FORTE BIOSCIENCES, INC., 10-Q filed on 11/12/2019
Quarterly Report
v3.19.3
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Nov. 01, 2019
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Trading Symbol TOCA  
Entity Registrant Name Tocagen Inc  
Entity Central Index Key 0001419041  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   23,897,771
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period true  
Entity Shell Company false  
Entity Current Reporting Status Yes  
Entity File Number 001-38052  
Entity Tax Identification Number 26-1243872  
Entity Address, Address Line One 4242 Campus Point Court  
Entity Address, Address Line Two Suite 500  
Entity Address, City or Town San Diego  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 92121  
City Area Code 858  
Local Phone Number 412-8400  
Document Quarterly Report true  
Document Transition Report false  
Entity Incorporation, State or Country Code DE  
Title of 12(b) Security Common Stock, par value $0.001 per share  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
v3.19.3
Condensed Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 25,580 $ 40,813
Marketable securities 29,762 55,273
Prepaid expenses and other current assets 4,201 1,662
Total current assets 59,543 97,748
Property and equipment, net 3,604 3,973
Operating lease right-of-use asset 7,597  
Other assets 5 1,360
Total assets 70,749 103,081
Current liabilities:    
Accounts payable 2,293 3,404
Accrued liabilities 11,601 13,094
Notes payable, current portion 27,843  
Deferred license revenue 9 36
Total current liabilities 41,746 16,534
Operating lease liability, net of current portion 9,122  
Notes payable, net of current portion   26,201
Deferred rent, net of current portion   2,201
Other long term liabilities 81  
Total liabilities 50,949 44,936
Commitments and contingencies
Stockholders’ equity:    
Common stock, $0.001 par value; 200,000,000 shares authorized at September 30, 2019 and December 31, 2018; 23,897,711 and 23,000,151 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively 23 23
Additional paid-in capital 288,551 274,029
Accumulated deficit (268,817) (215,884)
Accumulated other comprehensive income (loss) 43 (23)
Total stockholders’ equity 19,800 58,145
Total liabilities and stockholders’ equity $ 70,749 $ 103,081
v3.19.3
Condensed Balance Sheets (Parenthetical) (Unaudited) - $ / shares
Sep. 30, 2019
Dec. 31, 2018
Statement Of Financial Position [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 23,897,711 23,000,151
Common stock, shares outstanding 23,897,711 23,000,151
v3.19.3
Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Income Statement [Abstract]        
License revenue $ 9 $ 18,009 $ 27 $ 18,027
Type of Revenue [Extensible List] us-gaap:LicenseMember us-gaap:LicenseMember us-gaap:LicenseMember us-gaap:LicenseMember
Operating expenses        
Research and development $ 13,295 $ 12,262 $ 37,703 $ 35,461
General and administrative 3,837 4,320 13,133 9,311
Total operating expenses 17,132 16,582 50,836 44,772
(Loss) Income from operations (17,123) 1,427 (50,809) (26,745)
Other income (expense), net        
Interest income 361 441 1,367 1,087
Interest expense (1,973) (742) (3,490) (2,184)
Total other expense, net (1,612) (301) (2,123) (1,097)
(Loss) Income before income taxes (18,735) 1,126 (52,932) (27,842)
Income tax expense   (1,509) (1) (1,510)
Net loss (18,735) (383) (52,933) (29,352)
Other comprehensive loss:        
Net unrealized (loss) gain on investments (13) 31 66 11
Comprehensive loss $ (18,748) $ (352) $ (52,867) $ (29,341)
Net loss per common share, basic and diluted $ (0.78) $ (0.02) $ (2.25) $ (1.47)
Weighted-average number of common shares outstanding, basic and diluted 23,897,243 19,951,262 23,540,222 19,926,662
v3.19.3
Condensed Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2017 $ 71,082 $ 20 $ 238,025 $ (166,929) $ (34)
Beginning balance, shares at Dec. 31, 2017   19,882,551      
Exercise of stock options 37   37    
Exercise of stock options, shares   35,093      
Issuance of common stock pursuant to employee stock purchase plan 290   290    
Issuance of common stock pursuant to employee stock purchase plan, shares   35,365      
Stock-based compensation 5,120   5,120    
Issuance of common stock warrants 479   479    
Other comprehensive income (loss) 11       11
Net loss (29,352)     (29,352)  
Ending balance at Sep. 30, 2018 47,667 $ 20 243,951 (196,281) (23)
Ending balance, shares at Sep. 30, 2018   19,953,009      
Beginning balance at Jun. 30, 2018 46,089 $ 20 242,021 (195,898) (54)
Beginning balance, shares at Jun. 30, 2018   19,951,158      
Exercise of stock options 3   3    
Exercise of stock options, shares   1,851      
Stock-based compensation 1,927   1,927    
Other comprehensive income (loss) 31       31
Net loss (383)     (383)  
Ending balance at Sep. 30, 2018 47,667 $ 20 243,951 (196,281) (23)
Ending balance, shares at Sep. 30, 2018   19,953,009      
Beginning balance at Dec. 31, 2018 58,145 $ 23 274,029 (215,884) (23)
Beginning balance, shares at Dec. 31, 2018   23,000,151      
Exercise of stock options 252   252    
Exercise of stock options, shares   69,697      
Issuance of common stock pursuant to employee stock purchase plan 298   298    
Issuance of common stock pursuant to employee stock purchase plan, shares   67,774      
Issuance of common stock, net of offering costs 7,575   7,575    
Issuance of common stock, net of offering costs, shares   760,089      
Stock-based compensation 6,397   6,397    
Other comprehensive income (loss) 66       66
Net loss (52,933)     (52,933)  
Ending balance at Sep. 30, 2019 19,800 $ 23 288,551 (268,817) 43
Ending balance, shares at Sep. 30, 2019   23,897,711      
Beginning balance at Jun. 30, 2019 36,486 $ 23 286,489 (250,082) 56
Beginning balance, shares at Jun. 30, 2019   23,895,742      
Exercise of stock options, shares   434      
Issuance of common stock, net of offering costs 9   9    
Issuance of common stock, net of offering costs, shares   1,535      
Stock-based compensation 2,053   2,053    
Other comprehensive income (loss) (13)       (13)
Net loss (18,735)     (18,735)  
Ending balance at Sep. 30, 2019 $ 19,800 $ 23 $ 288,551 $ (268,817) $ 43
Ending balance, shares at Sep. 30, 2019   23,897,711      
v3.19.3
Condensed Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
OPERATING ACTIVITIES    
Net loss $ (52,933) $ (29,352)
Adjustments to reconcile net loss to net cash used in operating activities    
Stock-based compensation 6,397 5,120
Depreciation 657 421
Noncash interest expense 1,641 1,016
Amortization of premium (discount) on investments, net 102 (114)
Changes in operating assets and liabilities:    
Prepaid expenses and other assets (611) (3,780)
Accounts payable (983) 2,367
Accrued liabilities (3,049) 1,062
Deferred license revenue (27) (27)
Other 280 761
Net cash used in operating activities (48,526) (22,526)
INVESTING ACTIVITIES    
Proceeds from the sale/maturity of marketable securities 76,638 49,186
Purchases of marketable securities (51,163) (52,636)
Purchases of property and equipment (428) (1,496)
Net cash provided by (used in) investing activities 25,047 (4,946)
FINANCING ACTIVITIES    
Proceeds from issuance of common stock 550 327
Proceeds from offering of common stock, net of issuance costs 7,696  
Proceeds from issuance of notes payable, net of issuance costs   26,325
Cash paid on extinguishment of debt   (8,631)
Principal payments on notes payable   (3,000)
Net cash provided by financing activities 8,246 15,021
Net decrease in cash and cash equivalents (15,233) (12,451)
Cash and cash equivalents, beginning of period 40,813 35,933
Cash and cash equivalents, end of period 25,580 23,482
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION    
Cash paid for interest 1,856 1,013
NONCASH INVESTING AND FINANCING ACTIVITIES    
Property and equipment purchases included in accounts payable and accrued liabilities $ 37 506
Tenant improvement allowance   1,243
Fair value of common stock warrants issued in connection with notes payable   $ 479
v3.19.3
Organization and Basis of Presentation
9 Months Ended
Sep. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Organization and Basis of Presentation

1.

Organization and Basis of Presentation

Tocagen Inc. (Tocagen or the Company) is a clinical-stage, cancer-selective gene therapy company focused on developing first-in-class, broadly-applicable product candidates designed to activate a patient’s immune system against their own cancer. The Company’s cancer-selective gene therapy platform is built on retroviral replicating vectors which are designed to selectively deliver therapeutic genes into the DNA of cancer cells. Tocagen’s gene therapy approach is designed to fight cancer through immunotherapeutic mechanisms of action without the autoimmune toxicities commonly experienced with other immunotherapies. The Company views its operations and manages its business in one operating segment.

From inception through September 30, 2019, the Company has devoted substantially all of its efforts to developing its gene therapy platform and its lead product candidate, Toca 511 & Toca FC, as well as raising capital and building its infrastructure. The Company has not generated revenues from its principal operations.

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, from which the balance sheet information herein was derived.

Liquidity

The accompanying financial statements have been prepared on a basis which assumes the Company is a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to the Company’s ability to continue as a going concern. The Company has experienced net losses and negative cash flows from operating activities since its inception. As of September 30, 2019, the Company had an accumulated deficit of $268.8 million and working capital of $17.8 million available to fund future operations.

Based on the Company’s operating plans, cash, cash equivalents and marketable securities may not be sufficient to fund operations for the next 12 months. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. All amounts due under the Term Loans (see note 5) have been classified as a current liability as of September 30, 2019 due to the considerations discussed above and the assessment that a material adverse change clause under the Term Loans is not within the Company’s control. On October 31, 2019, the Company entered into an amendment (the Second Amendment) to its Amended and Restated Loan and Security Agreement with the two lenders, dated May 18, 2018, which was further amended on August 3, 2018 (the Loan Agreement), and made a prepayment of $23.3 million, which amount was used to prepay i) a portion equal to $21.5 million of the outstanding principal of the Term Loans plus all accrued and unpaid interest thereon through the prepayment date, ii) prorated portion of the final payment with respect to the portion of such Term Loans being prepaid, plus iii) all outstanding lenders’ expenses as of the date of the Second Amendment (see note 9). The Company has not been notified of an event of default by the lenders as of the date of the filing of this Form 10-Q.

The Company will seek to fund its losses from operations and capital needs through debt and equity financing, or through collaborations or partnerships with other entities which may not be available on a timely basis on terms acceptable to the Company, or at all.  If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or discontinue the advancement of product candidates, further reduce headcount, reorganize, merge with another entity, file for bankruptcy, or cease operations.

As of September 30, 2019, the Company had cash, cash equivalents and marketable securities of $55.3 million.

Use of Estimates

The Company’s financial statements are prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Significant estimates in the Company’s financial statements relate to clinical trial accruals, the valuation of equity awards, and the development period used for license revenue recognition. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results may differ from these estimates under different assumptions or conditions.

v3.19.3
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2.

Summary of Significant Accounting Policies  

Clinical Trial Accruals

Expenses related to clinical studies are based on estimates of the services received and efforts expended pursuant to the Company’s contract arrangements. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to the Company’s service providers will temporarily exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients, site initiation and the completion of clinical milestones. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from its estimate, the Company adjusts the accrual or prepaid expense balance accordingly. Historically, the Company’s estimated accrued liabilities have materially approximated actual expense incurred.

Revenue Recognition

Revenue generally consists of license revenue with upfront payments and development milestones considered probable of achievement.

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those goods and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the transaction price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when or as the Company satisfies the performance obligation(s).

At contract inception, the Company assesses the goods and services promised within each contract and assesses whether each promised good or service is distinct and determines that those are performance obligations. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when the Company determines there are no uncertainties regarding payment terms or transfer of control.

Collaborative Arrangements

The Company enters into collaborative arrangements with partners that may include payment to the Company of one or more of the following: (i) license fees; (ii) payments related to the achievement of developmental, regulatory, or commercial milestones; and (iii) royalties on net sales of licensed products.  Where a portion of non‑refundable upfront fees or other payments received are allocated to continuing performance obligations under the terms of a collaborative arrangement, they are recorded as contract liabilities and recognized as revenue when (or as) the underlying performance obligation is satisfied.  

As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligation(s). The stand-alone selling price may include items such as forecasted revenues, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if it can be satisfied at a point in time or over time. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

License Fees

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment.

Milestone Payments

At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. If it is probable that a milestone event would occur at the inception of the arrangement, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, the Company evaluates the probability of achievement of such milestones and any related constraint(s), and if necessary, may adjust the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment.

Royalties

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaborative arrangements.

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of stock awards, including stock options, and stock purchase rights granted to employees and members of the Company’s board of directors. For awards with time-based vesting provisions, the Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model and recognizes the expense over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis. For awards with performance-based vesting provisions, the Company estimates the fair value of stock option grants on the date of grant, or the date when all of the terms of the grant have been agreed to, if later, and recognizes the expense based on the probability of the occurrence of the individual milestones at each reporting period. The expense is recognized over the implicit service period that commences once management believes the performance criteria are probable of being met.  For purchase rights, the Company estimates the fair value of the purchase as of the plan enrollment date and recognizes expense on a straight-line basis over the applicable offering period.  The Company accounts for forfeitures when they occur and reverses any compensation cost previously recognized for awards for which the requisite service has not been completed, in the period that the award is forfeited.

Net Loss Per Share

Basic and diluted net loss per common share for the periods presented is computed by dividing net loss by the weighted-average number of common shares outstanding during the respective periods, without consideration of common stock equivalents as they are anti-dilutive. Common stock equivalents that could potentially dilute earnings in the future are comprised of options to purchase shares of common stock outstanding under the Company’s equity incentive plan and warrants for the purchase of shares of common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

Common stock equivalents from potentially dilutive securities that are not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows:

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Common stock options

 

 

4,395,696

 

 

 

3,637,502

 

 

 

4,395,696

 

 

 

3,637,502

 

Common stock warrants

 

 

66,514

 

 

 

67,238

 

 

 

66,514

 

 

 

67,238

 

Total

 

 

4,462,210

 

 

 

3,704,740

 

 

 

4,462,210

 

 

 

3,704,740

 

 

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The new standard is aimed at making leasing activities more transparent and comparable.  Under the new guidance, lessees are required to recognize substantially all leases on their balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company adopted Topic 842 on January 1, 2019 using the modified retrospective approach with a cumulative-effect adjustment as of January 1, 2019. The Company recognized a right-of-use asset and a lease liability on the condensed balance sheet for the discounted value of future lease payments from the date of adoption. The impact on the condensed balance sheet as of the date of adoption was as follows (in thousands):

 

 

 

ASC 840

 

 

ASC 842

 

 

Impact of

 

 

 

January 1, 2019

 

 

January 1, 2019

 

 

Adoption

 

Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities

 

$

154

 

 

$

645

 

 

$

491

 

Deferred rent, net of current portion

 

 

2,201

 

 

 

 

 

 

(2,201

)

Operating lease right-of-use asset

 

 

 

 

 

8,060

 

 

 

8,060

 

Operating lease liability, net of current portion

 

 

 

 

 

9,770

 

 

 

9,770

 

 

Operating lease assets and liabilities were recorded in the Company’s condensed balance sheet as of September 30, 2019 (in thousands):

 

 

 

 

 

September 30, 2019

 

Operating lease right-of-use asset

 

 

 

$

7,597

 

Accrued liabilities

 

 

 

 

876

 

Operating lease liability, net of current portion

 

 

 

 

9,122

 

 

In June 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This new standard is intended to simplify aspects of share-based compensation issued to non-employees by aligning the accounting for share-based payment awards issued to employees and non-employees as it relates to the measurement date and impact of performance conditions. The new standard became effective January 1, 2019 and did not have a material impact to the overall financial statements of the Company.

v3.19.3
Fair Value of Financial Instruments
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

3.

Fair Value of Financial Instruments

Fair Values of Assets Measured on a Recurring Basis

The following tables summarize the Company’s assets that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):

 

 

 

 

 

 

 

Fair Value Measurements at End of Period Using:

 

 

 

Total

 

 

Quoted Market

Prices for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

2,494

 

 

$

 

 

$

2,494

 

 

$

 

 

 

$

2,494

 

 

$

 

 

$

2,494

 

 

$

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

$

11,687

 

 

$

 

 

$

11,687

 

 

$

 

Commercial paper

 

 

12,478

 

 

 

 

 

 

12,478

 

 

 

 

Asset-backed securities

 

 

5,597

 

 

 

 

 

 

5,597

 

 

 

 

 

 

$

29,762

 

 

$

 

 

$

29,762

 

 

$

 

 

 

 

 

 

 

 

Fair Value Measurements at End of Period Using:

 

 

 

Total

 

 

Quoted Market

Prices for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

$

4,783

 

 

$

 

 

$

4,783

 

 

$

 

Commercial paper

 

 

1,987

 

 

 

 

 

 

1,987

 

 

 

 

 

 

$

6,770

 

 

$

 

 

$

6,770

 

 

$

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

$

16,301

 

 

$

 

 

$

16,301

 

 

$

 

Commercial paper

 

 

24,576

 

 

 

 

 

 

24,576

 

 

 

 

U.S. treasury securities

 

 

1,997

 

 

 

1,997

 

 

 

 

 

 

 

Asset-backed securities

 

 

12,399

 

 

 

 

 

 

12,399

 

 

 

 

 

 

$

55,273

 

 

$

1,997

 

 

$

53,276

 

 

$

 

 

Marketable Securities. For fair values determined by Level 1 inputs, which utilize quoted prices in active markets for identical assets, the level of judgment required to estimate fair value is relatively low. The fair values of investments in U.S. treasury securities were determined using Level 1 inputs. 

Fair values determined by Level 2 inputs, which utilize data points that are observable such as quoted prices, interest rates and yield curves, require the exercise of judgment and use of estimates, that if changed, could significantly affect the Company’s financial position and results of operations. Investments in corporate debt securities, commercial paper and asset-backed securities are valued using Level 2 inputs. Level 2 securities are initially valued at the transaction price and subsequently valued and reported utilizing inputs other than quoted prices that are observable either directly or indirectly, such as quotes from third-party pricing vendors.

There were no transfers in or out of Level 1 or Level 2 investments during the nine months ended September 30, 2019 or 2018.

At September 30, 2019 and December 31, 2018, the Company had investments in money market funds of $20.1 million and $30.9 million, respectively, that were measured at fair value using the net asset value per share (or its equivalent) that have not been classified in the fair value hierarchy. The funds invest primarily in U.S. government securities. Refer to Note 4 for information regarding the Company’s investments.

 

Fair Values of Other Financial Instruments

The carrying amounts of certain of the Company’s financial instruments, including cash and accounts payable, approximate their respective fair values due to their short-term nature. The carrying amount of the Company’s notes payable of $27.8 million at September 30, 2019 approximated their fair value as the terms of the notes are consistent with the market terms of transactions with similar profiles as of such date (Level 2 inputs).

v3.19.3
Certain Financial Statement Caption Information
9 Months Ended
Sep. 30, 2019
Balance Sheet Related Disclosures [Abstract]  
Certain Financial Statement Caption Information

4.

Certain Financial Statement Caption Information

Marketable Securities

The following is a summary of the Company’s marketable securities (in thousands):

 

 

 

Maturity

(in years)

 

Amortized Cost

 

 

Unrealized Gain

 

 

Unrealized Loss

 

 

Fair Value

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

1 or less

 

$

7,494

 

 

$

11

 

 

$

 

 

$

7,505

 

Corporate debt securities

 

>1 and <5

 

 

4,169

 

 

 

13

 

 

 

 

 

 

4,182

 

Commercial paper

 

1 or less

 

 

12,469

 

 

 

9

 

 

 

 

 

 

12,478

 

Asset-backed securities

 

1 or less

 

 

4,838

 

 

 

9

 

 

 

 

 

 

4,847

 

Asset-backed securities

 

>1 and <5

 

 

749

 

 

 

1

 

 

 

 

 

 

750

 

 

 

 

 

$

29,719

 

 

$

43

 

 

$

 

 

$

29,762

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

1 or less

 

$

10,013

 

 

$

1

 

 

$

(4

)

 

$

10,010

 

Corporate debt securities

 

>1 and <5

 

 

6,293

 

 

 

2

 

 

 

(4

)

 

 

6,291

 

Commercial paper

 

1 or less

 

 

24,584

 

 

 

 

 

 

(8

)

 

 

24,576

 

U.S. treasury securities

 

1 or less

 

 

1,997

 

 

 

 

 

 

 

 

 

1,997

 

Asset-backed securities

 

1 or less

 

 

10,612

 

 

 

 

 

 

(8

)

 

 

10,604

 

Asset-backed securities

 

>1 and <5

 

 

1,797

 

 

 

 

 

 

(2

)

 

 

1,795

 

 

 

 

 

$

55,296

 

 

$

3

 

 

$

(26

)

 

$

55,273

 

 

The Company has classified all of its available-for-sale investment securities, including those with maturity greater than one year, as current assets on the balance sheet based on the highly liquid nature of these investment securities and because these investment securities are considered available for use in current operations.

There were no impairments considered other-than-temporary during the periods presented, as it is management’s intention and ability to hold the securities until a recovery of the cost basis or recovery of fair value. Gross realized gains and losses on sales of marketable securities were immaterial for all periods presented.

Accrued Liabilities

Accrued liabilities are comprised of (in thousands):

 

 

 

September 30,

2019

 

 

December 31,

2018

 

Clinical trial expenses

 

$

3,636

 

 

$

4,535

 

Payroll and other employee-related expenses

 

1526

 

 

 

2,840

 

Contract manufacturing services

 

 

3,349

 

 

 

3,411

 

Current lease liability

 

 

876

 

 

 

 

Professional fees

 

 

245

 

 

 

474

 

Interest payable

 

 

198

 

 

 

205

 

Other

 

 

1,771

 

 

 

1,629

 

Total accrued liabilities

 

$

11,601

 

 

$

13,094

 

v3.19.3
Notes Payable
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Notes Payable

5.

Notes Payable

Loan Agreement

On October 30, 2015, the Company entered into a Loan and Security Agreement (Prior Loan Agreement) with two lenders whereby it borrowed $18.0 million (the Initial Loans). Balances under the Prior Loan Agreement were due in monthly principal and interest payments, with final maturity of the Initial Loans in May 2019. Each Initial Loan included a final payment fee of 7.95% of the original principal amount due upon maturity.

On May 18, 2018, the Company entered into the Loan Agreement, which was further amended on August 3, 2018, pursuant to which the lenders agreed to lend the Company $26.5 million as term loans (the Term Loans). Of the total proceeds, $8.6 million was applied to the repayment of outstanding principal, interest and final payment owed pursuant to the Initial Loans.

The Company evaluated the Loan Agreement in accordance with ASC Topic 470, which requires assessment of whether the modification is considered a substantial modification, in which case the modification would be accounted for as a debt extinguishment. Based on the Company’s evaluation, the Loan Agreement was considered substantial and therefore the unamortized discount associated with the Prior Loan Agreement was written off through interest expense and the principal balance of the Prior Loan Agreement was written off.

The Term Loans will mature on December 1, 2022 (the Maturity Date) and the Company will have interest-only payments through January 1, 2020, followed by 36 equal monthly payments of principal and interest.

The Term Loans bear interest at a floating per annum rate equal to the greater of (i) 8.50% and (ii) the sum of (a) the prime rate reported in the Wall Street Journal on the last business day of the month that immediately proceeds the month in which the interest will accrue, plus (b) 3.75%. The Company will be required to make a final payment of 7.95% of the principal amount of the Term Loans payable on the earlier of (i) the Maturity Date, (ii) the acceleration of any Term Loans, or (iii) the prepayment of the Term Loans.  On October 31, 2019, the Company entered into the Second Amendment and made a prepayment of $23.3 million, which amount was used to prepay i) a portion equal to $21.5 million of the outstanding principal of the Term Loans plus all accrued and unpaid interest thereon through the prepayment date, ii) prorated portion of the final payment with respect to the portion of such Term Loans being prepaid, plus iii) all outstanding lenders’ expenses as of the date of the Second Amendment (see note 9).

In conjunction with the Loan Agreement, the Company has issued the lenders warrants exercisable for 56,578 shares of common stock (the Warrants). The Warrants are exercisable in whole or in part, immediately, and have a per share exercise price of $9.35. The Warrants will terminate on the earlier of May 18, 2028 or the closing of a certain merger or consolidation transaction. The Company recorded the Warrants as a debt discount, which is a contra-liability against debt, and is amortizing the balance over the life of the underlying debt. The offset to the contra-liability is recorded as additional paid in capital in the Company’s balance sheet as the Warrants were determined to be an equity instrument. The Company determined the fair value of the Warrants at the date of issuance was $0.5 million using the Black-Scholes option pricing model based on significant unobservable inputs (Level 3) with an expected term of 10 years, volatility of 85.6%, risk free rate of 3.1% and expected dividend of 0%.  

The costs incurred to issue the Term Loans of $0.1 million were deferred and are included in the discount to the carrying value of the Term Loans in the accompanying balance sheet. The deferred costs and the final payment fee are amortized to interest expense over the expected term of the Term Loans using the effective interest method with an effective interest rate of 10.7%.

The aggregate carrying amounts of the Term Loans are comprised of the following (in thousands):

 

 

 

September 30,

2019

 

 

December 31,

2018

 

Principal

 

$

26,450

 

 

$

26,450

 

Add: accreted liability for final payment fee

 

 

1,821

 

 

 

276

 

Less: unamortized discount

 

 

(428

)

 

 

(525

)

 

 

$

27,843

 

 

$

26,201

 

 

The Term Loans are secured by substantially all of the Company’s assets other than its intellectual property, except rights to payment from the sale, licensing or disposition of such intellectual property. In connection with the Second Amendment on October 31, 2019, the Company agreed to grant a security interest in the Company’s intellectual property as additional collateral to secure the Term Loans for the ratable benefit of the lenders.

The Company is also required to maintain its primary operating accounts at all times with one of the lenders. The Loan Agreement contains customary conditions of borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness and make distributions to holders of its capital stock. Should an event of default occur, including the occurrence of a material adverse change, the Company could be liable for immediate repayment of all obligations under the Loan Agreement. As of September 30, 2019, the Company was in compliance with the covenants contained in the Loan Agreement.

Based on the Company’s operating plans, cash, cash equivalents and marketable securities may not be sufficient to fund operations for the next 12 months. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. All amounts due under the Term Loans have been classified as a current liability on the condensed balance sheets.

Future maturities of the Term Loans, including the final payment fee, as of September 30, 2019 are as follows (in thousands):

 

 

 

September 30,

2019

 

Year ending December 31, 2019

 

 

 

Year ending December 31, 2020

 

 

8,817

 

Year ending December 31, 2021

 

 

8,817

 

Year ending December 31, 2022

 

 

10,919

 

 

 

 

28,553

 

Unaccreted balance for final payment fee on Loans

 

 

(282

)

Unamortized discounts

 

 

(428

)

 

 

$

27,843

 

 

Subsequent to the Company’s Second Amendment, its future payments under the Term Loans are 36 equal monthly payments of principal and interest, beginning January 1, 2020 and will mature on December 1, 2022. An exit fee of 7.95% of the outstanding principal of $5.0 million will be due upon maturity.

v3.19.3
Stockholders' Equity
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Stockholders' Equity

6.

Stockholders’ Equity

In November 2018, the Company entered into an Equity Distribution Agreement (the Sales Agreement) with an outside placement agent (the Placement Agent) to sell shares of the Company’s common stock with aggregate gross proceeds of up to $30.0 million, from time to time, through an “at-the-market” equity distribution program under which the Placement Agent will act as sales agent. Under the Sales Agreement, the Company will set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitation on the number of shares that may be sold, and any minimum price below which sales may not be made. The Sales Agreement provides that the Placement Agent will be entitled to compensation for its services in an amount equal to up to 3.0% of the gross proceeds from the sales of shares sold through the Placement Agent under the Sales Agreement. The Company has no obligation to sell any shares under the Sales Agreement, and may at any time suspend solicitation and offers under the Sales Agreement.

During the three and nine months ended September 30, 2019, the Company sold 1,535 shares and 760,089 shares of its common stock under the Sales Agreement, respectively. The sales were made at a weighted average price of $6.02 for the three months ended September 30, 2019 and $10.41 for the nine months ended September 30, 2019. The Company received net proceeds of less than $0.1 million during the three months ended September 30, 2019 and net proceeds of $7.7 million during the nine months ended September 30, 2019. The Company may sell up to an additional $22.1 million in shares of the Company’s common stock under the Sales Agreement.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2019 is as follows:

 

Issued and Outstanding:

 

 

 

 

Stock options

 

 

4,395,696

 

Warrants for common stock

 

 

66,514

 

Shares reserved for issuance under the 2017 Employee Stock

   Purchase Plan

 

 

488,405

 

Shares reserved for future award grants

 

 

482,523

 

Total

 

 

5,433,138

 

 

The following table summarizes the allocation of the Company’s non-cash stock-based compensation expense for all stock awards during the three and nine months ended September 30, 2019 and 2018 (in thousands):

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Research and development

 

$

901

 

 

$

842

 

 

$

2,635

 

 

$

2,377

 

General and administrative

 

 

1,152

 

 

 

1,085

 

 

 

3,762

 

 

 

2,743

 

Total

 

$

2,053

 

 

$

1,927

 

 

$

6,397

 

 

$

5,120

 

 

The Company has not recognized non-cash stock-based compensation expense for outstanding options to purchase 188,651 shares of common stock with performance-based vesting provisions after its evaluation that the occurrence of the individual milestones is not probable as of September 30, 2019.

 

v3.19.3
Collaborative Arrangements
9 Months Ended
Sep. 30, 2019
Collaborative Arrangements [Abstract]  
Collaborative Arrangements

7.

Collaborative Arrangements

ApolloBio License

On April 18, 2018, the Company entered into a License Agreement (the License Agreement) with Beijing Apollo Venus Biomedical Technology Limited and ApolloBio Corp. (collectively, ApolloBio), which became effective in July 2018, pursuant to which the Company granted to ApolloBio an exclusive license to develop and commercialize Toca 511 & Toca FC within the greater China region, including mainland China, Hong Kong, Macao and Taiwan (the Licensed Territory).

The Company is eligible to receive up to an aggregate $111.0 million, less withholding and other taxes, upon the achievement of specified development and commercial milestones.  The Company completed its planned enrollment of 380 patients in the Toca 5 clinical trial in 2018 and earned a $2.0 million development milestone payment. The Company is also eligible for low double-digit tiered royalty payments based on annual net sales of licensed products in the Licensed Territory, subject to reduction under specified circumstances. ApolloBio will be responsible for all development and commercialization costs in the Licensed Territory. Future payments by ApolloBio are subject to the People’s Republic of China (PRC) currency exchange approval and may be subject to other approvals by PRC authorities.

Under the License Agreement, the Company has received net proceeds of $15.2 million which is comprised of a $16.0 million up-front payment and a $2.0 million development milestone payment less $1.7 million in foreign income taxes and $1.1 million in certain foreign non-income taxes.

Unless earlier terminated, the License Agreement will expire upon the expiration of the last-to-expire royalty term for any and all licensed products, which royalty term is, with respect to a licensed product in a particular region (i.e., mainland China, Hong Kong, Macao and Taiwan) of the Licensed Territory (each, a Region), the latest of (i) 10 years after the first commercial sale of such licensed product in such Region, (ii) the expiration of all regulatory exclusivity as to such licensed product in such Region and (iii) the date of expiration of the last valid patent claim covering such licensed product in such Region. Either party may terminate the License Agreement upon a material breach by the other party that remains uncured following 60 days (or, with respect to any payment breach, 10 days) after the date of written notice of such breach. ApolloBio may terminate the License Agreement at any time by providing 90 days’ prior written notice to the Company. In addition, the Company may terminate the License Agreement upon written notice to ApolloBio under specified circumstances if ApolloBio challenges the licensed patent rights.

Under ASU 2014-09, Revenue from Contracts with Customers (Topic 606), the Company evaluated the terms of the License Agreement and the transfer of intellectual property rights (the license) was identified as the only performance obligation as of the inception of the License Agreement. The Company determined that the transaction price under the License Agreement was comprised solely of the $16.0 million upfront payment. The future potential development and commercial milestone payments were not included in the transaction price as they were determined to be fully constrained. As part of the evaluation of the development and commercial milestone constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals, each of which was uncertain at the inception of the License Agreement. The Company will re-evaluate the transaction price each quarter or as uncertain events are resolved or other changes in circumstances occur. Future potential development and commercial milestone amounts would be recognized as revenue, if unconstrained. Any reimbursable program costs are recognized proportionately with the performance of the underlying services and are accounted for as a reduction to research and development expense and are excluded from the transaction price.

The entire $16.0 million transaction price was allocated to the license performance obligation. The license was delivered in connection with the execution of the License Agreement and the performance obligation was fully satisfied in 2018 (transfer of intellectual property). Additionally, the Company earned a $2.0 million development milestone payment in 2018 upon completion of the planned enrollment of 380 patients in the Toca 5 clinical trial.

 

v3.19.3
Commitments
9 Months Ended
Sep. 30, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments

8.

Commitments

The Company leases its office and laboratory space located in San Diego, California, for its corporate headquarters and research facility under an operating lease agreement (the Lease). The Lease commenced in March 2018. The term of the Lease is eight years and the Company has one option to extend the Lease for a period of five additional years. In connection with the inception of the Lease, the Company was provided and fully utilized a tenant improvement allowance of $1.2 million. The Lease provides for an abatement of a portion of the lease payments for the first nine months of the lease term and includes escalation clauses in the future. The Company excluded the extension option in its calculation of present value of lease payments as it is not reasonably certain to be exercised. The Company’s lease payment consists primarily of fixed rental payments for the right to use the underlying leased assets over the lease term as well as payments for common-area maintenance and administrative services.

Operating lease right-of-use asset and liability on the Company’s condensed balance sheets represent the present value of our remaining lease payments over the remaining lease term. The Company does not allocate lease payments to non-lease components; therefore, fixed payments for common-area maintenance and administrative services are included in its operating lease right-of-use asset and liability. The future undiscounted cash flows for the Company’s lease are consistent with those disclosed in its Form 10-K for the fiscal year ended December 31, 2018. The Company uses its incremental borrowing rate of 10.9% to calculate the present value of lease payments, as the implicit rate in its lease is not readily determinable.

v3.19.3
Subsequent Events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

 

9.

Subsequent Events

 

Corporate Restructuring

 

In October 2019, the Company implemented a corporate restructuring to extend the Company’s resources. In connection with the restructuring, the Company committed to a reduction in its total workforce by approximately 65%, to approximately 30 employees. The restructuring was approved by the Company’s Board of Directors on October 1, 2019. The Company estimates that it will incur a one-time personnel-related restructuring charge of approximately $1.0 million for employee severance and other related termination benefits. Payments are expected to be paid by December 31, 2019.

 

Loan Amendment

On October 31, 2019, the Company entered into the Second Amendment with its lenders. Pursuant to the terms of the Second Amendment, the lenders (i) agreed to waive any prepayment fee otherwise applicable to a prepayment of the Term Loans in connection with any prepayment of the Term Loans on or after the date of the Second Amendment, (ii) consent to the sale of certain specified equipment, so long as the net cash proceeds from the sale of such assets are used to repay the Term Loans, and (iii) release their lien on the specified equipment upon the closing of any such sale. Under the Second Amendment, the Company has also agreed to grant a security interest in the Company’s intellectual property as additional collateral to secure the Term Loans for the ratable benefit of the lenders.

 

In connection with the Second Amendment, the Company made a prepayment of $23.3 million, which amount was used to prepay i) a portion equal to $21.5 million of the outstanding principal of the Term Loans plus all accrued and unpaid interest thereon through the prepayment date, ii) prorated portion of the final payment with respect to the portion of such Term Loans being repaid, plus iii) all outstanding lenders expenses as of the date of the Second Amendment.

 

The pro-rated portion of the final payment with respect to the portion of such Term Loans repaid in October 2019 were recorded as notes payable, current portion in the accompanying condensed balance sheet as of September 30, 2019.

 

 

v3.19.3
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Use of Estimates

Use of Estimates

The Company’s financial statements are prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Significant estimates in the Company’s financial statements relate to clinical trial accruals, the valuation of equity awards, and the development period used for license revenue recognition. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results may differ from these estimates under different assumptions or conditions.

Clinical Trial Accruals

Clinical Trial Accruals

Expenses related to clinical studies are based on estimates of the services received and efforts expended pursuant to the Company’s contract arrangements. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to the Company’s service providers will temporarily exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients, site initiation and the completion of clinical milestones. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known at that time. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from its estimate, the Company adjusts the accrual or prepaid expense balance accordingly. Historically, the Company’s estimated accrued liabilities have materially approximated actual expense incurred.

Revenue Recognition

Revenue Recognition

Revenue generally consists of license revenue with upfront payments and development milestones considered probable of achievement.

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those goods and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the transaction price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when or as the Company satisfies the performance obligation(s).

At contract inception, the Company assesses the goods and services promised within each contract and assesses whether each promised good or service is distinct and determines that those are performance obligations. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. The Company considers a performance obligation satisfied once the Company has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when the Company determines there are no uncertainties regarding payment terms or transfer of control.

Collaborative Arrangements

The Company enters into collaborative arrangements with partners that may include payment to the Company of one or more of the following: (i) license fees; (ii) payments related to the achievement of developmental, regulatory, or commercial milestones; and (iii) royalties on net sales of licensed products.  Where a portion of non‑refundable upfront fees or other payments received are allocated to continuing performance obligations under the terms of a collaborative arrangement, they are recorded as contract liabilities and recognized as revenue when (or as) the underlying performance obligation is satisfied.  

As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligation(s). The stand-alone selling price may include items such as forecasted revenues, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if it can be satisfied at a point in time or over time. In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

License Fees

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment.

Milestone Payments

At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. If it is probable that a milestone event would occur at the inception of the arrangement, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, the Company evaluates the probability of achievement of such milestones and any related constraint(s), and if necessary, may adjust the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration or other revenues and earnings in the period of adjustment.

Royalties

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from its collaborative arrangements.

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation expense represents the cost of the grant date fair value of stock awards, including stock options, and stock purchase rights granted to employees and members of the Company’s board of directors. For awards with time-based vesting provisions, the Company estimates the fair value of stock options on the date of grant using the Black-Scholes option pricing model and recognizes the expense over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis. For awards with performance-based vesting provisions, the Company estimates the fair value of stock option grants on the date of grant, or the date when all of the terms of the grant have been agreed to, if later, and recognizes the expense based on the probability of the occurrence of the individual milestones at each reporting period. The expense is recognized over the implicit service period that commences once management believes the performance criteria are probable of being met.  For purchase rights, the Company estimates the fair value of the purchase as of the plan enrollment date and recognizes expense on a straight-line basis over the applicable offering period.  The Company accounts for forfeitures when they occur and reverses any compensation cost previously recognized for awards for which the requisite service has not been completed, in the period that the award is forfeited.

Net Loss Per Share

Net Loss Per Share

Basic and diluted net loss per common share for the periods presented is computed by dividing net loss by the weighted-average number of common shares outstanding during the respective periods, without consideration of common stock equivalents as they are anti-dilutive. Common stock equivalents that could potentially dilute earnings in the future are comprised of options to purchase shares of common stock outstanding under the Company’s equity incentive plan and warrants for the purchase of shares of common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

Common stock equivalents from potentially dilutive securities that are not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows:

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Common stock options

 

 

4,395,696

 

 

 

3,637,502

 

 

 

4,395,696

 

 

 

3,637,502

 

Common stock warrants

 

 

66,514

 

 

 

67,238

 

 

 

66,514

 

 

 

67,238

 

Total

 

 

4,462,210

 

 

 

3,704,740

 

 

 

4,462,210

 

 

 

3,704,740

 

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The new standard is aimed at making leasing activities more transparent and comparable.  Under the new guidance, lessees are required to recognize substantially all leases on their balance sheet as a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company adopted Topic 842 on January 1, 2019 using the modified retrospective approach with a cumulative-effect adjustment as of January 1, 2019. The Company recognized a right-of-use asset and a lease liability on the condensed balance sheet for the discounted value of future lease payments from the date of adoption. The impact on the condensed balance sheet as of the date of adoption was as follows (in thousands):

 

 

 

ASC 840

 

 

ASC 842

 

 

Impact of

 

 

 

January 1, 2019

 

 

January 1, 2019

 

 

Adoption

 

Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities

 

$

154

 

 

$

645

 

 

$

491

 

Deferred rent, net of current portion

 

 

2,201

 

 

 

 

 

 

(2,201

)

Operating lease right-of-use asset

 

 

 

 

 

8,060

 

 

 

8,060

 

Operating lease liability, net of current portion

 

 

 

 

 

9,770

 

 

 

9,770

 

 

Operating lease assets and liabilities were recorded in the Company’s condensed balance sheet as of September 30, 2019 (in thousands):

 

 

 

 

 

September 30, 2019

 

Operating lease right-of-use asset

 

 

 

$

7,597

 

Accrued liabilities

 

 

 

 

876

 

Operating lease liability, net of current portion

 

 

 

 

9,122

 

 

In June 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This new standard is intended to simplify aspects of share-based compensation issued to non-employees by aligning the accounting for share-based payment awards issued to employees and non-employees as it relates to the measurement date and impact of performance conditions. The new standard became effective January 1, 2019 and did not have a material impact to the overall financial statements of the Company.

v3.19.3
Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Schedule of Common Stock Equivalents from Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss Per Share

Common stock equivalents from potentially dilutive securities that are not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows:

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Common stock options

 

 

4,395,696

 

 

 

3,637,502

 

 

 

4,395,696

 

 

 

3,637,502

 

Common stock warrants

 

 

66,514

 

 

 

67,238

 

 

 

66,514

 

 

 

67,238

 

Total

 

 

4,462,210

 

 

 

3,704,740

 

 

 

4,462,210

 

 

 

3,704,740

 

Schedule of Impact of Adoption of New Accounting Pronouncements on Condensed Balance Sheet The impact on the condensed balance sheet as of the date of adoption was as follows (in thousands):

 

 

 

ASC 840

 

 

ASC 842

 

 

Impact of

 

 

 

January 1, 2019

 

 

January 1, 2019

 

 

Adoption

 

Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities

 

$

154

 

 

$

645

 

 

$

491

 

Deferred rent, net of current portion

 

 

2,201

 

 

 

 

 

 

(2,201

)

Operating lease right-of-use asset

 

 

 

 

 

8,060

 

 

 

8,060

 

Operating lease liability, net of current portion

 

 

 

 

 

9,770

 

 

 

9,770

 

 

Schedule of Operating Lease Assets and Liabilities Recorded in Balance Sheet

Operating lease assets and liabilities were recorded in the Company’s condensed balance sheet as of September 30, 2019 (in thousands):

 

 

 

 

 

September 30, 2019

 

Operating lease right-of-use asset

 

 

 

$

7,597

 

Accrued liabilities

 

 

 

 

876

 

Operating lease liability, net of current portion

 

 

 

 

9,122

 

v3.19.3
Fair Value of Financial Instruments (Tables)
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Summary of Fair Values of Assets Measured on a Recurring Basis

The following tables summarize the Company’s assets that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):

 

 

 

 

 

 

 

Fair Value Measurements at End of Period Using:

 

 

 

Total

 

 

Quoted Market

Prices for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

$

2,494

 

 

$

 

 

$

2,494

 

 

$

 

 

 

$

2,494

 

 

$

 

 

$

2,494

 

 

$

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

$

11,687

 

 

$

 

 

$

11,687

 

 

$

 

Commercial paper

 

 

12,478

 

 

 

 

 

 

12,478

 

 

 

 

Asset-backed securities

 

 

5,597

 

 

 

 

 

 

5,597

 

 

 

 

 

 

$

29,762

 

 

$

 

 

$

29,762

 

 

$

 

 

 

 

 

 

 

 

Fair Value Measurements at End of Period Using:

 

 

 

Total

 

 

Quoted Market

Prices for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

$

4,783

 

 

$

 

 

$

4,783

 

 

$

 

Commercial paper

 

 

1,987

 

 

 

 

 

 

1,987

 

 

 

 

 

 

$

6,770

 

 

$

 

 

$

6,770

 

 

$

 

Marketable securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

$

16,301

 

 

$

 

 

$

16,301

 

 

$

 

Commercial paper

 

 

24,576

 

 

 

 

 

 

24,576

 

 

 

 

U.S. treasury securities

 

 

1,997

 

 

 

1,997

 

 

 

 

 

 

 

Asset-backed securities

 

 

12,399

 

 

 

 

 

 

12,399

 

 

 

 

 

 

$

55,273

 

 

$

1,997

 

 

$

53,276

 

 

$

 

v3.19.3
Certain Financial Statement Caption Information (Tables)
9 Months Ended
Sep. 30, 2019
Balance Sheet Related Disclosures [Abstract]  
Summary of Marketable Securities

The following is a summary of the Company’s marketable securities (in thousands):

 

 

 

Maturity

(in years)

 

Amortized Cost

 

 

Unrealized Gain

 

 

Unrealized Loss

 

 

Fair Value

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

1 or less

 

$

7,494

 

 

$

11

 

 

$

 

 

$

7,505

 

Corporate debt securities

 

>1 and <5

 

 

4,169

 

 

 

13

 

 

 

 

 

 

4,182

 

Commercial paper

 

1 or less

 

 

12,469

 

 

 

9

 

 

 

 

 

 

12,478

 

Asset-backed securities

 

1 or less

 

 

4,838

 

 

 

9

 

 

 

 

 

 

4,847

 

Asset-backed securities

 

>1 and <5

 

 

749

 

 

 

1

 

 

 

 

 

 

750

 

 

 

 

 

$

29,719

 

 

$

43

 

 

$

 

 

$

29,762

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

1 or less

 

$

10,013

 

 

$

1

 

 

$

(4

)

 

$

10,010

 

Corporate debt securities

 

>1 and <5

 

 

6,293

 

 

 

2

 

 

 

(4

)

 

 

6,291

 

Commercial paper

 

1 or less

 

 

24,584

 

 

 

 

 

 

(8

)

 

 

24,576

 

U.S. treasury securities

 

1 or less

 

 

1,997

 

 

 

 

 

 

 

 

 

1,997

 

Asset-backed securities

 

1 or less

 

 

10,612

 

 

 

 

 

 

(8

)

 

 

10,604

 

Asset-backed securities

 

>1 and <5

 

 

1,797

 

 

 

 

 

 

(2

)

 

 

1,795

 

 

 

 

 

$

55,296

 

 

$

3

 

 

$

(26

)

 

$

55,273

 

Components of Accrued Liabilities

Accrued liabilities are comprised of (in thousands):

 

 

 

September 30,

2019

 

 

December 31,

2018

 

Clinical trial expenses

 

$

3,636

 

 

$

4,535

 

Payroll and other employee-related expenses

 

1526

 

 

 

2,840

 

Contract manufacturing services

 

 

3,349

 

 

 

3,411

 

Current lease liability

 

 

876

 

 

 

 

Professional fees

 

 

245

 

 

 

474

 

Interest payable

 

 

198

 

 

 

205

 

Other

 

 

1,771

 

 

 

1,629

 

Total accrued liabilities

 

$

11,601

 

 

$

13,094

 

v3.19.3
Notes Payable (Tables)
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Schedule of Aggregate Carrying Amounts of Term Loans

The aggregate carrying amounts of the Term Loans are comprised of the following (in thousands):

 

 

 

September 30,

2019

 

 

December 31,

2018

 

Principal

 

$

26,450

 

 

$

26,450

 

Add: accreted liability for final payment fee

 

 

1,821

 

 

 

276

 

Less: unamortized discount

 

 

(428

)

 

 

(525

)

 

 

$

27,843

 

 

$

26,201

 

 

Schedule of Future Maturities of Term Loans Including Final Payment Fee

Future maturities of the Term Loans, including the final payment fee, as of September 30, 2019 are as follows (in thousands):

 

 

 

September 30,

2019

 

Year ending December 31, 2019

 

 

 

Year ending December 31, 2020

 

 

8,817

 

Year ending December 31, 2021

 

 

8,817

 

Year ending December 31, 2022

 

 

10,919

 

 

 

 

28,553

 

Unaccreted balance for final payment fee on Loans

 

 

(282

)

Unamortized discounts

 

 

(428

)

 

 

$

27,843

 

 

v3.19.3
Stockholders' Equity (Tables)
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Schedule of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance as of September 30, 2019 is as follows:

 

Issued and Outstanding:

 

 

 

 

Stock options

 

 

4,395,696

 

Warrants for common stock

 

 

66,514

 

Shares reserved for issuance under the 2017 Employee Stock

   Purchase Plan

 

 

488,405

 

Shares reserved for future award grants

 

 

482,523

 

Total

 

 

5,433,138

 

Summary of Allocation of Non-Cash Stock-Based Compensation Expense for All Stock Awards

The following table summarizes the allocation of the Company’s non-cash stock-based compensation expense for all stock awards during the three and nine months ended September 30, 2019 and 2018 (in thousands):

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Research and development

 

$

901

 

 

$

842

 

 

$

2,635

 

 

$

2,377

 

General and administrative

 

 

1,152

 

 

 

1,085

 

 

 

3,762

 

 

 

2,743

 

Total

 

$

2,053

 

 

$

1,927

 

 

$

6,397

 

 

$

5,120

 

v3.19.3
Organization and Basis of Presentation - Additional Information (Details)
$ in Thousands
9 Months Ended
Oct. 31, 2019
USD ($)
May 18, 2018
Lender
Sep. 30, 2019
USD ($)
Segment
Dec. 31, 2018
USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]        
Number of operating segment | Segment     1  
Accumulated deficit     $ 268,817 $ 215,884
Working capital     17,800  
Cash, cash equivalents and marketable securities     $ 55,300  
Loan Agreement | Term Loans        
Organization Consolidation And Presentation Of Financial Statements [Line Items]        
Number of Lenders | Lender   2    
Second Amendment Loan Agreement | Subsequent Events        
Organization Consolidation And Presentation Of Financial Statements [Line Items]        
Prepayment of term loans $ 23,300      
Second Amendment Loan Agreement | Term Loans | Subsequent Events        
Organization Consolidation And Presentation Of Financial Statements [Line Items]        
Prepayment of term loans $ 21,500      
v3.19.3
Summary of Significant Accounting Policies - Schedule of Common Stock Equivalents from Potentially Dilutive Securities Not Included in Calculation of Diluted Net Loss Per Share (Details) - shares
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Potential dilutive securities not included in calculation of diluted net loss per share 4,462,210 3,704,740 4,462,210 3,704,740
Common Stock Options        
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Potential dilutive securities not included in calculation of diluted net loss per share 4,395,696 3,637,502 4,395,696 3,637,502
Common Stock Warrants        
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Potential dilutive securities not included in calculation of diluted net loss per share 66,514 67,238 66,514 67,238
v3.19.3
Summary of Significant Accounting Policies - Schedule of Impact of Adoption of New Accounting Pronouncements on Condensed Balance Sheet (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Jan. 01, 2019
Dec. 31, 2018
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Accrued liabilities $ 11,601   $ 13,094
Deferred rent, net of current portion     $ 2,201
Operating lease right-of-use asset 7,597    
Operating lease liability, net of current portion $ 9,122    
ASC 840      
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Accrued liabilities   $ 154  
Deferred rent, net of current portion   2,201  
ASC 842      
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Accrued liabilities   645  
Operating lease right-of-use asset   8,060  
Operating lease liability, net of current portion   9,770  
ASC 842 | Impact of Adoption      
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Accrued liabilities   491  
Deferred rent, net of current portion   (2,201)  
Operating lease right-of-use asset   8,060  
Operating lease liability, net of current portion   $ 9,770  
v3.19.3
Summary of Significant Accounting Policies - Schedule of Operating Lease Assets and Liabilties Recorded in Balance Sheet (Details)
$ in Thousands
Sep. 30, 2019
USD ($)
Accounting Policies [Abstract]  
Operating lease right-of-use asset $ 7,597
Accrued liabilities $ 876
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] us-gaap:AccruedLiabilitiesCurrent
Operating lease liability, net of current portion $ 9,122
v3.19.3
Fair Value of Financial Instruments - Summary of Fair Values of Assets Measured on a Recurring Basis (Details) - Fair Value Measured on Recurring Basis - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Cash equivalents $ 2,494 $ 6,770
Marketable securities 29,762 55,273
Quoted Market Prices for Identical Assets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Marketable securities   1,997
Significant Other Observable Inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Cash equivalents 2,494 6,770
Marketable securities 29,762 53,276
Asset-backed Securities    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Marketable securities 5,597 12,399
Asset-backed Securities | Significant Other Observable Inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Marketable securities 5,597 12,399
Corporate Debt Securities    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Cash equivalents   4,783
Marketable securities 11,687 16,301
Corporate Debt Securities | Significant Other Observable Inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Cash equivalents   4,783
Marketable securities 11,687 16,301
Commercial Paper    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Cash equivalents 2,494 1,987
Marketable securities 12,478 24,576
Commercial Paper | Significant Other Observable Inputs (Level 2)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Cash equivalents 2,494 1,987
Marketable securities $ 12,478 24,576
U.S. Treasury Securities    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Marketable securities   1,997
U.S. Treasury Securities | Quoted Market Prices for Identical Assets (Level 1)    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Marketable securities   $ 1,997
v3.19.3
Fair Value of Financial Instruments - Additional Information (Details) - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Sep. 30, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]      
Investments, transfer of Level 1 to Level 2 $ 0   $ 0
Carrying Amount | Significant Unobservable Inputs (Level 3)      
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]      
Notes payable 27,800,000    
Money Market Funds      
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]      
Investments in money market funds measured at fair value using net asset value per share $ 20,100,000 $ 30,900,000  
v3.19.3
Certain Financial Statement Caption Information - Summary of Marketable Securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 29,719 $ 55,296
Unrealized Gain 43 3
Unrealized Loss   (26)
Fair Value 29,762 55,273
Corporate Debt Securities | Maturity (in years) 1 or Less    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 7,494 10,013
Unrealized Gain 11 1
Unrealized Loss   (4)
Fair Value 7,505 10,010
Corporate Debt Securities | Maturity More Than 1 Year and Less Than 5 Years    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 4,169 6,293
Unrealized Gain 13 2
Unrealized Loss   (4)
Fair Value 4,182 6,291
Commercial Paper | Maturity (in years) 1 or Less    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 12,469 24,584
Unrealized Gain 9  
Unrealized Loss   (8)
Fair Value 12,478 24,576
U.S. Treasury Securities | Maturity (in years) 1 or Less    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost   1,997
Fair Value   1,997
Asset-backed Securities | Maturity (in years) 1 or Less    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 4,838 10,612
Unrealized Gain 9  
Unrealized Loss   (8)
Fair Value 4,847 10,604
Asset-backed Securities | Maturity More Than 1 Year and Less Than 5 Years    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 749 1,797
Unrealized Gain 1  
Unrealized Loss   (2)
Fair Value $ 750 $ 1,795
v3.19.3
Certain Financial Statement Caption Information - Additional Information (Details)
9 Months Ended
Sep. 30, 2019
USD ($)
Balance Sheet Related Disclosures [Abstract]  
Other-than-temporary impairments during period $ 0
v3.19.3
Certain Financial Statement Caption Information - Components of Accrued Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]    
Clinical trial expenses $ 3,636 $ 4,535
Payroll and other employee-related expenses 1,526 2,840
Contract manufacturing services 3,349 3,411
Current lease liability 876  
Professional fees 245 474
Interest payable 198 205
Other 1,771 1,629
Total accrued liabilities $ 11,601 $ 13,094
v3.19.3
Notes Payable - Additional Information (Details)
$ / shares in Units, $ in Thousands
9 Months Ended
Oct. 31, 2019
USD ($)
May 18, 2018
USD ($)
Lender
$ / shares
shares
Oct. 30, 2015
USD ($)
Lender
Sep. 30, 2019
Sep. 30, 2018
USD ($)
Debt Instrument [Line Items]          
Proceeds from term loans         $ 8,631
Prior Agreement          
Debt Instrument [Line Items]          
Number of Lenders | Lender     2    
Loans     $ 18,000    
Debt instrument, frequency of periodic payment       due in monthly principal and interest payments, with final maturity of the Initial Loans in May 2019.  
Debt instrument maturity     May 31, 2019    
Debt instrument, final payment fee, percentage     7.95%    
Loan Agreement | Term Loans          
Debt Instrument [Line Items]          
Number of Lenders | Lender   2      
Loans   $ 26,500      
Debt instrument maturity   Dec. 01, 2022      
Debt instrument, final payment fee, percentage   7.95%      
Proceeds from term loans   $ 8,600      
Number of equal monthly payments of principal and interest   36 months      
Debt instrument payment terms       the Company will have interest-only payments through January 1, 2020, followed by 36 equal monthly payments of principal and interest  
Debt instrument, interest rate terms       The Term Loans bear interest at a floating per annum rate equal to the greater of (i) 8.50% and (ii) the sum of (a) the prime rate reported in the Wall Street Journal on the last business day of the month that immediately proceeds the month in which the interest will accrue, plus (b) 3.75%.  
Warrants to purchase shares of common stock | shares   56,578      
Warrant to purchase common stock, exercise price | $ / shares   $ 9.35      
Fair value of warrants at the date of issuance   $ 500      
Deferred debt issuance cost   $ 100      
Debt instrument effective interest rate   10.70%      
Loan Agreement | Term Loans | Expected Term | Significant Unobservable Inputs (Level 3)          
Debt Instrument [Line Items]          
Expected term in years   10 years      
Loan Agreement | Term Loans | Volatility | Significant Unobservable Inputs (Level 3)          
Debt Instrument [Line Items]          
Warrant rate   0.856      
Loan Agreement | Term Loans | Risk Free | Significant Unobservable Inputs (Level 3)          
Debt Instrument [Line Items]          
Warrant rate   0.031      
Loan Agreement | Term Loans | Expected Dividend | Significant Unobservable Inputs (Level 3)          
Debt Instrument [Line Items]          
Warrant rate   0.00      
Loan Agreement | Term Loans | Prime Rate          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate   3.75%      
Loan Agreement | Term Loans | Minimum          
Debt Instrument [Line Items]          
Floating rate of interest   8.50%      
Second Amendment Loan Agreement | Subsequent Events          
Debt Instrument [Line Items]          
Prepayment of term loans $ 23,300        
Second Amendment Loan Agreement | Term Loans | Subsequent Events          
Debt Instrument [Line Items]          
Debt instrument maturity Dec. 01, 2022        
Number of equal monthly payments of principal and interest 36 months        
Prepayment of term loans $ 21,500        
Debt instrument exit fee percentage 7.95%        
Debt instrument outstanding principal amount due upon maturity $ 5,000        
v3.19.3
Notes Payable - Schedule of Aggregate Carrying Amounts of Term Loans (Details) - Loan Agreement - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Debt Instrument [Line Items]    
Debt Instrument, Type [Extensible List] toca:TermLoanMember toca:TermLoanMember
Principal $ 26,450 $ 26,450
Add: accreted liability for final payment fee 1,821 276
Less: unamortized discount (428) (525)
Loans, aggregate carrying amount $ 27,843 $ 26,201
v3.19.3
Notes Payable - Schedule of Future Maturities of Term Loans Including Final Payment Fee (Details) - Loan Agreement - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Debt Instrument [Line Items]    
Debt Instrument, Type [Extensible List] toca:TermLoanMember toca:TermLoanMember
Year ending December 31, 2020 $ 8,817  
Year ending December 31, 2021 8,817  
Year ending December 31, 2022 10,919  
Long-term debt at maturity 28,553  
Unaccreted balance for final payment fee on Loans (282)  
Less: unamortized discount (428) $ (525)
Loans, aggregate carrying amount $ 27,843 $ 26,201
v3.19.3
Stockholders' Equity - Additional Information (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Nov. 30, 2018
Sep. 30, 2019
Sep. 30, 2019
Sep. 30, 2018
Class Of Stock [Line Items]        
Proceeds from issuance of common stock     $ 550,000 $ 327,000
Maximum shares to be sold under Sales Agreement   $ 9,000 $ 7,575,000  
Performance-Based Vesting Provisions        
Class Of Stock [Line Items]        
Stock options outstanding   188,651 188,651  
ATM Facility        
Class Of Stock [Line Items]        
Common stock issued, shares   1,535 760,089  
Weighted average sales price, per share   $ 6.02 $ 10.41  
Proceeds from issuance of common stock     $ 7,700,000  
Maximum | ATM Facility        
Class Of Stock [Line Items]        
Proceeds from issuance of common stock $ 30,000,000      
Compensation percent of gross equity proceeds 3.00%      
Proceeds from issuance of common stock   $ 100,000    
Maximum shares to be sold under Sales Agreement     $ 22,100,000  
v3.19.3
Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Details)
Sep. 30, 2019
shares
Class Of Stock [Line Items]  
Common stock reserved for future issuance 5,433,138
Shares Reserved for Issuance Under the 2017 Employee Stock Purchase Plan  
Class Of Stock [Line Items]  
Common stock reserved for future issuance 488,405
Warrants  
Class Of Stock [Line Items]  
Common stock reserved for future issuance 66,514
Stock Options  
Class Of Stock [Line Items]  
Common stock reserved for future issuance 4,395,696
Shares Reserved for Future Award Grants  
Class Of Stock [Line Items]  
Common stock reserved for future issuance 482,523
v3.19.3
Stockholders' Equity - Summary of Allocation of Non-Cash Stock-Based Compensation Expense for All Stock Awards (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Total non-cash stock-based compensation expense $ 2,053 $ 1,927 $ 6,397 $ 5,120
Research and Development        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Total non-cash stock-based compensation expense 901 842 2,635 2,377
General and Administrative        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Total non-cash stock-based compensation expense $ 1,152 $ 1,085 $ 3,762 $ 2,743
v3.19.3
Collaborative Arrangements - Additional Information (Details) - License Agreement With Beijing Apollo Venus Biomedical Technology Limited and Apollo Bio Corp
Apr. 18, 2018
USD ($)
Patient
Collaborative Arrangements [Line Items]  
Development milestone earned $ 2,000,000
Future payment description Future payments by ApolloBio are subject to the People’s Republic of China (PRC) currency exchange approval and may be subject to other approvals by PRC authorities.
Net proceeds from collaborative agreement $ 15,200,000
Upfront payment to be received 16,000,000
Development milestone payment 2,000,000
Foreign income taxes expense $ 1,700,000
Agreement termination description the License Agreement will expire upon the expiration of the last-to-expire royalty term for any and all licensed products, which royalty term is, with respect to a licensed product in a particular region (i.e., mainland China, Hong Kong, Macao and Taiwan) of the Licensed Territory (each, a Region), the latest of (i) 10 years after the first commercial sale of such licensed product in such Region, (ii) the expiration of all regulatory exclusivity as to such licensed product in such Region and (iii) the date of expiration of the last valid patent claim covering such licensed product in such Region. Either party may terminate the License Agreement upon a material breach by the other party that remains uncured following 60 days (or, with respect to any payment breach, 10 days) after the date of written notice of such breach. ApolloBio may terminate the License Agreement at any time by providing 90 days’ prior written notice to the Company. In addition, the Company may terminate the License Agreement upon written notice to ApolloBio under specified circumstances if ApolloBio challenges the licensed patent rights.
Transaction price allocated to license performance obligation $ 16,000,000
General and Administrative  
Collaborative Arrangements [Line Items]  
Foreign non-income taxes expense $ 1,100,000
Health Care, Patient Service  
Collaborative Arrangements [Line Items]  
Number of patients | Patient 380
Maximum  
Collaborative Arrangements [Line Items]  
Development and commercial milestone payment receivable $ 111,000,000
v3.19.3
Commitments - Additional Information (Details)
$ in Millions
9 Months Ended
Sep. 30, 2019
USD ($)
Commitments And Contingencies Disclosure [Abstract]  
Operating lease, description The Company leases its office and laboratory space located in San Diego, California, for its corporate headquarters and research facility under an operating lease agreement (the Lease). The Lease commenced in March 2018.
Operating lease, commenced period 2018-03
Operating lease, term of contract 8 years
Operating lease, existence of option to extend true
Operating lease, option to extend the Company has one option to extend the Lease for a period of five additional years.
Operating lease, additional term of contract 5 years
Operating lease, tenant improvement allowance $ 1.2
Operating lease, term of terminate 9 months
Operating Lease, incremental borrowing rate 10.90%
v3.19.3
Subsequent Events - Additional Information (Details) - Subsequent Events
$ in Millions
1 Months Ended
Oct. 31, 2019
USD ($)
Oct. 31, 2019
USD ($)
Employee
Subsequent Event [Line Items]    
Percentage of reduction in total workforce   65.00%
Number of reduction of employees | Employee   30
Second Amendment Loan Agreement    
Subsequent Event [Line Items]    
Prepayment of term loans $ 23.3  
Second Amendment Loan Agreement | Term Loans    
Subsequent Event [Line Items]    
Prepayment of term loans $ 21.5  
One-time Termination Benefits    
Subsequent Event [Line Items]    
Restructuring charge   $ 1.0