Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 10, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ODT | |
Entity Registrant Name | Odonate Therapeutics, Inc. | |
Entity Central Index Key | 0001717452 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 32,187,490 | |
Entity Address, State or Province | CA | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 206,904 | $ 139,050 |
Prepaid expenses and other current assets | 2,916 | 750 |
Total current assets | 209,820 | 139,800 |
Property and equipment, net | 1,798 | 1,899 |
Right-of-use lease assets | 1,913 | |
Restricted cash | 251 | 251 |
Other | 810 | 723 |
Total assets | 214,592 | 142,673 |
Current liabilities: | ||
Accounts payable | 7,961 | 10,777 |
Accrued expenses | 13,360 | 7,365 |
Lease liabilities, current portion | 502 | |
Deferred rent, current portion | 66 | |
Total current liabilities | 21,823 | 18,208 |
Lease liabilities, less current portion | 1,908 | |
Deferred rent, less current portion | 461 | |
Total liabilities | 23,731 | 18,669 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value—100,000,000 shares authorized; 31,474,990 and 26,747,438 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 292 | 244 |
Additional paid-in capital | 376,168 | 252,012 |
Accumulated deficit | (185,599) | (128,252) |
Total stockholders' equity | 190,861 | 124,004 |
Total liabilities and stockholders' equity | $ 214,592 | $ 142,673 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 31,474,990 | 26,747,438 |
Common stock, shares outstanding | 31,474,990 | 26,747,438 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating expenses: | ||||
Research and development | $ 26,453 | $ 17,024 | $ 53,084 | $ 31,484 |
General and administrative | 2,783 | 2,755 | 5,374 | 5,176 |
Total operating expenses | 29,236 | 19,779 | 58,458 | 36,660 |
Loss from operations | (29,236) | (19,779) | (58,458) | (36,660) |
Interest income | 534 | 389 | 1,111 | 389 |
Net loss | $ (28,702) | $ (19,390) | $ (57,347) | $ (36,271) |
Net loss per share: | ||||
Basic and diluted | $ (1.15) | $ (0.79) | $ (2.31) | $ (1.49) |
Weighted-average shares outstanding: | ||||
Basic and diluted | 24,893,232 | 24,402,466 | 24,788,404 | 24,376,885 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance at Dec. 31, 2017 | $ 195,982 | $ 240 | $ 235,034 | $ (39,292) |
Beginning balance, shares at Dec. 31, 2017 | 26,890,356 | |||
Issuance of common stock, net of issuance costs | 9,848 | $ 4 | 9,844 | |
Issuance of common stock, net of issuance costs, shares | 441,073 | |||
Forfeiture of common stock underlying incentive units, shares | (445,740) | |||
Non-cash contributions for expenses | 64 | 64 | ||
Equity-based compensation expense | 1,011 | 1,011 | ||
Net loss | (16,881) | (16,881) | ||
Ending balance at Mar. 31, 2018 | 190,024 | $ 244 | 245,953 | (56,173) |
Ending balance, shares at Mar. 31, 2018 | 26,885,689 | |||
Beginning balance at Dec. 31, 2017 | 195,982 | $ 240 | 235,034 | (39,292) |
Beginning balance, shares at Dec. 31, 2017 | 26,890,356 | |||
Non-cash contributions for expenses | 100 | |||
Net loss | (36,271) | |||
Ending balance at Jun. 30, 2018 | 172,322 | $ 244 | 247,641 | (75,563) |
Ending balance, shares at Jun. 30, 2018 | 26,890,708 | |||
Beginning balance at Mar. 31, 2018 | 190,024 | $ 244 | 245,953 | (56,173) |
Beginning balance, shares at Mar. 31, 2018 | 26,885,689 | |||
Issuance of common stock under employee stock plans | 99 | 99 | ||
Issuance of common stock under employee stock plans, shares | 5,019 | |||
Non-cash contributions for expenses | 0 | |||
Equity-based compensation expense | 1,589 | 1,589 | ||
Net loss | (19,390) | (19,390) | ||
Ending balance at Jun. 30, 2018 | 172,322 | $ 244 | 247,641 | (75,563) |
Ending balance, shares at Jun. 30, 2018 | 26,890,708 | |||
Beginning balance at Dec. 31, 2018 | 124,004 | $ 244 | 252,012 | (128,252) |
Beginning balance, shares at Dec. 31, 2018 | 26,747,438 | |||
Issuance of common stock under employee stock plans | 159 | 159 | ||
Issuance of common stock under employee stock plans, shares | 10,606 | |||
Forfeiture of common stock underlying incentive units, shares | (5,618) | |||
Equity-based compensation expense | 2,925 | 2,925 | ||
Net loss | (28,645) | (28,645) | ||
Ending balance at Mar. 31, 2019 | 98,443 | $ 244 | 255,096 | (156,897) |
Ending balance, shares at Mar. 31, 2019 | 26,752,426 | |||
Beginning balance at Dec. 31, 2018 | 124,004 | $ 244 | 252,012 | (128,252) |
Beginning balance, shares at Dec. 31, 2018 | 26,747,438 | |||
Non-cash contributions for expenses | 0 | |||
Net loss | (57,347) | |||
Ending balance at Jun. 30, 2019 | 190,861 | $ 292 | 376,168 | (185,599) |
Ending balance, shares at Jun. 30, 2019 | 31,474,990 | |||
Beginning balance at Mar. 31, 2019 | 98,443 | $ 244 | 255,096 | (156,897) |
Beginning balance, shares at Mar. 31, 2019 | 26,752,426 | |||
Issuance of common stock, net of issuance costs | 117,703 | $ 48 | 117,655 | |
Issuance of common stock, net of issuance costs, shares | 4,750,000 | |||
Issuance of common stock under employee stock plans | 427 | 427 | ||
Issuance of common stock under employee stock plans, shares | 18,502 | |||
Forfeiture of common stock underlying incentive units, shares | (45,938) | |||
Non-cash contributions for expenses | 0 | |||
Equity-based compensation expense | 2,990 | 2,990 | ||
Net loss | (28,702) | (28,702) | ||
Ending balance at Jun. 30, 2019 | $ 190,861 | $ 292 | $ 376,168 | $ (185,599) |
Ending balance, shares at Jun. 30, 2019 | 31,474,990 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (57,347) | $ (36,271) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Equity-based compensation expense | 5,915 | 2,600 |
Depreciation and amortization | 180 | 60 |
Non-cash contributions for expenses | 64 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (2,253) | 1,399 |
Accounts payable | (2,822) | 287 |
Accrued expenses | 5,995 | 2,343 |
Deferred rent | 433 | |
Net cash used in operating activities | (50,332) | (29,085) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (103) | (1,289) |
Net cash used in investing activities | (103) | (1,289) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 117,703 | 9,848 |
Proceeds from issuance of common stock under employee stock plans | 586 | 98 |
Net cash provided by financing activities | 118,289 | 9,946 |
Net increase (decrease) in cash and restricted cash | 67,854 | (20,428) |
Cash and restricted cash, beginning of period | 139,301 | 198,105 |
Cash and restricted cash, end of period | 207,155 | 177,677 |
Supplemental disclosure of cash flow information: | ||
Initial recognition of right-of-use lease assets | 2,215 | |
Property and equipment purchases included in accounts payable | $ 7 | $ 113 |
Business
Business | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | 1. Business Odonate Therapeutics, Inc. (“Odonate” or the “Company”) is a pharmaceutical company dedicated to the development of best-in-class therapeutics that improve and extend the lives of patients with cancer. The Company’s initial focus is on the development of tesetaxel, an investigational, orally administered chemotherapy agent that belongs to a class of drugs known as taxanes, which are widely used in the treatment of cancer. Tesetaxel has several pharmacologic properties that make it unique among taxanes, including: oral administration with a low pill burden; a long (~8-day) terminal plasma half-life in humans, enabling the maintenance of adequate drug levels with relatively infrequent dosing; no history of hypersensitivity (allergic) reactions; and significant activity against chemotherapy-resistant tumors. In patients with metastatic breast cancer, tesetaxel was shown to have significant, single-agent antitumor activity in two multicenter, Phase 2 studies. The Company is currently conducting three studies in breast cancer, including a multinational, multicenter, randomized, Phase 3 study in patients with human epidermal growth factor receptor 2 (“HER2”) negative, hormone receptor (“HR”) On June 28, 2019, the Company closed an underwritten public offering of 4,750,000 shares of common stock at a public offering price of $26.00 per share. The gross proceeds were $123.5 million, and the net proceeds were $117.7 million after deducting underwriting discounts and commissions and offering costs. As of June 30, 2019, the Company had $206.9 million in cash. The Company has incurred operating losses and negative cash flows from operations since inception. Management believes the Company’s existing cash as of June 30, 2019 will be sufficient to meet the Company’s anticipated cash requirements through at least one year from the date this Quarterly Report on Form 10-Q is filed with the U.S. Securities and Exchange Commission (the “SEC”). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The Company’s condensed financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) The preparation of the Company’s condensed financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates and assumptions in the Company’s condensed financial statements relate to accrued expenses and equity-based compensation expense. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Summary of Significant Accounting Policies During the six months ended June 30, 2019, other than the policy described below and the removal of the deferred rent policy on the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases Leases At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02. This guidance requires lessees to recognize operating leases with a term greater than one year on the balance sheet as a right-of-use asset and corresponding lease liability. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. Although ASU 2016-02 is required to be adopted at the earliest period presented using a modified retrospective approach, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements The Company adopted ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed for under ASU 2018-11. As a result, the Company recorded lease liabilities and right-of-use lease assets of $2.7 million and $2.2 million, respectively, on its balance sheet as of January 1, 2019. The lease liabilities represent the present value of the remaining lease payments of the Company’s San Diego Lease and New York Lease (see Note 5), discounted using the Company’s incremental borrowing rate as of January 1, 2019. The corresponding right-of-use lease assets are recorded based on the lease liabilities, adjusted for the unamortized lease incentives received and the cumulative difference between rent expense and amounts paid under the San Diego Lease and New York Lease. The adoption of ASU 2016-02 did not have a material impact on either the statement of operations or statement of cash flows for the three and six months ended June 30, 2019. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 3. Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration of common stock equivalents. The basic net loss per share calculation excludes 1,896,695 and 2,485,662 outstanding shares of common stock held by Odonate Holdings, LLC (“Odonate Holdings”) as of June 30, 2019 and 2018, respectively, to be used to settle incentive units previously issued under the Odonate Management Holdings Equity Incentive Plan (the “Management Plan”). These shares of common stock are subject to transfer to the Company and cancellation until such incentive units are vested and exercised and, as such, are considered common stock equivalents. Therefore, the shares of common stock held by Odonate Holdings are excluded from the basic net loss per share calculation until the incentive units are exercised. Diluted net loss per share is calculated by adjusting weighted-average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. Common stock equivalents, which consist of shares of common stock underlying incentive units and vested stock options, were excluded from the calculation of diluted net loss per share because they were anti-dilutive. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | 4. Balance Sheet Details Property and equipment consisted of the following (in thousands): June 30, December 31, 2019 2018 Leasehold improvements $ 1,113 $ 1,113 Office equipment 607 504 Furniture and fixtures 432 432 Software 130 126 Total gross property and equipment 2,282 2,175 Less accumulated depreciation (484 ) (276 ) Property and equipment, net $ 1,798 $ 1,899 Depreciation expense was $0.1 million and $0.2 million for the three and six months ended June 30, 2019, respectively, compared to $47,000 and $0.1 million, respectively, for the same periods in 2018. Accrued expenses consisted of the following (in thousands): June 30, December 31, 2019 2018 Accrued clinical development costs $ 10,082 $ 5,732 Accrued compensation and related expenses 3,009 1,619 Other accrued expenses 269 14 Total accrued expenses $ 13,360 $ 7,365 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Lease Commitments In March 2018, the Company entered into an agreement to lease office space in San Diego, California (the “San Diego Lease”) with aggregate payments of approximately $0.8 million over the term of the lease. The San Diego Lease expires on December 31, 2019. The San Diego Lease is classified as an operating lease. In February 2018, the Company entered into an agreement to lease office space in New York, New York (the “New York Lease”) with aggregate payments of approximately $2.8 million over the 7-year term of the lease. The Company has an option to extend the New York Lease for an additional three years at the end of the initial term. Further, the Company provided a standby letter of credit of $0.3 million in lieu of a security deposit during the term of the lease, subject to a reduction 3.5 years after the lease commencement. As of June 30, 2019, $0.3 million was pledged as collateral for the letter of credit and recorded as restricted cash. The New York lease is classified as an operating lease. Future minimum lease payments under the San Diego Lease and New York Lease as of June 30, 2019 are as follows (in thousands): 2019 $ 428 2020 376 2021 385 2022 399 2023 427 Thereafter 806 Total future minimum lease payments 2,821 Less discount (411 ) Total lease liabilities $ 2,410 The Company recorded lease liabilities and right-of-use lease assets for the San Diego Lease and New York Lease based on the present value of lease payments over the expected lease terms, discounted using the Company’s incremental borrowing rate. The option to extend the New York Lease was not recognized as part of the Company’s lease liability and right-of-use lease asset. Rent expense was $0.2 million and $0.4 million for the three and six months ended June 30, 2019, respectively, compared to $0.2 million and $0.3 million, respectively, for the same periods in 2018. Amortization of the right-of-use lease assets was $17,000 and $31,000 for the three and six months ended June 30, 2019, respectively. Other Commitments The Company enters into contracts in the normal course of business with contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts. Contingencies From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 6. Stockholders’ Equity Common Stock Sales On June 28, 2019, the Company closed an underwritten public offering of 4,750,000 shares of common stock at a public offering price of $26.00 per share. The gross proceeds were $123.5 million, and the net proceeds were $117.7 million after deducting underwriting discounts and commissions and offering costs. On December 11, 2017, the Company closed its initial public offering (the “IPO”) of 6,250,000 shares of common stock at a public offering price of $24.00 per share. On January 10, 2018, the underwriters exercised their option to purchase 441,073 additional shares of common stock in the IPO. The aggregate gross proceeds from the IPO were $160.6 million, and the net proceeds were $147.3 million after deducting underwriting discounts and commissions and offering costs. Non-cash Contributions for Expenses Non-cash contributions for expenses represent certain services and other benefits received by the Company from an affiliate without charge to the Company (see Note 10). These services and other benefits are recorded as expense with corresponding increases to additional paid-in capital. No expense for services and other benefits provided without charge to the Company was recorded for the three and six months ended June 30, 2019 and the three months ended June 30, 2018. The Company recorded expense, and a corresponding increase to additional paid-in capital, of $0.1 million for the six months ended June 30, 2018 for services and other benefits provided without charge to the Company. |
Equity Incentive Plans
Equity Incentive Plans | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 7. Equity Incentive Plans 2017 Stock Option Plan A total of 4,800,000 shares of common stock have been reserved for issuance under the Odonate Therapeutics, Inc. 2017 Stock Option Plan (the “2017 Plan”). As of June 30, 2019, 1,467,981 shares of common stock remained available for future grants under the 2017 Plan. 2017 Employee Stock Purchase Plan A total of 500,000 shares of common stock have been reserved for issuance under the Odonate Therapeutics, Inc. 2017 Employee Stock Purchase Plan (the “ESPP”). As of June 30, 2019, 462,640 shares of common stock remained available for future grants under the ESPP. Management Plan On December 6, 2017, the Company converted from a Delaware limited liability company to a Delaware corporation by filing a certificate of conversion with the Delaware Secretary of State, and changed its name from “Odonate Therapeutics, LLC” to “Odonate Therapeutics, Inc.” (the “Conversion”). Prior to the Conversion, the Company issued an aggregate of 2,931,402 incentive units under the Management Plan. As of June 30, 2019, 1,896,695 outstanding shares of common stock were held by Odonate Holdings to be used to settle incentive units previously issued under the Management Plan. Following the Conversion, the Company has not granted, and will no longer grant, any incentive units. Equity Awards The activity related to equity awards, which are comprised of stock options and incentive units, during the six months ended June 30, 2019 is summarized as follows: Equity Awards Weighted-average Exercise Price per Share Weighted-average Remaining Contractual Term ( 1) (years) Aggregate Intrinsic Value ( 2) (millions) Outstanding at December 31, 2018 5,361,920 $ 12.63 Granted 368,897 $ 20.00 Exercised (190,653 ) $ 5.39 Cancelled/forfeited (324,822 ) $ 19.01 Outstanding at June 30, 2019 5,215,342 $ 13.02 9.3 $ 123.0 Exercisable at June 30, 2019 1,347,938 $ 8.02 8.6 $ 38.7 (1) (2) The total intrinsic value of equity awards exercised during the six months ended June 30, 2019 was $5.8 million. No equity awards were exercised during the six months ended June 30, 2018. The total fair value of equity awards vested during the six months ended June 30, 2019 and 2018 was $8.6 million and $1.2 million, respectively. Equity-based Compensation Expense For the six months ended June 30, 2019 and 2018, the weighted-average grant-date fair value per equity award was $13.32 and $15.81, respectively. The Company estimated the fair value of each equity award on the grant date using the Black-Scholes option-pricing model with the following assumptions: Six Months Ended June 30, 2019 2018 Expected volatility 74% – 75% 72% – 73% Expected life 6 years 6 years Risk-free interest rate 2.4% – 2.5% 2.3% – 2.6% Expected dividend yield 0% 0% Under the ESPP, eligible employees may purchase shares of the Company’s common stock twice per month at a price equal to 85% of the closing price of shares of the Company’s common stock on the date of each purchase. , which is equal to a 15% discount on the shares of the Company’s common stock purchased, is recognized as equity-based compensation expense on the date of each purchase. The classification of equity-based compensation expense is summarized as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Equity-based compensation expense: Research and development $ 2,573 $ 1,264 $ 5,073 $ 2,203 General and administrative 417 325 842 397 Total equity-based compensation expense $ 2,990 $ 1,589 $ 5,915 $ 2,600 As of June 30, 2019, total unrecognized equity-based compensation expense related to unvested equity awards was $33.6 million, which will be recognized over a weighted-average period of 3.0 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes For the three and six months ended June 30, 2019 and 2018, the Company did not record a provision for income taxes due to having recorded a full valuation allowance against its deferred tax assets. As of June 30, 2019 and December 31, 2018, the Company established a full valuation allowance against its federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets. |
License Agreement
License Agreement | 6 Months Ended |
Jun. 30, 2019 | |
License Agreement [Abstract] | |
License Agreement | 9. License Agreement In 2013, the Company licensed rights to tesetaxel in all major markets from Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), the original inventor of the product. Under the Daiichi Sankyo license agreement, the Company is obligated to use commercially reasonable efforts to develop and commercialize tesetaxel in the following countries: France, Germany, Italy, Spain, the United Kingdom and the U.S. The Company is required to make aggregate future milestone payments of up to $31.0 million, contingent on attainment of certain regulatory milestones. Additionally, the Company will pay Daiichi Sankyo a tiered royalty that ranges from the low to high single digits, depending on annual net sales of tesetaxel. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Commencing in 2016, the Company received certain services and other benefits from an affiliate (the “Affiliate”) of the Chairman and Chief Executive Officer of the Company. The Company was not charged any fees for these services and other benefits, which included personnel costs for research and development and administrative functions, rent and facility costs and other direct expenses. No expense for services and other benefits provided without charge to the Company was recorded for the three and six months ended June 30, 2019 and the three months ended June 30, 2018. The Company recorded expense, and a corresponding increase to additional paid-in capital, of $0.1 million for the six months ended June 30, 2018 for services and other benefits provided without charge to the Company. Personnel costs were based on actual costs incurred by the Affiliate, which were allocated based on the estimated percentage of time employees spent working for Odonate on an employee-by-employee basis. Rent and facility costs were based on actual costs incurred by the Affiliate and allocated based on the Company’s use of shared space using headcount. Other direct expenses paid by the Affiliate were specifically identifiable to the Company and were allocated directly to the Company. The Chairman and Chief Executive Officer of the Company has elected to receive an annual salary of $1.00 and to not receive any bonuses, equity or other compensation. Management believes that the method used to allocate costs is a fair and reasonable reflection of the utilization of the services provided to, or the benefit received by, the Company during the periods presented. The allocations may not, however, reflect the costs that the Company would have incurred if the Company had not received these services. Actual costs would depend on a number of factors, including strategic decisions in the areas of hiring, facility location and whether to outsource certain functions. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events On July 2, 2019, the underwriters exercised in full their option in connection with the Company’s June 28, 2019 underwritten public offering to purchase 712,500 additional shares of common stock for gross proceeds of $18.5 million and net proceeds of $17.4 million after deducting underwriting discounts and commissions and offering costs. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The Company’s condensed financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) The preparation of the Company’s condensed financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed financial statements and accompanying notes. The most significant estimates and assumptions in the Company’s condensed financial statements relate to accrued expenses and equity-based compensation expense. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Leases | Leases At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02. This guidance requires lessees to recognize operating leases with a term greater than one year on the balance sheet as a right-of-use asset and corresponding lease liability. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. Although ASU 2016-02 is required to be adopted at the earliest period presented using a modified retrospective approach, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements The Company adopted ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed for under ASU 2018-11. As a result, the Company recorded lease liabilities and right-of-use lease assets of $2.7 million and $2.2 million, respectively, on its balance sheet as of January 1, 2019. The lease liabilities represent the present value of the remaining lease payments of the Company’s San Diego Lease and New York Lease (see Note 5), discounted using the Company’s incremental borrowing rate as of January 1, 2019. The corresponding right-of-use lease assets are recorded based on the lease liabilities, adjusted for the unamortized lease incentives received and the cumulative difference between rent expense and amounts paid under the San Diego Lease and New York Lease. The adoption of ASU 2016-02 did not have a material impact on either the statement of operations or statement of cash flows for the three and six months ended June 30, 2019. |
Net Loss per Share | Basic net loss per share is calculated by dividing net loss by the weighted-average shares outstanding during the period, without consideration of common stock equivalents. The basic net loss per share calculation excludes 1,896,695 and 2,485,662 outstanding shares of common stock held by Odonate Holdings, LLC (“Odonate Holdings”) as of June 30, 2019 and 2018, respectively, to be used to settle incentive units previously issued under the Odonate Management Holdings Equity Incentive Plan (the “Management Plan”). These shares of common stock are subject to transfer to the Company and cancellation until such incentive units are vested and exercised and, as such, are considered common stock equivalents. Therefore, the shares of common stock held by Odonate Holdings are excluded from the basic net loss per share calculation until the incentive units are exercised. Diluted net loss per share is calculated by adjusting weighted-average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. Common stock equivalents, which consist of shares of common stock underlying incentive units and vested stock options, were excluded from the calculation of diluted net loss per share because they were anti-dilutive. |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following (in thousands): June 30, December 31, 2019 2018 Leasehold improvements $ 1,113 $ 1,113 Office equipment 607 504 Furniture and fixtures 432 432 Software 130 126 Total gross property and equipment 2,282 2,175 Less accumulated depreciation (484 ) (276 ) Property and equipment, net $ 1,798 $ 1,899 |
Summary of Accrued Expenses | Accrued expenses consisted of the following (in thousands): June 30, December 31, 2019 2018 Accrued clinical development costs $ 10,082 $ 5,732 Accrued compensation and related expenses 3,009 1,619 Other accrued expenses 269 14 Total accrued expenses $ 13,360 $ 7,365 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | Future minimum lease payments under the San Diego Lease and New York Lease as of June 30, 2019 are as follows (in thousands): 2019 $ 428 2020 376 2021 385 2022 399 2023 427 Thereafter 806 Total future minimum lease payments 2,821 Less discount (411 ) Total lease liabilities $ 2,410 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity Related to Equity Awards Comprised of Stock Options and Incentive Units | The activity related to equity awards, which are comprised of stock options and incentive units, during the six months ended June 30, 2019 is summarized as follows: Equity Awards Weighted-average Exercise Price per Share Weighted-average Remaining Contractual Term ( 1) (years) Aggregate Intrinsic Value ( 2) (millions) Outstanding at December 31, 2018 5,361,920 $ 12.63 Granted 368,897 $ 20.00 Exercised (190,653 ) $ 5.39 Cancelled/forfeited (324,822 ) $ 19.01 Outstanding at June 30, 2019 5,215,342 $ 13.02 9.3 $ 123.0 Exercisable at June 30, 2019 1,347,938 $ 8.02 8.6 $ 38.7 (1) (2) |
Schedule of Estimated Fair Value of Equity Award on Grant Date Using Black-Scholes Option-pricing Model | The Company estimated the fair value of each equity award on the grant date using the Black-Scholes option-pricing model with the following assumptions: Six Months Ended June 30, 2019 2018 Expected volatility 74% – 75% 72% – 73% Expected life 6 years 6 years Risk-free interest rate 2.4% – 2.5% 2.3% – 2.6% Expected dividend yield 0% 0% |
Summary of Equity-based Compensation Expense | The classification of equity-based compensation expense is summarized as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Equity-based compensation expense: Research and development $ 2,573 $ 1,264 $ 5,073 $ 2,203 General and administrative 417 325 842 397 Total equity-based compensation expense $ 2,990 $ 1,589 $ 5,915 $ 2,600 |
Business - Additional Informati
Business - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 28, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Sale of common stock, number of shares issued | 4,750,000 | ||
Sale of common stock, price per share | $ 26 | ||
Gross proceeds from sale of common stock | $ 123,500 | ||
Net proceeds from sale of common stock | $ 117,700 | ||
Cash | $ 206,904 | $ 139,050 | |
Cash requirements minimum period | 1 year |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
Accounting Policies [Abstract] | ||
Lease liabilities | $ 2,410 | $ 2,700 |
Right-of-use lease assets | $ 1,913 | $ 2,200 |
Net Loss per Share - Additional
Net Loss per Share - Additional Information (Details) - shares | Jun. 30, 2019 | Jun. 30, 2018 |
Management Plan | ||
Earnings Per Share Basic [Line Items] | ||
Outstanding shares of common stock underlying incentive units | 1,896,695 | 2,485,662 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Property And Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | $ 2,282 | $ 2,175 |
Less accumulated depreciation | (484) | (276) |
Property and equipment, net | 1,798 | 1,899 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | 1,113 | 1,113 |
Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | 607 | 504 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | 432 | 432 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | $ 130 | $ 126 |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation Expense | $ 100,000 | $ 47,000 | $ 200,000 | $ 100,000 |
Balance Sheet Details - Summa_2
Balance Sheet Details - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued clinical development costs | $ 10,082 | $ 5,732 |
Accrued compensation and related expenses | 3,009 | 1,619 |
Other accrued expenses | 269 | 14 |
Total accrued expenses | $ 13,360 | $ 7,365 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Feb. 28, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Lease [Line Items] | ||||||
Aggregate payments under lease | $ 2,821,000 | $ 2,821,000 | ||||
Aggregate payment of rental expense | 200,000 | $ 200,000 | 400,000 | $ 300,000 | ||
Amortization of right-of-use lease assets | 17,000 | 31,000 | ||||
San Diego | ||||||
Operating Lease [Line Items] | ||||||
Aggregate payments under lease | $ 800,000 | |||||
Lease expiration date | Dec. 31, 2019 | |||||
New York | ||||||
Operating Lease [Line Items] | ||||||
Aggregate payments under lease | $ 2,800,000 | |||||
Lease initial term | 7 years | |||||
Existence of option to extend | true | |||||
Additional lease extended term | 3 years | |||||
Restricted cash | $ 300,000 | $ 300,000 | ||||
New York | Letter of Credit | ||||||
Operating Lease [Line Items] | ||||||
Security deposit | $ 300,000 | |||||
Period of reduction in security deposit | 3 years 6 months |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
Commitments And Contingencies Disclosure [Abstract] | ||
2019 | $ 428 | |
2020 | 376 | |
2021 | 385 | |
2022 | 399 | |
2023 | 427 | |
Thereafter | 806 | |
Total future minimum lease payments | 2,821 | |
Less discount | (411) | |
Total lease liabilities | $ 2,410 | $ 2,700 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 28, 2019 | Jan. 10, 2018 | Dec. 11, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Subsidiary Sale Of Stock [Line Items] | ||||||||
Net proceeds from sale of common stock | $ 117,700 | |||||||
Gross proceeds from sale of common stock | $ 123,500 | |||||||
Sale of common stock, number of shares issued | 4,750,000 | |||||||
Sale of common stock, price per share | $ 26 | |||||||
Non-cash contributions for expenses | $ 0 | $ 0 | $ 64 | $ 0 | $ 100 | |||
IPO | ||||||||
Subsidiary Sale Of Stock [Line Items] | ||||||||
Net proceeds from sale of common stock | $ 147,300 | |||||||
Sale of common stock, number of shares issued | 441,073 | 6,250,000 | ||||||
Sale of common stock, price per share | $ 24 | |||||||
Sale of common stock, gross proceeds from IPO | $ 160,600 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 06, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total intrinsic value of equity awards exercised | $ 5,800,000 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 8,600,000 | $ 1,200,000 | |
Weighted average grant-date fair value per equity award | $ 13.32 | $ 15.81 | |
Unrecognized equity-based compensation expense not yet recognized | $ 33,600,000 | ||
Unrecognized equity-based compensation expense not yet recognized, period for recognition | 3 years | ||
2017 Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of common stock reserved for issuance | 4,800,000 | ||
Common stock available for future grants | 1,467,981 | ||
ESPP | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of common stock reserved for issuance | 500,000 | ||
Common stock available for future grants | 462,640 | ||
Purchase price of common stock as percentage of fair value of common stock | 85.00% | ||
Percentage of discount to employees on purchase of common stock | 15.00% | ||
Unrecognized equity-based compensation expense not yet recognized | $ 0 | ||
Management Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Aggregate number of incentive units issued | 2,931,402 | ||
Outstanding shares of common stock underlying incentive units | 1,896,695 |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of Activity Related to Equity Awards Comprised of Stock Options and Incentive Units (Details) $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Equity Awards | |
Equity awards outstanding, Beginning balance | shares | 5,361,920 |
Equity awards, Granted | shares | 368,897 |
Equity awards, Exercised | shares | (190,653) |
Equity awards, Cancelled/forfeited | shares | (324,822) |
Equity awards outstanding, Ending balance | shares | 5,215,342 |
Equity awards exercisable | shares | 1,347,938 |
Weighted Average Exercise Price per Share | |
Weighted average exercise price per share outstanding, Beginning balance | $ / shares | $ 12.63 |
Weighted average exercise price per share outstanding, Granted | $ / shares | 20 |
Weighted average exercise price per share outstanding, Exercised | $ / shares | 5.39 |
Weighted average exercise price per share outstanding, Cancelled/forfeited | $ / shares | 19.01 |
Weighted average exercise price per share outstanding, Ending balance | $ / shares | 13.02 |
Weighted average exercise price per share, Exercisable | $ / shares | $ 8.02 |
Weighted-Average Remaining Contractual Term | |
Weighted average remaining contractual term (years), outstanding | 9 years 3 months 18 days |
Weighted average remaining contractual term (years), exercisable | 8 years 7 months 6 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 123 |
Aggregate Intrinsic Value, Exercisable | $ | $ 38.7 |
Equity Incentive Plans - Summ_2
Equity Incentive Plans - Summary of Activity Related to Equity Awards Comprised of Stock Options and Incentive Units (Parenthetical) (Details) | Jun. 28, 2019$ / shares |
Stockholders Equity Note [Abstract] | |
Share price | $ 36.69 |
Equity Incentive Plans - Schedu
Equity Incentive Plans - Schedule of Estimated Fair Value of Equity Award on Grant Date Using Black-Scholes Option-pricing Model (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected volatility, minimum | 74.00% | 72.00% |
Expected volatility, maximum | 75.00% | 73.00% |
Expected life | 6 years | 6 years |
Risk-free interest rate, minimum | 2.40% | 2.30% |
Risk-free interest rate, maximum | 2.50% | 2.60% |
Expected dividend yield | 0.00% | 0.00% |
Equity Incentive plans - Summ_3
Equity Incentive plans - Summary of Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | $ 2,990 | $ 1,589 | $ 5,915 | $ 2,600 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | 2,573 | 1,264 | 5,073 | 2,203 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total equity-based compensation expense | $ 417 | $ 325 | $ 842 | $ 397 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
License Agreement - Additional
License Agreement - Additional Information (Details) $ in Millions | Dec. 31, 2013USD ($) |
Tesetaxel | Daiichi Sankyo | |
License Agreement [Line Items] | |
Aggregate future milestone payments | $ 31 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |||||
Non-cash contributions for expenses | $ 0 | $ 0 | $ 64,000 | $ 0 | $ 100,000 |
Chairman and Chief Executive Officer | |||||
Related Party Transaction [Line Items] | |||||
Annual salary of chairman and chief executive officer of the company | $ 1 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Millions | Jul. 02, 2019 | Jun. 28, 2019 |
Subsequent Event [Line Items] | ||
Issuance of common stock, net of issuance costs, shares | 4,750,000 | |
Gross proceeds from sale of common stock | $ 123.5 | |
Net proceeds from sale of common stock | $ 117.7 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Issuance of common stock, net of issuance costs, shares | 712,500 | |
Gross proceeds from sale of common stock | $ 18.5 | |
Net proceeds from sale of common stock | $ 17.4 |