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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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22-2816046
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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9920 Belward Campus Drive, Rockville, MD
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20850
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(Address of principal executive offices)
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(Zip code)
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Large accelerated filer ¨
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Accelerated filer x
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Non-accelerated filer ¨
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Smaller reporting company ¨
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(Do not check if a smaller reporting company)
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Page No.
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||||
PART I. FINANCIAL INFORMATION
|
||||
Item 1.
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Financial Statements
|
|||
Balance Sheets as of September 30, 2011 (unaudited) and December 31, 2010
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1
|
|||
Statements of Operations for the three and nine months ended September 30, 2011 and 2010 (unaudited)
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2
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|||
Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 (unaudited)
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3
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|||
Notes to the Financial Statements (unaudited)
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4
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|||
Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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12
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||
Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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23
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||
Item 4.
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Controls and Procedures
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24
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PART II. OTHER INFORMATION
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||||
Item 1.
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Legal Proceedings
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24
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Item 1A.
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Risk Factors
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24
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||
Item 5.
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Other Information
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24
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||
Item 6.
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Exhibits
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25
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SIGNATURES
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26
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September 30,
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December 31,
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|||||||
2011
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2010
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|||||||
(unaudited)
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||||||||
ASSETS
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||||||||
Current assets:
|
||||||||
Cash and cash equivalents
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$ | 14,318 | $ | 8,061 | ||||
Short-term investments available-for-sale
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5,286 | 23,615 | ||||||
Accounts receivables
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17 | 54 | ||||||
Unbilled receivables
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3,848 | — | ||||||
Prepaid expenses
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2,392 | 1,342 | ||||||
Other current assets
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392 | 265 | ||||||
Total current assets
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26,253 | 33,337 | ||||||
Property and equipment, net
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7,531 | 8,206 | ||||||
Goodwill
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33,141 | 33,141 | ||||||
Other non-current assets
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160 | 160 | ||||||
Total assets
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$ | 67,085 | $ | 74,844 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
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$ | 2,395 | $ | 3,572 | ||||
Accrued expenses and other current liabilities
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3,931 | 6,273 | ||||||
Current portion of notes payable
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40 | 80 | ||||||
Deferred rent
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375 | 341 | ||||||
Total current liabilities
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6,741 | 10,266 | ||||||
Warrant liability
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869 | 2,842 | ||||||
Deferred revenue
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2,500 | — | ||||||
Non-current portion of notes payable
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300 | 320 | ||||||
Deferred rent
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2,078 | 2,366 | ||||||
Total liabilities
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12,488 | 15,794 | ||||||
Commitments and contingences
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— | — | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.01 par value, 2,000,000 shares authorized; no shares issued and outstanding
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— | — | ||||||
Common stock, $0.01 par value, 200,000,000 shares authorized; and 115,387,768 shares issued and 114,932,338 shares outstanding at September 30, 2011 and 111,492,014 shares issued and 111,036,584 shares outstanding at December 31, 2010
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1,154 | 1,115 | ||||||
Additional paid-in capital
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380,931 | 371,477 | ||||||
Notes receivable from former directors
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— | (1,572 | ) | |||||
Accumulated deficit
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(325,951 | ) | (310,292 | ) | ||||
Treasury stock, 455,430 shares, cost basis
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(2,450 | ) | (2,450 | ) | ||||
Accumulated other comprehensive income
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913 | 772 | ||||||
Total stockholders’ equity
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54,597 | 59,050 | ||||||
Total liabilities and stockholders’ equity
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$ | 67,085 | $ | 74,844 |
For the Three Months
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For the Nine Months
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|||||||||||||
Ended September 30,
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Ended September 30,
|
|||||||||||||
2011
|
2010
|
2011
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2010
|
|||||||||||
Revenue
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$ | 5,008 | $ | 175 | $ | 8,843 | $ | 292 | ||||||
Operating expenses:
|
||||||||||||||
Research and development
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6,239 | 7,870 | 17,237 | 23,226 | ||||||||||
General and administrative
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2,737 | 2,844 | 8,926 | 8,528 | ||||||||||
Total operating expenses
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8,976 | 10,714 | 26,163 | 31,754 | ||||||||||
Loss from operations
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(3,968 | ) | (10,539 | ) | (17,320 | ) | (31,462) | |||||||
Other income (expense):
|
||||||||||||||
Interest income
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22 | 50 | 106 | 138 | ||||||||||
Interest expense
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(2 | ) | (2 | ) | (6 | ) | (6) | |||||||
Change in fair value of warrant liability
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736 | 133 | 1,973 | 1,771 | ||||||||||
Loss from operations before income tax
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(3,212 | ) | (10,358 | ) | (15,247 | ) | (29,559) | |||||||
Income tax (benefit) expense
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― | (136 | ) | 412 | (136) | |||||||||
Net loss
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$ | (3,212 | ) | $ | (10,222 | ) | $ | (15,659 | ) | $ | (29,423) | |||
Basic and diluted net loss per share
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$ | (0.03 | ) | $ | (0.10 | ) | $ | (0.14 | ) | $ | (0.29) | |||
Basic and diluted weighted average number of common shares outstanding
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115,107 | 107,092 | 113,053 | 102,683 |
For the Nine Months
|
||||||||
Ended September 30,
|
||||||||
2011
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2010
|
|||||||
Operating Activities:
|
||||||||
Net loss
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$ | (15,659 | ) | $ | (29,423 | ) | ||
Reconciliation of net loss to net cash used in operating activities:
|
||||||||
Change in fair value of warrant liability
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(1,973 | ) | (1,771 | ) | ||||
Depreciation and amortization
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1,197 | 991 | ||||||
Amortization of net premiums on short-term investments
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317 | 134 | ||||||
Impairment of property and equipment
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60 | 127 | ||||||
Loss of disposal of property and equipment
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— | 32 | ||||||
Deferred rent
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(254 | ) | (206 | ) | ||||
Non-cash stock-based compensation
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1,677 | 1,141 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivables
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37 | (341 | ) | |||||
Unbilled receivables
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(3,848 | ) | — | |||||
Prepaid expenses and other current assets
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(1,127 | ) | 947 | |||||
Accounts payable and accrued expenses
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(3,687 | ) | 1,468 | |||||
Deferred revenue
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2,500 | (143 | ) | |||||
Net cash used in operating activities
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(20,760 | ) | (27,044 | ) | ||||
Investing Activities:
|
||||||||
Capital expenditures
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(414 | ) | (1,424 | ) | ||||
Proceeds from maturities of short-term investments
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20,235 | 11,000 | ||||||
Purchases of short-term investments
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(2,082 | ) | (27,545 | ) | ||||
Net cash provided by (used in) by investing activities
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17,739 | (17,969 | ) | |||||
Financing Activities:
|
||||||||
Principal payments of notes payable
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(60 | ) | (66 | ) | ||||
Net proceeds from sales of common stock, net of offering costs of $0.2 million and $0.4 million, respectively
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9,182 | 22,114 | ||||||
Proceeds from the exercise of stock options
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156 | 423 | ||||||
Net cash provided by financing activities
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9,278 | 22,471 | ||||||
Net increase (decrease) in cash and cash equivalents
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6,257 | (22,542 | ) | |||||
Cash and cash equivalents at beginning of period
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8,061 | 38,757 | ||||||
Cash and cash equivalents at end of period
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$ | 14,318 | $ | 16,215 | ||||
Supplemental disclosure of non-cash activities:
|
||||||||
Equipment purchases included in accounts payable
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$ | 168 | $ | 128 | ||||
Settlement of notes receivable (See Note 9)
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$ | 1,522 | $ | — |
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·
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Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
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·
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Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
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·
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Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
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Fair Value at September 30, 2011
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Fair Value at December 31, 2010
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|||||||||||||||||||||||
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Level 1
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Level 2
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Level 3
|
Level 1
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Level 2
|
Level 3
|
||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Corporate debt and auction rate securities
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$ | — | $ | 5,286 | $ | — | $ | — | $ | 23,615 | $ | — | ||||||||||||
Total Short-term investments
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$ | — | $ | 5,286 | $ | — | $ | — | $ | 23,615 | $ | — | ||||||||||||
Liabilities
|
||||||||||||||||||||||||
Warrant liability
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$ | — | $ | — | $ | 869 | $ | — | $ | — | $ | 2,842 |
Fair Value Measurements of
|
||||
Warrants Using Significant
|
||||
Unobservable Inputs
|
||||
(Level 3)
|
||||
Balance at December 31, 2010
|
$ | 2,842 | ||
Change in fair value of Warrant liability
|
(1,973 | ) | ||
Balance at September 30, 2011
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$ | 869 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||||||||||||||
Auction rate securities
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$ | 3,373 | $ | 913 | $ | — | $ | 4,286 | $ | 3,373 | $ | 773 | $ | — | $ | 4,146 | ||||||||||||||||
Corporate debt securities
|
1,000 | — | — | 1,000 | 19,470 | — | (1 | ) | 19,469 | |||||||||||||||||||||||
Total
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$ | 4,373 | $ | 913 | $ | — | $ | 5,286 | $ | 22,843 | $ | 773 | $ | (1 | ) | $ | 23,615 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Research and development
|
$ | 176 | $ | 207 | $ | 449 | $ | 215 | ||||||||
General and administrative
|
366 | 425 | 1,228 | 926 | ||||||||||||
Total stock-based compensation expense
|
$ | 542 | $ | 632 | $ | 1,677 | $ | 1,141 |
2005 Stock Incentive
Plan
|
1995 Stock Option
Plan
|
|||||||||||||||
Stock
Options
|
Weighted-
Average
Exercise
Price
|
Stock
Options
|
Weighted-
Average
Exercise
Price
|
|||||||||||||
Outstanding at January 1, 2011
|
5,214,794 | $ | 2.34 | 579,850 | $ | 4.97 | ||||||||||
Granted
|
3,122,400 | $ | 2.19 | — | $ | — | ||||||||||
Exercised
|
(159,221 | ) | $ | 0.98 | — | $ | — | |||||||||
Canceled
|
(927,305 | ) | $ | 2.48 | (57,700 | ) | $ | 8.87 | ||||||||
Outstanding at September 30, 2011
|
7,250,668 | $ | 2.29 | 522,150 | $ | 4.56 | ||||||||||
Shares exercisable at September 30, 2011
|
3,682,407 | $ | 2.38 | 522,150 | $ | 4.56 | ||||||||||
Shares available for grant at September 30, 2011
|
3,515,260 |
Three Months Ended
|
Nine Months Ended
|
|||||||
September 30,
|
September 30,
|
|||||||
2011
|
2010
|
2011
|
2010
|
|||||
Weighted-average fair value of stock options granted
|
$0.78
|
$1.43
|
$1.19
|
$1.47
|
||||
Risk-free interest rate
|
0.48%-0.68%
|
1.11%-1.28%
|
0.48%-1.91%
|
1.11%-2.89%
|
||||
Dividend yield
|
0%
|
0%
|
0%
|
0%
|
||||
Volatility
|
75.86%-80.40%
|
97.79%-105.26%
|
73.28%-80.48%
|
97.79%-108.02%
|
||||
Expected life (in years)
|
3.49-4.21
|
3.34-4.47
|
3.26-4.47
|
3.06-6.26
|
||||
Expected forfeiture rate
|
0-23.15%
|
21.07%
|
0-23.15%
|
21.07%
|
Number of
Shares
|
Per Share
Weighted-
Average
Grant-Date
Fair Value
|
|||||||
Outstanding at January 1, 2011
|
56,666 | $ | 2.47 | |||||
Restricted stock granted
|
— | $ | — | |||||
Restricted stock vested
|
(53,333 | ) | $ | 2.30 | ||||
Restricted stock forfeited
|
— | $ | — | |||||
Outstanding at September 30, 2011
|
3,333 | $ | 5.21 |
|
·
|
potential commercialization of our product candidates;
|
|
·
|
our expectation that we will have adequate capital resources available to operate at planned levels for at least the next twelve months;
|
|
·
|
our expectations for future revenue under the contract with the Department of Health and Human Services, Biomedical Advanced Research and Development Authority (HHS BARDA) and funding requirements and capital raising activity, including possible proceeds from our At Market Issuance Sales Agreement;
|
|
·
|
our expectations on financial or business performance, conditions or strategies and other financial and business matters, including expectations regarding operating expenses, use of cash, and the fluctuations in expenses and capital requirements associated with pre-clinical studies, clinical trials and other research and development activities;
|
|
·
|
our expectations on clinical development and anticipated milestones, including under the contract with HHS BARDA and our RSV clinical trial;
|
|
·
|
our expectations that our multivalent seasonal influenza VLP vaccine could potentially address an unmet medical need in older adults;
|
|
·
|
our expectations that our RSV vaccine could potentially address unmet medical needs;
|
|
·
|
our expectation that we will utilize the amount of services that is required to be provided by Cadila Pharmaceuticals Limited (Cadila) under the master services agreement;
|
|
·
|
our expectations regarding payments to Wyeth and UMMS;
|
|
·
|
our expectations for the use of results from our Pandemic H1N1 clinical trial in Mexico to support the development of our influenza vaccines in other countries, including the United States;
|
|
·
|
the impact of new accounting pronouncements; and
|
|
·
|
our expectations concerning payments under existing license agreements.
|
|
·
|
our ability to progress any vaccine candidates into pre-clinical studies or clinical trials;
|
|
·
|
the scope, initiation, rate and progress of our pre-clinical studies and clinical trials and other research and development activities;
|
|
·
|
clinical trial results;
|
|
·
|
even with positive data from pre-clinical studies or clinical trials, the vaccine candidate may not prove to be safe and efficacious;
|
|
·
|
decisions by regulatory agencies may delay or prevent our development programs or increase the costs of such programs;
|
|
·
|
regulatory approval is needed before any vaccines can be sold in or outside the United States and, to date, no governmental authority has approved any of our vaccine candidates for sale;
|
|
·
|
influenza is seasonal in nature, and if approval or commercial launch after approval is not timely in relation to the influenza season, we may not be able to manufacture or sell our influenza vaccines on terms favorable to us until the next influenza season, if at all;
|
|
·
|
RSV is a difficult disease to prevent and there is significant activity by many companies toward the development of a suitable vaccine;
|
|
·
|
we have not manufactured any of our vaccine candidates at a commercial scale;
|
|
·
|
we utilize a unique manufacturing process and the scale-up of that process may prove difficult and/or costly;
|
|
·
|
our dependence on third parties to manufacture and distribute our vaccines;
|
|
·
|
because of the unique and specialized nature of our technology, the regulatory requirements imposed on our clinical efforts, as well as other factors, we may not be able to fully utilize services that can be provided by Cadila as called for under the master services agreement;
|
|
·
|
risks associated with conducting business outside of the United States;
|
|
·
|
the cost and our ability of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
|
|
·
|
competition for clinical resources and patient enrollment from drug candidates in development by other companies with greater resources and visibility;
|
|
·
|
our ability to enter into future collaborations with industry partners and the terms, timing and success of any such collaboration;
|
|
·
|
our ability to obtain adequate financing in the future through product licensing, co-promotional arrangements, public or private equity or debt financings or otherwise;
|
|
·
|
our ability to meet the significant requirements of a federal government contractor, which includes having appropriate accounting, project tracking and earned-value management systems implemented and operational, under our contract with HHS BARDA; and
|
|
·
|
other factors referenced herein.
|
Program
|
Development Phase
|
|
Pandemic Influenza (H1N1)
|
Phase II (ended)
|
|
Pandemic Influenza (H5N1)
|
Phase II
|
|
Seasonal Influenza
|
Phase II
|
|
Respiratory Syncytial Virus (RSV)
|
Phase I
|
Three Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Revenue:
|
||||||||||||
Total revenue
|
$ | 5,008 | $ | 175 | $ | 4,833 |
Three Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Operating Expenses:
|
||||||||||||
Research and development
|
$ | 6,239 | $ | 7,870 | $ | (1,631 | ) | |||||
General and administrative
|
2,737 | 2,844 | (107 | ) | ||||||||
Total operating expenses
|
$ | 8,976 | $ | 10,714 | $ | (1,738 | ) |
Manufacturing
|
$ | 3.3 | ||
Vaccine Discovery
|
0.8 | |||
Clinical and Regulatory Affairs
|
2.1 | |||
Total research and development expenses
|
$ | 6.2 |
|
·
|
the number of patients who participate in the trials;
|
|
·
|
the number of sites included in the trials;
|
|
·
|
if trial locations are domestic, international or both;
|
|
·
|
the time to enroll patients;
|
|
·
|
the duration of treatment and follow-up;
|
|
·
|
the safety and efficacy profile of the vaccine candidate; and
|
|
·
|
the cost and timing of, and the ability to secure, regulatory approvals.
|
Three Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Other Income (Expense):
|
||||||||||||
Interest income
|
$ | 22 | $ | 50 | $ | (28 | ) | |||||
Interest expense
|
(2 | ) | (2 | ) | — | |||||||
Change in fair value of warrant liability
|
736 | 133 | 603 | |||||||||
Total other income (expense)
|
$ | 756 | $ | 181 | $ | 575 |
Three Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Income Tax:
|
||||||||||||
Total income tax (benefit) expense
|
$ | — | $ | (136 | ) | $ | 136 |
Three Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Net Loss:
|
||||||||||||
Net loss
|
$ | (3,212 | ) | $ | (10,222 | ) | $ | 7,010 | ||||
Net loss per share
|
$ | (0.03 | ) | $ | (0.10 | ) | $ | 0.07 | ||||
Weighted shares outstanding
|
115,107 | 107,092 | 8,015 |
Nine Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Revenue:
|
||||||||||||
Total revenue
|
$ | 8,843 | $ | 292 | $ | 8,551 |
Nine Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Operating Expenses:
|
||||||||||||
Research and development
|
$ | 17,237 | $ | 23,226 | $ | (5,989 | ) | |||||
General and administrative
|
8,926 | 8,528 | 398 | |||||||||
Total operating expenses
|
$ | 26,163 | $ | 31,754 | $ | (5,591 | ) |
Manufacturing
|
$ | 9.5 | ||
Vaccine Discovery
|
2.4 | |||
Clinical and Regulatory Affairs
|
5.3 | |||
Total research and development expenses
|
$ | 17.2 |
Nine Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Other Income (Expense):
|
||||||||||||
Interest income
|
$ | 106 | $ | 138 | $ | (32 | ) | |||||
Interest expense
|
(6 | ) | (6 | ) | — | |||||||
Change in fair value of warrant liability
|
1,973 | 1,771 | 202 | |||||||||
Total other income (expense)
|
$ | 2,073 | $ | 1,903 | $ | 170 |
Nine Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Income Tax:
|
||||||||||||
Total income tax (benefit) expense
|
$ | 412 | $ | (136 | ) | $ | (548 | ) |
Nine Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change
2010 to
2011
|
||||||||||
Net Loss:
|
||||||||||||
Net loss
|
$ | (15,659 | ) | $ | (29,423 | ) | $ | 13,764 | ||||
Net loss per share
|
$ | (0.14 | ) | $ | (0.29 | ) | $ | 0.15 | ||||
Weighted shares outstanding
|
113,053 | 102,683 | 10,370 |
Nine Months Ended
September 30,
|
||||||||||||
2011
|
2010
|
Change 2010
to 2011
|
||||||||||
Summary of Cash Flows:
|
||||||||||||
Net cash (used in) provided by:
|
||||||||||||
Operating activities
|
$ | (20,760 | ) | $ | (27,044 | ) | $ | 6,284 | ||||
Investing activities
|
17,739 | (17,969 | ) | 35,708 | ||||||||
Financing activities
|
9,278 | 22,471 | (13,193 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents
|
6,257 | (22,542 | ) | 28,799 | ||||||||
Cash and cash equivalents at beginning of period
|
8,061 | 38,757 | (30,696 | ) | ||||||||
Cash and cash equivalents at end of period
|
$ | 14,318 | $ | 16,215 | $ | (1,897 | ) |
10.1*
|
Amendment No. 1 to Master Services Agreement between Novavax, Inc. and Cadila Pharmaceuticals Limited dated July 27, 2011
|
31.1*
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act
|
31.2*
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(e) of the Securities Exchange Act
|
32.1*
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2*
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
NOVAVAX, INC.
|
||
Date: November 8, 2011
|
By:
|
/s/ Stanley C. Erck
|
President and Chief Executive Officer
|
||
and Director
|
||
(Principal Executive Officer)
|
||
Date: November 8, 2011
|
By:
|
/s/ Frederick W. Driscoll
|
Vice President, Chief Financial Officer
|
||
and Treasurer
|
||
(Principal Financial and Accounting Officer)
|
NOVAVAX, INC.
|
CADILA PHARMACEUTICALS LIMITED
|
|||
By:
|
/s/ Stanley C. Erck
|
By:
|
/s/ Rajiv I. Modi
|
|
Stanley C. Erck
|
Rajiv I. Modi
|
|||
President and Chief Executive Officer
|
Managing Director
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
Date: November 8, 2011
|
By: /s/ Stanley C. Erck
|
President and Chief Executive Officer
|
Date: November 8, 2011
|
By: /s/ Frederick W. Driscoll
|
Vice President, Chief Financial Officer and Treasurer
|
Date: November 8, 2011
|
By:
|
/s/ Stanley C. Erck
|
|
President and Chief Executive Officer
|
Date: November 8, 2011
|
By:
|
/s/ Frederick W. Driscoll
|
|
Vice President, Chief Financial Officer and Treasurer |
BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 115,387,768 | 111,492,014 |
Common stock, shares outstanding | 114,932,338 | 111,036,584 |
Treasury stock, shares | 455,430 | 455,430 |
STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Revenue | $ 5,008 | $ 175 | $ 8,843 | $ 292 |
Operating expenses: | ||||
Research and development | 6,239 | 7,870 | 17,237 | 23,226 |
General and administrative | 2,737 | 2,844 | 8,926 | 8,528 |
Total operating expenses | 8,976 | 10,714 | 26,163 | 31,754 |
Loss from operations | (3,968) | (10,539) | (17,320) | (31,462) |
Other income (expense): | ||||
Interest income | 22 | 50 | 106 | 138 |
Interest expense | (2) | (2) | (6) | (6) |
Change in fair value of warrant liability | 736 | 133 | 1,973 | 1,771 |
Loss from operations before income tax | (3,212) | (10,358) | (15,247) | (29,559) |
Income tax (benefit) expense | 0 | (136) | 412 | (136) |
Net loss | $ (3,212) | $ (10,222) | $ (15,659) | $ (29,423) |
Basic and diluted net loss per share | $ (0.03) | $ (0.10) | $ (0.14) | $ (0.29) |
Basic and diluted weighted average number of common shares outstanding | 115,107 | 107,092 | 113,053 | 102,683 |
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Oct. 31, 2011 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NVAX | |
Entity Registrant Name | NOVAVAX INC | |
Entity Central Index Key | 0001000694 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 114,971,796 |
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At Market Issuance Sales Agreement | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
At Market Issuance Sales Agreement |
Note 6 – At Market Issuance Sales Agreement
In
March 2010, the Company entered into a sales agreement, under which
the Company may sell an aggregate of $50 million in gross proceeds
of its common stock. The Company’s Board of Directors has
authorized the sale of up to 25 million shares of the
Company’s common stock pursuant to this agreement. The shares
of common stock are being offered pursuant to a shelf registration
statement filed with the SEC. For the nine months ended September
30, 2011, the Company sold 4.0 million shares at an average sales
price of $2.34 per share, resulting in $9.2 million in net
proceeds. Since September 30, 2011 through November 7, 2011, the
Company has not sold any additional shares.
|
Liquidity Matters | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Liquidity Matters |
Note 2 – Liquidity Matters
Since
its inception, the Company has incurred, and continues to incur,
significant losses from operations. At September 30, 2011, the
Company had cash and cash equivalents of $14.3 million and
short-term investments with a fair value of $5.3
million.
The
Company’s vaccine candidates currently under development will
require significant additional research and development efforts,
including extensive pre-clinical and clinical testing, and
regulatory approval prior to commercial use. The Company’s
research and development efforts may not be successful and any
potential vaccine candidates may not prove to be safe and effective
in clinical trials. Even if developed, these vaccine candidates may
not receive regulatory approval or be successfully introduced and
marketed at prices that would permit the Company to operate
profitably. The commercial launch of any vaccine is subject to
significant risks including, but not limited to, manufacturing
scale-up and market acceptance.
Based
on the Company’s cash and cash equivalents and short-term
investments balances as of September 30, 2011, anticipated revenue
under the contract with the Department of Health and Human
Services, Biomedical Advanced Research and Development Authority
(“HHS BARDA”) that was awarded in February 2011,
possible proceeds from sales of the Company’s common stock
under its At Market Issuance Sales Agreement and its current
business operations, the Company believes it will have adequate
capital resources available to operate at planned levels for at
least the next twelve months. Additional capital will be required
in the future to develop its vaccine candidates through clinical
development, manufacturing and commercialization. The
Company’s ability to generate revenue under the HHS BARDA
contract is subject to its performance under the contract; its
ability to raise funds under its At Market Issuance Sales Agreement
is subject to both its business performance and market conditions.
Further, the Company may seek additional capital through public or
private equity offerings, debt financing, strategic alliance and
licensing arrangements, government contracts, collaborative
arrangements, or some combination of these financing alternatives.
Any capital raised by an equity offering, whether public or
private, will likely be substantially dilutive to the existing
stockholders and any licensing or development arrangement may
require the Company to give up rights to a product or technology at
less than its full potential value. Other than the Company’s
At Market Issuance Sales Agreement, the Company has not secured any
additional commitments for new financing, nor can the Company
provide any assurance that financing will be available on
commercially acceptable terms, if at all. If the Company is unable
to perform under the HHS BARDA contract or obtain additional
capital, it will assess its capital resources and will likely be
required to delay, reduce the scope of, or eliminate one or more of
its research and development programs, and/or downsize the
organization, including its general and administrative
infrastructure.
|
Master Services Agreement | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Master Services Agreement |
Note 8 – Master Services Agreement
In
July 2011, the Company and Cadila extended the term by one year for
which services can be provided by Cadila under its master services
agreement. Under the recently revised terms, if, by March 2013, the
amount of services provided by Cadila under the master services
agreement is less than $7.5 million, the Company will pay Cadila
the portion of the shortfall amount that is less than or equal to
$2.0 million and 50% of the portion of the shortfall amount that
exceeds $2.0 million. Through September 30, 2011, the Company has
purchased $0.2 million in services from Cadila pursuant to this
agreement.
|
Notes Receivable from Former Directors | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Notes Receivable from Former Directors |
Note 9 – Notes Receivable from Former Directors
In
March 2010, the Company initiated legal proceedings against Mr.
Mitch Kelly in the state of New York and Dr. Denis O’Donnell
in the Commonwealth of Massachusetts for collection of their
respective indebtedness due to the Company. Mr. Kelly and Dr.
O’Donnell are former directors of the Company that had each
defaulted on outstanding notes due to the Company in the aggregate
principal amount of $1,572,000. In 2002, Mr. Kelly and Dr.
O’Donnell executed notes with the Company as payment of the
exercise price in connection with stock options to acquire Novavax
Common Stock. In September 2011, the Company executed
settlement agreements with both Mr. Kelly and Dr. O’Donnell,
and in each case the lawsuit has been dismissed and the pledged
shares of Common Stock were surrendered to the Company. As
reflected on the Company’s balance sheet, the remaining notes
receivable were eliminated with a corresponding reduction in Common
Stock and Additional Paid-In Capital as of September 30,
2011.
|
License Agreement | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
License Agreement |
Note 7 – License Agreement
In
February 2011, the Company entered into a License Agreement with LG
Life Sciences, Ltd. (“LGLS”) to develop, manufacture
and commercialize influenza vaccines using the Company’s
proprietary VLP technology exclusively in South Korea and
non-exclusively in certain other emerging countries. The term of
the License Agreement is expected to terminate in 2027. Payments to
the Company under the License Agreement include an upfront payment,
milestone payments of up to an aggregate value of $2.5 million,
reimbursements of certain development and product costs and royalty
payments between ten and twenty percent from LGLS’s future
commercial sales of influenza VLP vaccines.
The
upfront payment has been deferred and will be recognized as revenue
when certain obligations in the agreement are satisfied. Payments
related to milestones deemed substantive under ASU 2010-17 will be
recognized upon achievement of such events. Payments for
milestones not deemed substantive will be recognized over the
remaining term of the research and development period upon
achievement of such milestone.
|
STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Millions | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Net proceeds from sales of common stock, offering costs | $ 0.2 | $ 0.4 |
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
Note 3 – Summary of Significant Accounting
Policies
Basis of Presentation
The
accompanying unaudited financial statements have been prepared in
accordance with United States Generally Accepted Accounting
Principles (“GAAP”) for interim financial information
and the instructions to Form 10-Q and Article 10 of Regulation S-X.
The balance sheet as of September 30, 2011, statements of
operations for the three and nine months ended September 30, 2011
and 2010 and the statements of cash flows for the nine months ended
September 30, 2011 and 2010 are unaudited, but include all
adjustments (consisting of normal recurring adjustments) that the
Company considers necessary for a fair presentation of the
financial position, operating results and cash flows, respectively,
for the periods presented. Although the Company believes that the
disclosures in these financial statements are adequate to make the
information presented not misleading, certain information and
footnote information normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted
pursuant to the rules and regulations of the United States
Securities and Exchange Commission
(“SEC”).
Results
for any interim period are not necessarily indicative of results
for any future interim period or for the entire year. The
accompanying unaudited financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2010.
Use of Estimates
The
preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ materially from
these estimates.
Fair Value Measurements
The
Company adopted Accounting Standards Codification
(“ASC”) Topic 820, Fair Value Measurements and
Disclosures, for financial and non-financial assets and
liabilities.
ASC
820 discusses valuation techniques, such as the market approach
(comparable market prices), the income approach (present value of
future income or cash flow) and the cost approach (cost to replace
the service capacity of an asset or replacement cost). The
statement utilizes a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value into
three broad levels. The following is a brief description of those
three levels:
Financial
assets and liabilities measured at fair market value on a recurring
basis as of September 30, 2011 and December 31, 2010 are summarized
below (in thousands):
The
following table summarizes the activity of Level 3 inputs measured
on a recurring basis as of September 30, 2011 (in
thousands):
The
amounts in the Company’s balance sheet for accounts
receivable, unbilled receivables, accounts payable and notes
payable approximate fair value due to their short-term
nature.
Short-Term Investments
Short-term
investments at September 30, 2011 consist of investments in
commercial paper and three auction rate securities. All marketable
securities had original maturities greater than 90 days, but less
than one year. The auction rate securities have a par value of $5.1
million. The Company has classified these securities as
available-for-sale since the Company may need to liquidate these
securities within the next year. The available-for-sale securities
are carried at fair value and unrealized gains and losses, if
determined to be temporary, on these securities are included in
accumulated other comprehensive income (loss) in
stockholders’ equity. Investments available for sale are
evaluated periodically to determine whether a decline in value is
“other-than-temporary.” The term
“other-than-temporary” is not intended to indicate a
permanent decline in value. Rather, it means that the prospects for
a near term recovery of value are not necessarily favorable, or
that there is a lack of evidence to support fair values equal to,
or greater than, the carrying value of the security. Management
reviews criteria, such as the magnitude and duration of the
decline, as well as the Company’s ability to hold the
securities until market recovery, to predict whether the loss in
value is other-than-temporary. If a decline in value is determined
to be other-than-temporary, the value of the security is reduced
and the impairment is recorded in the statements of operations. The
specific identification method is used in computing realized gains
and losses on sale of the Company’s securities.
Short-term
investments classified as available-for-sale as of September 30,
2011 and December 31, 2010 were comprised of (in
thousands):
Net Loss per Share
Net loss per share is computed using the
weighted average number of shares of common stock outstanding. All
outstanding warrants, stock options and unvested restricted stock
awards totaling 11,119,476 shares and 9,761,587 shares at September
30, 2011 and 2010, respectively, are excluded from the computation,
as their effect is antidilutive.
Comprehensive Income (Loss)
Comprehensive
income (loss) is the total net income (loss) plus all changes in
equity during the period except those changes resulting from
investment by and distribution to owners. Total comprehensive loss,
including unrealized gains (losses) on the Company’s
available-for-sale investments, was $3.2 million and $10.1
million for the three months ended September 30, 2011 and 2010,
respectively. Total comprehensive loss, including unrealized gains
(losses) on the Company’s available-for-sale investments, was
$15.5 million and $29.4
million for the nine months ended September 30, 2011 and 2010,
respectively.
Recent Accounting Pronouncements
In
January 2010, the Financial Accounting Standards Board (FASB)
issued Accounting Standards Update (ASU) 2010-06, Fair Value Measurements and
Disclosures (Topic 820)—Improving Disclosures about Fair
Value Measurements, which amends Topic 820 to add new
requirements for disclosures about transfers into and out of Levels
1 and 2 and separate disclosures about purchases, sales, issuances
and settlements related to Level 3 measurements. ASU 2010-06 also
clarifies existing fair value disclosures about the level of
disaggregation and about inputs and valuation techniques used to
measure fair value. The ASU was effective for the first reporting
period beginning after December 15, 2009, except for the
requirements to provide the Level 3 activity of purchases, sales,
issuances and settlements on a gross basis, which was effective for
fiscal years beginning after December 15, 2010, and for
interim periods within those fiscal years. Early adoption was
permitted.
The 2011 adoption for the requirement to provide the Level 3
activity did not have a material impact on the Company’s
financial statements.
In
September 2009, ASU 2009-13, Revenue Recognition
(Topic 605)—Multiple-Deliverable Revenue
Arrangements, was issued and changed the accounting for
multiple-deliverable arrangements to enable vendors to account for
products or services (deliverables) separately rather than as a
combined unit. Specifically, this guidance amends the criteria in
Subtopic 605-25, Revenue
Recognition—Multiple-Element
Arrangements, for separating consideration in
multiple-deliverable arrangements. This guidance establishes a
selling price hierarchy for determining the selling price of a
deliverable, which is based on: (a) vendor-specific objective
evidence; (b) third-party evidence; or (c) estimates.
This guidance also eliminates the residual method of allocation and
requires that arrangement consideration be allocated at the
inception of the arrangement to all deliverables using the relative
selling price method. In addition, this guidance significantly
expands required disclosures related to a vendor’s
multiple-deliverable revenue arrangements. ASU 2009-13 became
effective prospectively for multiple deliverable revenue
arrangements entered into, or materially modified, on or after
January 1, 2011. The adoption of this ASU did not have a material
impact on the Company’s financial statements.
In
March 2010, ASU 2010-17, Revenue
Recognition—Milestone Method (Topic 605): Milestone Method of Revenue
Recognition—a consensus of the FASB Emerging Issues Task
Force, was issued and amended the accounting for revenue
arrangements under which a vendor satisfies its performance
obligations to a customer over a period of time, when the
deliverable or unit of accounting is not within the scope of other
authoritative literature and when the arrangement consideration is
contingent upon the achievement of a milestone. The amendment
defines a milestone and clarifies whether an entity may recognize
consideration earned from the achievement of a milestone in the
period in which the milestone is achieved. ASU 2010-17 became
effective prospectively for milestones achieved within research and
development arrangements on or after January 1, 2011. The adoption
of this ASU did not have a material impact on the Company’s
financial statements.
In
June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic
220): Presentation of Comprehensive Income (“ASU
2011-05”). This guidance is intended to increase the
prominence of other comprehensive income in financial statements by
presenting it in either a single-statement or two-statement
approach. This ASU is effective for the Company beginning
January 1, 2012. The adoption of ASU 2011-05 will not have a
material effect on the Company’s financial
statements.
a. In
September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill
and Other (Topic 350): Testing Goodwill for Impairment
(“ASU 2011-08”), to give both public
and nonpublic entities the option to qualitatively determine
whether they can bypass the two-step goodwill impairment test.
Under the new guidance, if an entity chooses to perform a
qualitative assessment and determines that it is more likely than
not (a more than 50 percent likelihood) that the fair value of
a reporting unit is less than its carrying amount, it would then
perform Step 1 of the annual goodwill impairment test in
ASC 350-20 and, if necessary, proceed to Step 2.
Otherwise, no further evaluation would be necessary. The decision
to perform a qualitative assessment is made at the reporting unit
level, and an entity with multiple reporting units may utilize a
mix of qualitative assessments and quantitative tests among its
reporting units. The amended guidance is effective for interim and
annual goodwill impairment tests performed for fiscal years
beginning after December 15, 2011, although early adoption is
permitted. The adoption of ASU 2011-08 will not have a
material effect on the Company’s financial
statements.
|
Stock-Based Compensation | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
Note 4 – Stock-Based Compensation
Under
the Company’s stock-based compensation plan, the 2005 Stock
Incentive Plan (the “2005 Plan”), equity awards may be
granted to officers, directors, employees, consultants and advisors
to the Company and any present or future subsidiary. The 2005
Plan, approved in May 2005 and amended in June 2011 by the
stockholders of the Company, currently authorizes the grant of
equity awards for up to 14,312,192 shares of common stock, which
included, at the time of approval of the 2005 Plan, a maximum
5,746,468 shares of common stock subject to stock options
outstanding under the Company’s 1995 Stock Option Plan (the
“1995 Plan”) that may revert to and become issuable
under the 2005 Plan if such options should expire or otherwise
terminate unexercised. The term of the Company’s 1995 Plan
has expired. Outstanding stock options remain in existence in
accordance with their terms and no new awards will be made under
the 1995 Plan.
The
Company recorded stock-based compensation expense in the statements
of operations as follows (in thousands):
Stock Options Awards
The
following is a summary of option activity under the 2005 Plan and
the 1995 Plan for the nine months ended September 30,
2011:
The
fair value of stock options granted was estimated at the date of
grant using the Black-Scholes option-pricing model with the
following assumptions:
The
aggregate intrinsic value and weighted-average remaining
contractual term of stock options outstanding as of September 30,
2011 was approximately $0.7 million and 6.0 years,
respectively. The aggregate intrinsic value and weighted-average
remaining contractual term of stock options exercisable as of
September 30, 2011 was approximately $0.6 million and
5.7 years,
respectively. The aggregate intrinsic value represents the total
intrinsic value (the difference between the Company’s closing
stock price on the last trading day of the period and the exercise
price, multiplied by the number of in-the-money options) that would
have been received by the option holders had all option holders
exercised their options on September 30, 2011. This amount is
subject to change based on changes to the fair value of the
Company’s common stock. The aggregate intrinsic value of
options exercised for the nine months ended September 30, 2011 and
2010 was $0.2 million and $0.3 million, respectively.
Restricted Stock Awards
Under
the 2005 Plan, the Company has granted restricted stock awards
subject to certain performance-based and time-based vesting
conditions which, if not met, would result in forfeiture of the
shares and reversal of any previously recognized related
stock-based compensation expense.
The
following is a summary of restricted stock awards activity for the
nine months ended September 30, 2011:
As
of September 30, 2011, there was approximately $2.9 million of total
unrecognized compensation expense (net of estimated forfeitures)
related to unvested options and restricted stock awards. This
unrecognized compensation expense is expected to be recognized over
a weighted-average period of 1.6 years. This
estimate does not include the impact of other possible stock-based
awards that may be made during future periods.
|
Warrant Liability | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Warrant Liability |
Note 5 – Warrant Liability
In
July 2008, the Company completed a registered direct offering of
6,686,650 units, raising approximately $17.5 million in net
proceeds. Each unit consisted of one share of common stock and a
warrant to purchase 0.5 shares of common stock (the
“Warrants”) at a price of $2.68 per unit. The Warrants
represent the right to acquire an aggregate of 3,343,325 shares of
common stock at an exercise price of $3.62 per share and are
exercisable between January 31, 2009 and July 31,
2013.
During
the nine months ended September 30, 2011 and 2010, the Company
recorded as other income in its statements of operations a change
in fair value of warrant liability of $2.0 million and $1.8
million, respectively. As of September 30, 2011, the warrant
liability recorded on the balance sheet was $0.9 million and all
Warrants remain outstanding as of that date.
|
Organization | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Organization |
Note 1 – Organization
Novavax,
Inc. (the “Company”), is a clinical-stage
biopharmaceutical company focused on developing novel and effective
recombinant vaccines. These vaccines leverage the Company’s
platform technology coupled with a single-use bioprocessing
production system to develop virus-like particle
(“VLP”) vaccines, as well as recombinant nanoparticle
vaccines. VLPs are genetically engineered three-dimensional
nanostructures that incorporate immunologically important
recombinant proteins. The Company’s VLPs resemble the virus
they were engineered to mimic, but lack the genetic material to
replicate the virus and its single-use bioprocessing production
technology uses insect cells rather than chicken eggs or mammalian
cells. Similarly, recombinant nanoparticle vaccines are smaller in
size than traditional VLPs, but the protein-based structures mimic
key portions of the virus and their native configurations that are
critical for induction of effective immunogenic responses. The
Company’s current product targets include VLP vaccines
against seasonal and pandemic (including H5N1) influenza and a
recombinant nanoparticle vaccine against Respiratory Syncytial
Virus (“RSV”).
In
2009, the Company formed a joint venture (the “JV”)
with Cadila Pharmaceuticals Limited (“Cadila”) named
CPL Biologicals Private Limited to develop and manufacture
vaccines, biological therapeutics and diagnostics in India. The
Company owns 20% of the JV, and Cadila owns the remaining
80%.
|