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Delaware
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001-31564
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87-0458888
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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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, $.001 par value
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The Nasdaq Stock Market LLC
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Emerging growth company
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our expectation that our existing cash resources, will be sufficient to enable us to fund our operations into the first quarter of 2019;
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future expenses and capital expenditures;
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our estimates regarding expenses, future revenues, capital requirements and needs for, and ability to obtain, additional financing;
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our plans to address our future capital requirements and the consequences of failing to do so;
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our plans to resolve our noncompliance with the minimum bid price requirements of the Nasdaq Capital Market (Nasdaq) listing rules and the consequences of failing to do so;
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our need to raise substantial additional capital to fund our operations;
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our plans to execute enrollment of pediatric patients in the Phase 2 portion of our Phase 1/2 clinical trial of FCX-007 in the first quarter of 2018;
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our plans to report interim data from patients from our Phase 1/2 clinical trial for FCX-007 in the second quarter of 2018;
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our expectation to begin dosing patients in the Phase 2 portion of our Phase 1/2 clinical trial of FCX-007 in the second quarter of 2018;
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our expectation to complete enrollment of patients for our Phase 1/2 clinical trial of FCX-007 in the third quarter of 2018;
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our plans to report interim data from patients from our Phase 1/2 clinical trial for FCX-007 in the first quarter of 2019;
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our expectation to initiate enrollment in a Phase 1/2 clinical trial of FCX-013 in the third quarter of 2018;
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our product development goals under our collaborations with Intrexon Corporation for our product candidates;
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the potential benefits of Fast Track, Orphan Drug and Rare Pediatric Disease designations;
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the potential advantages of our product candidates and technologies; and
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the effect of legal and regulatory developments;
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Leveraging our proprietary autologous fibroblast technology and patented manufacturing process;
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Advancing our clinical stage gene therapy product candidate, FCX-007, through human clinical trials;
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Advancing our gene therapy product candidate, FCX-013, into and through human clinical trials;
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Advancing our research stage gene therapy program focused on arthritis and related conditions through research and into pre-clinical development; and
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Leveraging our FDA-compliant current Good Manufacturing Practices (cGMP) manufacturing facility and our expertise in cell therapy manufacturing to advance the development of our autologous cell and gene therapy pipeline.
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Localized administration
—avoids side effects typically associated with systemic therapy
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Reduced rejection and immunogenicity concerns
—because autologous fibroblasts are compatible with the unique biology of each patient
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Fibroblast cells are
genetically modified
ex vivo
—to enable testing for safety and confirmation of protein expression levels prior to administration to the patient
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Demonstrated expertise
in manufacturing our fibroblast cell therapy
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Intrexon’s proprietary vector technology, which is designed to facilitate the assembly and delivery of the necessary target gene constructs for delivery to autologous fibroblast cells. Access to this technology allows us to rapidly screen and construct genetic therapeutic solutions.
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Intrexon’s proprietary RheoSwitch Therapeutic System
®
(RTS
®
) technology. The RTS
®
biologic switch is activated by an orally-administered compound (veledimex) to control level and timing of protein expression in those diseases where such control is ideal.
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Program
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Potential Indication
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Status
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FCX-007
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RDEB
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Phase 1/2
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FCX-013
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Moderate to severe localized scleroderma
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Post-IND
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Research Program
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Arthritis
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Research
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the enhanced production and purification of autologous fibroblasts (without genetic modification) for all aesthetic and therapeutic indications;
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the enhanced production and purification of autologous dermal cells (without genetic modification) for aesthetic and therapeutic treatment of dermal, vocal cord, and periodontal indications;
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the development of genetically modified autologous fibroblasts for all aesthetic and therapeutic indications where an autologous fibroblast itself is the principal effector of the product in contrast to the use of autologous fibroblasts as the source of expression of a systemically available therapeutic protein in which that protein (and not the fibroblast) is the principal therapeutic effector;
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the development of genetically modified autologous dermal cells for aesthetic and therapeutic treatment of dermal, vocal cord, and periodontal indications;
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autologous fibroblasts genetically modified to express a therapeutic protein and/or bioactive ribonucleic acid for the treatment of autoimmune and non-infectious inflammatory disorders that manifest in cutaneous tissues, fascia and/or muscle; and
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autologous human fibroblasts with gene therapy to express bioactive Tenascin-X locally to correct connective tissue disorders associated with Ehlers-Danlos Syndrome (hypermobility type).
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completion of pre-clinical laboratory tests or studies and formulation studies;
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submission to the FDA of an IND application for a new drug or biologic product, which must become effective before human clinical trials may begin;
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performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug, or safety, purity, and potency of the proposed biologic product for its intended use;
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detailed information on product characterization and manufacturing process; and
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submission and approval of a New Drug Application (NDA) for a drug, or a BLA for a biologic product.
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Phase 1: The product candidate is usually first introduced into healthy humans or, on occasion, into patients, and is tested for safety, dosage tolerance, absorption, distribution, excretion and metabolism;
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Phase 2: The product candidate is introduced into a limited patient population to:
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assess its efficacy in specific, targeted indications;
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assess dosage tolerance and optimal dosage; and
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identify possible adverse effects and safety risks.
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Phase 3: These are commonly referred to as pivotal studies. If a product candidate is found to have an acceptable safety profile and to be potentially effective in Phase 2 clinical trials, clinical trials in Phase 3 will be initiated to further demonstrate clinical efficacy, optimal dosage and safety within an expanded and diverse patient population at geographically dispersed clinical trial sites; and
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If the FDA does ultimately approve the product candidate, it may require post-marketing testing, including potentially expensive Phase 4 studies, to confirm or further evaluate its safety and effectiveness. Continued ability to commercialize the product may be based on the successful completion of these additional studies.
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a substantial scientific issue essential to determining the safety or efficacy of the drug has been identified after testing has begun;
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the protocol that was agreed upon with the FDA has not been followed by a sponsor;
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the relevant data, assumptions, or information provided by a sponsor in a request for a SPA change are found to be false or misleading, or are found to exclude relevant facts; or
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the FDA and sponsor agree in writing to modify the protocol and such modification is intended to improve the study.
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Accelerated Approval.
The FDA may grant accelerated approval to drugs or biologic products that treat serious or life-threatening illnesses and that provide meaningful therapeutic benefits to patients over existing treatments. Under this program, the FDA may approve a product based on surrogate endpoints or clinical endpoints that can be measured earlier than mortality or irreversible morbidity. When approval is based on surrogate endpoints or clinical endpoints that can be measured earlier than mortality or irreversible morbidity, the sponsor will be required to conduct additional post-approval clinical trials to verify and describe clinical benefit. Under the agency’s accelerated approval regulations, if the FDA concludes that a product that has been shown to be effective can be safely used only if distribution or use is restricted, it may require certain post-marketing restrictions as necessary to assure safe use. In addition, for products approved under accelerated approval, sponsors will be required to submit all copies of their promotional materials, including advertisements, to the FDA at least thirty days prior to initial dissemination unless otherwise informed by the FDA. After a hearing, the FDA may withdraw a previously granted accelerated approval if, for instance, post-marketing studies fail to verify any clinical benefit, it becomes clear that restrictions on the distribution of the product are inadequate to ensure its safe use, or if a sponsor fails to comply with the conditions of the accelerated approval.
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Breakthrough Therapy.
The FDA may grant “breakthrough therapy” status to drugs or biologic products designed to treat, alone or in combination with another drug(s) or biologic(s), a serious or life-threatening disease or condition and for which preliminary evidence suggests a substantial improvement on clinically-meaningful endpoints over existing therapies. Such products need not address an unmet need, but are nevertheless eligible for expedited review if they offer the potential for an improvement over existing therapies. Breakthrough therapy status entitles the sponsor to earlier and more frequent meetings with the FDA regarding the development of nonclinical and clinical data and permits the FDA to offer product development or regulatory advice for the purpose of potentially shortening the time to product approval. The FDA may rescind breakthrough therapy designation if it believes the designated product no longer meets the qualifying criteria. Breakthrough therapy status does not guarantee that a product will be developed or reviewed more quickly and does not ensure FDA approval.
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Fast Track.
The FDA may grant “fast track” status to drugs or biologic products that are intended to treat serious diseases or illness and demonstrate the potential to fill an unmet medical need. Fast track is a process designed to expedite the review of such products by providing, among other things, more frequent meetings with the FDA to discuss the product’s development plan, more frequent written correspondence from the FDA about trial design, potential eligibility for accelerated approval, and rolling review, which allows submission of individually completed sections of a NDA or BLA for the FDA’s review before the entire filing is completed. Fast track status does not ensure that a product will be developed more quickly or receive FDA approval more quickly, if at all.
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Priority Review.
The FDA may grant “priority review” status to products that, if approved, would be significant improvements in safety or effectiveness of the treatment, diagnosis or prevention of serious conditions. Priority review is intended to reduce the time it takes for the FDA to review an NDA or BLA.
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Regenerative Medicine Advanced Therapy.
A product may be eligible for regenerative medicine advanced therapy (RMAT) designation if:
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The drug is a regenerative medicine therapy, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, except
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The drug is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and
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Preliminary clinical evidence indicates that the drug has the potential to address unmet medical needs for such disease or condition
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that we will be the first to obtain approval for any drug for which we obtain orphan drug designation;
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that orphan drug designation will result in any commercial advantage or reduce competition; or
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that the limited exceptions to this exclusivity will not be invoked by the relevant regulatory authority.
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The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other. Although there are a number of statutory exemptions and regulatory safe harbors protecting some business arrangements from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from federal Anti-Kickback Statute liability. The Affordable Care Act, among other things, clarified that liability may be established under the federal Anti-Kickback Statute without proving actual knowledge of the statute or specific intent to violate it. In addition, the Affordable Care Act provides that 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 civil False Claims Act (discussed below) or the civil monetary penalties statute, which imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.
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The federal civil False Claims Act prohibits any person from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds; knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government; or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the statute and to share in any monetary recovery. Many pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements with the federal government under the civil False Claims Act for a variety of alleged improper marketing activities, including: providing free product to customers with the expectation that the customers would bill federal programs for the product; providing sham consulting fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices reported to private price publication services, which are used to set drug payment rates under government healthcare programs. In addition, in recent years the government has pursued civil False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted as a result of the marketing of their products for unapproved, and thus non-reimbursable, uses. False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties in the tens of thousands of dollars. Pharmaceutical and other healthcare companies also are subject to other federal false claim laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.
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HIPAA created federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors,
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Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to items or services reimbursed under Medicaid and other state programs or, in several states, apply regardless of the payor. Some state laws also require pharmaceutical companies to report expenses relating to the marketing and promotion of pharmaceutical products and to report gifts and payments to certain healthcare providers in the states. Other states prohibit providing meals to prescribers or other marketing related activities. Other states restrict the ability of manufacturers to offer co-pay support to patients for certain prescription drugs. Still other states and cities require identification or licensing of sales representatives. In addition, California, Connecticut, Nevada and Massachusetts require pharmaceutical companies to implement compliance programs or marketing codes of conduct.
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The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, requires certain pharmaceutical manufacturers to engage in extensive tracking of payments and other transfers of value to physicians and teaching hospitals, and to submit such data to CMS, which will then make all of this data publicly available on the CMS website. Pharmaceutical manufacturers with products for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program are required to track reportable payments and must submit a report to CMS on or before the 90th day of each calendar year disclosing reportable payments made in the previous calendar year. Failure to comply with the reporting obligations may result in civil monetary penalties.
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The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties, or international organizations with the intent to obtain or retain business or seek a business advantage. Recently, there has been a substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent and aggressive investigations and enforcement proceedings by both DOJ and the U.S. Securities and Exchange Commission (SEC). Violations of United States or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor or other third-party relationships, termination of necessary licenses and permits and other legal or equitable sanctions. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence.
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significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates or one or more of our other research and development initiatives;
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seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;
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sell or license on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves; or
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seek bankruptcy protection which may result in the termination of agreements pursuant to which we license important intellectual property rights including our exclusive collaboration agreements with Intrexon.
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continue our research and pre-clinical and clinical development of our product candidates;
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initiate additional pre-clinical, clinical or other studies or trials for our product candidates, including under our collaboration agreements with Intrexon;
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continue or expand our collaborations with Intrexon and our other collaborators;
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further develop the manufacturing process for our product candidates;
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continue to maintain a cGMP manufacturing facility;
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change or add additional manufacturers or suppliers;
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seek regulatory approvals for our product candidates that successfully complete clinical trials;
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establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval;
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seek to identify and validate additional product candidates;
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acquire or in-license other product candidates and technologies;
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maintain, protect and expand our intellectual property portfolio;
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attract and retain skilled personnel;
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create additional infrastructure to support our product development and planned future commercialization efforts; and
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experience any delays or encounter issues with any of the above.
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completing research and pre-clinical and clinical development of our product candidates;
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seeking and obtaining regulatory approvals for product candidates for which we complete clinical trials;
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developing a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates;
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establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support clinical development and the market demand for our product candidates, if approved;
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launching and commercializing product candidates for which we obtain regulatory approval, either by collaborating with a partner or, if launched independently, by establishing a sales force, marketing, sales operations and distribution infrastructure;
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obtaining market acceptance of our product candidates and cell therapy and gene therapy as viable treatment options;
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addressing any competing technological and market developments;
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implementing additional internal systems and infrastructure, as needed;
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identifying and validating new product candidates;
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negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;
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maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and
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attracting, hiring and retaining qualified personnel.
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our default in a payment obligation under the Notes;
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our default in a payment obligation under our other debt in excess of $5 million;
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our breach of the restrictive covenants or other terms of the Notes;
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certain specified insolvency and bankruptcy-related events; and
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our common stock ceasing to be listed or quoted on Nasdaq or another national securities exchange.
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pay cash dividends or make distributions on our capital stock or redeem or repurchase our capital stock;
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create, assume or suffer to exist at any time any lien upon any of our properties or assets;
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assign any accounts or other right to receive income;
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incur any senior and
pari passu
debt;
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enter into transactions with affiliates other than on terms and conditions approved by a majority of the disinterested members of our board of directors (the Board); and
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use the proceeds of the 2016 Private Placement or Series A Preferred Stock Offering (as defined below) for any purpose other than solely for the continued pre-clinical and clinical development of our product candidates and for other general corporate purposes.
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up to 5,280,370 shares of our common stock could be issuable by us in connection with the conversion of principal under the Notes; plus
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up to 2,581,843 shares of our common stock could be issuable by us in satisfaction of our interest payment obligations under the Notes; plus
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up to 6,029,174 shares of our common stock could be issuable by us in connection with the exercise of the Private Placement Warrants; plus
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up to 3,432,000 shares of our common stock could be issuable by us in connection with the conversion of the shares of Series A Preferred Stock; plus
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up to 3,437,334 shares of our common stock could be issuable by us in connection with the exercise of the March 2017 Warrants; plus
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up to 2,416,104 shares of common stock could be issuable by us in connection with the exercise of the December 2017 Pre-Funded Warrants; plus
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up to 436,364 shares of our common stock could be issuable by us in connection with the exercise of the December 2017 Underwriter Warrants; plus
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up to 14,046,950 shares of our common stock could be issuable by us in connection with the exercise of the December 2017 Common Warrants.
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a limited availability of market quotations for our securities;
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a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and little or no analyst coverage for us;
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we would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; and
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a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or obtain additional financing in the future.
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test short-term safety;
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establish biological plausibility;
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identify biologically active dose levels;
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establish feasibility and reasonable safety of the investigational product’s proposed clinical route of administration;
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identify physiologic parameters that can guide clinical monitoring; and/or
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establish proof of concept, or the feasibility and rationale for use of an investigational product in the targeted patient population.
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severity of the disease under investigation;
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design of the study protocol;
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prevalence of the disease/size of the patient population;
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eligibility criteria for the clinical trial in question;
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perceived risks and benefits of the product candidate under study;
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proximity and availability of clinical trial sites for prospective patients;
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availability of competing therapies and clinical trials;
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efforts to facilitate timely enrollment in clinical trials;
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patient referral practices of physicians; and
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ability to monitor patients adequately during and after treatment.
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delays in obtaining regulatory approvals to commence a study or trial;
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delays in identifying and reaching agreement on acceptable terms with prospective clinical trial sites;
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delays or failures in obtaining approval of our clinical trial protocol from an IRB to conduct a clinical trial at a prospective study site;
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delays in the enrollment of patients;
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manufacturing difficulties;
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failure of our clinical trials and clinical investigators to be in compliance with the FDA’s GCP;
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failure of our third-party contract research organizations, clinical site organizations or other clinical trial managers, to satisfy their contractual duties, comply with regulations or meet expected deadlines;
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lack of efficacy during clinical trials; or
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unforeseen safety issues.
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administrative or judicial enforcement actions;
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changes to advertising;
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failure to obtain regulatory approvals for our product candidates;
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revocation or suspension of regulatory approvals of products;
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product seizures or recalls;
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court-ordered injunctions;
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import detentions;
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delay, interruption or suspension of product manufacturing, distribution, marketing and sales; or
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civil or criminal sanctions.
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incurring substantial expenses, including fines, penalties, legal fees and costs to comply with the FDA’s requirements;
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changes in the methods of marketing and selling products;
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taking FDA mandated corrective action, which may include placing advertisements or sending letters to physicians rescinding previous advertisements or promotions; or
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disruption in the distribution of products and loss of sales until compliance with the FDA’s position is obtained.
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The efficacy, safety and other potential advantages in relation to alternative treatments;
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The relative convenience and ease of administration;
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The availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid;
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The prevalence and severity of adverse events;
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The cost of treatment in relation to alternative treatments, including generic or biosimilar products;
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The extent and strength of our third party manufacturer and supplier support;
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The extent and strength of marketing and distribution support;
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The limitations or warnings contained in a product’s FDA approved labeling; and
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Distribution and use restrictions imposed by the FDA or to which we agree as part of a mandatory REMS or voluntary risk management plan
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changes in federal, state or foreign government regulations or private third-party payors’ reimbursement policies;
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pressure by employers on private health insurance plans to reduce costs; and
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consolidation and increasing assertiveness of payors, including managed care organizations, health insurers, pharmacy benefit managers, government health administration authorities, private health insurers and other organizations, seeking price discounts or rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or biologics pricing determined based on perceived value.
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availability, performance, or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier;
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capacity of our facility and those of contract manufacturer;
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the performance of information technology systems;
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compliance with regulatory requirements;
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inclement weather and natural disasters;
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changes in forecasts of future demand for product components;
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timing and actual number of production runs for product components;
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potential facility contamination by microorganisms or viruses;
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updating of manufacturing specifications; and
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product quality success rates and yields.
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others may be able to make biologics that are the same as or similar to our product candidates, but that are not covered by the claims of the patents that we own or have exclusively licensed;
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we or our licensors or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed;
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we or our licensors might not have been the first to file patent applications covering certain of our inventions;
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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;
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our competitors might conduct research and development activities in the U.S. 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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we may not develop additional proprietary technologies that are patentable; and
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the patents of others may have an adverse effect on our business.
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The federal Anti-Kickback Statute, which constrains our business activities, including our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities, by prohibiting, among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual or the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;
|
•
|
Federal civil false claims laws and civil monetary penalty laws, which prohibit, individuals or entities from, among other things, knowingly presenting, or causing to be presented, claims for payment of government funds, or other third-party payors that are false or fraudulent. Criminal prosecution is also possible for making or presenting a false or fictitious or fraudulent claim to the federal government;
|
•
|
HIPAA’s anti-fraud provisions, which prohibit, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
•
|
HIPAA’s privacy and security provisions, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;
|
•
|
The federal Physician Payment Sunshine Act (implemented as the Open Payments program), which requires pharmaceutical manufacturers to report annually to CMS for certain “transfers of value” made to teaching hospitals and physicians and any ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations during the preceding calendar year; and
|
•
|
State and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government that otherwise restricts certain payments that may be made to healthcare providers and entities; state laws that require drug manufacturers to report information related to payments and other transfer of value to physicians and other healthcare providers and entities; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
|
•
|
whether our clinical trials can be conducted within the timeframe that we expect and whether such trials will yield positive results;
|
•
|
whether our collaborations with Intrexon can be advanced with positive results within the timeframe and budget that we expect;
|
•
|
changes in laws or regulations applicable to our products or product candidates, including but not limited to clinical trial requirements for approvals;
|
•
|
unanticipated serious safety concerns related to the use of our product candidates;
|
•
|
a decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;
|
•
|
our ability to increase our manufacturing capacity and reduce our manufacturing costs through the improvement of our manufacturing process, our ability to validate any such improvements with the relevant regulatory agencies and our ability to accomplish the foregoing on a timely basis;
|
•
|
adverse regulatory decisions;
|
•
|
the introduction of new products or technologies offered by us or our competitors;
|
•
|
negative public opinion or perception of cell and gene therapies;
|
•
|
the inability to effectively manage our growth;
|
•
|
actual or anticipated variations in quarterly operating results;
|
•
|
the failure to meet or exceed the estimates and projections of the investment community;
|
•
|
the perception of the biopharmaceutical industry by the public, legislatures, regulators and the investment community;
|
•
|
the overall performance of the U.S. equity capital markets and general political and economic conditions;
|
•
|
announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments by us or our competitors;
|
•
|
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
|
•
|
additions or departures of key personnel;
|
•
|
the trading volume of our common stock; and
|
•
|
other events or factors, many of which are beyond our control.
|
•
|
the timing, implementation and cost of our research, pre-clinical studies and clinical trials;
|
•
|
expenses in connection with our exclusive channel collaboration agreements with Intrexon;
|
•
|
the timely and successful implementation of improved manufacturing processes;
|
•
|
our ability to attract and retain personnel with the necessary strategic, technical and creative skills required for effective operations;
|
•
|
the amount and timing of expenditures by practitioners and their patients;
|
•
|
introduction of new technologies;
|
•
|
product liability litigation, class action and derivative action litigation, or other litigation;
|
•
|
the amount and timing of capital expenditures and other costs relating to the expansion of our operations;
|
•
|
the state of the debt and/or equity capital markets at the time of any proposed offering we choose to initiate;
|
•
|
our ability to successfully integrate new acquisitions into our operations;
|
•
|
government regulation and legal developments regarding our product candidates in the United States and in the foreign countries in which we may operate in the future; and
|
•
|
general economic conditions.
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2017
|
|
|
|
|
|
||
First Quarter
|
$
|
3.51
|
|
|
$
|
1.86
|
|
Second Quarter
|
$
|
4.64
|
|
|
$
|
1.80
|
|
Third Quarter
|
$
|
4.17
|
|
|
$
|
2.41
|
|
Fourth Quarter
|
$
|
3.29
|
|
|
$
|
0.61
|
|
Year Ended December 31, 2016
|
|
|
|
|
|
||
First Quarter
|
$
|
13.86
|
|
|
$
|
6.12
|
|
Second Quarter
|
$
|
11.34
|
|
|
$
|
2.73
|
|
Third Quarter
|
$
|
4.14
|
|
|
$
|
2.10
|
|
Fourth Quarter
|
$
|
3.15
|
|
|
$
|
1.56
|
|
|
Year Ended December 31,
|
|
2017 vs 2016 Change
|
|
||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$
|
%
|
|
|||||||
Revenue from product sales
|
$
|
—
|
|
|
$
|
337
|
|
|
$
|
(337
|
)
|
(100.0
|
)%
|
(1)
|
Collaboration revenue
|
—
|
|
|
18
|
|
|
(18
|
)
|
(100.0
|
)%
|
(1)
|
|||
Total revenue
|
—
|
|
|
355
|
|
|
(355
|
)
|
(100.0
|
)%
|
|
|||
Cost of product sales
|
—
|
|
|
696
|
|
|
(696
|
)
|
(100.0
|
)%
|
(1)
|
|||
Cost of collaboration revenue
|
—
|
|
|
1
|
|
|
(1
|
)
|
(100.0
|
)%
|
(1)
|
|||
Total cost of revenue
|
—
|
|
|
697
|
|
|
(697
|
)
|
(100.0
|
)%
|
|
|||
Gross loss
|
$
|
—
|
|
|
$
|
(342
|
)
|
|
342
|
|
(100.0
|
)%
|
|
(1)
|
As a result of the wind-down of azficel-T operations in the second half of 2016, we have no products for sale. Therefore in the year ended December 31, 2017 we had no revenues or related cost of revenue.
|
|
Year Ended December 31,
|
2017 vs 2016 Change
|
|
|
|||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$
|
%
|
|
|
|||||||
Direct costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||
FCX-007
|
4,350
|
|
|
3,216
|
|
|
1,134
|
|
35.3
|
%
|
|
(1)
|
|||
FCX-013
|
3,117
|
|
|
1,534
|
|
|
1,583
|
|
103.2
|
%
|
|
(2)
|
|||
Other
|
72
|
|
|
366
|
|
|
(294
|
)
|
(80.3
|
)%
|
|
(3)
|
|||
Total direct costs
|
7,539
|
|
|
5,116
|
|
|
2,423
|
|
47.4
|
%
|
|
|
|||
Indirect costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Regulatory costs
|
91
|
|
|
762
|
|
|
(671
|
)
|
(88.1
|
)%
|
|
(4)
|
|||
Intangible amortization
|
—
|
|
|
231
|
|
|
(231
|
)
|
(100.0
|
)%
|
|
(5)
|
|||
Compensation and related expenses
|
2,031
|
|
|
3,267
|
|
|
(1,236
|
)
|
(37.8
|
)%
|
|
(6)
|
|||
Process development
|
7
|
|
|
1,014
|
|
|
(1,007
|
)
|
(99.3
|
)%
|
|
(7)
|
|||
Other indirect R&D costs
|
2,564
|
|
|
1,734
|
|
|
830
|
|
47.9
|
%
|
|
(8)
|
|||
Total indirect costs
|
4,693
|
|
|
7,008
|
|
|
(2,315
|
)
|
(33.0
|
)%
|
|
|
|||
Total research and development expenses
|
$
|
12,232
|
|
|
$
|
12,124
|
|
|
$
|
108
|
|
0.9
|
%
|
|
|
(1)
|
Costs for our FCX-007 program increased approximately
$1.1 million
, or
35.3%
, for the year ended December 31, 2017 compared to 2016 due primarily to costs associated with the Phase 1 portion of our Phase 1/2 clinical trial for FCX-007 in adults which began in the second quarter of 2016 and continued throughout 2017.
|
(2)
|
Costs for our FCX-013 program for the year ended December 31, 2017 increased approximately $1.6 million, or 103.2% compared to 2016 due primarily to costs associated with a pre-clinical dose-ranging study and a toxicology study.
|
(3)
|
Costs for our other programs decreased approximately $0.3 million or 80.3%, for the year ended December 31, 2017 compared to 2016. The azficel-T for chronic dysphonia program was discontinued at June 30, 2016 and the costs recorded since then relate to specific close out activities of the program.
|
(4)
|
Regulatory costs decreased approximately
$0.7 million
, or
88.1%
, for the year ended December 31, 2017 compared to 2016 due primarily to a decrease in costs incurred with the FDA for fees levied under the Prescription Drug User Fee Act (PDUFA). The decrease in fees resulted from our decision to wind-down azficel-T (including LAVIV), which began in the fourth quarter of 2016, exempted us from being assessed annual product registration and establishment fees imposed under PDUFA, which resulted in substantial cost savings.
|
(5)
|
Intangible asset amortization decreased approximately
$0.2 million
, or
100.0%
, for the year ended December 31, 2017 compared to 2016 due to the impairment of our intangible assets during the second quarter of 2016 which resulted in no amortization expense during the second half of 2016 or all of 2017. See Note 3 in the accompanying Notes to the Consolidated Financial Statements contained in this Form 10-K for further details.
|
(6)
|
Compensation and related expenses decreased approximately
$1.2 million
, or
37.8%
, for the year ended December 31, 2017 compared to 2016, due primarily to decreases in salaries, benefits and bonus expense resulting from the reduction in workforce associated with the wind-down of azficel-T operations which occurred in June 2016.
|
(7)
|
Process development costs decreased approximately
$1.0 million
, or
99.3%
, for the year ended December 31, 2017 compared to 2016, as a result primarily of internal process development work being halted in June 2016 in connection with the wind-down of azficel-T operations and related restructuring initiatives.
|
(8)
|
Other indirect R&D costs increased approximately
$0.8 million
, or
47.9%
, for the year ended December 31, 2017 compared to 2016, due primarily to the inclusion of costs for overhead items that were previously part of the cost of products sold computation.
|
|
Year Ended December 31,
|
|
2017 vs 2016 Change
|
|
|
||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$
|
%
|
|
|
|||||||
Compensation and related expenses
|
$
|
1,764
|
|
|
$
|
4,695
|
|
|
(2,931
|
)
|
(62.4
|
)%
|
|
(1)
|
|
Professional fees
|
2,103
|
|
|
2,161
|
|
|
(58
|
)
|
(2.7
|
)%
|
|
(2)
|
|||
Facilities and related expenses and other
|
2,882
|
|
|
2,917
|
|
|
(35
|
)
|
(1.2
|
)%
|
|
(3)
|
|||
Total selling, general and administrative expenses
|
$
|
6,749
|
|
|
$
|
9,773
|
|
|
$
|
(3,024
|
)
|
(30.9
|
)%
|
|
|
(1)
|
Compensation and related expenses decreased approximately $2.9 million, or 62.4% for the year ended December 31, 2017 compared to 2016. The decrease is due primarily to reductions in employee count and their related expenses, all as part of a reduction in workforce at June 30, 2016, and management reorganization and reduction later into 2016 and early 2017.
|
(2)
|
Professional fees decreased approximately $0.06 million, or 2.7%, for the year ended December 31, 2017 compared to 2016. This decrease is attributable primarily to lower levels of business activity.
|
(3)
|
Facilities and related expenses were approximately $2.9 million for both of the years ending December 31, 2017 and 2016.
|
|
As of December 31,
|
|
Change
|
||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$
|
%
|
|||||||
Cash and cash equivalents
|
$
|
17,417
|
|
|
$
|
17,515
|
|
|
$
|
(98
|
)
|
(0.6
|
)%
|
|
|
|
|
|
|
|
|||||||
Working capital:
|
|
|
|
|
|
|
|||||||
Total current assets
|
$
|
17,902
|
|
|
$
|
18,028
|
|
|
$
|
(126
|
)
|
(0.7
|
)%
|
Less: Total current liabilities
|
4,425
|
|
|
2,987
|
|
|
1,438
|
|
48.1
|
%
|
|||
Net working capital
|
$
|
13,477
|
|
|
$
|
15,041
|
|
|
$
|
(1,564
|
)
|
(10.4
|
)%
|
|
|
|
|
|
|
|
|||||||
Convertible notes payable (gross principal)
|
$
|
18,003
|
|
|
$
|
18,088
|
|
|
$
|
(85
|
)
|
(0.5
|
)%
|
•
|
the cost of clinical activities and outcomes related to our Phase 1/2 clinical trial for FCX-007;
|
•
|
the costs of clinical activities related to FCX-013, for which we received FDA allowance for our IND in the first quarter of 2018;
|
•
|
the cost of additional pre-clinical studies and clinical trials in order to obtain regulatory approvals for our product candidates;
|
•
|
the cost of regulatory submissions, as well as the preparation, initiation and execution of clinical trials in potential new clinical indications; and
|
•
|
the cost of filing, surveillance around, prosecuting, defending and enforcing patent claims.
|
•
|
significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates or one or more of our other research and development initiatives;
|
•
|
seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; or
|
•
|
sell or license on unfavorable terms our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves.
|
|
Year Ended December 31,
|
|
2017 vs 2016 Change
|
||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$
|
%
|
|||||||
Net cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|||||
Operating activities
|
$
|
(17,037
|
)
|
|
$
|
(29,390
|
)
|
|
$
|
12,353
|
|
(42.0
|
)%
|
Investing activities
|
$
|
(433
|
)
|
|
$
|
(252
|
)
|
|
$
|
(181
|
)
|
71.8
|
%
|
Financing activities
|
$
|
17,372
|
|
|
$
|
17,889
|
|
|
$
|
(517
|
)
|
(2.9
|
)%
|
|
Payments due by period
|
||||||||||||||||||||||||||
($ in thousands)
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and
thereafter
|
||||||||||||||
Operating lease obligations (1)
|
$
|
7,451
|
|
|
$
|
1,254
|
|
|
$
|
1,416
|
|
|
$
|
1,471
|
|
|
$
|
1,471
|
|
|
$
|
1,471
|
|
|
$
|
368
|
|
Debt obligations (2)
|
21,968
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,968
|
|
|
—
|
|
|
—
|
|
|||||||
Total (3)
|
$
|
29,419
|
|
|
$
|
1,254
|
|
|
$
|
1,416
|
|
|
$
|
1,471
|
|
|
$
|
23,439
|
|
|
$
|
1,471
|
|
|
$
|
368
|
|
(1)
|
Operating lease obligations are stated based on the amended lease agreement for our office, warehouse and laboratory facility executed in February 2012.
|
(2)
|
Obligations under the Notes issued in connection with the 2016 Private Placement which includes principal and accrued interest through September 7, 2021, based on stated fixed rates, as we have elected to accrue interest. The Notes have a maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty (180) days after the date on which our product candidate, FCX-007, is approved by the FDA for the treatment of RDEB. However, each Note holder has the right to require us to repay all or any portion of the unpaid principal and accrued interest from time to time on or after September 7, 2021. See details under the sub-heading “
2016 Private Placement”
below.
|
(3)
|
This table does not include (a) any milestone payments which may become payable to third parties under license agreements as the timing and likelihood of such payments are not known, (b) any royalty payments to third parties as the amounts of such payments, timing and/or the likelihood of such payments are not known, and (c) contracts that are entered into in the ordinary course of business which are not material in the aggregate in any period presented above.
|
EXHIBIT
NO. |
|
IDENTIFICATION OF EXHIBIT
|
|
2.1
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
3.6
|
|
|
|
3.7
|
|
|
|
3.8
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
4.9
|
|
|
|
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
|
|
t
|
|
10.14
|
|
U
|
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
U
|
|
10.19
|
|
U
|
|
10.20
|
|
U
|
|
10.21
|
|
U
|
|
10.22
|
|
U
|
|
10.23
|
|
|
*
|
Filed herewith.
|
U
|
Indicates management contract or compensatory plan or arrangement.
|
t
|
Confidential treatment has been granted as to certain portions of this exhibit pursuant to Rule 406 of the Securities Act of 1933, as amended, or Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|
FIBROCELL SCIENCE, INC.
|
|
|
|
|
|
By:
|
/s/ John M. Maslowski
|
|
|
John M. Maslowski
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date: March 19, 2018
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ John M. Maslowski
|
|
President and Chief Executive Officer
|
|
March 19, 2018
|
John M. Maslowski
|
|
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Douglas J. Swirsky
|
|
Chairman of the Board
|
|
March 19, 2018
|
Douglas J. Swirsky
|
|
|
|
|
|
|
|
|
|
/s/ Kelvin Moore
|
|
Director
|
|
March 19, 2018
|
Kelvin Moore
|
|
|
|
|
|
|
|
|
|
/s/ Marc Mazur
|
|
Director
|
|
March 19, 2018
|
Marc Mazur
|
|
|
|
|
|
|
|
|
|
/s/ Julian Kirk
|
|
Director
|
|
March 19, 2018
|
Julian Kirk
|
|
|
|
|
|
|
|
|
|
/s/ Marcus Smith
|
|
Director
|
|
March 19, 2018
|
Marcus Smith
|
|
|
|
|
|
|
|
|
|
/s/ Christine St.Clare
|
|
Director
|
|
March 19, 2018
|
Christine St.Clare
|
|
|
|
|
|
PAGE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
17,417
|
|
|
$
|
17,515
|
|
Prepaid expenses and other current assets
|
485
|
|
|
513
|
|
||
Total current assets
|
17,902
|
|
|
18,028
|
|
||
Property and equipment, net of accumulated depreciation of $1,919 and $1,561, respectively
|
1,470
|
|
|
1,489
|
|
||
Other assets
|
39
|
|
|
65
|
|
||
Total assets
|
$
|
19,411
|
|
|
$
|
19,582
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
862
|
|
|
$
|
440
|
|
Related party payable
|
2,303
|
|
|
942
|
|
||
Accrued expenses
|
1,260
|
|
|
1,551
|
|
||
Warrant liability, current
|
—
|
|
|
54
|
|
||
Total current liabilities
|
4,425
|
|
|
2,987
|
|
||
Convertible promissory notes, net of debt discount of $18,003 and $18,088, respectively (see Note 7)
|
—
|
|
|
—
|
|
||
Accrued interest payable
|
967
|
|
|
228
|
|
||
Warrant liability, long term
|
1,073
|
|
|
5,980
|
|
||
Derivative liability
|
3,136
|
|
|
1,735
|
|
||
Deferred rent
|
803
|
|
|
791
|
|
||
Total liabilities
|
10,404
|
|
|
11,721
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 8,000 shares issued and outstanding as of December 31, 2017; 5,000,000 shares authorized, no shares issued and outstanding as of December 31, 2016; aggregate liquidation preference of $8,264 at December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 150,000,000 shares authorized, 25,940,247 shares issued and
outstanding as of December 31, 2017; 150,000,000 shares authorized, 14,688,135 shares issued
and outstanding as of December 31, 2016
|
26
|
|
|
15
|
|
||
Additional paid-in capital
|
187,784
|
|
|
170,409
|
|
||
Accumulated deficit
|
(178,803
|
)
|
|
(162,563
|
)
|
||
Total stockholders’ equity
|
9,007
|
|
|
7,861
|
|
||
Total liabilities and stockholders’ equity
|
$
|
19,411
|
|
|
$
|
19,582
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenue from product sales
|
$
|
—
|
|
|
$
|
337
|
|
Collaboration revenue
|
—
|
|
|
18
|
|
||
Total revenue
|
—
|
|
|
355
|
|
||
Cost of product sales
|
—
|
|
|
696
|
|
||
Cost of collaboration revenue
|
—
|
|
|
1
|
|
||
Total cost of revenue
|
—
|
|
|
697
|
|
||
Gross loss
|
—
|
|
|
(342
|
)
|
||
Research and development expenses
|
6,512
|
|
|
8,400
|
|
||
Research and development expenses - related party
|
5,720
|
|
|
3,724
|
|
||
Selling, general and administrative expenses
|
6,749
|
|
|
9,773
|
|
||
Intangible asset impairment expense
|
—
|
|
|
3,905
|
|
||
Restructuring costs
|
—
|
|
|
335
|
|
||
Operating loss
|
(18,981
|
)
|
|
(26,479
|
)
|
||
Other income (expense):
|
|
|
|
|
|
||
Warrant revaluation income
|
4,920
|
|
|
11,884
|
|
||
Derivative revaluation expense
|
(1,407
|
)
|
|
(462
|
)
|
||
Interest expense
|
(828
|
)
|
|
(228
|
)
|
||
Other income (expense), net
|
56
|
|
|
(7
|
)
|
||
Loss before income taxes
|
(16,240
|
)
|
|
(15,292
|
)
|
||
Income tax benefit
|
—
|
|
|
—
|
|
||
Net loss
|
(16,240
|
)
|
|
$
|
(15,292
|
)
|
|
Dividend paid in-kind to preferred stockholders
|
(264
|
)
|
|
—
|
|
||
Deemed dividend on preferred stock (see Note 9)
|
(4,099
|
)
|
|
—
|
|
||
Net loss attributable to common stockholders
|
$
|
(20,603
|
)
|
|
$
|
(15,292
|
)
|
|
|
|
|
||||
Per Share Information:
|
|
|
|
|
|
||
Net loss
|
|
|
|
||||
— Basic
|
$
|
(1.33
|
)
|
|
$
|
(1.04
|
)
|
— Diluted
|
$
|
(1.33
|
)
|
|
$
|
(1.18
|
)
|
|
|
|
|
||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
||
— Basic
|
15,454,199
|
|
|
14,641,528
|
|
||
— Diluted
|
15,460,118
|
|
|
14,647,534
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional
paid-in capital
|
|
Accumulated deficit
|
|
Total Equity
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||
Balance, December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
14,634,855
|
|
|
$
|
15
|
|
|
$
|
161,359
|
|
|
$
|
(147,171
|
)
|
|
$
|
14,203
|
|
Cumulative effect from adoption of new accounting standard (Note 3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|
(100
|
)
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,933
|
|
|
—
|
|
|
1,933
|
|
|||||
Issuance of shares under “At-The-Market” equity program, net of offering costs
|
—
|
|
|
—
|
|
|
53,280
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Intrinsic value of beneficial ownership conversion feature, net of issuance costs (Note 7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,017
|
|
|
—
|
|
|
7,017
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,292
|
)
|
|
(15,292
|
)
|
|||||
Balance, December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
14,688,135
|
|
|
$
|
15
|
|
|
$
|
170,409
|
|
|
$
|
(162,563
|
)
|
|
$
|
7,861
|
|
Issuance of Series A convertible preferred stock with detachable warrants net of issuance costs of $377
|
8,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,623
|
|
|
—
|
|
|
7,623
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
322
|
|
|
—
|
|
|
322
|
|
|||||
Exercise of liability-classified warrants
|
—
|
|
|
—
|
|
|
6,941
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
41
|
|
|||||
Conversion of promissory notes
|
—
|
|
|
—
|
|
|
24,911
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|||||
Issuance of common stock with detachable warrants net of issuance costs $1,175
|
—
|
|
|
—
|
|
|
11,220,260
|
|
|
11
|
|
|
9,294
|
|
|
—
|
|
|
9,305
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,240
|
)
|
|
(16,240
|
)
|
|||||
Balance, December 31, 2017
|
8,000
|
|
|
$
|
—
|
|
|
25,940,247
|
|
|
$
|
26
|
|
|
$
|
187,784
|
|
|
$
|
(178,803
|
)
|
|
$
|
9,007
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(16,240
|
)
|
|
$
|
(15,292
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||
Stock-based compensation expense
|
322
|
|
|
1,933
|
|
||
Warrant liability revaluation income
|
(4,920
|
)
|
|
(11,884
|
)
|
||
Derivative liability revaluation expense
|
1,407
|
|
|
462
|
|
||
Loss on disposal or impairment of property and equipment
|
40
|
|
|
69
|
|
||
Depreciation and amortization
|
384
|
|
|
564
|
|
||
Amortization of discount on convertible debt converted to common shares
|
86
|
|
|
—
|
|
||
Intangible asset impairment
|
—
|
|
|
3,905
|
|
||
Recovery of doubtful accounts
|
—
|
|
|
(12
|
)
|
||
Loss on write-down of inventory
|
—
|
|
|
356
|
|
||
Decrease (increase) in operating assets:
|
|
|
|
|
|
||
Accounts receivable
|
—
|
|
|
12
|
|
||
Inventory
|
—
|
|
|
126
|
|
||
Prepaid expenses and other current assets
|
28
|
|
|
796
|
|
||
Other assets
|
26
|
|
|
(65
|
)
|
||
Increase (decrease) in operating liabilities:
|
|
|
|
||||
Accounts payable
|
69
|
|
|
(139
|
)
|
||
Related party payable
|
1,361
|
|
|
(9,778
|
)
|
||
Accrued expenses and deferred rent
|
(342
|
)
|
|
(214
|
)
|
||
Accrued interest payable
|
742
|
|
|
228
|
|
||
Deferred revenue
|
—
|
|
|
(457
|
)
|
||
Net cash used in operating activities
|
(17,037
|
)
|
|
(29,390
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchase of property and equipment
|
(433
|
)
|
|
(253
|
)
|
||
Proceeds from the sale of property and equipment
|
—
|
|
|
1
|
|
||
Net cash used in investing activities
|
(433
|
)
|
|
(252
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from private placement, net
|
7,623
|
|
|
17,933
|
|
||
Proceeds from common stock offering, net
|
9,749
|
|
|
—
|
|
||
Payment of deferred offering costs
|
—
|
|
|
(42
|
)
|
||
Principal payments on capital lease obligations
|
—
|
|
|
(2
|
)
|
||
Net cash provided by financing activities
|
17,372
|
|
|
17,889
|
|
||
Net decrease in cash and cash equivalents
|
(98
|
)
|
|
(11,753
|
)
|
||
Cash and cash equivalents, beginning of period
|
17,515
|
|
|
29,268
|
|
||
Cash and cash equivalents, end of period
|
$
|
17,417
|
|
|
$
|
17,515
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Property and equipment in accounts payable
|
$
|
29
|
|
|
$
|
57
|
|
Offering costs in accounts payable and accrued expenses
|
$
|
444
|
|
|
$
|
23
|
|
Reduction of warrant liability upon cashless exercise of warrants
|
$
|
41
|
|
|
$
|
—
|
|
Reduction of accrued interest payable upon cashless exercise of promissory notes
|
$
|
3
|
|
|
$
|
—
|
|
Reduction in derivative liability upon cashless exercise of promissory notes
|
$
|
6
|
|
|
$
|
—
|
|
Cashless exercise of promissory notes
|
$
|
85
|
|
|
$
|
—
|
|
Dividend paid in-kind to preferred stockholders
|
$
|
264
|
|
|
$
|
—
|
|
Deemed dividend on preferred stock
|
$
|
4,099
|
|
|
$
|
—
|
|
Property and equipment category
|
|
Useful life
|
Computer equipment and software
|
|
3 years
|
Laboratory equipment
|
|
6 years
|
Furniture and fixtures
|
|
10 years
|
Leasehold improvements
|
|
Lesser of remaining lease term or life of asset
|
|
December 31,
|
||||||
($ in thousands)
|
2017
|
|
2016
|
||||
Laboratory equipment
|
$
|
1,514
|
|
|
$
|
1,429
|
|
Computer equipment and software
|
318
|
|
|
313
|
|
||
Furniture and fixtures
|
44
|
|
|
44
|
|
||
Leasehold improvements
|
1,412
|
|
|
1,228
|
|
||
Construction-in-process
|
101
|
|
|
36
|
|
||
Total property and equipment, gross
|
3,389
|
|
|
3,050
|
|
||
Less: Accumulated depreciation
|
(1,919
|
)
|
|
(1,561
|
)
|
||
Total property and equipment, net
|
$
|
1,470
|
|
|
$
|
1,489
|
|
|
December 31,
|
||||||
($ in thousands)
|
2017
|
|
2016
|
||||
Accrued professional fees
|
$
|
322
|
|
|
$
|
526
|
|
Accrued compensation
|
462
|
|
|
631
|
|
||
Accrued other
|
476
|
|
|
394
|
|
||
Total accrued expenses
|
$
|
1,260
|
|
|
$
|
1,551
|
|
($ in thousands)
|
December 31,
|
||||||
2017
|
|
2016
|
|||||
Convertible promissory notes
|
$
|
18,003
|
|
|
$
|
18,088
|
|
Debt discount - warrants
|
(9,598
|
)
|
|
(9,643
|
)
|
||
Debt discount - compound bifurcated derivatives
|
(1,267
|
)
|
|
(1,273
|
)
|
||
Debt discount - beneficial conversion feature
|
(7,138
|
)
|
|
(7,172
|
)
|
||
Convertible promissory notes, net
|
$
|
—
|
|
|
$
|
—
|
|
($ in thousands except per share data)
|
December 31, 2017
|
December 31, 2016
|
||||
Calculated aggregate value
|
$
|
3,136
|
|
$
|
1,735
|
|
Closing price per share of common stock
|
$
|
0.64
|
|
$
|
1.89
|
|
Contractual remaining term
|
8 years, 8 months
|
|
9 years, 8 months
|
|
||
Contractual interest rate
|
4.0
|
%
|
4.0
|
%
|
||
Volume-weighted average conversion rate
|
$
|
3.40933
|
|
$
|
3.40985
|
|
Risk-free interest rate (term structure)
|
1.28% - 2.40%
|
|
.44% - 2.45%
|
|
||
Dividend yield
|
—
|
|
—
|
|
||
Credit Rating
|
CC
|
|
CC
|
|
||
Credit Spread
|
36.98
|
%
|
33.27
|
%
|
||
Volatility
|
99.0
|
%
|
99.9
|
%
|
|
Number of Warrants
|
|
|
|
|
||||||
|
December 31, 2017
|
|
December 31, 2016
|
|
Exercise
Price
|
|
Expiration Dates
|
||||
Liability-classified Warrants
|
|
|
|
|
|
|
|
||||
Issued in Series E Preferred Stock offering (1)
|
—
|
|
|
71,430
|
|
|
$
|
2.10
|
|
|
Dec 2017
|
Issued with June 2012 Convertible Notes
|
375,194
|
|
|
375,194
|
|
|
$
|
7.50
|
|
|
Jun 2018
|
Issued in Series E Preferred Stock offering
|
523,045
|
|
|
523,045
|
|
|
$
|
22.50
|
|
|
Dec 2018
|
Issued with September 2016 Convertible Notes
|
6,029,174
|
|
|
6,029,174
|
|
|
$
|
4.50
|
|
|
Sep 2021
|
|
6,927,413
|
|
|
6,998,843
|
|
|
|
|
|
||
Equity-classified Warrants
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Issued in 2017 Series A Preferred Stock Offering
|
3,437,334
|
|
|
—
|
|
|
$
|
2.54
|
|
|
Mar 2022
|
Issued in 2017 Common Stock Offering - common warrants
|
14,046,950
|
|
|
—
|
|
|
$
|
0.77
|
|
|
Dec 2022
|
Issued in 2017 Common Stock Offering - underwriter warrants
|
436,364
|
|
|
—
|
|
|
$
|
0.9625
|
|
|
Dec 2022
|
Issued in 2017 Common Stock Offering - pre-funded warrants
|
2,416,104
|
|
|
—
|
|
|
$
|
0.01
|
|
|
No exp
|
|
20,336,752
|
|
|
—
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
Total outstanding warrants
|
27,264,165
|
|
|
6,998,843
|
|
|
|
|
|
|
(1)
|
As a result of the anti-dilution provisions contained in the warrants, the exercise price for warrants issued in connection with the Company’s Series E Preferred Stock offering was decreased from
$2.50
per warrant share to
$2.10
and from
$2.10
per warrant share to
$0.77
and the number of warrant shares was increased by
154,288
and
80,197
during 2016 and 2017, respectively.
|
|
Number of warrants
|
|
|
|||||||||
|
Liability-classified
|
|
Equity-classified
|
|
Total
|
|
Weighted-average exercise price
|
|||||
Outstanding at December 31, 2016
|
6,998,843
|
|
|
—
|
|
|
6,998,843
|
|
|
$
|
5.98
|
|
Granted
|
—
|
|
|
23,842,856
|
|
|
23,842,856
|
|
|
0.84
|
|
|
Adjustments (1)
|
80,197
|
|
|
|
|
80,197
|
|
|
0.77
|
|
||
Exercised
|
(25,000
|
)
|
|
(3,506,104
|
)
|
|
(3,531,104
|
)
|
|
0.02
|
|
|
Expired
|
(126,627
|
)
|
|
—
|
|
|
(126,627
|
)
|
|
0.77
|
|
|
Outstanding at December 31, 2017
|
6,927,413
|
|
|
20,336,752
|
|
|
27,264,165
|
|
|
$
|
2.26
|
|
($ in thousands, except per share data)
|
December 31,
2017 |
|
December 31,
2016 |
||||
Calculated aggregate value
|
$
|
1,073
|
|
|
$
|
6,034
|
|
Weighted average exercise price per share
|
$
|
6.02
|
|
|
$
|
5.98
|
|
Closing price per share of common stock
|
$
|
0.64
|
|
|
$
|
1.89
|
|
Volatility
|
92.2
|
%
|
|
85.6
|
%
|
||
Weighted average remaining expected life
|
3 years, 4 months
|
|
|
4 years, 3 months
|
|
||
Risk-free interest rate
|
2.00
|
%
|
|
1.75
|
%
|
||
Dividend yield
|
—
|
|
|
—
|
|
•
|
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
•
|
Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
•
|
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
|
December 31, 2017
|
||||||||||||||
($ in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
14,670
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,670
|
|
Total Assets
|
$
|
14,670
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,670
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,073
|
|
|
$
|
1,073
|
|
Derivative liability
|
—
|
|
|
—
|
|
|
3,136
|
|
|
3,136
|
|
||||
Total Liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,209
|
|
|
$
|
4,209
|
|
|
December 31, 2016
|
||||||||||||||
($ in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
17,515
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,515
|
|
Total Assets
|
$
|
17,515
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,515
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,034
|
|
|
$
|
6,034
|
|
Derivative liability
|
—
|
|
|
—
|
|
|
1,735
|
|
|
1,735
|
|
||||
Total Liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,769
|
|
|
$
|
7,769
|
|
($ in thousands)
|
Warrant Liability
|
||
Balance at December 31, 2015
|
$
|
8,275
|
|
Issuance of warrants
(3)
|
9,643
|
|
|
Expiration of warrants (2)
|
(1,910
|
)
|
|
Change in fair value of warrant liability
|
(9,974
|
)
|
|
Balance at December 31, 2016
|
$
|
6,034
|
|
Exercise of warrants (1)
|
(41
|
)
|
|
Change in fair value of warrant liability
|
(4,920
|
)
|
|
Balance at December 31, 2017
|
$
|
1,073
|
|
(1)
|
Warrants were exercised under the cashless exercise method pursuant to the corresponding warrant agreements. As a result of such exercises, the Company issued
6,941
shares of common stock. Consequently, these instruments were no longer classified as liabilities. These common stock warrants were remeasured to their fair value as of the exercise date with the change in fair value recorded to the Company’s Consolidated Statement of Operations. The fair value related to the shares issued in connection with the exercised warrants was reclassified from a liability to additional paid-in capital in the Company’s Consolidated Balance Sheets.
|
(2)
|
Represents the fair value as of the beginning of the year for warrants expiring during the year and has been recorded to warrant revaluation income in the Company’s Consolidated Statement of Operations for the respective year end.
|
(3)
|
Represents the fair value of warrants on the issuance date.
|
($ in thousands)
|
Derivative Liability
|
||
Balance at December 31, 2015
|
$
|
—
|
|
Issuance of convertible notes (1)
|
1,273
|
|
|
Change in fair value of derivative liability
|
462
|
|
|
Balance at December 31, 2016
|
$
|
1,735
|
|
Derivative liability to equity upon note conversion (2)
|
(6
|
)
|
|
Change in fair value of derivative liability
|
1,407
|
|
|
Balance at December 31, 2017
|
$
|
3,136
|
|
(1)
|
Represents fair value of embedded derivatives on the issuance date.
|
(2)
|
Convertible notes were converted to shares of common stock pursuant to the corresponding convertible note agreements. As a result of such conversions, the Company issued
24,911
shares of common stock. Consequently, these instruments were no longer classified as liabilities. These embedded derivatives were remeasured to their fair value as of the exercise date with the change in fair value recorded to the Company’s Consolidated Statement of Operations. The fair value related to the shares issued in connection with the converted notes was reclassified from a liability to additional paid-in capital in the Company’s Consolidated Balance Sheets.
|
|
2017
|
|
2016
|
||
Expected life (1)
|
5 years, 11 months
|
|
|
6 years, 2 months
|
|
Interest rate
|
1.9
|
%
|
|
1.5
|
%
|
Dividend yield
|
—
|
|
|
—
|
|
Volatility
|
88.7
|
%
|
|
92.4
|
%
|
(1)
|
The Company uses the simplified method for estimating the stock option term.
|
($ in thousands, except share and per share data)
|
|
Number of shares
|
|
Weighted-
average
exercise
price
|
|
Weighted-
average
remaining
contractual term
(in years)
|
|
Aggregate
intrinsic
value
|
|||||
Outstanding at December 31, 2015
|
|
1,044,723
|
|
|
$
|
18.69
|
|
|
8 years
|
|
$
|
1,630
|
|
Granted
|
|
528,479
|
|
|
4.80
|
|
|
|
|
|
|
||
Expired
|
|
(11,840
|
)
|
|
11.84
|
|
|
|
|
|
|||
Forfeited
|
|
(281,983
|
)
|
|
8.49
|
|
|
|
|
|
|
||
Outstanding at December 31, 2016
|
|
1,279,379
|
|
|
$
|
15.16
|
|
|
7 years, 2 months
|
|
$
|
—
|
|
Granted
|
|
295,000
|
|
|
2.88
|
|
|
|
|
|
|
||
Expired
|
|
(211,773
|
)
|
|
21.35
|
|
|
|
|
|
|||
Forfeited
|
|
(273,093
|
)
|
|
9.50
|
|
|
|
|
|
|
||
Outstanding at December 31, 2017 (1)
|
|
1,089,513
|
|
|
$
|
12.06
|
|
|
7 years, 3 months
|
|
$
|
—
|
|
Exercisable at December 31, 2017
|
|
665,334
|
|
|
$
|
17.48
|
|
|
6 years, 1 month
|
|
$
|
—
|
|
(1)
|
Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition.
|
($ in thousands)
|
|
Employee Severance and Benefits
|
|
Asset Impairments
|
|
Total
|
||||||
Accrued restructuring balance as of December 31, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additional accruals
|
|
301
|
|
|
34
|
|
|
335
|
|
|||
Cash payments
|
|
(282
|
)
|
|
—
|
|
|
(282
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
|||
Accrued restructuring balance as of December 31, 2016
|
|
19
|
|
|
—
|
|
|
19
|
|
|||
Cash payments
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||
Accrued restructuring balance as of December 31, 2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||
($ in thousands)
|
2017
|
|
2016
|
||||
U.S. Federal:
|
|
|
|
|
|
||
Current
|
$
|
—
|
|
|
$
|
—
|
|
Deferred
|
—
|
|
|
—
|
|
||
U.S. State:
|
|
|
|
|
|
||
Current
|
—
|
|
|
—
|
|
||
Deferred
|
—
|
|
|
—
|
|
||
Income tax expense (benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||
($ in thousands)
|
2017
|
|
2016
|
||||
Tax benefit at U.S. federal statutory rate
|
$
|
(5,684
|
)
|
|
$
|
(5,353
|
)
|
Increase in domestic valuation allowance
|
5,914
|
|
|
10,162
|
|
||
State income taxes benefit before valuation allowance, net of federal benefit
|
561
|
|
|
(1,160
|
)
|
||
Warrant revaluation income and other financing costs
|
(898
|
)
|
|
(3,742
|
)
|
||
Credits
|
(904
|
)
|
|
(366
|
)
|
||
Stock-based compensation
|
61
|
|
|
239
|
|
||
Return to provision true-ups
|
127
|
|
|
220
|
|
||
Capital loss carryforward expiration
|
817
|
|
|
—
|
|
||
Impact of federal rate change
|
34,463
|
|
|
—
|
|
||
Impact of federal rate change on valuation allowance
|
(34,463
|
)
|
|
—
|
|
||
Other
|
6
|
|
|
—
|
|
||
Income tax expense (benefit)
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||
($ in thousands)
|
2017
|
|
2016
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
||
Convertible notes
|
$
|
2,821
|
|
|
$
|
4,263
|
|
Total deferred tax liabilities
|
$
|
2,821
|
|
|
$
|
4,263
|
|
Deferred tax assets:
|
|
|
|
|
|
||
Loss carryforwards
|
$
|
60,428
|
|
|
$
|
85,263
|
|
Intangible assets
|
68
|
|
|
117
|
|
||
Capital loss carryforward
|
—
|
|
|
852
|
|
||
Property and equipment
|
606
|
|
|
1,067
|
|
||
License fees
|
4,419
|
|
|
7,776
|
|
||
Accrued expenses and other
|
401
|
|
|
549
|
|
||
Stock-based compensation
|
2,753
|
|
|
4,059
|
|
||
Credits
|
1,436
|
|
|
418
|
|
||
Total deferred tax assets before valuation allowance
|
70,111
|
|
|
100,101
|
|
||
Less: valuation allowance
|
(67,290
|
)
|
|
(95,838
|
)
|
||
Total deferred tax assets
|
$
|
2,821
|
|
|
$
|
4,263
|
|
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
•
|
the enhanced production and purification of autologous fibroblasts, without gene therapy, for all aesthetic and therapeutic indications;
|
•
|
the enhanced production and purification of autologous dermal cells, without gene therapy, for aesthetic and therapeutic treatment of dermal, vocal cord, and periodontal indications;
|
•
|
the development of our gene therapies applied to autologous fibroblasts for all aesthetic and therapeutic indications;
|
•
|
the development of our gene therapies applied to autologous dermal cells for aesthetic and therapeutic treatment of dermal, vocal cord, and periodontal indications;
|
•
|
autologous human fibroblasts with gene therapy to express a therapeutic protein and/or bioactive ribonucleic acid for the treatment of autoimmune and non-infectious inflammatory disorders that manifest in cutaneous tissues, fascia and/or muscle; and
|
•
|
autologous human fibroblasts with gene therapy to express bioactive Tenascin-X locally to correct connective tissue disorders associated with Ehlers-Danlos Syndrome (hypermobility type).
|
|
For the Year Ended December 31,
|
||||||
($ in thousands except share and per share data)
|
2017
|
|
2016
|
||||
Loss per share — Basic:
|
|
|
|
|
|||
Net loss
|
$
|
(16,240
|
)
|
|
$
|
(15,292
|
)
|
Less: Dividend paid in-kind to preferred stockholders
|
(264
|
)
|
|
—
|
|
||
Less: Deemed dividend on preferred stock
|
(4,099
|
)
|
|
—
|
|
||
Net loss attributable to common stockholders - basic
|
$
|
(20,603
|
)
|
|
$
|
(15,292
|
)
|
|
|
|
|
||||
Numerator for basic loss per share
|
$
|
(20,603
|
)
|
|
$
|
(15,292
|
)
|
Denominator for basic loss per share
|
15,454,199
|
|
|
14,641,528
|
|
||
Basic loss per common share
|
$
|
(1.33
|
)
|
|
$
|
(1.04
|
)
|
|
|
|
|
||||
Loss per share — Diluted:
|
|
|
|
|
|
||
Numerator for basic loss per share
|
$
|
(20,603
|
)
|
|
$
|
(15,292
|
)
|
Adjust: Warrant revaluation income for dilutive warrants
|
(34
|
)
|
|
(1,958
|
)
|
||
Numerator for diluted loss per share
|
$
|
(20,637
|
)
|
|
$
|
(17,250
|
)
|
|
|
|
|
||||
Denominator for basic loss per share
|
15,454,199
|
|
|
14,641,528
|
|
||
Plus: Incremental shares underlying “in the money” warrants outstanding
|
5,919
|
|
|
6,006
|
|
||
Denominator for diluted loss per share
|
15,460,118
|
|
|
14,647,534
|
|
||
Diluted loss per common share
|
$
|
(1.33
|
)
|
|
$
|
(1.18
|
)
|
|
For the Year Ended December 31,
|
||||
|
2017
|
|
2016
|
||
“In the money” stock options
|
212,494
|
|
|
150,120
|
|
“Out of the money” stock options
|
769,881
|
|
|
1,218,563
|
|
“In the money” warrants
|
44,991
|
|
|
17,858
|
|
“Out of the money” warrants
|
10,529,782
|
|
|
4,382,445
|
|
Shares underlying convertible notes
|
5,292,853
|
|
|
5,304,533
|
|
Shares underlying accrued interest on convertible notes
|
203,702
|
|
|
40,137
|
|
Shares underlying convertible preferred stock
|
3,494,000
|
|
|
—
|
|
|
Payments due by period
|
||||||||||||||||||||||||||
($ in thousands)
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and
thereafter
|
||||||||||||||
Operating lease obligations (1)
|
7,451
|
|
|
1,254
|
|
|
1,416
|
|
|
1,471
|
|
|
1,471
|
|
|
1,471
|
|
|
368
|
|
|||||||
Debt obligations (2)
|
21,968
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,968
|
|
|
—
|
|
|
—
|
|
|||||||
Total
(3)
|
$
|
29,419
|
|
|
$
|
1,254
|
|
|
$
|
1,416
|
|
|
$
|
1,471
|
|
|
$
|
23,439
|
|
|
$
|
1,471
|
|
|
$
|
368
|
|
(1)
|
Operating lease obligations are stated based on the Amended Lease agreement for the office, warehouse and laboratory facilities executed in February 2012.
|
(2)
|
Obligations under the Notes issued in connection with the 2016 Private Placement which includes principal and accrued interest through September 7, 2021, based on stated fixed rates, as the Company has elected to accrue interest. The Notes have a maturity date of the earlier of (i) September 7, 2026 and (ii) one-hundred and eighty (
180
) days after the date on which the Company
’
s product candidate, FCX-007, is approved by the FDA for the treatment of RDEB. However, each Note holder has the right to require the Company to repay all or any portion of the unpaid principal and accrued interest from time to time on or after September 7, 2021. See details within Note 7.
|
(3)
|
This table does not include (a) any milestone payments which may become payable to third parties under license agreements as the timing and likelihood of such payments are not known, (b) any royalty payments to third parties as the amounts of such payments, timing and/or the likelihood of such payments are not known, and (c) contracts that are entered into in the ordinary course of business which are not material in the aggregate in any period presented above.
|
/s/ PricewaterhouseCoopers
|
|
Philadelphia, Pennsylvania
|
March 19, 2018
|
Dated:
|
March 19, 2018
|
By:
|
/s/ John M. Maslowski
|
|
John M. Maslowski
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
By:
|
/s/ John M. Maslowski
|
|
John M. Maslowski
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
|
|
Fibrocell Science, Inc.
|
|