Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 21, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | GERON CORP | ||
Entity Central Index Key | 886,744 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 424,378,000 | ||
Entity Common Stock, Shares Outstanding | 159,158,636 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 12,810 | $ 21,248 |
Restricted cash | 268 | 267 |
Marketable securities | 102,035 | 92,524 |
Interest and other receivables | 475 | 1,206 |
Prepaid assets | 524 | 647 |
Total current assets | 116,112 | 115,892 |
Noncurrent marketable securities | 13,954 | 32,661 |
Property and equipment, net | 183 | 207 |
Total assets | 130,249 | 148,760 |
Current liabilities: | ||
Accounts payable | 225 | 160 |
Accrued compensation and benefits | 2,843 | 3,026 |
Accrued collaboration charges | 3,367 | 2,328 |
Accrued liabilities | 1,434 | 1,120 |
Total current liabilities | 7,869 | 6,634 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 3,000,000 shares authorized; no shares issued and outstanding at December 31, 2016 and 2015 | ||
Common Stock, $0.001 par value; 300,000,000 shares authorized; 159,158,636 and 158,781,359 shares issued and outstanding at December 31, 2016 and 2015, respectively | 159 | 159 |
Additional paid-in capital | 1,080,198 | 1,070,567 |
Accumulated deficit | (957,924) | (928,387) |
Accumulated other comprehensive loss | (53) | (213) |
Total stockholders' equity | 122,380 | 142,126 |
Total liabilities and stockholders' equity | $ 130,249 | $ 148,760 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 159,158,636 | 158,781,359 |
Common stock, shares outstanding | 159,158,636 | 158,781,359 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Collaboration revenue | $ 35,000 | ||
License fees and royalties | $ 6,162 | 1,371 | $ 1,153 |
Total revenues | 6,162 | 36,371 | 1,153 |
Operating expenses: | |||
Research and development | 18,047 | 17,831 | 20,707 |
Restructuring charges | 1,306 | ||
General and administrative | 18,761 | 17,793 | 16,758 |
Total operating expenses | 36,808 | 36,930 | 37,465 |
Loss from operations | (30,646) | (559) | (36,312) |
Unrealized gain on derivatives | 16 | 351 | |
Interest and other income | 1,192 | 677 | 373 |
Interest and other expense | (83) | (88) | (82) |
Net (loss) income | $ (29,537) | $ 46 | $ (35,670) |
Net (loss) income per share: | |||
Basic (in dollars per share) | $ (0.19) | $ 0 | $ (0.23) |
Diluted (in dollars per share) | $ (0.19) | $ 0 | $ (0.23) |
Shares used in computing net (loss) income per share: | |||
Basic (in shares) | 159,045,644 | 158,036,162 | 153,540,341 |
Diluted (in shares) | 159,045,644 | 162,663,894 | 153,540,341 |
STATEMENTS OF COMPREHENSIVE LOS
STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
STATEMENTS OF COMPREHENSIVE LOSS | |||
Net (loss) income | $ (29,537) | $ 46 | $ (35,670) |
Net unrealized gain (loss) on marketable securities | 160 | (129) | (70) |
Comprehensive loss | $ (29,377) | $ (83) | $ (35,740) |
STATEMENTS OF STOCKHOLDERS' EQU
STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balances at Dec. 31, 2013 | $ 131 | $ 952,403 | $ (892,763) | $ (14) | $ 59,757 |
Balances (in shares) at Dec. 31, 2013 | 130,677,949 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | (35,670) | (35,670) | |||
Other comprehensive (loss) income | (70) | (70) | |||
Issuance of common stock in connection with public offering, net of issuance costs of $6,695 | $ 26 | 96,779 | 96,805 | ||
Issuance of common stock in connection with public offering, net of issuance costs (in shares) | 25,875,000 | ||||
Stock-based compensation related to issuance of common stock and options in exchange for services | 253 | 253 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 71,239 | ||||
Issuance of common stock upon net exercise of warrants (in shares) | 168,039 | ||||
Issuances of common stock under equity plans, net of cancellations of non-vested restricted stock | 1,555 | 1,555 | |||
Issuances of common stock under equity plans, net of cancellations of non-vested restricted stock (in shares) | 564,950 | ||||
Stock-based compensation for equity-based awards to employees and directors | 7,658 | 7,658 | |||
401(k) contribution | 424 | 424 | |||
401(k) contribution (in shares) | 72,694 | ||||
Balances at Dec. 31, 2014 | $ 157 | 1,059,072 | (928,433) | (84) | 130,712 |
Balances (in shares) at Dec. 31, 2014 | 157,429,871 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | 46 | 46 | |||
Other comprehensive (loss) income | (129) | (129) | |||
Stock-based compensation related to issuance of common stock and options in exchange for services | 364 | 364 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 18,077 | ||||
Issuance of common stock upon exercise of warrants | $ 1 | 880 | 881 | ||
Issuance of common stock upon exercise of warrants (in shares) | 235,000 | ||||
Issuances of common stock under equity plans, net of cancellations of non-vested restricted stock | $ 1 | 1,693 | 1,694 | ||
Issuances of common stock under equity plans, net of cancellations of non-vested restricted stock (in shares) | 1,098,411 | ||||
Stock-based compensation for equity-based awards to employees and directors | 8,397 | 8,397 | |||
401(k) contribution | 161 | 161 | |||
Balances at Dec. 31, 2015 | $ 159 | 1,070,567 | (928,387) | (213) | $ 142,126 |
Balances (in shares) at Dec. 31, 2015 | 158,781,359 | 158,781,359 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | (29,537) | $ (29,537) | |||
Other comprehensive (loss) income | 160 | 160 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services | 156 | 156 | |||
Stock-based compensation related to issuance of common stock and options in exchange for services (in shares) | 21,541 | ||||
Issuances of common stock under equity plans, net of cancellations of non-vested restricted stock | 1,169 | 1,169 | |||
Issuances of common stock under equity plans, net of cancellations of non-vested restricted stock (in shares) | 355,736 | ||||
Stock-based compensation for equity-based awards to employees and directors | 8,245 | 8,245 | |||
401(k) contribution | 61 | 61 | |||
Balances at Dec. 31, 2016 | $ 159 | $ 1,080,198 | $ (957,924) | $ (53) | $ 122,380 |
Balances (in shares) at Dec. 31, 2016 | 159,158,636 | 159,158,636 |
STATEMENTS OF STOCKHOLDERS' EQ7
STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
STATEMENTS OF STOCKHOLDERS' EQUITY | |
Issuance costs | $ 6,695 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (29,537) | $ 46 | $ (35,670) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 81 | 56 | 47 |
Accretion and amortization on investments, net | 552 | 2,098 | 2,889 |
(Gain) loss on sales/retirement of property and equipment | (16) | 3 | |
Loss on sales of marketable securities | 1 | ||
Stock-based compensation for services by non-employees | 156 | 364 | 253 |
Stock-based compensation for employees and directors | 8,245 | 8,397 | 7,658 |
Amortization related to 401(k) contributions | 61 | 161 | 111 |
Unrealized gain on derivatives | (16) | (351) | |
Changes in assets and liabilities: | |||
Interest and other receivables | 731 | (243) | (399) |
Prepaid assets | 123 | 89 | (72) |
Deposits and other assets | 5 | ||
Accounts payable | 65 | (873) | (364) |
Accrued compensation and benefits | (183) | (1,187) | 486 |
Accrued collaboration charges | 1,039 | 2,328 | |
Accrued liabilities | 314 | (417) | (246) |
Deferred revenue | (35,000) | 35,000 | |
Net cash (used in) provided by operating activities | (18,369) | (24,196) | 9,350 |
Cash flows from investing activities: | |||
Restricted cash transfer | (1) | (1) | 529 |
Purchases of property and equipment | (57) | (90) | (131) |
Proceeds from sales of property and equipment | 16 | ||
Purchases of marketable securities | (129,250) | (206,459) | (190,263) |
Proceeds from sales/calls of marketable securities | 4,242 | 10,549 | |
Proceeds from maturities of marketable securities | 138,054 | 202,381 | 101,412 |
Net cash provided by (used in) investing activities | 8,762 | 73 | (77,904) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock, net of issuance costs | 1,169 | 2,575 | 98,360 |
Net cash provided by financing activities | 1,169 | 2,575 | 98,360 |
Net (decrease) increase in cash and cash equivalents | (8,438) | (21,548) | 29,806 |
Cash and cash equivalents, at beginning of year | 21,248 | 42,796 | 12,990 |
Cash and cash equivalents, at end of year | $ 12,810 | $ 21,248 | $ 42,796 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Geron Corporation, or we or Geron, was incorporated in the State of Delaware on November 28, 1990. We are a biopharmaceutical company that currently supports the clinical stage development of a telomerase inhibitor, imetelstat, in hematologic myeloid malignancies, by Janssen Biotech, Inc., or Janssen. Principal activities to date have included obtaining financing, securing operating facilities and conducting research and development. In November 2014, we entered into an exclusive collaboration and license agreement, or the Collaboration Agreement, with Janssen to develop and commercialize imetelstat worldwide for all indications in oncology, including hematologic myeloid malignancies, and all other human therapeutic uses. Under the Collaboration Agreement, Janssen is wholly responsible for the worldwide development, manufacturing, seeking regulatory approval for and commercialization of, imetelstat, which was our sole product candidate. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the periods presented, without consideration of common stock equivalents. Diluted net income per share is calculated by adjusting the weighted-average number of shares of common stock outstanding for the dilutive effect of common stock equivalents outstanding for the periods presented, as determined using the treasury-stock method. Potential dilutive securities primarily consist of outstanding stock options, restricted stock awards and warrants to purchase our common stock. For periods in which we have incurred a net loss, common stock equivalents outstanding for the periods presented, as determined using the treasury-stock method, are excluded, as their effect would be anti-dilutive, resulting in the same number of shares being used for the calculation of basic and diluted net loss per share. For all periods presented in the accompanying statements of operations, the net income (loss) applicable to common stockholders is equal to the reported net income (loss). Year Ended December 31, (In thousands, except share and per share data) 2016 2015 2014 Net (loss) income $ ) $ $ ) Weighted-average shares: Basic Effect of dilutive securities: Stock options and restricted stock awards — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Basic $ ) $ $ ) Diluted $ ) $ $ ) Because we were in a net loss position for 2016 and 2014, 3,023,520 and 3,072,340 common stock equivalents, respectively, related to outstanding stock options, restricted stock awards and warrants (as determined using the treasury-stock method at the estimated average market value) were excluded from the diluted net loss per share calculation as their effect would have been anti-dilutive. In addition for 2016, 2015 and 2014, 11,352,766, 9,375,851 and 9,113,088 potentially dilutive securities, respectively, were excluded from the treasury-stock method and calculation of diluted net income (loss) per share as their effect would have been anti-dilutive. Reclassifications We have reclassified certain prior period financial statement amounts to conform to current period presentation. On the balance sheets and statements of cash flows, amounts in "Accrued restructuring charges" have been reclassified to "Accrued compensation and benefits". Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On a regular basis, management evaluates these estimates and assumptions. Actual results could differ from those estimates. Fair Value of Financial Instruments Cash Equivalents and Marketable Securities We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We are subject to credit risk related to our cash equivalents and marketable securities. We place our cash and cash equivalents in money market funds and cash operating accounts. Our marketable securities include U.S. government-sponsored enterprise securities, commercial paper and corporate notes with original maturities ranging from four to 24 months. We classify our marketable securities as available-for-sale. We record available-for-sale securities at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in stockholders' equity. Realized gains and losses are included in interest and other income and are derived using the specific identification method for determining the cost of securities sold and have been insignificant to date. Dividend and interest income are recognized when earned and included in interest and other income in our statements of operations. We recognize a charge when the declines in the fair values below the amortized cost basis of our available-for-sale securities are judged to be other-than-temporary. We consider various factors in determining whether to recognize an other-than-temporary charge, including whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis. Declines in market value associated with credit losses judged as other-than-temporary result in a charge to interest and other income. Other-than-temporary charges not related to credit losses are included in accumulated other comprehensive income (loss) in stockholders' equity. We have not recorded any other-than-temporary impairment charges on our available-for-sale securities for the years ended December 31, 2016, 2015 and 2014. See Note 2 on Fair Value Measurements. Fair Value of Derivatives Non-employee options classified as derivative liabilities are marked to fair value at each financial reporting date with any resulting changes in fair value being recorded in the statements of operations as unrealized gain (loss) on derivatives. The non-employee options continue to be reported as a derivative liability until such time as the instruments are exercised or expire, at which time these instruments are marked to fair value and reclassified from liabilities to stockholders' equity. As of March 31, 2015, all non-employee options classified as derivative liabilities expired unexercised. Revenue Recognition We recognize revenue for each unit of accounting when all of the following criteria have been met: (a) persuasive evidence of an arrangement exists, (b) delivery has occurred or services have been rendered, (c) the seller's price to the buyer is fixed or determinable, and (d) collectability is reasonably assured. Amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as noncurrent deferred revenue. License and/or Collaboration Agreements In addition to the Collaboration Agreement (which is more fully described in Note 4 on License Agreements), we have entered into several license or collaboration agreements with various oncology, diagnostics, research tools and biologics production companies. Economic terms in these agreements may include non-refundable upfront license payments in cash or equity securities, option payments in cash or equity securities, cost reimbursements, cost-sharing arrangements, milestone payments, royalties on future sales of products, or any combination of these items. In applying the appropriate revenue recognition guidance related to these agreements, we first assess whether the arrangement contains multiple elements. In this evaluation, we consider: (i) the deliverables included in the arrangement and (ii) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. This evaluation involves subjective determinations and requires us to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a standalone basis, and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. In assessing whether an item has standalone value, we consider factors such as the research, manufacturing and commercialization capabilities of the collaboration partner or licensee and the availability of the associated expertise in the general marketplace. In addition, we consider whether the collaboration partner or licensee can use the other deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s) and whether there are other vendors that can provide the undelivered element(s). Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method. We then apply the applicable revenue recognition criteria noted above to each of the separate units of accounting in determining the appropriate period and pattern of recognition. We determine how to allocate arrangement consideration to identified units of accounting based on the selling price hierarchy provided under relevant accounting guidance. The estimated fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor-specific-objective evidence and third-party evidence are not available. Upfront non-refundable signing, license or non-exclusive option fees are recognized as revenue: (i) when rights to use the intellectual property have been delivered, if the license has standalone value from the other deliverables to be provided under the agreement, or (ii) over the term of the agreement if we have continuing performance obligations, as the arrangement would be accounted for as a single unit of accounting. When payments are received in equity securities, we do not recognize any revenue unless such securities are determined to be realizable in cash. At the inception of an arrangement that includes milestone payments, we assess whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether: (i) the consideration is commensurate with either the performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the performance to achieve the milestone, (ii) the consideration relates solely to past performance and (iii) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. We consider various factors, such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone, in making this assessment. There is considerable judgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive. Milestone payments for milestones that are considered substantive would be recognized as revenue in their entirety upon successful accomplishment of the milestone, assuming all other revenue recognition criteria are met. Milestone payments for milestones that are not considered substantive would be recognized as revenue over the remaining period of performance, assuming all other revenue recognition criteria are met. Royalties are recognized as earned in accordance with contract terms when royalties from licensees can be reasonably estimated and collectability is reasonably assured. If royalties cannot be reasonably estimated or collectability of a royalty amount is not reasonably assured, royalties are recognized as revenue when the cash is received. Revenue from commercial milestone payments is accounted for as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. Cost-sharing expenses are recorded as earned or owed based on the performance requirements by both parties under the respective contracts. For arrangements in which we and our collaboration partner in the agreement are exposed to significant risks and rewards that depend on the commercial success of the activity, we recognize payments between the parties on a net basis and record such amounts as a reduction or addition to research and development expense. For arrangements in which we have agreed to perform certain research and development services for our collaboration partner and are not exposed to significant risks and rewards that depend on the commercial success of the activity, we recognize the respective cost reimbursements as revenue under the collaborative agreement as the related research and development services are rendered. Restricted Cash Restricted cash consists of funds maintained in a separate certificate of deposit account for credit card purchases. Research and Development Expenses Research and development expenses consist of expenses incurred in identifying, developing and testing product candidates resulting from our independent efforts as well as efforts associated with collaborations. These expenses include, but are not limited to, in-process research and development acquired in an asset acquisition and deemed to have no alternative future use, payroll and personnel expense, lab supplies, preclinical studies, clinical trials, including support for investigator-sponsored clinical trials, raw materials to manufacture clinical trial drugs, manufacturing costs for research and clinical trial materials, sponsored research at other labs, consulting, costs to maintain technology licenses, our proportionate share of research and development costs under cost-sharing arrangements with collaboration partners and research-related overhead. Research and development costs are expensed as incurred, including costs incurred under our collaboration and/or license agreements. Clinical Trial Costs Prior to our collaboration with Janssen for imetelstat, substantial portions of our preclinical studies and all of our clinical trials were performed by third-party contract research organizations, or CROs, and other vendors. We accrued expenses for these activities based upon the estimated amount of work completed on each study. For our clinical trial expenses, the significant factors used in estimating accruals included the number of patients enrolled, the number of active clinical sites and the duration for which the patients had been enrolled in the study. For the clinical development activities being conducted by Janssen under the Collaboration Agreement, we monitor patient enrollment levels and related activities to the extent possible through discussions with Janssen personnel and base our estimates on the best information available at the time. However, additional information may become available to us which would allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Depreciation and Amortization We record property and equipment at cost and calculate depreciation using the straight-line method over the estimated useful lives of the assets, generally four years. Leasehold improvements are amortized over the shorter of the estimated useful life or remaining term of the lease. Stock-Based Compensation We maintain various stock incentive plans under which stock options and restricted stock awards are granted to employees, directors and consultants. We also have an employee stock purchase plan for all eligible employees. We recognize stock-based compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period. For additional information, see Note 8 on Stockholders' Equity. Stock Options and Employee Stock Purchase Plan We grant service-based stock options under our equity plans to employees, directors and consultants. The vesting period for employee options is generally four years. We use the Black Scholes option-pricing model to estimate the grant-date fair value of our stock options and employee stock plan purchases. The determination of fair value for these stock-based awards on the date of grant using the Black Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. For additional information, see Note 8 on Stockholders' Equity. Restricted Stock Awards Prior to 2012, we granted restricted stock awards to employees and non-employee directors with service-based vesting schedules that generally vested annually over four years. The fair value for service-based restricted stock awards was determined using the fair value of our common stock on the date of grant. The fair value was amortized as stock-based compensation expense over the requisite service period of the award, which was generally the vesting period, on a straight-line basis and was reduced for estimated forfeitures, as applicable. Non-Employee Stock-Based Awards For our non-employee stock-based awards, the measurement date on which the fair value of the stock-based award is calculated is equal to the earlier of: (i) the date at which a commitment for performance by the counterparty to earn the equity instrument is reached or (ii) the date at which the counterparty's performance is complete. We recognize stock-based compensation expense for the fair value of the vested portion of non-employee stock-based awards in our statements of operations. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss includes certain changes in stockholders' equity which are excluded from net income (loss). Accumulated other comprehensive loss on our balance sheets as of December 31, 2016 and 2015 is solely comprised of net unrealized losses on marketable securities. Income Taxes We maintain deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and are subject to tests of recoverability. Our deferred tax assets include net operating loss carryforwards, research credits and capitalized research and development. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Our net deferred tax asset has been fully offset by a valuation allowance because of our history of losses. Any potential accrued interest and penalties related to unrecognized tax benefits would be recorded as income tax expense. Concentrations of Customers and Suppliers The majority of our revenues was earned in the United States. Approximately 81% of our 2016 revenues represented an upfront payment from Janssen Pharmaceuticals, Inc., or Janssen Pharmaceuticals, in connection with a License Agreement signed in September 2016. Approximately 96% of our 2015 revenues represented an upfront payment from Janssen under the imetelstat Collaboration Agreement. Two other customers accounted for approximately 31% of our 2014 revenues. In accordance with the Collaboration Agreement, Janssen is now responsible for the manufacture and management of the supply of imetelstat on a global basis for clinical trials and, after any regulatory approval, all commercial activities. Janssen contracts third-party manufacturers to produce GMP-grade drugs for preclinical and clinical studies. Janssen also contracts for starting materials to supply those manufacturers and for its own use. Certain development and clinical activities may be delayed if Janssen is unable to obtain sufficient quantities of starting materials or GMP-grade drugs from current third-party suppliers or other third-party sources. Segment Information Our executive management team represents our chief decision maker. We view our operations as a single segment, the development of therapeutic products for oncology. As a result, the financial information disclosed herein materially represents all of the financial information related to our principal operating segment. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, or ASU 2014-09, which creates Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or Topic 606, and supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition , including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In summary, the core principle of Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Companies are allowed to select between two transition methods: (1) a full retrospective transition method with the application of the new guidance to each prior reporting period presented, or (2) a retrospective transition method that recognizes the cumulative effect on prior periods at the date of adoption together with additional footnote disclosures. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In March, April, May and December 2016, the FASB issued Accounting Standards Update No. 2016-08 (Topic 606), Revenue From Contracts With Customers: Principal vs. Agent Considerations , or ASU 2016-08, Accounting Standards Update No. 2016-10 (Topic 606), Revenue From Contracts with Customers: Identifying Performance Obligations and Licensing , or ASU 2016-10, Accounting Standards Update No. 2016-12 (Topic 606), Revenue From Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , or ASU 2016-12, and Accounting Standards Update No. 2016-20 (Topic 606), Revenue from Contracts with Customers : Technical Corrections and Improvements to Topic 606, or ASU 2016-20, respectively, to provide supplemental adoption guidance and clarification to ASU 2014-09. We do not plan to early adopt these standards. We currently anticipate adopting ASU 2014-09 and its related supplemental guidance using the full retrospective transition method to restate each prior reporting period presented in our financial statements. While we are continuing to assess the effect of this new standard, we have not identified any material differences in the accounting treatment under ASU 2014-09 compared to the current accounting treatment for the Collaboration Agreement with Janssen, which is currently the most material agreement to our financial statements. However, such assessment is preliminary and subject to change. Our analysis of other agreements could identify material changes from the current accounting treatment. ASU 2014-09 differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments. Under our current accounting policy, we recognize milestone revenue using the milestone method specified in ASC 605-28, Milestone Method of Revenue Recognition , which generally results in the recognition of milestone payments as revenue in the period that the milestone is achieved. However, under the new accounting standard, it is possible to start to recognize milestone revenue before the milestone is achieved, subject to management's assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. We are still in the process of evaluating the effect of the new standard on our historical financial statements. While we have not completed our evaluation, we currently believe the impact to revenue and expense recognized will not be material to any of the years presented. As we complete our evaluation of this new standard, new information may arise that could change our current understanding of the impact to revenue and expense recognized. Additionally, we will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust our assessment and implementation plans accordingly. In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , or ASU 2015-17. Current generally accepted accounting principles require an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a statement of financial position. The current requirement that deferred tax liabilities and assets of a tax paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We plan to adopt ASU 2015-17 commencing in 2017 and do not expect the adoption of this guidance to have any impact on our financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) , or ASU 2016-02. ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Certain quantitative and qualitative disclosures about leasing arrangements also are required. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The updated guidance requires a modified retrospective adoption. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our financial statements and related disclosures and have not made any decision regarding the timing of adoption. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting , or ASU 2016-09, which amends Accounting Standards Codification Topic 718, Compensation—Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods and early adoption is permitted. We plan to adopt ASU 2016-09 commencing in 2017 and do not expect the adoption of this guidance to have a material impact on our financial statements and related disclosures. In June 2016, the FASB issued Accounting Standard Update No. 2016-13, Measurement of Credit Losses on Financial Instruments , or ASU 2016-13. ASU 2016-13 amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the "incurred loss" model with an "expected loss" model. Accordingly, these financial assets will be presented at the net amount expected to be collected. ASU 2016-13 also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current other-than-temporary-impairment model. ASU 2016-13 is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for interim and annual periods beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements and related disclosures and have not made any decision regarding the timing of adoption. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments , or ASU 2016-15, to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods and early adoption is permitted. ASU 2016-15 must be applied retrospectively to each period presented. We do not plan to early adopt ASU 2016-15. We are currently evaluating the impact of the adoption of ASU 2016-15 on our financial statements and related disclosures. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash , or ASU 2016-18, to address the diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period which would require any adjustments to be reflected as of the beginning of the annual period that includes that interim period. ASU 2016-18 must be applied using a retrospective transition method to each period presented. We do not plan to early adopt ASU 2016-18. We are currently evaluating the impact of the adoption of ASU 2016-18 on our financial statements and related disclosures. With the exception of the standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 2. FAIR VALUE MEASUREMENTS We categorize financial instruments recorded at fair value on our balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2—Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life. Level 3—Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Below is a description of the valuation methodologies used for financial instruments measured at fair value on our balance sheets, including the category for such financial instruments. Cash Equivalents and Marketable Securities Available-for-Sale Certificates of deposit and money market funds are categorized as Level 1 within the fair value hierarchy as their fair values are based on quoted prices available in active markets. U.S. government-sponsored enterprise securities, commercial paper and corporate notes are categorized as Level 2 within the fair value hierarchy as their fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Cash equivalents, restricted cash and marketable securities by security type at December 31, 2016 were as follows: (In thousands) Amortized Gross Gross Estimated Included in cash and cash equivalents: Money market funds $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted cash: Certificate of deposit $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable securities: Government-sponsored enterprise securities (due in less than one year) $ $ — $ ) $ Government-sponsored enterprise securities (due in one to two years) — ) Commercial paper (due in less than one year) ) Corporate notes (due in less than one year) ) Corporate notes (due in one to two years) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents, restricted cash and marketable securities by security type at December 31, 2015 were as follows: (In thousands) Amortized Gross Gross Estimated Included in cash and cash equivalents: Money market funds $ $ — $ — $ Government-sponsored enterprise securities — — Commercial paper — — Corporate notes — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted cash: Certificate of deposit $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable securities: Government-sponsored enterprise securities (due in one to two years) $ $ — $ ) $ Commercial paper (due in less than one year) ) Corporate notes (due in less than one year) ) Corporate notes (due in one to two years) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents and marketable securities with unrealized losses at December 31, 2016 and 2015 were as follows: Less Than 12 Months 12 Months or Greater Total (In thousands) Estimated Gross Estimated Gross Estimated Gross As of December 31, 2016: Government-sponsored enterprise securities (due in less than one year) $ $ ) $ — $ — $ $ ) Government-sponsored enterprise securities (due in one to two years) ) — — ) Commercial paper (due in less than one year) ) — — ) Corporate notes (due in less than one year) ) ) ) Corporate notes (due in one to two years) ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2015: Government-sponsored enterprise securities (due in one to two years) $ $ ) $ — $ — $ $ ) Commercial paper (due in less than one year) ) — — ) Corporate notes (due in less than one year) ) ) ) Corporate notes (due in one to two years) ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The gross unrealized losses related to government-sponsored enterprise securities, commercial paper and corporate notes as of December 31, 2016 and 2015 were due to changes in interest rates. We determined that the gross unrealized losses on our cash equivalents and marketable securities as of December 31, 2016 and 2015 were temporary in nature. We review our investments quarterly to identify and evaluate whether any investments have indications of possible impairment. Factors considered in determining whether a loss is temporary include the length of time and extent to which the fair value has been less than the cost basis and whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis. We currently do not intend to sell these securities before recovery of their amortized cost bases. Fair Value on a Recurring Basis The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of December 31, 2016 and indicates the fair value category assigned. Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds (1) $ $ — $ — $ Government-sponsored enterprise securities (2)(3) — — Commercial paper (2) — — Corporate notes (2)(3) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of December 31, 2015 and indicates the fair value category assigned. Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds (1) $ $ — $ — $ Government-sponsored enterprise securities (1)(3) — — Commercial paper (1)(2) — — Corporate notes (1)(2)(3) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Included in cash and cash equivalents on our balance sheets. (2) Included in current portion of marketable securities on our balance sheets. (3) Included in noncurrent portion of marketable securities on our balance sheets. Credit Risk We currently place our cash, restricted cash, cash equivalents and marketable securities with four financial institutions in the United States. Generally, these deposits may be redeemed upon demand and therefore, bear minimal risk. Deposits with banks may exceed the amount of insurance provided on such deposits. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents and marketable securities. Cash equivalents and marketable securities currently consist of money market funds, U.S. government-sponsored enterprise securities, commercial paper and corporate notes. Our investment policy, approved by the audit committee of our board of directors, limits the amount we may invest in any one type of investment issuer, thereby reducing credit risk concentrations. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 3. PROPERTY AND EQUIPMENT Property and equipment, stated at cost, is comprised of the following: December 31, (In thousands) 2016 2015 Furniture and computer equipment $ $ Lab equipment Leasehold improvements ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
LICENSE AGREEMENTS | |
LICENSE AGREEMENTS | 4. LICENSE AGREEMENTS Janssen Biotech, Inc. Collaboration and License Agreement On November 13, 2014, we and Janssen entered into the Collaboration Agreement under which we granted to Janssen exclusive worldwide rights to develop and commercialize imetelstat for all human therapeutic uses, including hematologic myeloid malignancies. Upon the effectiveness of the Collaboration Agreement, we received $35,000,000 from Janssen as an upfront payment, which we classified as deferred revenue upon receipt. Under the Collaboration Agreement, Janssen is wholly responsible for the development, manufacturing, seeking regulatory approval for and commercialization of, imetelstat worldwide. To that end, Janssen is currently proceeding with the development of imetelstat with two clinical trials: a Phase 2 trial in myelofibrosis, referred to as IMbark, and a Phase 2/3 trial in myelodysplastic syndromes, referred to as IMerge. Development costs for IMbark and IMerge are being shared between us and Janssen on a 50/50 basis. Additionally, under the terms of the Collaboration Agreement, we remain responsible for prosecuting, at Janssen's direction, the patents licensed to Janssen at the time we entered into the Collaboration Agreement, with costs shared between us and Janssen on a 50/50 basis. The cost-sharing arrangement with Janssen began in January 2015. As of December 31, 2016, accrued collaboration charges of $3,367,000 on our balance sheet represent the net amount owed to Janssen for our proportionate share of research and development costs incurred by Janssen under the Collaboration Agreement for the three months ended December 31, 2016. Following the protocol-specified primary analysis of IMbark or a certain time period after the initiation of the first Phase 3 myelofibrosis study, if any, Janssen must notify us of their decision, or a Continuation Decision, as to whether they elect to maintain the license rights granted to them under the Collaboration Agreement and continue to advance the development of imetelstat in any indication. In the event that IMbark is terminated early, or placed on clinical hold or suspended by a regulatory authority for an extended period of time, then Janssen must instead notify us of their Continuation Decision by the date that is approximately 24 months after the initiation of IMerge. In the event that Janssen provides an affirmative Continuation Decision, we then would have an option, or the U.S. Opt-In Rights, to share further U.S. development and promotion costs, including our share of development costs incurred to date by Janssen beyond IMbark or IMerge, in exchange for higher tiered royalty rates and higher future development and regulatory milestone payments if imetelstat is successfully developed and approved. If we exercise the U.S. Opt-In Rights, then we and Janssen would share U.S. development and promotion costs beyond IMbark and IMerge on a 20/80 basis (Geron 20%, Janssen 80%), we would receive a $65,000,000 milestone payment, or the Continuation Fee, at the time of an affirmative Continuation Decision, and would be eligible to receive additional potential payments of up to $470,000,000 for the achievement of certain development and regulatory milestones, up to $350,000,000 for the achievement of certain sales milestones, and tiered royalties ranging from a mid-teens up to low twenties percentage rate on worldwide net sales of imetelstat in any countries where regulatory exclusivity exists or there are valid claims under the patent rights exclusively licensed to Janssen. In addition, if we exercise the U.S. Opt-In Rights, we then would also have a separate option, or the U.S. Co-Promotion Option, to provide 20% of the U.S. selling effort with our sales force personnel, in lieu of funding 20% of U.S. promotion costs, upon regulatory approval and commercial launch of imetelstat in the United States. Such co-promotion would be conducted under a Janssen prepared promotion plan, and in accordance with a co-promotion agreement to be agreed by the parties at the time of our exercise of the U.S. Co-Promotion Option. We would be responsible for all costs associated with establishing and maintaining our sales force in any conduct of such co-promotion. All product sales would be booked by Janssen. If we do not exercise the U.S. Opt-In Rights, then all further development and promotion costs beyond IMbark and IMerge would be borne by Janssen, we would receive the $65,000,000 Continuation Fee at the time of an affirmative Continuation Decision plus a $70,000,000 payment, or the Full U.S. Rights Fee, for Janssen's retention of full U.S. rights to imetelstat, and would be eligible to receive additional potential payments of up to $415,000,000 for the achievement of certain development and regulatory milestones, up to $350,000,000 for the achievement of certain sales milestones, and tiered royalties ranging from a double-digit up to mid-teens percentage rate on worldwide net sales of imetelstat in any countries where regulatory exclusivity exists or there are valid claims under the patent rights exclusively licensed to Janssen. Under the terms of the Collaboration Agreement, we and Janssen have created a joint governance structure, including joint development and steering committees and working groups, to oversee and manage worldwide regulatory, development and manufacturing work under the joint clinical development plan and promotional activities (assuming we exercise the U.S. Opt-In Rights) for imetelstat, with Janssen responsible for the operational execution of those activities. In addition, both we and Janssen may propose to the joint development committee imetelstat development for any new indications not then provided for in the joint clinical development plan and if we and Janssen agree such development should be conducted outside of the joint clinical development plan, both we and Janssen would be entitled to independently undertake such development at the developing party's own cost, subject to the other party's obligation to provide reimbursement for its specified portion of the development costs plus a premium following marketing approval of imetelstat in such newly proposed indication as a result of such independent development. In the event that we do not exercise the U.S. Opt-In Rights following an affirmative Continuation Decision by Janssen, if any, the joint governance structure under the Collaboration Agreement would be dissolved, a joint oversight committee would monitor the progress of the collaboration, and we would have no further rights to conduct any independent imetelstat development. After an affirmative Continuation Decision by Janssen, the Collaboration Agreement would remain in effect until the expiration of the last-to-expire patent or the royalty obligations on sales of imetelstat cease, unless terminated earlier. If Janssen does not effect an affirmative Continuation Decision, then the Collaboration Agreement would terminate and all rights to the imetelstat program would revert to us. Janssen may terminate the Collaboration Agreement at any time for convenience or due to a safety-related concern. If a notice of termination from Janssen occurs, we would be entitled to certain continued operational support and cost sharing under various circumstances and all rights to the imetelstat program would revert to us. The terms of the Collaboration Agreement contain multiple deliverables, which included at inception: (i) exclusive worldwide rights to develop and commercialize imetelstat for all indications, (ii) transfer of know-how and intellectual property, including our obligation to procure supply for manufacturing imetelstat for up to nine months after the effective date of the Collaboration Agreement, (iii) participation on the joint committees and working groups and (iv) potential participation in promoting imetelstat in the United States, if approved for commercial sale. We concluded the license for exclusive worldwide rights to develop and commercialize imetelstat has standalone value to Janssen based on the technical and financial resources of Janssen, including Janssen's drug development experience, sizeable employee base with specific experience in hematologic malignancies, and sufficient capital to independently develop imetelstat on a global basis. Since Janssen has final decision-making authority in the event a unanimous decision cannot be reached by the joint committees, we determined our participation on the joint committees does not represent a non-contingent deliverable under the Collaboration Agreement. In addition, we determined our potential participation in promoting imetelstat in the United States does not represent a non-contingent deliverable because such participation is uncertain and dependent on imetelstat being approved for commercial sale, which is not within our control. Accordingly, we determined delivery of the license rights granted by us to Janssen, together with our performance of certain technology transfer-related activities under the Collaboration Agreement, represents the sole non-contingent deliverable under the Collaboration Agreement associated with the upfront payment. Therefore, we accounted for our delivery of the imetelstat license rights and our performance of the technology transfer-related activities as a single unit of accounting. During the third quarter of 2015, we completed performance of the technology transfer-related activities to Janssen as outlined under the Collaboration Agreement. Combining this performance with the delivery of the imetelstat license rights, we fully recognized the $35,000,000 upfront payment from Janssen as collaboration revenue on our statements of operations in the third quarter of 2015. We have determined that each of the additional potential milestone payments to us under the Collaboration Agreement, including: (i) the Continuation Fee at the time of an affirmative Continuation Decision, (ii) the Full U.S. Rights Fee, if we do not exercise the U.S. Opt-In Rights and (iii) payments based on the achievement of certain development, regulatory or sales milestones, represent substantive milestones. Consequently, we will recognize revenue for these payments in their entirety upon successful accomplishment of the respective milestone. Royalties on future product sales of imetelstat, if successfully commercialized under the Collaboration Agreement, will be recognized as revenue when earned. Janssen Pharmaceuticals, Inc. License Agreement On September 15, 2016, we entered into a license agreement, or License Agreement, with Janssen Pharmaceuticals whereby we granted to Janssen Pharmaceuticals an exclusive worldwide license, or the Exclusive License, under our proprietary patents for the research, development and commercialization of products based on specialized oligonucleotide backbone chemistry and novel amidates for ribonucleic acid interference, or RNAi, for the prevention, treatment and/or diagnosis of any and all human disorders, excluding cancers originating from the blood or bone marrow, and products whose predominant or primary mechanism of action is telomerase inhibition. In addition to the Exclusive License, we granted to Janssen Pharmaceuticals a non-exclusive worldwide license, or the Non-Exclusive License, under our patents covering the synthesis of monomers, which are the building blocks of oligonucleotides, and certain know-how necessary for the research, development and commercialization of products under the Exclusive License. The patent rights under the Non-Exclusive License are also licensed exclusively to Janssen under the Collaboration Agreement, as described in the section above titled "Janssen Biotech, Inc. Collaboration and License Agreement", for the development and commercialization of imetelstat, and the License Agreement with Janssen Pharmaceuticals expressly excludes, and is subject to, the rights and licenses granted to Janssen under the Collaboration Agreement. Under the terms of the License Agreement, Janssen Pharmaceuticals, at its sole expense, is required to use reasonable efforts to perform research, development and commercialization activities to obtain at least one licensed product to be researched, developed and commercialized under the License Agreement. We remain responsible for prosecuting the patent rights under the Exclusive License, with reasonable input provided by Janssen Pharmaceuticals, and the costs for such prosecution will be shared between us and Janssen Pharmaceuticals on a 50/50 basis. In addition, we remain responsible for prosecuting the patent rights under the Non-Exclusive License, as set forth under the terms of the Collaboration Agreement with Janssen. Under the terms of the License Agreement, we received $5,000,000 from Janssen Pharmaceuticals as a non-refundable upfront payment. We are also eligible to receive additional potential payments of up to an aggregate maximum total of $75,000,000 for the achievement of certain development and regulatory milestones and tiered royalties in the low single digit percentage range on worldwide net sales of each licensed product commercialized under the License Agreement in any countries where there are valid claims under the patent rights licensed to Janssen Pharmaceuticals. The License Agreement will remain in effect until the expiration of the last-to-expire patent, unless terminated earlier. Janssen Pharmaceuticals may also terminate the License Agreement at will upon prior written notice to us. In the event of an early termination of the License Agreement, all licenses to Janssen Pharmaceuticals would terminate. The terms of the License Agreement contain multiple deliverables, which included at inception the transfer of: (i) license rights under the Exclusive License and (ii) license rights and certain know-how under the Non-Exclusive License. We concluded the License Agreement has standalone value to Janssen Pharmaceuticals based on Janssen Pharmaceuticals' technical and financial resources, including drug development experience, sizeable employee base with specific knowledge of oligonucleotide chemistry, and sufficient capital to independently research, develop and commercialize products under the License Agreement on a global basis. Accordingly, we have determined delivery of the license rights granted by us to Janssen Pharmaceuticals under the Exclusive License and Non-Exclusive License, together with the transfer of certain know-how under the Non-Exclusive License, represents the sole non-contingent deliverable under the License Agreement associated with the upfront payment. Therefore, we accounted for our delivery of the license rights and transfer of know-how under the License Agreement as a single unit of accounting. During the third quarter of 2016, we completed the delivery of the license rights and transfer of know-how to Janssen Pharmaceuticals under the License Agreement. Accordingly, we fully recognized the $5,000,000 upfront payment from Janssen Pharmaceuticals as license fee revenue on our statements of operations in the third quarter of 2016. We have determined that each of the additional potential development and regulatory milestone payments to us under the License Agreement represent substantive milestones. Consequently, we will recognize revenue for these payments in their entirety upon successful accomplishment of the respective milestone. Royalties on potential future product sales under the License Agreement will be recognized as revenue when earned. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 5. ACCRUED LIABILITIES Accrued liabilities consisted of the following: December 31, (In thousands) 2016 2015 Professional legal and accounting fees $ $ Clinical trial costs Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2016 | |
RESTRUCTURING | |
RESTRUCTURING | 6. RESTRUCTURING With projected reduced operational demands as a result of the Collaboration Agreement with Janssen, on March 3, 2015, we announced an organizational resizing to reduce our workforce. For the year ended December 31, 2015, we recorded restructuring charges of approximately $1,306,000, net of non-cash adjustments, related to one-time termination benefits. These charges included $307,000 of non-cash stock-based compensation expense relating to the extension of the post-termination exercise period for certain stock options previously granted to employees affected by the restructuring. The restructuring resulted in aggregate cash expenditures of approximately $988,000 after adjustments and non-cash credits. All actions associated with this restructuring were completed in 2015, and we do not anticipate incurring any further charges in connection with this restructuring. As of December 31, 2016, we had no remaining obligations related to the restructuring. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Securities and Derivative Lawsuits We and certain of our officers have been named as defendants in two purported class action securities lawsuits filed in the United States District Court for the Northern District of California, or the California District Court, as well as a third securities lawsuit, not styled as a class action, which was originally filed in the United States District Court for the Southern District of Mississippi, and subsequently transferred to the California District Court. These three cases, or the Class Action Lawsuits, which are based on the same factual background, have been consolidated for all purposes, and are currently stayed to enable the parties to seek to resolve them. On November 23, 2016, the parties signed a Memorandum of Understanding that set forth material deal points of resolving the Class Action Lawsuits. On December 13, 2016, the parties filed a notice of settlement, which the California District Court signed on December 16, 2016, staying the Class Action Lawsuits pending final approval of a settlement. Final settlement of the Class Action Lawsuits is contingent upon, among other things, approval by the California District Court. Such approval, if any, is not expected until the end of 2017. Certain of our officers and directors were also named as defendants in four purported stockholder derivative lawsuits, two of which were filed in the Superior Court of California for the County of San Mateo, or the San Mateo County Court, and two of which were filed in the California District Court. These cases were all based on the same factual background and were consolidated in their respective courts. On July 22, 2016, the parties entered into a stipulation to settle all claims in each of the foregoing derivative lawsuits in exchange for our agreement to (i) implement certain corporate governance refinements, and (ii) instruct our insurer to pay in full the plaintiffs' attorneys a total of $950,000. On August 19, 2016, the San Mateo County Court preliminarily approved the proposed settlement. On November 18, 2016, the San Mateo County Court issued an order granting final approval of the settlement and dismissing with prejudice the two derivative lawsuits filed in the San Mateo County Court. On December 6, 2016, the California District Court issued an order dismissing with prejudice the two derivative lawsuits filed in the California District Court. Accordingly, as of December 6, 2016, all of the derivative lawsuits have been fully and finally settled and dismissed. As of December 31, 2016, we have implemented the corporate governance refinements specified in the stipulation of settlement and our insurers have paid the settlement amount in full to the plaintiffs' attorneys. For a more complete discussion of the Class Action Lawsuits and the derivative lawsuits, see the section entitled "Legal Proceedings" under Item 3 of this annual report on Form 10-K. It is possible that additional lawsuits will be filed, or allegations will be made by stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants. The Class Action Lawsuits and any other lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. Monitoring, initiating and defending against legal actions is time-consuming for our management, likely to be expensive and may detract from our ability to fully focus our internal resources on our business activities. In addition, despite the availability of insurance, we may incur substantial legal fees and costs in connection with litigation and such amounts could be material to our financial statements. We could be forced to expend significant resources in the implementation of the corporate governance refinements required by the terms of the settlement for the derivative lawsuits, or in the settlement or defense of the Class Action Lawsuits or any other lawsuits, and we may not prevail in such lawsuits. We have not established any reserve for any potential liability relating to any additional lawsuits. Indemnifications to Officers and Directors Our corporate bylaws require that we indemnify our officers and directors, as well as those who act as directors and officers of other entities at our request, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceedings arising out of their services to Geron. In addition, we have entered into separate indemnification agreements with each of our directors and officers which provide for indemnification of these directors and officers under similar circumstances and under additional circumstances. The indemnification obligations are more fully described in our bylaws and the indemnification agreements. We purchase standard insurance to cover claims or a portion of the claims made against our directors and officers. Since a maximum obligation is not explicitly stated in our bylaws or in our indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated. Operating Lease Commitment On September 15, 2015, we amended the lease agreement for our premises at 149 Commonwealth Drive, Menlo Park, California, to extend the lease term from February 2016 through January 2018. As of December 31, 2016, operating lease obligations under the amended lease agreement include aggregate future minimum payments of approximately $716,000. Rent expense under our operating leases was approximately $708,000, $878,000 and $936,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Severance Plan We have an Amended and Restated Severance Plan, or Severance Plan, that applies to all employees that are not subject to performance improvement plans, and provides for, among other benefits: (i) a severance payment upon a Change of Control Triggering Event and Separation from Service and (ii) a severance payment for each non-executive employee upon a Non-Change of Control Triggering Event and Separation from Service. As defined in the Severance Plan, a Change of Control Triggering Event and Separation from Service requires a "double trigger" where: (i) an employee is terminated by us without cause in connection with a change of control or within 12 months following a change of control provided, however, that if an employee is terminated by us in connection with a change of control but immediately accepts employment with our successor or acquirer, the employee will not be eligible for the benefits outlined in the Severance Plan, (ii) an employee resigns because in connection with a change of control, the offered terms of employment (new or continuing) by us or our successor or acquirer within 30 days after the change of control results in a material change in the terms of employment, or (iii) after accepting (or continuing) employment with us after a change of control, an employee resigns within 12 months following a change of control due to a material change in the terms of employment. Under the Severance Plan, a Non-Change of Control Triggering Event and Separation from Service is defined as an event where a non-executive employee is terminated by us without cause. Severance payments range from two to 18 months of base salary, depending on the employee's position with us, payable in a lump sum payment. The Severance Plan also provides that the provisions of employment agreements entered into between us and executive or non-executive employees supersede the provisions of the Severance Plan. As of December 31, 2016, all our executive officers have employment agreements with provisions that may provide greater severance benefits than those in the Severance Plan. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 8. STOCKHOLDERS' EQUITY Sales Agreement On August 28, 2015, we entered into an At Market Issuance Sales Agreement, or the 2015 Sales Agreement, with MLV & Co. LLC, or MLV, pursuant to which we may elect to issue and sell shares of our common stock having an aggregate offering price of up to $50,000,000 from time to time into the open market at prevailing prices through MLV as our sales agent. We will pay MLV an aggregate commission rate equal to up to 3.0% of the gross proceeds of the sales price per share for common stock sold through MLV under the 2015 Sales Agreement. Pursuant to the 2015 Sales Agreement, sales of common stock will be made in such quantities and on such minimum price terms as we may set from time to time. We are not obligated to make any sales of common stock under the 2015 Sales Agreement. As of December 31, 2016, we had not sold any common stock pursuant to the 2015 Sales Agreement. The 2015 Sales Agreement will expire in August 2018 unless extended by the parties. Public Offering On February 4, 2014, we completed an underwritten public offering of 25,875,000 shares of our common stock at a public offering price of $4.00 per share, resulting in net cash proceeds of approximately $96,805,000 after deducting the underwriting discount and offering expenses payable by us. Warrants In connection with each disbursement under a previous loan agreement with the California Institute for Regenerative Medicine, or CIRM, we were obligated to issue to CIRM a warrant to purchase Geron common stock. Such warrants and the underlying common stock were unregistered. We have no further obligations to issue any additional warrants to CIRM. As of December 31, 2016, a warrant to purchase 537,893 shares of our common stock remained outstanding. The warrant was issued to CIRM in August 2011 at an exercise price of $3.98 per share and expires in August 2021. In December 2014, CIRM exercised a warrant to purchase 461,382 shares of our common stock utilizing the net exercise provision in the warrant resulting in the issuance of 168,039 shares of our common stock. On March 31, 2015, a warrant to purchase 235,000 shares of our common stock was exercised at an exercise price of $3.75 per share. We received cash proceeds of approximately $881,000 from the exercise of this warrant. Equity Plans 2002 Equity Incentive Plan The 2002 Equity Incentive Plan, or 2002 Plan, expired in May 2012. Upon the adoption of the 2011 Incentive Award Plan in May 2011 (see below), no further grants of options or stock purchase rights were made from the 2002 Plan. Options granted under the 2002 Plan expire no later than ten years from the date of grant. Option exercise prices were equal to 100% of the fair market value of the underlying common stock on the date of grant. Service-based stock options under the 2002 Plan generally vested over a period of four years from the date of the option grant. Other stock awards (restricted stock awards and restricted stock units) had variable vesting schedules which were determined by our board of directors on the date of grant. All outstanding awards granted under the 2002 Plan remain subject to the terms of the 2002 Plan and the individual award agreements thereunder. 2011 Incentive Award Plan In May 2011, our stockholders approved the adoption of the 2011 Incentive Award Plan, or 2011 Plan. Our board of directors administers the 2011 Plan. The 2011 Plan provides for grants to employees (including officers and employee directors) of either incentive stock options or nonstatutory stock options and stock purchase rights to employees (including officers and employee directors) and consultants (including non-employee directors). As of December 31, 2016, an aggregate of 9,570,535 shares of our common stock were available for future grants of equity awards under the 2011 Plan. Pursuant to the terms of the 2011 Plan, any shares subject to outstanding stock options or outstanding unvested restricted stock awards originally granted under the 2002 Plan that expire or terminate for any reason prior to exercise or settlement or are forfeited because of the failure to meet a contingency or condition required to vest such shares shall become available for issuance under the 2011 Plan. Options granted under the 2011 Plan expire no later than ten years from the date of grant. Option exercise prices shall be equal the fair market value of the underlying common stock on the date of grant. If, at the time we grant an option, the optionee directly or by attribution owns stock possessing more than 10% of the total combined voting power of all classes of our stock, the option exercise price shall be at least 110% of the fair market value of the underlying common stock and shall not be exercisable more than five years after the date of grant. We grant service-based stock options to employees under our 2011 Plan that generally vest over a period of four years from the date of the option grant. Other stock awards (restricted stock awards and restricted stock units) have variable vesting schedules as determined by our board of directors on the date of grant. Under certain circumstances, options may be exercised prior to vesting, subject to our right to repurchase shares subject to such option at the exercise price paid per share. Our repurchase rights would generally terminate on a vesting schedule identical to the vesting schedule of the exercised option. During 2016, we have not repurchased any shares under the 2011 Plan. As of December 31, 2016, we have no shares outstanding subject to repurchase. As of December 31, 2016, our Non-Employee Director Compensation Policy adopted by our board of directors in March 2014 and amended by our board of directors in February 2016 provides for the automatic grant to non-employee directors of the following types of equity awards under the 2011 Plan: First Director Option. Each person who becomes a non-employee director, whether by election by our stockholders or by appointment by our board of directors to fill a vacancy, will automatically be granted an option to purchase 100,000 shares of common stock, or First Director Option, on the date such person first becomes a non-employee director. The First Director Option vests annually over three years upon each anniversary date of appointment to our board of directors. Subsequent Director Option. Each non-employee director (other than any director receiving a First Director Option on the date of the annual meeting) will automatically be granted a subsequent option to purchase 50,000 shares of common stock, a Subsequent Director Option, on the date of the annual meeting of stockholders in each year during such director's service on our board of directors. The Subsequent Director Option vests in full on the earlier of: (i) the date of the next annual meeting of our stockholders or (ii) the first anniversary of the date of grant. 2006 Directors' Stock Option Plan The 2006 Directors' Stock Option Plan, or 2006 Directors Plan, was terminated by our board of directors and replaced by the 2011 Plan in March 2014. No further grants of options were made from the 2006 Directors Plan upon the 2006 Directors Plan's termination. All outstanding awards granted under the 2006 Directors Plan remain subject to the terms of the 2006 Directors Plan and the individual award agreements made thereunder. The options granted to non-employee directors under the 2006 Directors Plan were nonstatutory stock options, and they expire no later than ten years from the date of grant. The option exercise price was equal to the fair market value of the underlying common stock on the date of grant. The First Director Option granted to non-employee directors under the 2006 Directors Plan vested annually over three years upon each anniversary date of appointment to the board of directors. The Subsequent Director Option granted to non-employee directors on the date of the annual meeting of stockholders in each year during such director's service on our board of directors under the 2006 Directors Plan vested one year from the date of grant. Aggregate option and award activity for the 2002 Plan, 2011 Plan and 2006 Directors Plan is as follows: Outstanding Options Shares Number of Weighted Average Weighted Average Aggregate Balance at December 31, 2015 $3.29 Options granted ) $2.56 Awards granted ) — $ — Options exercised — ) $1.50 Options cancelled/forfeited ) $5.34 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2016 $3.15 6.65 $3,816 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at December 31, 2016 $2.99 6.05 $3,718 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options fully vested and expected to vest at December 31, 2016 $3.14 6.60 $3,815 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on Geron's closing stock price of $2.07 per share as of December 30, 2016, which would have been received by the option holders had all the option holders exercised their options as of that date. We have not granted any options with an exercise price below or greater than the fair market value of our common stock on the date of grant in 2016, 2015 or 2014. As of December 31, 2016, 2015 and 2014, there were 14,074,457, 11,356,232 and 9,129,576 exercisable options outstanding at weighted average exercise prices per share of $2.99, $2.98 and $3.12, respectively. The total pretax intrinsic value of stock options exercised during 2016, 2015 and 2014 was $595,000, $2,398,000 and $989,000, respectively. Cash received from the exercise of options in 2016, 2015 and 2014 totaled approximately $493,000, $2,205,000 and $1,286,000, respectively. Information about stock options outstanding as of December 31, 2016 is as follows: Options Outstanding Exercise Price Range Number of Weighted Average Weighted Average $1.10 - $1.51 $1.45 5.89 $1.55 - $2.54 $2.27 7.25 $2.74 - $5.01 $4.55 7.28 $5.09 - $9.32 $5.59 5.36 ​ ​ ​ ​ ​ ​ ​ ​ $1.10 - $9.32 $3.15 6.65 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Aggregate restricted stock activity for the 2011 Plan is as follows: Number of Weighted Weighted Average Non-vested restricted stock at December 31, 2015 $4.65 0.10 Granted $2.44 Vested ) $2.49 ​ ​ ​ ​ ​ ​ ​ ​ Non-vested restricted stock at December 31, 2016 — $— — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The weighted average grant date fair value of restricted stock granted during the years ended December 31, 2016, 2015 and 2014 was $2.44, $3.75 and $2.67 per share, respectively. The total fair value of restricted stock that vested during 2016, 2015 and 2014 was $54,000, $275,000 and $782,000, respectively. Employee Stock Purchase Plan In March 2014, our board of directors adopted the 2014 Employee Stock Purchase Plan, or 2014 Purchase Plan. The 2014 Purchase Plan was approved by our stockholders in May 2014. The 2014 Purchase Plan replaced the 1996 Employee Stock Purchase Plan, or 1996 Purchase Plan, which was terminated effective as of the date the 2014 Purchase Plan was approved by our stockholders. Under the 2014 Purchase Plan, we are authorized to sell to eligible employees up to an aggregate of 1,000,000 shares of Geron common stock. As of December 31, 2016, an aggregate of 84,885 shares of our common stock have been issued under the 2014 Purchase Plan since its adoption. The 2014 Purchase Plan is comprised of a series of offering periods, each with a maximum duration (not to exceed 12 months) with new offering periods commencing on January 1st and July 1st of each year. The date an employee enters the offering period will be designated as the entry date for purposes of that offering period. An employee may participate only in one offering period at a time. Each offering period consists of two consecutive purchase periods of six months' duration, with the last day of such period designated a purchase date. Under the terms of the 2014 Purchase Plan, employees can choose to have up to 10% of their annual salary withheld to purchase our common stock. An employee may not make additional payments into such account or increase the withholding percentage during the offering period. The purchase price per share at which common stock is purchased by the employee on each purchase date within the offering period is equal to 85% of the lower of (i) the fair market value per share of Geron's common stock on the employee's entry date into that offering period or (ii) the fair market value per share of Geron's common stock on the purchase date. If the fair market value of Geron's common stock on the purchase date is less than the fair market value at the beginning of the offering period, a new 12 month offering period will automatically begin on the first business day following the purchase date with a new fair market value. Stock-Based Compensation for Employees and Directors We measure and recognize compensation expense for all share-based payment awards made to employees and directors, including employee stock options, restricted stock awards and employee stock purchases, based on grant-date fair values for these instruments. We use the Black Scholes option-pricing model to estimate the grant-date fair value of our stock options and employee stock purchases. The fair value for service-based restricted stock awards is determined using the fair value of our common stock on the date of grant. As stock-based compensation expense recognized in the statements of operations for the years ended December 31, 2016, 2015 and 2014 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures but at a minimum, reflects the grant-date fair value of those awards that actually vested in the period. Forfeitures have been estimated at the time of grant based on historical data and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize stock-based compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period. The following table summarizes the stock-based compensation expense related to stock options, restricted stock awards and employee stock purchases for the years ended December 31, 2016, 2015 and 2014 which was allocated as follows: Year Ended December 31, (In thousands) 2016 2015 2014 Research and development $ $ $ Restructuring charges — — General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense included in operating expenses $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense also has been recognized for the modification of the post-termination exercise period for certain stock options previously granted to employees affected by the March 2015 restructuring, which has been included in restructuring charges in our statements of operations. See Note 6 on Restructuring for further discussion of the restructuring. The fair value of stock options granted in 2016, 2015 and 2014 has been estimated at the date of grant using the Black Scholes option-pricing model with the following assumptions: 2016 2015 2014 Dividend yield 0% 0% 0% Expected volatility range 0.888 to 0.890 0.874 to 0.884 0.898 to 0.922 Risk-free interest rate range 1.21% to 1.38% 1.68% to 1.71% 1.64% to 1.92% Expected term 5.5 yrs 5.5 yrs 5.5 yrs The fair value of employee stock purchases in 2016, 2015 and 2014 has been estimated using the Black Scholes option-pricing model with the following assumptions: 2016 2015 2014 Dividend yield 0% 0% 0% Expected volatility range 0.641 to 0.684 0.654 to 1.392 0.835 to 1.666 Risk-free interest rate range 0.28% to 0.45% 0.11% to 0.28% 0.06% to 0.15% Expected term range 6 mos to 12 mos 6 mos to 12 mos 6 mos to 12 mos Dividend yield is based on historical cash dividend payments and Geron has paid no cash dividends to date. The expected volatility range is based on historical volatilities of our stock since traded options on Geron common stock do not correspond to option terms and the trading volume of options is limited. The risk-free interest rate range is based on the U.S. Zero Coupon Treasury Strip Yields for the expected term in effect on the date of grant for an award. The expected term of options is derived from actual historical exercise and post-vesting cancellation data and represents the period of time that options granted are expected to be outstanding. The expected term of employees' purchase rights is equal to the purchase period. Based on the Black Scholes option-pricing model, the weighted average estimated fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was $1.83, $3.06 and $3.57 per share, respectively. The weighted average estimated fair value of employees' purchase rights for the years ended December 31, 2016, 2015 and 2014 was $1.01, $1.64 and $2.10 per share, respectively. As of December 31, 2016, total compensation cost related to unvested share-based payment awards not yet recognized, net of estimated forfeitures, was $10,128,000, which is expected to be recognized over the next 24 months on a weighted-average basis. 401(k) Plan Matching Contributions We sponsor a defined-contribution savings plan under Section 401(k) of the Internal Revenue Code covering all full-time U.S. employees, or the Geron 401K Plan. Participating employees may contribute up to the annual Internal Revenue Service contribution limit. The Geron 401K Plan also permits us to provide discretionary matching and profit sharing contributions. Prior to 2014, our board of directors approved matching contributions for the Geron 401K Plan in our common stock, which vested ratably over four years for each year of service completed by our employees, commencing from the date of hire. Stock-Based Compensation to Service Providers We grant stock options and restricted stock awards to consultants from time to time in exchange for services performed for us. In general, the stock options and restricted stock awards vest over the contractual period of the consulting arrangement. We granted stock options to purchase 75,000 shares of our common stock to consultants in 2014. The fair value of stock options and restricted stock awards held by consultants is recorded as operating expenses over the vesting term of the respective equity awards. In addition, we will record any increase in the fair value of the stock options and restricted stock awards as the respective equity award vests. We recorded stock-based compensation expense of $104,000, $311,000 and $94,000 for the vested portion of the fair value of stock options and restricted stock awards held by consultants in 2016, 2015 and 2014, respectively. We have also issued common stock to non-employee directors, consultants and vendors. For stock issuances where services are to be performed for us, we record a prepaid asset equal to the fair market value of the shares on the date of issuance and amortize the fair value of the shares to our operating expenses on a pro-rata basis as services are performed or goods are received. For stock issuances where services have been performed for us, we record the fair market value of the shares on the date of issuance to offset the amounts owed. In 2016, 2015 and 2014, we issued 21,541, 18,077 and 71,239 shares of common stock, respectively, in exchange for goods or services. In 2016, 2015 and 2014, we recognized approximately $52,000, $53,000 and $158,000, respectively, of expense in connection with stock grants to non-employee directors, consultants and vendors. Common Stock Reserved for Future Issuance Common stock reserved for future issuance as of December 31, 2016 is as follows: Outstanding stock options Options and awards available for grant Employee stock purchase plan Warrant outstanding ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are as follows: December 31, 2016 2015 (In thousands) Net operating loss carryforwards $ $ Research credits Capitalized research and development License fees Other—net ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowance for deferred tax assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial performance. Forming a conclusion that a valuation allowance is not required is difficult when there is negative evidence such as cumulative losses in recent years. Because of our history of losses, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $9,600,000 for the year ended December 31, 2016 and decreased by $2,300,000 and $3,300,000 during the years ended December 31, 2015 and 2014, respectively. Approximately $6,400,000 of the valuation allowance for deferred tax assets relates to benefits of stock option deductions which, when recognized, will be allocated directly to contributed capital. No income tax benefit was realized from stock options exercised in 2016. As of December 31, 2016, we had domestic federal net operating loss carryforwards of approximately $778,000,000 expiring at various dates beginning in 2018 through 2036 and state net operating loss carryforwards of approximately $293,000,000 expiring at various dates beginning in 2017 through 2036, if not utilized. We also had federal research and development tax credit carryforwards of approximately $21,100,000 expiring at various dates beginning in 2018 through 2036, if not utilized. Our state research and development tax credit carryforwards of approximately $13,300,000 carry forward indefinitely. Due to the change of ownership provisions of the Tax Reform Act of 1986, utilization of a portion of our domestic net operating loss and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. We adopted the provision of the standard for accounting for uncertainties in income taxes on January 1, 2007. Upon adoption, we recognized no material adjustment in the liability for unrecognized tax benefits. At December 31, 2016, we had approximately $14,700,000 of unrecognized tax benefits, none of which would currently affect our effective tax rate if recognized due to our deferred tax assets being fully offset by a valuation allowance. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): Balance as of December 31, 2015 $ Decrease related to prior year tax positions ) Increase related to current year tax positions ​ ​ ​ ​ ​ Balance as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ If applicable, we would classify interest and penalties related to uncertain tax positions in income tax expense. Through December 31, 2016, there has been no interest expense or penalties related to unrecognized tax benefits. We do not currently expect any significant changes to unrecognized tax benefits during the fiscal year ended December 31, 2017. In certain cases, our uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. Tax years for which we have carryforward net operating loss and credit attributes remain subject to examination by federal and most state tax authorities. |
STATEMENTS OF CASH FLOWS DATA
STATEMENTS OF CASH FLOWS DATA | 12 Months Ended |
Dec. 31, 2016 | |
STATEMENTS OF CASH FLOWS DATA | |
STATEMENTS OF CASH FLOWS DATA | 10. STATEMENTS OF CASH FLOWS DATA Year Ended December 31, 2016 2015 2014 (In thousands) Supplemental operating activities: Issuance of common stock for 401(k) matching contributions $ — $ — $ Reclassification between deposits and other current assets $ — $ — $ Supplemental investing activities: Net unrealized gain (loss) on marketable securities $ $ ) $ ) We have not made any cash payments for taxes or interest for the years ended December 31, 2016, 2015 and 2014. |
SELECTED QUARTERLY FINANCIAL IN
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 11. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) First Second Third Fourth (In thousands, except per share amounts) Year Ended December 31, 2016: Revenues (1) $ $ $ $ Operating expenses Net loss ) ) ) ) Basic and diluted net loss per share $ ) $ ) $ ) $ ) Year Ended December 31, 2015: Revenues (2) $ $ $ $ Operating expenses Net (loss) income ) ) ) Basic and diluted net (loss) income per share $ ) $ ) $ $ ) (1) The third quarter of 2016 includes the full recognition of the $5,000,000 upfront payment from Janssen Pharmaceuticals as license fee revenue. See Note 4 on License Agreements. (2) The third quarter of 2015 includes the full recognition of the $35,000,000 upfront payment from Janssen as collaboration revenue. See Note 4 on License Agreements. Basic and diluted net income (loss) per share are computed independently for each of the quarters presented. Therefore, the sum of the quarters may not be equal to the full year net income (loss) per share amounts. |
ORGANIZATION AND SUMMARY OF S20
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the periods presented, without consideration of common stock equivalents. Diluted net income per share is calculated by adjusting the weighted-average number of shares of common stock outstanding for the dilutive effect of common stock equivalents outstanding for the periods presented, as determined using the treasury-stock method. Potential dilutive securities primarily consist of outstanding stock options, restricted stock awards and warrants to purchase our common stock. For periods in which we have incurred a net loss, common stock equivalents outstanding for the periods presented, as determined using the treasury-stock method, are excluded, as their effect would be anti-dilutive, resulting in the same number of shares being used for the calculation of basic and diluted net loss per share. For all periods presented in the accompanying statements of operations, the net income (loss) applicable to common stockholders is equal to the reported net income (loss). Year Ended December 31, (In thousands, except share and per share data) 2016 2015 2014 Net (loss) income $ ) $ $ ) Weighted-average shares: Basic Effect of dilutive securities: Stock options and restricted stock awards — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Basic $ ) $ $ ) Diluted $ ) $ $ ) Because we were in a net loss position for 2016 and 2014, 3,023,520 and 3,072,340 common stock equivalents, respectively, related to outstanding stock options, restricted stock awards and warrants (as determined using the treasury-stock method at the estimated average market value) were excluded from the diluted net loss per share calculation as their effect would have been anti-dilutive. In addition for 2016, 2015 and 2014, 11,352,766, 9,375,851 and 9,113,088 potentially dilutive securities, respectively, were excluded from the treasury-stock method and calculation of diluted net income (loss) per share as their effect would have been anti-dilutive. |
Reclassifications | Reclassifications We have reclassified certain prior period financial statement amounts to conform to current period presentation. On the balance sheets and statements of cash flows, amounts in "Accrued restructuring charges" have been reclassified to "Accrued compensation and benefits". |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On a regular basis, management evaluates these estimates and assumptions. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Cash Equivalents and Marketable Securities We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We are subject to credit risk related to our cash equivalents and marketable securities. We place our cash and cash equivalents in money market funds and cash operating accounts. Our marketable securities include U.S. government-sponsored enterprise securities, commercial paper and corporate notes with original maturities ranging from four to 24 months. We classify our marketable securities as available-for-sale. We record available-for-sale securities at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in stockholders' equity. Realized gains and losses are included in interest and other income and are derived using the specific identification method for determining the cost of securities sold and have been insignificant to date. Dividend and interest income are recognized when earned and included in interest and other income in our statements of operations. We recognize a charge when the declines in the fair values below the amortized cost basis of our available-for-sale securities are judged to be other-than-temporary. We consider various factors in determining whether to recognize an other-than-temporary charge, including whether we intend to sell the security or whether it is more likely than not that we would be required to sell the security before recovery of the amortized cost basis. Declines in market value associated with credit losses judged as other-than-temporary result in a charge to interest and other income. Other-than-temporary charges not related to credit losses are included in accumulated other comprehensive income (loss) in stockholders' equity. We have not recorded any other-than-temporary impairment charges on our available-for-sale securities for the years ended December 31, 2016, 2015 and 2014. See Note 2 on Fair Value Measurements. Fair Value of Derivatives Non-employee options classified as derivative liabilities are marked to fair value at each financial reporting date with any resulting changes in fair value being recorded in the statements of operations as unrealized gain (loss) on derivatives. The non-employee options continue to be reported as a derivative liability until such time as the instruments are exercised or expire, at which time these instruments are marked to fair value and reclassified from liabilities to stockholders' equity. As of March 31, 2015, all non-employee options classified as derivative liabilities expired unexercised. |
Revenue Recognition | Revenue Recognition We recognize revenue for each unit of accounting when all of the following criteria have been met: (a) persuasive evidence of an arrangement exists, (b) delivery has occurred or services have been rendered, (c) the seller's price to the buyer is fixed or determinable, and (d) collectability is reasonably assured. Amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as noncurrent deferred revenue. License and/or Collaboration Agreements In addition to the Collaboration Agreement (which is more fully described in Note 4 on License Agreements), we have entered into several license or collaboration agreements with various oncology, diagnostics, research tools and biologics production companies. Economic terms in these agreements may include non-refundable upfront license payments in cash or equity securities, option payments in cash or equity securities, cost reimbursements, cost-sharing arrangements, milestone payments, royalties on future sales of products, or any combination of these items. In applying the appropriate revenue recognition guidance related to these agreements, we first assess whether the arrangement contains multiple elements. In this evaluation, we consider: (i) the deliverables included in the arrangement and (ii) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. This evaluation involves subjective determinations and requires us to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a standalone basis, and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. In assessing whether an item has standalone value, we consider factors such as the research, manufacturing and commercialization capabilities of the collaboration partner or licensee and the availability of the associated expertise in the general marketplace. In addition, we consider whether the collaboration partner or licensee can use the other deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s) and whether there are other vendors that can provide the undelivered element(s). Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method. We then apply the applicable revenue recognition criteria noted above to each of the separate units of accounting in determining the appropriate period and pattern of recognition. We determine how to allocate arrangement consideration to identified units of accounting based on the selling price hierarchy provided under relevant accounting guidance. The estimated fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor-specific-objective evidence and third-party evidence are not available. Upfront non-refundable signing, license or non-exclusive option fees are recognized as revenue: (i) when rights to use the intellectual property have been delivered, if the license has standalone value from the other deliverables to be provided under the agreement, or (ii) over the term of the agreement if we have continuing performance obligations, as the arrangement would be accounted for as a single unit of accounting. When payments are received in equity securities, we do not recognize any revenue unless such securities are determined to be realizable in cash. At the inception of an arrangement that includes milestone payments, we assess whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether: (i) the consideration is commensurate with either the performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the performance to achieve the milestone, (ii) the consideration relates solely to past performance and (iii) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. We consider various factors, such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone, in making this assessment. There is considerable judgment involved in determining whether a milestone satisfies all of the criteria required to conclude that a milestone is substantive. Milestone payments for milestones that are considered substantive would be recognized as revenue in their entirety upon successful accomplishment of the milestone, assuming all other revenue recognition criteria are met. Milestone payments for milestones that are not considered substantive would be recognized as revenue over the remaining period of performance, assuming all other revenue recognition criteria are met. Royalties are recognized as earned in accordance with contract terms when royalties from licensees can be reasonably estimated and collectability is reasonably assured. If royalties cannot be reasonably estimated or collectability of a royalty amount is not reasonably assured, royalties are recognized as revenue when the cash is received. Revenue from commercial milestone payments is accounted for as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. Cost-sharing expenses are recorded as earned or owed based on the performance requirements by both parties under the respective contracts. For arrangements in which we and our collaboration partner in the agreement are exposed to significant risks and rewards that depend on the commercial success of the activity, we recognize payments between the parties on a net basis and record such amounts as a reduction or addition to research and development expense. For arrangements in which we have agreed to perform certain research and development services for our collaboration partner and are not exposed to significant risks and rewards that depend on the commercial success of the activity, we recognize the respective cost reimbursements as revenue under the collaborative agreement as the related research and development services are rendered. |
Restricted Cash | Restricted Cash Restricted cash consists of funds maintained in a separate certificate of deposit account for credit card purchases. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist of expenses incurred in identifying, developing and testing product candidates resulting from our independent efforts as well as efforts associated with collaborations. These expenses include, but are not limited to, in-process research and development acquired in an asset acquisition and deemed to have no alternative future use, payroll and personnel expense, lab supplies, preclinical studies, clinical trials, including support for investigator-sponsored clinical trials, raw materials to manufacture clinical trial drugs, manufacturing costs for research and clinical trial materials, sponsored research at other labs, consulting, costs to maintain technology licenses, our proportionate share of research and development costs under cost-sharing arrangements with collaboration partners and research-related overhead. Research and development costs are expensed as incurred, including costs incurred under our collaboration and/or license agreements. Clinical Trial Costs Prior to our collaboration with Janssen for imetelstat, substantial portions of our preclinical studies and all of our clinical trials were performed by third-party contract research organizations, or CROs, and other vendors. We accrued expenses for these activities based upon the estimated amount of work completed on each study. For our clinical trial expenses, the significant factors used in estimating accruals included the number of patients enrolled, the number of active clinical sites and the duration for which the patients had been enrolled in the study. For the clinical development activities being conducted by Janssen under the Collaboration Agreement, we monitor patient enrollment levels and related activities to the extent possible through discussions with Janssen personnel and base our estimates on the best information available at the time. However, additional information may become available to us which would allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. |
Depreciation and Amortization | Depreciation and Amortization We record property and equipment at cost and calculate depreciation using the straight-line method over the estimated useful lives of the assets, generally four years. Leasehold improvements are amortized over the shorter of the estimated useful life or remaining term of the lease. |
Stock-Based Compensation | Stock-Based Compensation We maintain various stock incentive plans under which stock options and restricted stock awards are granted to employees, directors and consultants. We also have an employee stock purchase plan for all eligible employees. We recognize stock-based compensation expense on a straight-line basis over the requisite service period, which is generally the vesting period. For additional information, see Note 8 on Stockholders' Equity. Stock Options and Employee Stock Purchase Plan We grant service-based stock options under our equity plans to employees, directors and consultants. The vesting period for employee options is generally four years. We use the Black Scholes option-pricing model to estimate the grant-date fair value of our stock options and employee stock plan purchases. The determination of fair value for these stock-based awards on the date of grant using the Black Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. For additional information, see Note 8 on Stockholders' Equity. Restricted Stock Awards Prior to 2012, we granted restricted stock awards to employees and non-employee directors with service-based vesting schedules that generally vested annually over four years. The fair value for service-based restricted stock awards was determined using the fair value of our common stock on the date of grant. The fair value was amortized as stock-based compensation expense over the requisite service period of the award, which was generally the vesting period, on a straight-line basis and was reduced for estimated forfeitures, as applicable. Non-Employee Stock-Based Awards For our non-employee stock-based awards, the measurement date on which the fair value of the stock-based award is calculated is equal to the earlier of: (i) the date at which a commitment for performance by the counterparty to earn the equity instrument is reached or (ii) the date at which the counterparty's performance is complete. We recognize stock-based compensation expense for the fair value of the vested portion of non-employee stock-based awards in our statements of operations. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated other comprehensive loss includes certain changes in stockholders' equity which are excluded from net income (loss). Accumulated other comprehensive loss on our balance sheets as of December 31, 2016 and 2015 is solely comprised of net unrealized losses on marketable securities. |
Income Taxes | Income Taxes We maintain deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and are subject to tests of recoverability. Our deferred tax assets include net operating loss carryforwards, research credits and capitalized research and development. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Our net deferred tax asset has been fully offset by a valuation allowance because of our history of losses. Any potential accrued interest and penalties related to unrecognized tax benefits would be recorded as income tax expense. |
Concentrations of Customers and Suppliers | Concentrations of Customers and Suppliers The majority of our revenues was earned in the United States. Approximately 81% of our 2016 revenues represented an upfront payment from Janssen Pharmaceuticals, Inc., or Janssen Pharmaceuticals, in connection with a License Agreement signed in September 2016. Approximately 96% of our 2015 revenues represented an upfront payment from Janssen under the imetelstat Collaboration Agreement. Two other customers accounted for approximately 31% of our 2014 revenues. In accordance with the Collaboration Agreement, Janssen is now responsible for the manufacture and management of the supply of imetelstat on a global basis for clinical trials and, after any regulatory approval, all commercial activities. Janssen contracts third-party manufacturers to produce GMP-grade drugs for preclinical and clinical studies. Janssen also contracts for starting materials to supply those manufacturers and for its own use. Certain development and clinical activities may be delayed if Janssen is unable to obtain sufficient quantities of starting materials or GMP-grade drugs from current third-party suppliers or other third-party sources. |
Segment Information | Segment Information Our executive management team represents our chief decision maker. We view our operations as a single segment, the development of therapeutic products for oncology. As a result, the financial information disclosed herein materially represents all of the financial information related to our principal operating segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, or ASU 2014-09, which creates Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or Topic 606, and supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition , including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In summary, the core principle of Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Companies are allowed to select between two transition methods: (1) a full retrospective transition method with the application of the new guidance to each prior reporting period presented, or (2) a retrospective transition method that recognizes the cumulative effect on prior periods at the date of adoption together with additional footnote disclosures. The amendments in ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In March, April, May and December 2016, the FASB issued Accounting Standards Update No. 2016-08 (Topic 606), Revenue From Contracts With Customers: Principal vs. Agent Considerations , or ASU 2016-08, Accounting Standards Update No. 2016-10 (Topic 606), Revenue From Contracts with Customers: Identifying Performance Obligations and Licensing , or ASU 2016-10, Accounting Standards Update No. 2016-12 (Topic 606), Revenue From Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , or ASU 2016-12, and Accounting Standards Update No. 2016-20 (Topic 606), Revenue from Contracts with Customers : Technical Corrections and Improvements to Topic 606, or ASU 2016-20, respectively, to provide supplemental adoption guidance and clarification to ASU 2014-09. We do not plan to early adopt these standards. We currently anticipate adopting ASU 2014-09 and its related supplemental guidance using the full retrospective transition method to restate each prior reporting period presented in our financial statements. While we are continuing to assess the effect of this new standard, we have not identified any material differences in the accounting treatment under ASU 2014-09 compared to the current accounting treatment for the Collaboration Agreement with Janssen, which is currently the most material agreement to our financial statements. However, such assessment is preliminary and subject to change. Our analysis of other agreements could identify material changes from the current accounting treatment. ASU 2014-09 differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments. Under our current accounting policy, we recognize milestone revenue using the milestone method specified in ASC 605-28, Milestone Method of Revenue Recognition , which generally results in the recognition of milestone payments as revenue in the period that the milestone is achieved. However, under the new accounting standard, it is possible to start to recognize milestone revenue before the milestone is achieved, subject to management's assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. We are still in the process of evaluating the effect of the new standard on our historical financial statements. While we have not completed our evaluation, we currently believe the impact to revenue and expense recognized will not be material to any of the years presented. As we complete our evaluation of this new standard, new information may arise that could change our current understanding of the impact to revenue and expense recognized. Additionally, we will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust our assessment and implementation plans accordingly. In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes , or ASU 2015-17. Current generally accepted accounting principles require an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a statement of financial position. The current requirement that deferred tax liabilities and assets of a tax paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We plan to adopt ASU 2015-17 commencing in 2017 and do not expect the adoption of this guidance to have any impact on our financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) , or ASU 2016-02. ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. Certain quantitative and qualitative disclosures about leasing arrangements also are required. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The updated guidance requires a modified retrospective adoption. We are currently evaluating the impact that the adoption of ASU 2016-02 will have on our financial statements and related disclosures and have not made any decision regarding the timing of adoption. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting , or ASU 2016-09, which amends Accounting Standards Codification Topic 718, Compensation—Stock Compensation . ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods and early adoption is permitted. We plan to adopt ASU 2016-09 commencing in 2017 and do not expect the adoption of this guidance to have a material impact on our financial statements and related disclosures. In June 2016, the FASB issued Accounting Standard Update No. 2016-13, Measurement of Credit Losses on Financial Instruments , or ASU 2016-13. ASU 2016-13 amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the "incurred loss" model with an "expected loss" model. Accordingly, these financial assets will be presented at the net amount expected to be collected. ASU 2016-13 also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current other-than-temporary-impairment model. ASU 2016-13 is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for interim and annual periods beginning after December 15, 2018. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements and related disclosures and have not made any decision regarding the timing of adoption. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments , or ASU 2016-15, to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods and early adoption is permitted. ASU 2016-15 must be applied retrospectively to each period presented. We do not plan to early adopt ASU 2016-15. We are currently evaluating the impact of the adoption of ASU 2016-15 on our financial statements and related disclosures. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash , or ASU 2016-18, to address the diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period which would require any adjustments to be reflected as of the beginning of the annual period that includes that interim period. ASU 2016-18 must be applied using a retrospective transition method to each period presented. We do not plan to early adopt ASU 2016-18. We are currently evaluating the impact of the adoption of ASU 2016-18 on our financial statements and related disclosures. With the exception of the standards discussed above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our financial statements. |
ORGANIZATION AND SUMMARY OF S21
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of the calculation of basic and diluted net (loss) income per share | Year Ended December 31, (In thousands, except share and per share data) 2016 2015 2014 Net (loss) income $ ) $ $ ) Weighted-average shares: Basic Effect of dilutive securities: Stock options and restricted stock awards — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income per share: Basic $ ) $ $ ) Diluted $ ) $ $ ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of cash equivalents, restricted cash and marketable securities by security type | Cash equivalents, restricted cash and marketable securities by security type at December 31, 2016 were as follows: (In thousands) Amortized Gross Gross Estimated Included in cash and cash equivalents: Money market funds $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted cash: Certificate of deposit $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable securities: Government-sponsored enterprise securities (due in less than one year) $ $ — $ ) $ Government-sponsored enterprise securities (due in one to two years) — ) Commercial paper (due in less than one year) ) Corporate notes (due in less than one year) ) Corporate notes (due in one to two years) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents, restricted cash and marketable securities by security type at December 31, 2015 were as follows: (In thousands) Amortized Gross Gross Estimated Included in cash and cash equivalents: Money market funds $ $ — $ — $ Government-sponsored enterprise securities — — Commercial paper — — Corporate notes — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ — $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted cash: Certificate of deposit $ $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marketable securities: Government-sponsored enterprise securities (due in one to two years) $ $ — $ ) $ Commercial paper (due in less than one year) ) Corporate notes (due in less than one year) ) Corporate notes (due in one to two years) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of cash equivalents and marketable securities with unrealized losses | Less Than 12 Months 12 Months or Greater Total (In thousands) Estimated Gross Estimated Gross Estimated Gross As of December 31, 2016: Government-sponsored enterprise securities (due in less than one year) $ $ ) $ — $ — $ $ ) Government-sponsored enterprise securities (due in one to two years) ) — — ) Commercial paper (due in less than one year) ) — — ) Corporate notes (due in less than one year) ) ) ) Corporate notes (due in one to two years) ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2015: Government-sponsored enterprise securities (due in one to two years) $ $ ) $ — $ — $ $ ) Commercial paper (due in less than one year) ) — — ) Corporate notes (due in less than one year) ) ) ) Corporate notes (due in one to two years) ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of financial instruments measured at fair value on recurring basis | The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of December 31, 2016 and indicates the fair value category assigned. Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds (1) $ $ — $ — $ Government-sponsored enterprise securities (2)(3) — — Commercial paper (2) — — Corporate notes (2)(3) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents information about our financial instruments that are measured at fair value on a recurring basis as of December 31, 2015 and indicates the fair value category assigned. Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Significant (In thousands) Level 1 Level 2 Level 3 Total Assets Money market funds (1) $ $ — $ — $ Government-sponsored enterprise securities (1)(3) — — Commercial paper (1)(2) — — Corporate notes (1)(2)(3) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Included in cash and cash equivalents on our balance sheets. (2) Included in current portion of marketable securities on our balance sheets. (3) Included in noncurrent portion of marketable securities on our balance sheets. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment, stated at cost | December 31, (In thousands) 2016 2015 Furniture and computer equipment $ $ Lab equipment Leasehold improvements ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | December 31, (In thousands) 2016 2015 Professional legal and accounting fees $ $ Clinical trial costs Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
STOCKHOLDERS' EQUITY | |
Schedule of aggregate option and award activity | Outstanding Options Shares Number of Weighted Average Weighted Average Aggregate Balance at December 31, 2015 $3.29 Options granted ) $2.56 Awards granted ) — $ — Options exercised — ) $1.50 Options cancelled/forfeited ) $5.34 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2016 $3.15 6.65 $3,816 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at December 31, 2016 $2.99 6.05 $3,718 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options fully vested and expected to vest at December 31, 2016 $3.14 6.60 $3,815 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of information about stock options outstanding by exercise price range | Information about stock options outstanding as of December 31, 2016 is as follows: Options Outstanding Exercise Price Range Number of Weighted Average Weighted Average $1.10 - $1.51 $1.45 5.89 $1.55 - $2.54 $2.27 7.25 $2.74 - $5.01 $4.55 7.28 $5.09 - $9.32 $5.59 5.36 ​ ​ ​ ​ ​ ​ ​ ​ $1.10 - $9.32 $3.15 6.65 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of aggregate restricted stock activity | Number of Weighted Weighted Average Non-vested restricted stock at December 31, 2015 $4.65 0.10 Granted $2.44 Vested ) $2.49 ​ ​ ​ ​ ​ ​ ​ ​ Non-vested restricted stock at December 31, 2016 — $— — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of allocation of stock-based compensation expense related to share-based payment awards | Year Ended December 31, (In thousands) 2016 2015 2014 Research and development $ $ $ Restructuring charges — — General and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense included in operating expenses $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of assumptions used to estimate the fair value of stock options granted | 2016 2015 2014 Dividend yield 0% 0% 0% Expected volatility range 0.888 to 0.890 0.874 to 0.884 0.898 to 0.922 Risk-free interest rate range 1.21% to 1.38% 1.68% to 1.71% 1.64% to 1.92% Expected term 5.5 yrs 5.5 yrs 5.5 yrs |
Schedule of assumptions used to estimate the fair value of employee stock purchases under the purchase plan | 2016 2015 2014 Dividend yield 0% 0% 0% Expected volatility range 0.641 to 0.684 0.654 to 1.392 0.835 to 1.666 Risk-free interest rate range 0.28% to 0.45% 0.11% to 0.28% 0.06% to 0.15% Expected term range 6 mos to 12 mos 6 mos to 12 mos 6 mos to 12 mos |
Schedule of common stock reserved for future issuance | Common stock reserved for future issuance as of December 31, 2016 is as follows: Outstanding stock options Options and awards available for grant Employee stock purchase plan Warrant outstanding ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
Schedule of significant components of the entity's deferred tax assets | December 31, 2016 2015 (In thousands) Net operating loss carryforwards $ $ Research credits Capitalized research and development License fees Other—net ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Valuation allowance for deferred tax assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of the beginning and ending amounts of unrecognized tax benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): Balance as of December 31, 2015 $ Decrease related to prior year tax positions ) Increase related to current year tax positions ​ ​ ​ ​ ​ Balance as of December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
STATEMENTS OF CASH FLOWS DATA (
STATEMENTS OF CASH FLOWS DATA (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
STATEMENTS OF CASH FLOWS DATA | |
Supplemental schedule of non-cash operating and investing activities | Year Ended December 31, 2016 2015 2014 (In thousands) Supplemental operating activities: Issuance of common stock for 401(k) matching contributions $ — $ — $ Reclassification between deposits and other current assets $ — $ — $ Supplemental investing activities: Net unrealized gain (loss) on marketable securities $ $ ) $ ) |
SELECTED QUARTERLY FINANCIAL 28
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |
Schedule of selected quarterly financial information (unaudited) | First Second Third Fourth (In thousands, except per share amounts) Year Ended December 31, 2016: Revenues (1) $ $ $ $ Operating expenses Net loss ) ) ) ) Basic and diluted net loss per share $ ) $ ) $ ) $ ) Year Ended December 31, 2015: Revenues (2) $ $ $ $ Operating expenses Net (loss) income ) ) ) Basic and diluted net (loss) income per share $ ) $ ) $ $ ) (1) The third quarter of 2016 includes the full recognition of the $5,000,000 upfront payment from Janssen Pharmaceuticals as license fee revenue. See Note 4 on License Agreements. (2) The third quarter of 2015 includes the full recognition of the $35,000,000 upfront payment from Janssen as collaboration revenue. See Note 4 on License Agreements. |
ORGANIZATION AND SUMMARY OF S29
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Net (loss) income | $ (8,482) | $ (3,576) | $ (8,637) | $ (8,842) | $ (8,468) | $ 27,185 | $ (9,356) | $ (9,315) | $ (29,537) | $ 46 | $ (35,670) |
Weighted-average shares: | |||||||||||
Basic (in shares) | 159,045,644 | 158,036,162 | 153,540,341 | ||||||||
Effect of dilutive securities from stock options and restricted stock awards (in shares) | 4,627,732 | ||||||||||
Diluted (in shares) | 159,045,644 | 162,663,894 | 153,540,341 | ||||||||
Net (loss) income per share: | |||||||||||
Basic (in dollars per share) | $ (0.19) | $ 0 | $ (0.23) | ||||||||
Diluted (in dollars per share) | $ (0.19) | $ 0 | $ (0.23) |
ORGANIZATION AND SUMMARY OF S30
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ANTI-DILUTIVE SHARES (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Potential dilutive securities excluded from diluted earnings (loss) per share calculation (in shares) | 11,352,766 | 9,375,851 | 9,113,088 |
Stock options, restricted stock awards, and warrants excluded from diluted net loss per share calculation due to net loss position | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Potential dilutive securities excluded from diluted earnings (loss) per share calculation (in shares) | 3,023,520 | 3,072,340 |
ORGANIZATION AND SUMMARY OF S31
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Minimum | |
Marketable securities | |
Original maturity period of marketable securities | 4 months |
Maximum | |
Marketable securities | |
Original maturity period of marketable securities | 24 months |
ORGANIZATION AND SUMMARY OF S32
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DEPRECIATION AND AMORTIZATION (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Depreciation and Amortization | |
Estimated useful lives of assets | 4 years |
ORGANIZATION AND SUMMARY OF S33
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Stock options | |
Stock-Based Compensation | |
Vesting period of awards | 4 years |
Service-based restricted stock awards | |
Stock-Based Compensation | |
Vesting period of awards | 4 years |
ORGANIZATION AND SUMMARY OF S34
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONCENTRATIONS OF CUSTOMERS AND SUPPLIERS (Details) - customer | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Concentration risk | |||
Number of customers | 2 | ||
Concentrations of Customers and Suppliers | |||
Concentration risk | |||
Concentration risk percentage | 31.00% | ||
Janssen Biotech | |||
Concentration risk | |||
Concentration risk percentage | 96.00% | ||
Janssen Pharmaceuticals | |||
Concentration risk | |||
Concentration risk percentage | 81.00% |
FAIR VALUE MEASUREMENTS - SECUR
FAIR VALUE MEASUREMENTS - SECURITY TYPE (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Included in cash and cash equivalents: | ||
Amortized Cost | $ 11,193 | $ 19,177 |
Gross Unrealized Losses | (1) | |
Estimated Fair Value | 11,193 | 19,176 |
Restricted cash: | ||
Amortized Cost | 268 | 267 |
Estimated Fair Value | 268 | 267 |
Marketable securities: | ||
Amortized Cost | 116,042 | 125,397 |
Gross Unrealized Gains | 54 | 50 |
Gross Unrealized Losses | (107) | (262) |
Estimated Fair Value | 115,989 | 125,185 |
Money market funds | ||
Included in cash and cash equivalents: | ||
Amortized Cost | 11,193 | 4,577 |
Estimated Fair Value | 11,193 | 4,577 |
Commercial paper | ||
Included in cash and cash equivalents: | ||
Amortized Cost | 7,599 | |
Estimated Fair Value | 7,599 | |
Government-sponsored enterprise securities | ||
Included in cash and cash equivalents: | ||
Amortized Cost | 1,999 | |
Estimated Fair Value | 1,999 | |
Corporate notes | ||
Included in cash and cash equivalents: | ||
Amortized Cost | 5,002 | |
Gross Unrealized Losses | (1) | |
Estimated Fair Value | 5,001 | |
Certificate of deposit | ||
Restricted cash: | ||
Amortized Cost | 268 | 267 |
Estimated Fair Value | 268 | 267 |
Government-sponsored enterprise securities (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 5,000 | |
Gross Unrealized Losses | (3) | |
Estimated Fair Value | 4,997 | |
Government-sponsored enterprise securities (due in one to two years) | ||
Marketable securities: | ||
Amortized Cost | 12,500 | 10,007 |
Gross Unrealized Losses | (42) | (57) |
Estimated Fair Value | 12,458 | 9,950 |
Commercial paper (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 31,024 | 27,661 |
Gross Unrealized Gains | 50 | 49 |
Gross Unrealized Losses | (5) | (2) |
Estimated Fair Value | 31,069 | 27,708 |
Corporate notes (due in less than one year) | ||
Marketable securities: | ||
Amortized Cost | 66,012 | 64,892 |
Gross Unrealized Gains | 4 | 1 |
Gross Unrealized Losses | (47) | (77) |
Estimated Fair Value | 65,969 | 64,816 |
Corporate notes (due in one to two years) | ||
Marketable securities: | ||
Amortized Cost | 1,506 | 22,837 |
Gross Unrealized Losses | (10) | (126) |
Estimated Fair Value | $ 1,496 | $ 22,711 |
FAIR VALUE MEASUREMENTS - SEC36
FAIR VALUE MEASUREMENTS - SECURITIES WITH UNREALIZED LOSSES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available for sale securities with unrealized losses | ||
Less Than 12 Months - Estimated Fair Value | $ 66,534 | $ 101,501 |
Less Than 12 Months - Gross Unrealized Losses | (97) | (256) |
More Than 12 Months - Estimated Fair Value | 6,944 | 6,301 |
More Than 12 Months - Gross Unrealized Losses | (10) | (7) |
Total - Estimated Fair Value | 73,478 | 107,802 |
Total - Gross Unrealized Losses | (107) | (263) |
Government-sponsored enterprise securities (due in less than one year) | ||
Available for sale securities with unrealized losses | ||
Less Than 12 Months - Estimated Fair Value | 4,997 | |
Less Than 12 Months - Gross Unrealized Losses | (3) | |
Total - Estimated Fair Value | 4,997 | |
Total - Gross Unrealized Losses | (3) | |
Government-sponsored enterprise securities (due in one to two years) | ||
Available for sale securities with unrealized losses | ||
Less Than 12 Months - Estimated Fair Value | 12,458 | 9,950 |
Less Than 12 Months - Gross Unrealized Losses | (42) | (57) |
Total - Estimated Fair Value | 12,458 | 9,950 |
Total - Gross Unrealized Losses | (42) | (57) |
Commercial paper (due in less than one year) | ||
Available for sale securities with unrealized losses | ||
Less Than 12 Months - Estimated Fair Value | 8,365 | 7,834 |
Less Than 12 Months - Gross Unrealized Losses | (5) | (2) |
Total - Estimated Fair Value | 8,365 | 7,834 |
Total - Gross Unrealized Losses | (5) | (2) |
Corporate notes (due in less than one year) | ||
Available for sale securities with unrealized losses | ||
Less Than 12 Months - Estimated Fair Value | 39,218 | 61,006 |
Less Than 12 Months - Gross Unrealized Losses | (37) | (71) |
More Than 12 Months - Estimated Fair Value | 6,944 | 6,301 |
More Than 12 Months - Gross Unrealized Losses | (10) | (7) |
Total - Estimated Fair Value | 46,162 | 67,307 |
Total - Gross Unrealized Losses | (47) | (78) |
Corporate notes (due in one to two years) | ||
Available for sale securities with unrealized losses | ||
Less Than 12 Months - Estimated Fair Value | 1,496 | 22,711 |
Less Than 12 Months - Gross Unrealized Losses | (10) | (126) |
Total - Estimated Fair Value | 1,496 | 22,711 |
Total - Gross Unrealized Losses | $ (10) | $ (126) |
FAIR VALUE MEASUREMENTS - RECUR
FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Total | $ 127,182 | $ 144,361 |
Money market funds | ||
Assets | ||
Total | 11,193 | 4,577 |
Government-sponsored enterprise securities | ||
Assets | ||
Total | 17,455 | 11,949 |
Commercial paper | ||
Assets | ||
Total | 31,069 | 35,307 |
Corporate notes | ||
Assets | ||
Total | 67,465 | 92,528 |
Level 1 | ||
Assets | ||
Total | 11,193 | 4,577 |
Level 1 | Money market funds | ||
Assets | ||
Total | 11,193 | 4,577 |
Level 2 | ||
Assets | ||
Total | 115,989 | 139,784 |
Level 2 | Government-sponsored enterprise securities | ||
Assets | ||
Total | 17,455 | 11,949 |
Level 2 | Commercial paper | ||
Assets | ||
Total | 31,069 | 35,307 |
Level 2 | Corporate notes | ||
Assets | ||
Total | $ 67,465 | $ 92,528 |
FAIR VALUE MEASUREMENTS - CREDI
FAIR VALUE MEASUREMENTS - CREDIT RISK (Details) | 12 Months Ended |
Dec. 31, 2016item | |
Credit Risk | |
Number of financial institutions with which cash, restricted cash, cash equivalents and marketable securities are placed | 4 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 1,391 | $ 1,452 |
Less accumulated depreciation and amortization | (1,208) | (1,245) |
Property and equipment, net | 183 | 207 |
Furniture and computer equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 1,268 | 1,224 |
Lab equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 12 | 130 |
Leasehold improvements | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 111 | $ 98 |
LICENSE AGREEMENTS (Details)
LICENSE AGREEMENTS (Details) | Sep. 15, 2016USD ($)item | Dec. 15, 2014USD ($)item | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
LICENSE AGREEMENTS | |||||||
License fee revenue | $ 6,162,000 | $ 1,371,000 | $ 1,153,000 | ||||
Collaboration revenue | 35,000,000 | ||||||
Accrued collaboration charges | 3,367,000 | $ 2,328,000 | |||||
Janssen Biotech | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Collaboration revenue | $ 35,000,000 | ||||||
Accrued collaboration charges | $ 3,367,000 | ||||||
Janssen Pharmaceuticals | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Upfront payment received under license agreement | $ 5,000,000 | ||||||
License fee revenue | $ 5,000,000 | ||||||
Least number of products under License Agreement | item | 1 | ||||||
Aggregate maximum total payments for development and regulatory milestones under license agreement | $ 75,000,000 | ||||||
Tiered royalties percentage range | low single digit | ||||||
Initial Period | Janssen Biotech | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Upfront payment received | $ 35,000,000 | ||||||
Number of agreed upon studies | item | 2 | ||||||
Percentage of costs to be paid by Geron | 50.00% | ||||||
Percentage of costs to be paid by Janssen | 50.00% | ||||||
Notification period | 24 months | ||||||
Maximum period Geron is obligated to procure supply for manufacturing imetelstat under collaboration agreement | 9 months | ||||||
U.S. Opt-In Rights exercised | Janssen Biotech | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Percentage of costs to be paid by Geron | 20.00% | ||||||
Percentage of costs to be paid by Janssen | 80.00% | ||||||
Continuation Election milestone payment | $ 65,000,000 | ||||||
Aggregate maximum total payments for development and regulatory milestones under collaboration agreement | 470,000,000 | ||||||
Aggregate maximum total of payments for sales milestones under collaboration agreement | $ 350,000,000 | ||||||
Tiered royalties percentage, low end of the range | mid-teens | ||||||
Tiered royalties percentage, high end of the range | low twenties | ||||||
U.S. selling effort percentage | 20.00% | ||||||
U.S. Opt-In Rights not exercised | Janssen Biotech | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Continuation Election milestone payment | $ 65,000,000 | ||||||
Full U.S. Rights fee | 70,000,000 | ||||||
Aggregate maximum total payments for development and regulatory milestones under collaboration agreement | 415,000,000 | ||||||
Aggregate maximum total of payments for sales milestones under collaboration agreement | $ 350,000,000 | ||||||
Tiered royalties percentage, low end of the range | double-digit | ||||||
Tiered royalties percentage, high end of the range | mid-teens | ||||||
Collaborative Arrangement IP Exclusively Licensed | Janssen Biotech | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Percentage of costs to be paid by Geron | 50.00% | ||||||
Percentage of costs to be paid by Janssen | 50.00% | ||||||
License Arrangement IP Exclusively Licensed | Janssen Pharmaceuticals | License agreements | |||||||
LICENSE AGREEMENTS | |||||||
Percentage of license agreement costs to be paid by Geron | 50.00% | ||||||
Percentage of license agreement costs to be paid by Jassen Pharmaceuticals | 50.00% |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
ACCRUED LIABILITIES | ||
Professional legal and accounting fees | $ 350 | $ 481 |
Clinical trial costs | 723 | 375 |
Other | 361 | 264 |
Accrued liabilities | $ 1,434 | $ 1,120 |
RESTRUCTURING - (Details)
RESTRUCTURING - (Details) - USD ($) | 12 Months Ended | 22 Months Ended |
Dec. 31, 2015 | Dec. 31, 2016 | |
Restructuring | ||
Restructuring charges | $ 1,306,000 | |
Outstanding Restructuring Liability | ||
Cash payments after adjustments and non-cash credits | $ 988,000 | |
One-time termination benefits | ||
Restructuring | ||
Restructuring charges | 1,306,000 | |
Non-cash stock-based compensation expense | $ 307,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Jul. 22, 2016USD ($) | Dec. 31, 2016caselawsuit |
Pending Litigation | Securities Lawsuits | ||
COMMITMENTS AND CONTINGENCIES | ||
Number of purported class action lawsuits that have been filed | 2 | |
Number of cases that have been filed | case | 3 | |
Settled Litigation | Stockholder Derivatives Lawsuits | ||
COMMITMENTS AND CONTINGENCIES | ||
Number of cases that have been filed | 4 | |
Settled Litigation | Stockholder Derivatives Lawsuits Filed In Superior Court Of California | ||
COMMITMENTS AND CONTINGENCIES | ||
Number of cases that have been filed | 2 | |
Settled Litigation | Stockholder Derivatives Lawsuits Filed In California District Court | ||
COMMITMENTS AND CONTINGENCIES | ||
Number of cases that have been filed | 2 | |
Insurance Claims | Settled Litigation | Stockholder Derivatives Lawsuits | ||
COMMITMENTS AND CONTINGENCIES | ||
Settlement amount | $ | $ 950,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating Lease Commitment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
COMMITMENTS AND CONTINGENCIES | |||
Future minimum payments under operating lease | $ 716,000 | ||
Rent expense under operating leases | $ 708,000 | $ 878,000 | $ 936,000 |
COMMITMENTS AND CONTINGENCIES45
COMMITMENTS AND CONTINGENCIES - Severance Plan (Details) - Severance Plan | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
Period within which employee is terminated by entity without cause following a change of control | 12 months |
Period within which no comparable employment is offered by the entity following a change of control | 30 days |
Period within which employee resigns following a change of control due to material change in terms of employment | 12 months |
Minimum | |
COMMITMENTS AND CONTINGENCIES | |
Period of base salary to be considered for severance payments | 2 months |
Maximum | |
COMMITMENTS AND CONTINGENCIES | |
Period of base salary to be considered for severance payments | 18 months |
STOCKHOLDERS' EQUITY - SALES AG
STOCKHOLDERS' EQUITY - SALES AGREEMENT (Details) | Aug. 28, 2015USD ($) |
STOCKHOLDERS' EQUITY | |
Aggregate offering price of common stock | $ 50,000,000 |
Maximum commission rate (as a percent) | 3.00% |
STOCKHOLDERS' EQUITY - PUBLIC O
STOCKHOLDERS' EQUITY - PUBLIC OFFERING (Details) - USD ($) | Feb. 04, 2014 | Dec. 31, 2014 |
Underwritten Public Offering | ||
Issuance of common stock in connection with public offering, net of issuance costs (in shares) | 25,875,000 | |
Public offering price (in dollars per share) | $ 4 | |
Net cash proceeds from public offering after deducting the underwriting discount and offering expenses | $ 96,805,000 | $ 96,805,000 |
STOCKHOLDERS' EQUITY - WARRANTS
STOCKHOLDERS' EQUITY - WARRANTS (Details) - USD ($) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Warrants Exercised In March 2015 | |||
Warrants | |||
Exercise Price (in dollars per share) | $ 3.75 | ||
Issuance of common stock upon exercise of warrants (in shares) | 235,000 | ||
Proceeds from Warrant Exercises | $ 881,000 | ||
CIRM | Warrants issued in August 2011 | |||
Warrants | |||
Exercise Price (in dollars per share) | $ 3.98 | ||
Number of shares into which warrant is converted upon exercise of warrant (in shares) | 537,893 | ||
CIRM | Warrants Exercised In December 2014 | |||
Warrants | |||
Number of shares into which warrant is converted upon exercise of warrant (in shares) | 461,382 | ||
Issuance of common stock upon net exercise of warrants (in shares) | 168,039 |
STOCKHOLDERS' EQUITY - EQUITY P
STOCKHOLDERS' EQUITY - EQUITY PLANS (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 30, 2016 | |
Shares Available For Grant | ||||
Balance at the beginning of the period (in shares) | 12,054,916 | |||
Options granted (in shares) | (2,834,000) | |||
Awards granted (in shares) | (21,541) | |||
Options cancelled/forfeited (in shares) | 371,160 | |||
Balance at the end of the period (in shares) | 9,570,535 | 12,054,916 | ||
Number of Shares | ||||
Balance at the beginning of the period (in shares) | 17,205,683 | |||
Options granted (in shares) | 2,834,000 | |||
Options exercised (in shares) | (328,486) | |||
Options cancelled/forfeited (in shares) | (585,910) | |||
Balance at the end of the period (in shares) | 19,125,287 | 17,205,683 | ||
Options exercisable at the end of the period (in shares) | 14,074,457 | 11,356,232 | 9,129,576 | |
Options fully vested and expected to vest at the end of the period (in shares) | 18,694,300 | |||
Weighted Average Exercise Price Per Share | ||||
Balance at the beginning of the period (in dollars per share) | $ 3.29 | |||
Options granted (in dollars per share) | 2.56 | |||
Options exercised (in dollars per share) | 1.50 | |||
Options cancelled/forfeited (in dollars per share) | 5.34 | |||
Balance at the end of the period (in dollars per share) | 3.15 | $ 3.29 | ||
Options exercisable at the end of the period (in dollars per share) | 2.99 | $ 2.98 | $ 3.12 | |
Options fully vested and expected to vest at the end of the period (in dollars per share) | $ 3.14 | |||
Weighted Average Remaining Contractual Life (In years) | ||||
Balance at the end of the period | 6 years 7 months 24 days | |||
Options exercisable at the end of the period | 6 years 18 days | |||
Options fully vested and expected to vest at the end of the period | 6 years 7 months 6 days | |||
Aggregate Intrinsic Value | ||||
Balance at the end of the period (in dollars) | $ 3,816,000 | |||
Options exercisable at the end of the period (in dollars) | 3,718,000 | |||
Options fully vested and expected to vest at the end of the period (in dollars) | 3,815,000 | |||
Closing stock price (in dollars per share) | $ 2.07 | |||
Total pretax intrinsic value of stock options exercised (in dollars) | 595,000 | $ 2,398,000 | $ 989,000 | |
Cash received from exercise of options (in dollars) | $ 493,000 | $ 2,205,000 | $ 1,286,000 | |
2002 Plan | ||||
STOCKHOLDERS' EQUITY | ||||
Vesting period of options | 4 years | |||
Exercise price as a percentage of fair market value | 100.00% | |||
2002 Plan | Maximum | ||||
STOCKHOLDERS' EQUITY | ||||
Expiration term of options from date of grant | 10 years | |||
2011 Plan | ||||
STOCKHOLDERS' EQUITY | ||||
Vesting period of options | 4 years | |||
Minimum percentage of ownership required for granting options at least 110% of fair market value of common stock | 10.00% | |||
Minimum exercise price as a percentage of fair market value for employees having more than 10 % outstanding common stock | 110.00% | |||
Maximum expiration term of options granted to employees having more than 10 % outstanding common stock | 5 years | |||
Shares Available For Grant | ||||
Balance at the end of the period (in shares) | 9,570,535 | |||
2011 Plan | Maximum | ||||
STOCKHOLDERS' EQUITY | ||||
Expiration term of options from date of grant | 10 years | |||
2011 Plan | First Director Option | ||||
STOCKHOLDERS' EQUITY | ||||
Vesting period of options | 3 years | |||
Options to be granted to purchase shares upon appointment (in shares) | 100,000 | |||
2011 Plan | Subsequent Director Option | ||||
STOCKHOLDERS' EQUITY | ||||
Options to be granted to purchase shares (in shares) | 50,000 | |||
2006 Directors Plan | Maximum | ||||
STOCKHOLDERS' EQUITY | ||||
Expiration term of options from date of grant | 10 years | |||
2006 Directors Plan | First Director Option | ||||
STOCKHOLDERS' EQUITY | ||||
Vesting period of options | 3 years | |||
2006 Directors Plan | Subsequent Director Option | ||||
STOCKHOLDERS' EQUITY | ||||
Vesting period of options | 1 year |
STOCKHOLDERS' EQUITY - STOCK OP
STOCKHOLDERS' EQUITY - STOCK OPTIONS OUTSTANDING (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
$1.10 - $1.51 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | $ 1.10 |
Exercise price, high end of range (in dollars per share) | $ 1.51 |
Options Outstanding | |
Number of Shares | shares | 5,668,162 |
Weighted Average Exercise Price Per Share (in dollars per share) | $ 1.45 |
Weighted Average Remaining Contractual Life (In years) | 5 years 10 months 21 days |
$1.55 - $2.54 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | $ 1.55 |
Exercise price, high end of range (in dollars per share) | $ 2.54 |
Options Outstanding | |
Number of Shares | shares | 5,017,031 |
Weighted Average Exercise Price Per Share (in dollars per share) | $ 2.27 |
Weighted Average Remaining Contractual Life (In years) | 7 years 3 months |
$2.74 - $5.01 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | $ 2.74 |
Exercise price, high end of range (in dollars per share) | $ 5.01 |
Options Outstanding | |
Number of Shares | shares | 6,347,008 |
Weighted Average Exercise Price Per Share (in dollars per share) | $ 4.55 |
Weighted Average Remaining Contractual Life (In years) | 7 years 3 months 11 days |
$5.09 - $9.32 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | $ 5.09 |
Exercise price, high end of range (in dollars per share) | $ 9.32 |
Options Outstanding | |
Number of Shares | shares | 2,093,086 |
Weighted Average Exercise Price Per Share (in dollars per share) | $ 5.59 |
Weighted Average Remaining Contractual Life (In years) | 5 years 4 months 10 days |
$1.10 - $9.32 | |
Exercise Price Range | |
Exercise price, low end of range (in dollars per share) | $ 1.10 |
Exercise price, high end of range (in dollars per share) | $ 9.32 |
Options Outstanding | |
Number of Shares | shares | 19,125,287 |
Weighted Average Exercise Price Per Share (in dollars per share) | $ 3.15 |
Weighted Average Remaining Contractual Life (In years) | 6 years 7 months 24 days |
STOCKHOLDERS' EQUITY - RESTRICT
STOCKHOLDERS' EQUITY - RESTRICTED STOCK ACTIVITY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Granted (in shares) | 21,541 | ||
Restricted stock awards | |||
Number of Shares | |||
Non-vested restricted stock at the beginning of the period (in shares) | 500 | ||
Granted (in shares) | 21,541 | ||
Vested (in shares) | (22,041) | ||
Non-vested restricted stock at the end of the period (in shares) | 500 | ||
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested restricted stock at the beginning of the period (in dollars per share) | $ 4.65 | ||
Granted (in dollars per share) | 2.44 | $ 3.75 | $ 2.67 |
Vested (in dollars per share) | $ 2.49 | ||
Non-vested restricted stock at the end of the period (in dollars per share) | $ 4.65 | ||
Weighted Average Remaining Contractual Term (In years) | |||
Non-vested restricted stock at the end of the period | 1 month 6 days | ||
Other disclosures | |||
Total fair value of restricted stock that vested | $ 54,000 | $ 275,000 | $ 782,000 |
STOCKHOLDERS' EQUITY - EMPLOYEE
STOCKHOLDERS' EQUITY - EMPLOYEE STOCK PURCHASE PLAN (Details) - Employee stock purchase plan | 12 Months Ended |
Dec. 31, 2016itemshares | |
Employee Stock Purchase Plan | |
Shares of common stock authorized for issuance | shares | 1,000,000 |
Aggregate shares issued under plan | shares | 84,885 |
Maximum duration of offering period | 12 months |
Number of offering periods in which an employee can participate at a time | item | 1 |
Number of consecutive purchase periods in an offering period | item | 2 |
Maximum percentage of annual salary that can be withheld | 10.00% |
Duration of the purchase period | 6 months |
Percentage applied to common stock market value in calculating purchase price under purchase plan | 85.00% |
Duration of the new offering period | 12 months |
STOCKHOLDERS' EQUITY - STOCK-BA
STOCKHOLDERS' EQUITY - STOCK-BASED COMPENSATION EXPENSE FOR EMPLOYEES AND DIRECTORS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-Based Compensation Expense | |||
Stock-based compensation expense included in operating expenses | $ 8,245 | $ 8,397 | $ 7,658 |
Research and development | |||
Stock-Based Compensation Expense | |||
Stock-based compensation expense included in operating expenses | 1,275 | 2,139 | 2,545 |
Restructuring charges | |||
Stock-Based Compensation Expense | |||
Stock-based compensation expense included in operating expenses | 307 | ||
General and administrative | |||
Stock-Based Compensation Expense | |||
Stock-based compensation expense included in operating expenses | $ 6,970 | $ 5,951 | $ 5,113 |
STOCKHOLDERS' EQUITY - PRICING
STOCKHOLDERS' EQUITY - PRICING MODEL ASSUMPTIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation cost related to unvested stock awards not yet recognized | |||
Compensation cost not yet recognized, net of estimated forfeitures (in dollars) | $ 10,128,000 | ||
Period for recognition of compensation cost on weighted average basis | 24 months | ||
Employee stock purchase plan | |||
Assumptions used to estimate fair value of awards | |||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected volatility range, minimum (as a percent) | 64.10% | 65.40% | 83.50% |
Expected volatility range, maximum (as a percent) | 68.40% | 139.20% | 166.60% |
Risk-free interest rate range, minimum (as a percent) | 0.28% | 0.11% | 0.06% |
Risk-free interest rate range, maximum (as a percent) | 0.45% | 0.28% | 0.15% |
Additional disclosures | |||
Weighted average estimated fair value of purchase rights (in dollars per share) | $ 1.01 | $ 1.64 | $ 2.10 |
Employee stock purchase plan | Minimum | |||
Assumptions used to estimate fair value of awards | |||
Expected term | 6 months | 6 months | 6 months |
Employee stock purchase plan | Maximum | |||
Assumptions used to estimate fair value of awards | |||
Expected term | 12 months | 12 months | 12 months |
Stock options | |||
Assumptions used to estimate fair value of awards | |||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Expected volatility range, minimum (as a percent) | 88.80% | 87.40% | 89.80% |
Expected volatility range, maximum (as a percent) | 89.00% | 88.40% | 92.20% |
Risk-free interest rate range, minimum (as a percent) | 1.21% | 1.68% | 1.64% |
Risk-free interest rate range, maximum (as a percent) | 1.38% | 1.71% | 1.92% |
Expected term | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Additional disclosures | |||
Weighted average estimated fair value of employee stock options granted (in dollars per share) | $ 1.83 | $ 3.06 | $ 3.57 |
STOCKHOLDERS' EQUITY - 401(k) P
STOCKHOLDERS' EQUITY - 401(k) PLAN (Details) | 12 Months Ended |
Dec. 31, 2013 | |
401(k) Plan | |
Period of vesting of matching contributions | 4 years |
STOCKHOLDERS' EQUITY - STOCK-56
STOCKHOLDERS' EQUITY - STOCK-BASED COMPENSATION TO SERVICE PROVIDERS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-Based Compensation to Service Providers | |||
Stock-based compensation for services by non-employees | $ 156,000 | $ 364,000 | $ 253,000 |
Consultants | Stock options | |||
Stock-Based Compensation to Service Providers | |||
Options granted (in shares) | 75,000 | ||
Stock-based compensation for services by non-employees | $ 104,000 | $ 311,000 | $ 94,000 |
Consultants and Vendors | Common Stock | |||
Stock-Based Compensation to Service Providers | |||
Shares issued (in shares) | 21,541 | 18,077 | 71,239 |
Stock-based compensation for services by non-employees | $ 52,000 | $ 53,000 | $ 158,000 |
STOCKHOLDERS' EQUITY - COMMON S
STOCKHOLDERS' EQUITY - COMMON STOCK RESERVED FOR FUTURE ISSUANCE (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
STOCKHOLDERS' EQUITY | ||
Outstanding stock options (in shares) | 19,125,287 | 17,205,683 |
Options and awards available for grant (in shares) | 9,570,535 | 12,054,916 |
Warrant outstanding (in shares) | 537,893 | |
Common stock reserved for future issuance (in shares) | 30,148,830 | |
Employee stock purchase plan | ||
STOCKHOLDERS' EQUITY | ||
Common stock reserved for future issuance (in shares) | 915,115 |
INCOME TAXES - DEFERRED TAXES (
INCOME TAXES - DEFERRED TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant components of deferred tax assets | |||
Net operating loss carryforwards | $ 280,400,000 | $ 276,100,000 | |
Research credits | 29,800,000 | 25,000,000 | |
Capitalized research and development | 300,000 | 1,400,000 | |
License fees | 200,000 | 300,000 | |
Other - net | 11,500,000 | 9,800,000 | |
Total deferred tax assets | 322,200,000 | 312,600,000 | |
Valuation allowance for deferred tax assets | (322,200,000) | (312,600,000) | |
Valuation allowance | |||
Increase (decrease) in valuation allowance | 9,600,000 | $ (2,300,000) | $ (3,300,000) |
Valuation allowance for deferred tax assets related to benefits of stock option deductions | $ 6,400,000 |
INCOME TAXES - OPERATING LOSS C
INCOME TAXES - OPERATING LOSS CARRYFORWARDS (Details) | Dec. 31, 2016USD ($) |
Federal | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 778,000,000 |
State | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 293,000,000 |
INCOME TAXES - TAX CREDIT CARRY
INCOME TAXES - TAX CREDIT CARRYFORWARDS (Details) - Research and Development | Dec. 31, 2016USD ($) |
Federal | |
Tax credit carryforwards | |
Tax credit carryforwards | $ 21,100,000 |
State | |
Tax credit carryforwards | |
Tax credit carryforwards | $ 13,300,000 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Unrecognized tax benefits | |
Unrecognized tax benefits, if recognized would impact effective tax rate | $ 14,700,000 |
Balance at the beginning of the period | 20,100,000 |
Decrease related to prior year tax positions | (7,500,000) |
Increase related to current year tax positions | 2,100,000 |
Balance at the end of the period | $ 14,700,000 |
STATEMENTS OF CASH FLOWS DATA62
STATEMENTS OF CASH FLOWS DATA (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental operating activities: | |||
Issuance of common stock for 401(k) matching contributions | $ 313 | ||
Reclassification between deposits and other current assets | 190 | ||
Supplemental investing activities: | |||
Net unrealized gain (loss) on marketable securities | $ 160 | $ (129) | $ (70) |
SELECTED QUARTERLY FINANCIAL 63
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | $ 94,000 | $ 5,108,000 | $ 211,000 | $ 749,000 | $ 220,000 | $ 35,363,000 | $ 251,000 | $ 537,000 | $ 6,162,000 | $ 36,371,000 | $ 1,153,000 |
Operating expenses | 8,875,000 | 8,985,000 | 9,122,000 | 9,826,000 | 8,864,000 | 8,343,000 | 9,730,000 | 9,993,000 | 36,808,000 | 36,930,000 | 37,465,000 |
Net (loss) income | $ (8,482,000) | $ (3,576,000) | $ (8,637,000) | $ (8,842,000) | $ (8,468,000) | $ 27,185,000 | $ (9,356,000) | $ (9,315,000) | (29,537,000) | 46,000 | (35,670,000) |
Basic and diluted net (loss) income per share | $ (0.05) | $ (0.02) | $ (0.05) | $ (0.06) | $ (0.05) | $ 0.17 | $ (0.06) | $ (0.06) | |||
License fee revenue | $ 6,162,000 | 1,371,000 | $ 1,153,000 | ||||||||
Collaboration revenue | $ 35,000,000 | ||||||||||
Janssen Pharmaceuticals | License agreements | |||||||||||
License fee revenue | $ 5,000,000 | ||||||||||
Janssen Biotech | License agreements | |||||||||||
Collaboration revenue | $ 35,000,000 |