Attached files
file | filename |
---|---|
EX-99.3 - EX-99.3 - Bioverativ Inc. | bivv-20170628ex99379b874.htm |
EX-99.1 - EX-99.1 - Bioverativ Inc. | bivv-20170628ex9911d2cf5.htm |
EX-23.1 - EX-23.1 - Bioverativ Inc. | bivv-20170628ex23184e296.htm |
8-K/A - 8-K/A - Bioverativ Inc. | bivv-20170628x8ka.htm |
True North Therapeutics, Inc.
Condensed balance sheets
(In thousands, except share and per share data)
(unaudited)
|
|
March 31, |
|
December 31, |
||
|
|
2017 |
|
2016 |
||
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,119 |
|
$ |
12,030 |
Short-term investments |
|
|
69,665 |
|
|
82,895 |
Prepaid expenses and other current assets |
|
|
835 |
|
|
1,000 |
Total current assets |
|
|
88,619 |
|
|
95,925 |
Property and equipment, net |
|
|
255 |
|
|
271 |
Other long-term assets |
|
|
1,433 |
|
|
1,297 |
Total assets |
|
$ |
90,307 |
|
$ |
97,493 |
Liabilities, Convertible Preferred Stock and Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,284 |
|
$ |
702 |
Accrued expenses |
|
|
1,894 |
|
|
2,579 |
Other current liabilities |
|
|
76 |
|
|
98 |
Total current liabilities |
|
|
3,254 |
|
|
3,379 |
Other long-term liabilities |
|
|
4 |
|
|
11 |
Total liabilities |
|
$ |
3,258 |
|
$ |
3,390 |
Commitments and contingencies |
|
|
|
|
|
|
Convertible preferred stock, $0.0001 par value |
|
|
143,348 |
|
|
143,348 |
Stockholders’ deficit: |
|
|
1 |
|
|
1 |
Additional paid-in capital |
|
|
70,634 |
|
|
70,171 |
Accumulated other comprehensive income |
|
|
4 |
|
|
29 |
Related party promissory notes for the purchase of common stock |
|
|
(378) |
|
|
(376) |
Accumulated deficit |
|
|
(126,560) |
|
|
(119,070) |
Total stockholders’ (deficit) equity |
|
$ |
(56,299) |
|
$ |
(49,245) |
Total liabilities, convertible preferred stock and stockholders’ deficit |
|
$ |
90,307 |
|
$ |
97,493 |
See accompanying notes to condensed financial statements.
True North Therapeutics, Inc.
Condensed statements of operations and comprehensive loss
(In thousands, except share and per share data)
(unaudited)
|
|
Three months ended March 31, |
||||
|
|
2017 |
|
2016 |
||
Revenues: |
|
|
|
|
|
|
Grant revenue |
|
$ |
51 |
|
$ |
— |
Operating expenses: |
|
|
|
|
|
|
Research and development |
|
|
5,993 |
|
|
3,447 |
General and administrative |
|
|
1,774 |
|
|
862 |
Total operating expenses |
|
|
7,767 |
|
|
4,309 |
Loss from operations |
|
|
(7,716) |
|
|
(4,309) |
Interest income |
|
|
223 |
|
|
110 |
Other income |
|
|
3 |
|
|
59 |
Total other income, net |
|
|
226 |
|
|
169 |
Net loss |
|
$ |
(7,490) |
|
$ |
(4,140) |
Other comprehensive income: |
|
|
|
|
|
|
Net unrealized gain on short-term investments |
|
|
(25) |
|
|
33 |
Comprehensive loss |
|
$ |
(7,515) |
|
$ |
(4,107) |
Net loss per share, basic and diluted |
|
|
(0.54) |
|
|
(0.32) |
Weighted average number of shares used in computing net loss per share, basic and diluted |
|
|
13,847,664 |
|
|
13,075,496 |
See accompanying notes to condensed financial statements.
True North Therapeutics, Inc.
Condensed statements of cash flows
(In thousands)
(unaudited)
|
|
Three months ended March 31, |
||||
|
|
2017 |
|
2016 |
||
Operating activities |
|
|
|
|
|
|
Net loss |
|
$ |
(7,490) |
|
$ |
(4,140) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
28 |
|
|
26 |
Stock-based compensation expense |
|
|
426 |
|
|
142 |
Other |
|
|
(29) |
|
|
16 |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses and other assets |
|
|
28 |
|
|
101 |
Accounts payable, accrued expenses and other liabilities |
|
|
(105) |
|
|
(196) |
Net cash used in operating activities |
|
|
(7,142) |
|
|
(4,051) |
Investing activities |
|
|
|
|
|
|
Purchases of short-term investments |
|
|
(14,019) |
|
|
(30,499) |
Maturities of short-term investments |
|
|
27,250 |
|
|
9,125 |
Purchase of property and equipment |
|
|
(11) |
|
|
— |
Net cash used in investing activities |
|
|
13,220 |
|
|
(21,374) |
Financing activities |
|
|
|
|
|
|
Proceeds from the issuance of convertible preferred stock, net of issuance costs |
|
|
— |
|
|
41 |
Proceeds from issuance of common stock upon exercise of stock options, net of repurchases |
|
|
11 |
|
|
— |
Net cash provided by financing activities |
|
|
11 |
|
|
41 |
Net increase (decrease) in cash and cash equivalents |
|
|
6,089 |
|
|
(25,384) |
Cash and cash equivalents at beginning of year |
|
$ |
12,030 |
|
$ |
45,043 |
Cash and cash equivalents at end of year |
|
$ |
18,119 |
|
$ |
19,659 |
See accompanying notes to condensed financial statements.
True North Therapeutics, Inc.
Notes to unaudited condensed financial statements
1. |
Organization and operations |
Description of the business
True North Therapeutics, Inc. (“True North” or the “Company”) is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for Complement-mediated diseases. The Company’s lead drug candidate, TNT009, is, to our knowledge, the first clinical-stage antibody designed to inhibit the C1s protein of the Classical Complement pathway.
On July 10, 2013 iPierian, Inc. (“iPierian”) incorporated True North in Delaware as a wholly owned subsidiary. On August 23, 2013, iPierian entered into a Contribution Agreement with True North to contribute and assign the assets and rights relating primarily to its Complement program and certain assets, liabilities and debt, in exchange for 9,999,875 shares of the Company’s common stock. These common shares were distributed on a pro-rata basis to the stockholders of iPierian (“Spin-off”). Upon execution of the Spin-off, iPierian no longer owned any equity in True North.
Pursuant to a Contribution Agreement, iPierian completed the Spin-Off of True North to its stockholders on August 23, 2013. The Spin-off was accounted for as a reverse spin-off in accordance with Accounting Standards Codification (“ASC”) 505-50, Spinoffs and Reverse Spinoffs. The Company was deemed to be the “spinnor” for accounting purposes as it retained all of the employees of iPierian and the Spin-off was designed as a means to dispose of the program related to the preclinical development of the Tau program which was retained by iPierian, the “spinnee” for accounting purposes (“New iPierian”). Therefore, the Company’s accumulated deficit includes $70.1 million from iPierian prior to the Spin-off.
The Company is located in South San Francisco, California.
Liquidity and management plans
In the course of its development activities, the Company has sustained operating losses and expects such losses to continue over at least the next several years. The Company’s ultimate success depends on the outcome of its research and development activities. Since inception through March 31, 2017, the Company has incurred cumulative net losses of $126.6 million. Because the Spin-off was accounted for as a reverse spin-off, the cumulative net losses of $126.6 million include losses of iPierian amounting to $70.1 million prior to the Spin-off.
Management expects to incur additional losses in the future to conduct research and development and recognizes the need to raise additional capital to fully implement its business plan. The Company intends to raise such capital through the issuance of additional equity and potentially through borrowings and strategic alliances with partner companies.
However, if such financing is not available at adequate levels, the Company will need to reevaluate its operating plans. Management believes that its existing cash, cash equivalents and short-term investments of $87.8 million will be sufficient to fund the Company’s operations for a period of twelve months from the date of this filing.
2. |
Basis or presentation and summary of significant accounting policies |
Unaudited condensed financial statements
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to Article 10 of Regulation S-X of the Securities Act of 1933, as amended (Securities Act). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited
4
condensed financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the financial position and the results of the Company’s operations and cash flows. Interim-period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The condensed balance sheet at December 31, 2016 has been derived from audited financial statements at that date, but does not include all disclosures required by U.S. GAAP for complete financial statements. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these unaudited condensed financial statements and the notes accompanying them should be read in conjunction with our audited financial statements included elsewhere in this prospectus.
Other long-term assets
Other long-term assets consist primarily of legal, accounting, filing and other fees related to the Company’s initial public offering (IPO) capitalized. The deferred offering costs will be offset against proceeds from the IPO upon the effectiveness of the IPO. In the event the IPO is terminated, all capitalized deferred offering costs will be expensed.
Net loss per share
Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive common shares would have been anti-dilutive for all periods presented. Shares of common stock subject to repurchase are excluded from the calculation of weighted average shares as the vesting of such shares is contingent upon continued services being rendered by such holders.
Recent accounting pronouncements
In March 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 requires recognition of the income tax effects of vested or settled awards in the income statement and involves several other aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted this standard prospectively as of January 1, 2017 therefore prior periods have not been adjusted. The Company has also elected to continue to estimate the impact of forfeitures when determining the amount of compensation cost to be recognized each period rather than account for forfeitures as they occur. This adoption did not have any effect on the Company’s financial statements.
3. |
Fair value measurements |
Cash, cash equivalents and short-term investments consisted of the following (in thousands):
|
|
December 31, 2016 |
||||||||||
|
|
Amortized |
|
Gross |
|
Gross |
|
Estimated |
||||
|
|
cost |
|
unrealized gains |
|
unrealized losses |
|
fair value |
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
9,528 |
|
$ |
— |
|
$ |
— |
|
$ |
9,528 |
Asset backed securities |
|
|
12,468 |
|
|
— |
|
|
(3) |
|
|
12,465 |
Corporate bonds |
|
|
29,936 |
|
|
— |
|
|
(10) |
|
|
29,926 |
Corporate commercial paper |
|
|
31,655 |
|
|
47 |
|
|
— |
|
|
31,702 |
U.S. government agency securities |
|
|
4,803 |
|
|
— |
|
|
(3) |
|
|
4,800 |
U.S. treasury securities |
|
|
5,506 |
|
|
— |
|
|
(2) |
|
|
5,504 |
Repurchase agreement |
|
|
1,000 |
|
|
— |
|
|
— |
|
|
1,000 |
Total financial assets |
|
$ |
94,896 |
|
$ |
47 |
|
$ |
(18) |
|
$ |
94,925 |
|
|
March 31, 2017 |
||||||||||
|
|
Amortized |
|
Gross |
|
Gross |
|
Estimated |
||||
|
|
cost |
|
unrealized gains |
|
unrealized losses |
|
fair value |
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
5
Money market funds |
|
$ |
14,320 |
|
$ |
— |
|
$ |
— |
|
$ |
14,320 |
Asset backed securities |
|
|
10,461 |
|
|
— |
|
|
(3) |
|
|
10,458 |
Corporate bonds |
|
|
22,720 |
|
|
— |
|
|
(12) |
|
|
22,708 |
Corporate commercial paper |
|
|
29,705 |
|
|
25 |
|
|
— |
|
|
29,730 |
U.S. government agency securities |
|
|
4,774 |
|
|
— |
|
|
(4) |
|
|
4,770 |
U.S. treasury securities |
|
|
2,001 |
|
|
— |
|
|
(3) |
|
|
1,998 |
Repurchase agreement |
|
|
3,800 |
|
|
— |
|
|
— |
|
|
3,800 |
Total financial assets |
|
$ |
87,781 |
|
$ |
25 |
|
$ |
(22) |
|
$ |
87,784 |
The following table summarizes the fair value of cash, cash equivalents and short-term investments by contractual maturity (in thousands):
|
|
December 31, 2016 |
||||||||||||||||
|
|
Mature |
|
Mature |
|
|
|
|||||||||||
|
|
within 90 |
|
between |
|
Estimated |
||||||||||||
|
|
days |
|
91 and 365 days |
|
fair value |
||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|||||||||
Money market funds |
|
$ |
9,528 |
|
$ |
— |
|
$ |
9,528 |
|||||||||
Asset backed securities |
|
|
2,001 |
|
|
10,464 |
|
|
12,465 |
|||||||||
Corporate bonds |
|
|
12,005 |
|
|
17,921 |
|
|
29,926 |
|||||||||
Corporate commercial paper |
|
|
11,240 |
|
|
20,462 |
|
|
31,702 |
|||||||||
U.S. government agency securities |
|
|
— |
|
|
4,800 |
|
|
4,800 |
|||||||||
U.S. treasury securities |
|
|
3,504 |
|
|
2,000 |
|
|
5,504 |
|||||||||
Repurchase agreement |
|
|
1,000 |
|
|
— |
|
|
1,000 |
|||||||||
Total financial assets |
|
$ |
39,278 |
|
$ |
55,647 |
|
$ |
94,925 |
|||||||||
|
|
March 31, 2017 |
||||||||||||||||
|
|
Mature |
|
Mature |
|
|
|
|||||||||||
|
|
within 90 |
|
between |
|
Estimated |
||||||||||||
|
|
days |
|
91 and 365 days |
|
fair value |
||||||||||||
Financial assets |
|
|
|
|
|
|
|
|
|
|||||||||
Money market funds |
|
$ |
14,320 |
|
$ |
— |
|
$ |
14,320 |
|||||||||
Asset backed securities |
|
|
1,953 |
|
|
8,505 |
|
|
10,458 |
|||||||||
Corporate bonds |
|
|
8,501 |
|
|
14,207 |
|
|
22,708 |
|||||||||
Corporate commercial paper |
|
|
20,486 |
|
|
9,244 |
|
|
29,730 |
|||||||||
U.S. government agency securities |
|
|
2,269 |
|
|
2,501 |
|
|
4,770 |
|||||||||
U.S. treasury securities |
|
|
— |
|
|
1,998 |
|
|
1,998 |
|||||||||
Repurchase agreement |
|
|
3,800 |
|
|
— |
|
|
3,800 |
|||||||||
Total financial assets |
|
$ |
51,329 |
|
$ |
36,455 |
|
$ |
87,784 |
Fair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).
Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and
6
Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.
Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows (in thousands):
|
|
December 31, 2016 |
||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
9,528 |
|
$ |
— |
|
$ |
— |
|
$ |
9,528 |
Asset backed securities |
|
|
— |
|
|
12,465 |
|
|
— |
|
|
12,465 |
Corporate bonds |
|
|
— |
|
|
29,926 |
|
|
— |
|
|
29,926 |
Corporate commercial paper |
|
|
— |
|
|
31,702 |
|
|
— |
|
|
31,702 |
U.S. government agency securities |
|
|
— |
|
|
4,800 |
|
|
— |
|
|
4,800 |
U.S. treasury securities |
|
|
— |
|
|
5,504 |
|
|
— |
|
|
5,504 |
Repurchase agreement |
|
|
— |
|
|
1,000 |
|
|
— |
|
|
1,000 |
Total financial assets |
|
$ |
9,528 |
|
$ |
85,397 |
|
$ |
— |
|
$ |
94,925 |
|
|
March 31, 2017 |
||||||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
14,320 |
|
$ |
— |
|
$ |
— |
|
$ |
14,320 |
Asset backed securities |
|
|
— |
|
|
10,458 |
|
|
— |
|
|
10,458 |
Corporate bonds |
|
|
— |
|
|
22,708 |
|
|
— |
|
|
22,708 |
Corporate commercial paper |
|
|
— |
|
|
29,730 |
|
|
— |
|
|
29,730 |
U.S. government agency securities |
|
|
— |
|
|
4,770 |
|
|
— |
|
|
4,770 |
U.S. treasury securities |
|
|
— |
|
|
1,998 |
|
|
— |
|
|
1,998 |
Repurchase agreement |
|
|
— |
|
|
3,800 |
|
|
— |
|
|
3,800 |
Total financial assets |
|
$ |
14,320 |
|
$ |
73,464 |
|
$ |
— |
|
$ |
87,784 |
The Company did not have financial liabilities subject to fair value measurements on a recurring basis.
4. |
Property and equipment, net |
Property and equipment, net consists of the following (in thousands):
|
|
March 31, |
|
December 31, |
||
|
|
2017 |
|
2016 |
||
Laboratory equipment |
|
$ |
540 |
|
$ |
540 |
Computer equipment |
|
|
135 |
|
|
123 |
Capitalized software |
|
|
17 |
|
|
17 |
Office furniture |
|
|
42 |
|
|
42 |
Total property and equipment |
|
|
734 |
|
|
722 |
Less: accumulated depreciation and amortization |
|
|
(479) |
|
|
(451) |
Property and equipment, net |
|
$ |
255 |
|
$ |
271 |
Depreciation and amortization expense was $26,000 and $28,000 for the three months ended March 31, 2016 and 2017, respectively.
5. |
Other long-term assets |
Other long-term assets consist of the following (in thousands):
|
|
March 31, |
|
December 31, |
||
|
|
2017 |
|
2016 |
||
Deferred initial public offering costs |
|
$ |
1,392 |
|
$ |
1,256 |
Other |
|
|
41 |
|
|
41 |
7
Total other long-term assets |
|
$ |
1,433 |
|
$ |
1,297 |
6. |
Accrued expenses |
Accrued expenses consist of the following (in thousands):
|
|
March 31, |
|
December 31, |
||
|
|
2017 |
|
2016 |
||
Accrued clinical and manufacturing expenses |
|
$ |
742 |
|
$ |
974 |
Accrued compensation |
|
|
520 |
|
|
805 |
Accrued professional and consulting services |
|
|
566 |
|
|
700 |
Other |
|
|
66 |
|
|
100 |
Total accrued expenses |
|
$ |
1,894 |
|
$ |
2,579 |
7. |
Related-party transactions |
In August 2013, the Company entered into full-recourse promissory notes with its chief executive officer and its executive chairman for the purchase of restricted common stock. The principal amounts of the notes are $268,000 and $89,000, respectively. The notes are secured by shares of restricted stock of the Company held by the individuals. The notes accrue interest at a rate of 1.63% per annum and are due for repayment in 2020. As of December 31, 2016 and March 31, 2017, the aggregate outstanding balance under these notes, including accrued interest, was approximately $376,000 and $378,000, respectively. Such notes are included in stockholders’ deficit in the balance sheets.
In November 2016, the Company entered into a consulting agreement with one of the Company’s investors and a representative of this investor to serve as the Company’s Chief Medical Officer. For the three months ended March 31, 2017, the Company recorded $0.1 million for such services to research and development expenses included in condensed statement of operations and comprehensive loss. In addition, the Company granted the Chief Medical Officer options to purchase 1,919,678 shares of common stock at an exercise price of $1.34, of which 255,957 shares are subject to a clinical milestone related performance condition.
8. |
Common stock warrants |
During 2013 and 2014, in conjunction with the issuance of Series A convertible preferred stock, the Company issued warrants to purchase 1,902,809 and 1,625,147 shares of common stock, respectively, all of which were outstanding as of June 30, 2016. The exercise price of the warrants is $0.01 per share, subject to adjustment in the event of any stock dividend, stock split, combination, or similar recapitalization affecting the Company’s common stock. The warrants expire in 2020 and will be automatically net exercised immediately prior to the completion of an IPO, if not otherwise exercised. The assumptions used in estimating the fair value of the warrants on issuance, were: volatility of 65%, risk-free interest rate of 1.71%, expected life of 7 years, and a dividend yield of zero. The warrants were valued at $0.5 million at issuance and recorded in equity. As of December 31, 2016 and March 31, 2017, the Company had warrants outstanding to purchase 3,527,956 shares of common stock.
9. |
Common stock |
The following table sets forth the summary of option activity under the Company’s 2013 Stock Option Plan (the “2013 Plan”):
|
|
Outstanding stock options |
||||||||||
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
Weighted |
|
average |
|
|
|
|
|
|
|
|
|
|
average |
|
remaining |
|
Aggregate |
||
|
|
|
|
Number of |
|
exercise |
|
contractual |
|
intrinsic |
||
|
|
Shares |
|
shares |
|
price per |
|
term |
|
value |
||
|
|
available |
|
outstanding |
|
share |
|
(years) |
|
(in thousands) |
||
Balances at December 31, 2016 |
|
5,155,767 |
|
11,242,892 |
|
$ |
0.67 |
|
8.92 |
|
$ |
7,502 |
Stock options granted |
|
(3,033,893) |
|
3,033,893 |
|
|
1.34 |
|
|
|
|
|
Stock options exercised |
|
— |
|
(18,951) |
|
|
0.56 |
|
|
|
|
|
Stock options forfeited |
|
863,421 |
|
(863,421) |
|
|
0.47 |
|
|
|
|
|
8
Balances at March 31, 2017 |
|
2,985,295 |
|
13,394,413 |
|
$ |
0.84 |
|
8.96 |
|
$ |
13,030 |
The assumptions used to value employee and director stock option awards granted under the 2013 Plan during the three months ended March 31, 2016 and 2017, using a Black-Scholes option pricing model, were as follows:
|
|
Three months ended March 31, |
||
|
|
2017 |
|
2016 |
Expected term (in years) |
|
5.97 – 6.01 |
|
5.98 – 5.98 |
Volatility |
|
66.26% – 66.26% |
|
58.86% – 60.15% |
Risk-free interest rate |
|
1.98% – 2.07% |
|
1.74% |
Dividend yield |
|
— |
|
— |
Early exercise of stock options
The terms of the 2013 Plan permit option holders to exercise stock options before they are vested, subject to certain limitations. Such unvested shares are subject to repurchase by the Company at the original exercise price in the event the option holder’s service to the Company is terminated either voluntarily or involuntarily. As a result of early exercises under the 2013 Plan, approximately 116,176 and 91,458 shares were subject to repurchase as of December 31, 2016, and March 31, 2017 respectively. The Company treats cash received from the exercise of unvested options as a refundable deposit and classifies such amounts as a liability in its balance sheets. As of December 31, 2016 and March 31, 2017, the Company included cash received for the early exercise of unvested options of $19,000 and $16,000 in other current liabilities, respectively. Amounts are transferred from liabilities into common stock and additional paid-in capital as the shares vest, which is generally over a period of 48 months and may include a one-year cliff.
Restricted stock awards
In 2013, the Company issued a total of 2,549,397 shares of common stock at $0.14 per share to its chief executive officer and its executive chairman under restricted stock agreements. As of the date of grant, the shares had an estimated fair value of $0.14 per share. The Company entered into full recourse promissory notes with the individuals for the total purchase price of the restricted shares. The loans are secured by the shares of common stock of the Company held by the individuals. See Note 7 for further discussion. Under the terms of the restricted stock agreements, shares vest monthly over four years. Upon termination of service of these individuals, unvested shares are subject to repurchase by the Company at the original issue price. As of March 31, 2017, there were 265,563 shares of restricted stock subject to repurchase.
The following table sets forth the summary of non-vested restricted stock activity for the three-month period ended March 31, 2017:
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
average |
|
Remaining |
|
|
|
|
|
grant |
|
contractual |
|
|
|
Number |
|
date fair |
|
term |
|
|
|
of shares |
|
value |
|
(years) |
|
Balance, December 31, 2016 |
|
424,901 |
|
|
0.14 |
|
0.64 |
Vested |
|
(159,338) |
|
|
0.14 |
|
|
Balance, March 31, 2017 |
|
265,563 |
|
$ |
0.14 |
|
0.39 |
The Company did not record any stock-based compensation expense related to restricted stock awards for the three months ended March 31, 2016 and 2017, respectively, as all restricted stock awards were issued at a price that approximated the estimated fair value of the Company’s common stock on the date of issuance, and all the awards were exercised on the date of grant.
Stock-based compensation expense
Total stock-based compensation recognized for both employees and non-employees was as follows (in thousands):
|
|
Three months ended March 31, |
||||
|
|
2017 |
|
|
2016 |
9
Research and development |
|
$ |
143 |
|
$ |
36 |
General and administrative |
|
|
283 |
|
|
106 |
Total stock-based compensation expense |
|
$ |
426 |
|
$ |
142 |
As of March 31, 2017 total unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $5.8 million, which is expected to be recognized over the remaining weighted-average vesting period of approximately 3.30 years.
10. |
Commitments |
The Company enters into contracts in the normal course of business with contract research organizations (“CROs”) for preclinical studies and clinical trials and contract manufacturing organization (“CMOs”) for the manufacture of clinical trial materials. As of March 31, 2017, the Company had commitments of $31.6 million with CMOs and $7.2 million with CROs. These agreements provide for notice of termination by either party and are therefore cancelable contracts.
11. |
Net loss per share |
The following table sets forth the computation of the basic and diluted net loss per share during the three months ended March 31, 2016 and 2017 (in thousands, except share and per share data):
|
|
Three months ended March 31, |
||||
|
|
2017 |
|
2016 |
||
Numerator: |
|
|
|
|
|
|
Net loss |
|
$ |
(7,490) |
|
$ |
(4,140) |
Denominator: |
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
14,282,516 |
|
|
14,255,547 |
Less: weighted-average unvested restricted stock subject to repurchase |
|
|
(318,676) |
|
|
(956,025) |
Less: weighted-average unvested common shares subject to repurchase |
|
|
(116,176) |
|
|
(224,026) |
Weighted-average shares used to compute net loss per share, basic and diluted |
|
|
13,847,664 |
|
|
13,075,496 |
Net loss per share, basic and diluted |
|
$ |
(0.54) |
|
$ |
(0.32) |
The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect:
|
|
March 31, |
||
|
|
2017 |
|
2016 |
Convertible preferred stock |
|
93,783,318 |
|
75,786,199 |
Options to purchase common stock |
|
13,394,413 |
|
8,273,235 |
Warrant to purchase common stock |
|
3,527,956 |
|
3,527,956 |
Total |
|
110,705,687 |
|
87,587,390 |
12. |
Subsequent events |
On June 28, 2017, the Company was acquired by Bioverativ, Inc.
The Company has reviewed and evaluated subsequent events through September 13, 2017, the date the interim financial statements were available to be issued. No additional subsequent events have been identified for disclosure.
10