☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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45-4488360
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common stock, par value $0.0001 per share
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The Nasdaq Capital Market
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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x
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Smaller reporting company
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x
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Emerging growth company
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x
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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the anticipated timing, costs and conduct of our planned clinical trials and preclinical studies, as applicable, for our candidate, Qtrypta™ M207;
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our expectations regarding our expenses and revenue, the sufficiency of our cash resources and needs for additional financing;
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our expectations regarding the clinical effectiveness and safety of our product candidate;
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the ability to obtain and maintain regulatory approval of our product candidate, and the labeling for any approved product;
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our manufacturing capabilities and strategy, and our ability to establish and maintain relationships with contract manufacturing organization(s) to expand our manufacturing capacity;
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our intellectual property position and our ability to obtain and maintain intellectual property protection for our product candidate;
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our expectations regarding competition;
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the anticipated trends and challenges in our business and the markets in which we operate;
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the scope, progress, expansion, and costs of developing and commercializing our product candidate;
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the size and growth of the potential markets for our product candidate and the ability to serve those markets;
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the rate and degree of market acceptance of our product candidate;
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our ability to establish and maintain development partnerships;
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our ability to attract or retain key personnel;
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our expectations regarding federal, state and foreign regulatory requirements; and
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regulatory developments in the United States and foreign countries.
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Primary endpoint
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Placebo
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3.8mg M207
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p-value*
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Pain freedom at 2 hours
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14.3%
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41.5%
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0.0001
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Most bothersome symptom freedom at 2 hours
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42.9%
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68.3%
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0.0009
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Pain Freedom
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Placebo
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3.8mg M207
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p-value*
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Pain freedom at 45 minutes
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5.2%
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17.1%
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0.0175
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Pain freedom at 60 minutes
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10.4%
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26.8%
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0.0084
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Pain freedom at 24 hours
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39.0%
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69.5%
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0.0001
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Pain freedom at 48 hours
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39.0%
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64.6%
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0.0013
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*
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The “p” value is the probability of an event occurring by chance alone. When the p value is less than 5% (0.05) the results are considered to be statistically significant.
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Develop and commercialize Qtrypta™ (M207).
We believe that Qtrypta™ (M207), if approved by the FDA, will offer significant therapeutic and practical advantages as compared to existing migraine therapeutics, including its rapid onset, ease of use and stability. We have retained worldwide commercial rights to Qtrypta™ (M207). While we currently intend to develop Qtrypta™ (M207) through FDA approval and commercialization in the United States ourselves, we are also considering collaborations with potential strategic partners to maximize the strategic value of our product and our company.
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Focus on regulatory support and market opportunities for Qtrypta™ (M207).
We intend to focus our resources on the clinical and other studies, including our long-term safety study, required for NDA filing and, if approved, would support market acceptance and expansion for Qtrypta™ (M207).
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Pursue indications outside migraine.
We have performed initial feasibility studies on a number of compounds and have observed that our ADAM intracutaneous delivery system may have potential applications for use with large molecules, small molecules, and vaccines. These programs are in CNS and other therapeutic indications, where rapid drug delivery could
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Primary endpoint
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Placebo
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3.8mg M207
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p-value
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Pain freedom at 2 hours
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14.3%
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41.5%
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0.0001
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Most bothersome symptom free at 2 hours
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42.9%
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68.3%
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0.0009
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Pain Freedom
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Placebo
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3.8mg M207
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p-value
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Pain freedom at 45 minutes
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5.2%
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17.1%
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0.0175
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Pain freedom at 60 minutes
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10.4%
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26.8%
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0.0084
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Pain freedom at 24 hours
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39.0%
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69.5%
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0.0001
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Pain freedom at 48 hours
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39.0%
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64.6%
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0.0013
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Pain Freedom at 2 Hours
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Placebo
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3.8mg M207
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p-value
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All Subjects
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14.3%
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41.5%
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0.0001
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Morning Migraine
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15.9%
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44.4%
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0.0056
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Sustained Pain Freedom
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Placebo
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3.8mg M207
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p-value*
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2 – 24 Hours
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10.4%
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31.7%
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0.001
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2 – 48 Hours
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9.1%
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26.8%
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0.0035
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Pain Relief
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Placebo
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3.8mg M207
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p-value*
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1 Hour
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53.2%
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68.3%
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< 0.05
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2 Hours
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57.1%
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80.5%
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< 0.05
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Sustained Pain Relief
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Placebo
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3.8mg M207
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p-value*
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2 – 24 Hours
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37.7%
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68.3%
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< 0.0001
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2 – 48 Hours
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32.5%
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63.4%
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< 0.0001
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Nausea Freedom
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Placebo
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3.8mg M207
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p-value*
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2 Hours
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63.6%
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81.7%
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< 0.05
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preclinical laboratory tests, animal studies, and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations;
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submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials in the U.S. may begin and must be updated annually;
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approval by an independent institutional review board ("IRB"), at each clinical trial site before each trial may be initiated;
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adequate and well-controlled human clinical trials, in accordance with good clinical practice ("GCP") requirements, to establish the safety and efficacy of the drug for each indication to the FDA’s satisfaction;
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submission to the FDA of an NDA;
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FDA acceptance and review of the NDA, which may require an FDA advisory committee review, if applicable;
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satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMP; and
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FDA approval of the NDA.
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Phase 1
: In Phase 1, through the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness.
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Phase 2
: Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication, dosage tolerance and optimum dosage, and to identify common adverse effects and safety risks.
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Phase 3
: Phase 3 trials help obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug. In most cases, FDA requires two adequate and well controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3 trial with other confirmatory evidence may be sufficient in rare instances.
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An annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;
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Beginning in 2013, entities that manufacture, produce or import medical devices were required to pay an excise tax in an amount equal to 2.3% of the price for which such devices are sold in the United States. Through a series of legislative amendments, the tax was suspended for 2016 through 2019, but is scheduled to return beginning in 2020, absent further Congressional action.
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Expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; and
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A new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
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the scope, progress, expansion, and costs of manufacturing our product candidate;
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the scope, progress, expansion, costs, and results of our clinical trials;
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the timing of, and costs involved in, obtaining regulatory approvals;
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the type, number, costs, and results of the product candidate development programs which we are pursuing or may choose to pursue in the future;
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our ability to establish and maintain development partnering arrangements;
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the timing, receipt and amount of contingent, royalty, and other payments from any of our future development partners;
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the emergence of competing technologies and other adverse market developments;
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the costs of maintaining, expanding, and protecting our intellectual property portfolio, including potential litigation costs and liabilities;
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the resources we devote to marketing, and if approved, commercializing our product candidate;
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our ability to draw funds from our build-to-suit arrangement; and
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the costs associated with being a public company.
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create liens on our property;
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sell, transfer, or otherwise dispose of all or substantially all of our assets;
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transfer, dispose or relocate financed equipment;
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acquire or merge with another entity; and
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engage in a transaction that would constitute 50% or more in change in control.
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continuing to conduct clinical development of our product candidate;
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obtaining required regulatory approvals;
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formulating and manufacturing product; and
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conducting sales and marketing activities.
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we may be unable to obtain additional funding to develop our product candidate;
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we may experience delays in regulatory review and approval of our product candidate in clinical development;
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the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;
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the FDA may disagree with the number, design, size, conduct or implementation of our clinical trials;
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the FDA may not find the data from preclinical studies and clinical trials sufficient to demonstrate that clinical and other benefits outweigh its safety risks;
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the FDA may disagree with our interpretation of data from our preclinical studies and clinical trials or may require that we conduct additional studies or trials;
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the FDA may not accept data generated at our clinical trial sites;
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we may be unable to obtain and maintain regulatory approval of our product candidate in the United States and foreign jurisdictions;
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potential side effects of our product candidate could delay or prevent commercialization, limit the indications for any approved product candidate, require the establishment of a risk evaluation and mitigation strategy, or REMS, or cause an approved product candidate to be taken off the market;
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the FDA may identify deficiencies in our manufacturing processes or facilities or those of our contract manufacturing organizations CMOs;
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the FDA may change its approval policies or adopt new regulations;
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we may need to depend on third party manufacturers to supply or manufacture our products;
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we depend on contract research organizations to conduct our clinical trials;
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we may experience delays in the commencement of, enrollment of patients in and timing of our clinical trials;
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we may not be able to demonstrate that our product candidate is safe and effective as a treatment for its intended indications to the satisfaction of the FDA or other similar regulatory bodies;
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we may be unable to establish or maintain collaborations, licensing or other arrangements;
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the market may not accept our product candidate;
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we may be unable to establish and maintain an effective sales and marketing infrastructure, either through the creation of a commercial infrastructure or through strategic collaborations;
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we may experience competition from existing products or new products that may emerge; and
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we and our licensors may be unable to successfully obtain, maintain, defend and enforce intellectual property rights important to protect our product candidate.
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changes in government regulation, administrative action or changes in FDA policy with respect to clinical trials that change the requirements for approval;
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delays in obtaining authorization from regulators and required IRB approval at each site to commence a trial;
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imposition of a clinical hold for safety reasons or following an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authority;
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delays in reaching agreement on acceptable terms with prospective contract research organizations ("CROs") and clinical trial sites, or failure by such CROs or trial sites to carry out the clinical trial at each site in accordance with the terms of our agreements with them;
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difficulties or delays in having patients complete participation in a trial or return for post-treatment follow-up;
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clinical sites electing to end their participation in one of our clinical trials, which would likely have detrimental effect on subject enrollment;
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time required to add new clinical sites;
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delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials;
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unforeseen safety issues;
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determination of dosing issues;
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lack of effectiveness during clinical trials;
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slower than expected rates of patient recruitment and enrollment;
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inability to raise or delays in raising funding necessary to initiate or continue a trial;
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inability to monitor patients adequately during or after treatment; and
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inability or unwillingness of medical investigators to follow our clinical protocols.
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be delayed in obtaining marketing approval for our product candidate;
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not obtain marketing approval at all;
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obtain approval for indications or patient populations that are not as broad as intended or desired;
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obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
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be subject to additional post-marketing testing requirements; or
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have our product candidate(s) removed from the market after obtaining marketing approval.
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foreign regulatory requirements that could restrict or limit our ability to conduct our clinical trials;
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administrative burdens of conducting clinical trials under multiple foreign regulatory schema;
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foreign exchange fluctuations; and
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diminished protection of intellectual property in some countries.
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delay commercialization of, and our ability to derive product revenues from, our products;
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impose costly procedures on us; and
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diminish any competitive advantages that we may otherwise enjoy.
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restrictions on such product candidate, or manufacturing processes;
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restrictions on the labeling or marketing of a product;
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restrictions on product distribution or use;
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requirements to conduct post-marketing clinical trials;
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warning or untitled letters;
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withdrawal of the products from the market;
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refusal to approve pending applications or supplements to approved applications that we submit;
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recall of products;
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fines, restitution or disgorgement of profits or revenue;
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suspension or withdrawal of marketing approvals;
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refusal to permit the import or export of our products;
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product seizure; or
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injunctions or the imposition of civil or criminal penalties.
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regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies;
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we may be required to change the way the product candidate is administered, conduct additional clinical trials or change the labeling of the product;
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we may be required to implement REMS, which could result in substantial cost increases and have a negative impact on our ability to commercialize the product candidate;
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we may be required to limit the patients who can receive the product candidate;
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we may be subject to limitations on how we promote the product candidate;
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sales of the product candidate may decrease significantly;
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regulatory authorities may require us to take our approved product candidate off the market;
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we may be subject to litigation or product liability claims; and
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our reputation may suffer.
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demonstration of clinical safety and efficacy of our products generally;
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relative convenience and ease of administration;
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prevalence and severity of any adverse effects;
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willingness of physicians to prescribe our product and of the target patient population to try new therapies and routes of administration;
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efficacy and safety of our products compared to competing products;
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introduction of any new products, including generics, that may in the future become available to treat indications for which our products may be approved;
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new procedures or methods of treatment that may reduce the incidences of any of the indications in which our products may show utility;
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pricing and cost-effectiveness;
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effectiveness of our or any future collaborators’ sales and marketing strategies;
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limitations or warnings contained in FDA-approved labeling; and
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our ability to obtain and maintain sufficient third party coverage or reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third party payers.
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our supplier may cease or reduce production or deliveries, raise prices or renegotiate terms;
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we may be unable to locate a suitable replacement on acceptable terms or on a timely basis, if at all;
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delays caused by supply issues may harm our reputation; and
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our ability to progress our business could be materially and adversely impacted if our single-source supplier upon which we rely were to experience a significant business challenge, disruption or failure due to issues such as financial difficulties or bankruptcy, issues relating regulatory or quality compliance issues, or other legal or reputational issues.
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a collaboration partner may seek to renegotiate or terminate their relationships with us due to unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control or other reasons;
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a collaboration partner may shift its priorities and resources away from our product candidate due to a change in business strategy, or a merger, acquisition, sale or downsizing;
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a collaboration partner may not devote sufficient resources towards, or cease development in, therapeutic areas which are the subject of our strategic collaboration;
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a collaboration partner may change the success criteria for a product candidate thereby delaying or ceasing development of such candidate;
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a collaboration partner could develop a product candidate that competes, either directly or indirectly, with our product candidate;
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a significant delay in initiation of certain development activities by a collaboration partner will also delay payment of milestones tied to such activities, thereby impacting our ability to fund our own activities;
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a collaboration partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution or sale of a product;
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a collaboration partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirements;
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a dispute may arise between us and a collaboration partner concerning the research, development or commercialization of a product candidate resulting in a delay in milestones, royalty payments or termination of an alliance and possibly resulting in costly litigation or arbitration which may divert management attention and resources;
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a collaboration partner may use our products or technology in such a way as to invite litigation from a third party; and
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a collaboration partner may exercise a contractual right to terminate a strategic alliance, making us ineligible to receive milestone or royalty payments under such agreement.
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developing drugs;
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undertaking preclinical testing and human clinical trials;
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obtaining FDA and other regulatory approvals of drugs;
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formulating and manufacturing drugs; and
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launching, marketing and selling drugs.
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withdrawal of clinical trial participants;
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termination of clinical trial sites or entire trial programs;
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costs of related litigation;
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substantial monetary awards to patients or other claimants;
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decreased demand for an approved product and loss of revenue;
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impairment of our business reputation;
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diversion of management and scientific resources from our business operations; and
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the inability to commercialize an approved product candidate.
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the scope of rights granted under a license agreement and other interpretation-related issues;
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the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
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the sublicensing of patent and other rights under our collaborative development relationships;
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our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
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the inventorship or ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and
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the priority of invention of patented technology.
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we or our collaborators may initiate litigation or other proceedings against third parties seeking to invalidate the patents held by those third parties or to obtain a judgment that our products or processes do not infringe those third parties’ patents;
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if our competitors file patent applications that claim technology also claimed by us or our licensors, we or our licensors may be required to participate in interference or opposition proceedings to determine the priority of invention, which could jeopardize our patent rights and potentially provide a third party with a dominant patent position;
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if third parties initiate litigation claiming that our processes or products infringe their patent or other intellectual property rights, we and our collaborators will need to defend against such proceedings; and,
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if a license to necessary intellectual property is terminated, the licensor may initiate litigation claiming that our processes or products infringe, misappropriate or otherwise violate their patent or other intellectual property rights and/or that we breached our obligations under the license agreement, and we and our collaborators would need to defend against such proceedings.
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obtain licenses, which may not be available on commercially reasonable terms, if at all;
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abandon an infringing product;
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redesign our product candidate or processes to avoid infringement;
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stop using the subject matter claimed in the patents held by others;
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pay damages; or
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defend litigation or administrative proceedings which may be costly whether we win or lose and which could result in a substantial diversion of our financial and management resources.
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Others may be able to make compounds that are the same as or similar to our product candidate, which are aimed initially at the generic market and are not covered by the claims of the patents that we own or have exclusively licensed;
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We or any of our licensors or strategic partners might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;
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Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
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It is possible that our pending patent applications will not lead to issued patents;
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Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;
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Our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.
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the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; The term “remuneration” has been broadly interpreted to include anything of value. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Violations of the federal Anti-Kickback Statute may result in civil monetary penalties up to $100,000 for each violation, plus up to three times the remuneration involved. Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations can also result in criminal penalties, including criminal fines and imprisonment of up to 10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid;
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the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or
qui tam
actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment by a federal government program, or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties and exclude the entity from participation in Medicare, Medicaid and other government healthcare programs;
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•
|
the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
|
•
|
the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;
|
•
|
the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians, certain other healthcare providers, and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (covered manufacturers are required to submit reports to the government by the 90th day of each calendar year); and analogous state laws and regulations, such as state anti-kickback and false claims laws and analogous non-U.S. fraud and abuse laws and regulations, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payers, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures.
|
•
|
analogous state laws and regulations, such as state anti-kickback and false claims laws and analogous non-U.S. fraud and abuse laws and regulations, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payers, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures.
|
•
|
government and health administration authorities;
|
•
|
private health maintenance organizations and health insurers; and
|
•
|
other healthcare payers.
|
•
|
the difficulty of integrating the operations and personnel of the acquired companies;
|
•
|
the potential disruption of our ongoing business and distraction of management;
|
•
|
potential unknown liabilities and expenses;
|
•
|
the failure to achieve the expected benefits of the combination or acquisition;
|
•
|
the maintenance of acceptable standards, controls, procedures and policies; and
|
•
|
the impairment of relationships with employees as a result of any integration of new management and other personnel.
|
•
|
announcements relating to development, regulatory approvals or commercialization of our product candidates or those of competitors;
|
•
|
results of clinical trials of our product candidates or those of our competitors;
|
•
|
announcements by us or our competitors of significant strategic partnerships or collaborations or terminations of such arrangements;
|
•
|
actual or anticipated variations in our operating results;
|
•
|
changes in financial estimates by us or by any securities analysts who might cover our stock;
|
•
|
conditions or trends in our industry;
|
•
|
changes in laws or other regulatory actions affecting us or our industry;
|
•
|
stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the biopharmaceutical industry;
|
•
|
announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;
|
•
|
capital commitments;
|
•
|
investors’ general perception of our company and our business;
|
•
|
disputes concerning our intellectual property or other proprietary rights;
|
•
|
recruitment or departure of key personnel; and
|
•
|
sales of our common stock, including sales by our directors and officers or specific stockholders.
|
•
|
the liquidity of our common stock;
|
•
|
the market price of our common stock;
|
•
|
our ability to obtain financing for the continuation of our operations;
|
•
|
the number of institutional and general investors that will consider investing in our common stock;
|
•
|
the number of market makers in our common stock;
|
•
|
the availability of information concerning the trading prices and volume of our common stock; and
|
•
|
the number of broker-dealers willing to execute trades in shares of our common stock.
|
•
|
providing for three classes of directors with the term of office of one class expiring each year, commonly referred to as a staggered board;
|
•
|
authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
limiting the liability of, and providing indemnification to, our directors;
|
•
|
limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
•
|
controlling the procedures for the conduct and scheduling of board and stockholder meetings;
|
•
|
limiting the determination of the number of directors on our board and the filling of vacancies or newly created seats on the board to our board of directors then in office; and
|
•
|
providing that directors may be removed by stockholders only for cause.
|
•
|
being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “
Management’s Discussion and Analysis of Financial Condition and Results of Operations
” disclosure;
|
•
|
not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
|
•
|
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
|
•
|
reduced disclosure obligations regarding executive compensation; and
|
•
|
not being required to hold a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved.
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands, except per share and share data)
|
||||||
Statements of Operations Data:
|
|
|
|
||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
Operating expenses:
|
|
|
|
||||
Research and development
(1)
|
25,508
|
|
|
20,118
|
|
||
General and administrative
(1)
|
9,357
|
|
|
8,182
|
|
||
Impairment loss
(1)
|
511
|
|
|
70
|
|
||
Total operating expenses
|
35,376
|
|
|
28,370
|
|
||
Loss from operations
|
(35,376
|
)
|
|
(28,370
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest income
(1)
|
381
|
|
|
75
|
|
||
Interest expense
(1)
|
(379
|
)
|
|
(817
|
)
|
||
Other income, net
(1)
|
16
|
|
|
7
|
|
||
Net loss
|
$
|
(35,358
|
)
|
|
$
|
(29,105
|
)
|
Net loss per common share — basic and diluted
|
$
|
(3.74
|
)
|
|
$
|
(16.82
|
)
|
Weighted-average common shares outstanding — basic and diluted
|
9,452,491
|
|
|
1,730,388
|
|
||
|
|
|
|
||||
|
|
|
|
||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Balance Sheets Data:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,140
|
|
|
$
|
11,651
|
|
Marketable securities at fair value
(2)
|
$
|
13,862
|
|
|
$
|
—
|
|
Working capital
(2)
|
$
|
12,073
|
|
|
$
|
2,936
|
|
Total assets
|
$
|
35,780
|
|
|
$
|
18,000
|
|
Build-to-suit obligation, net of debt issuance costs and discount
(3)
|
$
|
6,804
|
|
|
$
|
—
|
|
Secured promissory note (including accrued interest), net of issuance costs
(4)
|
$
|
—
|
|
|
$
|
6,687
|
|
Accumulated deficit
|
$
|
(261,232
|
)
|
|
$
|
(225,874
|
)
|
Total stockholders’ equity
|
$
|
18,710
|
|
|
$
|
7,048
|
|
•
|
production costs which include, but are not limited to, employee-related expenses, including salaries, benefits and stock-based compensation expense, drug formulation, and clinical trials;
|
•
|
expenses related to the purchase of active pharmaceutical ingredients and raw materials for the production of our intracutaneous delivery system, including fees paid to contract manufacturing organizations;
|
•
|
fees paid to CROs, clinical consultants, clinical trial sites and vendors, including IRBs, in conjunction with implementing and monitoring our clinical trials and acquiring and evaluating clinical trial data, including all related fees, such as for investigator grants, patient screening fees, laboratory work and statistical compilation and analysis;
|
•
|
fees paid to conduct clinical studies, drug formulation, and cost of consumables used in nonclinical and clinical trials;
|
•
|
other consulting fees paid to third parties; and
|
•
|
allocation of certain shared costs, such as facilities-related costs.
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Research and development
|
$
|
25,508
|
|
|
$
|
20,118
|
|
|
$
|
5,390
|
|
|
27
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Impairment loss
|
$
|
511
|
|
|
$
|
70
|
|
|
$
|
441
|
|
|
630
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Interest income
|
$
|
381
|
|
|
$
|
75
|
|
|
$
|
306
|
|
|
408
|
%
|
Interest expense
|
$
|
(379
|
)
|
|
$
|
(817
|
)
|
|
$
|
438
|
|
|
(54
|
)%
|
Other income, net
|
$
|
16
|
|
|
$
|
7
|
|
|
$
|
9
|
|
|
129
|
%
|
•
|
the scope, progress, expansion and costs of manufacturing our product candidates;
|
•
|
the scope, progress, expansion, costs and results of our clinical trials;
|
•
|
the timing of and costs involved in obtaining regulatory approvals;
|
•
|
the scope, progress, expansion, costs and results of our clinical trials;
|
•
|
the type, number, costs and results of the product candidate development programs which we are pursuing or may choose to pursue in the future;
|
•
|
our ability to establish and maintain development partnering arrangements;
|
•
|
the timing, receipt and amount of contingent, royalty and other payments from any of our future development partners;
|
•
|
the emergence of competing technologies and other adverse market developments;
|
•
|
the costs of maintaining, expanding and protecting our intellectual property portfolio, including potential litigation costs and liabilities;
|
•
|
the resources we devote to marketing and, if approved, commercializing our product candidates;
|
•
|
our ability to draw funds from our build-to-suit arrangement; and
|
•
|
the costs associated with being a public company.
|
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Net cash (used in) provided by:
|
|
|
|
||||
Operating activities
|
$
|
(29,122
|
)
|
|
$
|
(26,839
|
)
|
Investing activities
|
(19,213
|
)
|
|
(1,228
|
)
|
||
Financing activities
|
45,824
|
|
|
24,995
|
|
||
Decrease in cash, cash equivalents, and restricted cash
|
$
|
(2,511
|
)
|
|
$
|
(3,072
|
)
|
|
Payment Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
One Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
(1)
|
$
|
10,664
|
|
|
$
|
1,762
|
|
|
$
|
3,678
|
|
|
$
|
5,224
|
|
|
$
|
—
|
|
Capital lease obligation
|
34
|
|
|
10
|
|
|
20
|
|
|
4
|
|
|
—
|
|
|||||
Build-to-suit obligation
(2)
|
9,113
|
|
|
2,909
|
|
|
6,204
|
|
|
—
|
|
|
—
|
|
|||||
Equipment purchase commitments
(3)
|
11,763
|
|
|
8,115
|
|
|
3,648
|
|
|
—
|
|
|
—
|
|
|||||
Contract manufacturing commitments
(4)
|
3,919
|
|
|
3,919
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
35,493
|
|
|
$
|
16,715
|
|
|
$
|
13,550
|
|
|
$
|
5,228
|
|
|
$
|
—
|
|
|
Name
|
|
Age
|
|
Position
|
|
Class I Directors whose term expires at the 2021 Annual Meeting of Stockholders
|
|
|
|
|
|
John P. Walker
|
|
70
|
|
|
President, Chief Executive Officer, and Chairman of the Board of Directors
|
Linda Grais M.D., J.D.
(1)
|
|
62
|
|
|
Director
|
|
|
|
|
|
|
Class II Directors whose term expire at the 2019 Annual Meeting of Stockholders
|
|
|
|
|
|
Steven A. Elms
(3)
|
|
55
|
|
|
Director
|
Kenneth R. Greathouse
(3)
|
|
66
|
|
|
Director
|
|
|
|
|
|
|
Class II Directors whose term expire at the 2020 Annual Meeting of Stockholders
|
|
|
|
|
|
Joseph “Jay” P. Hagan
(1) (2)
|
|
50
|
|
|
Director
|
Troy Wilson, Ph.D., J.D.
(1) (2)
|
|
50
|
|
|
Director
|
Kleanthis G. Xanthopoulos, Ph.D.
(2) (3)
|
|
60
|
|
|
Director
|
|
|
|
|
|
|
Executive Officers (other than Mr. Walker):
|
|
|
|
|
|
Gregory Kitchener
|
|
48
|
|
|
Chief Financial Officer
|
Donald Kellerman, PharmD
|
|
64
|
|
|
VP Clinical Development and Medical Affairs
|
Hayley Lewis
|
|
43
|
|
|
Senior Vice President, Operations
|
|
•
|
the integrity of our financial statements;
|
•
|
our compliance with legal and regulatory requirements;
|
•
|
the qualifications and independence of our independent registered public accounting firm; and
|
•
|
the performance of our independent registered public accounting firm.
|
•
|
John P. Walker, President and Chief Executive Officer;
|
•
|
Donald Kellerman, Pharm.D., Vice President, Clinical Development and Medical Affairs; and
|
•
|
Hayley Lewis, Senior Vice President, Operations.
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)(1)
|
|
Stock
Awards ($)(2)
|
|
Fair Value
of Option
Awards ($)(3)
|
|
All Other Compensation ($)
|
|
|
|
Total ($)
|
||||||
John P. Walker
|
|
2018
|
|
446,962
|
|
|
—
|
|
|
—
|
|
|
1,274,020
|
|
|
—
|
|
|
|
|
1,720,982
|
|
President and Chief Executive Officer
(4)
|
|
2017
|
|
141,923
|
|
|
117,000
|
|
|
82,200
|
|
|
220,710
|
|
|
76,290
|
|
|
(5)
|
|
638,123
|
|
Donald Kellerman
|
|
2018
|
|
340,050
|
|
|
—
|
|
|
—
|
|
|
317,730
|
|
|
—
|
|
|
|
|
657,780
|
|
Vice President, Clinical Development and Medical Affairs
|
|
2017
|
|
331,200
|
|
|
95,491
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
426,691
|
|
Hayley Lewis
|
|
2018
|
|
330,000
|
|
|
—
|
|
|
—
|
|
|
317,730
|
|
|
—
|
|
|
|
|
647,730
|
|
Senior Vice President, Operations
|
|
2017
|
|
304,987
|
|
|
96,302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
401,289
|
|
|
•
|
the Company's performance relative to predetermined corporate objectives (weighted 100%, 80% and 80%, for Mr. Walker, Dr. Kellerman, and Ms. Lewis, respectively); and
|
•
|
in the case of named executive officers other than Mr. Walker, the named executive officer's individual performance (based on achievement of individual objectives) as determined by the compensation committee based on input from Mr. Walker (weighted 20% for both Dr. Kellerman and Ms. Lewis).
|
|
|
Option Awards
(6)
|
||||||||||||
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
unexercisable
|
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration
Date
|
|
Vesting Start Date
|
|||
John P. Walker
|
|
340
|
|
(1)
|
—
|
|
|
|
42.20
|
|
|
5/4/2026
|
|
5/4/2016
|
|
|
1,500
|
|
(1)
|
—
|
|
|
|
11.40
|
|
|
11/2/2026
|
|
11/1/2016
|
|
|
5,000
|
|
(2)
|
10,000
|
|
(2)
|
|
19.80
|
|
|
8/9/2027
|
|
8/9/2017
|
|
|
50,000
|
|
(3)
|
250,000
|
|
(3)
|
|
4.24
|
|
|
4/16/2028
|
|
4/16/2018
|
|
|
14,583
|
|
(3)
|
85,417
|
|
(3)
|
|
4.27
|
|
|
5/17/2028
|
|
5/17/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Donald Kellerman
|
|
1,125
|
|
(2)
|
375
|
|
(2)
|
|
45.20
|
|
|
12/15/2025
|
|
12/15/2015
|
|
|
412
|
|
(2)
|
188
|
|
(2)
|
|
51.40
|
|
|
3/29/2026
|
|
3/29/2016
|
|
|
749
|
|
(5)
|
—
|
|
(5)
|
|
51.40
|
|
|
3/29/2026
|
|
N/A
(5)
|
|
|
4,687
|
|
(4)
|
4,313
|
|
(4)
|
|
11.40
|
|
|
11/2/2026
|
|
11/1/2016
|
|
|
16,666
|
|
(3)
|
83,334
|
|
(3)
|
|
4.24
|
|
|
4/16/2028
|
|
4/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hayley Lewis
|
|
1,187
|
|
(2)
|
313
|
|
(2)
|
|
45.20
|
|
|
12/15/2025
|
|
10/15/2015
|
|
|
412
|
|
(2)
|
188
|
|
(2)
|
|
51.40
|
|
|
3/29/2026
|
|
3/29/2016
|
|
|
749
|
|
(5)
|
—
|
|
(5)
|
|
51.40
|
|
|
3/29/2026
|
|
N/A
(5)
|
|
|
4,687
|
|
(4)
|
4,313
|
|
(4)
|
|
11.40
|
|
|
11/2/2026
|
|
11/1/2016
|
|
|
16,666
|
|
(3)
|
83,334
|
|
(3)
|
|
4.24
|
|
|
4/16/2028
|
|
4/16/2018
|
|
•
|
for serving as a member of our board of directors, an annual cash retainer of $45,000 and a non-statutory stock option to purchase 1,500 shares of our common stock (at a per share exercise price equal to fair market value on the date of grant) vesting in equal monthly installments over a period of one year; and
|
•
|
for serving as the chairperson of the audit committee of the board of directors, an additional annual cash retainer of $10,000; for serving as the chairperson of the compensation committee of the board of directors, an additional annual cash retainer of $7,000; for serving as the chairperson of the nominating and corporate governance committee of the board of directors, an additional annual cash retainer of $7,000; for serving as the chairman of the board of directors, an additional annual cash retainer of $25,000; and for serving as lead independent director, an annual cash retainer of $55,000.
|
|
|
Fees Earned or
Paid in Cash ($)
|
|
Option Awards ($)
(1)
|
|
Total ($)
|
|||
Steven Elms
|
|
28,065
|
|
|
92,207
|
|
|
120,272
|
|
Kenneth R. Greathouse
|
|
49,167
|
|
|
105,014
|
|
|
154,181
|
|
Joseph “Jay” P. Hagan
|
|
55,000
|
|
|
105,014
|
|
|
160,014
|
|
Troy Wilson, Ph.D., J.D.
|
|
52,000
|
|
|
105,014
|
|
|
157,014
|
|
Kleanthis G. Xanthopoulos, Ph.D.
|
|
52,000
|
|
|
105,014
|
|
|
157,014
|
|
|
(1)
|
Represents the aggregate grant date fair value of stock options granted in fiscal year 2018, determined in accordance with FASB ASC 718. See Note 10.
Stock-Based Compensation
, to the financial statements included in this Annual Report for a description of the assumptions used in calculating the grant date fair value.
|
|
Number of Shares
Subject to Outstanding
Options
|
|
Steven Elms
|
25,000
|
|
Kenneth R. Greathouse
|
29,500
|
|
Joseph “Jay” P. Hagan
|
28,900
|
|
Troy Wilson, Ph.D., J.D.
|
28,915
|
|
Kleanthis G. Xanthopoulos, Ph.D.
|
28,915
|
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan category
|
|
Number of securities
to be issued upon exercise of
outstanding options
|
|
|
Weighted-average exercise
price of outstanding
options
|
|
Number of securities
available for future issuance under equity compensation
plans (excluding securities reflected in column (a))
|
||||
|
|
(a)
|
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
(1) (2)
|
|
1,296,157
|
|
|
|
$
|
5.75
|
|
|
55,799
|
|
Equity compensation plans not approved by security holders
(3) (4)
|
|
13,837
|
|
|
|
$
|
20.60
|
|
|
—
|
|
Total
|
|
1,309,994
|
|
|
|
|
|
55,799
|
|
•
|
each person or entity, or group of affiliated persons or entities, known by us to beneficially own more than 5% of our common stock;
|
•
|
each of our directors;
|
•
|
each of our named executive officers; and
|
•
|
all of our executive officers and directors as a group.
|
Name of Beneficial Owner
(1)
|
|
Total Shares
Beneficially
Owned
|
|
Percentage
|
|
|
||
5%+ Stockholders
|
|
|
|
|
|
|
||
Aisling Capital IV, LP and affiliates
(2)
|
|
1,600,000
|
|
|
13.4
|
|
|
%
|
888 Seventh Avenue, 12th Floor
|
|
|
|
|
|
|
||
New York, NY 10106
|
|
|
|
|
|
|
||
Adage Capital Partners GP, L.L.C. and affiliates
(3)
|
|
1,000,000
|
|
|
8.4
|
|
|
%
|
200 Clarendon Street, 52nd Floor
|
|
|
|
|
|
|
||
Boston, MA 02116
|
|
|
|
|
|
|
||
Amzak Capital Management, LLC
(4)
|
|
794,000
|
|
|
6.6
|
|
|
%
|
980 North Federal Highway, Suite 315
|
|
|
|
|
|
|
||
Boca Raton, FL 33432
|
|
|
|
|
|
|
||
Nexthera Capital LP and affiliates
(5)
|
|
700,000
|
|
|
5.8
|
|
|
%
|
900 Third Avenue, Suite 1100
|
|
|
|
|
|
|
||
New York, NY 10022
|
|
|
|
|
|
|
||
Directors and Named Executive Officers:
|
|
|
|
|
|
|
||
John P. Walker
(6)
|
|
109,868
|
|
|
|
|
*
|
|
Donald Kellerman, Ph.D.
(7)
|
|
32,393
|
|
|
|
|
*
|
|
Hayley Lewis
(8)
|
|
31,340
|
|
|
|
|
*
|
|
Kenneth Greathouse
(9)
|
|
18,354
|
|
|
|
|
*
|
|
Joseph “Jay” P. Hagan
(10)
|
|
9,570
|
|
|
|
|
*
|
|
Troy Wilson, Ph.D., J.D.
(11)
|
|
9,794
|
|
|
|
|
*
|
|
Kleanthis Xanthopoulos, Ph.D.
(12)
|
|
11,536
|
|
|
|
|
*
|
|
Steve A. Elms
(13)
|
|
1,600,375
|
|
|
13.4
|
|
|
%
|
Linda S. Grais
|
|
—
|
|
|
|
|
*
|
|
Current Directors and Executive Officers as a Group (10 persons)
(14)
|
|
1,823,230
|
|
|
15.0
|
|
|
%
|
|
•
|
approves the compensation and benefits of our executive officers;
|
•
|
reviews and makes recommendations to the board of directors regarding benefit plans and programs for employee compensation; and
|
•
|
administers our equity compensation plans.
|
•
|
identifies individuals qualified to become board members;
|
•
|
recommends to the board of directors nominations of persons to be elected to the board; and
|
•
|
advises the board regarding appropriate corporate governance policies and assists the board in achieving them.
|
|
2018
|
|
2017
|
||||
Audit fees
(1)
|
$
|
360,733
|
|
|
$
|
200,518
|
|
Audit-related fees
(2)
|
—
|
|
|
—
|
|
||
Tax fees
(3)
|
5,000
|
|
|
—
|
|
||
All other fees
(4)
|
—
|
|
|
—
|
|
||
Total fees
|
$
|
365,733
|
|
|
$
|
200,518
|
|
|
(1)
|
Represents fees for professional services primarily related to the audit of our annual financial statements, the review of our quarterly financial statements; comfort letters, consents and assistance with the review of documents filed with the SEC; and other accounting services necessary to comply with the standards of the Public Company Accounting Oversight Board (United States).
|
(2)
|
Represents fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”
|
(3)
|
Represents fees for preparation of federal and state tax returns and for tax advice.
|
(4)
|
Represents any other fees billed by our principal accountant and not reported under “Audit Fees,” “Audit-related fees,” and “Tax fees.”
|
(1)
|
FINANCIAL STATEMENTS
|
(2)
|
FINANCIAL STATEMENT SCHEDULES
|
(3)
|
INDEX TO EXHIBITS
|
|
|
|
Exhibit
number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
4.1
|
|
|
|
|
|
10.1**
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4**
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23#
|
|
|
|
|
|
10.24#
|
|
|
|
|
|
10.25#
|
|
|
|
|
|
10.26#
|
|
|
|
|
|
10.27#
|
|
|
|
|
|
10.28#
|
|
|
|
|
|
10.29#
|
|
|
|
|
|
10.30#
|
|
|
|
|
|
10.31#
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
10.34#
|
|
|
|
|
|
10.35#
|
|
|
|
|
|
10.36#
|
|
|
|
|
|
10.37#
|
|
|
|
|
|
10.38#
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
10.46
|
|
|
|
|
|
10.47
|
|
|
|
|
|
10.48
|
|
|
|
|
10.49
|
|
|
|
|
|
10.50
|
|
|
|
|
|
10.51
|
|
|
|
|
|
10.52
|
|
|
|
|
|
10.53
|
|
|
|
|
|
10.54
|
|
|
|
|
|
10.55**
|
|
|
|
|
|
10.56
|
|
|
|
|
|
10.57
|
|
|
|
|
|
10.58#
|
|
|
|
|
|
10.59#
|
|
|
|
|
|
10.60#
|
|
|
|
|
|
10.61
|
|
|
|
|
|
10.62
|
|
|
|
|
|
10.63#
|
|
|
|
|
10.64#
|
|
|
|
|
|
10.65#
|
|
|
|
|
|
10.66#
|
|
|
|
|
|
10.67#
|
|
|
|
|
|
10.68#
|
|
|
|
|
|
10.69
|
|
|
|
|
|
10.70
|
|
|
|
|
|
10.71#
|
|
|
|
|
|
10.72#
|
|
|
|
|
|
10.73#
|
|
|
|
|
|
10.74
|
|
|
|
|
|
10.75
|
|
|
|
|
|
10.76#
|
|
|
|
|
|
10.77#
|
|
|
|
|
|
10.78#
|
|
|
|
|
|
10.79#
|
|
|
|
|
|
10.80#
|
|
|
|
|
10.81*
|
|
|
|
|
|
10.82
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1†
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Confidential treatment has been granted as to certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.
|
#
|
Management contract or compensatory plan or arrangement.
|
†
|
The certifications attached as Exhibit 32.1 accompany this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
|
ZOSANO PHARMA CORPORATION
|
||
|
|
|
|
|
By:
|
|
/s/ John P. Walker
|
|
|
|
John P. Walker
|
|
|
|
Chief Executive Officer
|
|
Date:
|
|
March 25, 2019
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ John P. Walker
|
|
Chief Executive Officer (Principal
Executive Officer)
|
|
March 25, 2019
|
John P. Walker
|
|
|
|
|
|
|
|
||
/s/ Gregory Kitchener
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 25, 2019
|
Gregory Kitchener
|
|
|
|
|
|
|
|
||
/s/ Steven A. Elms
|
|
Director
|
|
March 25, 2019
|
Steven A. Elms
|
|
|
|
|
|
|
|
|
|
/s/ Lisa S. Grais
|
|
Director
|
|
March 25, 2019
|
Linda S. Grais
|
|
|
|
|
|
|
|
|
|
/s/ Kenneth R. Greathouse
|
|
Director
|
|
March 25, 2019
|
Kenneth R. Greathouse
|
|
|
|
|
|
|
|
||
/s/ Joseph P. Hagan
|
|
Director
|
|
March 25, 2019
|
Joseph P. Hagan
|
|
|
|
|
|
|
|
||
/s/ Troy Wilson
|
|
Director
|
|
March 25, 2019
|
Troy Wilson
|
|
|
|
|
|
|
|
||
/s/ Kleanthis G. Xanthopoulos
|
|
Director
|
|
March 25, 2019
|
Kleanthis G. Xanthopoulos
|
|
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
9,140
|
|
|
$
|
11,651
|
|
Marketable securities at fair value
|
13,862
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
358
|
|
|
1,742
|
|
||
Total current assets
|
23,360
|
|
|
13,393
|
|
||
Restricted cash
|
455
|
|
|
455
|
|
||
Property and equipment, net
|
11,916
|
|
|
4,152
|
|
||
Other long-term assets
|
49
|
|
|
—
|
|
||
Total assets
|
$
|
35,780
|
|
|
$
|
18,000
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,450
|
|
|
$
|
1,511
|
|
Accrued compensation
|
2,092
|
|
|
1,571
|
|
||
Capital lease obligation, current portion
|
5
|
|
|
—
|
|
||
Build-to-suit obligation, current portion
|
2,326
|
|
|
—
|
|
||
Secured promissory note (including accrued interest), net of issuance costs
|
—
|
|
|
6,687
|
|
||
Other accrued liabilities
|
2,414
|
|
|
688
|
|
||
Total current liabilities
|
11,287
|
|
|
10,457
|
|
||
Capital lease obligation, long-term portion
|
18
|
|
|
—
|
|
||
Build-to-suit obligation, long-term portion, net of debt issuance costs and discount
|
4,478
|
|
|
—
|
|
||
Deferred rent
|
1,287
|
|
|
495
|
|
||
Total liabilities
|
17,070
|
|
|
10,952
|
|
||
Commitments and contingencies (note 9)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding as of December 31, 2018 and 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value; 250,000,000 and 100,000,000 shares authorized as of December 31, 2018 and 2017, respectively; 11,973,039 and 1,973,039 shares issued and outstanding as of December 31, 2018 and 2017, respectively
|
1
|
|
|
—
|
|
||
Additional paid-in capital
|
279,946
|
|
|
232,922
|
|
||
Accumulated deficit
|
(261,232
|
)
|
|
(225,874
|
)
|
||
Accumulated other comprehensive loss
|
(5
|
)
|
|
—
|
|
||
Total stockholders’ equity
|
18,710
|
|
|
7,048
|
|
||
Total liabilities and stockholders’ equity
|
$
|
35,780
|
|
|
$
|
18,000
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
Operating expenses:
|
|
|
|
||||
Research and development
|
25,508
|
|
|
20,118
|
|
||
General and administrative
|
9,357
|
|
|
8,182
|
|
||
Impairment loss
|
511
|
|
|
70
|
|
||
Total operating expenses
|
35,376
|
|
|
28,370
|
|
||
Loss from operations
|
(35,376
|
)
|
|
(28,370
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest income
|
381
|
|
|
75
|
|
||
Interest expense
|
(379
|
)
|
|
(817
|
)
|
||
Other income, net
|
16
|
|
|
7
|
|
||
Loss before provision for income taxes
|
(35,358
|
)
|
|
(29,105
|
)
|
||
Provision for income taxes
|
—
|
|
|
—
|
|
||
Net loss
|
$
|
(35,358
|
)
|
|
$
|
(29,105
|
)
|
Unrealized loss on marketable securities, net of tax
|
(5
|
)
|
|
—
|
|
||
Comprehensive loss
|
$
|
(35,363
|
)
|
|
$
|
(29,105
|
)
|
Net loss per common share – basic and diluted
|
$
|
(3.74
|
)
|
|
$
|
(16.82
|
)
|
Weighted-average common shares outstanding – basic and diluted
|
9,452,491
|
|
|
1,730,388
|
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at January 1, 2017
|
840,798
|
|
|
$
|
—
|
|
|
$
|
201,253
|
|
|
$
|
(196,769
|
)
|
|
$
|
—
|
|
|
$
|
4,484
|
|
Issuance of common stock in connection with public offering
|
977,500
|
|
|
—
|
|
|
26,623
|
|
|
—
|
|
|
—
|
|
|
26,623
|
|
|||||
Issuance of common stock in connection with exercise of warrants
|
136,301
|
|
|
—
|
|
|
4,041
|
|
|
—
|
|
|
—
|
|
|
4,041
|
|
|||||
Issuance of common stock in connection with equity line of credit
|
11,375
|
|
|
—
|
|
|
174
|
|
|
—
|
|
|
—
|
|
|
174
|
|
|||||
Issuance and release of restricted stock to certain board members as remuneration
|
2,139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock to employees upon the exercise of stock options
|
4,926
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
692
|
|
|
—
|
|
|
—
|
|
|
692
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,105
|
)
|
|
—
|
|
|
(29,105
|
)
|
|||||
Balance at December 31, 2017
|
1,973,039
|
|
|
—
|
|
|
232,922
|
|
|
(225,874
|
)
|
|
—
|
|
|
7,048
|
|
|||||
Issuance of common stock in connection with public offering
|
10,000,000
|
|
|
1
|
|
|
45,603
|
|
|
—
|
|
|
—
|
|
|
45,604
|
|
|||||
Issuance of common stock warrants in connection with build-to-suit obligation
|
—
|
|
|
—
|
|
|
243
|
|
|
—
|
|
|
—
|
|
|
243
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,178
|
|
|
—
|
|
|
—
|
|
|
1,178
|
|
|||||
Unrealized loss on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,358
|
)
|
|
—
|
|
|
(35,358
|
)
|
|||||
Balance at December 31, 2018
|
11,973,039
|
|
|
$
|
1
|
|
|
$
|
279,946
|
|
|
$
|
(261,232
|
)
|
|
$
|
(5
|
)
|
|
$
|
18,710
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(35,358
|
)
|
|
$
|
(29,105
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Stock based compensation
|
1,178
|
|
|
692
|
|
||
Deferred rent
|
936
|
|
|
443
|
|
||
Depreciation
|
764
|
|
|
2,553
|
|
||
Effective interest on financing obligations
|
304
|
|
|
51
|
|
||
Capitalized interest
|
(294
|
)
|
|
—
|
|
||
(Accretion) amortization of interest on marketable securities
|
(131
|
)
|
|
2
|
|
||
Impairment loss
|
511
|
|
|
70
|
|
||
Other
|
(14
|
)
|
|
(8
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Prepaid expenses and other assets
|
1,208
|
|
|
(1,279
|
)
|
||
Accounts payable
|
98
|
|
|
(34
|
)
|
||
Accrued compensation and other accrued liabilities
|
1,676
|
|
|
(224
|
)
|
||
Net cash used in operating activities
|
(29,122
|
)
|
|
(26,839
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of marketable securities
|
(29,788
|
)
|
|
(8,280
|
)
|
||
Proceeds from maturities of marketable securities
|
16,050
|
|
|
8,274
|
|
||
Purchase of property and equipment
|
(5,490
|
)
|
|
(1,244
|
)
|
||
Proceeds from sale of property and equipment
|
15
|
|
|
22
|
|
||
Net cash used in investing activities
|
(19,213
|
)
|
|
(1,228
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from public offering of securities, net of commissions, discounts and other offering costs
|
45,604
|
|
|
26,623
|
|
||
Proceeds from build-to-suit obligation, net of issuance costs
|
7,570
|
|
|
—
|
|
||
Principal payments made on financing obligations
|
(6,999
|
)
|
|
(5,808
|
)
|
||
Payment of term loan end of term charge
|
(351
|
)
|
|
—
|
|
||
Proceeds from exercise of warrants and issuance of common stock
|
—
|
|
|
4,041
|
|
||
Proceeds from exercise of stock options and issuance of common stock
|
—
|
|
|
139
|
|
||
Net cash provided by financing activities
|
45,824
|
|
|
24,995
|
|
||
Net decrease in cash, cash equivalents, and restricted cash
|
(2,511
|
)
|
|
(3,072
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of year
|
12,106
|
|
|
15,178
|
|
||
Cash, cash equivalents, and restricted cash at end of year
|
$
|
9,595
|
|
|
$
|
12,106
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
884
|
|
|
$
|
865
|
|
Cash paid for income taxes
|
$
|
2
|
|
|
$
|
2
|
|
Non-cash investing activities:
|
|
|
|
||||
Acquisition of property and equipment under accounts payable and other accrued liabilities
|
$
|
3,374
|
|
|
$
|
144
|
|
Issuance of common stock warrants in connection with a build-to-suit obligation
|
$
|
243
|
|
|
$
|
—
|
|
Issuance of common stock in connection with equity line of credit
|
$
|
—
|
|
|
$
|
174
|
|
Property and equipment acquired through capital lease
|
$
|
25
|
|
|
$
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
9,140
|
|
|
$
|
11,651
|
|
Restricted cash
|
455
|
|
|
455
|
|
||
Total
|
$
|
9,595
|
|
|
$
|
12,106
|
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
|
(shares)
|
||||
Warrants to purchase common stock
|
274,524
|
|
|
199,524
|
|
Options to purchase common stock
|
1,309,994
|
|
|
118,379
|
|
Total
|
1,584,518
|
|
|
317,903
|
|
|
|
|
Fair value Measurements
|
||||||||||||
|
Total
|
|
Quoted prices in active market
Level I
|
|
Significant other observable inputs
Level II
|
|
Significant unobservable inputs
Level III
|
||||||||
|
(in thousands)
|
||||||||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
4,830
|
|
|
$
|
4,830
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
1,497
|
|
|
—
|
|
|
1,497
|
|
|
—
|
|
||||
Corporate notes and bonds
|
6,989
|
|
|
—
|
|
|
6,989
|
|
|
—
|
|
||||
U.S. treasuries
|
8,375
|
|
|
8,375
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
21,691
|
|
|
$
|
13,205
|
|
|
$
|
8,486
|
|
|
$
|
—
|
|
|
|
|
|
||||||||||||
Classified as:
|
|
|
|
||||||||||||
Cash equivalents
|
$
|
7,829
|
|
|
|
||||||||||
Marketable securities at fair value
|
13,862
|
|
|
|
|||||||||||
Total
|
$
|
21,691
|
|
|
|
||||||||||
|
|
|
|
||||||||||||
|
|
|
|
||||||||||||
|
|
|
Fair value Measurements
|
||||||||||||
|
Total
|
|
Quoted prices in active market
Level I
|
|
Significant other observable inputs
Level II
|
|
Significant unobservable inputs
Level III
|
||||||||
|
(in thousands)
|
||||||||||||||
As of December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
6,414
|
|
|
$
|
6,414
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. government agencies
|
650
|
|
|
—
|
|
|
650
|
|
|
—
|
|
||||
Total
|
$
|
7,064
|
|
|
$
|
6,414
|
|
|
$
|
650
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Classified as:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
7,064
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
December 31, 2018
|
||||||||||||||
|
(in thousands)
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
4,830
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,830
|
|
Commercial paper
|
1,497
|
|
|
—
|
|
|
—
|
|
|
1,497
|
|
||||
Corporate notes and bonds
|
6,994
|
|
|
—
|
|
|
(5
|
)
|
|
6,989
|
|
||||
U.S. treasuries
|
8,375
|
|
|
—
|
|
|
—
|
|
|
8,375
|
|
||||
Total
|
$
|
21,696
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
21,691
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2017
|
||||||||||||||
|
(in thousands)
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
6,414
|
|
|
—
|
|
|
—
|
|
|
6,414
|
|
|||
U.S. government agency bonds
|
650
|
|
|
—
|
|
|
—
|
|
|
650
|
|
||||
Total
|
$
|
7,064
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,064
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in thousands)
|
||||||
Leasehold improvements
|
$
|
16,690
|
|
|
$
|
15,660
|
|
Manufacturing equipment
|
10,387
|
|
|
10,387
|
|
||
Laboratory and office equipment
|
1,434
|
|
|
1,159
|
|
||
Computer equipment and software
|
206
|
|
|
209
|
|
||
Construction-in-progress
|
9,558
|
|
|
2,351
|
|
||
|
38,275
|
|
|
29,766
|
|
||
Less: accumulated depreciation
|
(26,359
|
)
|
|
(25,614
|
)
|
||
Total
|
$
|
11,916
|
|
|
$
|
4,152
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
|
(in thousands)
|
||||||
Contract manufacturing
|
|
$
|
834
|
|
|
$
|
—
|
|
Pre-clinical and clinical study
|
|
483
|
|
|
88
|
|
||
Construction-in-progress obligations
|
|
395
|
|
|
45
|
|
||
Accrued taxes
|
|
187
|
|
|
—
|
|
||
Professional service fees
|
|
112
|
|
|
377
|
|
||
Other
|
|
403
|
|
|
178
|
|
||
Total
|
|
$
|
2,414
|
|
|
$
|
688
|
|
Year
|
|
||
|
|
||
2019
|
$
|
10
|
|
2020
|
10
|
|
|
2021
|
10
|
|
|
2022
|
4
|
|
|
|
34
|
|
|
Less: amount representing interest
|
(11
|
)
|
|
Total
|
$
|
23
|
|
|
|
||
Capital lease obligation, current
|
$
|
5
|
|
Capital lease obligation, long-term
|
18
|
|
|
Total
|
$
|
23
|
|
Build-to-suit obligation principal amount
|
$
|
7,120
|
|
Build-to-suit obligation Purchase Option Fees
|
936
|
|
|
Less: Unamortized Purchase Option Fees
|
(845
|
)
|
|
Unamortized fair value of free-standing warrants
|
(207
|
)
|
|
Unamortized debt discount
|
(178
|
)
|
|
Unamortized debt issuance costs
|
(22
|
)
|
|
Build-to-suit obligation, net of debt issuance costs and discount
|
$
|
6,804
|
|
|
|
||
Build-to-suit obligation, current portion
|
$
|
2,326
|
|
Build-to-suit obligation, long-term portion, net of debt issuance costs and discount
|
4,478
|
|
|
Build-to-suit obligation, net of debt issuance costs and discount
|
$
|
6,804
|
|
Year
|
|
Principal
|
|
Interest
|
|
Purchase Option Fees
|
||||||
|
|
(in thousands)
|
||||||||||
2019
|
|
$
|
2,326
|
|
|
$
|
583
|
|
|
$
|
—
|
|
2020
|
|
2,632
|
|
|
367
|
|
|
—
|
|
|||
2021
|
|
2,162
|
|
|
107
|
|
|
936
|
|
|||
Total
|
|
$
|
7,120
|
|
|
$
|
1,057
|
|
|
$
|
936
|
|
|
Warrants
Outstanding as of December 31, 2017 |
|
Warrants Issued
|
|
Warrants
Exercised
|
|
Warrants
Expired
|
|
Warrants
Outstanding as of December 31, 2018 |
|
Exercise
Price
|
|
Expiration
Date
|
|||||||
PIPE Financing - Series B
|
195,906
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,906
|
|
|
$
|
31.00
|
|
|
8/19/2021
|
Hercules - June 2014
|
1,583
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,583
|
|
|
$
|
176.80
|
|
|
1/27/2020
|
Hercules - June 2015
|
2,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,035
|
|
|
$
|
147.40
|
|
|
6/23/2020
|
Trinity - September 2018
|
—
|
|
|
75,000
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|
$
|
3.59
|
|
|
9/25/2025
|
Total
|
199,524
|
|
|
75,000
|
|
|
—
|
|
|
—
|
|
|
274,524
|
|
|
|
|
|
Year
|
|
||
|
|
||
2019
|
$
|
1,762
|
|
2020
|
1,815
|
|
|
2021
|
1,863
|
|
|
2022
|
1,914
|
|
|
2023 and thereafter
|
3,310
|
|
|
Total
|
$
|
10,664
|
|
|
Shares
Available
for Grant
|
|
Outstanding
Number
of Shares
|
|
Weighted-
Average
Exercise
Price per Share
|
|
Weighted-
Average
Remaining
Contractual
Term
(In Years)
|
|
Aggregate
Intrinsic
Value
|
||||||
Balance at January 1, 2017
|
2,826
|
|
|
79,657
|
|
|
$
|
38.51
|
|
|
5.62
|
|
|
||
Additional shares reserved
|
52,950
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Options granted
|
(55,210
|
)
|
|
55,210
|
|
|
$
|
17.43
|
|
|
|
|
|
||
Options exercised
|
—
|
|
|
(4,926
|
)
|
|
$
|
27.94
|
|
|
|
|
|
||
Options canceled/forfeited/expired
|
30,912
|
|
|
(30,912
|
)
|
|
$
|
39.10
|
|
|
|
|
|
||
Restricted stock award granted
|
(3,000
|
)
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Restricted stock award forfeited
|
1,334
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Shares expired under 2012 Plan
|
(241
|
)
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Balance at December 31, 2017
|
29,571
|
|
|
99,029
|
|
|
$
|
25.33
|
|
|
8.46
|
|
|
||
Additional shares reserved
|
1,225,223
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Options granted
|
(1,212,200
|
)
|
|
1,212,200
|
|
|
$
|
4.24
|
|
|
|
|
|
||
Options canceled/forfeited/expired
|
15,072
|
|
|
(15,072
|
)
|
|
$
|
12.38
|
|
|
|
|
|
||
Shares expired under 2012 Plan
|
(1,867
|
)
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Balance at December 31, 2018
|
55,799
|
|
|
1,296,157
|
|
|
$
|
5.75
|
|
|
9.23
|
|
$
|
—
|
|
Exercisable at December 31, 2018
|
|
|
225,138
|
|
|
$
|
10.43
|
|
|
8.83
|
|
$
|
—
|
|
|
Vested or expected to vest at December 31, 2018
|
|
1,195,711
|
|
|
$
|
5.86
|
|
|
9.22
|
|
$
|
—
|
|
|
|
Outstanding
Number
of Shares
|
|
Weighted-
Average
Exercise
Price per
Share
|
|
Remaining
Contractual
Term
(In Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance at January 1, 2017
|
|
12,600
|
|
|
$
|
15.40
|
|
|
9.68
|
|
|
||
Options granted
|
|
6,750
|
|
|
$
|
26.06
|
|
|
|
|
|
||
Balance at December 31, 2017
|
|
19,350
|
|
|
$
|
19.12
|
|
|
8.91
|
|
|
||
Options granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Options canceled/forfeited/expired
|
|
(5,513
|
)
|
|
$
|
15.40
|
|
|
|
|
|
||
Balance at December 31, 2018
|
|
13,837
|
|
|
$
|
20.60
|
|
|
4.52
|
|
$
|
—
|
|
Exercisable at December 31, 2018
|
|
10,007
|
|
|
$
|
18.47
|
|
|
3.05
|
|
$
|
—
|
|
Vested or expected to vest at December 31, 2018
|
13,562
|
|
|
$
|
20.48
|
|
|
4.44
|
|
$
|
—
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Exercise Price
|
|
Number of
Shares
|
|
Weighted-
Average
Remaining
Contractual
Life (in years)
|
|
Weighted
Average
Exercise
Price
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price
|
||||||
$3.45 - $4.00
|
|
132,500
|
|
|
9.80
|
|
$
|
3.90
|
|
|
—
|
|
|
$
|
—
|
|
$4.24 - $4.24
|
|
937,637
|
|
|
9.29
|
|
$
|
4.24
|
|
|
156,409
|
|
|
$
|
4.24
|
|
$4.27 - $181.00
|
|
224,470
|
|
|
8.70
|
|
$
|
11.93
|
|
|
67,338
|
|
|
$
|
21.18
|
|
$182.60 - $182.60
|
|
150
|
|
|
6.32
|
|
$
|
182.60
|
|
|
137
|
|
|
$
|
182.60
|
|
$185.80 - $185.80
|
|
1,400
|
|
|
6.39
|
|
$
|
185.80
|
|
|
1,254
|
|
|
$
|
185.80
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Research and development
|
$
|
529
|
|
|
$
|
266
|
|
General and administrative
|
649
|
|
|
426
|
|
||
Total
|
$
|
1,178
|
|
|
$
|
692
|
|
|
Year Ended December 31,
|
||
|
2018
|
|
2017
|
Dividend yield
|
—%
|
|
—%
|
Risk-free interest rate
|
2.46% - 3.11%
|
|
1.90% – 2.25%
|
Expected volatility
|
89%
|
|
89%
|
Expected term (years)
|
6.08
|
|
6.08
|
Estimated forfeiture % rate
|
6.50%
|
|
6.50%
|
|
Year Ended December 31,
|
||||
|
2018
|
|
2017
|
||
Federal statutory tax rate
(1)
|
(21.0
|
)%
|
|
(34.0
|
)%
|
State statutory tax rate, net of federal benefit
|
(7.0
|
)
|
|
(5.8
|
)
|
Change in effective tax rate
|
—
|
|
|
18.1
|
|
Derecognition due to Section 382 and 383
|
25.4
|
|
|
30.2
|
|
Stock-based compensation
|
0.5
|
|
|
1.1
|
|
Permanent items
|
3.0
|
|
|
(2.5
|
)
|
Change in valuation allowance
|
(0.9
|
)
|
|
(7.1
|
)
|
Total
|
—
|
%
|
|
—
|
%
|
(1)
|
In December 2017, the United States government enacted tax reform legislation that reduced the U.S. federal statutory tax rate to 21 percent.
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Net operating loss carryforwards
|
$
|
10,942
|
|
|
$
|
12,226
|
|
Research and development credits
|
3,657
|
|
|
3,245
|
|
||
Depreciation and amortization
|
729
|
|
|
640
|
|
||
Accruals
|
569
|
|
|
507
|
|
||
Deferred rent
|
400
|
|
|
113
|
|
||
Stock-based compensation
|
213
|
|
|
98
|
|
||
Capital loss carryforward
|
23
|
|
|
23
|
|
||
Other
|
2
|
|
|
1
|
|
||
Net deferred tax assets
|
16,535
|
|
|
16,853
|
|
||
Valuation allowance
|
(16,535
|
)
|
|
(16,853
|
)
|
||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Balance at the beginning of year
|
$
|
1,006
|
|
|
$
|
943
|
|
Decrease related to prior year tax positions
|
(77
|
)
|
|
—
|
|
||
Increase related to current year tax positions
|
199
|
|
|
63
|
|
||
Balance at the end of year
|
$
|
1,128
|
|
|
$
|
1,006
|
|
|
|
|
|
|
|
|
Date: March 25, 2019
|
|
|
|
By:
|
|
/s/ John P. Walker
|
|
|
|
|
|
|
John P. Walker
|
|
|
|
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
Date: March 25, 2019
|
|
|
|
By:
|
|
/s/ Gregory Kitchener
|
|
|
|
|
|
|
Gregory Kitchener
|
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
|
|
|
Date: March 25, 2019
|
|
|
|
By:
|
|
/s/ John P. Walker
|
|
|
|
|
|
|
John P. Walker
|
|
|
|
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|||
Date: March 25, 2019
|
|
|
|
By:
|
|
/s/ Gregory Kitchener
|
|
|
|
|
|
|
Gregory Kitchener
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial Officer)
|