements of operations and comprehensive loss. |
Revenue Recognition | Product Revenues, net The Company generates substantially all of its revenue from sales of prescription drugs to its customers. Revenue from sales of prescription drugs was $6.7 million for the years ended December 31, 2020 and 2019. The Company has identified a single product delivery performance obligation, which is the provision of prescription drugs to its customers based upon master service agreements in place with wholesaler distributors, purchase orders from retail pharmacies or other direct customers and a contractual arrangement with a specialty pharmacy. The performance obligation is satisfied at a point in time, when control of the product has been transferred to the customer, either at the time the product has been received by the customer or to a lesser extent when the product is shipped. The Company determines the transaction price based on fixed consideration in its contractual agreements and the transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. In determining the transaction price, a significant financing component does not exist because the timing from when the Company delivers product to when the customers pay for the product is less than one year and the customers do not pay for product in advance of the transfer of the product. Revenues from sales of products are recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. The Company recognizes revenue only to the extent that it is probable that a significant revenue reversal will not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, our expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates and judgments each reporting period to adjust accordingly. Pursuant to a transition services agreement entered into between Aytu and Cerecor, Aytu manages Millipred ® commercial operations for a monthly fee of $12,000 for up to 18 months (post November 1, 2019) or until the Company establishes an independent commercial infrastructure for the product. As a result of the Aytu Divestiture in the fourth quarter of 2019, all product revenues for the year ended December 31, 2020 and 2019 related to the Pediatric Portfolio are included within net income from discontinued operations, net of tax. Concentration with Customer As is typical in the pharmaceutical industry, the Company sells its prescription drugs in the United States primarily through wholesale distributors and a specialty contracted pharmacy. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. In addition, the Company earns revenue from sales of its prescription pharmaceutical products directly to retail pharmacies. For the year ended December 31, 2020, the Company's three largest customers accounted for approximately 46%, 25% and 27%, respectively, of the Company's total net product revenues of prescription drugs. For the year ended December 31, 2019, the Company's three largest customers accounted for approximately 41%, 30% and 28%, respectively, of the Company's total net product revenues of prescription drugs. Returns and Allowances Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product's expiration date. The Company’s return policy generally allows customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. The Company’s estimate for returns and allowances may be impacted by a number of factors noted above. Rebates The Company is subject to rebates on sales made under governmental pricing programs. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Medicaid reserves are based on expected payments, which are driven by patient usage, contract performance and field inventory that will be subject to a Medicaid rebate. Medicaid rebates are typically billed up to 180 days after the product is shipped, however this can be as much as 270 days after the quarter in which the product is dispensed to the Medicaid participant. In addition to the estimates mentioned above, the Company’s calculation also requires other estimates, such as estimates of sales mix, to determine which sales are subject to rebates and the amount of such rebates. Periodically, the Company adjusts the Medicaid rebate provision based on actual claims paid. Due to the delay in billing, adjustments to actual claims paid may incorporate revisions of this provision for several periods. Because Medicaid pricing programs involve particularly difficult interpretations of complex statutes and regulatory guidance, the Company's estimates could differ from actual experience. In determining estimates for these rebates, the Company considers the terms of the contracts, relevant statutes, historical relationships of rebates to revenues, past payment experience, estimated inventory levels and estimated future trends. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will reassess the milestones each reporting period to determine the probability of achievement. Cost of Product Sales |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; costs associated with preclinical activities and regulatory operations, pharmacovigilance, quality and travel; and employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals |
Acquired In-Process Research and Development Expenses | Acquired In-Process Research and Development Expenses Acquired in-process research and development (“IPR&D”) expense includes the initial costs of IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use. |
Estimated Fair Value and Change in Fair Value of Contingent Consideration | Estimated Fair Value and Change in Fair Value of Contingent Consideration The Company's historical business acquisition of TRx Pharmaceuticals, LLC (“TRx”) in November 2017 (the “TRx Acquisition”) involved the potential for future payment of consideration that is contingent upon the achievement of operational and commercial milestones. The fair value of contingent consideration was determined at the acquisition date utilizing unobservable inputs such as the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability was remeasured at the current fair value with changes recorded in the consolidated statement of operations and comprehensive loss. As part of a settlement the Company entered into in the second quarter of 2019, the Company was released from its contingent consideration liability related to the TRx Acquisition. Therefore, the Company's contingent consideration liability was $0 as of December 31, 2020 and 2019. The change in fair value of contingent consideration was included within its own standalone line in operating expenses from continuing operations in the Company's consolidated statements of operations and comprehensive loss. Estimated Fair Value of Investment in Aytu and Change in Fair Value of Investment in Aytu As consideration for the sale of the Pediatric Portfolio to Aytu in the fourth quarter of 2019, the Company received 9,805,845 shares of Aytu Series G Convertible Preferred Stock (the “Investment in Aytu”). Pursuant to ASC 323, the Company accounted for this investment as a financial instrument because Cerecor's investment does not result in a controlling financial interest, as the preferred stock received is in-substance common stock and Cerecor does not have the ability to exercise significant influence or joint control of Aytu. Therefore, the fair value of the Investment in Aytu was determined at the divestiture date utilizing quoted prices for Aytu's common stock price with a discount for lack of marketability due to the Company’s shares being restricted as of December 31, 2019 and subject to a lockup period. Subsequent to the divestiture date, at each reporting period prior to the sale of the underlying common stock, the Investment in Aytu was remeasured at its current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations and comprehensive loss. In April 2020, Cerecor was permitted to convert the Aytu Series G Preferred Stock into 9,805,845 shares of Aytu’s common stock (the “Aytu Common Shares”), and subsequently sold all of the Aytu Common Shares in a series of transactions. The sale resulted in a realized gain, calculated as the difference between the net proceeds received and the fair value of the Investment in Aytu at the divestiture date, which was recognized in change in fair value of Investment in Aytu within the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. Estimated Fair Value of Guarantee and Change in Fair Value of Guarantee As of the closing date of the Aytu Divestiture on November 1, 2019, Aytu assumed the Company's debt obligation to Deerfield CSF, LLC (“Deerfield”) and the contingent consideration liability related to future royalties on Avadel Pharmaceuticals PLC’s (“Avadel”) pediatric products. In conjunction with the closing of this transaction, the Company entered into a Guarantee in favor of Deerfield, which guarantees the payment of the assumed liabilities to Deerfield, which included the debt obligation and the contingent consideration related to future potential royalties on Avadel's pediatric products (collectively referred to as the “Guarantee”). Aytu publicly reported that it had paid the $15.0 million balloon payment to Deerfield before it came due in June 2020, thus satisfying that portion of the debt obligation assumed as part of the divestiture. The remaining minimum commitments payable related to the future potential royalties on Avadel’s pediatric products was $7.3 million as of June 30, 2020 (as most recently publicly reported by Aytu), which represents Cerecor's estimated maximum potential future payments under the Guarantee. |
Paycheck Protection Program Loan | Paycheck Protection Program Loan The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provides stimulus measures, including the Paycheck Protection Program (“PPP”), to provide certain small businesses with liquidity to support their operations (such as to retain employees and maintain payroll and lease payments) during the COVID-19 pandemic. Cerecor received a $0.4 million PPP Loan during the second quarter of 2020 (the “PPP Loan”). PPP loans have a 1% fixed annual interest rate and mature in two years, and are eligible for forgiveness under certain conditions. If there is reasonable assurance that the PPP Loan will be forgiven, the Company may elect to account for the PPP Loan either as debt under ASC 470 or as a government grant. If accounted for as a government grant, the Company may elect to present the PPP Loan as either a credit in the income statement within other income or as a reduction to the related expense. As of December 31, 2020, the Company believes it meets the criteria for forgiveness and submitted an application for forgiveness with its lender in 2020. Once approved by the lender, the lender will submit the forgiveness application to the Small Business Administration (the “SBA”) for ultimate approval. The SBA has 90 days from receipt to approve or reject the forgiveness application. Because the Company believes it meets the criteria for forgiveness and incurred the related expenses during the year, the Company elected to recognized the PPP Loan as other income within the accompanying consolidated statement of operations and comprehensive loss for the year ended December 31, 2020. |
Stock-Based Compensation | Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations and comprehensive loss. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. For stock option grants with market-based conditions, compensation expense is recognized ratably over the attribution period. The Company estimates the fair value of the market-based stock option grants using a Monte-Carlo simulation. The Company generally estimates fair value using assumptions, including the expected term of the option, the expected volatility of peer group of similar companies, risk free interest rate and the expected dividend yield. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred tax assets primarily include net operating loss (“NOL”) and tax credit carryforwards, accrued expenses not currently deductible and the cumulative temporary differences related to certain research and patent costs. Certain tax attributes, including NOLs and research and development credit carryforwards, may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “IRC”). See Note 12 for further information. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of December 31, 2020, the Company did not believe any material uncertain tax positions were present. |
Comprehensive Loss | Comprehensive LossComprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the years ended December 31, 2020 and 2019, the Company’s net loss was equal to comprehensive loss and, accordingly, no additional disclosure is presented. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This guidance applies to all entities and impacts how entities account for credit losses for most financial assets and other instruments. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods therein. Upon adoption of the new standard on January 1, 2020, the Company began recognizing an allowance using a forward-looking approach to estimate the expected credit loss related to financial assets. The Company began monitoring the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in the customers’ credit profiles. Over 95% of sales were generated from three major industry wholesalers for the year ended December 31, 2020. Additionally, pursuant to the new standard, at each reporting period, the Company adjusts the Guarantee liability through earnings based on expected credit losses in accordance with Topic 326. The Company evaluated the impact of the adoption of this standard on its financial statements, concluding there was no significant impact on the Company's results of operations, financial position, cash flows or disclosures. Fair Value Measurements In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This new standard modifies certain disclosure requirements on fair value measurements. This new standard became effective for the Company on January 1, 2020. The Company evaluated the impact of the adoption of this new standard on its financial statements, concluding there was no significant impact. Income Tax Simplification |
Aytu Divestiture (Tables)
Aytu Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The following tables summarizes the assets and liabilities of the discontinued operations as of December 31, 2020 and 2019: December 31, 2020 2019 Assets Current assets: Accounts receivable, net $ — $ 497,577 Total current assets of discontinued operations — 497,577 Liabilities Current liabilities: Accounts payable — 387,975 Accrued expenses and other current liabilities 1,341,667 3,503,037 Total current liabilities of discontinued operations 1,341,667 3,891,012 Other long-term liabilities — 1,755,000 Total long-term liabilities of discontinued operations — 1,755,000 Year Ended December 31, 2020 2019 Product revenue, net $ (871,221) $ 10,166,611 Operating expenses: Cost of product sales — 4,288,234 General and administrative — 137,911 Sales and marketing — 8,521,190 Amortization expense — 2,425,083 Impairment of intangible assets — 1,449,121 Change in fair value of contingent consideration — 247,042 Total operating expenses — 17,068,581 Other income (expense): Change in value of Guarantee 1,755,000 — Interest expense, net — (793,860) Total other income (expense) 1,755,000 (793,860) Gain on sale of Pediatric Portfolio — 7,964,924 Income from discontinued operations before tax 883,779 269,094 Income tax expense — 70,888 Income from discontinued operations, net of tax $ 883,779 $ 198,206 Year Ended December 31, 2020 2019 Operating activities Amortization $ — $ 2,425,083 Impairment of intangible assets — 1,449,121 Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio — 327,180 Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel pediatric product — 107,271 Change in fair value of contingent consideration liability — 247,042 Change in fair value of Guarantee (1,755,000) — Gain on Aytu Divestiture — (7,964,924) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Net Loss Per Share of Common Stock | The following table sets forth the computation of basic and diluted net loss per share of common stock for continuing and discontinued operations for the years ended December 31, 2020 and 2019, which includes both classes of participating securities: Year Ended December 31, 2020 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (58,439,575) $ 802,188 $ (5,943,976) $ 81,591 Denominator: Weighted average shares 66,688,464 66,688,464 1,356,597 1,356,597 Basic and diluted net (loss) income per share $ (0.87) $ 0.01 $ (4.38) $ 0.06 Year Ended December 31, 2019 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (12,204,552) $ 148,673 $ (4,066,201) $ 49,533 Denominator: Weighted average shares 42,878,040 42,878,040 2,857,143 2,857,143 Basic and diluted net (loss) income per share $ (0.28) $ 0.00 $ (1.42) $ 0.01 |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Weighted Shares Outstanding | The following outstanding securities at December 31, 2020 and 2019 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2020 2019 Stock options 9,830,674 4,480,606 Warrants on common stock 4,002,380 4,024,708 Restricted Stock Units 155,833 267,500 Underwriters' unit purchase option — 40,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis | The following tables present, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities from continuing operations that are measured at fair value on a recurring basis: December 31, 2020 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 17,503,371 $ — $ — December 31, 2019 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 2,240,230 $ — $ — Investment in Aytu $ — $ 7,628,947 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment as of December 31, 2020 and 2019 consisted of the following: December 31, 2020 2019 Furniture and equipment $ 152,940 $ 143,168 Computers and software 56,240 6,708 Right-of-use assets 917,472 718,628 Leasehold improvements 657,328 657,328 Total property and equipment 1,783,980 1,525,832 Less accumulated depreciation (176,910) (78,169) Property and equipment, net $ 1,607,070 $ 1,447,663 |
Summary of Assets and Liabilities Lessee | Supplemental balance sheet information related to the leased properties include: As of December 31, 2020 December 31, 2019 Property and equipment, net $ 917,472 $ 718,626 Accrued expenses and other current liabilities $ 426,346 $ 155,815 Other long-term liabilities 1,038,395 1,111,965 Total operating lease liabilities $ 1,464,741 $ 1,267,780 |
Components of Lease Expense | The components of lease expense for the years ended December 31, 2020 and 2019 were as follows: Year Ended December 31, 2020 2019 Operating lease cost* $ 344,625 $ 160,767 *Includes short-term leases, which are immaterial. |
Operating Lease Maturities | The following table shows a maturity analysis of the operating lease liability as of December 31, 2020: Undiscounted Cash Flows 2021 $ 426,346 2022 173,748 2023 178,092 2024 182,544 2025 187,108 Thereafter 813,638 Total lease payments $ 1,961,476 Less implied interest (496,735) Total $ 1,464,741 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The changes in intangible assets for the years ended December 31, 2020 and 2019 were as follows: Balance as of December 31, 2018 $ 3,765,254 Amortization (1,338,996) Balance as of December 31, 2019 $ 2,426,258 Additions $ 900,000 Amortization $ (1,741,083) Balance as of December 31, 2020 $ 1,585,175 |
Schedule of Finite-Lived Intangible Assets | The following is a summary of intangible assets held by the Company at December 31, 2020 and 2019, respectively: December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (3,949,988) $ 1,106,012 0.9 Acquired Assembled Workforce 1,050,000 (570,837) 479,163 1.1 Total Intangible Assets $ 6,106,000 $ (4,520,825) $ 1,585,175 0.9 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (2,685,992) $ 2,370,008 1.9 Acquired Assembled Workforce 150,000 (93,750) 56,250 0.8 Total Intangible Assets $ 5,206,000 $ (2,779,742) $ 2,426,258 1.9 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization of intangibles for the next five years and thereafter is expected to be as follows: Estimated Amortization For the Years Ending December 31, Expense 2021 1,556,016 2022 29,159 2023 — 2024 — 2025 — Thereafter — Total future amortization expense $ 1,585,175 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of December 31, 2020 and 2019 consisted of the following: December 31, 2020 2019 Research and development expenses $ 4,939,095 $ 920,901 Compensation and benefits 3,119,399 1,591,964 General and administrative 771,381 360,016 Sales and marketing 30,795 120,056 Sales returns and allowances 1,793,811 2,284,175 Medicaid rebates 118,655 118,271 Lease liability, current 426,346 155,815 Other 110,239 89,054 Accrued expenses and other current liabilities $ 11,309,721 $ 5,640,252 |
Capital Structure (Tables)
Capital Structure (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Outstanding Common Stock Warrants | At December 31, 2020, the following common stock warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 2,380 $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 4,002,380 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of Stock-based Compensation Expense | The amount of stock-based compensation expense recognized for the years ended December 31, 2020 and 2019 was as follows: Year Ended December 31, 2020 2019 Research and development $ 1,338,916 $ 464,382 General and administrative 5,131,380 1,549,844 Sales and marketing 315,390 190,851 Total stock-based compensation, continuing operations 6,785,686 2,205,077 Total stock-based compensation, discontinued operations — 257,719 Total stock-based compensation $ 6,785,686 $ 2,462,796 |
Summary of Option Activity | The following table summarizes the Company's service-based option activity for the year ended December 31, 2020: Options Outstanding Number of shares Weighted average exercise price per share Weighted average grant date fair value per share Weighted average remaining contractual term (in years) Balance at December 31, 2019 4,180,606 $ 4.80 $ 2.67 7.9 Granted 5,938,365 $ 3.38 $ 2.16 Exercised (75,239) $ 1.52 $ 1.34 Forfeited (629,300) $ 3.26 $ 1.95 Expired (583,758) $ 5.42 $ 3.02 Balance at December 31, 2020 8,830,674 $ 3.95 $ 2.36 7.7 Exercisable at December 31, 2020 2,906,450 $ 4.42 $ 2.46 5.0 Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2019 300,000 $ 4.98 9.4 Granted 1,000,000 $ 3.29 Forfeited (300,000) $ 4.98 Balance at December 31, 2020 1,000,000 $ 3.29 9.5 $ — Exercisable at December 31, 2020 500,000 $ 2.51 9.5 $ 65,000 (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. |
Schedule of Fair Value Assumptions for Options | The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model, and the assumptions used to compute stock-based compensation expense for market-based stock option grants under a Monte Carlo simulation: Year Ended December 31, Service-based options 2020 2019 Risk-free interest rate 0.19% — 1.48% 1.47% — 2.59% Expected term of options (in years) 1.75 — 6.25 5.0 — 6.25 Expected stock price volatility 70 % 79 % 55% Expected annual dividend yield 0% 0% Market-based options Risk-free interest rate 0.30% 0.34% 2.32% Expected term of options (in years) 4.3 — 5.0 10 Expected stock price volatility 80% 60% Expected annual dividend yield 0% 0% |
Nonvested Restricted Stock Shares Activity | The following table summarizes the Company's RSU activity for the year ended December 31, 2020: RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2019 267,500 $ 4.92 Vested (111,667) $ 4.93 Unvested RSUs at December 31, 2020 155,833 $ 4.91 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision from continuing operations consisted of the following for the years ending December 31, 2020 and 2019: December 31, 2020 2019 Current: Federal $ (2,158,004) $ 209,001 State (439,372) 54,572 Total Current (2,597,376) 263,573 Deferred: Federal (146,655) 24,458 State (48,930) (7,715) Total Deferred (195,585) 16,743 Net income tax (benefit) expense $ (2,792,961) $ 280,316 |
Schedule of Components of Deferred Tax Assets | The net deferred tax liabilities consisted of the following for the years ending December 31, 2020 and 2019: December 31, 2020 2019 Deferred tax assets (liabilities): Net operating losses $ 14,935,387 $ 7,596,955 Accrued compensation 893,098 321,748 Investment in Aytu — 577,490 Tax credits 2,748,480 1,070,738 Stock-based compensation 2,848,797 1,872,442 Installment sale 461,593 441,305 Other reserves 542,852 399,885 Prepaid expenses (246,771) (120,863) Right-of-use asset (224,271) (167,943) Lease liability 358,025 296,259 Basis difference in tangible and intangible assets, net 1,935,389 1,968,008 Total deferred tax assets, net 24,252,579 14,256,024 Less valuation allowance (24,342,973) (14,342,005) Net deferred taxes $ (90,394) $ (85,981) |
Reconciliation of Income Tax Expenses Between Federal Statutory Rate and Effective Income Tax Rate | The income tax benefit (expense) for the years ended December 31, 2020 and 2019 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2020 2019 Federal statutory rate 21.00 % 21.00 % Stock compensation (0.47) (0.47) State taxes 0.60 (0.13) Research and development credit 2.53 5.13 Acquired in-process research and development (8.09) — Fair value adjustment to contingent consideration — 1.65 NOL carryback due to CARES Act 3.26 — Other (0.16) (1.86) Valuation allowance (14.46) (27.07) Effective income tax rate 4.21 % (1.75) % |
Business (Details)
Business (Details) | Jun. 11, 2020USD ($) | Jan. 31, 2021USD ($) | Apr. 30, 2020USD ($) | Dec. 31, 2020USD ($)productoffering | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Subsequent Event [Line Items] | ||||||
Number of equity offerings | offering | 3 | |||||
Net proceeds | $ 12,800,000 | $ 44,400,000 | $ 5,700,000 | |||
Cash and cash equivalents | 18,919,448 | $ 3,609,438 | ||||
Net (loss) income | (63,499,772) | (16,072,547) | ||||
Net cash used in operating activities | (40,539,700) | (19,134,332) | ||||
Accumulated deficit | $ (177,790,389) | $ (114,290,617) | ||||
Underwritten Public Offering | ||||||
Subsequent Event [Line Items] | ||||||
Net proceeds | $ 35,400,000 | |||||
Subsequent Event | Underwritten Public Offering | ||||||
Subsequent Event [Line Items] | ||||||
Net proceeds | $ 37,600,000 | |||||
Neurological Clinical And Preclinical Stage Compounds | ||||||
Subsequent Event [Line Items] | ||||||
Number of products in development | product | 2 | |||||
Clinical Stage | ||||||
Subsequent Event [Line Items] | ||||||
Number of products in development | product | 4 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | Nov. 01, 2019USD ($)shares | Apr. 30, 2020shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2020USD ($)contractreporting_unitsegment | Dec. 31, 2019USD ($) | Jun. 30, 2020USD ($) |
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | ||||
Payment terms | 30 days | |||||
Prompt payment discount | 2.00% | 2.00% | ||||
Number of operating leases | contract | 2 | |||||
Number of operating segments | segment | 1 | |||||
Number of reporting units | reporting_unit | 1 | |||||
Revenues | $ 6,698,615 | $ 6,750,351 | ||||
Contingent consideration | $ 0 | $ 0 | $ 0 | |||
Remaining contingent consideration | $ 7,300,000 | |||||
Payroll Protection Program Loan, CARES Act | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Principal amount | 400,000 | |||||
Deerfield Obligation | AYTU | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Balloon payment to be paid | $ 15,000,000 | |||||
Remaining contingent consideration | $ 9,300,000 | |||||
Pediatric Portfolio | Convertible Preferred Stock | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Shares received as consideration (in shares) | shares | 9,805,845 | 9,805,845 | 9,805,845 | |||
Major Customer Number One | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 46.00% | |||||
Major Customer Number One | Sales Revenue | Customer Concentration Risk | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 41.00% | |||||
Major Customer Number Two | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 25.00% | |||||
Major Customer Number Two | Sales Revenue | Customer Concentration Risk | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 30.00% | |||||
Major Customer Number Three | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 27.00% | |||||
Major Customer Number Three | Sales Revenue | Customer Concentration Risk | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 28.00% | |||||
Three Wholesalers | Sales Revenue | Customer Concentration Risk | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Concentration risk percentage | 95.00% | |||||
Maximum | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Medicaid billing period | 270 days | |||||
Minimum | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Medicaid billing period | 180 days | |||||
AYTU | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Monthly commercial operation payments | $ 12,000 | |||||
AYTU | Maximum | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Duration of monthly commercial operation payments | 18 months | |||||
Product revenue, net | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Revenues | $ 6,698,615 | $ 6,650,351 | ||||
Computers and software | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Computer, software, equipment and furniture, useful life | 4 years | |||||
Furniture and equipment | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Computer, software, equipment and furniture, useful life | 5 years | |||||
Leasehold improvements | ||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||
Computer, software, equipment and furniture, useful life | 10 years |
Aytu Divestiture - Narrative (D
Aytu Divestiture - Narrative (Details) - USD ($) shares in Millions | Nov. 01, 2019 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 31, 2021 | Jun. 30, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of pediatric portfolio | $ 0 | $ 7,964,924 | ||||
Remaining contingent consideration | $ 7,300,000 | |||||
Change in fair value on guarantee | 1,755,000 | 0 | ||||
Deerfield Obligation | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Contingent consideration paid | $ 3,200,000 | |||||
Deerfield Obligation | Subsequent Event | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Periodic payment | $ 100,000 | |||||
Deerfield Obligation | AYTU | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Balloon payment to be paid | $ 15,000,000 | |||||
Remaining contingent consideration | $ 9,300,000 | |||||
Deerfield Obligation | AYTU | Subsequent Event | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Periodic payment | 100,000 | |||||
Balloon payment to be paid | $ 15,000,000 | |||||
AYTU | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Monthly commercial operation payments | $ 12,000 | |||||
AYTU | Maximum | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Duration of monthly commercial operation payments | 18 months | |||||
AYTU | Convertible Preferred Stock | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Investment, shares (in shares) | 9.8 | |||||
Pediatric Portfolio | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of pediatric portfolio | 8,000,000 | |||||
Pediatric Portfolio | Deerfield Obligation | AYTU | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Periodic payment | $ 300,000 | |||||
Quarterly deferred payments, percentage of net sales of pediatric products | 15.00% | |||||
Future aggregate deferred payments | $ 12,500,000 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from sale of assets | 4,500,000 | 4,500,000 | ||||
Assumption of debt on sale of assets | 15,100,000 | |||||
Gain on sale of pediatric portfolio | 0 | 7,964,924 | ||||
Change in fair value on guarantee | 1,755,000 | 0 | ||||
Sales returns disposed of | 800,000 | |||||
Sales return reserve | $ 1,000,000 | |||||
Net assets transferred | 18,800,000 | |||||
Transaction expenses | 600,000 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Maximum | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales returns disposed of | 2,800,000 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Minimum | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales returns disposed of | 2,000,000 | |||||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | AYTU | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Liabilities assumed by buyer | $ 11,000,000 | |||||
Convertible preferred stock received | $ 7,600,000 |
Aytu Divestiture - Summary of A
Aytu Divestiture - Summary of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Total current assets of discontinued operations | $ 0 | $ 497,577 |
Current liabilities: | ||
Total current liabilities of discontinued operations | 1,341,667 | 3,891,012 |
Total long-term liabilities of discontinued operations | 0 | 1,755,000 |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Current assets: | ||
Accounts receivable, net | 0 | 497,577 |
Total current assets of discontinued operations | 0 | 497,577 |
Current liabilities: | ||
Accounts payable | 0 | 387,975 |
Accrued expenses and other current liabilities | 1,341,667 | 3,503,037 |
Total current liabilities of discontinued operations | 1,341,667 | 3,891,012 |
Other long-term liabilities | 0 | 1,755,000 |
Total long-term liabilities of discontinued operations | $ 0 | $ 1,755,000 |
Aytu Divestiture - Summary of I
Aytu Divestiture - Summary of Income Statement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses: | ||
Change in value of Guarantee | $ 1,755,000 | $ 0 |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Product revenue, net | (871,221) | 10,166,611 |
Operating expenses: | ||
Cost of product sales | 0 | 4,288,234 |
General and administrative | 0 | 137,911 |
Sales and marketing | 0 | 8,521,190 |
Amortization expense | 0 | 2,425,083 |
Impairment of intangible assets | 0 | 1,449,121 |
Change in fair value of contingent consideration | 0 | 247,042 |
Total operating expenses | 0 | 17,068,581 |
Change in value of Guarantee | 1,755,000 | 0 |
Interest expense, net | 0 | (793,860) |
Total other income (expense) | 1,755,000 | (793,860) |
Gain on sale of Pediatric Portfolio | 0 | 7,964,924 |
Income from discontinued operations before tax | 883,779 | 269,094 |
Income tax expense | 0 | 70,888 |
Income from discontinued operations, net of tax | $ 883,779 | $ 198,206 |
Aytu Divestiture - Summary of C
Aytu Divestiture - Summary of Cash Flows (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | ||
Change in fair value of Guarantee | $ (1,755,000) | $ 0 |
Gain on Aytu Divestiture | 0 | (7,964,924) |
Pediatric Portfolio | ||
Operating activities | ||
Gain on Aytu Divestiture | (8,000,000) | |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Operating activities | ||
Amortization | 0 | 2,425,083 |
Impairment of intangible assets | 0 | 1,449,121 |
Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio | 0 | 327,180 |
Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel pediatric product | 0 | 107,271 |
Change in fair value of contingent consideration | 0 | 247,042 |
Change in fair value of Guarantee | (1,755,000) | 0 |
Gain on Aytu Divestiture | $ 0 | $ (7,964,924) |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | Dec. 27, 2018shares | Dec. 26, 2018shares | Mar. 31, 2020shares | Dec. 31, 2020shares | Dec. 31, 2018shares | Dec. 31, 2019shares |
Subsidiary, Sale of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 2,900,000 | 5,000,000 | 5,000,000 | |||
Preferred Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Conversion of preferred stock to common stock (in shares) | (1,600,000) | |||||
Common stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Conversion of preferred stock to common stock (in shares) | 8,000,000 | 8,000,000 | ||||
Series B convertible preferred stock | Preferred Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | 0.20 | ||
Shares converted (in shares) | 1,600,000 | |||||
Private Placement | Series B convertible preferred stock | Preferred Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 | 2,857,143 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share of Common Stock for Continuing and Discontinued Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Common stock | ||
Numerator: | ||
Allocation of undistributed net (loss) income, continuing operations | $ (58,439,575) | $ (12,204,552) |
Allocation of undistributed net (loss) income, discontinued operations | $ 802,188 | $ 148,673 |
Denominator: | ||
Weighted average shares (in shares) | 66,688,464 | 42,878,040 |
Basic and diluted net loss per share, continuing operations (in dollars per share) | $ (0.87) | $ (0.28) |
Basic and diluted net loss per share, discontinued operations (in dollars per share) | $ 0.01 | $ 0 |
Preferred Stock | ||
Numerator: | ||
Allocation of undistributed net (loss) income, continuing operations | $ (5,943,976) | $ (4,066,201) |
Allocation of undistributed net (loss) income, discontinued operations | $ 81,591 | $ 49,533 |
Denominator: | ||
Weighted average shares (in shares) | 1,356,597 | 2,857,143 |
Basic and diluted net loss per share, continuing operations (in dollars per share) | $ (4.38) | $ (1.42) |
Basic and diluted net loss per share, discontinued operations (in dollars per share) | $ 0.06 | $ 0.01 |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock options | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 9,830,674 | 4,480,606 |
Warrants on common stock | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 4,002,380 | 4,024,708 |
Restricted Stock Units | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 155,833 | 267,500 |
Underwriters' unit purchase option | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding (in shares) | 0 | 40,000 |
Asset Acquisition (Details)
Asset Acquisition (Details) shares in Millions | Feb. 03, 2020USD ($)milestoneagreementshares | Dec. 31, 2019USD ($) | Mar. 31, 2020USD ($)agreement | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 05, 2019USD ($) |
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 900,000 | |||||
Useful life | 10 months 24 days | 1 year 10 months 24 days | ||||
Acquired Assembled Workforce | ||||||
Business Acquisition [Line Items] | ||||||
Useful life | 1 year 1 month 6 days | 9 months 18 days | ||||
Aevi | ||||||
Business Acquisition [Line Items] | ||||||
Forgiveness of loan | $ 4,100,000 | |||||
Aevi | ||||||
Business Acquisition [Line Items] | ||||||
Extended employment agreements | agreement | 7 | 7 | ||||
Loan for exercise of exclusive license | $ 4,100,000 | $ 4,100,000 | $ 4,100,000 | |||
Consideration transferred, shares issued | $ 15,500,000 | |||||
Shares issued (in shares) | shares | 3.9 | |||||
Contingent consideration | $ 6,500,000 | |||||
Transaction costs | 1,500,000 | |||||
Fair value assigned to intangible asset at purchase | 24,000,000 | |||||
Cash acquired | 300,000 | |||||
Net liabilities assumed | $ 5,100,000 | |||||
Useful life | 2 years | |||||
Number of contingent consideration milestones | milestone | 2 | |||||
Aevi | Milestone One | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | $ 2,000,000 | |||||
Aevi | Milestone Two | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | 4,500,000 | |||||
Aevi | Acquired Assembled Workforce | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets acquired | $ 900,000 | $ 900,000 | ||||
Useful life | 2 years | 2 years |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities from Continuing Operations (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Aytu | $ 0 | $ 7,628,947 |
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 17,503,371 | 2,240,230 |
Investment in Aytu | 0 | |
Recurring basis | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Investment in Aytu | 7,628,947 | |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | $ 0 | 0 |
Investment in Aytu | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Feb. 03, 2020USD ($)agreement | Nov. 01, 2019USD ($)$ / sharesshares | Apr. 30, 2020USD ($)shares | Dec. 31, 2020USD ($)shares | Mar. 31, 2020USD ($)agreement | Dec. 31, 2020USD ($)class_of_stock | Dec. 31, 2019USD ($)class_of_stock$ / shares | Dec. 31, 2018USD ($) |
Level 3 Valuation | ||||||||
Investment in Aytu | $ 0 | $ 0 | $ 7,628,947 | |||||
Net proceeds | $ 12,800,000 | 44,400,000 | $ 5,700,000 | |||||
Realized gain | 5,200,000 | |||||||
Change in fair value of contingent consideration | 0 | $ 1,256,211 | ||||||
Additions | $ 900,000 | |||||||
Useful life | 10 months 24 days | 1 year 10 months 24 days | ||||||
Number of changes in valuation techniques | class_of_stock | 0 | 0 | ||||||
Amount of transfers of assets from level 2 to level 1 | 0 | $ 0 | $ 0 | |||||
Amount of transfers of assets from level 1 to level 2 | 0 | 0 | 0 | |||||
Level 3 | Contingent Consideration | ||||||||
Level 3 Valuation | ||||||||
Contingent consideration | $ 0 | 0 | 0 | $ 1,300,000 | ||||
Change in fair value of contingent consideration | $ 0 | 1,300,000 | ||||||
Common stock | ||||||||
Level 3 Valuation | ||||||||
Net proceeds | $ 12,800,000 | |||||||
Pediatric Portfolio | Convertible Preferred Stock | ||||||||
Level 3 Valuation | ||||||||
Shares received as consideration (in shares) | shares | 9,805,845 | 9,805,845 | 9,805,845 | |||||
Shares received as consideration, price per share (in dollars per share) | $ / shares | $ 1.2747 | |||||||
AYTU | Convertible Preferred Stock | Level 2 | ||||||||
Level 3 Valuation | ||||||||
Investment in Aytu | $ 7,600,000 | $ 7,600,000 | ||||||
AYTU | Convertible Preferred Stock | Level 2 | Measurement input share price (in dollars per share) | ||||||||
Level 3 Valuation | ||||||||
Share price (in dollars per share) | $ / shares | $ 1.03 | $ 0.9725 | ||||||
AYTU | Convertible Preferred Stock | Level 2 | Measurement input, discount for lack of marketability | ||||||||
Level 3 Valuation | ||||||||
Equity securities, measurement input | 0.25 | 0.20 | ||||||
Aevi | ||||||||
Level 3 Valuation | ||||||||
Extended employment agreements | agreement | 7 | 7 | ||||||
Useful life | 2 years | |||||||
Acquired Assembled Workforce | ||||||||
Level 3 Valuation | ||||||||
Useful life | 1 year 1 month 6 days | 9 months 18 days | ||||||
Acquired Assembled Workforce | Aevi | ||||||||
Level 3 Valuation | ||||||||
Additions | $ 900,000 | $ 900,000 | ||||||
Useful life | 2 years | 2 years |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,783,980 | $ 1,525,832 |
Less accumulated depreciation | (176,910) | (78,169) |
Property and equipment, net | 1,607,070 | 1,447,663 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 152,940 | 143,168 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 56,240 | 6,708 |
Right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 917,472 | 718,628 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 657,328 | $ 657,328 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)contractrenewal_option | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 102,095 | $ 119,488 |
Number of operating leases | contract | 2 | |
Remaining lease term | 7 years 8 months 12 days | |
Discount rate | 7.40% | |
Building | MARYLAND | ||
Property, Plant and Equipment [Line Items] | ||
Annual base rent | $ 161,671 | |
Annual rent increase (as a percent) | 2.50% | |
Rent abatement period | 12 months | |
Lease term | 10 years | |
Number of renewal options | renewal_option | 2 | |
Lease renewal term | 5 years | |
Building | PENNSYLVANIA | ||
Property, Plant and Equipment [Line Items] | ||
Annual base rent | $ 280,185 |
Property and Equipment - Supple
Property and Equipment - Supplemental Balance Sheet Information (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | cerc:PropertyPlantAndEquipmentAndOperatingLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | cerc:PropertyPlantAndEquipmentAndOperatingLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Property and equipment, net | $ 917,472 | $ 718,626 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesAndOtherLiabilities | us-gaap:AccruedLiabilitiesAndOtherLiabilities |
Accrued expenses and other current liabilities | $ 426,346 | $ 155,815 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
Other long-term liabilities | $ 1,038,395 | $ 1,111,965 |
Total operating lease liabilities | $ 1,464,741 | $ 1,267,780 |
Property and Equipment - Lease
Property and Equipment - Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Operating lease cost | $ 344,625 | $ 160,767 |
Property and Equipment - Leas_2
Property and Equipment - Lease Maturity (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
2021 | $ 426,346 | |
2022 | 173,748 | |
2023 | 178,092 | |
2024 | 182,544 | |
2025 | 187,108 | |
Thereafter | 813,638 | |
Total lease payments | 1,961,476 | |
Less implied interest | (496,735) | |
Total operating lease liabilities | $ 1,464,741 | $ 1,267,780 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | Feb. 03, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | |||||
Changes in carrying amount of goodwill | $ 0 | $ 0 | |||
Intangible asset | $ 1,585,175 | $ 2,426,258 | $ 3,765,254 | ||
Useful life | 10 months 24 days | 1 year 10 months 24 days | |||
Aevi | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 2 years | ||||
Acquired Assembled Workforce | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life | 1 year 1 month 6 days | 9 months 18 days | |||
Acquired Assembled Workforce | Aevi | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset | $ 900,000 | ||||
Useful life | 2 years | 2 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets Rollforward (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Intangible assets, beginning balance | $ 2,426,258 | $ 3,765,254 |
Additions | 900,000 | |
Amortization | (1,741,083) | (1,338,996) |
Intangible assets, ending balance | $ 1,585,175 | $ 2,426,258 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,106,000 | $ 5,206,000 |
Accumulated Amortization | (4,520,825) | (2,779,742) |
Total future amortization expense | $ 1,585,175 | $ 2,426,258 |
Weighted-Average Remaining Life (in years) | 10 months 24 days | 1 year 10 months 24 days |
Acquired Product Marketing Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,056,000 | $ 5,056,000 |
Accumulated Amortization | (3,949,988) | (2,685,992) |
Total future amortization expense | $ 1,106,012 | $ 2,370,008 |
Weighted-Average Remaining Life (in years) | 10 months 24 days | 1 year 10 months 24 days |
Acquired Assembled Workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,050,000 | $ 150,000 |
Accumulated Amortization | (570,837) | (93,750) |
Total future amortization expense | $ 479,163 | $ 56,250 |
Weighted-Average Remaining Life (in years) | 1 year 1 month 6 days | 9 months 18 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 1,556,016 | |
2022 | 29,159 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total future amortization expense | $ 1,585,175 | $ 2,426,258 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Research and development expenses | $ 4,939,095 | $ 920,901 |
Compensation and benefits | 3,119,399 | 1,591,964 |
General and administrative | 771,381 | 360,016 |
Sales and marketing | 30,795 | 120,056 |
Sales returns and allowances | 1,793,811 | 2,284,175 |
Medicaid rebates | 118,655 | 118,271 |
Lease liability, current | 426,346 | 155,815 |
Other | 110,239 | 89,054 |
Accrued expenses and other current liabilities | $ 11,309,721 | $ 5,640,252 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Narrative (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued research and development expense | $ 4,939,095 | $ 920,901 |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) $ / shares in Units, $ in Millions | Jun. 11, 2020USD ($)shares | Mar. 17, 2020USD ($)shares | Feb. 06, 2020USD ($)shares | Feb. 03, 2020shares | Sep. 04, 2019USD ($)shares | Mar. 08, 2019USD ($)shares | Dec. 27, 2018$ / sharesshares | Dec. 26, 2018$ / sharesshares | Jan. 31, 2021USD ($)$ / sharesshares | Apr. 30, 2020USD ($) | Mar. 31, 2020shares | Dec. 31, 2020class_of_stock$ / sharesshares | Dec. 31, 2020class_of_stock$ / sharesshares | Dec. 31, 2020USD ($)class_of_stock$ / sharesshares | Dec. 31, 2020class_of_stock$ / sharesshares | Dec. 31, 2020voteclass_of_stock$ / sharesshares | Dec. 31, 2020productclass_of_stock$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Class of Stock [Line Items] | |||||||||||||||||||
Number of classes of stock authorized to issue | class_of_stock | 2 | 2 | 2 | 2 | 2 | 2 | |||||||||||||
Number of shares of capital stock authorized to issue (in shares) | 205,000,000 | 205,000,000 | 205,000,000 | 205,000,000 | 205,000,000 | 205,000,000 | |||||||||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||
Preferred stock, shares authorized (in shares) | 2,900,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 2 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Net proceeds | $ | $ 12.8 | $ 44.4 | $ 5.7 | ||||||||||||||||
Number of shares available under warrant (in shares) | 4,000,000 | ||||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 | ||||||||||||||||||
Expected life | 5 years 6 months | ||||||||||||||||||
Aevi | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Consideration issued (in shares) | 3,900,000 | ||||||||||||||||||
Subsequent Event | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||||||||
Subsequent Event | Warrant | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 1,676,923 | ||||||||||||||||||
Subsequent Event | Nantahala Capital Management LLC | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Percentage of ownership | 5.00% | ||||||||||||||||||
Common stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Consideration issued (in shares) | 3,893,361 | ||||||||||||||||||
Shares issued upon conversion (in shares) | 8,000,000 | ||||||||||||||||||
Series B convertible preferred stock | Preferred Stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | 0.20 | |||||||||||||||
Shares converted (in shares) | 1,600,000 | ||||||||||||||||||
Common stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Net proceeds | $ | $ 12.8 | ||||||||||||||||||
Number of votes per share | vote | 1 | ||||||||||||||||||
Number of preemptive, conversion or subscription rights | 0 | 0 | |||||||||||||||||
Number of redemption or sinking fund provisions | class_of_stock | 0 | ||||||||||||||||||
Private Placement | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares available under warrant (in shares) | 14,285,714 | ||||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.40 | ||||||||||||||||||
Private Placement | Series B convertible preferred stock | Preferred Stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 | 2,857,143 | ||||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||||||||
Underwritten Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 15,180,000 | ||||||||||||||||||
Net proceeds | $ | $ 35.4 | ||||||||||||||||||
Underwritten Public Offering | Subsequent Event | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 13,971,889 | ||||||||||||||||||
Net proceeds | $ | $ 37.6 | ||||||||||||||||||
Registered Direct Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 1,306,282 | ||||||||||||||||||
Net proceeds | $ | $ 5.1 | ||||||||||||||||||
Armistice Purchase Agreement | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 1,951,219 | 1,200,000 | |||||||||||||||||
Net proceeds | $ | $ 3.9 | $ 3.7 | |||||||||||||||||
Bought Deal | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 1,818,182 | ||||||||||||||||||
Net proceeds | $ | $ 9 | ||||||||||||||||||
Nantahala | Subsequent Event | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares available under warrant (in shares) | 1,676,923 | ||||||||||||||||||
Nantahala | Underwritten Public Offering | Subsequent Event | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 1,400,000 | ||||||||||||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 2.599 | ||||||||||||||||||
Armistice | Series B convertible preferred stock | Preferred Stock | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | ||||||||||||||||||
Armistice | Underwritten Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 2,000,000 | ||||||||||||||||||
Armistice | Underwritten Public Offering | Subsequent Event | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 2,500,000 | ||||||||||||||||||
Armistice | Registered Direct Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 1,256,282 | ||||||||||||||||||
Armistice | Bought Deal | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 363,637 | ||||||||||||||||||
Officers | Underwritten Public Offering | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued (in shares) | 110,000 |
Capital Structure - Common Stoc
Capital Structure - Common Stock Warrants (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2018 |
Class of Warrant or Right [Line Items] | ||
Number of shares available under warrant (in shares) | 4,000,000 | |
Exercise price per share (in dollars per share) | $ 12.50 | |
Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Number of shares available under warrant (in shares) | 4,002,380 | |
Common Stock Warrants, Expiration Date of May 2022 | Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Number of shares available under warrant (in shares) | 2,380 | |
Exercise price per share (in dollars per share) | $ 8.68 | |
Common Stock Warrants Expiration Date of June 2024 | Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Number of shares available under warrant (in shares) | 4,000,000 | |
Exercise price per share (in dollars per share) | $ 12.50 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) | Mar. 01, 2021 | Jun. 18, 2020 | Feb. 29, 2020 | Jan. 01, 2020 | May 18, 2016 | Jan. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | Aug. 31, 2019 | May 31, 2018 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Annual share reserve increase | 4.00% | |||||||||||||
Aggregate intrinsic value | $ 0 | |||||||||||||
Aggregate intrinsic value of options exercisable | 65,000 | |||||||||||||
Total stock-based compensation | $ 6,785,686 | $ 2,462,796 | ||||||||||||
Stock-based compensation, reversal from forfeitures | $ 400,000 | |||||||||||||
Expected annual dividend yield | 0.00% | |||||||||||||
Employee Stock Purchase Plan (ESPP) | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 500,000 | |||||||||||||
Common stock remaining for future issuance (in shares) | 1,425,308 | |||||||||||||
Total stock-based compensation | $ 300,000 | |||||||||||||
Purchase price of common stock, percentage | 85.00% | |||||||||||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15.00% | |||||||||||||
Maximum annual amount of fair market value of the company's common stock that a participant may accrue the rights to purchase | $ 25,000 | |||||||||||||
Shares of common stock for future issuance (in shares) | 500,000 | |||||||||||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1.00% | |||||||||||||
Board of Directors Chairman | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 1,000,000 | |||||||||||||
Board of Directors Chairman | Tranche One | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options vested (in shares) | 500,000 | |||||||||||||
Vested (in dollars per share) | $ 2.51 | |||||||||||||
Board of Directors Chairman | Tranche Two | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options vested (in shares) | 250,000 | |||||||||||||
Premium on stock price, threshold percentage | 50.00% | |||||||||||||
Board of Directors Chairman | Tranche Three | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Options vested (in shares) | 250,000 | |||||||||||||
Premium on stock price, threshold percentage | 75.00% | |||||||||||||
Service Based Options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 5,938,365 | |||||||||||||
Compensation committee of annual value | $ 414,432 | |||||||||||||
Aggregate intrinsic value | $ 900,000 | |||||||||||||
Aggregate intrinsic value of options exercisable | 600,000 | |||||||||||||
Intrinsic value of options exercised | $ 100,000 | 900,000 | ||||||||||||
Options vested (in shares) | 1,336,699 | |||||||||||||
Weighted average exercise price (in dollars per share) | $ 4.43 | |||||||||||||
Fair value of options vested in period | $ 3,300,000 | $ 2,200,000 | ||||||||||||
Total stock-based compensation | 4,600,000 | |||||||||||||
Compensation not yet recognized | $ 10,200,000 | |||||||||||||
Period for recognition | 2 years 10 months 24 days | |||||||||||||
Granted (in dollars per share) | $ 2.16 | |||||||||||||
Expected annual dividend yield | 0.00% | 0.00% | ||||||||||||
Granted (in dollars per share) | $ 3.38 | |||||||||||||
Service Based Options | Executive Officer | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 2,400,000 | |||||||||||||
Service Based Options | Chief Executive Officer | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Annual base salary | $ 450,000 | $ 35,568 | ||||||||||||
Market Based Options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 1,000,000 | |||||||||||||
Fair value of options vested in period | $ 800,000 | |||||||||||||
Total stock-based compensation | 1,100,000 | |||||||||||||
Compensation not yet recognized | $ 100,000 | |||||||||||||
Period for recognition | 3 months 18 days | |||||||||||||
Granted (in dollars per share) | $ 1.50 | |||||||||||||
Share based compensation arrangement Options granted | $ 1,500,000 | |||||||||||||
Expected annual dividend yield | 0.00% | 0.00% | ||||||||||||
Granted (in dollars per share) | $ 3.29 | |||||||||||||
Market Based Options | Board of Directors Chairman | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 300,000 | |||||||||||||
Restricted Stock | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years | |||||||||||||
Total stock-based compensation | $ 800,000 | |||||||||||||
Fair value of awards vested in period | $ 600,000 | $ 800,000 | ||||||||||||
Subsequent Event | Service Based Options | Employee | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 2,700,000 | |||||||||||||
Granted (in dollars per share) | $ 3.32 | |||||||||||||
Subsequent Event | Service Based Options | Tranche One | Employee | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights percentage | 25.00% | 25.00% | ||||||||||||
Subsequent Event | Service Based Options | Tranche Two | Employee | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights percentage | 75.00% | 75.00% | ||||||||||||
Subsequent Event | Service Based Options | Chief Executive Officer | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years | |||||||||||||
Granted (in shares) | 500,000 | |||||||||||||
Granted (in dollars per share) | $ 3.73 | |||||||||||||
Subsequent Event | Service Based Options | Chief Executive Officer | Tranche Two | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 36 months | |||||||||||||
2016 Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 600,000 | 1,400,000 | ||||||||||||
Common stock remaining for future issuance (in shares) | 2,971,623 | |||||||||||||
2016 Plan | Stock options | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award expiration period | 10 years | |||||||||||||
2016 Plan | Stock options | Minimum | Employee | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 3 years | |||||||||||||
2016 Plan | Stock options | Minimum | Director | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 1 year | |||||||||||||
2016 Plan | Stock options | Maximum | Employee | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years | |||||||||||||
2016 Plan | Stock options | Maximum | Director | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 3 years | |||||||||||||
2016 Plan | Subsequent Event | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 3,000,165 | |||||||||||||
2015 Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Common stock remaining for future issuance (in shares) | 464,476 | |||||||||||||
2016 Second Amended Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 850,000 | |||||||||||||
Third Amended 2016 Plan | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Increase in number of shares reserved for issuance (in shares) | 2,014,400 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 6,785,686 | $ 2,462,796 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 1,338,916 | 464,382 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 5,131,380 | 1,549,844 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 315,390 | 190,851 |
Total stock-based compensation, continuing operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 6,785,686 | 2,205,077 |
Total stock-based compensation, discontinued operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 0 | $ 257,719 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Options With Service-based Vesting Conditions (Details) - Service Based Options - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of shares | ||
Balance, beginning of period (in shares) | 4,180,606 | |
Granted (in shares) | 5,938,365 | |
Exercised (in shares) | (75,239) | |
Forfeited (in shares) | (629,300) | |
Expired (in shares) | (583,758) | |
Balance, end of period (in shares) | 8,830,674 | 4,180,606 |
Exercisable (in shares) | 2,906,450 | |
Weighted average exercise price per share | ||
Balance, beginning of period (in dollars per share) | $ 4.80 | |
Granted (in dollars per share) | 3.38 | |
Exercised (in dollars per share) | 1.52 | |
Forfeited (in dollars per share) | 3.26 | |
Expired (in dollars per share) | 5.42 | |
Balance, end of period (in dollars per share) | 3.95 | $ 4.80 |
Exercisable (in dollars per share) | 4.42 | |
Weighted average grant date fair value per share | ||
Balance, beginning of period (in dollars per share) | 2.67 | |
Granted (in dollars per share) | 2.16 | |
Exercised (in dollars per share) | 1.34 | |
Forfeited (in dollars per share) | 1.95 | |
Expired (in dollars per share) | 3.02 | |
Balance, end of period (in dollars per share) | 2.36 | $ 2.67 |
Exercisable (in dollars per share) | $ 2.46 | |
Weighted average remaining contractual term (in years) | ||
Weighted average remaining contractual term | 7 years 8 months 12 days | 7 years 10 months 24 days |
Exercisable | 5 years |
Stock Based Compensation - St_3
Stock Based Compensation - Stock Options With Company's Market-based Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Aggregate intrinsic value | ||
Aggregate intrinsic value | $ 0 | |
Aggregate intrinsic value of options exercisable | $ 65 | |
Market Based Options | ||
Number of shares | ||
Balance, beginning of period (in shares) | 300,000 | |
Granted (in shares) | 1,000,000 | |
Forfeited (in shares) | (300,000) | |
Balance, end of period (in shares) | 1,000,000 | 300,000 |
Exercisable (in shares) | 500,000 | |
Weighted average exercise price per share | ||
Balance, beginning of period (in dollars per share) | $ 4.98 | |
Granted (in dollars per share) | 3.29 | |
Forfeited (in dollars per share) | 4.98 | |
Balance, end of period (in dollars per share) | 3.29 | $ 4.98 |
Exercisable (in dollars per share) | $ 2.51 | |
Weighted average remaining contractual term (in years) | ||
Weighted average remaining contractual term | 9 years 6 months | 9 years 4 months 24 days |
Exercisable | 9 years 6 months |
Stock Based Compensation - St_4
Stock Based Compensation - Stock-based Compensation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term of options (in years) | 5 years 6 months | ||
Expected annual dividend yield | 0.00% | ||
Service Based Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected stock price volatility | 55.00% | ||
Expected annual dividend yield | 0.00% | 0.00% | |
Service Based Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.19% | 1.47% | |
Expected term of options (in years) | 1 year 9 months | 5 years | |
Expected stock price volatility | 70.00% | ||
Service Based Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.48% | 2.59% | |
Expected term of options (in years) | 6 years 3 months | 6 years 3 months | |
Expected stock price volatility | 79.00% | ||
Market Based Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.30% | 2.32% | |
Expected term of options (in years) | 10 years | ||
Expected stock price volatility | 80.00% | 60.00% | |
Expected annual dividend yield | 0.00% | 0.00% | |
Market Based Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term of options (in years) | 4 years 3 months 18 days | ||
Market Based Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.34% | ||
Expected term of options (in years) | 5 years |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock Units (Details) - Restricted Stock | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Restricted Stock Award, Number of Shares | |
Nonvested restricted, beginning balance (in shares) | shares | 267,500 |
Vested (in shares) | shares | (111,667) |
Nonvested restricted, ending balance (in shares) | shares | 155,833 |
Restricted Stock Award Weighted Average Grant Date Fair Value [Abstract] | |
Beginning of period (in dollars per share) | $ / shares | $ 4.92 |
Vested (in dollars per share) | $ / shares | 4.93 |
End of period (in dollars per share) | $ / shares | $ 4.91 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Accrued penalties and interest accrued | $ 0 | $ 0 |
Income tax (benefit) expense, current | (2,597,376) | $ 263,573 |
Refund received | 500,000 | |
Research and Experimental Tax Credits | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit | 2,700,000 | |
Federal and State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 61,100,000 | |
Net operating loss carryforwards, not subject to expiration | $ 55,400,000 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Federal | $ (2,158,004) | $ 209,001 |
State | (439,372) | 54,572 |
Total Current | (2,597,376) | 263,573 |
Deferred: | ||
Federal | (146,655) | 24,458 |
State | (48,930) | (7,715) |
Total Deferred | (195,585) | 16,743 |
Net income tax (benefit) expense | $ (2,792,961) | $ 280,316 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Taxes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets, Net [Abstract] | ||
Net operating losses | $ 14,935,387 | $ 7,596,955 |
Accrued compensation | 893,098 | 321,748 |
Investment in Aytu | 0 | 577,490 |
Tax credits | 2,748,480 | 1,070,738 |
Stock-based compensation | 2,848,797 | 1,872,442 |
Installment sale | 461,593 | 441,305 |
Other reserves | 542,852 | 399,885 |
Prepaid expenses | (246,771) | (120,863) |
Right-of-use asset | (224,271) | (167,943) |
Lease liability | 358,025 | 296,259 |
Basis difference in tangible and intangible assets, net | 1,935,389 | 1,968,008 |
Total deferred tax assets, net | 24,252,579 | 14,256,024 |
Less valuation allowance | (24,342,973) | (14,342,005) |
Net deferred taxes | $ (90,394) | $ (85,981) |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of income tax expense | ||
Federal statutory rate | 21.00% | 21.00% |
Stock compensation | (0.47%) | (0.47%) |
State taxes | 0.60% | (0.13%) |
Research and development credit | 2.53% | 5.13% |
Acquired in-process research and development | (8.09%) | 0.00% |
Fair value adjustment to contingent consideration | 0.00% | 1.65% |
NOL carryback due to CARES Act | 3.26% | 0.00% |
Other | (0.16%) | (1.86%) |
Valuation allowance | (14.46%) | (27.07%) |
Effective income tax rate | 4.21% | (1.75%) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Apr. 01, 2021USD ($) | Feb. 03, 2020USD ($)milestone | Sep. 24, 2018USD ($)therapymilestone | Feb. 16, 2018unit$ / shares | Aug. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Aug. 31, 2017USD ($) | Dec. 31, 2020 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2021USD ($) | Dec. 31, 2021USD ($) |
Operating Leased Assets [Line Items] | ||||||||||||
Revenues | $ 6,698,615 | $ 6,750,351 | ||||||||||
Potential future regulatory milestone | $ 20,000,000 | |||||||||||
Royalty agreement, payment received | $ 2,000,000 | |||||||||||
Period after public launch to terminate agreement | 3 years | |||||||||||
Buyout option, percentage of net present value of royalty payments | 75.00% | |||||||||||
Aevi | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Payment for contingent consideration | 0 | |||||||||||
Aevi | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Contingent consideration | $ 6,500,000 | |||||||||||
Number of contingent consideration milestones | milestone | 2 | |||||||||||
Aevi | Milestone One | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Contingent consideration | $ 2,000,000 | |||||||||||
Aevi | Milestone Two | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Contingent consideration | $ 4,500,000 | |||||||||||
Ichorion | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Contingent consideration | $ 15,000,000 | |||||||||||
Number of contingent consideration milestones | milestone | 3 | |||||||||||
Payment for contingent consideration | 0 | |||||||||||
Scenario, Forecast | Ichorion | Milestone One | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Payment for contingent consideration | $ 6,000,000 | |||||||||||
Scenario, Forecast | Ichorion | Milestone Two | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Payment for contingent consideration | 5,000,000 | |||||||||||
Scenario, Forecast | Ichorion | Milestone Three | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Payment for contingent consideration | $ 4,000,000 | |||||||||||
Millipred | Teva Pharmaceutical Industries Ltd. | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Extended term | 30 months | |||||||||||
Millipred | Scenario, Forecast | Teva Pharmaceutical Industries Ltd. | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Semi-annual payment | $ 75,000 | |||||||||||
Percent of net profit for installment payments | 50.00% | |||||||||||
Installment payments | $ 500,000 | |||||||||||
CERC-611 | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Potential milestone payment | $ 7,500,000 | |||||||||||
Potential milestone revenue threshold | 750,000,000 | |||||||||||
Potential milestone payment two | 12,500,000 | |||||||||||
Potential milestone revenue threshold two | 1,300,000,000 | |||||||||||
Potential milestone revenue threshold two | $ 1,300,000 | |||||||||||
CERC-611 | Armistice | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Revenue from related parties | 100,000 | |||||||||||
License and other revenue | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Revenues | $ 25,000,000 | $ 0 | $ 100,000 | |||||||||
CERC-801, CERC-802, And CERC-803 | Ichorion | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Number of preclinical therapies | therapy | 3 | |||||||||||
CERC-913 | Ichorion | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Number of preclinical therapies | therapy | 1 | |||||||||||
TRIS Pharma | Karbinal Agreement | ||||||||||||
Operating Leased Assets [Line Items] | ||||||||||||
Minimum quantity required | unit | 70,000 | |||||||||||
Make whole payment per unit (in dollars per share) | $ / shares | $ 30 |