Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Flex Pharma, Inc. | |
Entity Central Index Key | 1,615,219 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 18,013,532 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 21,948,395 | $ 19,186,036 |
Marketable securities | 1,999,399 | 14,129,723 |
Accounts receivable | 12,631 | 10,385 |
Inventory | 418,196 | 431,891 |
Prepaid expenses and other current assets | 1,261,232 | 777,102 |
Total current assets | 25,639,853 | 34,535,137 |
Property and equipment, net | 266,647 | 331,040 |
Restricted cash | 126,595 | 126,595 |
Total assets | 26,033,095 | 34,992,772 |
Current liabilities: | ||
Accounts payable | 2,241,402 | 2,004,440 |
Accrued expenses and other current liabilities | 1,820,292 | 3,712,221 |
Deferred revenue | 0 | 72,188 |
Deferred rent, current portion | 58,821 | 58,821 |
Total current liabilities | 4,120,515 | 5,847,670 |
Deferred rent, net of current portion | 24,509 | 39,214 |
Total liabilities | 4,145,024 | 5,886,884 |
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at March 31, 2018 and December 31, 2017; none issued or outstanding at March 31, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.0001 par value; 100,000,000 shares authorized at March 31, 2018 and December 31, 2017; 17,984,811 and 17,972,166 shares issued at March 31, 2018 and December 31, 2017, and 17,980,852 and 17,797,178 shares outstanding at March 31, 2018 and December 31, 2017, respectively | 1,798 | 1,780 |
Additional paid-in capital | 141,148,465 | 140,184,630 |
Accumulated other comprehensive income (loss) | 93 | (1,247) |
Accumulated deficit | (119,262,285) | (111,079,275) |
Total stockholders' equity | 21,888,071 | 29,105,888 |
Total liabilities and stockholders' equity | $ 26,033,095 | $ 34,992,772 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (shares) | 17,984,811 | 17,972,166 |
Common stock, shares outstanding (shares) | 17,980,852 | 17,797,178 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net product revenue | $ 176,255 | $ 240,292 |
Other revenue | 2,327 | 2,255 |
Total revenue | 178,582 | 242,547 |
Costs and expenses: | ||
Cost of product revenue | 83,934 | 79,106 |
Research and development | 4,680,181 | 3,914,974 |
Selling, general and administrative | 3,697,287 | 4,594,716 |
Total costs and expenses | 8,461,402 | 8,588,796 |
Loss from operations | (8,282,820) | (8,346,249) |
Interest income, net | 59,593 | 77,854 |
Net loss | (8,223,227) | (8,268,395) |
Net loss attributable to common stockholders | $ (8,223,227) | $ (8,268,395) |
Net loss per share attributable to common stockholders - basic and diluted (in usd per share) | $ (0.46) | $ (0.49) |
Weighted-average number of common shares outstanding — basic and diluted (shares) | 17,893,912 | 16,873,512 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (8,223,227) | $ (8,268,395) |
Other comprehensive gain (loss): | ||
Unrealized gain (loss) on available-for-sale securities | 1,340 | (10,739) |
Comprehensive loss | $ (8,221,887) | $ (8,279,134) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities | ||
Net loss | $ (8,223,227) | $ (8,268,395) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 64,066 | 91,367 |
Stock-based compensation expense | 908,940 | 1,188,752 |
Amortization and accretion on investments | 12,231 | 2,454 |
Other non-cash items | (3,480) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,514 | (6,881) |
Inventory | (3,297) | 39,810 |
Prepaid expenses and other current assets | (499,023) | (659,732) |
Accounts payable | 236,962 | (366,289) |
Accrued expenses and other current liabilities | (1,895,468) | (276,168) |
Deferred revenue | 0 | (7,707) |
Deferred rent | (14,705) | 37,197 |
Net cash used in operating activities | (9,412,487) | (8,225,592) |
Investing activities | ||
Purchases of marketable securities | (1,997,751) | (9,607,422) |
Proceeds from maturities and sales of marketable securities | 14,117,184 | 16,510,076 |
Purchases of property and equipment | 0 | (22,150) |
Proceeds from sales of property and equipment | 500 | 732 |
Net cash provided by investing activities | 12,119,933 | 6,881,236 |
Financing activities | ||
Proceeds from exercise of common stock | 54,913 | 0 |
Net cash provided by financing activities | 54,913 | 0 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,762,359 | (1,344,356) |
Cash, cash equivalents and restricted cash at beginning of period | 19,312,631 | 22,542,635 |
Cash, cash equivalents and restricted cash at end of period | 22,074,990 | 21,198,279 |
Supplemental cash flow information | ||
Property and equipment purchases included in accounts payable and accrued expenses at December 31, 2016 | $ 0 | $ 7,100 |
Organization and operations
Organization and operations | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and operations | Organization and operations The Company Flex Pharma, Inc. (the "Company") is a biotechnology company that is developing innovative and proprietary treatments for muscle cramps, spasms and spasticity associated with severe neurological conditions such as multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS) and Charcot-Marie-Tooth (CMT). The Company's lead drug product candidate, FLX-787, is currently being studied in two Phase 2 clinical trials in the United States. One Phase 2 clinical trial in the United States is in patients with motor neuron disease, primarily with ALS, who suffer from muscle cramps. FLX-787 is being developed for ALS under fast track designation which was granted by the United States Food and Drug Administration in July 2017. The other Phase 2 clinical trial in the United States is in patients with CMT who suffer from muscle cramps. In 2016, the Company launched its consumer product, HOTSHOT®, to prevent and treat exercise-associated muscle cramps. The Company operates as two reportable segments, Consumer Operations and Drug Development. See Note 12 for additional discussion and information on the reportable segments. The Company is subject to risks common to companies in the biotechnology and consumer products industries, including, but not limited to, risks of failure of pre-clinical studies and clinical trials, the need to obtain marketing approval for its drug product candidates, the need to successfully commercialize and gain market acceptance of its drug product candidates and its consumer products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and development by competitors of alternative products. Liquidity The Company has incurred an accumulated deficit of $119,262,285 since inception and will require substantial additional capital to fund its research and development and expenses related to its consumer brand and HOTSHOT. The Company had unrestricted cash, cash equivalents and marketable securities of $23,947,794 at March 31, 2018 . The Company's operating plan assumes: (1) the efforts of the Company's Drug Development segment are focused on the support and completion of current clinical trials; (2) reduced spending compared to the prior year by the Consumer Operations segment, including reduced marketing spend; and (3) limited headcount additions and corporate expenditures. Based on the Company's implemented operating plan, the Company believes that its existing cash, cash equivalents and marketable securities will be sufficient to allow the Company to fund its current operating plan for at least 12 months from the date the financial statements are issued. Management expects the Company to incur a loss for the foreseeable future. The Company's ability to achieve profitability in the future is dependent upon the successful development, approval and commercialization of its drug product candidates, and achieving a level of revenues adequate to support the Company's cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional private or public debt or equity offerings, and may seek additional capital through arrangements with collaborators or from other sources. There can be no assurances, however, that additional funding will be available on terms acceptable to the Company, or at all. If the Company is unable to raise additional capital in sufficient amounts or on acceptable terms, the Company may have to significantly delay, scale back or discontinue the development or commercialization of one or more of its drug product candidates or sell or license assets in the Drug Development and Consumer Operations segments. |
Summary of significant accounti
Summary of significant accounting policies and recent accounting pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies and recent accounting pronouncements | Summary of significant accounting policies and recent accounting pronouncements The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the condensed consolidated financial statements. As of March 31, 2018 , the Company’s significant accounting policies, which are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “ 2017 10-K”), have not changed, other than as noted below. Accounts receivable and allowance for doubtful accounts Accounts receivable are stated at their carrying values, net of any allowances for doubtful accounts. Accounts receivable consist primarily of amounts due from specialty retailers and sports teams, for which collection is probable based on the customer's intent and ability to pay. Receivables are evaluated for collection probability on a regular basis and an allowance for doubtful accounts is recorded, if necessary. No allowance for doubtful accounts was deemed necessary at March 31, 2018 or December 31, 2017. Restricted cash The Company has restricted cash in the form of a letter of credit it maintains as a security deposit on the lease of its office space in Boston, Massachusetts. Advertising expense Advertising expense consists of media and production costs related to print and digital advertising. All advertising is expensed as incurred. Total advertising expenses are included in selling, general and administrative expenses in the condensed consolidated statement of operations, and were approximately $508,000 for the three months ended March 31, 2018 and approximately $665,000 for the three months ended March 31, 2017 . Shipping and handling costs Shipping and handling costs related to the movement of inventory to the Company's co-packer and from the co-packer to the Company's third-party warehousing and fulfillment partners are capitalized as inventory and expensed as cost of product revenue when revenue is recognized. Shipping and handling costs to move finished goods from the Company's third-party warehousing and fulfillment partners to customer locations are included in selling, general and administrative expenses in the condensed consolidated statement of operations, and were approximately $25,000 for the three months ended March 31, 2018 , and approximately $34,000 for the three months ended March 31, 2017 . Unaudited interim financial information Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the 2017 10-K. The condensed consolidated financial statements as of March 31, 2018 , for the three months ended March 31, 2018 and 2017 , and the related information contained within the notes to the condensed consolidated financial statements, are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as annual audited consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated financial position as of March 31, 2018 , and the statements of operations, comprehensive loss and cash flows for the three month periods ended March 31, 2018 and 2017 . The results for the three months ended March 31, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018 , or any other future annual or interim periods. Basis of presentation and use of estimates The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, estimates related to clinical study accruals, estimates related to inventory realizability, stock-based compensation expense and amounts of expenses during the reported period. 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. Principles of consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: TK Pharma, Inc., a Massachusetts Securities Corporation, and Flex Innovation Group LLC, a Delaware limited liability company, which contains the Company's consumer-related operations. All significant intercompany balances and transactions have been eliminated in consolidation. Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASC 606") . ASC 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition ("ASC 605") and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. See Note 3 for further details. In February 2016, the FASB issued ASU No. 2016-02, Leases . The ASU requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. While the Company is currently evaluating the effect this standard will have on its consolidated financial statements, the Company expects that upon adoption, it will recognize right-of-use assets and lease liabilities and those amounts could be material. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The update amends the guidance in ASU Topic 230 and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The Company adopted ASU 2016-15 in the first quarter of 2018, retrospectively. The adoption of ASU 2016-15 did not have a significant impact on the consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows , which amends ASU Topic 230. This update requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities are no longer required to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. The Company adopted ASU 2016-18 in the first quarter of 2018, retrospectively, resulting in a change to the presentation of restricted cash on the condensed consolidated statement of cash flows. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of such amounts in the condensed consolidated statements of cash flows: March 31, 2018 December 31, 2017 Cash and cash equivalents $ 21,948,395 $ 19,186,036 Restricted cash 126,595 126,595 Cash, cash equivalents and restricted cash shown on the condensed consolidated statement of cash flows $ 22,074,990 $ 19,312,631 In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation (Topic 718): Scope of Modification Accounting , to provide clarity and reduce diversity in practice, cost and complexity when applying the guidance of Topic 718. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted and the guidance should be applied prospectively. The Company adopted this guidance in the first quarter of 2018, which did not impact the Company's condensed consolidated financial statements or disclosures. The Company believes that the impact of other recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. |
Revenues from contracts with cu
Revenues from contracts with customers | 3 Months Ended |
Mar. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from contracts with customers | Revenue from contracts with customers Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method applied to contracts not yet completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and are reported in accordance with the Company's historical accounting under ASC 605. The primary impact of the adoption of ASC 606 relates to the timing of revenue recognized for e-commerce sales, due to e-commerce refund rights. Under ASC 606, the Company recognizes revenue when control of the promised good is transferred to the customer, and reflects the consideration to which the Company expects to be entitled to receive in exchange for the good. This has resulted in accelerated revenue recognition for e-commerce sales, as under ASC 605, all revenue and related costs were deferred and recognized once the refund period lapsed. The cumulative effect of applying the new guidance to all contracts that were not completed as of January 1, 2018 was recorded as an adjustment to accumulated deficit of approximately $40,000 as of the adoption date, which was primarily the result of reducing deferred revenue of approximately $70,000 and deferred cost of product revenue and selling fees of approximately $30,000 , that were recorded on the consolidated balance sheet at December 31, 2017. The Company would have recognized approximately $18,000 of additional total revenue during the first quarter of 2018 if the Company had continued to recognize revenue under ASC 605. The adoption of ASC 606 did not impact income taxes, as the Company fully reserves its net deferred tax assets. Therefore, the change to the Company's net deferred tax asset position due to adoption was offset by a corresponding change to the valuation allowance. Revenue recognition Revenue includes sales of HOTSHOT bottled finished goods to e-commerce customers, specialty retailers and sports teams, including professional and collegiate teams. Revenue also consists of payments made by customers for expedited shipping and handling. The Company expenses fulfillment costs as incurred because the amortization period would be less than one year in accordance with the ASC 606 practical expedient. In accordance with ASC 606, the Company applies the following steps to recognize revenue for the sale of bottled finished goods that reflects the consideration to which the Company expects to be entitled to receive in exchange for the promised goods: 1. Identify the contract with a customer A contract with a customer exists when the Company enters into an enforceable contract with a customer. The contract is based on either the acceptance of standard terms and conditions on the websites for e-commerce customers, or the execution of terms and conditions contracts with specialty retailers and sports teams. These contracts define each party's rights, payment terms and other contractual terms and conditions of the sale. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer. 2. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. The Company has concluded the sale of bottled finished goods and related shipping and handling are accounted for as the single performance obligation. 3. Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled to receive in exchange for transferring goods to the customer. The Company issues refunds to e-commerce customers, upon request, within 30 days of delivery. The Company estimates the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For specialty retailers and sports teams, the Company does not offer a right of return or refund and revenue is recognized at the time products are delivered to customers. Discounts provided to customers are accounted for as an element of the transaction price and as a reduction to revenue, and were approximately $8,000 and $46,000 for the three months ended March 31, 2018 and 2017, respectively. Revenue is presented net of taxes collected from customers and remitted to governmental authorities. 4. Determine the satisfaction of performance obligations Revenue is recognized when control of the bottled finish goods are transferred to the customer. Control of the bottled finished goods is transferred at a point in time, upon delivery to the customer. The period of time between the satisfaction of the performance obligation and when payment is due from the customer is not significant. Concentrations of credit risk The Company had no customers that represented greater than 10% of total revenue during the three months ended March 31, 2018 or the three months ended March 31, 2017 . The vast majority of revenue was generated from sales within the United States. |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair value measurements The Company records cash equivalents and marketable securities at fair value. ASC Topic 820, Fair Value Measurements and Disclosures, established a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, directly or indirectly, for substantially the full term of the asset or liability. Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. The following tables summarize the cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 : Level 1 Level 2 Level 3 Balance as of March 31, 2018 Cash equivalents $ 11,243,193 $ — $ — $ 11,243,193 Marketable securities: U.S. government agency securities — 1,999,399 — 1,999,399 $ 11,243,193 $ 1,999,399 $ — $ 13,242,592 Level 1 Level 2 Level 3 Balance as of December 31, 2017 Cash equivalents $ 5,046,205 $ — $ — $ 5,046,205 Marketable securities: U.S. government agency securities — 8,986,259 — 8,986,259 Commercial paper — 4,440,689 — 4,440,689 Corporate debt securities — 702,775 — 702,775 $ 5,046,205 $ 14,129,723 $ — $ 19,175,928 Cash equivalents and marketable securities have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market based approaches and observable market inputs to determine value. The majority of the Company's cash equivalents consist of money market funds that are valued based on publicly available quoted market prices for identical securities as of March 31, 2018 . After completing its validation procedures, the Company did not adjust or override any fair value carrying amounts as of March 31, 2018 . The carrying amounts reflected in the condensed consolidated balance sheets for cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair values at March 31, 2018 and December 31, 2017 , due to their short-term nature. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between Level 1 and Level 2 during the three months ended March 31, 2018 or the year ended December 31, 2017 . The Company had no financial assets or liabilities that were classified as Level 3 at any time during the three months ended March 31, 2018 or the year ended December 31, 2017 . |
Cash equivalents and marketable
Cash equivalents and marketable securities | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash equivalents and marketable securities | Cash equivalents and marketable securities The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash equivalents as of March 31, 2018 and December 31, 2017 consisted of money market funds. Marketable securities as of March 31, 2018 consisted of U.S. government agency securities. Marketable securities as of December 31, 2017 consisted of U.S. government agency securities, commercial paper and corporate debt securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. The Company classifies its marketable securities as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities . Marketable securities are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income (loss) in stockholders’ equity and a component of total comprehensive income (loss) in the condensed consolidated statement of comprehensive income (loss), until realized. Realized gains and losses are included in investment income on a specific-identification basis. There were no realized gains on marketable securities during the three months ended March 31, 2018 , or during the three months ended March 31, 2017 . The Company reviews marketable securities for other-than-temporary impairment whenever the fair value of a marketable security is less than the amortized cost and evidence indicates that a marketable security’s carrying amount is not recoverable within a reasonable period of time. Other-than-temporary impairments of investments are recognized in the consolidated statement of operations if the Company has experienced a credit loss, has the intent to sell the marketable security, or if it is more likely than not that the Company will be required to sell the marketable security before recovery of the amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to the end of the period. Marketable securities at March 31, 2018 and December 31, 2017 consisted of the following: Amortized Cost Unrealized Gains Unrealized Losses Fair Value As of March 31, 2018 Current (due within 1 year): U.S. government agency securities $ 1,999,306 $ 93 $ — $ 1,999,399 Total $ 1,999,306 $ 93 $ — $ 1,999,399 Amortized Cost Unrealized Gains Unrealized Losses Fair Value As of December 31, 2017 Current (due within 1 year): U.S. government agency securities $ 8,987,254 $ 38 $ (1,033 ) $ 8,986,259 Commercial paper 4,440,689 — — 4,440,689 Corporate debt securities 703,027 — (252 ) 702,775 Total $ 14,130,970 $ 38 $ (1,285 ) $ 14,129,723 The Company held zero and six debt securities that were in an unrealized loss position at March 31, 2018 and December 31, 2017 , respectively, all of which have been in a continuous loss position for less than 12 months. The aggregate fair value of debt securities in an unrealized loss position was $0 and $8,191,315 at March 31, 2018 and December 31, 2017 , respectively. There were no individual securities that were in a significant unrealized loss position as of March 31, 2018 or December 31, 2017 . The Company evaluated its securities for other-than-temporary impairment and no marketable securities were considered to be other-than-temporarily impaired as of March 31, 2018 . At March 31, 2018 and December 31, 2017 , all investments held by the Company were classified as current. Investments classified as current have maturities of less than one year. Investments classified as noncurrent are those that (i) have a maturity greater than one year and (ii) management does not intend to liquidate within the next year, although these funds are available for use and therefore classified as available-for-sale. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory has been recorded at cost as of March 31, 2018 and December 31, 2017 . Costs capitalized at March 31, 2018 and December 31, 2017 relate to HOTSHOT finished goods, as well as raw materials available to be used for future production runs. The following table presents inventory: March 31, 2018 December 31, 2017 Raw materials $ 57,629 $ 17,411 Finished goods 360,567 414,480 Total inventory $ 418,196 $ 431,891 There were no inventory write-offs during the three months ended March 31, 2018 or March 31, 2017 . |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following: March 31, 2018 December 31, 2017 Research and development costs $ 985,763 $ 2,502,400 Payroll and employee-related costs 351,823 874,246 Professional fees 351,192 227,980 Consumer product-related costs 131,514 107,595 Total $ 1,820,292 $ 3,712,221 |
Common stock
Common stock | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Common stock | Common stock As of March 31, 2018 , the Company had authorized 100,000,000 shares of common stock, $0.0001 par value per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors. The Company does not intend to declare dividends for the foreseeable future. Restricted common stock to founders In March 2014, the Company sold 4,553,415 shares of restricted common stock to the founders of the Company ("recipients"), for $0.0004 per share, for total proceeds of $1,950 . In April 2014, based upon anti-dilution provisions granted to the founders, an additional 867,314 shares of restricted common stock were sold to the same founders, after which the anti-dilution provisions were terminated. The restricted common stock vested 25% upon issuance, and the remaining 75% vested ratably over four years , during which time the Company had the right to repurchase the unvested shares held by a recipient if the relationship between such recipient and the Company ceased. Such shares were not accounted for as outstanding until they vested. Unvested restricted common stock awards to non-employees were re-measured at each vest date and each financial reporting date. All restricted common stock sold to founders had vested as of March 31, 2018, and is no longer subject to re-valuation or eligible for repurchase. The following is a summary of restricted common stock activity: Number of Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2017 169,654 $ 0.10 Issued — — Vested (169,654 ) 0.10 Forfeited — — Unvested at March 31, 2018 — $ — Restricted common stock to consultants During 2016, the Company issued 18,194 shares of restricted common stock to non-employee consultants and advisors. Such shares are not accounted for as outstanding until they vest. There were 14,235 shares of restricted common stock issued to consultants outstanding as of March 31, 2018 . Unvested restricted common stock awards to non-employees are re-measured at each vest date and each financial reporting date. The following is a summary of restricted common stock activity: Number of Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2017 5,334 $ 10.51 Issued — — Vested (1,375 ) 8.95 Forfeited — — Unvested at March 31, 2018 3,959 $ 11.05 |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | Stock-based compensation In March 2014, the Company adopted the Flex Pharma, Inc. 2014 Equity Incentive Plan (the "2014 Plan"), under which it had the ability to grant incentive stock options ("ISOs"), non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights to purchase up to 116,754 shares of common stock. In April 2014, the Company amended the 2014 Plan to reserve for the issuance of up to 1,451,087 shares of common stock pursuant to equity awards. In September 2014, the Company further amended the 2014 Plan to reserve for the issuance of up to 2,070,200 shares of common stock pursuant to equity awards. Terms of stock award agreements, including vesting requirements, were determined by the board of directors, subject to the provisions of the 2014 Plan. For options granted under the 2014 Plan, the exercise price equaled the fair market value of the common stock as determined by the board of directors on the date of grant. No further awards will be granted under the 2014 Plan. In January 2015, the Company's board of directors adopted, and the Company's stockholders approved, the 2015 Equity Incentive Plan (the "2015 Plan"), which became effective immediately prior to the closing of the Company's initial public offering ("IPO"). The 2015 Plan provides for the grant of ISOs, nonstatutory stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance-based stock awards and other stock-based awards. Additionally, the 2015 Plan provides for the grant of performance-based cash awards. ISOs may be granted only to the Company's employees. All other awards may be granted to the Company's employees, including officers, and to non-employee directors and consultants. As of March 31, 2018 , there were 1,017,543 shares remaining available for the grant of stock awards under the 2015 Plan. The Company has awarded stock options to its employees, directors, advisors and consultants, pursuant to the plans described above. Stock options subsequent to the completion of the Company's IPO are granted with an exercise price equal to the closing market price of the Company's common stock on the date of grant. Stock options generally vest over one to four years and have a contractual term of ten years . Stock options are valued using the Black-Scholes option pricing model and compensation cost is recognized based on the resulting value over the service period. Unvested awards to non-employees are re-measured at each vest date and at each financial reporting date. The following table summarizes stock option activity for employees and non-employees for the three months ended March 31, 2018 : Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Outstanding at December 31, 2017 2,580,491 $ 6.65 7.55 $ 803,600 Granted 813,000 3.98 Exercised (12,645 ) 4.34 Forfeited (216,350 ) 7.82 Expired (35,977 ) 15.03 Outstanding at March 31, 2018 3,128,519 $ 5.78 7.33 $ 3,017,213 Exercisable at March 31, 2018 1,518,128 $ 6.90 5.35 $ 1,507,813 Vested or expected to vest at March 31, 2018 3,128,519 $ 5.78 7.33 $ 3,017,213 Total stock-based compensation expense recognized for employee and non-employee restricted common stock, and stock options granted to employees and non-employees is included in the Company's condensed consolidated statements of operations as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Research and development $ 386,537 $ 394,417 Selling, general and administrative 522,403 794,335 Total $ 908,940 $ 1,188,752 As of March 31, 2018 , there was approximately $5,011,000 of total unrecognized compensation cost related to unvested equity awards. Total unrecognized compensation cost will be adjusted for the re-measurement of non-employee awards as well as future changes in employee and non-employee forfeitures, if any. The Company expects to recognize that cost over a remaining weighted-average period of 2.95 years . Employee stock purchase plan In 2015, the Company's board of directors adopted, and the Company's stockholders approved, the 2015 Employee Stock Purchase Plan (the "ESPP"). As of March 31, 2018 , no shares of common stock have been purchased under the ESPP. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. Based upon the Company's history of operating losses and the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, the Company has recorded a full valuation allowance against the Company’s otherwise recognizable net deferred tax assets. There was no significant income tax provision or benefit for the three months ended March 31, 2018 or 2017 . In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . The ASU adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which was effective immediately. The SEC issued SAB 118 to address concerns about a reporting entity's ability to timely comply with the accounting requirements to recognize all of the effects of the Tax Cuts and Jobs Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Tax Cuts and Jobs Act are incomplete by the due date of the financial statements and, if possible, to provide a reasonable estimate. The Company's accounting for certain income tax effects is incomplete, but it has determined reasonable estimates for those effects and has included provisional amounts in its condensed consolidated financial statements as of March 31, 2018 and December 31, 2017. |
Net loss per share
Net loss per share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net loss per share | Net loss per share Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period, determined using the treasury stock method and the if-converted method, for convertible securities, if inclusion of these is dilutive. As the Company has reported a net loss for the periods presented, diluted net loss per common share is the same as basic net loss per common share. The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding for the periods indicated, because including them would have had an anti-dilutive impact: March 31, 2018 March 31, 2017 Options to purchase common stock 3,128,519 2,672,069 Unvested restricted common stock 3,959 941,341 Total 3,132,478 3,613,410 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates as two reportable segments: • The Consumer Operations segment, which reflects the total revenue and costs and expenses related to HOTSHOT and the Company's consumer operations. • The Drug Development segment, which reflects the costs and expenses related to the Company's efforts to develop innovative and proprietary drug products to treat muscle cramps, spasms and spasticity associated with severe neurological conditions. The Company discloses information about its reportable segments based on the way that the Company's Chief Operating Decision Maker, who the Company has identified as the Chief Executive Officer, and management, organize segments within the Company for making operating decisions and assessing financial performance. The Company evaluates the performance of its reportable segments based on revenue and operating income or loss. The accounting policies of the segments are the same as those described herein as well as those described in Note 2 to the audited consolidated financial statements in the 2017 Form 10-K. Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to "Corporate". No asset information has been provided for the Company's reportable segments as management does not measure or allocate such assets on a reportable segment basis. Information for the Company's reportable segments for the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 Consumer Operations Drug Development Corporate Consolidated Total revenue $ 178,582 — — $ 178,582 Interest income, net $ — — 59,593 $ 59,593 Loss from operations $ 1,257,306 4,664,077 2,361,437 $ 8,282,820 Three Months Ended March 31, 2017 Consumer Operations Drug Development Corporate Consolidated Total revenue $ 242,547 — — $ 242,547 Interest income, net $ — — 77,854 $ 77,854 Loss from operations $ 1,987,810 3,828,281 2,530,158 $ 8,346,249 |
Summary of significant accoun19
Summary of significant accounting policies and recent accounting pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounts receivable | Accounts receivable are stated at their carrying values, net of any allowances for doubtful accounts. Accounts receivable consist primarily of amounts due from specialty retailers and sports teams, for which collection is probable based on the customer's intent and ability to pay. |
Allowance for doubtful accounts | Receivables are evaluated for collection probability on a regular basis and an allowance for doubtful accounts is recorded, if necessary. |
Restricted Cash | The Company has restricted cash in the form of a letter of credit it maintains as a security deposit on the lease of its office space in Boston, Massachusetts. |
Advertising expense | Advertising expense consists of media and production costs related to print and digital advertising. All advertising is expensed as incurred. |
Shipping and handling costs | Shipping and handling costs related to the movement of inventory to the Company's co-packer and from the co-packer to the Company's third-party warehousing and fulfillment partners are capitalized as inventory and expensed as cost of product revenue when revenue is recognized. Shipping and handling costs to move finished goods from the Company's third-party warehousing and fulfillment partners to customer locations are included in selling, general and administrative expenses in the condensed consolidated statement of operations |
Basis of presentation | The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). |
Use of estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, estimates related to clinical study accruals, estimates related to inventory realizability, stock-based compensation expense and amounts of expenses during the reported period. 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. |
Principles of consolidation | The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: TK Pharma, Inc., a Massachusetts Securities Corporation, and Flex Innovation Group LLC, a Delaware limited liability company, which contains the Company's consumer-related operations. All significant intercompany balances and transactions have been eliminated in consolidation. |
Recent accounting pronouncements | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASC 606") . ASC 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition ("ASC 605") and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method. See Note 3 for further details. In February 2016, the FASB issued ASU No. 2016-02, Leases . The ASU requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted. While the Company is currently evaluating the effect this standard will have on its consolidated financial statements, the Company expects that upon adoption, it will recognize right-of-use assets and lease liabilities and those amounts could be material. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The update amends the guidance in ASU Topic 230 and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The Company adopted ASU 2016-15 in the first quarter of 2018, retrospectively. The adoption of ASU 2016-15 did not have a significant impact on the consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows , which amends ASU Topic 230. This update requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities are no longer required to present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. The Company adopted ASU 2016-18 in the first quarter of 2018, retrospectively, resulting in a change to the presentation of restricted cash on the condensed consolidated statement of cash flows. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of such amounts in the condensed consolidated statements of cash flows: March 31, 2018 December 31, 2017 Cash and cash equivalents $ 21,948,395 $ 19,186,036 Restricted cash 126,595 126,595 Cash, cash equivalents and restricted cash shown on the condensed consolidated statement of cash flows $ 22,074,990 $ 19,312,631 In May 2017, the FASB issued ASU No. 2017-09, Stock Compensation (Topic 718): Scope of Modification Accounting , to provide clarity and reduce diversity in practice, cost and complexity when applying the guidance of Topic 718. The guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted and the guidance should be applied prospectively. The Company adopted this guidance in the first quarter of 2018, which did not impact the Company's condensed consolidated financial statements or disclosures. The Company believes that the impact of other recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption. |
Fair value measurements | The Company records cash equivalents and marketable securities at fair value. ASC Topic 820, Fair Value Measurements and Disclosures, established a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, directly or indirectly, for substantially the full term of the asset or liability. Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date. |
Cash equivalents | The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. |
Marketable securities | Marketable securities as of March 31, 2018 consisted of U.S. government agency securities. Marketable securities as of December 31, 2017 consisted of U.S. government agency securities, commercial paper and corporate debt securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. The Company classifies its marketable securities as available-for-sale pursuant to ASC 320, Investments – Debt and Equity Securities . Marketable securities are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income (loss) in stockholders’ equity and a component of total comprehensive income (loss) in the condensed consolidated statement of comprehensive income (loss), until realized. Realized gains and losses are included in investment income on a specific-identification basis. There were no realized gains on marketable securities during the three months ended March 31, 2018 , or during the three months ended March 31, 2017 . The Company reviews marketable securities for other-than-temporary impairment whenever the fair value of a marketable security is less than the amortized cost and evidence indicates that a marketable security’s carrying amount is not recoverable within a reasonable period of time. Other-than-temporary impairments of investments are recognized in the consolidated statement of operations if the Company has experienced a credit loss, has the intent to sell the marketable security, or if it is more likely than not that the Company will be required to sell the marketable security before recovery of the amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to the end of the period. |
Summary of significant accoun20
Summary of significant accounting policies and recent accounting pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of such amounts in the condensed consolidated statements of cash flows: March 31, 2018 December 31, 2017 Cash and cash equivalents $ 21,948,395 $ 19,186,036 Restricted cash 126,595 126,595 Cash, cash equivalents and restricted cash shown on the condensed consolidated statement of cash flows $ 22,074,990 $ 19,312,631 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of such amounts in the condensed consolidated statements of cash flows: March 31, 2018 December 31, 2017 Cash and cash equivalents $ 21,948,395 $ 19,186,036 Restricted cash 126,595 126,595 Cash, cash equivalents and restricted cash shown on the condensed consolidated statement of cash flows $ 22,074,990 $ 19,312,631 |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Cash Equivalents and Marketable Securities Measured at Fair Value on a Recurring Basis | The following tables summarize the cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 : Level 1 Level 2 Level 3 Balance as of March 31, 2018 Cash equivalents $ 11,243,193 $ — $ — $ 11,243,193 Marketable securities: U.S. government agency securities — 1,999,399 — 1,999,399 $ 11,243,193 $ 1,999,399 $ — $ 13,242,592 Level 1 Level 2 Level 3 Balance as of December 31, 2017 Cash equivalents $ 5,046,205 $ — $ — $ 5,046,205 Marketable securities: U.S. government agency securities — 8,986,259 — 8,986,259 Commercial paper — 4,440,689 — 4,440,689 Corporate debt securities — 702,775 — 702,775 $ 5,046,205 $ 14,129,723 $ — $ 19,175,928 |
Cash equivalents and marketab22
Cash equivalents and marketable securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Marketable Securities | Marketable securities at March 31, 2018 and December 31, 2017 consisted of the following: Amortized Cost Unrealized Gains Unrealized Losses Fair Value As of March 31, 2018 Current (due within 1 year): U.S. government agency securities $ 1,999,306 $ 93 $ — $ 1,999,399 Total $ 1,999,306 $ 93 $ — $ 1,999,399 Amortized Cost Unrealized Gains Unrealized Losses Fair Value As of December 31, 2017 Current (due within 1 year): U.S. government agency securities $ 8,987,254 $ 38 $ (1,033 ) $ 8,986,259 Commercial paper 4,440,689 — — 4,440,689 Corporate debt securities 703,027 — (252 ) 702,775 Total $ 14,130,970 $ 38 $ (1,285 ) $ 14,129,723 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | The following table presents inventory: March 31, 2018 December 31, 2017 Raw materials $ 57,629 $ 17,411 Finished goods 360,567 414,480 Total inventory $ 418,196 $ 431,891 |
Accrued expenses and other cu24
Accrued expenses and other current liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses and other current liabilities consisted of the following: March 31, 2018 December 31, 2017 Research and development costs $ 985,763 $ 2,502,400 Payroll and employee-related costs 351,823 874,246 Professional fees 351,192 227,980 Consumer product-related costs 131,514 107,595 Total $ 1,820,292 $ 3,712,221 |
Schedule of other current liabilities | Accrued expenses and other current liabilities consisted of the following: March 31, 2018 December 31, 2017 Research and development costs $ 985,763 $ 2,502,400 Payroll and employee-related costs 351,823 874,246 Professional fees 351,192 227,980 Consumer product-related costs 131,514 107,595 Total $ 1,820,292 $ 3,712,221 |
Common stock (Tables)
Common stock (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Restricted common stock activity | The following is a summary of restricted common stock activity: Number of Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2017 5,334 $ 10.51 Issued — — Vested (1,375 ) 8.95 Forfeited — — Unvested at March 31, 2018 3,959 $ 11.05 The following is a summary of restricted common stock activity: Number of Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2017 169,654 $ 0.10 Issued — — Vested (169,654 ) 0.10 Forfeited — — Unvested at March 31, 2018 — $ — |
Stock-based compensation (Table
Stock-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | The following table summarizes stock option activity for employees and non-employees for the three months ended March 31, 2018 : Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Outstanding at December 31, 2017 2,580,491 $ 6.65 7.55 $ 803,600 Granted 813,000 3.98 Exercised (12,645 ) 4.34 Forfeited (216,350 ) 7.82 Expired (35,977 ) 15.03 Outstanding at March 31, 2018 3,128,519 $ 5.78 7.33 $ 3,017,213 Exercisable at March 31, 2018 1,518,128 $ 6.90 5.35 $ 1,507,813 Vested or expected to vest at March 31, 2018 3,128,519 $ 5.78 7.33 $ 3,017,213 |
Summary of stock-based compensation expense | Total stock-based compensation expense recognized for employee and non-employee restricted common stock, and stock options granted to employees and non-employees is included in the Company's condensed consolidated statements of operations as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Research and development $ 386,537 $ 394,417 Selling, general and administrative 522,403 794,335 Total $ 908,940 $ 1,188,752 |
Net loss per share (Tables)
Net loss per share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from computation of earnings per share | The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding for the periods indicated, because including them would have had an anti-dilutive impact: March 31, 2018 March 31, 2017 Options to purchase common stock 3,128,519 2,672,069 Unvested restricted common stock 3,959 941,341 Total 3,132,478 3,613,410 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Information for the Company's Operating Segments | Information for the Company's reportable segments for the three months ended March 31, 2018 and 2017 are as follows: Three Months Ended March 31, 2018 Consumer Operations Drug Development Corporate Consolidated Total revenue $ 178,582 — — $ 178,582 Interest income, net $ — — 59,593 $ 59,593 Loss from operations $ 1,257,306 4,664,077 2,361,437 $ 8,282,820 Three Months Ended March 31, 2017 Consumer Operations Drug Development Corporate Consolidated Total revenue $ 242,547 — — $ 242,547 Interest income, net $ — — 77,854 $ 77,854 Loss from operations $ 1,987,810 3,828,281 2,530,158 $ 8,346,249 |
Organization and operations (De
Organization and operations (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of reportable segments | segment | 2 | |
Retained earnings (accumulated deficit) | $ (119,262,285) | $ (111,079,275) |
Cash, cash equivalents, and marketable securities | $ 23,947,794 |
Summary of significant accoun30
Summary of significant accounting policies and recent accounting pronouncements - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accounting Policies [Abstract] | ||
Advertising expense | $ 508,000 | $ 665,000 |
Shipping and handling costs | $ 25,000 | $ 34,000 |
Summary of significant accoun31
Summary of significant accounting policies and recent accounting pronouncements - Summary of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 21,948,395 | $ 19,186,036 | ||
Restricted cash | 126,595 | 126,595 | ||
Cash, cash equivalents and restricted cash shown on the condensed consolidated statement of cash flows | $ 22,074,990 | $ 19,312,631 | $ 21,198,279 | $ 22,542,635 |
Revenues from contracts with 32
Revenues from contracts with customers (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Increase to retained earnings due to adoption of Topic 606 | $ (119,262,285) | $ (111,079,275) | ||
Refund period | 30 days | |||
Discounts to customers | $ 8,000 | $ 46,000 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Increase to retained earnings due to adoption of Topic 606 | $ 40,000 | |||
Decrease in deferred revenue | 70,000 | |||
Decrease in deferred costs from product revenue | $ 30,000 | |||
Increase in revenue from contracts due to application of Topic 606 | $ 18,000 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Marketable securities: | ||
Fair Value | $ 1,999,399 | $ 14,129,723 |
U.S. government agency securities | ||
Marketable securities: | ||
Fair Value | 1,999,399 | 8,986,259 |
Commercial paper | ||
Marketable securities: | ||
Fair Value | 4,440,689 | |
Corporate debt securities | ||
Marketable securities: | ||
Fair Value | 702,775 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 11,243,193 | 5,046,205 |
Marketable securities: | ||
Total assets | 13,242,592 | 19,175,928 |
Fair Value, Measurements, Recurring | U.S. government agency securities | ||
Marketable securities: | ||
Fair Value | 1,999,399 | 8,986,259 |
Fair Value, Measurements, Recurring | Commercial paper | ||
Marketable securities: | ||
Fair Value | 4,440,689 | |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Marketable securities: | ||
Fair Value | 702,775 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 11,243,193 | 5,046,205 |
Marketable securities: | ||
Total assets | 11,243,193 | 5,046,205 |
Fair Value, Measurements, Recurring | Level 1 | U.S. government agency securities | ||
Marketable securities: | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Commercial paper | ||
Marketable securities: | ||
Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Corporate debt securities | ||
Marketable securities: | ||
Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Marketable securities: | ||
Total assets | 1,999,399 | 14,129,723 |
Fair Value, Measurements, Recurring | Level 2 | U.S. government agency securities | ||
Marketable securities: | ||
Fair Value | 1,999,399 | 8,986,259 |
Fair Value, Measurements, Recurring | Level 2 | Commercial paper | ||
Marketable securities: | ||
Fair Value | 4,440,689 | |
Fair Value, Measurements, Recurring | Level 2 | Corporate debt securities | ||
Marketable securities: | ||
Fair Value | 702,775 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Marketable securities: | ||
Total assets | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | U.S. government agency securities | ||
Marketable securities: | ||
Fair Value | $ 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Commercial paper | ||
Marketable securities: | ||
Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Corporate debt securities | ||
Marketable securities: | ||
Fair Value | $ 0 |
Cash equivalents and marketab34
Cash equivalents and marketable securities (Details) | Mar. 31, 2018USD ($)security | Dec. 31, 2017USD ($)security |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 1,999,306 | $ 14,130,970 |
Unrealized Gains | 93 | 38 |
Unrealized Losses | 0 | (1,285) |
Fair Value | $ 1,999,399 | $ 14,129,723 |
Number of debt securities held | security | 0 | 6 |
Aggregate fair value of debt securities in an unrealized loss position | $ 0 | $ 8,191,315 |
U.S. government agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,999,306 | 8,987,254 |
Unrealized Gains | 93 | 38 |
Unrealized Losses | 0 | (1,033) |
Fair Value | $ 1,999,399 | 8,986,259 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,440,689 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 4,440,689 | |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 703,027 | |
Unrealized Gains | 0 | |
Unrealized Losses | (252) | |
Fair Value | $ 702,775 |
Inventory (Details)
Inventory (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 57,629 | $ 17,411 | |
Finished goods | 360,567 | 414,480 | |
Total inventory | 418,196 | $ 431,891 | |
Write-off of inventory | $ 0 | $ 0 |
Accrued expenses and other cu36
Accrued expenses and other current liabilities (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Research and development costs | $ 985,763 | $ 2,502,400 |
Payroll and employee-related costs | 351,823 | 874,246 |
Professional fees | 351,192 | 227,980 |
Consumer product-related costs | 131,514 | 107,595 |
Total | $ 1,820,292 | $ 3,712,221 |
Common stock - Narrative (Detai
Common stock - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2014shares | Mar. 31, 2014USD ($)$ / sharesshares | Mar. 31, 2018vote$ / sharesshares | Dec. 31, 2016shares | Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Common stock, number of votes per share | vote | 1 | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, shares sold (shares) | 867,314 | 4,553,415 | |||
Restricted common stock, price per share (in usd per share) | $ / shares | $ 0.0004 | ||||
Proceeds from sale of restricted common stock to founders | $ | $ 1,950 | ||||
Restricted stock | Non-employee Consultants and Advisers | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, shares sold (shares) | 18,194 | ||||
Restricted common stock, shares outstanding (shares) | 14,235 | ||||
Restricted stock | Vests upon issuance | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, percent vested | 25.00% | ||||
Restricted stock | Vests ratably over four years | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted common stock, percent vested | 75.00% | ||||
Restricted common stock, vesting period (in years) | 4 years |
Common stock - Restricted commo
Common stock - Restricted common stock activity (Details) - Restricted stock | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Beginning balance, unvested (shares) | shares | 169,654 |
Issued (shares) | shares | 0 |
Vested (shares) | shares | (169,654) |
Forfeited (shares) | shares | 0 |
Ending balance, unvested (shares) | shares | 0 |
Weighted-Average Grant Date Fair Value | |
Beginning balance, weighted average grant date fair value (in usd per share) | $ / shares | $ 0.10 |
Issued, weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in usd per share) | $ / shares | 0.10 |
Forfeited, weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Ending balance, weighted average grant date fair value (in usd per share) | $ / shares | $ 0 |
Non-employee Consultants and Advisers | |
Number of Shares | |
Beginning balance, unvested (shares) | shares | 5,334 |
Issued (shares) | shares | 0 |
Vested (shares) | shares | (1,375) |
Forfeited (shares) | shares | 0 |
Ending balance, unvested (shares) | shares | 3,959 |
Weighted-Average Grant Date Fair Value | |
Beginning balance, weighted average grant date fair value (in usd per share) | $ / shares | $ 10.51 |
Issued, weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Vested, weighted average grant date fair value (in usd per share) | $ / shares | 8.95 |
Forfeited, weighted average grant date fair value (in usd per share) | $ / shares | 0 |
Ending balance, weighted average grant date fair value (in usd per share) | $ / shares | $ 11.05 |
Stock-based compensation - Narr
Stock-based compensation - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Sep. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 5,011,000 | |||
Unrecognized compensation cost, recognition period (in years) | 2 years 11 months 12 days | |||
Employee stock option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, contractual term | 10 years | |||
Minimum | Employee stock option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, vesting period (in years) | 1 year | |||
Maximum | Employee stock option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, vesting period (in years) | 4 years | |||
Flex Pharma, Inc. 2014 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized | 2,070,200 | 1,451,087 | 116,754 | |
2015 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares remaining available for grant of stock awards | 1,017,543 |
Stock-based compensation - Summ
Stock-based compensation - Summary of stock option activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Shares outstanding, Beginning Balance (shares) | 2,580,491 | |
Shares granted (shares) | 813,000 | |
Shares exercised (shares) | (12,645) | |
Shares forfeited (shares) | (216,350) | |
Shares expired (shares) | (35,977) | |
Shares outstanding, Ending Balance (shares) | 3,128,519 | 2,580,491 |
Shares exercisable (shares) | 1,518,128 | |
Shares vested or expected to vest (shares) | 3,128,519 | |
Weighted-Average Exercise Price | ||
Shares outstanding, weighted-average exercise price, Beginning Balance (in usd per share) | $ 6.65 | |
Shares granted, weighted-average exercise price (in usd per share) | 3.98 | |
Shares exercised, weighted-average exercise price (in usd per share) | 4.34 | |
Shares forfeited, weighted-average exercise price (in usd per share) | 7.82 | |
Shares expired, weighted-average exercise price (in usd per share) | 15.03 | |
Shares outstanding, weighted-average exercise price, Ending Balance (in usd per share) | 5.78 | $ 6.65 |
Shares exercisable, weighted-average exercise price (in usd per share) | 6.90 | |
Shares vested or expected to vest, weighted-average exercise price (in usd per share) | $ 5.78 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted-average remaining contractual term (in years) | 7 years 3 months 29 days | 7 years 6 months 18 days |
Exercisable, weighted-average remaining contractual term (in years) | 5 years 4 months 6 days | |
Vested or expected to vest, weighted-average remaining contractual term (in years) | 7 years 3 months 29 days | |
Outstanding, aggregate intrinsic value | $ 3,017,213 | $ 803,600 |
Exercisable, aggregate intrinsic value | 1,507,813 | |
Vested or expected to vest, aggregate intrinsic value | $ 3,017,213 |
Stock-based compensation - Su41
Stock-based compensation - Summary of stock-based compensation expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 908,940 | $ 1,188,752 |
Research and development | ||
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 386,537 | 394,417 |
Selling, general and administrative | ||
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 522,403 | $ 794,335 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision (benefit) | $ 0 | $ 0 |
Net loss per share (Details)
Net loss per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 3,132,478 | 3,613,410 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 3,128,519 | 2,672,069 |
Unvested restricted common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 3,959 | 941,341 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 178,582 | $ 242,547 |
Interest income, net | 59,593 | 77,854 |
Loss from operations | 8,282,820 | 8,346,249 |
Operating Segments | Consumer Operations | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 178,582 | 242,547 |
Interest income, net | 0 | 0 |
Loss from operations | 1,257,306 | 1,987,810 |
Operating Segments | Drug Development | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Interest income, net | 0 | 0 |
Loss from operations | 4,664,077 | 3,828,281 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Interest income, net | 59,593 | 77,854 |
Loss from operations | $ 2,361,437 | $ 2,530,158 |