Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document And Entity Information Abstract | ||
Entity Registrant Name | Entasis Therapeutics Holdings Inc. | |
Entity Central Index Key | 0001724344 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 14,614,073 | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 17,450 | $ 16,034 |
Short-term investments | 10,016 | 24,962 |
Grants receivable | 901 | 1,232 |
Prepaid expenses | 2,932 | 4,560 |
Other current assets | 1,485 | 2,218 |
Total current assets | 32,784 | 49,006 |
Property and equipment, net | 308 | 345 |
Operating lease right-of-use assets | 1,505 | 1,620 |
Other assets | 63 | 63 |
Total assets | 34,660 | 51,034 |
Current liabilities: | ||
Accounts payable | 1,150 | 1,304 |
Accrued expenses and other current liabilities | 4,633 | 6,252 |
Total current liabilities | 5,783 | 7,556 |
Operating lease liabilities, net of current portion | 1,173 | 1,321 |
Total liabilities | 6,956 | 8,877 |
Commitments (Notes 5 and 11) | ||
Stockholders’ equity: | ||
Common stock, par value $0.001; 125,000,000 shares authorized and 13,291,563 shares issued and outstanding as of March 31, 2020 and December 31, 2019 | 13 | 13 |
Additional paid-in capital | 176,888 | 176,103 |
Accumulated other comprehensive income | 28 | |
Accumulated deficit | (149,225) | (133,959) |
Total stockholders’ equity | 27,704 | 42,157 |
Total liabilities and stockholders’ equity | $ 34,660 | $ 51,034 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock par value (in dollar per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock issued (in shares) | 13,291,563 | 13,291,563 |
Common stock outstanding (in shares) | 13,291,563 | 13,291,563 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating expenses: | ||
Research and development | $ 11,623 | $ 11,002 |
General and administrative | 3,780 | 3,189 |
Total operating expenses | 15,403 | 14,191 |
Loss from operations | (15,403) | (14,191) |
Other income: | ||
Grant income | 13 | 829 |
Interest income | 124 | 492 |
Total other income | 137 | 1,321 |
Loss before income taxes | (15,266) | (12,870) |
Provision for income taxes | 71 | |
Net loss | $ (15,266) | $ (12,941) |
Net Loss per Share | ||
Net loss per share—basic and diluted (in dollar per share) | $ (1.15) | $ (0.99) |
Weighted average common stock outstanding—basic and diluted (in shares) | 13,291,563 | 13,126,595 |
Other comprehensive loss: | ||
Net loss | $ (15,266) | $ (12,941) |
Net unrealized gain on investments held | 28 | 43 |
Comprehensive loss | $ (15,238) | $ (12,898) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 13 | $ 172,988 | $ (9) | $ (90,109) | $ 82,883 |
Balance (in shares) at Dec. 31, 2018 | 13,124,842 | ||||
Stock-based compensation expense | 578 | 578 | |||
Exercise of stock options | 11 | 11 | |||
Exercise of stock options (in shares) | 2,286 | ||||
Unrealized gain on investments held | 43 | 43 | |||
Net loss | (12,941) | (12,941) | |||
Balance at Mar. 31, 2019 | $ 13 | 173,577 | 34 | (103,050) | 70,574 |
Balance (in shares) at Mar. 31, 2019 | 13,127,128 | ||||
Balance at Dec. 31, 2019 | $ 13 | 176,103 | (133,959) | 42,157 | |
Balance (in shares) at Dec. 31, 2019 | 13,291,563 | ||||
Stock-based compensation expense | 785 | 785 | |||
Unrealized gain on investments held | 28 | 28 | |||
Net loss | (15,266) | (15,266) | |||
Balance at Mar. 31, 2020 | $ 13 | $ 176,888 | $ 28 | $ (149,225) | $ 27,704 |
Balance (in shares) at Mar. 31, 2020 | 13,291,563 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (15,266) | $ (12,941) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 37 | 40 |
Stock-based compensation expense | 785 | 578 |
Amortization and accretion of investments | (27) | (195) |
Changes in operating assets and liabilities: | ||
Grants receivable | 331 | (22) |
Prepaid expenses | 1,628 | (340) |
Other assets | 1,032 | (2,208) |
Accounts payable | (154) | 2,747 |
Accrued expenses and other liabilities | (1,934) | 1,917 |
Deferred rent | (175) | |
Net cash used in operating activities | (13,568) | (10,599) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (37) | |
Proceeds from maturities of short-term investments | 15,000 | |
Purchases of short-term investments | (25,050) | |
Net cash provided by (used in) investing activities | 15,000 | (25,087) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 11 | |
Payments of initial public offering costs | (150) | |
Payments of financing costs | (16) | |
Net cash used in financing activities | (16) | (139) |
Net increase (decrease) in cash and cash equivalents | 1,416 | (35,825) |
Cash and cash equivalents at beginning of the period | 16,034 | 49,360 |
Cash and cash equivalents at end of the period | 17,450 | $ 13,535 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Deferred financing costs included in accrued expenses and other current liabilities | $ 166 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business Entasis Therapeutics Holdings Inc., or Entasis, or the Company, is an advanced clinical‑stage biopharmaceutical company focused on the discovery, development and commercialization of novel antibacterial products to treat serious infections caused by multidrug-resistant Gram‑negative bacteria. The Company has four subsidiaries: Entasis Therapeutics Limited; Entasis Therapeutics Inc.; Entasis Therapeutics Security Corporation; and Entasis Therapeutics (Ireland) Limited. The Company was initially formed as Entasis Therapeutics Limited, or Entasis Limited, on March 6, 2015 in the United Kingdom, or the U.K., as a wholly owned subsidiary of AstraZeneca AB, or AstraZeneca. Entasis was ultimately spun out from AstraZeneca in May 2015. In March 2018, as part of a corporate reorganization, Entasis Limited formed Entasis Therapeutics Holdings Inc., a Delaware corporation, which became the sole shareholder of Entasis Limited. Upon the completion of a reorganization on April 23, 2018, the historical consolidated financial statements of Entasis Limited became the historical consolidated financial statements of Entasis Therapeutics Holdings Inc. On September 28, 2018, the Company completed an initial public offering of its common stock, in which the Company issued and sold 5,000,000 shares of common stock at a price to the public of $15.00 per share. The aggregate net proceeds to the Company from the initial public offering were approximately $65.6 million after deducting underwriting discounts and commissions and offering expenses paid by the Company. Upon the completion of the Company’s initial public offering, all of the outstanding shares of redeemable convertible preferred stock of the Company, including accrued dividends, automatically converted into 8,084,414 shares of the Company’s common stock. Risks and Uncertainties As of March 31, 2020, the Company had $27.5 million in cash, cash equivalents and short-term investments, and an accumulated deficit of $149.2 million. Since its inception through March 31, 2020, the Company has funded its operations primarily with proceeds from the sale of redeemable convertible preferred stock and the sale of its common stock. The Company has also either directly received funding or financial commitments from, or has had its program activities conducted and funded by, United States government agencies and non-profit entities. In the absence of positive cash flows from operations, the Company is highly dependent on its ability to find additional sources of funding in the form of debt, equity financing, strategic collaborations, or partnerships. As discussed further in Note 13, Subsequent Events , in April 2020 the Company entered into a securities purchase agreement with Innoviva, Inc. pursuant to which the Company expects to receive aggregate gross proceeds of $35 million. The Company believes its existing cash, cash equivalents and short-term investments, together with proceeds to be received from this transaction will enable it to fund its operating expenses and capital requirements through one year from the date of this filing. As a clinical-stage company, Entasis is subject to a number of risks common to other life science companies, including, but not limited to, raising additional capital, development by its competitors of new technological innovations, risk of failure in preclinical and clinical studies, safety and efficacy of its product candidates in clinical trials, the risk of relying on external parties such as contract research organizations and contract manufacturing organizations the regulatory approval process, market acceptance of the Company’s products once approved, lack of marketing and sales history, dependence on key personnel and protection of proprietary technology. The Company’s therapeutic programs are currently pre-commercial, spanning discovery through late-stage development and will require additional research and development efforts, including the completion of Phase 3 registration trials and regulatory approval, prior to commercialization of any product candidates. These efforts require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company may never achieve profitability, and unless and until it does, it will continue to need to raise additional capital or obtain financing from other sources, such as strategic collaborations or partnerships. The global outbreak of a novel strain of coronavirus (COVID-19) has, and will likely continue to have, a significant impact on the U.S. economy and businesses. The social distancing and stay-at-home orders issued by national, state and local governments have resulted in closures of offices and factories and disrupted supply chains. The pandemic also has taxed healthcare systems both in the U.S. and around the world, resulting in disruption to or temporary suspension of clinical trials. As a result of these changes, the timelines for completion of our clinical trials and earlier-stage development programs may be impacted. The nature and extent of the impact remains uncertain as the duration of the outbreak and the time needed for businesses and healthcare systems to recover remains unknown. The full impact of the pandemic on economy, including the capital markets, also remains unknown. Some economists and major investment banks have expressed concern that the continued spread of the virus globally could lead to a world-wide economic downturn or recession and, by extension, limit our access to financial resources from the capital markets and other sources. It is not possible to predict the full impact of the COVID-19 pandemic on our business and access to capital in the future. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2019 and the notes thereto, which are included in the Company’s most recent Annual Report on Form 10-K. Since the date of those consolidated financial statements, there have been no material changes to its significant accounting policies. Basis of Presentation and Consolidation The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The December 31, 2019 consolidated balance sheet was derived from audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission, or SEC, on March 11, 2020. The interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. The accompanying consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the recognition of revenue, and the recognition of certain development costs. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. Recently Adopted Accounting Pronouncements Effective January 1, 2020, the Company adopted the requirements under the FASB ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The adoption of the new guidance did not affect the Company’s consolidated financial statements. Effective January 1, 2020, the Company adopted the provisions of FASB ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update clarifies the interaction between Topic 808, Collaborative Arrangements, and Topic 606, Revenue from Contracts with Customers . The guidance is required to be applied retrospectively to the date of initial application of Topic 606 and entities should recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial application of Topic 606. The adoption of the new guidance did not affect the Company’s consolidated financial statements and did not require an adjustment to the opening balance of retained earnings. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , or ASU 2019-12. The amendments in ASU 2019-12 are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted. The Company does not anticipate that the adoption of ASU 2019-12 will have a material effect on the Company’s consolidated financial statements. |
Short-Term Investments
Short-Term Investments | 3 Months Ended |
Mar. 31, 2020 | |
Short-Term Investments. | |
Short-Term Investments | 3. Short-Term Investments The following table summarizes the amortized cost and estimated fair value of the Company’s marketable securities, which are considered to be available-for-sale investments and are included in short-term investments on the consolidated balance sheets: Amortized Unrealized Unrealized Cost Gains Losses Fair Value (in thousands) Balance as of March 31, 2020: U.S. Treasury securities $ 9,991 $ 25 $ — $ 10,016 Total $ 9,991 $ 25 $ — $ 10,016 Amortized Unrealized Unrealized Cost Gains Losses Fair Value (in thousands) Balance as of December 31, 2019: U.S. Treasury securities $ 24,957 $ 5 $ — $ 24,962 Total $ 24,957 $ 5 $ — $ 24,962 Certain short-term debt securities with original maturities of less than 90 days are included in cash and cash equivalents on the consolidated balance sheets and are not included in the tables above. As of March 31, 2020 and December 31, 2019, all short-term investments have contractual maturities within one year. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The following tables set forth the Company’s assets that were accounted for at fair value on a recurring basis: March 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 9,038 $ — $ — $ 9,038 Short-term investments: U.S. Treasury securities 10,016 — — 10,016 Total $ 19,054 $ — $ — $ 19,054 December 31, 2019 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 13,949 $ — $ — $ 13,949 Short-term investments: U.S. Treasury securities 24,962 — — 24,962 Total $ 38,911 $ — $ — $ 38,911 The Company classifies its money market funds and U.S. Treasury securities as Level 1 assets under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets without any valuation adjustment. The Company uses the carrying amounts of its cash equivalents, grants receivable, accounts receivable, prepaid expenses, other current assets, accounts payable and accrued expenses and other current liabilities to approximate their fair value due to the short-term nature of these amounts. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Leases | 5. Leases The Company adopted FASB ASC 842, Leases , or ASC 842, on January 1, 2019. ASC 842 allows the Company to elect a package of practical expedients, which include: (i) an entity need not reassess whether any expired or existing contracts are or contain leases; (ii) an entity need not reassess the lease classification for any expired or existing leases; and (iii) an entity need not reassess any initial direct costs for any existing leases. Another practical expedient allows the Company to use hindsight in determining the lease term when considering lessee options to extend or terminate the lease and to purchase the underlying asset. The Company elected to utilize this package of practical expedients and elected not to use the hindsight methodology in its implementation of ASC 842. The Company determined that it held one significant operating lease as of January 1, 2019, consisting of 20,062 square feet of office and laboratory space in Waltham, Massachusetts that expires in December 2022 pursuant to a May 2015 lease with AstraZeneca, or the AZ lease, as amended in February 2018. During the three months ended March 31, 2020 and 2019, the Company recorded lease expense of $0.2 million related to this lease. The Company has two additional operating leases that are included in its lease accounting which are not considered significant. In calculating the present value of future lease payments, the Company utilized its incremental borrowing rate based on the remaining lease term at the date of adoption. The AZ lease contains a renewal option that can extend the lease for three years. Because the Company is not reasonably certain to exercise this renewal option, the option is not considered in determining the lease term, and associated potential additional payments are excluded from lease payments. The Company elected to account for each lease component and its associated non-lease components as a single lease component and has allocated all of the contract consideration across lease components only. The Company has existing net leases in which the non-lease components (e.g., common area maintenance) are paid separately from rent based on actual costs incurred and therefore are not included in the operating lease right-of-use assets and lease liabilities and are reflected as an expense in the period incurred. The following table summarizes the presentation of the Company’s operating leases in its consolidated balance sheets (in thousands): As of As of March 31, 2020 December 31, 2019 Assets Operating lease right-of-use assets $ 1,505 $ 1,620 Liabilities Operating lease liabilities, current $ 544 $ 506 Operating lease liabilities, net of current portion 1,173 1,321 Total operating lease liabilities $ 1,717 $ 1,827 The operating lease right-of-use assets and operating lease liabilities balances relate primarily to amounts associated with the AZ lease. Future minimum lease payments under non-cancelable leases as of March 31, 2020, were as detailed below (in thousands): Fiscal Year As of 2020 (remaining 9 months) $ 508 2021 717 2022 737 2023 1 Total undiscounted lease payments 1,963 Less: imputed interest (246) Total operating lease liabilities $ 1,717 As of March 31, 2020, the weighted average remaining lease term was 2.8 years and the weighted-average incremental borrowing rate used to determine the operating lease right-of-use assets was 9.1%. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses and Other Current Liabilities. | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, 2020 2019 Accrued compensation and benefits $ 995 $ 2,490 Accrued contract manufacturing 1,578 1,550 Accrued clinical 405 606 Accrued professional services 756 530 Accrued research 186 275 Current portion of operating lease liabilities 544 506 Other 169 295 Total accrued expenses and other current liabilities $ 4,633 $ 6,252 |
Funding Arrangements
Funding Arrangements | 3 Months Ended |
Mar. 31, 2020 | |
Funding Arrangements | |
Funding Arrangements | 7. Funding Arrangements In March 2017 and October 2017, the Company entered into funding arrangements with the Trustees of Boston University to utilize funds from the U.S. government through the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, or CARB‑X, program, in support of our ETX0282 and ETX0462 programs . In September 2019, the funding arrangements were amended to increase the amount of specified research expenditures of the Company that could be covered from $16.4 million to up to $16.8 million from April 2017 through September 2021. The Company recognized grant income in connection with the CARB-X agreements of $13,000 and $0.8 million during the three months ended March 31, 2020 and 2019, respectively. The Company received $0.4 million and $0.6 million of payments under the grants during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 and December 31, 2019, the Company’s receivables for unreimbursed, eligible costs incurred under the CARB-X agreements totaled $0.9 million and $1.2 million, respectively. |
License and Collaboration Agree
License and Collaboration Agreements | 3 Months Ended |
Mar. 31, 2020 | |
License and Collaboration Agreements | |
License and Collaboration Agreements | 8. License and Collaboration Agreements GARDP In July 2017, the Company entered into a collaboration agreement with the Global Antibiotic Research and Development Partnership, or GARDP, for the development, manufacture and commercialization of the product candidate zoliflodacin in certain countries. Under the terms of the collaboration agreement, GARDP will use commercially reasonable endeavors to perform and fully fund the Phase 3 registration trial, including the manufacture and supply of the product candidate containing zoliflodacin, in uncomplicated gonorrhea. The Phase 3 registration trial was initiated in September 2019. Given the focus at our clinical trial sites to address the immediate medical needs due to the COVID-19 pandemic, GARDP, with our full agreement, has made the decision to temporarily suspend patient enrollment into the Phase 3 registration trial at U.S. sites and activation of new clinical trial sites in ex-U.S. regions. Zai Lab In April 2018, the Company entered into a license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd., or Zai Lab, pursuant to which Zai Lab licensed exclusive rights to durlobactam and sulbactam-durlobactam, or SUL-DUR, in the Asia‑Pacific region, or the Zai Agreement. Under the terms of the Zai Agreement, Zai Lab will fund most of the Company’s clinical trial costs in China for SUL-DUR, including all costs in China for the Company’s Phase 3 registration trial of SUL-DUR, with the exception of Phase 3 patient drug supply. Zai Lab will conduct development activities and plan and obtain regulatory approval in a specified number of countries in the Asia‑Pacific region beyond China after regulatory approval of a licensed product in China. Zai Lab is also solely responsible for commercializing licensed products in the Asia‑Pacific region and will commercialize licensed products for which it has obtained regulatory approval. The Company is obligated to conduct specified development activities for the Asia‑Pacific region. The Company is also obligated to supply Zai Lab with the licensed products for clinical development, although Zai Lab may take over manufacturing responsibilities for its own commercialization activities within a specified time period following the effective date of the Zai Agreement. Both parties are prohibited from developing and commercializing products in the Asia‑Pacific region that would compete with the licensed products. The Company received an upfront, non‑refundable payment of $5.0 million, milestone payments of $7.0 million, research support funding of $0.6 million and certain other reimbursable registration trial costs of $2.0 million, less applicable taxes of $2.0 million from Zai Lab through March 2020. During the three months ended March 31, 2020 and 2019, the Company recognized no revenue under the Zai Agreement. The Company is eligible to receive up to an aggregate of $91.0 million in additional research and development support payments and development, regulatory and sales milestone payments related to SUL-DUR, imipenem and other combinations with the licensed products. In the event the China Food and Drug Administration requires a modification or supplement to the trial protocol, and the Company delays Zai Lab from proceeding with such modified protocol and subsequently obtaining regulatory approval for the pivotal study of SUL-DUR in China, then the future sales‑based milestone payments that become due to the Company will be reduced by an agreed upon amount that increases with the length of the delay. Zai Lab will pay the Company a tiered royalty equal to a high‑single digit to low‑double digit percentage based on annual net sales of licensed products in the territory, subject to specified reductions for the market entry of competing products, loss of patent coverage of licensed products and for payments owed to third parties for additional rights necessary to commercialize licensed products in the territory. The Company determined the $5.0 million non‑refundable upfront payment was the entire transaction price at the outset of the Zai Agreement. All other future potential milestone payments were excluded from the transaction price as they were fully constrained as the risk of significant reversal of revenue had not yet been resolved. At the outset of the Zai Agreement, the achievement of the future potential milestones was not within the Company’s control and was subject to certain research and development success, regulatory approvals or commercial success and therefore carried significant uncertainty. The Company reevaluates the likelihood of achieving the future milestones at the end of each reporting period. Future development milestone revenue from the arrangement will be recognized as revenue in the period when it is no longer probable that revenue attributable to the milestone will result in a significant reversal of cumulative revenue. Payments received for research support and reimbursable clinical trial costs are recorded as an offset to research and development expense during the period in which the qualifying expenses are incurred. The Company evaluated the Zai Agreement under Topic 606 and identified two material promises: (1) an exclusive license to develop, manufacture and commercialize products containing durlobactam or SUL-DUR in the territory and (2) the initial technology transfer of licensed know‑how. The Company determined that the exclusive license and initial technology transfer were not distinct from one another, as the license has limited value without the transfer of the Company’s technology and Zai Lab would incur additional costs to recreate the Company’s know‑how. Therefore, the license and initial technology transfer were combined as a single performance obligation. |
Stockholders' Equity and Stock-
Stockholders' Equity and Stock-Based Compensation Expense | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity and Stock-Based Compensation Expense | |
Stockholders' Equity and Stock-Based Compensation Expense | 9. Stockholders’ Equity and Stock‑Based Compensation Expense Aspire Common Stock Purchase Agreement In October 2019, the Company entered into a common stock purchase agreement, or CSPA, with Aspire Capital Fund, LLC, or Aspire, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire is committed to purchase up to an aggregate of $20.0 million of shares of the Company’s common stock over the 30-month term of the CSPA. Under the CSPA, on any trading day selected by the Company on which the closing price of its common stock is equal to or greater than $0.25 per share, the Company has the right, in its sole discretion, to present Aspire with a purchase notice directing Aspire to purchase up to 50,000 shares of common stock per business day, at a purchase price equal to the lesser of the lowest sale price of common stock on the purchase date, or the arithmetic average of the three lowest closing sale prices during the 10 consecutive business days ending on the trading day immediately preceding the purchase date. The Company and Aspire also may mutually agree to increase the number of shares that may be sold to as much as 2,000,000 shares per business day. In addition, on any date on which the Company submits a purchase notice to Aspire in an amount equal to 50,000 shares, the Company also has the right, in its sole discretion, to present Aspire with a volume-weighted average price purchase notice, or the VWAP Purchase Notice, directing Aspire to purchase an amount of stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day, or the VWAP Purchase Date, subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 97% of the volume-weighted average price for the Company’s common stock traded on its principal market on the VWAP Purchase Date. Under the CSPA, the Company controls the timing and amount of any sales to Aspire, and is not limited with respect to use of proceeds or by any financial or business covenants, restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the CSPA. The CSPA may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire has no trading volume requirements or restrictions and has no right to require any sales by the Company but is obligated to make purchases as directed by the Company in accordance with the CSPA. Aspire has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of common stock during any time prior to the termination of the CSPA. The CSPA further provides that the number of shares that may be sold pursuant to the CSPA will be limited to 2,626,165 shares, including 104,167 shares of common stock issued to Aspire as a commitment fee, which represented 19.99% of the Company’s outstanding shares of common stock as of October 21, 2019, unless stockholder approval is obtained to issue more than 19.99%. This limitation will not apply under certain circumstances specified in the CSPA. During the quarter ended March 31, 2020, there were no shares purchased by Aspire pursuant to the CSPA. Concurrently with entering into the CSPA, the Company also entered into a registration rights agreement with Aspire, pursuant to which the Company filed with the SEC a prospectus supplement to the Company’s effective shelf registration statement on Form S-3 (File No. 333-234041), registering all of the shares of common stock that may be offered to Aspire from time to time under the CSPA. The Company’s ability to sell shares to Aspire under the CSPA is subject to certain limitations arising under the Securities Purchase Agreement with Innoviva, which is discussed in Note 13, Subsequent Events . Stock Incentive Plans In September 2018, the Company’s board of directors adopted, and its stockholders approved the 2018 Equity Incentive Plan, or the 2018 Plan, which became effective on September 25, 2018, at which point no further grants will be made under the 2015 Stock Incentive Plan, or the 2015 Plan. Under the 2018 Plan, the Company may grant incentive stock options, or ISOs, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. As of March 31, 2020, options to purchase an aggregate of 2,226,406 shares had been granted and 150,720 shares were available for future issuance under the 2018 Plan. At its inception, the aggregate number of shares of the Company’s common stock available for issuance under the 2018 Plan was 2,350,000. The number of shares of the Company’s common stock reserved for issuance under the 2018 Plan automatically increases on January 1 of each year, for a period of 10 years, from January 1, 2019 continuing through January 1, 2028, by 4% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. Accordingly, on January 1, 2020 and 2019, 531,662 and 524,993 shares were added to the number of available shares, respectively. The maximum number of shares that may be issued pursuant to the exercise of ISOs under the 2018 Plan is 7,500,000. The maximum number of shares of the Company’s common stock subject to awards granted under the 2018 Plan or otherwise during a single calendar year to any nonemployee director, taken together with any cash fees paid by the Company to such nonemployee director during the calendar year for serving on the Company’s board of directors, will not exceed $500,000 in total value, or, with respect to the calendar year in which a nonemployee director is first appointed or elected to the Company’s board of directors, $800,000. All options and awards granted under the 2015 Plan consisted of the Company’s common stock. As of September 25, 2018, no additional stock awards have been or will be granted under the 2015 Plan. Although the 2015 Plan was terminated as to future awards in September 2018, it continues to govern the terms of options that remain outstanding under the 2015 Plan. Stock Option Activity Stock option activity under both plans during the three months ended March 31, 2020 is summarized as follows: Weighted- Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value (in thousands) Outstanding as of December 31, 2019 2,388,400 $ 6.20 8.44 $ 906 Granted 839,200 4.87 Exercised — — Forfeited (11,100) 5.01 Outstanding as of March 31, 2020 3,216,500 $ 5.86 8.58 $ — Exercisable as of March 31, 2020 1,110,613 $ 5.66 7.50 $ — The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. During the three months ended March 31, 2020, the weighted-average grant date fair value per granted option was $3.34. Employee Stock Purchase Plan In September 2018, the Company’s board of directors and its stockholders approved the 2018 Employee Stock Purchase Plan, or the ESPP, which became effective as of September 25, 2018. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the U.S. Internal Revenue Code of 1986, as amended. The number of shares of common stock initially reserved for issuance under the ESPP was 140,000 shares. The ESPP provides for an annual increase on the first day of each year beginning in 2019 and ending in 2028, in each case subject to the approval of the board of directors, equal to the lesser of (i) 1% of the shares of common stock outstanding on the last day of the prior fiscal year or (ii) 250,000 shares; provided, that prior to the date of any such increase, the board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Pursuant to the terms of the 2018 Employee Stock Purchase Plan, an additional 132,915 and 131,248 shares were added to the number of available shares effective January 1, 2020 and 2019, respectively. As of March 31, 2020, no shares of common stock had been issued under the ESPP and 404,163 shares remained available for future issuance under the ESPP. No offering period under the ESPP has been set by the Company’s board of directors. Stock‑Based Compensation Stock‑based compensation expense was classified in the consolidated statement of operations as follows (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 349 $ 232 General and administrative 436 346 Total stock-based compensation expense $ 785 $ 578 As of March 31, 2020, total unrecognized stock‑based compensation expense related to unvested options was $8.0 million, which is expected to be recognized over the weighted average period of approximately 2.9 years. The total unrecognized stock-based compensation expense will be adjusted for actual forfeitures as they occur. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2020 | |
Net Loss per Share | |
Net Loss per Share | 10. Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. Options to purchase 3,216,500 and 1,966,976 shares of common stock as of March 31, 2020 and 2019, respectively, were excluded from the calculation of net loss per share due to their anti-dilutive effect. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2020 | |
Commitments | |
Commitments | 11. Commitments Lease Commitments The Company has an operating lease agreement for its office and laboratory space with AstraZeneca. See Note 5, Leases , for additional information. A Subscription Agreement In connection with the Company’s 2015 spin-out from AstraZeneca, the Company entered into a business transfer and subscription agreement with AstraZeneca pursuant to which the Company agreed to pay AstraZeneca a one‑time milestone payment of $5.0 million within three months of achieving a specified cumulative net sales milestone for durlobactam. This milestone payment will be automatically waived should the Company’s common stock trade on The Nasdaq Global Market at or above a specified price at any time prior to achieving such specified cumulative net sales milestone for durlobactam. The Company is also obligated to pay AstraZeneca a one‑time milestone payment of $10.0 million within two years of achieving the first commercial sale of zoliflodacin. At the Company’s election, either milestone payment may be paid in cash, common stock, or a combination of cash and common stock. Additionally, the Company is obligated to pay AstraZeneca tiered, single‑digit, per‑country royalties on the annual worldwide net sales of durlobactam and zoliflodacin. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions AstraZeneca The Company was formed in May 2015 as a wholly owned subsidiary of AstraZeneca. Prior to the closing of the initial public offering on September 28, 2018, AstraZeneca was the sole series A preferred stockholder. Upon the closing of the initial public offering, all shares of preferred stock converted into shares of common stock of the Company. AstraZeneca continues to maintain an ownership interest in the Company. The Company has an operating lease agreement for its office and laboratory space with AstraZeneca. See Note 5, Leases, for additional information. Pharmaron Beijing Co., Ltd. (China) The Company contracts with Pharmaron Beijing Co., Ltd. (China), or Pharmaron, to provide various medicinal chemistry research, manufacturing development and clinical services related to the Company’s ongoing product candidates. The Company began utilizing Pharmaron as a service provider prior to the spin-out in 2015 (see Note 1, Organization and Description of Business, to these notes to consolidated financial statements), and this relationship has continued into 2020. In 2019, the Senior Vice President of Strategic Partnerships at Pharmaron began sharing a household with the Company’s Chief Executive Officer, and as a result the Company now considers the agreements between the Company and Pharmaron to be related-party transactions. The Company recorded expense of $0.9 million and $2.2 million during the three months ended March 31, 2020 and 2019, respectively, for services rendered pursuant to multiple Pharmaron agreements. Amounts due to Pharmaron were $0.2 million and $0.8 million and as of March 31, 2020 and December 31, 2019, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events Securities Purchase Agreement On April 12, 2020, the Company entered into a securities purchase agreement, or the Securities Purchase Agreement, with Innoviva, Inc., or Innoviva, pursuant to which the Company agreed to issue and sell to Innoviva, in a private placement under the applicable Nasdaq Stock Market LLC, or Nasdaq, rules up to 14,000,000 newly issued shares of common stock, par value $0.001 per share, of the Company, or the Common Stock, and warrants, or the Common Warrants, to purchase up to 14,000,000 shares of the Common Stock, each with an exercise price per share of $2.50, collectively the Private Placement. The Common Warrants will be exercisable immediately and will have a five-year term. Each share of Common Stock and Common Warrant, or together, the Common Unit, will be issued and sold together to Innoviva at a price per Common Unit of $2.50. Under the Securities Purchase Agreement, the Private Placement occurs in two tranches. At the closing of the first tranche, or the First Closing, which occurred on April 22, 2020, Innoviva purchased 1,322,510 shares of the Common Stock and the Common Warrants to purchase 1,322,510 shares of the Common Stock, for an aggregate purchase price of approximately $3.3 million. At the closing of the second tranche, or the Second Closing, subject to satisfaction of certain closing conditions, including the Company’s stockholders’ voting in favor of the transaction, Innoviva will purchase the remaining shares of the Common Stock and Common Warrants, which is anticipated to be 12,677,490 shares of the Common Stock and the Common Warrants to purchase 12,677,490 shares of the Common Stock for an aggregate purchase price of approximately $31.7 million. The Company expects to receive aggregate gross proceeds from the Private Placement of $35.0 million, before deducting transaction expenses, and excluding proceeds (if any) received in connection with the exercise of any of the Common Warrants. At the effective time of the Second Closing, assuming the exercise of all of the Common Warrants, Innoviva will hold approximately 67.8% of the Company’s outstanding common stock. The Securities Purchase Agreement contains customary representations and warranties as well as certain operating covenants applicable to the Company until the Second Closing. The Securities Purchase Agreement contains certain customary termination rights for both the Company and Innoviva, including, but not limited to, mutual written consent of the parties; by either party, if a governmental entity of competent jurisdiction issues a final and non-appealable order; and by either party, upon the breach of any representation, warranty, covenant or other agreement of the Securities Purchase Agreement by the other that is not cured before the earlier of the 10th day following notice of such breach and the termination date. If the Second Closing does not occur under specified circumstances, the Company will be required to pay Innoviva a termination fee in an amount equal to $850,000, plus reimbursement of expenses, which are capped at $250,000. The Second Closing is expected to close in the second quarter of 2020, subject to the satisfaction of certain closing conditions referenced above. To date, the Company has incurred $0.2 million in financing costs in connection with the Securities Purchase Agreement. Investor Rights Agreement At the First Closing, Innoviva and the Company entered into an investors rights agreement, or the Investor Rights Agreement, which provides that for so long as Innoviva and its affiliates hold at least 15% of the outstanding shares of the Common Stock on a fully-diluted basis, Innoviva shall have the right to designate two directors to the board of directors of the Company, or the Board; and for so long as Innoviva and its affiliates hold at least 8% of the outstanding shares of the Common Stock on a fully-diluted basis, Innoviva shall have the right to designate one director to the Board, subject to certain qualifications and conditions in the Investor Rights Agreement. The Investor Rights Agreement also provides for participation rights for Innoviva to participate pro rata in future offerings of securities by the Company. Registration Rights Agreements At the First Closing, the Company and Innoviva entered into a registration rights agreement, or the Registration Rights Agreement, pursuant to which, among other things, the Company must prepare and file with the SEC a registration statement with respect to resales of the shares of the Common Stock and the Common Warrants purchased by Innoviva under the Securities Purchase Agreement within 30 days of the First Closing. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. The December 31, 2019 consolidated balance sheet was derived from audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission, or SEC, on March 11, 2020. The interim consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. The accompanying consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020, any other interim periods, or any future year or period. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the recognition of revenue, and the recognition of certain development costs. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2020, the Company adopted the requirements under the FASB ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The adoption of the new guidance did not affect the Company’s consolidated financial statements. Effective January 1, 2020, the Company adopted the provisions of FASB ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update clarifies the interaction between Topic 808, Collaborative Arrangements, and Topic 606, Revenue from Contracts with Customers . The guidance is required to be applied retrospectively to the date of initial application of Topic 606 and entities should recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings of the later of the earliest annual period presented and the annual period that includes the date of the entity’s initial application of Topic 606. The adoption of the new guidance did not affect the Company’s consolidated financial statements and did not require an adjustment to the opening balance of retained earnings. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , or ASU 2019-12. The amendments in ASU 2019-12 are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted. The Company does not anticipate that the adoption of ASU 2019-12 will have a material effect on the Company’s consolidated financial statements. |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Short-Term Investments. | |
Summary of amortized cost and estimated fair value of Company’s marketable securities | Amortized Unrealized Unrealized Cost Gains Losses Fair Value (in thousands) Balance as of March 31, 2020: U.S. Treasury securities $ 9,991 $ 25 $ — $ 10,016 Total $ 9,991 $ 25 $ — $ 10,016 Amortized Unrealized Unrealized Cost Gains Losses Fair Value (in thousands) Balance as of December 31, 2019: U.S. Treasury securities $ 24,957 $ 5 $ — $ 24,962 Total $ 24,957 $ 5 $ — $ 24,962 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Financial Instruments | |
Schedule of assets that were accounted for at fair value on recurring basis | March 31, 2020 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 9,038 $ — $ — $ 9,038 Short-term investments: U.S. Treasury securities 10,016 — — 10,016 Total $ 19,054 $ — $ — $ 19,054 December 31, 2019 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents: Money market funds $ 13,949 $ — $ — $ 13,949 Short-term investments: U.S. Treasury securities 24,962 — — 24,962 Total $ 38,911 $ — $ — $ 38,911 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases | |
Schedule of operating lease balance sheet information | The following table summarizes the presentation of the Company’s operating leases in its consolidated balance sheets (in thousands): As of As of March 31, 2020 December 31, 2019 Assets Operating lease right-of-use assets $ 1,505 $ 1,620 Liabilities Operating lease liabilities, current $ 544 $ 506 Operating lease liabilities, net of current portion 1,173 1,321 Total operating lease liabilities $ 1,717 $ 1,827 |
Schedule of future lease payments | Future minimum lease payments under non-cancelable leases as of March 31, 2020, were as detailed below (in thousands): Fiscal Year As of 2020 (remaining 9 months) $ 508 2021 717 2022 737 2023 1 Total undiscounted lease payments 1,963 Less: imputed interest (246) Total operating lease liabilities $ 1,717 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses and Other Current Liabilities. | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, 2020 2019 Accrued compensation and benefits $ 995 $ 2,490 Accrued contract manufacturing 1,578 1,550 Accrued clinical 405 606 Accrued professional services 756 530 Accrued research 186 275 Current portion of operating lease liabilities 544 506 Other 169 295 Total accrued expenses and other current liabilities $ 4,633 $ 6,252 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock-Based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity and Stock-Based Compensation Expense | |
Summary of Stock option activity under the 2015 and 2018 Plan | Weighted- Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term (Years) Value (in thousands) Outstanding as of December 31, 2019 2,388,400 $ 6.20 8.44 $ 906 Granted 839,200 4.87 Exercised — — Forfeited (11,100) 5.01 Outstanding as of March 31, 2020 3,216,500 $ 5.86 8.58 $ — Exercisable as of March 31, 2020 1,110,613 $ 5.66 7.50 $ — |
Schedule of stock-based compensation expense | Stock‑based compensation expense was classified in the consolidated statement of operations as follows (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 349 $ 232 General and administrative 436 346 Total stock-based compensation expense $ 785 $ 578 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | Sep. 28, 2018USD ($)$ / sharesshares | Apr. 30, 2020USD ($) | Mar. 31, 2020USD ($)subsidiary | Dec. 31, 2019USD ($) |
Number of subsidiaries | subsidiary | 4 | |||
Going Concern | ||||
Cash, cash equivalents and short-term investments | $ 27,500 | |||
Accumulated deficit | $ (149,225) | $ (133,959) | ||
Aggregate gross proceeds of securities purchase agreement | $ 35,000 | |||
Initial Public Offering | ||||
Shares issued (in shares) | shares | 5,000,000 | |||
Share price (in dollars per share) | $ / shares | $ 15 | |||
Proceeds from initial public offering, net of issuance costs paid in the period | $ 65,600 | |||
Preferred stock including accrued dividends, converted into common stock | shares | 8,084,414 |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Table summarizes the amortized cost and estimated fair value of the Company’s marketable securities | ||
Amortized Cost | $ 9,991 | $ 24,957 |
Unrealized Gains | 25 | 5 |
Fair Value | 10,016 | 24,962 |
U.S. Treasury securities | ||
Table summarizes the amortized cost and estimated fair value of the Company’s marketable securities | ||
Amortized Cost | 9,991 | 24,957 |
Unrealized Gains | 25 | 5 |
Fair Value | $ 10,016 | $ 24,962 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Company’s assets that were accounted for at fair value on a recurring basis | ||
Short-term investments | $ 10,016 | $ 24,962 |
Recurring | ||
Company’s assets that were accounted for at fair value on a recurring basis | ||
Total | 19,054 | 38,911 |
Recurring | Level 1 | ||
Company’s assets that were accounted for at fair value on a recurring basis | ||
Total | 19,054 | 38,911 |
Recurring | Money market funds | ||
Company’s assets that were accounted for at fair value on a recurring basis | ||
Cash equivalents | 9,038 | 13,949 |
Recurring | Money market funds | Level 1 | ||
Company’s assets that were accounted for at fair value on a recurring basis | ||
Cash equivalents | 9,038 | 13,949 |
Recurring | U.S. Treasury securities | ||
Company’s assets that were accounted for at fair value on a recurring basis | ||
Short-term investments | 10,016 | 24,962 |
Recurring | U.S. Treasury securities | Level 1 | ||
Company’s assets that were accounted for at fair value on a recurring basis | ||
Short-term investments | $ 10,016 | $ 24,962 |
Leases - Lease Commitments (Det
Leases - Lease Commitments (Details) $ in Millions | Jan. 01, 2019ft²item | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Leases | |||
Lease, Practical Expedients, Package | true | ||
Lease, Practical Expedient, Use of Hindsight | false | ||
Number of other non-significant operating leases | 2 | ||
Lessee, Operating Lease, Existence of Option to Extend | true | ||
Renewal term | 3 years | ||
Waltham, Massachusetts lease | |||
Leases | |||
Number of significant operating leases | 1 | ||
Significant operating lease space | ft² | 20,062 | ||
Operating lease expense | $ | $ 0.2 | $ 0.2 |
Leases - Lease Balance Sheet (D
Leases - Lease Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Operating lease right-of-use assets | $ 1,505 | $ 1,620 |
Operating lease liabilities, current | $ 544 | 506 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Expenses And Other Current Liabilities | |
Operating lease liabilities, net of current portion | $ 1,173 | 1,321 |
Total operating lease liabilities | $ 1,717 | $ 1,827 |
Leases -Operating Lease Maturit
Leases -Operating Lease Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases | ||
2020 (remaining 9 months) | $ 508 | |
2021 | 717 | |
2022 | 737 | |
2023 | 1 | |
Total undiscounted lease payments | 1,963 | |
Less: imputed interest | (246) | |
Total operating lease liabilities | $ 1,717 | $ 1,827 |
Weighted average remaining lease term | 2 years 9 months 18 days | |
weighted average incremental borrowing rate (as a percent) | 9.10% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses and Other Current Liabilities. | ||
Accrued compensation and benefits | $ 995 | $ 2,490 |
Accrued contract manufacturing | 1,578 | 1,550 |
Accrued clinical | 405 | 606 |
Accrued professional services | 756 | 530 |
Accrued research | 186 | 275 |
Current portion of operating lease liabilities | 544 | 506 |
Other | 169 | 295 |
Total accrued expenses and other current liabilities | $ 4,633 | $ 6,252 |
Funding Arrangements (Details)
Funding Arrangements (Details) - CARB-X program - USD ($) | 1 Months Ended | 3 Months Ended | 8 Months Ended | ||
Sep. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Oct. 31, 2017 | Dec. 31, 2019 | |
Funding Arrangements | |||||
Grant income recognized | $ 13,000 | $ 800,000 | |||
Funds received during the period | 400,000 | $ 600,000 | |||
Grants receivable | $ 900,000 | $ 1,200,000 | |||
Maximum | |||||
Funding Arrangements | |||||
Reimbursable research expenditures | $ 16,800,000 | $ 16,400,000 |
License and Collaboration Agr_2
License and Collaboration Agreements (Details) - License and collaboration agreement with Zai Lab - USD ($) | 1 Months Ended | 3 Months Ended | 24 Months Ended | |
Apr. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | |
License and Collaboration Agreement with Zai Lab | ||||
Upfront, non-refundable payment received | $ 5,000,000 | $ 5,000,000 | ||
Research support funding | 600,000 | |||
Certain other reimbursable registration trial costs | 2,000,000 | |||
Payment received, tax expense | 2,000,000 | |||
Eligible amount receivable in research and development support payments and development, regulatory and sales milestone payments | $ 91,000,000 | 91,000,000 | ||
Revenue | $ 0 | $ 0 | $ 7,000,000 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock-Based Compensation Expense - Equity (Details) $ / shares in Units, $ in Millions | Oct. 21, 2019shares | Sep. 28, 2018shares | Oct. 31, 2019USD ($)item$ / sharesshares | Mar. 31, 2020shares | Dec. 31, 2019shares |
Initial Public Offering | |||||
Common Stock | |||||
Shares issued (in shares) | 5,000,000 | ||||
Preferred stock including accrued dividends, converted into common stock | 8,084,414 | ||||
Aspire | |||||
Common Stock | |||||
Shares issued (in shares) | 0 | ||||
Maximum amount committed to be purchased | $ | $ 20 | ||||
Term over which the purchase can be made | 30 months | ||||
Threshold triggering closing price per share to issue purchase notice | $ / shares | $ 0.25 | ||||
Maximum number of shares that can be purchased under purchase notice | 50,000 | ||||
Number of lowest closing sales price | item | 3 | ||||
Number of consecutive business days immediately preceding the purchase date | 10 days | ||||
Maximum shares sold per business day | 2,000,000 | ||||
Volume-weighted average price notice, percentage of companys common stock | 30.00% | ||||
Purchase price as a percentage of volume-weighted average price | 97.00% | ||||
Number of commitment shares issued | 104,167 | ||||
Maximum number of shares sold | 2,626,165 | ||||
Commitment fee percentage | 19.99% | ||||
Number of commitment shares purchased | 50,000 |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock-Based Compensation Expense - Stock Incentive Plan (Details) - USD ($) | Jan. 01, 2020 | Jan. 01, 2019 | Sep. 25, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Sep. 26, 2018 |
Incentive stock options | ||||||
Stock-Based Compensation | ||||||
Annual increase in the number of shares to the shares of common stock (in shares) | 531,662 | 524,993 | ||||
2015 Stock Incentive Plan | ||||||
Stock-Based Compensation | ||||||
Number of options granted (in shares) | 0 | |||||
Number of shares available for future issuance (in shares) | 0 | |||||
2018 Stock Incentive Plan | Non-Employees | ||||||
Stock-Based Compensation | ||||||
Maximum cash fee paid | $ 500,000 | |||||
2018 Stock Incentive Plan | Board of directors | ||||||
Stock-Based Compensation | ||||||
Maximum cash fee paid | $ 800,000 | |||||
2018 Stock Incentive Plan | Stock Options | ||||||
Stock-Based Compensation | ||||||
Number of options granted (in shares) | 2,226,406 | |||||
Number of shares available for future issuance (in shares) | 150,720 | |||||
Number of shares available for grant (in shares) | 2,350,000 | |||||
Period of options | 10 years | |||||
Percentage of annual increase to the total number of common stock outstanding (as a percent) | 4.00% | |||||
2018 Stock Incentive Plan | Incentive stock options | ||||||
Stock-Based Compensation | ||||||
Maximum number of shares issued (in shares) | 7,500,000 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock-Based Compensation Expense - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2020 | Jan. 01, 2019 | Sep. 30, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Employee Stock Purchase Plan | |||||
Stock-Based Compensation | |||||
Number of shares available for future issuance (in shares) | 140,000 | 404,163 | |||
Percentage of annual increase to the total number of common stock outstanding (as a percent) | 1.00% | ||||
Annual increase in the number of shares to the shares of common stock (in shares) | 132,915 | 131,248 | 250,000 | ||
Maximum number of shares issued (in shares) | 0 | ||||
2015 and 2018 Stock Incentive Plan | |||||
Number of Options | |||||
Outstanding, as of beginning of period (in shares) | 2,388,400 | 2,388,400 | |||
Granted (in shares) | 839,200 | ||||
Forfeited (in shares) | (11,100) | ||||
Outstanding, as of end of period (in shares) | 3,216,500 | 2,388,400 | |||
Exercisable (in shares) | 1,110,613 | ||||
Weighted Average Exercise Price | |||||
Outstanding, as of beginning of period (in dollar per share) | $ 6.20 | $ 6.20 | |||
Granted (in dollar per share) | 4.87 | ||||
Forfeited (in dollars per share) | 5.01 | ||||
Outstanding, as of end of period (in dollar per share) | 5.86 | $ 6.20 | |||
Exercisable (in dollar per share) | $ 5.66 | ||||
Weighted Average Remaining Contractual Term (Years) | |||||
Options outstanding | 8 years 6 months 29 days | 8 years 5 months 9 days | |||
Exercisable | 7 years 6 months | ||||
Aggregate Intrinsic Value | |||||
Options outstanding | $ 906 | ||||
Weighted average grant date fair value per share of options granted (in dollar per share) | $ 3.34 |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock-Based Compensation Expense - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 785 | $ 578 |
Unrecognized compensation cost | $ 8,000 | |
Period for recognition | 2 years 10 months 24 days | |
Research and development. | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 349 | 232 |
General and administrative | ||
Stock-Based Compensation | ||
Total stock-based compensation expense | $ 436 | $ 346 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock Options | ||
Net Loss per Share | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,216,500 | 1,966,976 |
Commitments (Details)
Commitments (Details) - AstraZeneca $ in Millions | 1 Months Ended |
Apr. 30, 2018USD ($) | |
Commitments and Contingencies | |
Subscription agreement one-time milestone payment on net sales | $ 5 |
Term of the milestone payment on net sales | 3 months |
Subscription agreement one-time milestone payment on first commercial sale | $ 10 |
Term of the milestone payment on first commercial sale | 2 years |
Related Party Transactions (Det
Related Party Transactions (Details) - Pharmaron Beijing Co., Ltd. - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transactions | |||
Expenses recorded | $ 0.9 | $ 2.2 | |
Owed to related party | $ 0.2 | $ 0.8 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 12, 2020USD ($)directoritem$ / sharesshares | Mar. 31, 2020shares |
Aspire | ||
Subsequent Event | ||
Shares issued (in shares) | 0 | |
Subsequent Event | Securities purchase agreement | ||
Subsequent Event | ||
Number of days following the days of breach | item | 10 | |
Termination fee payable | $ | $ 850,000 | |
Capped reimbursement expense amount | $ | 250,000 | |
Financing costs incurred | $ | $ 200,000 | |
Subsequent Event | Investor rights agreement | Scenario 1 | ||
Subsequent Event | ||
Number of directors designated as board of directors | director | 2 | |
Subsequent Event | Investor rights agreement | Scenario 2 | ||
Subsequent Event | ||
Number of directors designated as board of directors | director | 1 | |
Subsequent Event | Investor rights agreement | Minimum | Scenario 1 | ||
Subsequent Event | ||
Percentage of Outstanding Shares Of Common Stock | 15.00% | |
Subsequent Event | Investor rights agreement | Minimum | Scenario 2 | ||
Subsequent Event | ||
Percentage of Outstanding Shares Of Common Stock | 8.00% | |
Subsequent Event | Private Placement | Securities purchase agreement | ||
Subsequent Event | ||
Common stock par value | $ / shares | $ 0.001 | |
Warrant exercise price | $ / shares | $ 2.50 | |
Term of warrant | 5 years | |
Price per common unit | $ / shares | $ 2.50 | |
Number of tranches | item | 2 | |
Proceeds from issuance of private placement | $ | $ 35,000,000 | |
Subsequent Event | Private Placement | Securities purchase agreement | Closing of second tranche | ||
Subsequent Event | ||
Percentage of Outstanding Shares Of Common Stock | 67.80% | |
Subsequent Event | Private Placement | Securities purchase agreement | Minimum | Closing of first tranche | ||
Subsequent Event | ||
Shares issued (in shares) | 1,322,510 | |
Warrants to purchase common stock | 1,322,510 | |
Aggregate purchase price of warrants | $ | $ 3,300,000 | |
Subsequent Event | Private Placement | Securities purchase agreement | Minimum | Closing of second tranche | ||
Subsequent Event | ||
Shares issued (in shares) | 12,677,490 | |
Warrants to purchase common stock | 12,677,490 | |
Aggregate purchase price of warrants | $ | $ 31,700,000 | |
Subsequent Event | Private Placement | Securities purchase agreement | Maximum | ||
Subsequent Event | ||
Shares issued (in shares) | 14,000,000 | |
Warrants to purchase common stock | 14,000,000 |