Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 02, 2019 | |
Document And Entity Information Abstract | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Entity Registrant Name | Zynerba Pharmaceuticals, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,198,010 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001621443 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 88,661,332 | $ 59,763,773 |
Incentive and tax receivables | 3,407,677 | 3,444,620 |
Prepaid expenses and other current assets | 1,501,924 | 3,747,087 |
Total current assets | 93,570,933 | 66,955,480 |
Property and equipment, net | 332,076 | 371,963 |
Incentive and tax receivables | 1,459,830 | |
Right-of-use assets | 206,250 | |
Total assets | 95,569,089 | 67,327,443 |
Current liabilities: | ||
Accounts payable | 3,742,146 | 4,461,567 |
Accrued expenses | 6,027,522 | 5,264,215 |
Lease liabilities | 216,014 | |
Total current liabilities | 9,985,682 | 9,725,782 |
Total liabilities | 9,985,682 | 9,725,782 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 200,000,000 shares authorized; 23,198,010 shares issued and outstanding at June 30, 2019 and 17,626,873 shares issued and outstanding at December 31, 2018 | 23,198 | 17,627 |
Additional paid-in capital | 223,734,452 | 175,476,075 |
Accumulated deficit | (138,174,243) | (117,892,041) |
Total stockholders' equity | 85,583,407 | 57,601,661 |
Total liabilities and stockholders' equity | $ 95,569,089 | $ 67,327,443 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 23,198,010 | 17,626,873 |
Common stock, shares outstanding | 23,198,010 | 17,626,873 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating expenses: | ||||
Research and development | $ 8,223,783 | $ 8,533,466 | $ 14,530,495 | $ 17,508,979 |
General and administrative | 3,287,276 | 3,436,340 | 6,446,933 | 6,856,963 |
Total operating expenses | 11,511,059 | 11,969,806 | 20,977,428 | 24,365,942 |
Loss from operations | (11,511,059) | (11,969,806) | (20,977,428) | (24,365,942) |
Other income (expense): | ||||
Interest income | 439,201 | 186,304 | 790,152 | 361,488 |
Foreign exchange loss | (63,327) | (223,731) | (94,926) | (309,113) |
Total other income (expense) | 375,874 | (37,427) | 695,226 | 52,375 |
Net loss | $ (11,135,185) | $ (12,007,233) | $ (20,282,202) | $ (24,313,567) |
Net loss per share basic and diluted | $ (0.50) | $ (0.89) | $ (0.98) | $ (1.80) |
Basic and diluted weighted average shares outstanding | 22,116,758 | 13,504,485 | 20,791,784 | 13,486,191 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) | Common stock | Additional paid-capital | Accumulated deficit | Total |
Balance at Dec. 31, 2017 | $ 13,554 | $ 138,916,900 | $ (77,980,866) | $ 60,949,588 |
Balance (in shares) at Dec. 31, 2017 | 13,553,873 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of restricted stock | $ 7 | (7) | ||
Issuance of restricted stock (in shares) | 7,500 | |||
Stock-based compensation expense | 1,687,024 | 1,687,024 | ||
Net loss | (12,306,334) | (12,306,334) | ||
Balance at Mar. 31, 2018 | $ 13,561 | 140,603,917 | (90,287,200) | 50,330,278 |
Balance (in shares) at Mar. 31, 2018 | 13,561,373 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Stock-based compensation expense | 1,755,859 | 1,755,859 | ||
Net loss | (12,007,233) | (12,007,233) | ||
Balance at Jun. 30, 2018 | $ 13,561 | 142,359,776 | (102,294,433) | 40,078,904 |
Balance (in shares) at Jun. 30, 2018 | 13,561,373 | |||
Balance at Dec. 31, 2018 | $ 17,627 | 175,476,075 | (117,892,041) | 57,601,661 |
Balance (in shares) at Dec. 31, 2018 | 17,626,873 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 3,439 | 18,076,359 | 18,079,798 | |
Issuance of common stock, net of issuance costs (in shares) | 3,439,523 | |||
Issuance of restricted stock | $ 9 | (9) | ||
Issuance of restricted stock (in shares) | 8,600 | |||
Stock-based compensation expense | 1,496,292 | 1,496,292 | ||
Net loss | (9,147,017) | (9,147,017) | ||
Balance at Mar. 31, 2019 | $ 21,075 | 195,048,717 | (127,039,058) | 68,030,734 |
Balance (in shares) at Mar. 31, 2019 | 21,074,996 | |||
Balance at Dec. 31, 2018 | $ 17,627 | 175,476,075 | (117,892,041) | 57,601,661 |
Balance (in shares) at Dec. 31, 2018 | 17,626,873 | |||
Balance at Jun. 30, 2019 | $ 23,198 | 223,734,452 | (138,174,243) | 85,583,407 |
Balance (in shares) at Jun. 30, 2019 | 23,198,010 | |||
Balance at Mar. 31, 2019 | $ 21,075 | 195,048,717 | (127,039,058) | 68,030,734 |
Balance (in shares) at Mar. 31, 2019 | 21,074,996 | |||
Increase (Decrease) in Stockholders' Equity (Deficit) | ||||
Issuance of common stock, net of issuance costs | $ 2,082 | 27,014,371 | 27,016,453 | |
Issuance of common stock, net of issuance costs (in shares) | 2,082,031 | |||
Exercise of stock options | $ 41 | 189,659 | 189,700 | |
Exercise of stock options (in shares) | 40,983 | |||
Stock-based compensation expense | 1,481,705 | 1,481,705 | ||
Net loss | (11,135,185) | (11,135,185) | ||
Balance at Jun. 30, 2019 | $ 23,198 | $ 223,734,452 | $ (138,174,243) | $ 85,583,407 |
Balance (in shares) at Jun. 30, 2019 | 23,198,010 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (20,282,202) | $ (24,313,567) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 62,180 | 48,152 |
Stock-based compensation | 2,977,997 | 3,442,883 |
Changes in operating assets and liabilities: | ||
Incentive and tax receivables | (1,422,887) | (2,034,642) |
Prepaid expenses and other assets | 2,245,163 | (337,277) |
Right-of-use assets | (3,060) | |
Accounts payable | (720,964) | 2,921,369 |
Accrued expenses | 775,155 | 995,427 |
Net cash used in operating activities | (16,368,618) | (19,277,655) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (24,616) | (117,571) |
Net cash used in investing activities | (24,616) | (117,571) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net of offering costs | 45,101,093 | |
Proceeds from the exercise of stock options | 189,700 | |
Net cash provided by financing activities | 45,290,793 | |
Net increase (decrease) in cash and cash equivalents | 28,897,559 | (19,395,226) |
Cash and cash equivalents at beginning of period | 59,763,773 | 62,510,277 |
Cash and cash equivalents at end of period | 88,661,332 | 43,115,051 |
Supplemental disclosures of cash flow information: | ||
Deferred financing costs included in accounts payable and accrued expenses | 4,842 | 63,288 |
Changes in property and equipment acquired but not paid | 2,323 | $ 39,838 |
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | 12,824 | |
Right-of-use assets and lease liability recorded upon adoption of ASC 842 | $ 325,683 |
Nature of Business and Liquidit
Nature of Business and Liquidity | 6 Months Ended |
Jun. 30, 2019 | |
Nature of Business and Liquidity | |
Nature of Business and Liquidity | (1) Nature of Business and Liquidity Zynerba Pharmaceuticals, Inc., together with its subsidiary, Zynerba Pharmaceuticals Pty Ltd (“Zynerba”, the “Company”, “we”), is a clinical stage specialty pharmaceutical company focused on the development of pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders, including Fragile X syndrome, autism spectrum disorder, 22q11.2 deletion syndrome, and a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies. The Company was incorporated on January 31, 2007 under the laws of the State of Delaware as AllTranz, Inc. and changed its name to Zynerba Pharmaceuticals, Inc. in August 2014. The Company has incurred losses and negative cash flows from operations since inception and has an accumulated deficit of $138.2 million as of June 30, 2019. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenue from its product candidates currently in development. The Company's primary source of liquidity has been the issuance of equity securities. In June 2017, the Company entered into the Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC, (“Jefferies”) pursuant to which the Company sold $50.0 million of its common stock. In the first quarter of 2019, the Company sold and issued 3,439,523 shares of common stock under the Sales Agreement with Jefferies in the open market at a weighted average selling price of $5.44 per share, resulting in gross proceeds of $18.7 million. Net proceeds received after deducting commissions and offering expenses were $18.1 million. In the second quarter of 2019, the Company sold and issued 2,082,031 shares of common stock under the Sales Agreement with Jefferies in the open market at a weighted average selling price of $13.50 per share, resulting in gross proceeds of $28.1 million. Net proceeds received after deducting commissions and offering expenses were $27.0 million. The last sale under the Sales Agreement was made on May 16, 2019. From June 2017 through May 16, 2019, the Company has cumulative gross proceeds of $50.0 million from shares sold in the open market under the Sales Agreement, which has terminated pursuant to its terms. In July 2018, the Company completed a follow-on public offering, selling 4,062,500 shares of its common stock at an offering price of $8.00 per share, resulting in gross proceeds of $32.5 million. Net proceeds received after deducting underwriting discounts and commissions and offering expenses were $29.9 million. In July 2019, the Australian government’s Department of Industry, Innovation and Science (“AusIndustry”) responded to an Advance Overseas Finding (“AOF”) application submitted by Zynerba that will allow certain research and development expenses incurred with respect to the Company’s product candidate Zygel™ outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. Management believes that this decision will generate an incremental $7.0 to $9.0 million in cash tax credits over the next 18 to 24 months. Management believes that current cash and cash equivalents and the proceeds anticipated from the AOF are sufficient to fund operations and capital requirements into the second half of 2021. Substantial additional financings will be needed by the Company to fund its operations, to complete clinical development of and to commercially develop its product candidates. There is no assurance that such financing will be available when needed or on acceptable terms. The Company is subject to those risks associated with any clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company's research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies a. Basis of Presentation The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The interim unaudited consolidated financial statements have been prepared on the same basis as the consolidated financial statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Annual Report”), filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying consolidated financial statements of the Company include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the consolidated financial statements) considered necessary to present fairly the Company's financial position as of June 30, 2019, its results of operations for the three and six months ended June 30, 2019 and 2018 and cash flows for the six months ended June 30, 2019 and 2018. Operating results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2018 Annual Report. b. 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 and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from such estimates. c. Incentive and Tax Receivables The Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd (the “Subsidiary”), is incorporated in Australia. The Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, the Subsidiary is eligible to receive a cash refund from the Australian Taxation Office for a percentage of the research and development costs expended by the Subsidiary in Australia. The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million (Australian dollars) during the reimbursable period. The Company’s estimate of the amount of cash refund it expects to receive related to the Australian research and development tax incentive program is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of June 30, 2019, the Company’s estimate of the amount of cash refund it expects to receive in 2019 for 2018 eligible spending as part of this incentive program was $3.1 million and was recorded as a current asset. The Company’s estimate of the amount of cash refund it expects to receive in 2020 for 2019 eligible spending through June 30, 2019 was $1.5 million and was recorded as a non-current asset. In July 2019, AusIndustry responded to an AOF application submitted by Zynerba that will allow certain research and development expenses incurred with respect to Zygel outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. The anticipated benefit of this AOF decision will be assessed and recorded in the Company’s third quarter consolidated financial statements. In addition, the Subsidiary incurs Goods and Services Tax (“GST”) on services provided by Australian vendors. As an Australian entity, the Subsidiary is entitled to a refund of the GST paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST incurred is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of June 30, 2019, incentive and tax receivables included $0.3 million for refundable GST on expenses incurred with Australian vendors during the three months ended June 30, 2019. d. Research and Development Research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants and employee-related expenses including salaries and benefits. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. R esearch and development expenses are recorded net of expected refunds of eligible research and development costs paid pursuant to the Australian research and development tax incentive program and GST incurred on services provided by Australian vendors . The Company incurred research and development expenses of $14.5 million and $17.5 million for the six months ended June 30, 2019 and 2018, respectively, which were net of $1.5 million and $2.1 million, respectively, associated with the Australian research and development tax incentive program. e . Net Loss Per Share Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as restricted stock and stock options, which would result in the issuance of incremental shares of common stock. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of restricted stock and stock options would be anti-dilutive. The following potentially dilutive securities outstanding as of June 30, 2019 and 2018 have been excluded from the computation of diluted weighted average shares outstanding, as their effects on net loss per share for the periods presented would be anti-dilutive: June 30, 2019 2018 Stock options 3,874,957 3,222,413 Unvested restricted stock 11,600 43,745 3,886,557 3,266,158 f. Recently Adopted Accounting Pronouncements In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), Accounting Standards Codification 842 (“ASC 842”), which amends a number of aspects of lease accounting and requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for leases with lease terms of more than 12 months. ASC 842 became effective on January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which offered a transition option to entities adopting ASC 842. Under ASU 2018-11, entities can elect to apply ASC 842 using a modified-retrospective adoption approach resulting in a cumulative effect adjustment, if any, to retained earnings at the beginning of the year in which the new lease standard is adopted, rather than adjustments to the earliest comparative period presented in their financial statements. As of January 1, 2019, the Company adopted ASC 842 using the modified-retrospective method and recognized right-of-use assets and corresponding lease liability of $325,683, which represented the present value of the remaining lease payments of $350,507, discounted using the Company’s incremental borrowing rate of 11.17%. In addition, the Company eliminated its deferred rent liability and recorded an adjustment to decrease its right-of-use assets by $12,824. The adoption of the standard did not have an impact on the Company’s consolidated statements of cash flows and had no impact on the Company’s consolidated statement of operations . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | (3) Fair Value Measurements The Company measures certain assets and liabilities at fair value in accordance with Accounting Standards Codification 820 (“ASC 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 (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy that serves to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows : Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3 — Valuations based on unobservable inputs and models that are supported by little or no market activity. In accordance with the fair value hierarchy described above, the following table sets forth the Company's financial assets measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018: Fair Value Measurement Carrying amount as of June 30, 2019 as of June 30, 2019 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 88,539,038 $ 88,539,038 $ — $ — $ 88,539,038 $ 88,539,038 $ — $ — Fair Value Measurement Carrying amount as of December 31, 2018 as of December 31, 2018 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 59,554,458 $ 59,554,458 $ — $ — $ 59,554,458 $ 59,554,458 $ — $ — |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 Prepaid development expenses $ 1,012,799 $ 2,671,815 Prepaid insurance 66,925 393,451 Deferred financing costs — 255,754 Other current assets 422,200 426,067 Total prepaid expenses and other current assets $ 1,501,924 $ 3,747,087 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment | |
Property and Equipment | (5) Property and Equipment Property and equipment consisted of the following as of June 30, 2019 and December 31, 2018: Estimated useful life June 30, December 31, (in years) 2019 2018 Equipment 2-5 $ 257,309 $ 178,001 Computer equipment 3-5 30,319 30,319 Furniture and fixtures 3-5 300,407 300,407 Leasehold improvements various 68,881 68,881 Construction in process — 57,015 Total cost 656,916 634,623 Less accumulated depreciation (324,840) (262,660) Property and equipment, net $ 332,076 $ 371,963 Depreciation expense was $32,924 and $21,586 for the three months ended June 30, 2019 and 2018, respectively, and $62,180 and $48,152 for the six months ended June 30, 2019 and 2018, respectively. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Expenses | |
Accrued Expenses | (6) Accrued Expenses Accrued expenses consisted of the following as of June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 Accrued compensation $ 1,412,440 $ 2,188,801 Accrued research and development 4,250,219 1,928,305 Grants payable — 747,926 Other 364,863 399,183 Total accrued expenses $ 6,027,522 $ 5,264,215 |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2019 | |
Common Stock | |
Common Stock | (7) Common Stock In June 2017, the Company entered into the Sales Agreement with Jefferies pursuant to which the Company sold $50.0 million of its common stock. In the first quarter of 2019, the Company sold and issued 3,439,523 shares of common stock under the Sales Agreement with Jefferies in the open market at a weighted average selling price of $5.44 per share, resulting in gross proceeds of $18.7 million. Net proceeds received after deducting commissions and offering expenses were $18.1 million. In the second quarter of 2019, the Company sold and issued 2,082,031 shares of common stock under the Sales Agreement with Jefferies in the open market at a weighted average selling price of $13.50 per share, resulting in gross proceeds of $28.1 million. Net proceeds received after deducting commissions and offering expenses were $27.0 million. The last sale under the Sales Agreement was made on May 16, 2019. From June 2017 through May 16, 2019, the Company has cumulative gross proceeds of $50.0 million from shares sold in the open market under the Sales Agreement, which has terminated pursuant to its terms. In July 2018, the Company completed a follow-on public offering, selling 4,062,500 shares of its common stock at an offering price of $8.00 per share, resulting in gross proceeds of $32.5 million. Net proceeds received after deducting underwriting discounts and commissions and offering expenses were $29.9 million. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | (8) Stock-Based Compensation The Company maintains the Amended and Restated 2014 Omnibus Incentive Compensation Plan, as amended (the “2014 Plan”), which allows for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, performance units and other stock‑based awards to employees, officers, non-employee directors, consultants, and advisors. In addition, the 2014 Plan provides selected executive employees with the opportunity to receive bonus awards that are considered qualified performance‑based compensation. T he 2014 Plan is subject to automatic annual increases in the number of shares authorized for issuance under the 2014 Plan on the first trading day of January each year equal to the lesser of 1.5 million shares or 10% of the number of shares of common stock outstanding on the last trading day of December of the preceding year. As of January 1, 2019, the number of shares of common stock that may be issued under the 2014 Plan was automatically increased by 1.5 million shares, increasing the number of shares of common stock available for issuance under the 2014 Plan to 6,304,869 shares. As of June 30, 2019, 1,881,536 shares were available for future issuance under the 2014 Plan. Options issued under the 2014 Plan have a contractual life of 10 years and may be exercisable in cash or as otherwise determined by the board of directors. The Company has granted options to employees and non‑employee directors. Stock options granted to employees vest 25% upon the first anniversary of the grant date and the balance of unvested options vests in quarterly installments over the remaining three years. Stock options granted annually to non-employee directors vest on the earlier of the one-year anniversary of the grant date, or the date of the Company’s next annual stockholders’ meeting that occurs after the grant date. The Company’s non-employee director compensation policy enables directors to receive stock options in lieu of quarterly cash payments. Any option granted to the directors in lieu of cash compensation vests in full on the grant date. The Company records forfeitures as they occur. During 2018, the Company granted 83,280 performance-based stock options to certain employees. These performance options have a 10-year life and an exercise price equal to the fair value of the Company’s stock at the grant date. During 2019, the Company granted 5,000 performance-based restricted stock awards . Vesting of the performance-based options and restricted stock awards is dependent on meeting certain performance conditions, which relate to the Company’s research and development progress, which were established by the Company’s board of directors. The Company’s board of directors determines if the performance conditions have been met. Stock-based compensation expense for these performance-based grants are recorded when management estimates that the vesting of these shares is probable based on the status of the Company’s research and development programs and other relevant factors. For the six months ended June 30, 2019, none of the performance-based metrics were deemed probable of achievement. Any change in these estimates will result in a cumulative adjustment in the period in which the estimate is changed, so that as of the end of a period, the cumulative compensation expense recognized for an award or grant equals the amount that would be recognized on a straight-line basis as if the current estimates had been utilized since the beginning of the service period. As of June 30, 2019, the aggregate estimated grant date fair values of options and restricted stock awards for which the satisfaction of the related-performance conditions have not been deemed probable were $663,484 and $24,850, respectively. For the six months ended June 30, 2019 and 2018, the Company recorded stock-based compensation expense related to its stock option grants and restricted stock awards, as follows: Stock Option Grants Restricted stock awards Total 2019 2018 2019 2018 2019 2018 Research and development $ 1,327,595 $ 1,393,962 $ 14,537 $ 130,668 $ 1,342,132 $ 1,524,630 General and administrative 1,635,865 1,878,707 — 39,546 1,635,865 1,918,253 $ 2,963,460 $ 3,272,669 $ 14,537 $ 170,214 $ 2,977,997 $ 3,442,883 The following table summarizes the stock option activity for the six months ended June 30, 2019: Weighted- Weighted- Average Average Aggregate Number Exercise Contractual Intrinsic of Shares Price Life (in Years) Value Outstanding as of December 31, 2018 3,152,267 $ 12.16 Granted 815,423 4.85 Exercised (40,983) 4.63 Cancelled / Forfeited (51,750) 10.87 Outstanding as of June 30, 2019 3,874,957 10.72 7.68 $ 14,759,569 Exercisable as of June 30, 2019 2,225,087 11.77 6.81 $ 6,380,901 Vested and expected to vest as of June 30, 2019 3,791,677 $ 10.70 The weighted-average grant date fair values of options granted during the six months ended June 30, 2019 and 2018 were $3.37 and $7.94, respectively. The fair values of stock options granted were calculated using the Black-Scholes option pricing model with the following weighted-average assumptions: Six months ended June 30, 2019 2018 Weighted-average risk-free interest rate Expected term of options (in years) Expected stock price volatility Expected dividend yield As of June 30, 2019, excluding performance-based stock options that have not been deemed probable, there was $8.8 million of unrecognized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.21 years. The following table summarizes the restricted stock award activity under the 2014 Plan for the six months ended June 30, 2019: Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2018 10,500 $ 11.86 Granted 8,600 4.42 Vested (7,500) 13.46 Unvested as of June 30, 2019 11,600 $ 5.31 As of June 30, 2019, excluding performance-based restricted stock awards that have not been deemed probable, there was $16,239 of unrecognized stock-based compensation expense related to unvested restricted stock awards, which is expected to be recognized over a weighted-average period of 1.09 years. The Company expects that all 6,600 of unvested, non-performance based, restricted stock awards will vest. |
Operating Lease Obligations
Operating Lease Obligations | 6 Months Ended |
Jun. 30, 2019 | |
Operating Lease Obligations | |
Operating Lease Obligations | (9) Operating Lease Obligations The Company adopted ASC 842 prospectively using the modified-retrospective method and elected the package of transition practical expedients that does not require reassessment of: (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and nonlease components, which consist principally of common area maintenance charges, and to exclude leases with an initial term of 12 months or less. The Company leases its headquarters where it occupies 10,877 square feet of office space pursuant to a five-year lease that expires on May 31, 2020. The Company’s lease contains variable lease costs that do not depend on a rate or index and consist primarily of common area maintenance, taxes, and insurance. As the implicit rate was not readily determinable for the Company’s lease, the Company used an estimated incremental borrowing rate, or discount rate, to determine the initial present value of the lease payments. The discount rate for the lease was calculated using a synthetic credit rating model. As of January 1, 2019, the Company recognized a lease liability of $325,683 and right-of-use assets of $312,859, which was recorded net of a pre-existing deferred rent liability of $12,824. As of June 30, 2019, the Company’s right-of-use asset, net of amortization, was $206,250. Other operating lease information as of June 30, 2019: Weighted-average remaining lease term - operating leases years Weighted-average discount rate - operating leases % The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of June 30, 2019: Year ended: December 31, 2019 (remaining months) $ 124,508 December 31, 2020 103,757 Total minimum lease payments 228,265 Less: imputed lease interest (12,251) Total lease liabilities $ 216,014 Lease expense for the six months ended June 30, 2019 was comprised of the following: Operating lease expense $ 119,182 Variable lease expense 29,349 Total lease expense $ 148,531 Cash payments related to operating leases for the six months ended June 30, 2019 was $122,242. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
Subsequent Events | (10) Subsequent Events In July 2019, AusIndustry responded to an AOF application submitted by Zynerba that will allow certain research and development expenses incurred with respect to Zygel outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. Management believes that this decision will generate an incremental $7.0 to $9.0 million in cash tax credits over the next 18 to 24 months. The anticipated benefit of this AOF decision will be assessed and recorded in the Company’s third quarter consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | a. Basis of Presentation The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The interim unaudited consolidated financial statements have been prepared on the same basis as the consolidated financial statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Annual Report”), filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying consolidated financial statements of the Company include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the consolidated financial statements) considered necessary to present fairly the Company's financial position as of June 30, 2019, its results of operations for the three and six months ended June 30, 2019 and 2018 and cash flows for the six months ended June 30, 2019 and 2018. Operating results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2018 Annual Report. |
Use of Estimates | b. 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 and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from such estimates. |
Incentive and Tax Receivables | c. Incentive and Tax Receivables The Company’s subsidiary, Zynerba Pharmaceuticals Pty Ltd (the “Subsidiary”), is incorporated in Australia. The Subsidiary is eligible to participate in an Australian research and development tax incentive program. As part of this program, the Subsidiary is eligible to receive a cash refund from the Australian Taxation Office for a percentage of the research and development costs expended by the Subsidiary in Australia. The cash refund is available to eligible companies with an annual aggregate revenue of less than $20.0 million (Australian dollars) during the reimbursable period. The Company’s estimate of the amount of cash refund it expects to receive related to the Australian research and development tax incentive program is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of June 30, 2019, the Company’s estimate of the amount of cash refund it expects to receive in 2019 for 2018 eligible spending as part of this incentive program was $3.1 million and was recorded as a current asset. The Company’s estimate of the amount of cash refund it expects to receive in 2020 for 2019 eligible spending through June 30, 2019 was $1.5 million and was recorded as a non-current asset. In July 2019, AusIndustry responded to an AOF application submitted by Zynerba that will allow certain research and development expenses incurred with respect to Zygel outside of Australia to be eligible for the Australian research and development tax incentive program. As a result of this finding, the Company is eligible to receive a cash refund from the Australian Taxation Office for the qualifying research and development costs expended outside of Australia in 2018, 2019 and 2020. The anticipated benefit of this AOF decision will be assessed and recorded in the Company’s third quarter consolidated financial statements. In addition, the Subsidiary incurs Goods and Services Tax (“GST”) on services provided by Australian vendors. As an Australian entity, the Subsidiary is entitled to a refund of the GST paid. The Company’s estimate of the amount of cash refund it expects to receive related to GST incurred is included in “Incentive and tax receivables” in the accompanying consolidated balance sheets. As of June 30, 2019, incentive and tax receivables included $0.3 million for refundable GST on expenses incurred with Australian vendors during the three months ended June 30, 2019. |
Research and Development | d. Research and Development Research and development costs are expensed as incurred and are primarily comprised of external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants and employee-related expenses including salaries and benefits. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. R esearch and development expenses are recorded net of expected refunds of eligible research and development costs paid pursuant to the Australian research and development tax incentive program and GST incurred on services provided by Australian vendors . The Company incurred research and development expenses of $14.5 million and $17.5 million for the six months ended June 30, 2019 and 2018, respectively, which were net of $1.5 million and $2.1 million, respectively, associated with the Australian research and development tax incentive program. |
Net Loss per Share | e . Net Loss Per Share Basic net loss per share is determined using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share includes the effect, if any, from the potential exercise or conversion of securities, such as restricted stock and stock options, which would result in the issuance of incremental shares of common stock. Basic and dilutive computations of net loss per share are the same in periods in which a net loss exists as the dilutive effects of restricted stock and stock options would be anti-dilutive. The following potentially dilutive securities outstanding as of June 30, 2019 and 2018 have been excluded from the computation of diluted weighted average shares outstanding, as their effects on net loss per share for the periods presented would be anti-dilutive: June 30, 2019 2018 Stock options 3,874,957 3,222,413 Unvested restricted stock 11,600 43,745 3,886,557 3,266,158 |
Recently Adopted Accounting Pronouncements | f. Recently Adopted Accounting Pronouncements In 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), Accounting Standards Codification 842 (“ASC 842”), which amends a number of aspects of lease accounting and requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for leases with lease terms of more than 12 months. ASC 842 became effective on January 1, 2019. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which offered a transition option to entities adopting ASC 842. Under ASU 2018-11, entities can elect to apply ASC 842 using a modified-retrospective adoption approach resulting in a cumulative effect adjustment, if any, to retained earnings at the beginning of the year in which the new lease standard is adopted, rather than adjustments to the earliest comparative period presented in their financial statements. As of January 1, 2019, the Company adopted ASC 842 using the modified-retrospective method and recognized right-of-use assets and corresponding lease liability of $325,683, which represented the present value of the remaining lease payments of $350,507, discounted using the Company’s incremental borrowing rate of 11.17%. In addition, the Company eliminated its deferred rent liability and recorded an adjustment to decrease its right-of-use assets by $12,824. The adoption of the standard did not have an impact on the Company’s consolidated statements of cash flows and had no impact on the Company’s consolidated statement of operations . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding | June 30, 2019 2018 Stock options 3,874,957 3,222,413 Unvested restricted stock 11,600 43,745 3,886,557 3,266,158 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Measurements | |
Summary of financial assets measured at fair value on a recurring basis | Fair Value Measurement Carrying amount as of June 30, 2019 as of June 30, 2019 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 88,539,038 $ 88,539,038 $ — $ — $ 88,539,038 $ 88,539,038 $ — $ — Fair Value Measurement Carrying amount as of December 31, 2018 as of December 31, 2018 Level 1 Level 2 Level 3 Cash equivalents (money market accounts) $ 59,554,458 $ 59,554,458 $ — $ — $ 59,554,458 $ 59,554,458 $ — $ — |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | June 30, December 31, 2019 2018 Prepaid development expenses $ 1,012,799 $ 2,671,815 Prepaid insurance 66,925 393,451 Deferred financing costs — 255,754 Other current assets 422,200 426,067 Total prepaid expenses and other current assets $ 1,501,924 $ 3,747,087 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment | |
Schedule of property and equipment | Estimated useful life June 30, December 31, (in years) 2019 2018 Equipment 2-5 $ 257,309 $ 178,001 Computer equipment 3-5 30,319 30,319 Furniture and fixtures 3-5 300,407 300,407 Leasehold improvements various 68,881 68,881 Construction in process — 57,015 Total cost 656,916 634,623 Less accumulated depreciation (324,840) (262,660) Property and equipment, net $ 332,076 $ 371,963 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Expenses | |
Schedule of accrued expenses | June 30, December 31, 2019 2018 Accrued compensation $ 1,412,440 $ 2,188,801 Accrued research and development 4,250,219 1,928,305 Grants payable — 747,926 Other 364,863 399,183 Total accrued expenses $ 6,027,522 $ 5,264,215 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense | Stock Option Grants Restricted stock awards Total 2019 2018 2019 2018 2019 2018 Research and development $ 1,327,595 $ 1,393,962 $ 14,537 $ 130,668 $ 1,342,132 $ 1,524,630 General and administrative 1,635,865 1,878,707 — 39,546 1,635,865 1,918,253 $ 2,963,460 $ 3,272,669 $ 14,537 $ 170,214 $ 2,977,997 $ 3,442,883 |
Summary of stock option activity | Weighted- Weighted- Average Average Aggregate Number Exercise Contractual Intrinsic of Shares Price Life (in Years) Value Outstanding as of December 31, 2018 3,152,267 $ 12.16 Granted 815,423 4.85 Exercised (40,983) 4.63 Cancelled / Forfeited (51,750) 10.87 Outstanding as of June 30, 2019 3,874,957 10.72 7.68 $ 14,759,569 Exercisable as of June 30, 2019 2,225,087 11.77 6.81 $ 6,380,901 Vested and expected to vest as of June 30, 2019 3,791,677 $ 10.70 |
Schedule of weighted-average assumptions used to calculate fair values of stock options | Six months ended June 30, 2019 2018 Weighted-average risk-free interest rate Expected term of options (in years) Expected stock price volatility Expected dividend yield |
Summary of restricted stock activity | Weighted Average Grant Date Shares Fair Value Unvested as of December 31, 2018 10,500 $ 11.86 Granted 8,600 4.42 Vested (7,500) 13.46 Unvested as of June 30, 2019 11,600 $ 5.31 |
Operating Lease Obligations (Ta
Operating Lease Obligations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Operating Lease Obligations | |
Schedule of other operating lease information | Weighted-average remaining lease term - operating leases years Weighted-average discount rate - operating leases % |
Schedule of operating lease liabilities maturity analysis | Year ended: December 31, 2019 (remaining months) $ 124,508 December 31, 2020 103,757 Total minimum lease payments 228,265 Less: imputed lease interest (12,251) Total lease liabilities $ 216,014 |
Schedule of lease expense | Operating lease expense $ 119,182 Variable lease expense 29,349 Total lease expense $ 148,531 |
Nature of Business and Liquid_2
Nature of Business and Liquidity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 23 Months Ended | |||
Jul. 31, 2018 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | May 16, 2019 | Dec. 31, 2018 | Jun. 30, 2017 | |
Sales of Stock | |||||||
Accumulated deficit | $ 138,174,243 | $ 138,174,243 | $ 117,892,041 | ||||
Proceeds from the issuance of common stock, net of offering costs | $ 45,101,093 | ||||||
Open Market Offering | |||||||
Sales of Stock | |||||||
Maximum aggregate value of common stock available for offering | $ 50,000,000 | ||||||
Shares issued | 2,082,031 | 3,439,523 | |||||
Offering price per share | $ 13.50 | $ 5.44 | $ 13.50 | ||||
Gross proceeds from issuance of common stock | $ 28,100,000 | $ 18,700,000 | $ 50,000,000 | ||||
Proceeds from the issuance of common stock, net of offering costs | $ 27,000,000 | $ 18,100,000 | |||||
Follow On Public Offering | |||||||
Sales of Stock | |||||||
Shares issued | 4,062,500 | ||||||
Offering price per share | $ 8 | ||||||
Gross proceeds from issuance of common stock | $ 32,500,000 | ||||||
Proceeds from the issuance of common stock, net of offering costs | $ 29,900,000 |
Nature of Business and Liquid_3
Nature of Business and Liquidity - Subsequent Event (Details) - Subsequent Event - Australian Taxation Office $ in Millions | 1 Months Ended |
Jul. 31, 2019USD ($) | |
Minimum | |
Subsequent Events | |
Incremental cash tax credits to be received | $ 7 |
Period to receive incremental research and development cash tax credits | 18 months |
Maximum | |
Subsequent Events | |
Incremental cash tax credits to be received | $ 9 |
Period to receive incremental research and development cash tax credits | 24 months |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Incentive and Tax Receivable (Details) - Jun. 30, 2019 - Australian Taxation Office $ in Millions, $ in Millions | AUD ($) | USD ($) |
Incentive and Tax Receivable | ||
Aggregate revenue maximum to be eligible to receive a cash refund | $ 20 | |
Incentive and Tax Receivables Current | ||
Incentive and Tax Receivable | ||
Cash refund from research and development incentive program | $ 3.1 | |
Estimated GST receivable | 0.3 | |
Incentive and Tax Receivables Noncurrent | ||
Incentive and Tax Receivable | ||
Cash refund from research and development incentive program | $ 1.5 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Research and Development | ||||
Research and development | $ 8,223,783 | $ 8,533,466 | $ 14,530,495 | $ 17,508,979 |
Australian Taxation Office | ||||
Research and Development | ||||
Research and development tax incentive refunds | $ 1,500,000 | $ 2,100,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Anti-dilutive securities (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities | 3,886,557 | 3,266,158 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities | 3,874,957 | 3,222,413 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Anti-dilutive securities | 11,600 | 43,745 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Recently Adopted (Details) - USD ($) | Jan. 01, 2019 | Jun. 30, 2019 |
Recently Adopted Accounting Pronouncements | ||
Operating Lease, Liability | $ 216,014 | |
Lessee, Operating Lease, Liability, Payments, Due | $ 228,265 | |
Lease discount rate | 11.17% | |
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 | |
Accounting Standards Update 2016-02 | ||
Recently Adopted Accounting Pronouncements | ||
Lease discount rate | 11.17% | |
Accounting Standards Update 2016-02 | Adjustment | ||
Recently Adopted Accounting Pronouncements | ||
Operating Lease, Liability | $ 325,683 | |
Lessee, Operating Lease, Liability, Payments, Due | 350,507 | |
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying value | ||
Fair value on a recurring basis | ||
Cash equivalents (money market accounts) | $ 88,539,038 | $ 59,554,458 |
Total | 88,539,038 | 59,554,458 |
Recurring | Fair Value Measurement | Level 1 | ||
Fair value on a recurring basis | ||
Cash equivalents (money market accounts) | 88,539,038 | 59,554,458 |
Total | $ 88,539,038 | $ 59,554,458 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Prepaid Expenses and Other Current Assets | ||
Prepaid development expenses | $ 1,012,799 | $ 2,671,815 |
Prepaid insurance | 66,925 | 393,451 |
Deferred financing costs | 255,754 | |
Other current assets | 422,200 | 426,067 |
Total prepaid expenses and other current assets | $ 1,501,924 | $ 3,747,087 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment | |||||
Total cost | $ 656,916 | $ 656,916 | $ 634,623 | ||
Less accumulated depreciation | (324,840) | (324,840) | (262,660) | ||
Property and equipment, net | 332,076 | 332,076 | 371,963 | ||
Depreciation expense | 32,924 | $ 21,586 | 62,180 | $ 48,152 | |
Equipment | |||||
Property, Plant and Equipment | |||||
Total cost | 257,309 | $ 257,309 | 178,001 | ||
Equipment | Minimum | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | P2Y | ||||
Equipment | Maximum | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | P5Y | ||||
Computer equipment | |||||
Property, Plant and Equipment | |||||
Total cost | 30,319 | $ 30,319 | 30,319 | ||
Computer equipment | Minimum | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | P3Y | ||||
Computer equipment | Maximum | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | P5Y | ||||
Furniture and fixtures | |||||
Property, Plant and Equipment | |||||
Total cost | 300,407 | $ 300,407 | 300,407 | ||
Furniture and fixtures | Minimum | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | P3Y | ||||
Furniture and fixtures | Maximum | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | P5Y | ||||
Leasehold improvements | |||||
Property, Plant and Equipment | |||||
Estimated useful life (in years) | various | ||||
Total cost | $ 68,881 | $ 68,881 | 68,881 | ||
Construction in process | |||||
Property, Plant and Equipment | |||||
Total cost | $ 57,015 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Accrued Expenses | ||
Accrued compensation | $ 1,412,440 | $ 2,188,801 |
Accrued research and development | 4,250,219 | 1,928,305 |
Grants payable | 747,926 | |
Other | 364,863 | 399,183 |
Total accrued expenses | $ 6,027,522 | $ 5,264,215 |
Common Stock (Details)
Common Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 23 Months Ended | ||
Jul. 31, 2018 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2019 | May 16, 2019 | Jun. 30, 2017 | |
Sales of Stock | ||||||
Proceeds from the issuance of common stock, net of offering costs | $ 45,101,093 | |||||
Open Market Offering | ||||||
Sales of Stock | ||||||
Maximum aggregate value of common stock available for offering | $ 50,000,000 | |||||
Shares issued | 2,082,031 | 3,439,523 | ||||
Offering price per share | $ 13.50 | $ 5.44 | $ 13.50 | |||
Gross proceeds from issuance of common stock | $ 28,100,000 | $ 18,700,000 | $ 50,000,000 | |||
Proceeds from the issuance of common stock, net of offering costs | $ 27,000,000 | $ 18,100,000 | ||||
Follow On Public Offering | ||||||
Sales of Stock | ||||||
Shares issued | 4,062,500 | |||||
Offering price per share | $ 8 | |||||
Gross proceeds from issuance of common stock | $ 32,500,000 | |||||
Proceeds from the issuance of common stock, net of offering costs | $ 29,900,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation Narrative (Details) - 2014 Plan - USD ($) | Jan. 01, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Stock-Based Compensation | |||
Annual threshold increase of authorized shares for issuance | 1,500,000 | ||
Annual threshold increase of authorized shares for issuance (as a percent) | 10.00% | ||
Additional number of shares authorized for issuance | 1,500,000 | ||
Shares reserved for issuance | 6,304,869 | ||
Shares available for issuance | 1,881,536 | ||
Stock options | |||
Stock-Based Compensation | |||
Granted (in shares) | 815,423 | ||
Contractual life (in years) | 10 years | ||
Restricted stock | |||
Stock-Based Compensation | |||
Shares granted | 8,600 | ||
Performance-based awards | |||
Stock-Based Compensation | |||
Shares options vested based upon performance-based metrics | 0 | ||
Performance Based Stock Options | |||
Stock-Based Compensation | |||
Granted (in shares) | 83,280 | ||
Contractual life (in years) | 10 years | ||
Aggregate estimated grant date fair value of performance awards | $ 663,484 | ||
Performance Based Restricted Awards | |||
Stock-Based Compensation | |||
Shares granted | 5,000 | ||
Aggregate estimated grant date fair value of performance awards | $ 24,850 | ||
Employees | Stock options | |||
Stock-Based Compensation | |||
Vesting percentage | 25.00% | ||
Vesting period | 3 years | ||
Board of Directors | Stock options | |||
Stock-Based Compensation | |||
Vesting period | 1 year |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - 2014 Plan - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Stock-Based Compensation | ||
Stock-based compensation | $ 2,977,997 | $ 3,442,883 |
Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation | 1,342,132 | 1,524,630 |
General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation | 1,635,865 | 1,918,253 |
Stock options | ||
Stock-Based Compensation | ||
Stock-based compensation | 2,963,460 | 3,272,669 |
Stock options | Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation | 1,327,595 | 1,393,962 |
Stock options | General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation | 1,635,865 | 1,878,707 |
Restricted stock | ||
Stock-Based Compensation | ||
Stock-based compensation | 14,537 | 170,214 |
Restricted stock | Research and development | ||
Stock-Based Compensation | ||
Stock-based compensation | $ 14,537 | 130,668 |
Restricted stock | General and administrative | ||
Stock-Based Compensation | ||
Stock-based compensation | $ 39,546 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options Activity, Unrecognized Costs, Valuation (Details) - 2014 Plan - Stock options | 6 Months Ended | |
Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018$ / shares | |
Options | ||
Balance (in shares) | shares | 3,152,267 | |
Granted (in shares) | shares | 815,423 | |
Exercised (in shares) | shares | (40,983) | |
Forfeited (in shares) | shares | (51,750) | |
Balance (in shares) | shares | 3,874,957 | |
Options exercisable (in shares) | shares | 2,225,087 | |
Options vested and expected to vest (in shares) | shares | 3,791,677 | |
Weighted average exercise price per share | ||
Balance (in dollars per shares) | $ 12.16 | |
Granted (in dollars per shares) | 4.85 | |
Exercised (in dollars per share) | 4.63 | |
Forfeited (in dollars per share) | 10.87 | |
Balance (in dollars per shares) | 10.72 | |
Options exercisable (in dollars per shares) | 11.77 | |
Options vested and expected to vest (in dollars per share) | $ 10.70 | |
Additional disclosures | ||
Options Outstanding Weighted Average Contractual term | 7 years 8 months 5 days | |
Options Vested and Expected to Vest Weighted Average Contractual Life | 6 years 9 months 22 days | |
Options Outstanding Aggregate Intrinsic Value | $ | $ 14,759,569 | |
Options Exercisable Aggregate Intrinsic Value | $ | 6,380,901 | |
Expected stock based compensation expense | $ | $ 8,800,000 | |
Recognition period for compensation costs | 2 years 2 months 16 days | |
Weighted Average Grant Date Fair Value | ||
Granted (in dollars per share) | $ 3.37 | $ 7.94 |
Assumptions and Methodology | ||
Weighted average risk-free interest rate (as a percent) | 2.47% | 2.51% |
Expected term of options (in years) | 6 years 1 month 24 days | 6 years 1 month 17 days |
Expected stock price volatility (as a percent) | 80.00% | 78.00% |
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity, Unrecognized Costs (Details) - 2014 Plan - Restricted stock | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Restricted stock award activity | |
Unvested balance (in shares) | 10,500 |
Granted (in shares) | 8,600 |
Vested (in shares) | (7,500) |
Unvested balance (in shares) | 11,600 |
Weighted Average Grant Date Fair Value | |
Unvested balance (in dollars per share) | $ / shares | $ 11.86 |
Granted (in dollars per share) | $ / shares | 4.42 |
Vested (in dollars per share) | $ / shares | 13.46 |
Unvested balance (in dollars per share) | $ / shares | $ 5.31 |
Unrecognized compensation expense related to unvested awards | $ | $ 16,239 |
Recognition period for compensation costs | 1 year 1 month 2 days |
Unvested restricted stock awards expected to vest (in shares) | 6,600 |
Operating Lease Obligations - N
Operating Lease Obligations - Narrative (Details) | Jan. 01, 2019USD ($) | Jun. 30, 2019USD ($)ft² |
Operating Lease Obligations | ||
Practical expedients - Package | true | |
Area of leasable office space | ft² | 10,877 | |
Term of lease | 5 years | |
Operating lease liability | $ 216,014 | |
Right-of-use assets | 206,250 | |
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 | |
Accounting Standards Update 2016-02 | Adjustment | ||
Operating Lease Obligations | ||
Operating lease liability | $ 325,683 | |
Right-of-use assets | 312,859 | |
Reclassification of deferred rent liability to right-of-use assets upon adoption of ASC 842 | $ 12,824 |
Operating Lease Obligations - O
Operating Lease Obligations - Other Operating Lease Information (Details) | Jun. 30, 2019 |
Operating Lease Obligations | |
Weighted-average remaining lease term - operating leases | 10 months 24 days |
Weighted-average discount rate - operating leases | 11.17% |
Operating Lease Obligations - M
Operating Lease Obligations - Maturities (Details) | Jun. 30, 2019USD ($) |
Maturity Analysis of Operating Lease Liabilities | |
December 31, 2019 (remaining months) | $ 124,508 |
December 31, 2020 | 103,757 |
Total minimum lease payments | 228,265 |
Less: imputed lease interest | (12,251) |
Total lease liabilities | $ 216,014 |
Operating Lease Obligations - L
Operating Lease Obligations - Lease Expense and Payments (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Lease expense | |
Operating lease expense | $ 119,182 |
Variable lease expense | 29,349 |
Total lease expense | 148,531 |
Cash payments related to operating leases | $ 122,242 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Australian Taxation Office $ in Millions | 1 Months Ended |
Jul. 31, 2019USD ($) | |
Minimum | |
Subsequent Events | |
Incremental cash tax credits to be received | $ 7 |
Period to receive incremental research and development cash tax credits | 18 months |
Maximum | |
Subsequent Events | |
Incremental cash tax credits to be received | $ 9 |
Period to receive incremental research and development cash tax credits | 24 months |