Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 03, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Fibrocell Science, Inc. | ||
Entity Central Index Key | 357,097 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Trading Symbol | FCSC | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 44,079,447 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 31.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 17,515 | $ 29,268 |
Inventory | 0 | 482 |
Prepaid expenses and other current assets | 513 | 1,244 |
Total current assets | 18,028 | 30,994 |
Property and equipment, net | 1,489 | 1,582 |
Intangible assets, net of accumulated amortization of $0 and $2,204, respectively | 0 | 4,136 |
Other assets | 65 | 0 |
Total assets | 19,582 | 36,712 |
Current liabilities: | ||
Accounts payable | 440 | 499 |
Related party payable | 942 | 10,720 |
Accrued expenses | 1,551 | 1,779 |
Deferred revenue | 0 | 457 |
Warrant liability, current | 54 | 1,910 |
Total current liabilities | 2,987 | 15,365 |
Convertible promissory notes, net of debt discount of $18,088 and $0, respectively (see Note 7) | 0 | 0 |
Accrued interest payable | 228 | 0 |
Warrant liability, long term | 5,980 | 6,365 |
Derivative liability | 1,735 | 0 |
Deferred rent | 791 | 779 |
Total liabilities | 11,721 | 22,509 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares outstanding | 0 | 0 |
Common stock, $0.001 par value; 150,000,000 shares authorized, 44,058,626 shares issued and outstanding as of December 31, 2016; 100,000,000 shares authorized, 43,898,785 shares issued and outstanding as of December 31, 2015 | 44 | 44 |
Additional paid-in capital | 170,380 | 161,330 |
Accumulated deficit | (162,563) | (147,171) |
Total stockholders’ equity | 7,861 | 14,203 |
Total liabilities and stockholders’ equity | $ 19,582 | $ 36,712 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Intangible assets, net of accumulated amortization | $ 0 | $ 2,204 |
Debt discount | $ 18,088 | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 44,058,626 | 43,898,785 |
Common stock, shares outstanding (in shares) | 44,058,626 | 43,898,785 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from product sales | $ 337 | $ 270 |
Collaboration revenue | 18 | 222 |
Total revenue | 355 | 492 |
Cost of product sales | 696 | 426 |
Cost of collaboration revenue | 1 | 296 |
Total cost of revenue | 697 | 722 |
Gross loss | (342) | (230) |
Research and development expenses | 8,400 | 9,968 |
Selling, general and administrative expenses | 9,773 | 11,285 |
Intangible asset impairment expense | 3,905 | 0 |
Restructuring costs | 335 | 0 |
Operating loss | (26,479) | (37,407) |
Other income (expense): | ||
Warrant revaluation income | 11,884 | 2,929 |
Derivative revaluation expense | (462) | 0 |
Interest expense | (228) | 0 |
Other income (expense), net | (7) | 25 |
Loss before income taxes | (15,292) | (34,453) |
Income tax benefit | 0 | 0 |
Net loss | $ (15,292) | $ (34,453) |
Per Share Information: | ||
Net loss per share, basic (in dollars per share) | $ (0.35) | $ (0.82) |
Net loss per share, diluted (in dollars per share) | $ (0.39) | $ (0.85) |
Weighted average number of common shares outstanding | ||
Weighted average number of common shares outstanding - basic (in shares) | 43,924,404 | 42,178,397 |
Weighted average number of common shares outstanding - diluted (in shares) | 43,942,421 | 42,351,346 |
Affiliated Entity | ||
Research and development expenses | $ 3,724 | $ 15,924 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Accumulated deficit |
Balance at Dec. 31, 2014 | $ 30,409 | $ 41 | $ 143,086 | $ (112,718) |
Balance (shares) at Dec. 31, 2014 | 40,856,815 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of shares | 15,872 | $ 3 | 15,869 | |
Issuance of shares (in shares) | 2,974,136 | |||
Stock-based compensation expense | 2,038 | 2,038 | ||
Exercise of stock options | $ 255 | 255 | ||
Exercise of stock options (in shares) | 56,250 | 56,250 | ||
Exercise of warrants | $ 82 | 82 | ||
Exercise of warrants (in shares) | 11,584 | |||
Net loss | (34,453) | (34,453) | ||
Balance at Dec. 31, 2015 | 14,203 | $ 44 | 161,330 | (147,171) |
Balance (shares) at Dec. 31, 2015 | 43,898,785 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Cumulative effect from adoption of new accounting standard | 100 | (100) | ||
Issuance of shares (in shares) | 159,841 | |||
Intrinsic value of beneficial conversion feature, net of issuance costs | 7,017 | 7,017 | ||
Stock-based compensation expense | $ 1,933 | 1,933 | ||
Exercise of stock options (in shares) | 0 | |||
Net loss | $ (15,292) | (15,292) | ||
Balance at Dec. 31, 2016 | $ 7,861 | $ 44 | $ 170,380 | $ (162,563) |
Balance (shares) at Dec. 31, 2016 | 44,058,626 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (15,292,000) | $ (34,453,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 1,933,000 | 2,038,000 |
Warrant liability revaluation income | (11,884,000) | (2,929,000) |
Derivative liability revaluation expense | 462,000 | 0 |
Loss on disposal or impairment of property and equipment | 69,000 | 56,000 |
Depreciation and amortization | 564,000 | 767,000 |
Intangible asset impairment | 3,905,000 | 0 |
Recovery of doubtful accounts | (12,000) | (5,000) |
Loss on write-down of inventory | 356,000 | 0 |
Decrease (increase) in operating assets: | ||
Accounts receivable | 12,000 | 9,000 |
Inventory | 126,000 | 89,000 |
Prepaid expenses and other current assets | 796,000 | 35,000 |
Other assets | (65,000) | 0 |
Increase (decrease) in operating liabilities: | ||
Accounts payable | (139,000) | (114,000) |
Related party payable | (9,778,000) | 9,719,000 |
Accrued expenses and deferred rent | (214,000) | 641,000 |
Accrued interest payable | 228,000 | 0 |
Deferred revenue | (457,000) | 41,000 |
Net cash used in operating activities | (29,390,000) | (24,106,000) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (253,000) | (271,000) |
Proceeds from the sale of property and equipment | 1,000 | 26,000 |
Net cash used in investing activities | (252,000) | (245,000) |
Cash flows from financing activities: | ||
Proceeds from private placement, net | 17,933,000 | 0 |
Proceeds from common stock offering, net | 0 | 15,872,000 |
Payment of deferred offering costs | (42,000) | 0 |
Proceeds from the exercise of stock options | 0 | 255,000 |
Principal payments on capital lease obligations | (2,000) | (3,000) |
Net cash provided by financing activities | 17,889,000 | 16,124,000 |
Net decrease in cash and cash equivalents | (11,753,000) | (8,227,000) |
Cash and cash equivalents, beginning of period | 29,268,000 | 37,495,000 |
Cash and cash equivalents, end of period | 17,515,000 | 29,268,000 |
Noncash Investing and Financing Items [Abstract] | ||
Property and equipment in accounts payable | 57,000 | 11,000 |
Deferred offering costs in accounts payable | 23,000 | 0 |
Reduction of warrant liability upon cashless exercise of warrants | $ 0 | $ 82,000 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Organization Fibrocell Science, Inc. (as used herein, “we,” “us,” “our,” “Fibrocell” or the “Company”) is the parent company of Fibrocell Technologies, Inc. (Fibrocell Tech). Fibrocell Tech is the parent company of Isolagen International, S.A., a company organized under the laws of Switzerland (Isolagen Switzerland). The Company’s international activities are currently immaterial. Effective April 1, 2016, Fibrocell Science Hong Kong Limited (Fibrocell Hong Kong), a company organized under the laws of Hong Kong and former subsidiary of Fibrocell, was dissolved. As this entity had no historical financial or operational activities, the impact of the dissolution did not, and is not expected to have, a material impact on the Company’s present or future consolidated financial statements. Business Overview Fibrocell is an autologous cell and gene therapy company translating personalized biologics into medical breakthroughs. The Company is focused on discovering and developing therapies for the localized treatment of diseases affecting the skin and connective tissue. All of the Company’s product candidates incorporate its proprietary autologous fibroblast technology. The Company’s research and development efforts focus on gaining regulatory approvals of its product candidates in the United States. Liquidity and Financial Condition The Company expects to continue to incur losses and will require additional capital to advance its product candidates through development to commercialization. As of December 31, 2016, the Company had cash and cash equivalents of approximately $17.5 million and working capital of approximately $15.0 million . The Company believes that its cash and cash equivalents at December 31, 2016, including the proceeds from the recent March 2017 public offering of convertible preferred stock financing and warrants discussed in Note 17, will be sufficient to fund operations into the second quarter of 2018. The Company will require additional capital to fund operations beyond that point. To meet its capital needs, the Company intends to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions. However, there can be no assurance that the Company will be able to complete any such transaction on acceptable terms or otherwise. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition. These conditions raise substantial doubt about its ability to continue as a going concern. Consequently, the audit report prepared by the Company’s independent registered public accounting firm relating to its Consolidated Financial Statements for the year ended December 31, 2016 includes a going concern explanatory paragraph. On October 5, 2016, the Company received a notice (the Notice) from The Nasdaq Stock Market LLC (NASDAQ) that the Company is not currently in compliance with the $1.00 minimum closing bid requirements of NASDAQ Listing Rule 5550(a)(2). The Notice indicated that, consistent with NASDAQ Listing Rule 5810(c)(3)(A), the Company has until April 3, 2017 to regain compliance with the minimum bid price requirement by having the closing bid price of the Company’s common stock meet or exceed $1.00 per share for at least 10 consecutive business days. During that time, the Company’s common stock will continue to trade on NASDAQ under the symbol “FCSC”. On March 1, 2017, the Company's stockholders approved an amendment to the Company's Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company's outstanding shares of common stock at a ratio within a range from 1:3 to 1:10. The primary objective of the reverse stock split is to raise the per share trading price of the Company's common stock to allow the Company to maintain the listing of its common stock on NASDAQ. See Note 17 for further details. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation General The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include the accounts of Fibrocell and its wholly owned subsidiaries. The accompanying Consolidated Financial Statements should be read in conjunction with the Notes to the Consolidated Financial Statements. All intercompany accounts and transactions have been eliminated in consolidation. The Company's foreign operations are immaterial and it has no unrealized gains or losses from the sale of investments. As a result, it does not have any items that would be classified as other comprehensive income in such a statement. Reclassifications The prior year financial statements contain certain reclassifications to the results of operations for the year ended December 31, 2015 to conform to the presentation for the year ended December 31, 2016 in this Form 10-K. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosure of contingencies in the accompanying Consolidated Financial Statements and Notes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ materially from those estimates. Segment Information The Company has determined that it operates in only one segment, as it only reports operational results on an aggregate basis to its chief operating decision maker. Additionally, all of the Company's revenues are derived from within, research development activities occur in, and assets are located in, the United States. Cash and Cash Equivalents The Company considers highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are limited to the Company's cash and cash equivalents. As of December 31, 2016, the Company maintains its operating cash with one major U.S. domestic bank and the remainder of its cash and cash equivalents as a money market fund with one major global bank. Federal insurance coverage on operating cash amounted to $250,000 per depositor at each financial institution, and the Company’s non-interest bearing cash balances may exceed federally insured limits. The terms of these deposits are on demand to minimize risk. The Company has not incurred losses related to these deposits. Property and Equipment Property and equipment is carried at acquisition cost less accumulated depreciation, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-lived Assets" below. The cost of normal, recurring, or periodic repairs and maintenance activities related to property and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits. Depreciation is computed on a straight-line basis over the estimated useful life of the respective assets, which are summarized as follows: Property and equipment category Useful life Computer equipment and software 3 years Laboratory equipment 6 years Furniture and fixtures 10 years Leasehold improvements Lesser of remaining lease term or life of asset When an asset is disposed of, the associated cost and accumulated depreciation is removed from the related accounts on the Company's Consolidated Balance Sheet with any resulting gain or loss included in the Company's Consolidated Statement of Operations. Intangible Assets Intangible assets were research and development assets related to the Company’s primary study on azficel-T that were capitalized on the balance sheet upon emergence from bankruptcy. The portion of the reorganization value which was attributed to identifiable intangible assets was $6.3 million . Azficel-T had two target indications: the Company's FDA-approved product LAVIV ® and a clinical development program for azficel-T for the treatment of vocal cord scarring resulting in chronic or severe dysphonia. Effective January 1, 2012, the Company launched LAVIV and as a result, the research and development intangible assets related to the Company’s primary study were considered to be finite-lived intangible assets and began amortizing over 12 years , the estimated useful life of the assets which was analogous with the exclusivity period granted to the Company under the BLA. Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis. The Company reviews the estimated remaining useful life of its intangible assets on an annual basis with any changes, if applicable, accounted for prospectively. Additionally, finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-lived Assets" below. Amortization expense for the years ended December 31, 2016 and 2015 was approximately $0.2 million and $0.6 million , respectively. See below for discussion of impairment charges incurred. Impairment of Long-Lived Assets In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10-35, Impairment or Disposal of Long-Lived Assets , the Company reviews its long-lived assets and identifiable finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable (i.e. impaired). Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value (less costs to sell for assets to be disposed of) as estimated using one of the following approaches: income, cost and/or market. Fair value using the income approach is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value utilizing the cost approach is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount. In June 2016, based on its failure to achieve primary efficacy endpoints for its Phase II clinical trial of azficel-T for the treatment of vocal cord scarring, the Company determined to wind-down its azficel-T operations as more fully described in Note 12. As a result, management concluded that the Company’s intangible assets had become fully impaired. Accordingly, a non-cash impairment charge of approximately $3.9 million was recorded during the second quarter of 2016 and is included in the Consolidated Statement of Operations for the year ended December 31, 2016. No impairment expense was recognized for the year ended December 31, 2015. Warrant Liability The Company accounts for stock warrants as either equity instruments, derivative liabilities, or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (ASC 480), depending on the specific terms of the warrant agreement. Stock warrants are accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging (ASC 815) if the stock warrants contain “down-round protection” or other terms that could potentially require “net cash settlement” and therefore, do not meet the scope exception for treatment as a derivative. Since “down-round protection” is not an input into the calculation of the fair value of the warrants, the warrants cannot be considered indexed to the Company’s own stock which is a requirement for the scope exception as outlined under ASC 815. Warrant instruments that could potentially require “net cash settlement” in the absence of express language precluding such settlement and those which include “down-round provisions” are initially classified as derivative liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. The Company will continue to classify the fair value of the warrants that contain “down-round protection” and “net cash settlement” as a liability until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. Warrants that the Company may be required to redeem through payment of cash or other assets outside its control are classified as liabilities pursuant to ASC 480 and are initially and subsequently measured at their estimated fair values. For additional discussion on warrants, see Note 8. Debt Issued With Warrants The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for the issuance of convertible debt with detachable warrants. As described above under the caption “ Warrant Liability ”, the Company classifies stock warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with liability-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the warrants at their full estimated fair value and established as both a liability and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and beneficial conversion features, are allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument pursuant to ASC 835, Interest (ASC 835). Embedded Derivatives. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separate accounting as derivative financial instruments pursuant to ASC 815. Embedded derivatives are initially and subsequently measured at fair value. See Note 7 for additional discussion on the embedded derivatives associated with the Company’s convertible notes. Beneficial Conversion Feature. If the amount allocated to the convertible debt results in an effective per share conversion price less than the fair value of the Company’s common stock on the commitment date, the intrinsic value of this beneficial conversion feature is recorded as a discount to the convertible debt with a corresponding increase to additional paid in capital. The beneficial conversion feature discount is equal to the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date, unless limited by the remaining proceeds allocated to the debt. See Note 7 for additional discussion on the beneficial conversion feature associated with the Company’s convertible notes. Debt Issuance Costs. The Company follows the guidance under Accounting Standards Update (ASU) 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03) for accounting for debt issuance costs. The Company allocates debt issuance costs between the debt and the warrants on the same basis as proceeds were allocated. The Company expenses issuance costs allocated to the warrants and presents the issuance costs allocated to the debt as a direct reduction from the carrying amount of the debt liability in the balance sheet. However, if debt issuance costs exceed the carrying amount of the debt, issuance costs are recorded to additional paid-in capital as a reduction of the beneficial conversion feature. As of December 31, 2016, the Company’s debt issuance costs are presented in additional paid-in capital as a reduction of the beneficial conversion feature and are being amortized to interest expense (despite their classification in additional paid-in capital) using the effective interest rate method over the expected term of the debt pursuant to ASC 835. Revenue Recognition Revenue from Product Sales. In June 2011, the FDA approved the Company's BLA for LAVIV for the improvement of the appearance of moderate to severe nasolabial fold wrinkles in adults. The Company recognizes revenue from product sales in accordance with ASC 605, Revenue Recognition (ASC 605). In general, ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed and determinable and (4) collectability is reasonably assured. Prepayments on product sales are generally received at three different stages of the treatment: (1) the biopsy stage, (2) the cell harvest stage, and (3) the injection stage. As one full course of LAVIV therapy includes three series of injections, prepayments are deferred and revenue is recognized on a prorata basis as each of the three series of injections is shipped to the physician. In connection with the wind-down of azficel-T operations during 2016 as more fully described in Note 12, the Company is no longer accepting new prescriptions. Collaboration Revenue. The Company follows ASC 605-25, Revenue Recognition – Multiple-Element Arrangements (ASC 605-25) and ASC 808, Collaborative Arrangements , if applicable, to determine the recognition of revenue under its collaborative research, development and commercialization agreements. The terms of these agreements generally contain multiple elements, or deliverables, which may include (i) grants of licenses, or options to obtain licenses, to our intellectual property, (ii) research and development services, (iii) clinical and commercial manufacturing, and/or (iv) participation on joint research and/or joint development committees. The payments the Company may receive under these arrangements typically include one or more of the following: non-refundable, up-front license fees; funding of research and/or development efforts including proof-of-concept studies and product development; amounts due upon the achievement of specified objectives or milestones such as obtaining patents, trademarks and certain regulatory approvals, and achievement of commercialization of products; and/or royalties on future product sales. Each of the required deliverables under such an arrangement are evaluated, in accordance with ASC 605-25, to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Collaboration revenue is recognized on a gross basis, in accordance with the criteria set forth in ASC 605-45, Revenue Recognition: Principal Agent Considerations . Collaboration revenue for the years ended December 31, 2016 and 2015 is related to a research and development agreement that the Company has with a third party to investigate potential new non-pharmaceutical applications for the Company's conditioned fibroblast media technology. Revenue recognized to date from this collaboration relates to an upfront license fee that was amortized over the estimated total contract period and a proof-of-concept study which was completed in 2015. The Company will recognize future milestone payments when earned provided that (1) the milestone event is substantive in that it can only be achieved based in whole or in part on either the Company’s performance or on the occurrence of a specific outcome resulting from the Company’s performance and its achievability was not reasonably assured at the inception of the agreement; (2) the Company does not have ongoing performance obligations related to the achievement of the milestone; and (3) it would result in the receipt of additional payments. A milestone payment is considered substantive if all of the following conditions are met: (a) the milestone payment is non-refundable; (b) achievement of the milestone was not reasonably assured at the inception of the arrangement; (c) substantive effort is involved to achieve the milestone; and (d) the amount of the milestone payment appears reasonable in relation to the effort expended, the other milestones in the arrangement and the related risk associated with the achievement of the milestone. Cost of Revenue Cost of revenue includes expenses related to revenue from product sales and collaboration revenue. Cost of Product Sales. Costs include the expense to manufacture LAVIV, including direct and indirect costs. Costs incurred for shipping and handling during the biopsy stage (to/from physicians) are included in cost of product sales. Costs related to shipping and handling of injections (to physicians) are included in selling, general and administrative expenses. Cost of Collaboration Revenue . Costs directly related to deliverables in a revenue-generating collaboration are charged to cost of collaboration revenue as incurred. Research and Development Expenses Research and development costs are expensed as incurred and include employee salaries and benefits, costs incurred with third party contractors to perform research, conduct clinical trials, develop and manufacture drug materials and delivery devices, and a portion of facilities costs. Research and development expenses also include costs to manufacture product for clinical trial use and to develop manufacturing, cell collection and logistical process improvements. Clinical trial costs are a significant component of research and development expenses, often with third party service providers. Invoicing from third party contractors for services performed can lag several months. The Company accrues the costs of services rendered in connection with third party contractor activities based on its estimate of management fees, site management and monitoring costs and data management costs incurred in a given period. Stock-Based Compensation The Company follows ASC 718, Compensation – Stock Compensation (ASC 718), or ASC 505-50, Equity – Equity Based Payments to Non-Employees, where applicable. The Company accounts for stock-based awards to employees using the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. In addition, the Company accounts for stock-based compensation to non-employees in accordance with the accounting guidance for equity instruments that are issued to entities or persons other than employees. The Company uses a Black-Scholes option-pricing model to determine the fair value of each option grant as of the date of grant for expense incurred. The Black-Scholes option pricing model requires inputs for risk-free interest rate, dividend yield, expected stock price volatility and expected term of the options. The value of the award that is ultimately expected to vest based on the achievement of a performance condition (i.e., service period) is recognized as expense on a straight-line basis over the requisite service period. See Note 11 for additional details. Previously, ASC 718 required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. In the first quarter of 2016, the Company adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) , which allows an entity to elect as an accounting policy either to continue to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures when they occur. In connection with the adoption of this ASU, the Company made an accounting policy election to account for forfeitures as they occur and applied this change in accounting policy on a modified retrospective basis. As a result, the Company recorded a cumulative effect adjustment to retained earnings which resulted in an increase to accumulated deficit of $0.1 million with an offsetting increase to additional paid-in capital (zero net total equity impact) as of the date of adoption, principally related to additional stock compensation expense that would have been recognized on unvested outstanding options unadjusted for estimated forfeitures. Restructuring Costs Restructuring charges are primarily comprised of severance costs related to workforce reductions, contract termination and wind-down costs, asset impairments and costs of decommissioning the Company’s azficel-T manufacturing facility. In accordance with ASC 420, Exit or Disposal Cost Obligations , the Company recognizes restructuring charges when the liability has been incurred, except for one-time employee termination benefits that are incurred over time. Generally, one-time employee termination benefits (i.e., severance costs) are accrued at the date management has committed to a plan of termination and employees have been notified of their termination dates and expected severance payments. Other costs, including but not limited to, contract termination and wind-down costs and manufacturing facility decommissioning costs, will be recorded as incurred. Asset impairment charges have been, and will be, recognized when management has concluded that the assets have been impaired in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets , or other applicable authoritative guidance. See Note 12 for additional details. Income Taxes An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by a net operating loss carryover. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In the event the Company is charged interest or penalties related to income tax matters, the Company would record such interest as interest expense and would record such penalties as other expense in the Consolidated Statements of Operations. No such charges have been incurred by the Company. For each of the years ended December 31, 2016 and 2015, the Company had no uncertain tax positions. See Note 13 for additional details. Loss Per Share Data Basic loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during that period. The diluted loss per share calculation gives effect to dilutive stock options, warrants, convertible notes and other potentially dilutive common stock equivalents outstanding during the period. Diluted loss per share is based on the if-converted method or the treasury stock method, as applicable, and includes the effect from the potential issuance of common stock, such as shares issuable pursuant to the conversion of convertible notes and the exercise of stock options and warrants, assuming the exercise of all "in-the-money" common stock equivalents based on the average market price during the period. Common stock equivalents have been excluded where their inclusion would be anti-dilutive. See Note 15 for additional details. Recently Adopted Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (ASU 2014-15). This update defines management's responsibility to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. More specifically, the amendments (1) provide a definition of the term "substantial doubt", (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The guidance is effective for annual reporting periods ending after December 15, 2016 and the Company adopted ASU 2014-15 during the fourth quarter of 2016 with no material impact to the Company's Consolidated Financial Statements. The Company has concluded that certain conditions raise substantial doubt about its ability to continue as a going concern as more fully described in Note 1. In April 2015, the FASB issued ASU 2015-03, to simplify the presentation of debt issuance costs. The new standard requires entities to present debt issuance costs related to a recognized liability in the balance sheet as a direct deduction from that liability, or contra-liability, rather than an asset, consistent with the existing presentation of a debt discount. For public business entities, the amendments in ASU 2015-03 are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted this guidance during the third quarter of 2016 in connection with the issuance of convertible notes as discussed above under the subheading “ Debt Issued with Warrants” within Note 3 and also Note 7. In March 2016, the FASB issued ASU 2016-09 to simplify several aspects of accounting for share-based payment award transactions and includes accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification of awards as either equity or liabilities, as well as the classification on the statement of cash flows. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company elected to early adopt ASU 2016-09 during the first quarter of 2016. In connection with the adoption of this ASU, the Company elected to account for forfeitures as they occur and applied this change in accounting policy on a modified retrospective basis. As a result, the Company recorded a cumulative-effect adjustment to retained earnings which resulted in an increase to accumulated deficit of $0.1 million with an offsetting increase to additional paid-in capital (zero net total equity impact) as of the date of adoption, related to additional stock compensation expense that would have been recognized on unvested outstanding options unadjusted for estimated forfeitures. Other provisions of ASU 2016-09 had no impact on the Company’s Consolidated Financial Statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet (including by lessees for those leases classified as operating leases under previous GAAP) and disclosing key information about leasing arrangements. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Earlier application is permitted. While the Company is currently assessing the full impact this ASU will have on its Consolidated Financial Statements, the Company believes the primary impact upon adoption will be the recognition, on a discounted basis, of its minimum commitments under the current noncancelable operating lease, as amended, for its Exton, PA facility, resulting in the recording of right of use assets and lease obligations. The Company does not anticipate any other material impacts to its Consolidated Financial Statements. Current minimum commitments under noncancelable operating leases are disclosed in Note 16. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). In April 2016, the FASB also issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. These amendments include targeted improvements based on input the FASB received from the FASB/International Accounting Standards Boards’ Joint Transition Resource Group for Revenue Recognition and other stakeholders, but do not change the core principles in Topic 606. The ASUs seek to clarify the guidance within the applicable subtopics of ASC 606, including amendments to the implementation guidance and illustrations intended to improve the operability and understandability of the implementation guidance. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Given the Company's decision to wind-down azficel-T operation (including LAVIV), as more fully described in Note 12, and expectation that revenues from product sales and collaboration revenue will remain insignificant in the foreseeable future, management does not believe this ASU will have a material impact on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides guidance on the treatment of cash receipts and cash payments for certain types of cash transactions, to eliminate diversity in practice in the presentation of the cash flow statement. For public business entities, the amendments in ASU 2016-15 are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Earlier application is permitted. While this ASU is not currently material to the Company, given the recent issuance of convertible notes discussed above and in Note 7, this ASU may be applicable in the future. From time to time, new accounting pronouncements are issued by the FASB and rules are issued by the SEC that we adopt as of the specified date. Unless otherwise noted, management does not believe that any other recently issued accounting pronouncements issued by the FASB or guidance issued by the SEC had, or is expected to have, a material impact on the Company’s present or future consolidated financial statements. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventories have historically been recorded at the lower of cost or market value, with cost determined under specific identification and on the first-in, first-out (FIFO) method. Inventories consisted of raw materials and work-in-process intended for use in the manufacture of LAVIV, which was approved by the FDA in 2011 for the improvement of nasolabial fold wrinkles in adults. Raw materials that could be used either for manufacturing pre-clinical and clinical product candidates or the production of commercial products were expensed as research and development costs when selected for use in pre-clinical or clinical manufacturing operations. As a result of the wind-down of the Company’s azficel-T operations, more fully described in Note 12, the Company wrote off all remaining raw materials and work-in-process inventories as of September 30, 2016. Inventories consisted of the following as of: December 31, ($ in thousands) 2016 2015 Raw materials (LAVIV and product candidates) $ — $ 338 Work-in-process (LAVIV) — 144 Total inventory, net $ — $ 482 Total inventory write-offs of approximately $0.4 million are included in cost of product sales in the Company's Consolidated Statement of Operations for the year ended December 31, 2016. No inventory expiration/obsolescence expense was recognized during the year ended December 31, 2015. Future raw materials purchased for pre-clinical and clinical trials will be charged to R&D expense as incurred. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of: December 31, ($ in thousands) 2016 2015 Laboratory equipment $ 1,429 $ 1,416 Computer equipment and software 313 296 Furniture and fixtures 44 53 Leasehold improvements 1,228 903 Construction-in-process 36 156 Total property and equipment, gross 3,050 2,824 Less: Accumulated depreciation (1,561 ) (1,242 ) Total property and equipment, net $ 1,489 $ 1,582 Depreciation expense was approximately $0.3 million and $0.2 million for the years ended December 31, 2016 and 2015, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following as of: December 31, ($ in thousands) 2016 2015 Accrued professional fees $ 526 $ 824 Accrued compensation 631 755 Accrued other 394 200 Total accrued expenses $ 1,551 $ 1,779 |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Convertible Notes 2016 Private Placement In September 2016, the Company issued an aggregate of $18,087,500 in principal of convertible promissory notes (each, a Note and collectively, the Notes) and accompanying warrants to purchase an aggregate of 18,087,500 shares of common stock (each a Warrant and collectively, the Warrants) in a private placement to institutional and accredited investors (each an Investor and collectively, the Investors). The Notes bear interest at four percent ( 4% ) per annum. Interest is earned daily and compounded quarterly and, at the election of the Company at the beginning of each quarter, shall accrue or be paid in cash. If the Company elects to have interest accrue, such interest will not be added to the principal amount of the Notes but such interest shall be subject to additional interest at the rate of four percent ( 4% ) per annum, compounded quarterly, and shall be due and payable upon the earliest of the conversion of the Notes, exercise of the Put Right, exercise of the Prepayment Right or the Maturity Date (in each case, as defined below). Additionally, if the Company elects for interest to accrue, then (i) the Company may elect to repay any such accrued and unpaid interest in cash at any time and from time to time and (ii) each Investor may elect to have the Company repay any such accrued and unpaid interest by delivering such number of shares of common stock equal to (x) the amount of the accrued and unpaid interest to be repaid, divided by (y) the greater of (i) the last closing bid price of a share of Common Stock as reported on NASDAQ on the date of such election and (ii) the Conversion Price (as defined below). As of December 31, 2016, the Company has elected to accrue interest. All unpaid principal of each Investor’s Note is convertible, at any time and from time to time, at the option of such Investor into shares of common stock at the greater of (x) $1.13625 and (y) the last closing bid price of a share of common stock as reported on NASDAQ at the time of such Investor’s execution of the Purchase Agreement, plus $0.12625 (as subject to adjustment, the “Conversion Price”) which range from $1.13625 to $1.22625 per share. The Notes have a maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty ( 180 ) days after the date on which the Company’s product candidate, FCX-007, is approved by the United States Food and Drug Administration for the treatment of recessive dystrophic epidermolysis bullosa (the Maturity Date). Each Investor has the right to require the Company to repay all or any portion of the unpaid principal and accrued and unpaid interest from time to time on or after September 7, 2021 (such right, a Put Right). Such Put Right must be exercised by such Investor by delivering written notice to the Company no later than one-hundred and eighty ( 180 ) days prior to such exercise date of such Put Right. In addition, upon consummation of a specified change of control transaction, each Investor may elect to accelerate the repayment of all unpaid principal and accrued interest under such Investor’s Note. If an Investor does not elect to have the Company prepay its Note upon such change of control transaction, then the Company may prepay the Notes, in an amount equal to one hundred one percent ( 101% ) of the outstanding principal due under the Notes (together with accrued and unpaid interest due thereon) (the Prepayment Right). Additionally, upon the occurrence of certain Events of Default, as defined in the Notes, each Investor may elect to accelerate the repayment of all unpaid principal and accrued interest under each Note and the Notes provide for automatic redemption upon the occurrence of certain bankruptcy related Events of Default, as defined in the Notes. Accounting for Convertible Notes and Embedded Derivatives The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from allocation of proceeds to interest expense using the effective interest method over the expected term of the Notes pursuant to ASC 835, Interest (ASC 835). See Note 3 for discussion of the Company’s policies for accounting for debt with detachable warrants. In connection with the issuance of the Notes and Warrants, the Company recorded a debt discount of approximately $18.1 million based on an allocation of proceeds to the Warrants of approximately $9.6 million , an allocation to bifurcated derivatives (which consist of a contingent put option upon a change of control or acceleration upon event of default (the Contingent Put Option) and a contingent call option upon a change of control (the Contingent Call Option) included in the Notes) of approximately $1.3 million, and a beneficial conversion feature of approximately $7.2 million , before issuance costs, based on the difference between the fair value of the underlying common stock at the commitment date of each Note transaction and the effective conversion price of the Notes, as limited by the proceeds allocated to the Notes. Convertible promissory notes outstanding were as follows: ($ in thousands) December 31, 2016 2015 Convertible promissory notes $ 18,088 $ — Debt discount - warrants (9,643 ) — Debt discount - compound bifurcated derivatives (1,273 ) — Debt discount - beneficial conversion feature (7,172 ) — Convertible promissory notes, net $ — $ — The debt discount and issuance costs are amortized using the effective interest method over five years , the expected term of the Notes. Amortization of the debt discounts included in interest expense in the Consolidated Statement of Operations for the year ended December 31, 2016 was $0 . Based on an effective yield of approximately 1157% resulting from the Notes being initially recorded at a full discount, the Company will not recognize any material amounts of amortization until years 2020 and 2021. Assumptions Used in Determining Fair Value of Compound Bifurcated Derivative The Company utilizes a binomial lattice model to value its bifurcated derivatives included in the Notes. ASC 815 does not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be combined together and fair valued as a single, compound embedded derivative. The Company selected a binomial lattice model to value the compound embedded derivative because it believes this technique is reflective of all significant assumptions that market participants would likely consider in negotiating the transfer of the Notes. Such assumptions include, among other inputs, stock price volatility, risk-free rates, credit risk assumptions, early redemption and conversion assumptions, and the potential for future adjustment of the conversion price due to a future dilutive financing. Additionally, there are other embedded features of the Notes requiring bifurcation, other than the Contingent Put Option and the Contingent Call Option, which had no value at December 31, 2016 due to management’s estimates of the likelihood of certain events, but that may have value in the future should those estimates change. The estimated fair value of the compound bifurcated derivative is determined using Level 2 and Level 3 inputs. Significant inputs and assumptions used in the binomial lattice model for the derivative liability are as follows: ($ in thousands except per share data) December 31, 2016 Calculated aggregate value $ 1,735 Closing price per share of common stock $ 0.63 Contractual remaining term 9 years, 8 months Contractual interest rate 4.0 % Volume-weighted average conversion rate $ 1.13662 Risk-free interest rate (term structure) 0.44% - 2.45% Dividend yield — Credit Rating CC Credit Spread 33.27 % Volatility 99.9 % The foregoing compound bifurcated derivative was recorded at its estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in derivative revaluation expense in the Company’s Consolidated Statement of Operations. The change in estimated fair value of the Company's derivative liability for the year ended December 31, 2016 resulted in non-cash expense of approximately $0.5 million . |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Warrants | Warrants The Company accounts for common stock warrants as equity instruments, derivative liabilities, or liabilities, depending on the specific terms of the warrant agreement. See Note 3 for further details on accounting policies related to the Company's stock warrants. In connection with various financing transactions, the Company has issued warrants to purchase the Company’s common stock. In September 2016, the Company issued warrants to purchase 18,087,500 shares of its common stock for an exercise price of $1.50 per share to investors in connection with a private placement of convertible debt securities as more fully discussed in Note 7. The warrants are exercisable at any time beginning six months after issuance through five years after issuance. The Company classified these warrants as liabilities based on the guidance in ASC 480, as the warrants contain a provision that could result in the Company’s redemption of the warrants outside its control for cash equal to the value of the warrants calculated using a Black-Scholes option pricing model. As of December 31, 2016 and 2015, all of the Company’s outstanding common stock warrants were classified as either derivative liabilities or liabilities. Liability-classified Warrants The following table summarizes outstanding liability-classified warrants to purchase common stock as of: Number of Warrants December 31, 2016 December 31, 2015 Exercise Price Expiration Dates Issued in March 2010 financing — 319,789 $ 6.25 Mar 2016 Issued in June 2011 financing — 6,113 $ 22.50 Jun 2016 Issued in August 2011 financing — 565,759 $ 18.75 Aug 2016 Issued to placement agents in August 2011 financing — 50,123 $ 13.635 Aug 2016 Issued in Series B and D Preferred Stock offerings — 1,970,594 $ 6.250 Jul 2016 - Dec 2016 Issued in Series E Preferred Stock offering (1) 214,288 60,000 $ 0.70 Dec 2017 Issued with June 2012 Convertible Notes 1,125,578 1,125,578 $ 2.50 Jun 2018 Issued in Series E Preferred Stock offering 1,568,823 1,568,823 $ 7.50 Dec 2018 Issued with September 2016 Convertible Notes 18,087,500 — $ 1.50 Sep 2021 Total 20,996,189 5,666,779 (1) As a result of the anti-dilution provisions contained in the warrants, the exercise price for warrants issued in connection with the Company’s Series E Preferred Stock offering was decreased from $2.50 per warrant share to $0.70 and the number of warrant shares was increased by 154,288 during 2016. The table below is a summary of the Company's warrant activity for the year ended December 31, 2016. Number of warrants Weighted average exercise price Outstanding at December 31, 2015 5,666,779 $ 7.14 Issued 18,087,500 1.50 Adjustments (1) 154,288 0.70 Exercised — — Expired (2,912,378 ) 8.84 Outstanding at December 31, 2016 20,996,189 $ 1.99 (1) See footnote 1 in table above. Accounting for Liability-classified Warrants The foregoing warrants are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in warrant revaluation income in the Company’s Consolidated Statement of Operations in each subsequent period. The change in estimated fair value of the Company's warrant liability for the years ended December 31, 2016 and 2015 resulted in non-cash income of $11.9 million and $2.9 million, respectively. Additionally, the warrants are classified as either current or non-current on the Company's Consolidated Balance Sheet based on their contractual expiration date. The Company utilizes the Monte Carlo simulation valuation method to value its liability-classified warrants. Assumptions Used in Determining Fair Value of Warrants The estimated fair value of warrants is determined using Level 2 and Level 3 inputs which is further discussed in Note 10. Inherent in the Monte Carlo simulation valuation method are the following assumptions: Volatility. The Company estimates stock price volatility based on the Company’s historical stock price performance over a period of time that matches the volume-weighted average expected remaining life of the warrants. Risk-free interest rate . The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve in effect at the valuation date commensurate with the expected remaining life assumption. Expected remaining life. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero. Scenarios. The probability of complex features of the warrants being triggered is subjective (no observable inputs or available market data) and based on internal and external information known to management at the valuation date. The following table summarizes the calculated aggregate fair values, along with the assumptions utilized in each calculation: ($ in thousands, except per share data) December 31, December 31, Calculated aggregate value $ 6,034 $ 8,275 Weighted average exercise price per share $ 1.99 $ 7.14 Closing price per share of common stock $ 0.63 $ 4.55 Volatility 85.6 % 85.2 % Weighted average remaining expected life 4 years, 3 months 1 year, 8 months Risk-free interest rate 1.75 % 0.98 % Dividend yield — — |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity | Equity Common Stock - 2015 Follow-on Public Offering On July 27, 2015, the Company completed an underwritten public offering of shares of the Company's common stock at a price per share of $5.80 per share (the 2015 Offering). The shares sold in the 2015 Offering included 2,586,206 shares of common stock plus an additional 387,930 shares of common stock pursuant to the exercise by the underwriters of the over-allotment option the Company granted to them. Total gross proceeds to the Company in the 2015 Offering (including the sale of shares of common stock pursuant to the exercise of the over-allotment option) totaled $17.3 million , and resulted in net proceeds of approximately $15.9 million after the deduction of underwriting discounts and other offering expenses. Common Stock - "At-The-Market" Equity Program In January 2016, the Company entered into a Controlled Equity Offering™ Sales Agreement (the ATM Agreement) with Cantor Fitzgerald & Co. (Cantor Fitzgerald) to implement an "At-The-Market" (ATM) equity program under which the Company, from time to time, may offer and sell shares of its common stock having an aggregate offering price of up to $50.0 million (the Shares) through Cantor Fitzgerald. Subject to the terms and conditions of the Agreement, Cantor Fitzgerald will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has no obligation to sell any of the Shares, and may at any time suspend sales under the ATM Agreement or terminate the ATM Agreement. Cantor Fitzgerald is entitled to a fixed commission of up to 3.0% of the gross proceeds from Shares sold. Through December 31, 2016, 159,841 Shares have been sold through the ATM equity program, resulting in no net proceeds to date after the deduction of commissions and other offering expenses. Common Stock - Shares Authorized In July 2016, the Company amended its Restated Certificate of Incorporation, as amended, to increase the number of shares of common stock that the Company is authorized to issue from 100,000,000 to 150,000,000 . Preferred Stock The Company is authorized to issue 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of the Company’s preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change of control of the Company or other corporate action. There were no preferred shares issued or outstanding as of December 31, 2016 or December 31, 2015. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company follows the guidance in ASC 820, Fair Value Measurement , to account for financial assets and liabilities measured on a recurring basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires fair value measurements be classified and disclosed in one of the following three categories: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; • Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level 1, 2 and 3 during each of the years ended December 31, 2016 and 2015. The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015: December 31, 2016 ($ in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 17,515 $ — $ — $ 17,515 Total Assets $ 17,515 $ — $ — $ 17,515 Liabilities: Warrant liability $ — $ — $ 6,034 $ 6,034 Derivative liability — — 1,735 1,735 Total Liabilities $ — $ — $ 7,769 $ 7,769 December 31, 2015 ($ in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 29,268 $ — $ — $ 29,268 Total Assets $ 29,268 $ — $ — $ 29,268 Liabilities: Warrant liability $ — $ — $ 8,275 $ 8,275 Derivative liability — — — — Total Liabilities $ — $ — $ 8,275 $ 8,275 Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis Common Stock Warrants - Warrant Liability The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows: ($ in thousands) Warrant Liability Balance at December 31, 2014 $ 11,286 Exercise of warrants (1) (82 ) Expiration of warrants (2) (276 ) Change in fair value of warrant liability (2,653 ) Balance at December 31, 2015 $ 8,275 Issuance of warrants (3) 9,643 Expiration of warrants (2) (1,910 ) Change in fair value of warrant liability (9,974 ) Balance at December 31, 2016 $ 6,034 (1) Warrants were exercised under the cashless exercise method pursuant to the corresponding warrant agreements. As a result of such exercises, the Company issued 11,584 shares of common stock. Consequently, these instruments were no longer classified as liabilities. These common stock warrants were remeasured to their fair value as of the exercise date with the change in fair value recorded to the Company's Consolidated Statement of Operations. The fair value related to the shares issued in connection with the exercised warrants was reclassified from a liability to additional paid-in capital in the Company's Consolidated Balance Sheets. (2) Represents the fair value as of the beginning of the year for warrants expiring during the year and has been recorded to warrant revaluation income in the Company's Consolidated Statement of Operations for the respective year end. (3) Represents the fair value of warrants on the issuance date. The fair value of the warrant liability is based on Level 3 inputs. For this liability, the Company developed its own assumptions that do not have observable inputs or available market data to support the fair value. See Note 8 for further discussion of the warrant liability. Bifurcated Compound Derivative - Derivative Liability The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) was as follows: ($ in thousands) Derivative Liability Balance at December 31, 2015 $ — Issuance of convertible notes (1) 1,273 Change in fair value of derivative liability 462 Balance at December 31, 2016 $ 1,735 (1) Represents fair value of embedded derivatives on the issuance date. Effect of the Company's Stock Price and Volatility Assumptions on the Calculation of Fair Value of Financial Instruments Measured on a Recurring Basis Common Stock Warrants - Warrant Liability The fair value of the Company's warrant liability is based on Level 3 inputs. As discussed in Note 8, the Company uses a Monte Carlo simulation valuation method to value its liability-classified warrants. The determination of fair value as of the reporting date is affected by the Company's stock price as well as assumptions regarding a number of subjective variables that do not have observable inputs or available market data to support the fair value. These variables include, but are not limited to, expected stock price volatility over the term of the warrants and the risk-free interest rate. The primary factors affecting the fair value of the warrant liability are the Company's stock price and volatility as well as certain assumptions by the Company as to the likelihood of provisions to the underlying warrant agreements being triggered. The methods described above and in Note 8 may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value could result in a different fair value measurement at the reporting date. Bifurcated Compound Derivative - Derivative Liability The fair value of the derivative liability is based on Level 3 inputs. As discussed in Note 7, the Company uses a binomial lattice model to value the compound embedded derivative bifurcated from the Notes. The determination of fair value as of the reporting date is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables that do not have observable inputs or available market data to support the fair value. These variables include, but are not limited to, expected stock price volatility, changes in interest rates, assumptions regarding the adjusted conversion prices in the Notes, and early redemption or conversion of the Notes. The methods described above and in Note 7 may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value could result in a different fair value measurement at the reporting date. Fair Value of Certain Financial Assets and Liabilities The Company believes that the fair values of its current assets and liabilities approximate their reported carrying amounts. The fair value of the long-term convertible promissory notes was approximately $13.9 million at December 31, 2016, compared to a carrying value of $0 , as a result of unamortized debt discounts. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2009 Equity Incentive Plan The Company's Board of Directors (the Board) adopted the 2009 Equity Incentive Plan (as amended to date, the Plan) effective September 3, 2009. The Plan is intended to further align the interests of the Company and its stockholders with its employees, including its officers, non-employee directors, consultants and advisers by providing equity-based incentives. The Plan allows for the issuance of up to 7,600,000 shares of the Company’s common stock. In addition, as of December 31, 2016, there were 25,000 options outstanding that were issued outside the Plan to consultants in 2013. The types of awards that may be granted under the Plan include options (both non-qualified stock options and incentive stock options), stock appreciation rights, stock awards, stock units, and other stock-based awards. The term of each award is determined by the Compensation Committee of the Board at the time each award is granted, provided that the term of the option does not exceed ten years . Vesting schedules for stock options vary, but generally vest 25% per year, over four years for employee options and on the one-year anniversary date for non-employee director options. The Plan had 3,722,705 options available for grant as of December 31, 2016. Accounting for Stock-Based Compensation The Company recognizes non-cash compensation expense for stock-based awards based on their grant date fair value, determined using the Black-Scholes option-pricing model. During the years ended December 31, 2016 and 2015, the weighted average fair market value of options granted was $1.22 and $3.59 , respectively. Total stock-based compensation expense recognized using the straight-line attribution method and included in operating expenses in the the Company's Consolidated Statements of Operations was approximately $1.9 million and $2.0 million for the years ended December 31, 2016 and 2015, respectively. Assumptions Used in Determining Fair Value of Stock Options Inherent in the Black-Scholes option-pricing model are the following assumptions: Volatility. The Company estimates stock price volatility based on the Company’s historical stock price performance over a period of time that matches the expected term of the stock options. Risk-free interest rate . The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. Expected term . The expected term of stock options granted is based on an estimate of when options will be exercised in the future. The Company applied the simplified method of estimating the expected term of the options, described in the SEC’s Staff Accounting Bulletins 107 and 110, as historical experience is not indicative of expected behavior in the future. The expected term, calculated under the simplified method, is applied to groups of stock options that have similar contractual terms. Using this method, the expected term is determined using the average of the vesting period and the contractual life of the stock options granted. Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero. Forfeitures. The Company accounts for forfeitures when they occur. Ultimately, the actual expense recognized over the vesting period will be for only those shares that vest. The fair market value of the stock options at the date of grant was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions for the years ended December 31: 2016 2015 Expected life (1) 6 years, 2 months 6 years, 1 month Interest rate 1.5 % 1.6 % Dividend yield — — Volatility (2) 92.4 % 103.2 % (1) The Company uses the simplified method for estimating the stock option term. (2) For the y ear ended December 31, 2016, the Company estimated expected volatility based on the historical volatility of its own common stock on a stand-alone basis. For the year ended December 31, 2015, the Company estimated expected volatility based on the historical volatility of a peer group. Stock Option Activity The following table summarizes stock option activity for the years ended December 31, 2016 and 2015: ($ in thousands, except share and per share data) Number of shares Weighted- average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value Outstanding at December 31, 2014 2,086,450 $ 7.43 7 years, 2 months $ — Granted 1,352,114 4.48 Exercised (56,250 ) 4.53 Expired (65,250 ) 10.54 Forfeited (182,970 ) 5.91 Outstanding at December 31, 2015 3,134,094 $ 6.23 8 years $ 1,630 Granted 1,585,400 1.60 Exercised — — Expired (35,482 ) 7.93 Forfeited (845,964 ) 2.83 Outstanding at December 31, 2016 (1) 3,838,048 $ 5.05 7 years, 2 months $ — Exercisable at December 31, 2016 2,179,198 $ 7.11 5 years, 7 months $ — (1) Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. The total fair value of options vested during the years ended December 31, 2016 and 2015 was $2.4 million and $1.5 million , respectively. Additionally, as of December 31, 2016, there was approximately $2.6 million of unrecognized compensation expense related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.6 years . During the year ended December 31, 2016, there were no exercises of vested stock options. During the year ended December 31, 2015 a total of 56,250 stock options with an aggregate intrinsic value of approximately $0.04 million were exercised resulting in proceeds of approximately $0.3 million . |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs In June 2016, the Company determined to wind-down its azficel-T operations at the Company’s Exton, PA facility and to reduce the workforce that supports such operations. This decision enables the Company to focus its resources towards development of its gene-therapy product candidates. Restructuring-related charges for the year ended December 31, 2016 were comprised of approximately $0.3 million of employee severance and benefit-related charges and less than $0.1 million of asset impairments. No such charges were incurred during the year ended December 31, 2015. The restructuring and asset impairment activity for the year ended December 31, 2016 was as follows: ($ in thousands) Employee Severance and Benefits Asset Impairments Total Accrued restructuring balance as of December 31, 2015 $ — $ — $ — Additional accruals 301 34 335 Cash payments (282 ) — (282 ) Non-cash settlements — (34 ) (34 ) Accrued restructuring balance as of December 31, 2016 $ 19 $ — $ 19 The restructuring-related charges incurred during the year ended December 31, 2016 related to employee severance and benefits resulting from the reduction-in-workforce and the impairment of property and equipment. In connection with the reduction-in-workforce, approximately 50% of the Company's employees were terminated, primarily in the areas of manufacturing and quality operations. The accrued restructuring balance as of December 31, 2016 relates to employee severance and benefits which are expected to be paid in the first quarter of 2017 and is recorded as a current liability within accrued expenses in the Company's Consolidated Balance Sheet. Additionally, the Company recognized inventory write-offs in cost of product sales related to the wind-down of its azficel-T (including LAVIV) operations as described in Note 4. The Company may incur additional charges in the future for contract termination and wind-down costs, asset impairments and costs to decommission the Company’s azficel-T manufacturing facility, but cannot estimate them at this time. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Fibrocell Science, Inc. and Fibrocell Technologies, Inc. file a consolidated U.S. federal income tax return, and file U.S. state income tax returns in several jurisdictions as well. In general, the U.S. federal and state income tax returns remain open to examination by taxing authorities for tax years beginning in 2013 to present. However, if and when the Company claims net operating loss (NOL) carryforwards from years prior to 2013 against future taxable income, those losses may be examined by the taxing authorities. The Company's foreign subsidiaries file income tax returns in their respective jurisdictions. The components of the income tax expense (benefit) related to operations, were as follows: Year ended December 31, ($ in thousands) 2016 2015 U.S. Federal: Current $ — $ — Deferred — — U.S. State: Current — — Deferred — — Income tax expense (benefit) $ — $ — The reconciliation between income tax expense (benefit) at the U.S. federal statutory rate and the amount recorded in the accompanying Consolidated Financial Statements were as follows: Year ended December 31, ($ in thousands) 2016 2015 Tax benefit at U.S. federal statutory rate $ (5,353 ) $ (12,183 ) Increase in domestic valuation allowance 10,162 14,236 State income taxes benefit before valuation allowance, net of federal benefit (1,160 ) (1,122 ) Warrant revaluation income and other financing costs (3,742 ) (1,026 ) Credits (366 ) — Stock-based compensation 239 292 Return to provision true-ups 220 (40 ) Other — (157 ) Income tax expense (benefit) $ — $ — The components of the Company’s net deferred tax assets and liabilities at December 31, 2016 and 2015 were as follows: Year ended December 31, ($ in thousands) 2016 2015 Deferred tax liabilities: Intangible assets $ — $ 1,764 Convertible notes 4,263 — Total deferred tax liabilities $ 4,263 $ 1,764 Deferred tax assets: Loss carryforwards $ 85,263 $ 77,194 Intangible assets 117 — Capital loss carryforward 852 840 Property and equipment 1,067 1,096 License fees 7,776 8,351 Accrued expenses and other 549 886 Stock-based compensation 4,059 3,445 Credits 418 — Total deferred tax assets before valuation allowance 100,101 91,812 Less: valuation allowance (95,838 ) (90,048 ) Total deferred tax assets $ 4,263 $ 1,764 Net deferred tax assets $ — $ — As of December 31, 2016, the Company had generated U.S. net operating loss carryforwards of approximately $219.1 million which expire from 2018 to 2036 and U.S. federal R&D credits of $0.4 million which expire from 2035 to 2036 . The NOL carryforwards are available to reduce future taxable income. However, the NOL carryforwards may be, or become subject to, an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. This could limit the amount of NOL's that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to an ownership change. Subsequent ownership changes may further affect the limitation in future years. If and when the Company utilizes the NOL carryforwards in a future period, it will perform an analysis to determine the effect, if any, of these loss limitation rules on the NOL carryforward balances. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes, therefore, the Company may not be able to take full advantage of these carryforwards for federal income tax purposes. In addition, the Company has NOL carryforwards in certain non-U.S. jurisdictions of approximately $0.3 million . However, it is not expected that these non-U.S. loss carryforwards will ever be utilized, so they are not included in the components of deferred taxes listed above. Finally, there are no unremitted earnings in foreign jurisdictions, so no provision for taxes thereupon is required. As the Company has had cumulative losses and there is no assurance of future taxable income, valuation allowances have been recorded to fully offset deferred tax assets at December 31, 2016 and 2015. The valuation allowance increased by $5.8 million and $15.9 million during 2016 and 2015, respectively, primarily due to the impact from the current year net losses incurred. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Overview of Related Parties The Company and Intrexon Corporation (Intrexon) are parties to two distinct exclusive channel collaboration agreements, as more fully described below. Pursuant to these agreements, the Company engages Intrexon for support services for the research and development of product candidates covered under the respective agreements and reimburses Intrexon for its cost for time and materials for such work. Additionally, the Company's future commitments pursuant to the agreements include cash royalties and various developmental and commercial milestone payments as more fully described below. For the years ended December 31, 2016 and 2015, the Company incurred expenses of $3.7 million and $15.9 million , respectively, with Intrexon. Of the expenses incurred during the 2016 period, $1.2 million related to direct expenses for work performed by Intrexon and $2.5 million related to pass-through costs for work performed under the 2012 ECC. Of the expenses incurred during the 2015 period, $10.0 million related to an up-front technology access fee pursuant to the 2015 ECC and $3.1 million related to direct expenses for work performed by Intrexon and $2.8 million related to pass-through costs, both for work performed under the 2012 ECC. As of December 31, 2016 and 2015, the Company had outstanding payables with Intrexon of $0.9 million and $10.7 million , respectively. In connection with the 2015 ECC, in consideration for the license and the other rights that the Company receives under the agreement, the Company paid Intrexon an up-front technology access fee of $10 million in cash in January 2016. Randal J. Kirk is the chairman of the board and chief executive officer of Intrexon and, together with his affiliates, owns more than 50% of Intrexon's common stock. Affiliates of Randal J. Kirk (including Intrexon) own approximately 38% of the Company's common stock. Additionally, two of the Company's directors, Julian Kirk (who is the son of Randal J. Kirk) and Marcus Smith, are employees of Third Security, LLC, which is an affiliate of Randal J. Kirk. Affiliates of Randal J. Kirk (including Intrexon) participated in the Company’s private placement of convertible debt securities in September 2016, more fully described in Note 7, and were issued an aggregate of $6,762,500 in principal of Notes and accompanying Warrants to purchase an aggregate of 6,762,500 shares of common stock. Additionally, affiliates of Randal J. Kirk (including Intrexon) participated in the Company's March 2017 Series A Convertible Preferred Stock offering, more fully described in Note 17, and were issued an aggregate of 3,016 shares of convertible preferred stock and accompanying warrants to purchase 3,887,624 shares of common stock. Intrexon Collaboration - 2012 ECC In October 2012, the Company entered into an Exclusive Channel Collaboration Agreement with Intrexon which was amended in June 2013 and January 2014 (as amended, the 2012 ECC) pursuant to which the Company is Intrexon's exclusive channel collaborator in the research, development and commercialization of products in the following fields (the 2012 Fields): • the enhanced production and purification of autologous fibroblasts, without gene therapy, for all aesthetic and therapeutic indications; • the enhanced production and purification of autologous dermal cells, without gene therapy, for aesthetic and therapeutic treatment of dermal, vocal cord, and periodontal indications; • the development of our gene therapies applied to autologous fibroblasts for all aesthetic and therapeutic indications; • the development of our gene therapies applied to autologous dermal cells for aesthetic and therapeutic treatment of dermal, vocal cord, and periodontal indications; • autologous human fibroblasts with gene therapy to express a therapeutic protein and/or bioactive ribonucleic acid for the treatment of autoimmune and non-infectious inflammatory disorders that manifest in cutaneous tissues, fascia and/or muscle; and • autologous human fibroblasts with gene therapy to express bioactive Tenascin-X locally to correct connective tissue disorders associated with Ehlers-Danlos Syndrome (hypermobility type). Pursuant to the terms of the 2012 ECC, Intrexon has granted the Company a license to use its proprietary technologies and other intellectual property to research, develop and commercialize products in the 2012 Fields within the United States. The Company is responsible for all costs incurred in connection with the research, development and commercialization of products under the 2012 ECC and will own all clinical data, regulatory filings and regulatory approvals relating to such products. The Company engages Intrexon for support services for the research and development of products under the 2012 ECC and reimburses Intrexon for its cost for time and materials for such services. In September 2015, the Company and Intrexon entered into a letter of agreement pursuant to which the parties mutually agreed to terminate their collaboration with respect to the development of potential therapies to treat Ehlers-Danlos Syndrome (hypermobility type) due to technical hurdles. As a result, the Company no longer has any rights or obligations under the 2012 ECC with respect to the development of “autologous human fibroblasts genetically modified to express bioactive Tenascin-X locally to correct connective tissue disorders”. The Company is required to pay Intrexon quarterly cash royalties on all products developed under the 2012 ECC in an amount equal to 7% on aggregate annualized net sales up to $100 million , plus 14% on aggregate annualized net sales greater than $100 million . The Company is also required to pay Intrexon half of any sublicensing revenues that it receives from third parties in consideration for sublicenses granted by the Company with respect to products developed under the 2012 ECC, but only to the extent such sublicensing revenues are not included in net sales subject to royalties. Sales from LAVIV (azficel-T), including new indications, or other products that the Company develops and commercializes outside of the 2012 ECC are not subject to royalty payments unless the Company is able to reduce the product's cost of goods sold through the 2012 ECC, in which case, the Company is required to pay quarterly cash royalties on such products equal to one third of such cost of goods sold savings. No royalties have been paid to date in connection with the 2012 ECC. Intrexon Collaboration - 2015 ECC In December 2015, the Company entered into an additional Exclusive Channel Collaboration Agreement with Intrexon (the 2015 ECC) pursuant to which the Company is Intrexon’s exclusive channel collaborator in the research, development and commercialization of products for the treatment of chronic inflammatory and degenerative diseases of human joints through intra-articular or other local administration of genetically modified fibroblasts (the 2015 Field). Pursuant to the terms of the 2015 ECC, Intrexon has granted the Company a license to use its proprietary technologies and other intellectual property to develop and commercialize collaboration products in the 2015 Field throughout the world. The Company is responsible for all costs incurred in connection with the development and commercialization of collaboration products and will own all clinical data, regulatory filings and regulatory approvals relating to such products. The Company engages Intrexon for support services in connection with the research and development of products under the 2015 ECC and reimburses Intrexon for its cost for time and materials for such services. In consideration for the license and the other rights that the Company receives under the 2015 ECC, the Company paid Intrexon an up-front technology access fee of $10 million in cash in January 2016. For each collaboration product the Company develops under the 2015 ECC, the Company is required to pay Intrexon development milestones of up to $30 million and commercialization milestones of up to $22.5 million , a low double-digit royalty on its net sales of such products and half of any sublicensing revenues received from third parties for such products. No royalties or milestone payments have been paid to date in connection with the 2015 ECC. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Details in the computation of basic and diluted loss per share were as follows: For the Year Ended December 31, ($ in thousands except share and per share data) 2016 2015 Loss per share — Basic: Numerator for basic loss per share $ (15,292 ) $ (34,453 ) Denominator for basic loss per share 43,924,404 42,178,397 Basic loss per common share $ (0.35 ) $ (0.82 ) Loss per share — Diluted: Numerator for basic loss per share $ (15,292 ) $ (34,453 ) Adjust: Warrant revaluation income for dilutive warrants 1,958 1,529 Numerator for diluted loss per share $ (17,250 ) $ (35,982 ) Denominator for basic loss per share 43,924,404 42,178,397 Plus: Incremental shares underlying “in the money” warrants outstanding 18,017 172,949 Denominator for diluted loss per share 43,942,421 42,351,346 Diluted loss per common share $ (0.39 ) $ (0.85 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding, as their effect would be anti-dilutive: For the Year Ended December 31, 2016 2015 “In the money” stock options 450,350 1,888,348 “Out of the money” stock options 3,655,467 1,173,590 “In the money” warrants 53,572 897,244 “Out of the money” warrants 13,146,825 4,721,408 Shares underlying convertible notes 15,913,612 — Shares underlying accrued interest on convertible notes 120,429 — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases On April 6, 2005, the Company entered into a non-cancellable operating lease (the Lease) for its office, warehouse and laboratory facilities in Exton, Pennsylvania. The lease agreement had an original term of 8 years . On February 17, 2012, the Company entered into an amended and restated lease (the Amended Lease) for an additional term of 10 years through the year 2023. The Lease and the Amended Lease provide for rent payments escalating on a periodic basis. In accordance with ASC 840-20, Operating Leases , the Company accounts for total minimum payments under the lease on a straight-line basis over the life of the lease. The difference between actual rent payments and payments accounted for using the straight-line basis are reflected as deferred rent on the Company's Consolidated Balance Sheets. The Company has the option to renew the lease for an additional 5 years at fair market value. Rental expense totaled approximately $1.6 million for both the years ended December 31, 2016 and 2015. Collaboration with Related Party (Intrexon) The Company is a party to two separate exclusive channel collaboration agreements with Intrexon, a related party. Pursuant to the agreements, the Company is Intrexon's exclusive channel collaborator in the research, development and commercialization of products in certain defined fields. The Company is required to pay future royalties, as well as development and commercialization milestones, under these agreements. See Note 14 for additional details. Contractual Obligations The following table summarizes the Company’s minimum contractual obligations as of December 31, 2016: Payments due by period ($ in thousands) Total 2017 2018 2019 2020 2021 2022 and thereafter Operating lease obligations (1) 8,704 1,254 1,254 1,416 1,471 1,471 1,838 Debt obligations (2) 22,071 — — — — 22,071 — Total (3) $ 30,775 $ 1,254 $ 1,254 $ 1,416 $ 1,471 $ 23,542 $ 1,838 (1) Operating lease obligations are stated based on the Amended Lease agreement for the office, warehouse and laboratory facilities executed in February 2012. (2) Obligations under the Notes issued in connection with the 2016 Private Placement which includes principal and accrued interest through September 7, 2021, based on stated fixed rates, as the Company has elected to accrue interest. The Notes have a maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty ( 180 ) days after the date on which the Company's product candidate, FCX-007, is approved by the FDA for the treatment of RDEB. However, each Note holder has the right to require the Company to repay all or any portion of the unpaid principal and accrued interest from time to time on or after September 7, 2021. See details within Note 7. (3) This table does not include (a) any milestone payments which may become payable to third parties under license agreements as the timing and likelihood of such payments are not known, (b) any royalty payments to third parties as the amounts of such payments, timing and/or the likelihood of such payments are not known, and (c) contracts that are entered into in the ordinary course of business which are not material in the aggregate in any period presented above. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Reverse Stock Split On March 1, 2017, an amendment to the Company's Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company's outstanding shares of common stock at a ratio within a range from 1:3 to 1:10, with the final ratio to be determined by the Board, in its sole discretion, was approved by stockholders at a Special Meeting of Stockholders. The reverse stock split will be realized simultaneously for all outstanding common stock and the ratio determined by the Board will be the same for all outstanding shares of common stock. The reverse stock split will affect all holders of shares of the Company's common stock uniformly and each stockholder will hold the same percentage of the Company's common stock outstanding immediately following the reverse stock split as that stockholder held immediately prior to the reverse stock split, except for adjustments that may result from the treatment of fractional shares. The amendment will not reduce the number of authorized shares of common stock (which will remain at 150,000,000 ) or preferred stock (which will remain at 5,000,000 ) or change the par values of our common stock (which will remain at $0.001 per share) or preferred stock (which will remain at $0.001 per share). As a result, on the effective date of the reverse stock split, the stated capital on the Company's balance sheet attributable to the common stock will be reduced to between and including one-third to one-tenth of its present amount, as the case may be based on the ratio for the reverse stock split as determined by the Board, and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced. The per share net loss and net book value of the Company's common stock will be retroactively increased for each period because there will be fewer shares of our common stock outstanding. 2017 Series A Convertible Preferred Stock Offering On March 7, 2017, the Company entered into a Securities Purchase Agreement (the Purchase Agreement) with certain of its existing investors pursuant to which the Company agreed to sell a total of 8,000 units (the Units) for a purchase price of $1,000 per Unit, with each Unit consisting of (i) one share of the Company's Series A Convertible Preferred Stock (the Series A Preferred Stock), with an initial stated value of $1,000 and is convertible into shares of the Company's common stock, with a conversion price of $0.7757 (the Conversion Shares), and (ii) a warrant (the Series A Warrants) to purchase 1,289 shares of our common stock. The Offering closed on March 8, 2017. Each Series A Warrant has an exercise price of $0.84591 per share and is exercisable commencing six months after the date of issuance through expiry, or five years from the date of issuance. The exercise price of the Series A Warrants is subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or similar events. The Company expects the net proceeds from the 2017 Series A Convertible Preferred Stock offering, after deducting estimated offering expenses, to be approximately $7.65 million . |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
General | General The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and include the accounts of Fibrocell and its wholly owned subsidiaries. The accompanying Consolidated Financial Statements should be read in conjunction with the Notes to the Consolidated Financial Statements. All intercompany accounts and transactions have been eliminated in consolidation. The Company's foreign operations are immaterial and it has no unrealized gains or losses from the sale of investments. As a result, it does not have any items that would be classified as other comprehensive income in such a statement. |
Reclassifications | Reclassifications The prior year financial statements contain certain reclassifications to the results of operations for the year ended December 31, 2015 to conform to the presentation for the year ended December 31, 2016 in this Form 10-K. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosure of contingencies in the accompanying Consolidated Financial Statements and Notes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ materially from those estimates. |
Segment Information | Segment Information The Company has determined that it operates in only one segment, as it only reports operational results on an aggregate basis to its chief operating decision maker. Additionally, all of the Company's revenues are derived from within, research development activities occur in, and assets are located in, the United States. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are limited to the Company's cash and cash equivalents. As of December 31, 2016, the Company maintains its operating cash with one major U.S. domestic bank and the remainder of its cash and cash equivalents as a money market fund with one major global bank. Federal insurance coverage on operating cash amounted to $250,000 per depositor at each financial institution, and the Company’s non-interest bearing cash balances may exceed federally insured limits. The terms of these deposits are on demand to minimize risk. The Company has not incurred losses related to these deposits. |
Property and Equipment | Property and Equipment Property and equipment is carried at acquisition cost less accumulated depreciation, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-lived Assets" below. The cost of normal, recurring, or periodic repairs and maintenance activities related to property and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits. Depreciation is computed on a straight-line basis over the estimated useful life of the respective assets, which are summarized as follows: Property and equipment category Useful life Computer equipment and software 3 years Laboratory equipment 6 years Furniture and fixtures 10 years Leasehold improvements Lesser of remaining lease term or life of asset When an asset is disposed of, the associated cost and accumulated depreciation is removed from the related accounts on the Company's Consolidated Balance Sheet with any resulting gain or loss included in the Company's Consolidated Statement of Operations. |
Intangible Assets and Impairment of Long-Lived Assets | Intangible Assets Intangible assets were research and development assets related to the Company’s primary study on azficel-T that were capitalized on the balance sheet upon emergence from bankruptcy. The portion of the reorganization value which was attributed to identifiable intangible assets was $6.3 million . Azficel-T had two target indications: the Company's FDA-approved product LAVIV ® and a clinical development program for azficel-T for the treatment of vocal cord scarring resulting in chronic or severe dysphonia. Effective January 1, 2012, the Company launched LAVIV and as a result, the research and development intangible assets related to the Company’s primary study were considered to be finite-lived intangible assets and began amortizing over 12 years , the estimated useful life of the assets which was analogous with the exclusivity period granted to the Company under the BLA. Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and if applicable, impairment charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis. The Company reviews the estimated remaining useful life of its intangible assets on an annual basis with any changes, if applicable, accounted for prospectively. Additionally, finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-lived Assets" below. Amortization expense for the years ended December 31, 2016 and 2015 was approximately $0.2 million and $0.6 million , respectively. See below for discussion of impairment charges incurred. Impairment of Long-Lived Assets In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 360-10-35, Impairment or Disposal of Long-Lived Assets , the Company reviews its long-lived assets and identifiable finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable (i.e. impaired). Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value (less costs to sell for assets to be disposed of) as estimated using one of the following approaches: income, cost and/or market. Fair value using the income approach is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value utilizing the cost approach is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount. In June 2016, based on its failure to achieve primary efficacy endpoints for its Phase II clinical trial of azficel-T for the treatment of vocal cord scarring, the Company determined to wind-down its azficel-T operations as more fully described in Note 12. As a result, management concluded that the Company’s intangible assets had become fully impaired. |
Warrant Liability | Warrant Liability The Company accounts for stock warrants as either equity instruments, derivative liabilities, or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity (ASC 480), depending on the specific terms of the warrant agreement. Stock warrants are accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging (ASC 815) if the stock warrants contain “down-round protection” or other terms that could potentially require “net cash settlement” and therefore, do not meet the scope exception for treatment as a derivative. Since “down-round protection” is not an input into the calculation of the fair value of the warrants, the warrants cannot be considered indexed to the Company’s own stock which is a requirement for the scope exception as outlined under ASC 815. Warrant instruments that could potentially require “net cash settlement” in the absence of express language precluding such settlement and those which include “down-round provisions” are initially classified as derivative liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. The Company will continue to classify the fair value of the warrants that contain “down-round protection” and “net cash settlement” as a liability until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. Warrants that the Company may be required to redeem through payment of cash or other assets outside its control are classified as liabilities pursuant to ASC 480 and are initially and subsequently measured at their estimated fair values. |
Debt Issued With Warrants | Debt Issued With Warrants The Company considers guidance within ASC 470-20, Debt (ASC 470), ASC 480, and ASC 815 when accounting for the issuance of convertible debt with detachable warrants. As described above under the caption “ Warrant Liability ”, the Company classifies stock warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with liability-classified warrants, the proceeds from the issuance of convertible debt are first allocated to the warrants at their full estimated fair value and established as both a liability and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and beneficial conversion features, are allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument pursuant to ASC 835, Interest (ASC 835). Embedded Derivatives. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separate accounting as derivative financial instruments pursuant to ASC 815. Embedded derivatives are initially and subsequently measured at fair value. See Note 7 for additional discussion on the embedded derivatives associated with the Company’s convertible notes. Beneficial Conversion Feature. If the amount allocated to the convertible debt results in an effective per share conversion price less than the fair value of the Company’s common stock on the commitment date, the intrinsic value of this beneficial conversion feature is recorded as a discount to the convertible debt with a corresponding increase to additional paid in capital. The beneficial conversion feature discount is equal to the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date, unless limited by the remaining proceeds allocated to the debt. See Note 7 for additional discussion on the beneficial conversion feature associated with the Company’s convertible notes. Debt Issuance Costs. The Company follows the guidance under Accounting Standards Update (ASU) 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03) for accounting for debt issuance costs. The Company allocates debt issuance costs between the debt and the warrants on the same basis as proceeds were allocated. The Company expenses issuance costs allocated to the warrants and presents the issuance costs allocated to the debt as a direct reduction from the carrying amount of the debt liability in the balance sheet. However, if debt issuance costs exceed the carrying amount of the debt, issuance costs are recorded to additional paid-in capital as a reduction of the beneficial conversion feature. As of December 31, 2016, the Company’s debt issuance costs are presented in additional paid-in capital as a reduction of the beneficial conversion feature and are being amortized to interest expense (despite their classification in additional paid-in capital) using the effective interest rate method over the expected term of the debt pursuant to ASC 835. |
Revenue Recognition | Revenue Recognition Revenue from Product Sales. In June 2011, the FDA approved the Company's BLA for LAVIV for the improvement of the appearance of moderate to severe nasolabial fold wrinkles in adults. The Company recognizes revenue from product sales in accordance with ASC 605, Revenue Recognition (ASC 605). In general, ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services rendered, (3) the fee is fixed and determinable and (4) collectability is reasonably assured. Prepayments on product sales are generally received at three different stages of the treatment: (1) the biopsy stage, (2) the cell harvest stage, and (3) the injection stage. As one full course of LAVIV therapy includes three series of injections, prepayments are deferred and revenue is recognized on a prorata basis as each of the three series of injections is shipped to the physician. In connection with the wind-down of azficel-T operations during 2016 as more fully described in Note 12, the Company is no longer accepting new prescriptions. Collaboration Revenue. The Company follows ASC 605-25, Revenue Recognition – Multiple-Element Arrangements (ASC 605-25) and ASC 808, Collaborative Arrangements , if applicable, to determine the recognition of revenue under its collaborative research, development and commercialization agreements. The terms of these agreements generally contain multiple elements, or deliverables, which may include (i) grants of licenses, or options to obtain licenses, to our intellectual property, (ii) research and development services, (iii) clinical and commercial manufacturing, and/or (iv) participation on joint research and/or joint development committees. The payments the Company may receive under these arrangements typically include one or more of the following: non-refundable, up-front license fees; funding of research and/or development efforts including proof-of-concept studies and product development; amounts due upon the achievement of specified objectives or milestones such as obtaining patents, trademarks and certain regulatory approvals, and achievement of commercialization of products; and/or royalties on future product sales. Each of the required deliverables under such an arrangement are evaluated, in accordance with ASC 605-25, to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Collaboration revenue is recognized on a gross basis, in accordance with the criteria set forth in ASC 605-45, Revenue Recognition: Principal Agent Considerations . Collaboration revenue for the years ended December 31, 2016 and 2015 is related to a research and development agreement that the Company has with a third party to investigate potential new non-pharmaceutical applications for the Company's conditioned fibroblast media technology. Revenue recognized to date from this collaboration relates to an upfront license fee that was amortized over the estimated total contract period and a proof-of-concept study which was completed in 2015. The Company will recognize future milestone payments when earned provided that (1) the milestone event is substantive in that it can only be achieved based in whole or in part on either the Company’s performance or on the occurrence of a specific outcome resulting from the Company’s performance and its achievability was not reasonably assured at the inception of the agreement; (2) the Company does not have ongoing performance obligations related to the achievement of the milestone; and (3) it would result in the receipt of additional payments. A milestone payment is considered substantive if all of the following conditions are met: (a) the milestone payment is non-refundable; (b) achievement of the milestone was not reasonably assured at the inception of the arrangement; (c) substantive effort is involved to achieve the milestone; and (d) the amount of the milestone payment appears reasonable in relation to the effort expended, the other milestones in the arrangement and the related risk associated with the achievement of the milestone. |
Cost of Revenue | Cost of Revenue Cost of revenue includes expenses related to revenue from product sales and collaboration revenue. Cost of Product Sales. Costs include the expense to manufacture LAVIV, including direct and indirect costs. Costs incurred for shipping and handling during the biopsy stage (to/from physicians) are included in cost of product sales. Costs related to shipping and handling of injections (to physicians) are included in selling, general and administrative expenses. Cost of Collaboration Revenue . Costs directly related to deliverables in a revenue-generating collaboration are charged to cost of collaboration revenue as incurred. |
Research and Development Expenses | Research and Development Expenses Research and development costs are expensed as incurred and include employee salaries and benefits, costs incurred with third party contractors to perform research, conduct clinical trials, develop and manufacture drug materials and delivery devices, and a portion of facilities costs. Research and development expenses also include costs to manufacture product for clinical trial use and to develop manufacturing, cell collection and logistical process improvements. Clinical trial costs are a significant component of research and development expenses, often with third party service providers. Invoicing from third party contractors for services performed can lag several months. The Company accrues the costs of services rendered in connection with third party contractor activities based on its estimate of management fees, site management and monitoring costs and data management costs incurred in a given period. |
Stock-Based Compensation | Stock-Based Compensation The Company follows ASC 718, Compensation – Stock Compensation (ASC 718), or ASC 505-50, Equity – Equity Based Payments to Non-Employees, where applicable. The Company accounts for stock-based awards to employees using the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. In addition, the Company accounts for stock-based compensation to non-employees in accordance with the accounting guidance for equity instruments that are issued to entities or persons other than employees. The Company uses a Black-Scholes option-pricing model to determine the fair value of each option grant as of the date of grant for expense incurred. The Black-Scholes option pricing model requires inputs for risk-free interest rate, dividend yield, expected stock price volatility and expected term of the options. The value of the award that is ultimately expected to vest based on the achievement of a performance condition (i.e., service period) is recognized as expense on a straight-line basis over the requisite service period. See Note 11 for additional details. Previously, ASC 718 required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. In the first quarter of 2016, the Company adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) , which allows an entity to elect as an accounting policy either to continue to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures when they occur. In connection with the adoption of this ASU, the Company made an accounting policy election to account for forfeitures as they occur and applied this change in accounting policy on a modified retrospective basis. As a result, the Company recorded a cumulative effect adjustment to retained earnings which resulted in an increase to accumulated deficit of $0.1 million with an offsetting increase to additional paid-in capital (zero net total equity impact) as of the date of adoption, principally related to additional stock compensation expense that would have been recognized on unvested outstanding options unadjusted for estimated forfeitures. |
Restructuring Costs | Restructuring Costs Restructuring charges are primarily comprised of severance costs related to workforce reductions, contract termination and wind-down costs, asset impairments and costs of decommissioning the Company’s azficel-T manufacturing facility. In accordance with ASC 420, Exit or Disposal Cost Obligations , the Company recognizes restructuring charges when the liability has been incurred, except for one-time employee termination benefits that are incurred over time. Generally, one-time employee termination benefits (i.e., severance costs) are accrued at the date management has committed to a plan of termination and employees have been notified of their termination dates and expected severance payments. Other costs, including but not limited to, contract termination and wind-down costs and manufacturing facility decommissioning costs, will be recorded as incurred. Asset impairment charges have been, and will be, recognized when management has concluded that the assets have been impaired in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets , or other applicable authoritative guidance. |
Income Taxes | Income Taxes An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by a net operating loss carryover. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. In the event the Company is charged interest or penalties related to income tax matters, the Company would record such interest as interest expense and would record such penalties as other expense in the Consolidated Statements of Operations. No such charges have been incurred by the Company. For each of the years ended December 31, 2016 and 2015, the Company had no uncertain tax positions. |
Loss Per Share Data | Loss Per Share Data Basic loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during that period. The diluted loss per share calculation gives effect to dilutive stock options, warrants, convertible notes and other potentially dilutive common stock equivalents outstanding during the period. Diluted loss per share is based on the if-converted method or the treasury stock method, as applicable, and includes the effect from the potential issuance of common stock, such as shares issuable pursuant to the conversion of convertible notes and the exercise of stock options and warrants, assuming the exercise of all "in-the-money" common stock equivalents based on the average market price during the period. Common stock equivalents have been excluded where their inclusion would be anti-dilutive. |
Recently Adopted and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (ASU 2014-15). This update defines management's responsibility to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. More specifically, the amendments (1) provide a definition of the term "substantial doubt", (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The guidance is effective for annual reporting periods ending after December 15, 2016 and the Company adopted ASU 2014-15 during the fourth quarter of 2016 with no material impact to the Company's Consolidated Financial Statements. The Company has concluded that certain conditions raise substantial doubt about its ability to continue as a going concern as more fully described in Note 1. In April 2015, the FASB issued ASU 2015-03, to simplify the presentation of debt issuance costs. The new standard requires entities to present debt issuance costs related to a recognized liability in the balance sheet as a direct deduction from that liability, or contra-liability, rather than an asset, consistent with the existing presentation of a debt discount. For public business entities, the amendments in ASU 2015-03 are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted this guidance during the third quarter of 2016 in connection with the issuance of convertible notes as discussed above under the subheading “ Debt Issued with Warrants” within Note 3 and also Note 7. In March 2016, the FASB issued ASU 2016-09 to simplify several aspects of accounting for share-based payment award transactions and includes accounting for income taxes, forfeitures, statutory tax withholding requirements and the classification of awards as either equity or liabilities, as well as the classification on the statement of cash flows. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is permitted. The Company elected to early adopt ASU 2016-09 during the first quarter of 2016. In connection with the adoption of this ASU, the Company elected to account for forfeitures as they occur and applied this change in accounting policy on a modified retrospective basis. As a result, the Company recorded a cumulative-effect adjustment to retained earnings which resulted in an increase to accumulated deficit of $0.1 million with an offsetting increase to additional paid-in capital (zero net total equity impact) as of the date of adoption, related to additional stock compensation expense that would have been recognized on unvested outstanding options unadjusted for estimated forfeitures. Other provisions of ASU 2016-09 had no impact on the Company’s Consolidated Financial Statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet (including by lessees for those leases classified as operating leases under previous GAAP) and disclosing key information about leasing arrangements. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Earlier application is permitted. While the Company is currently assessing the full impact this ASU will have on its Consolidated Financial Statements, the Company believes the primary impact upon adoption will be the recognition, on a discounted basis, of its minimum commitments under the current noncancelable operating lease, as amended, for its Exton, PA facility, resulting in the recording of right of use assets and lease obligations. The Company does not anticipate any other material impacts to its Consolidated Financial Statements. Current minimum commitments under noncancelable operating leases are disclosed in Note 16. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). In April 2016, the FASB also issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. These amendments include targeted improvements based on input the FASB received from the FASB/International Accounting Standards Boards’ Joint Transition Resource Group for Revenue Recognition and other stakeholders, but do not change the core principles in Topic 606. The ASUs seek to clarify the guidance within the applicable subtopics of ASC 606, including amendments to the implementation guidance and illustrations intended to improve the operability and understandability of the implementation guidance. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Given the Company's decision to wind-down azficel-T operation (including LAVIV), as more fully described in Note 12, and expectation that revenues from product sales and collaboration revenue will remain insignificant in the foreseeable future, management does not believe this ASU will have a material impact on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides guidance on the treatment of cash receipts and cash payments for certain types of cash transactions, to eliminate diversity in practice in the presentation of the cash flow statement. For public business entities, the amendments in ASU 2016-15 are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Earlier application is permitted. While this ASU is not currently material to the Company, given the recent issuance of convertible notes discussed above and in Note 7, this ASU may be applicable in the future. From time to time, new accounting pronouncements are issued by the FASB and rules are issued by the SEC that we adopt as of the specified date. Unless otherwise noted, management does not believe that any other recently issued accounting pronouncements issued by the FASB or guidance issued by the SEC had, or is expected to have, a material impact on the Company’s present or future consolidated financial statements. |
Inventory | Inventories have historically been recorded at the lower of cost or market value, with cost determined under specific identification and on the first-in, first-out (FIFO) method. Inventories consisted of raw materials and work-in-process intended for use in the manufacture of LAVIV, which was approved by the FDA in 2011 for the improvement of nasolabial fold wrinkles in adults. Raw materials that could be used either for manufacturing pre-clinical and clinical product candidates or the production of commercial products were expensed as research and development costs when selected for use in pre-clinical or clinical manufacturing operations. |
Fair Value of Financial Instruments | Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company follows the guidance in ASC 820, Fair Value Measurement , to account for financial assets and liabilities measured on a recurring basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires fair value measurements be classified and disclosed in one of the following three categories: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; • Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; • Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. |
Assumptions Used in Determining Fair Value of Compounded Bifurcated Derivative | Assumptions Used in Determining Fair Value of Compound Bifurcated Derivative The Company utilizes a binomial lattice model to value its bifurcated derivatives included in the Notes. ASC 815 does not permit an issuer to account separately for individual derivative terms and features embedded in hybrid financial instruments that require bifurcation and liability classification as derivative financial instruments. Rather, such terms and features must be combined together and fair valued as a single, compound embedded derivative. The Company selected a binomial lattice model to value the compound embedded derivative because it believes this technique is reflective of all significant assumptions that market participants would likely consider in negotiating the transfer of the Notes. Such assumptions include, among other inputs, stock price volatility, risk-free rates, credit risk assumptions, early redemption and conversion assumptions, and the potential for future adjustment of the conversion price due to a future dilutive financing. Additionally, there are other embedded features of the Notes requiring bifurcation, other than the Contingent Put Option and the Contingent Call Option, which had no value at December 31, 2016 due to management’s estimates of the likelihood of certain events, but that may have value in the future should those estimates change. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Property and Equipment Useful Lives | Depreciation is computed on a straight-line basis over the estimated useful life of the respective assets, which are summarized as follows: Property and equipment category Useful life Computer equipment and software 3 years Laboratory equipment 6 years Furniture and fixtures 10 years Leasehold improvements Lesser of remaining lease term or life of asset Property and equipment consisted of the following as of: December 31, ($ in thousands) 2016 2015 Laboratory equipment $ 1,429 $ 1,416 Computer equipment and software 313 296 Furniture and fixtures 44 53 Leasehold improvements 1,228 903 Construction-in-process 36 156 Total property and equipment, gross 3,050 2,824 Less: Accumulated depreciation (1,561 ) (1,242 ) Total property and equipment, net $ 1,489 $ 1,582 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following as of: December 31, ($ in thousands) 2016 2015 Raw materials (LAVIV and product candidates) $ — $ 338 Work-in-process (LAVIV) — 144 Total inventory, net $ — $ 482 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Depreciation is computed on a straight-line basis over the estimated useful life of the respective assets, which are summarized as follows: Property and equipment category Useful life Computer equipment and software 3 years Laboratory equipment 6 years Furniture and fixtures 10 years Leasehold improvements Lesser of remaining lease term or life of asset Property and equipment consisted of the following as of: December 31, ($ in thousands) 2016 2015 Laboratory equipment $ 1,429 $ 1,416 Computer equipment and software 313 296 Furniture and fixtures 44 53 Leasehold improvements 1,228 903 Construction-in-process 36 156 Total property and equipment, gross 3,050 2,824 Less: Accumulated depreciation (1,561 ) (1,242 ) Total property and equipment, net $ 1,489 $ 1,582 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following as of: December 31, ($ in thousands) 2016 2015 Accrued professional fees $ 526 $ 824 Accrued compensation 631 755 Accrued other 394 200 Total accrued expenses $ 1,551 $ 1,779 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes Outstanding | Convertible promissory notes outstanding were as follows: ($ in thousands) December 31, 2016 2015 Convertible promissory notes $ 18,088 $ — Debt discount - warrants (9,643 ) — Debt discount - compound bifurcated derivatives (1,273 ) — Debt discount - beneficial conversion feature (7,172 ) — Convertible promissory notes, net $ — $ — |
Estimated Fair Value of Compounded Bifurcated Derivative | Significant inputs and assumptions used in the binomial lattice model for the derivative liability are as follows: ($ in thousands except per share data) December 31, 2016 Calculated aggregate value $ 1,735 Closing price per share of common stock $ 0.63 Contractual remaining term 9 years, 8 months Contractual interest rate 4.0 % Volume-weighted average conversion rate $ 1.13662 Risk-free interest rate (term structure) 0.44% - 2.45% Dividend yield — Credit Rating CC Credit Spread 33.27 % Volatility 99.9 % |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Outstanding Liability Classified Warrants to Purchase Common Stock | The following table summarizes outstanding liability-classified warrants to purchase common stock as of: Number of Warrants December 31, 2016 December 31, 2015 Exercise Price Expiration Dates Issued in March 2010 financing — 319,789 $ 6.25 Mar 2016 Issued in June 2011 financing — 6,113 $ 22.50 Jun 2016 Issued in August 2011 financing — 565,759 $ 18.75 Aug 2016 Issued to placement agents in August 2011 financing — 50,123 $ 13.635 Aug 2016 Issued in Series B and D Preferred Stock offerings — 1,970,594 $ 6.250 Jul 2016 - Dec 2016 Issued in Series E Preferred Stock offering (1) 214,288 60,000 $ 0.70 Dec 2017 Issued with June 2012 Convertible Notes 1,125,578 1,125,578 $ 2.50 Jun 2018 Issued in Series E Preferred Stock offering 1,568,823 1,568,823 $ 7.50 Dec 2018 Issued with September 2016 Convertible Notes 18,087,500 — $ 1.50 Sep 2021 Total 20,996,189 5,666,779 (1) As a result of the anti-dilution provisions contained in the warrants, the exercise price for warrants issued in connection with the Company’s Series E Preferred Stock offering was decreased from $2.50 per warrant share to $0.70 and the number of warrant shares was increased by 154,288 during 2016. |
Summary of Warrant Activity | The table below is a summary of the Company's warrant activity for the year ended December 31, 2016. Number of warrants Weighted average exercise price Outstanding at December 31, 2015 5,666,779 $ 7.14 Issued 18,087,500 1.50 Adjustments (1) 154,288 0.70 Exercised — — Expired (2,912,378 ) 8.84 Outstanding at December 31, 2016 20,996,189 $ 1.99 (1) See footnote 1 in table above. |
Calculated Aggregate Fair Values and Net Cash Settlement Value | The following table summarizes the calculated aggregate fair values, along with the assumptions utilized in each calculation: ($ in thousands, except per share data) December 31, December 31, Calculated aggregate value $ 6,034 $ 8,275 Weighted average exercise price per share $ 1.99 $ 7.14 Closing price per share of common stock $ 0.63 $ 4.55 Volatility 85.6 % 85.2 % Weighted average remaining expected life 4 years, 3 months 1 year, 8 months Risk-free interest rate 1.75 % 0.98 % Dividend yield — — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Company's Financial Assets and Liability Measured at Fair Value on a Recurring Basis | The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015: December 31, 2016 ($ in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 17,515 $ — $ — $ 17,515 Total Assets $ 17,515 $ — $ — $ 17,515 Liabilities: Warrant liability $ — $ — $ 6,034 $ 6,034 Derivative liability — — 1,735 1,735 Total Liabilities $ — $ — $ 7,769 $ 7,769 December 31, 2015 ($ in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 29,268 $ — $ — $ 29,268 Total Assets $ 29,268 $ — $ — $ 29,268 Liabilities: Warrant liability $ — $ — $ 8,275 $ 8,275 Derivative liability — — — — Total Liabilities $ — $ — $ 8,275 $ 8,275 |
Reconciliation of Warrant Liability Measured at Fair Value on Recurring Basis | The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows: ($ in thousands) Warrant Liability Balance at December 31, 2014 $ 11,286 Exercise of warrants (1) (82 ) Expiration of warrants (2) (276 ) Change in fair value of warrant liability (2,653 ) Balance at December 31, 2015 $ 8,275 Issuance of warrants (3) 9,643 Expiration of warrants (2) (1,910 ) Change in fair value of warrant liability (9,974 ) Balance at December 31, 2016 $ 6,034 (1) Warrants were exercised under the cashless exercise method pursuant to the corresponding warrant agreements. As a result of such exercises, the Company issued 11,584 shares of common stock. Consequently, these instruments were no longer classified as liabilities. These common stock warrants were remeasured to their fair value as of the exercise date with the change in fair value recorded to the Company's Consolidated Statement of Operations. The fair value related to the shares issued in connection with the exercised warrants was reclassified from a liability to additional paid-in capital in the Company's Consolidated Balance Sheets. (2) Represents the fair value as of the beginning of the year for warrants expiring during the year and has been recorded to warrant revaluation income in the Company's Consolidated Statement of Operations for the respective year end. (3) Represents the fair value of warrants on the issuance date. The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) was as follows: ($ in thousands) Derivative Liability Balance at December 31, 2015 $ — Issuance of convertible notes (1) 1,273 Change in fair value of derivative liability 462 Balance at December 31, 2016 $ 1,735 (1) Represents fair value of embedded derivatives on the issuance date. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Details of Fair Value Option Award | The fair market value of the stock options at the date of grant was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions for the years ended December 31: 2016 2015 Expected life (1) 6 years, 2 months 6 years, 1 month Interest rate 1.5 % 1.6 % Dividend yield — — Volatility (2) 92.4 % 103.2 % (1) The Company uses the simplified method for estimating the stock option term. (2) For the y ear ended December 31, 2016, the Company estimated expected volatility based on the historical volatility of its own common stock on a stand-alone basis. For the year ended December 31, 2015, the Company estimated expected volatility based on the historical volatility of a peer group. |
Summary of Stock Option Activity | The following table summarizes stock option activity for the years ended December 31, 2016 and 2015: ($ in thousands, except share and per share data) Number of shares Weighted- average exercise price Weighted- average remaining contractual term (in years) Aggregate intrinsic value Outstanding at December 31, 2014 2,086,450 $ 7.43 7 years, 2 months $ — Granted 1,352,114 4.48 Exercised (56,250 ) 4.53 Expired (65,250 ) 10.54 Forfeited (182,970 ) 5.91 Outstanding at December 31, 2015 3,134,094 $ 6.23 8 years $ 1,630 Granted 1,585,400 1.60 Exercised — — Expired (35,482 ) 7.93 Forfeited (845,964 ) 2.83 Outstanding at December 31, 2016 (1) 3,838,048 $ 5.05 7 years, 2 months $ — Exercisable at December 31, 2016 2,179,198 $ 7.11 5 years, 7 months $ — (1) Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring | The restructuring and asset impairment activity for the year ended December 31, 2016 was as follows: ($ in thousands) Employee Severance and Benefits Asset Impairments Total Accrued restructuring balance as of December 31, 2015 $ — $ — $ — Additional accruals 301 34 335 Cash payments (282 ) — (282 ) Non-cash settlements — (34 ) (34 ) Accrued restructuring balance as of December 31, 2016 $ 19 $ — $ 19 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense Benefit | The components of the income tax expense (benefit) related to operations, were as follows: Year ended December 31, ($ in thousands) 2016 2015 U.S. Federal: Current $ — $ — Deferred — — U.S. State: Current — — Deferred — — Income tax expense (benefit) $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between income tax expense (benefit) at the U.S. federal statutory rate and the amount recorded in the accompanying Consolidated Financial Statements were as follows: Year ended December 31, ($ in thousands) 2016 2015 Tax benefit at U.S. federal statutory rate $ (5,353 ) $ (12,183 ) Increase in domestic valuation allowance 10,162 14,236 State income taxes benefit before valuation allowance, net of federal benefit (1,160 ) (1,122 ) Warrant revaluation income and other financing costs (3,742 ) (1,026 ) Credits (366 ) — Stock-based compensation 239 292 Return to provision true-ups 220 (40 ) Other — (157 ) Income tax expense (benefit) $ — $ — |
Schedule of Deferred Tax Assets and Liabilities | The components of the Company’s net deferred tax assets and liabilities at December 31, 2016 and 2015 were as follows: Year ended December 31, ($ in thousands) 2016 2015 Deferred tax liabilities: Intangible assets $ — $ 1,764 Convertible notes 4,263 — Total deferred tax liabilities $ 4,263 $ 1,764 Deferred tax assets: Loss carryforwards $ 85,263 $ 77,194 Intangible assets 117 — Capital loss carryforward 852 840 Property and equipment 1,067 1,096 License fees 7,776 8,351 Accrued expenses and other 549 886 Stock-based compensation 4,059 3,445 Credits 418 — Total deferred tax assets before valuation allowance 100,101 91,812 Less: valuation allowance (95,838 ) (90,048 ) Total deferred tax assets $ 4,263 $ 1,764 Net deferred tax assets $ — $ — |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | Details in the computation of basic and diluted loss per share were as follows: For the Year Ended December 31, ($ in thousands except share and per share data) 2016 2015 Loss per share — Basic: Numerator for basic loss per share $ (15,292 ) $ (34,453 ) Denominator for basic loss per share 43,924,404 42,178,397 Basic loss per common share $ (0.35 ) $ (0.82 ) Loss per share — Diluted: Numerator for basic loss per share $ (15,292 ) $ (34,453 ) Adjust: Warrant revaluation income for dilutive warrants 1,958 1,529 Numerator for diluted loss per share $ (17,250 ) $ (35,982 ) Denominator for basic loss per share 43,924,404 42,178,397 Plus: Incremental shares underlying “in the money” warrants outstanding 18,017 172,949 Denominator for diluted loss per share 43,942,421 42,351,346 Diluted loss per common share $ (0.39 ) $ (0.85 ) |
Securities excluded from calculation of weighted-average shares outstanding | The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding, as their effect would be anti-dilutive: For the Year Ended December 31, 2016 2015 “In the money” stock options 450,350 1,888,348 “Out of the money” stock options 3,655,467 1,173,590 “In the money” warrants 53,572 897,244 “Out of the money” warrants 13,146,825 4,721,408 Shares underlying convertible notes 15,913,612 — Shares underlying accrued interest on convertible notes 120,429 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | The following table summarizes the Company’s minimum contractual obligations as of December 31, 2016: Payments due by period ($ in thousands) Total 2017 2018 2019 2020 2021 2022 and thereafter Operating lease obligations (1) 8,704 1,254 1,254 1,416 1,471 1,471 1,838 Debt obligations (2) 22,071 — — — — 22,071 — Total (3) $ 30,775 $ 1,254 $ 1,254 $ 1,416 $ 1,471 $ 23,542 $ 1,838 (1) Operating lease obligations are stated based on the Amended Lease agreement for the office, warehouse and laboratory facilities executed in February 2012. (2) Obligations under the Notes issued in connection with the 2016 Private Placement which includes principal and accrued interest through September 7, 2021, based on stated fixed rates, as the Company has elected to accrue interest. The Notes have a maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty ( 180 ) days after the date on which the Company's product candidate, FCX-007, is approved by the FDA for the treatment of RDEB. However, each Note holder has the right to require the Company to repay all or any portion of the unpaid principal and accrued interest from time to time on or after September 7, 2021. See details within Note 7. (3) This table does not include (a) any milestone payments which may become payable to third parties under license agreements as the timing and likelihood of such payments are not known, (b) any royalty payments to third parties as the amounts of such payments, timing and/or the likelihood of such payments are not known, and (c) contracts that are entered into in the ordinary course of business which are not material in the aggregate in any period presented above. |
Business and Organization (Deta
Business and Organization (Details) $ / shares in Units, $ in Thousands | Mar. 01, 2017 | Oct. 05, 2016$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Subsequent Event [Line Items] | |||||
Cash and cash equivalents | $ 17,515 | $ 29,268 | $ 37,495 | ||
Working capital | $ 15,000 | ||||
NASDAQ listing rules, minimum closing bid price | $ / shares | $ 1 | ||||
NASDAQ listing rules, number of required consecutive business days at minimum bid price to regain compliance | 10 days | ||||
Subsequent Event | Minimum | |||||
Subsequent Event [Line Items] | |||||
Reverse stock split | 0.3333 | ||||
Subsequent Event | Maximum | |||||
Subsequent Event [Line Items] | |||||
Reverse stock split | 0.1000 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies Narrative (Details) | Jan. 01, 2012 | Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Sep. 03, 2009USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of operating segments | Segment | 1 | |||
Federal insurance coverage on operating cash | $ 250,000 | |||
Intangible assets | 0 | $ 4,136,000 | $ 6,300,000 | |
Finite-lived intangible assets useful life (years) | 12 years | |||
Amortization expense | 200,000 | 600,000 | ||
Intangible asset impairment | $ 3,905,000 | 0 | ||
Additional paid-in capital | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect from adoption of new accounting standard | 100,000 | |||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-09 | Accumulated deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect from adoption of new accounting standard | (100,000) | |||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-09 | Additional paid-in capital | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect from adoption of new accounting standard | $ 100,000 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies Useful Life (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Laboratory equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life (years) | 6 years |
Computer equipment and software | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life (years) | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life (years) | 10 years |
Inventory (Details)
Inventory (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory [Line Items] | ||
Loss on write-down of inventory | $ 356,000 | $ 0 |
Raw materials (LAVIV and product candidates) | 0 | 338,000 |
Work-in-process (LAVIV) | 0 | 144,000 |
Total inventory, net | 0 | $ 482,000 |
Cost of Sales | ||
Inventory [Line Items] | ||
Loss on write-down of inventory | $ 400,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Total property and equipment, gross | $ 3,050 | $ 2,824 |
Less: Accumulated depreciation | (1,561) | (1,242) |
Total property and equipment, net | 1,489 | 1,582 |
Laboratory equipment | ||
Total property and equipment, gross | 1,429 | 1,416 |
Computer equipment and software | ||
Total property and equipment, gross | 313 | 296 |
Furniture and fixtures | ||
Total property and equipment, gross | 44 | 53 |
Leasehold improvements | ||
Total property and equipment, gross | 1,228 | 903 |
Construction-in-process | ||
Total property and equipment, gross | $ 36 | $ 156 |
Property and Equipment Narrativ
Property and Equipment Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Depreciation | $ 0.3 | $ 0.2 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued professional fees | $ 526 | $ 824 |
Accrued compensation | 631 | 755 |
Accrued other | 394 | 200 |
Total accrued expenses | $ 1,551 | $ 1,779 |
Convertible Notes - Narrative (
Convertible Notes - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Debt discount | $ 18,088,000 | $ 0 | |
Amortization period | 5 years | ||
Derivative liability revaluation expense | 462,000 | 0 | |
Compounded Bifurcated Derivatives | |||
Debt Instrument [Line Items] | |||
Debt discount | $ 1,300,000 | 1,273,000 | 0 |
Issued with September 2016 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Debt discount | 9,600,000 | 9,643,000 | 0 |
Beneficial Conversion Feature | |||
Debt Instrument [Line Items] | |||
Debt discount | $ 7,200,000 | $ 7,172,000 | $ 0 |
Issued with September 2016 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Warrants issued to purchase common stock | 18,087,500 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Convertible debt principal | $ 18,087,500 | ||
Interest rate | 4.00% | ||
Period after product candidate FCX-007 is approved to reach maturity date | 180 days | 180 days | |
Required written notice period prior to exercise of put right | 180 days | ||
Prepayment as a percent of outstanding principal | 101.00% | ||
Debt discount | $ 18,100,000 | ||
Amortization expense | $ 0 | ||
Effective yield | 1157.00% | ||
Convertible Debt | Option One | |||
Debt Instrument [Line Items] | |||
Conversion price (usd per share) | $ 1.13625 | ||
Convertible Debt | Option Two | |||
Debt Instrument [Line Items] | |||
Additional conversion price (usd per share) | 0.12625 | ||
Convertible Debt | Option Two | Minimum | |||
Debt Instrument [Line Items] | |||
Conversion price (usd per share) | 1.13625 | ||
Convertible Debt | Option Two | Maximum | |||
Debt Instrument [Line Items] | |||
Conversion price (usd per share) | $ 1.22625 |
Convertible Notes - Promissory
Convertible Notes - Promissory Notes Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Debt discount | $ (18,088) | $ 0 | |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Convertible promissory notes | 18,088 | 0 | |
Debt discount | $ (18,100) | ||
Convertible promissory notes, net | 0 | 0 | |
Issued with September 2016 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Debt discount | (9,643) | (9,600) | 0 |
Compounded Bifurcated Derivatives | |||
Debt Instrument [Line Items] | |||
Debt discount | (1,273) | (1,300) | 0 |
Beneficial Conversion Feature | |||
Debt Instrument [Line Items] | |||
Debt discount | $ (7,172) | $ (7,200) | $ 0 |
Convertible Notes - Estimated F
Convertible Notes - Estimated Fair Value (Details) - Compounded Bifurcated Derivatives - Binomial Lattice Model $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / shares | |
Debt Instrument [Line Items] | |
Calculated aggregate value | $ | $ 1,735 |
Closing price per share of common stock (usd per share) | $ 0.63 |
Contractual remaining term | 9 years 8 months |
Contractual interest rate | 4.00% |
Volume-weighted average conversion rate | $ 1.13662 |
Dividend yield | 0.00% |
Credit Spread | 33.27% |
Volatility | 99.90% |
Minimum | |
Debt Instrument [Line Items] | |
Risk-free interest rate | 0.44% |
Maximum | |
Debt Instrument [Line Items] | |
Risk-free interest rate | 2.45% |
Warrants - Narrative (Details)
Warrants - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | |||
Warrants exercise price (usd per share) | $ 1.99 | $ 7.14 | |
Level 3 | Warrants | |||
Class of Warrant or Right [Line Items] | |||
Non-cash expense (income) resulting from change in estimated fair value | $ (11.9) | $ (2.9) | |
Issued with September 2016 Convertible Notes | |||
Class of Warrant or Right [Line Items] | |||
Warrants issued to purchase common stock | 18,087,500 | ||
Warrants exercise price (usd per share) | $ 1.50 | $ 1.50 | |
Period of time after issuance for warrants to become exercisable | 6 months | ||
Warrant exercise price | 5 years |
Warrants - Outstanding Liabilit
Warrants - Outstanding Liability Classified Warrants to Purchase Common Stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 20,996,189 | 5,666,779 | |
Warrants exercise price (usd per share) | $ 1.99 | $ 7.14 | |
Increase in number of warrant shares due to anti-dilution provisions (shares) | 154,288 | ||
Issued in March 2010 financing | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 0 | 319,789 | |
Warrants exercise price (usd per share) | $ 6.25 | ||
Issued in June 2011 financing | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 0 | 6,113 | |
Warrants exercise price (usd per share) | $ 22.50 | ||
Issued in August 2011 financing | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 0 | 565,759 | |
Warrants exercise price (usd per share) | $ 18.75 | ||
Issued to placement agents in August 2011 financing | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 0 | 50,123 | |
Warrants exercise price (usd per share) | $ 13.635 | ||
Issued in Series B and D Preferred Stock offerings | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 0 | 1,970,594 | |
Warrants exercise price (usd per share) | $ 6.25 | ||
Issued in Series E Preferred Stock offering | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 214,288 | 60,000 | |
Warrants exercise price (usd per share) | $ 0.70 | $ 2.50 | |
Issued with June 2012 Convertible Notes | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 1,125,578 | 1,125,578 | |
Warrants exercise price (usd per share) | $ 2.50 | ||
Issued in Series E Preferred Stock offering | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 1,568,823 | 1,568,823 | |
Warrants exercise price (usd per share) | $ 7.50 | ||
Issued with September 2016 Convertible Notes | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants (shares) | 18,087,500 | 0 | |
Warrants exercise price (usd per share) | $ 1.50 | $ 1.50 |
Warrants - Summary of Warrant A
Warrants - Summary of Warrant Activity (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Increase (Decrease) in Warrants Outstanding [Roll Forward] | |
Number of warrants outstanding (shares), beginning balance | shares | 5,666,779 |
Number of warrants granted during the period (shares) | shares | 18,087,500 |
Number of warrants adjusted during the period (shares) | shares | 154,288 |
Number of warrants exercised during the period (shares) | shares | 0 |
Number of warrants expired during the period (share) | shares | (2,912,378) |
Number of warrants outstanding (shares), ending balance | shares | 20,996,189 |
Warrants exercise price (usd per share), beginning balance | $ / shares | $ 7.14 |
Weighted-average exercise price, warrants granted during the period (usd per share) | $ / shares | 1.50 |
Weighted-average exercise price, warrants adjusted during the period (usd per share) | $ / shares | 0.70 |
Weighted-average exercise price, warrants exercised during the period (usd per share) | $ / shares | 0 |
Weighted-average exercise price, warrants expired during the period (usd per share) | $ / shares | 8.84 |
Warrants exercise price (usd per share), ending balance | $ / shares | $ 1.99 |
Warrants - Calculated Aggregate
Warrants - Calculated Aggregated Fair Values and Assumptions (Details) - Warrant Liability - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Warrant or Right [Line Items] | ||
Calculated aggregate value | $ 6,034 | $ 8,275 |
Weighted average exercise price per share of warrant (usd per share) | $ 1.99 | $ 7.14 |
Closing price per share of common stock (usd per share) | $ 0.63 | $ 4.55 |
Volatility | 85.60% | 85.20% |
Contractual remaining term | 4 years 3 months | 1 year 8 months |
Risk-free interest rate | 1.75% | 0.98% |
Dividend yield | 0.00% | 0.00% |
Equity (Details)
Equity (Details) - USD ($) | Jul. 27, 2015 | Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2016 | Jun. 30, 2016 |
Class of Stock [Line Items] | ||||||
Proceeds from public offering, gross | $ 17,300,000 | |||||
Proceeds from public offering, net | $ 15,900,000 | $ 0 | $ 15,872,000 | |||
Common stock, shares authorized (in shares) | 150,000,000 | 100,000,000 | 150,000,000 | 100,000,000 | ||
Preferred stock authorized for issuance (shares) | 5,000,000 | |||||
Preferred shares issued (in shares) | 0 | 0 | ||||
Preferred shares outstanding (in shares) | 0 | 0 | ||||
Cantor Fitzgerald & Co. | ||||||
Class of Stock [Line Items] | ||||||
Commission as a percent of gross proceeds | 3.00% | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Underwritten public offering (shares) | 2,586,206 | |||||
Common stock issued (usd per share) | $ 5.80 | |||||
Common Stock | Cantor Fitzgerald & Co. | ||||||
Class of Stock [Line Items] | ||||||
Underwritten public offering (shares) | 159,841 | |||||
Proceeds from public offering, net | $ 0 | |||||
Aggregate offering price | $ 50,000,000 | |||||
Common Stock | Over-Allotment Option | ||||||
Class of Stock [Line Items] | ||||||
Underwritten public offering (shares) | 387,930 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - Estimate of Fair Value Measurement - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 17,515 | $ 29,268 |
Total Assets | 17,515 | 29,268 |
Warrant liability | 6,034 | 8,275 |
Derivative liability | 1,735 | 0 |
Total Liabilities | 7,769 | 8,275 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 17,515 | 29,268 |
Total Assets | 17,515 | 29,268 |
Warrant liability | 0 | 0 |
Derivative liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total Assets | 0 | 0 |
Warrant liability | 0 | 0 |
Derivative liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total Assets | 0 | 0 |
Warrant liability | 6,034 | 8,275 |
Derivative liability | 1,735 | 0 |
Total Liabilities | $ 7,769 | $ 8,275 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Warrant Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Common Stock | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Issuance of shares from cashless warrant exercises (shares) | 11,584 | |
Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 8,275 | $ 11,286 |
Exercise of warrants | (82) | |
Cancellation of warrants | (276) | |
Issuance of warrants | 9,643 | |
Expiration of warrants | (1,910) | |
Change in fair value of warrant liability | (9,974) | (2,653) |
Ending Balance | 6,034 | 8,275 |
Derivative Liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | |
Issuance of convertible notes | 1,273 | |
Change in fair value of warrant liability | 462 | |
Ending Balance | $ 1,735 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Dec. 31, 2016USD ($) |
Fair Value Disclosures [Abstract] | |
Fair value of convertible promissory notes | $ 13,900,000 |
Carrying value of convertible promissory notes | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (shares) | 3,838,048 | 3,134,094 | 2,086,450 |
Fair market value of options granted (usd per share) | $ 1.22 | $ 3.59 | |
Stock-based compensation expense | $ 1,900 | $ 2,000 | |
Fair value of shares vested | $ 2,400 | $ 1,500 | |
Options exercises in period | 0 | 56,250 | |
Intrinsic value of options exercised | $ 40 | ||
Proceeds from the exercise of stock options | $ 0 | $ 255 | |
Service Based Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 2,600 | ||
Weighted-average period to recognize compensation cost (years) | 2 years 7 months | ||
2009 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized for issuance | 7,600,000 | ||
2009 Equity Incentive Plan | Share Based Compensation Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options expiration term, do not exceed (years) | 10 years | ||
Stock options vesting percent per year | 25.00% | ||
Stock options vesting term (years) | 4 years | ||
Options available for grant (shares) | 3,722,705 | ||
Equity Incentive Consultants | Share Based Compensation Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (shares) | 25,000 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Market Value of Stock Options (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected life | 6 years 2 months | 6 years 1 month |
Interest rate | 1.50% | 1.60% |
Dividend yield | 0.00% | 0.00% |
Volatility | 92.40% | 103.20% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of shares outstanding, beginning balance | 3,134,094 | 2,086,450 | |
Number of shares, granted | 1,585,400 | 1,352,114 | |
Number of shares, exercised | 0 | (56,250) | |
Number of shares, expired | (35,482) | (65,250) | |
Number of shares, forfeited | (845,964) | (182,970) | |
Number of shares outstanding, ending balance | 3,838,048 | 3,134,094 | 2,086,450 |
Number of shares, exercisable | 2,179,198 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted-average exercise price, outstanding (usd per share), beginning balance | $ 6.23 | $ 7.43 | |
Weighted-average exercise price, granted (usd per share) | 1.60 | 4.48 | |
Weighted-average exercise price, exercised (usd per share) | 0 | 4.53 | |
Weighted-average exercise price, expired (usd per share) | 7.93 | 10.54 | |
Weighted-average exercise price, forfeited (usd per share) | 2.83 | 5.91 | |
Weighted-average exercise price, outstanding (usd per share), ending balance | 5.05 | $ 6.23 | $ 7.43 |
Weighted-average exercise price, exercisable (usd per share) | $ 7.11 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Weighted-average remaining contractual term (in years), outstanding | 7 years 2 months | 8 years | 7 years 2 months |
Weighted-average remaining contractual term (in years), exercisable | 5 years 7 months | ||
Aggregate intrinsic value, outstanding | $ 0 | $ 1,630 | $ 0 |
Aggregate intrinsic value, exercisable | $ 0 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 335,000 | $ 0 |
Percent of employees terminated | 50.00% | |
Employee Severance and Benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 301,000 | 0 |
Asset Impairments | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 34,000 | $ 0 |
Restructuring Costs - Changes i
Restructuring Costs - Changes in Restructuring Balance (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | ||
December 31, 2015 | $ 0 | |
Additional accruals | 335,000 | $ 0 |
Cash payments | (282,000) | |
Non-cash settlements | (34,000) | |
Accrued restructuring balance as of December 31, 2016 | 19,000 | 0 |
Employee Severance and Benefits | ||
Restructuring Reserve [Roll Forward] | ||
December 31, 2015 | 0 | |
Additional accruals | 301,000 | 0 |
Cash payments | (282,000) | |
Non-cash settlements | 0 | |
Accrued restructuring balance as of December 31, 2016 | 19,000 | 0 |
Asset Impairments | ||
Restructuring Reserve [Roll Forward] | ||
December 31, 2015 | 0 | |
Additional accruals | 34,000 | 0 |
Cash payments | 0 | |
Non-cash settlements | (34,000) | |
Accrued restructuring balance as of December 31, 2016 | $ 0 | $ 0 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense/(Benefit) Related to Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
U.S. Federal: | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
U.S. State: | ||
Current | 0 | 0 |
Deferred | 0 | 0 |
Income tax expense (benefit) | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes/(Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Tax benefit at U.S. federal statutory rate | $ (5,353) | $ (12,183) |
Increase in domestic valuation allowance | 10,162 | 14,236 |
State income taxes benefit before valuation allowance, net of federal benefit | (1,160) | (1,122) |
Warrant revaluation income and other financing costs | (3,742) | (1,026) |
Credits | (366) | 0 |
Stock-based compensation | 239 | 292 |
Return to provision true-ups | 220 | (40) |
Other | 0 | (157) |
Income tax expense (benefit) | $ 0 | $ 0 |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax liabilities: | ||
Intangible assets | $ 0 | $ 1,764 |
Convertible notes | 4,263 | 0 |
Total deferred tax liabilities | 4,263 | 1,764 |
Deferred tax assets: | ||
Loss carryforwards | 85,263 | 77,194 |
Intangible assets | 117 | 0 |
Capital loss carryforward | 852 | 840 |
Property and equipment | 1,067 | 1,096 |
License fees | 7,776 | 8,351 |
Accrued expenses and other | 549 | 886 |
Stock-based compensation | 4,059 | 3,445 |
Credits | 418 | 0 |
Total deferred tax assets before valuation allowance | 100,101 | 91,812 |
Less: valuation allowance | (95,838) | (90,048) |
Total deferred tax assets | 4,263 | 1,764 |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward expiration year | 2018 to 2036 | |
Increase in valuation allowance | $ 5.8 | $ 15.9 |
Domestic Tax Authority | Research and development | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward | 0.4 | |
U.S | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 219.1 | |
Non us | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 0.3 |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2016USD ($) | Dec. 31, 2016USD ($)directoragreementshares | Dec. 31, 2015USD ($)shares | Mar. 07, 2017shares | Sep. 30, 2016USD ($)shares | |
Related Party Transaction [Line Items] | |||||
Number of collaboration agreements | agreement | 2 | ||||
Preferred shares issued (in shares) | shares | 0 | 0 | |||
2017 Private Placement | Subsequent Event | |||||
Related Party Transaction [Line Items] | |||||
Preferred shares issued (in shares) | shares | 1 | ||||
Issued with September 2016 Convertible Notes | |||||
Related Party Transaction [Line Items] | |||||
Warrants issued to purchase common stock | shares | 18,087,500 | ||||
Convertible Debt | |||||
Related Party Transaction [Line Items] | |||||
Convertible debt principal | $ 18,087,500 | ||||
Technology Access Fee | |||||
Related Party Transaction [Line Items] | |||||
Payments to Intrexon | $ 10,000,000 | ||||
Development Milestone | |||||
Related Party Transaction [Line Items] | |||||
Possible required payments to Intrexon | $ 30,000,000 | ||||
Commercialization Milestone | |||||
Related Party Transaction [Line Items] | |||||
Possible required payments to Intrexon | 22,500,000 | ||||
Milestones | |||||
Related Party Transaction [Line Items] | |||||
Payments to Intrexon | 0 | ||||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Research and development expenses - related party | 3,700,000 | $ 15,900,000 | |||
Trade payables | $ 900,000 | 10,700,000 | |||
Ownership percent of related party | 50.00% | ||||
Ownership percent of company common stock | 38.00% | ||||
Cash royalty, net sales benchmark | $ 100,000,000 | ||||
Payments to Intrexon | $ 0 | ||||
Affiliated Entity | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Cash royalty percent of sales | 7.00% | ||||
Affiliated Entity | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Cash royalty percent of sales | 14.00% | ||||
Affiliated Entity | 2017 Private Placement | Subsequent Event | |||||
Related Party Transaction [Line Items] | |||||
Warrants issued to purchase common stock | shares | 3,887,624 | ||||
Preferred shares issued (in shares) | shares | 3,016 | ||||
Affiliated Entity | Issued with September 2016 Convertible Notes | |||||
Related Party Transaction [Line Items] | |||||
Warrants issued to purchase common stock | shares | 6,762,500 | ||||
Affiliated Entity | Convertible Debt | |||||
Related Party Transaction [Line Items] | |||||
Convertible debt principal | $ 6,762,500 | ||||
Affiliated Entity | Technology Access Fee | |||||
Related Party Transaction [Line Items] | |||||
Research and development expenses - related party | 10,000,000 | ||||
Affiliated Entity | Direct Expenses for Work Performed | |||||
Related Party Transaction [Line Items] | |||||
Research and development expenses - related party | $ 1,200,000 | 3,100,000 | |||
Affiliated Entity | Pass-through Costs | |||||
Related Party Transaction [Line Items] | |||||
Research and development expenses - related party | $ 2,500,000 | $ 2,800,000 | |||
Director | |||||
Related Party Transaction [Line Items] | |||||
Number of directors | director | 2 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share, Basic [Abstract] | ||
Numerator for basic loss per share | $ (15,292) | $ (34,453) |
Denominator for basic loss per share (in shares) | 43,924,404 | 42,178,397 |
Basic income (loss) per common share (in dollars per share) | $ (0.35) | $ (0.82) |
Earnings Per Share, Diluted [Abstract] | ||
Numerator for basic loss per share | $ (15,292) | $ (34,453) |
Warrant revaluation income (expense) for dilutive warrants | 1,958 | 1,529 |
Numerator for diluted loss per share | $ (17,250) | $ (35,982) |
Denominator for basic loss per share (in shares) | 43,924,404 | 42,178,397 |
Incremental shares underlying in the money warrants outstanding (in shares) | 18,017 | 172,949 |
Denominator for diluted loss per share (in shares) | 43,942,421 | 42,351,346 |
Diluted net income (loss) per share (in dollars per share) | $ (0.39) | $ (0.85) |
Loss Per Share - Antidilutive S
Loss Per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
“In the money” stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 450,350 | 1,888,348 |
“Out of the money” stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 3,655,467 | 1,173,590 |
“In the money” warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 53,572 | 897,244 |
“Out of the money” warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 13,146,825 | 4,721,408 |
Shares underlying convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 15,913,612 | 0 |
Shares underlying accrued interest on convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (shares) | 120,429 | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | Feb. 17, 2012 | Apr. 06, 2005 | Dec. 31, 2016USD ($)agreement | Dec. 31, 2015USD ($) |
Lease agreement term (years) | 8 years | |||
Additional lease term (years) | 5 years | |||
Rental expense | $ | $ 1.6 | $ 1.6 | ||
Number of collaboration agreements | agreement | 2 | |||
Amended Lease | ||||
Lease agreement term (years) | 10 years |
Commitments and Contingencies68
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2016 | |
Other Commitments [Line Items] | ||
Total | $ 30,775 | |
2,017 | 1,254 | |
2,018 | 1,254 | |
2,019 | 1,416 | |
2,020 | 1,471 | |
2,021 | 23,542 | |
2022 and thereafter | $ 1,838 | |
Convertible Debt | ||
Other Commitments [Line Items] | ||
Period after product candidate FCX-007 is approved to reach maturity date | 180 days | 180 days |
Operating lease obligations | ||
Other Commitments [Line Items] | ||
Total | $ 8,704 | |
2,017 | 1,254 | |
2,018 | 1,254 | |
2,019 | 1,416 | |
2,020 | 1,471 | |
2,021 | 1,471 | |
2022 and thereafter | 1,838 | |
Debt obligations | ||
Other Commitments [Line Items] | ||
Total | 22,071 | |
2,017 | 0 | |
2,018 | 0 | |
2,019 | 0 | |
2,020 | 0 | |
2,021 | 22,071 | |
2022 and thereafter | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 07, 2017 | Mar. 01, 2017 | Dec. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||||||
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 | 100,000,000 | 100,000,000 | ||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||
Preferred shares issued (in shares) | 0 | 0 | ||||
Warrants exercise price (usd per share) | $ 1.99 | $ 7.14 | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares authorized (in shares) | 150,000,000 | |||||
Preferred stock, shares authorized (in shares) | 5,000,000 | |||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||||
Subsequent Event | 2017 Private Placement | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, par value (in dollars per share) | $ 1,000 | |||||
Preferred shares issued (in shares) | 1 | |||||
Conversion price (usd per share) | $ 0.7757 | |||||
Warrants exercise price (usd per share) | $ 0.84591 | |||||
Period of time after issuance for warrants to become exercisable | 6 months | |||||
Expiration period from Initial Exercise Date | 5 years | |||||
Expected proceeds from offering | $ 7,650 | |||||
Subsequent Event | 2017 Private Placement | Units | ||||||
Subsequent Event [Line Items] | ||||||
Number of units issued | 8,000 | |||||
Purchase price per unit | $ 1,000 | |||||
Subsequent Event | Minimum | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split | 0.3333 | |||||
Subsequent Event | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split | 0.1000 | |||||
Scenario, Forecast | Minimum | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split | 0.3333 | |||||
Reduction in stated capital as a result of the reverse stock split | 33.33% | |||||
Scenario, Forecast | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Reverse stock split | 0.1000 | |||||
Reduction in stated capital as a result of the reverse stock split | 10.00% | |||||
Common Stock | Subsequent Event | 2017 Private Placement | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares per warrant (shares) | 1,289 |