QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | ☒ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Title of each class: | Trading Symbol | Name of each exchange on which registered: | ||||||||||||
Page | |||||
3 | |||||
4 | |||||
5 | |||||
6 | |||||
7 | |||||
8 | |||||
27 | |||||
36 | |||||
36 | |||||
37 | |||||
37 | |||||
44 | |||||
45 |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Cash and Cash Equivalents | $ | $ | |||||||||
Investments Available-for-Sale | |||||||||||
Accounts Receivable, net | |||||||||||
Inventory, net | |||||||||||
Prepaid and Other Current Assets | |||||||||||
Total Current Assets | |||||||||||
Property and Equipment, net | |||||||||||
Inventory, Non-Current | |||||||||||
Right of Use Assets, net | |||||||||||
Goodwill | |||||||||||
Other Non-Current Assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Accounts Payable | $ | $ | |||||||||
Accrued Liabilities | |||||||||||
Settlement Payable | |||||||||||
Lease Liability - Current | |||||||||||
Deferred License Revenue - Current | |||||||||||
Insurance Financing Note Payable | |||||||||||
Customer Deposits | |||||||||||
Other Current Liability - Related Party | |||||||||||
Total Current Liabilities | |||||||||||
Lease Liability - Long-Term | |||||||||||
Term Loan, Net of Issuance Costs | |||||||||||
Deferred License Revenue - Long-Term | |||||||||||
Total Liabilities | |||||||||||
Commitments and Contingencies (See Note 14) | |||||||||||
Stockholders’ Equity: | |||||||||||
Preferred Stock, $ | |||||||||||
Common Stock, $ | |||||||||||
Additional Paid-in Capital | |||||||||||
Accumulated Deficit | ( | ( | |||||||||
Accumulated Other Comprehensive Income | |||||||||||
Total Stockholders’ Equity | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | $ |
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Net Sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of Sales | |||||||||||||||||||||||
Gross Profit | ( | ||||||||||||||||||||||
Selling and Marketing | |||||||||||||||||||||||
General and Administrative | |||||||||||||||||||||||
Settlement Expense | |||||||||||||||||||||||
Research and Product Development | |||||||||||||||||||||||
Operating Loss | ( | ( | ( | ( | |||||||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||
Realized Gain on Investments | |||||||||||||||||||||||
Warrant Modification Expense | ( | ||||||||||||||||||||||
Interest Expense | ( | ( | ( | ( | |||||||||||||||||||
Interest Income | |||||||||||||||||||||||
Total Other Income (Expense) | ( | ( | |||||||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic and Diluted Net Loss per Share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic and Diluted Weighted Average Shares Outstanding |
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Unrealized Gain (Loss) on Available-for-Sale Debt Instrument Investments | ( | ||||||||||||||||||||||
Foreign Currency Translation Adjustments | ( | ( | |||||||||||||||||||||
Comprehensive Loss | $ | ( | $ | ( | $ | ( | $ | ( |
COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED DEFICIT | ACCUMULATED OTHER COMPREHENSIVE INCOME | TOTAL STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||||
SHARES | AMOUNT | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2020 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized Loss on Available-for-Sale Investments | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/Public Offering | — | — | |||||||||||||||||||||||||||||||||
Issuance of Warrants related to Debt Financing | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based Compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized Loss on Available-for-Sale Investments | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/At-the-Market Offering | — | — | |||||||||||||||||||||||||||||||||
Vesting of Restricted Stock Units Issued, net of taxes withheld | ( | — | — | ( | |||||||||||||||||||||||||||||||
Warrant Modification Expense | — | — | — | — | |||||||||||||||||||||||||||||||
Stock-based Compensation expense | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized Gain on Available-for-Sale Investments | — | — | — | — | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/Public Offering | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/At-the-Market Offering | — | — | |||||||||||||||||||||||||||||||||
Vesting of Restricted Stock Units Issued, net of taxes withheld | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based Compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | ACCUMULATED DEFICIT | ACCUMULATED OTHER COMPREHENSIVE INCOME | TOTAL STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||||
SHARES | AMOUNT | ||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized Loss on Available-for-Sale Investments | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
Exercise of Employee Stock Options, Net of Tax | — | — | |||||||||||||||||||||||||||||||||
Delivery of common stock underlying restricted stock units, net of tax | ( | — | — | ( | |||||||||||||||||||||||||||||||
Stock-based Compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized Gain on Available-for-Sale Investments | — | — | — | — | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/Public Offering | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/At-the-Market Offering | — | — | |||||||||||||||||||||||||||||||||
Stock-based Compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net Loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized Gain on Available-for-Sale Investments | — | — | — | — | |||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Delivery of common stock underlying restricted stock units, net of tax | ( | — | — | ( | |||||||||||||||||||||||||||||||
Issuance of common stock, net of offering costs/Public Offering | — | — | |||||||||||||||||||||||||||||||||
Stock-based Compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of September 30, 2019 | $ | $ | $ | ( | $ | $ |
2020 | 2019 | ||||||||||
Cash Flows From Operating Activities: | |||||||||||
Net Loss | $ | ( | $ | ( | |||||||
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities: | |||||||||||
Depreciation and Amortization | |||||||||||
Stock-based Compensation | ( | ||||||||||
Warrant Modification Expense | |||||||||||
Increase in Inventory Reserves | |||||||||||
Amortization of Right of Use Asset | |||||||||||
Amortization of Debt Financing Costs and Accretion of Debt Discount | |||||||||||
Loss (Gain) on Disposal of Assets | ( | ||||||||||
Realized (Gain) on Sale of Investments Available-for-Sale | ( | ( | |||||||||
Foreign Currency Translation Adjustment | |||||||||||
Changes in Assets and Liabilities: | |||||||||||
Decrease in Accounts Receivable, net | |||||||||||
Decrease in Insurance Receivable | |||||||||||
(Increase) Decrease in Inventory | ( | ||||||||||
Decrease in Prepaid and Other Assets | |||||||||||
Increase (Decrease) in Accounts Payable | ( | ||||||||||
Decrease in Settlement Payable | ( | ( | |||||||||
Decrease in Lease Liability | ( | ( | |||||||||
Increase (Decrease) in Other Liabilities | ( | ||||||||||
Decrease in Deferred License Revenue | ( | ( | |||||||||
Changes in Assets and Liabilities | ( | ( | |||||||||
Cash Used In Operating Activities | ( | ( | |||||||||
Cash Flows From Investing Activities: | |||||||||||
Purchase of Investments Available-for-Sale | ( | ( | |||||||||
Sale of Investments Available-for-Sale | |||||||||||
Purchase of Equipment | ( | ( | |||||||||
Purchase of Research and Development Licenses (Related Party) | ( | ||||||||||
Cash Provided By (Used In) Investing Activities | ( | ||||||||||
Cash Flows From Financing Activities: | |||||||||||
Proceeds from Term Loan | |||||||||||
Debt Issuance Costs | ( | ||||||||||
Payments on Short Term Note Payable | ( | ( | |||||||||
Proceeds from the Issuance of Common Stock / Public Offering | |||||||||||
Offering Costs from the Issuance of Common Stock / Public Offering | ( | ( | |||||||||
Proceeds from the Issuance of Common Stock / At-the-Market Offering | |||||||||||
Offering Costs from the Issuance of Common Stock / At-the-Market Offering | ( | ( | |||||||||
Proceeds from the Exercise of Employee Stock Options | |||||||||||
Repurchase of Common Stock to Pay Employee Withholding Taxes | ( | ( | |||||||||
Cash Provided By Financing Activities | |||||||||||
Increase (Decrease) in Cash and Cash Equivalents | ( | ||||||||||
Cash and Cash Equivalents at Beginning of Period | |||||||||||
Cash and Cash Equivalents at End of Period | $ | $ | |||||||||
Supplemental Disclosure of Cash Flow Information: | |||||||||||
Cash Paid for Interest | $ | $ | |||||||||
Supplemental Disclosure of Noncash Investing and Financing Activities: | |||||||||||
Change in Unrealized Loss on Marketable Securities Available-for-Sale | $ | ( | $ | ||||||||
Insurance Financing Note Payable | $ | $ | |||||||||
Fair Value of Warrants issued related to Debt Financing | $ | $ |
As of September 30, | |||||||||||
2020 | 2019 | ||||||||||
Options to purchase common stock | |||||||||||
Unvested restricted stock awards | |||||||||||
Unvested restricted stock units | |||||||||||
Warrants to purchase common stock | |||||||||||
In thousands of U.S. dollars ($) | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||
Products By Geographic Area | Total | U.S. | Rest of World | Total | U.S. | Rest of World | |||||||||||||||||||||||||||||
Drug Revenues | |||||||||||||||||||||||||||||||||||
Product Sales – Point-in-time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
License Fee – Over time | |||||||||||||||||||||||||||||||||||
Total Drug Products | |||||||||||||||||||||||||||||||||||
Concentrate Products | |||||||||||||||||||||||||||||||||||
Product Sales – Point-in-time | |||||||||||||||||||||||||||||||||||
License Fee – Over time | |||||||||||||||||||||||||||||||||||
Total Concentrate Products | |||||||||||||||||||||||||||||||||||
Net Revenue | $ | $ | $ | $ | $ | $ |
In thousands of U.S. dollars ($) | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||
Products By Geographic Area | Total | U.S. | Rest of World | Total | U.S. | Rest of World | |||||||||||||||||||||||||||||
Drug Revenues | |||||||||||||||||||||||||||||||||||
Product Sales – Point-in-time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
License Fee – Over time | $ | $ | |||||||||||||||||||||||||||||||||
Total Drug Products | |||||||||||||||||||||||||||||||||||
Concentrate Products | |||||||||||||||||||||||||||||||||||
Product Sales – Point-in-time | |||||||||||||||||||||||||||||||||||
License Fee – Over time | |||||||||||||||||||||||||||||||||||
Total Concentrate Products | |||||||||||||||||||||||||||||||||||
Net Revenue | $ | $ | $ | $ | $ | $ |
In thousands of U.S. dollars ($) | September 30, 2020 | December 31, 2019 | |||||||||
Receivables, which are included in "Trade and other receivables" | $ | $ | |||||||||
Contract liabilities | $ | $ |
September 30, 2020 | |||||||||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Accrued Interest Income | Fair Value | |||||||||||||||||||||||||
Available-for-Sale Securities | |||||||||||||||||||||||||||||
Bonds | $ | $ | $ | ( | $ | $ |
December 31, 2019 | |||||||||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Accrued Interest | Fair Value | |||||||||||||||||||||||||
Available-for-Sale Securities | |||||||||||||||||||||||||||||
Bonds | $ | $ | $ | ( | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Raw Materials | $ | $ | |||||||||
Work in Process | |||||||||||
Finished Goods | |||||||||||
Total | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Leasehold Improvements | $ | $ | |||||||||
Machinery and Equipment | |||||||||||
Information Technology & Office Equipment | |||||||||||
Laboratory Equipment | |||||||||||
Accumulated Depreciation | ( | ( | |||||||||
Property and Equipment, net | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Accrued Research & Development Expense | $ | $ | |||||||||
Accrued Compensation and Benefits | |||||||||||
Accrued Legal Expenses | |||||||||||
Accrued Marketing Expenses | |||||||||||
Other Accrued Liabilities | |||||||||||
Total Accrued Liabilities | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service-based awards: | |||||||||||||||||||||||
Restricted stock units | $ | $ | $ | $ | |||||||||||||||||||
Stock option awards | |||||||||||||||||||||||
Performance-based awards: | |||||||||||||||||||||||
Restricted stock units | ( | ( | ( | ||||||||||||||||||||
Stock option awards | ( | ||||||||||||||||||||||
( | ( | ( | |||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2020 | $ | ||||||||||
Unvested at September 30, 2020 | $ |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2019 | $ | ||||||||||
Unvested at September 30, 2019 | $ |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2020 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested at September 30, 2020 | $ |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2019 | $ | ||||||||||
Granted | |||||||||||
Forfeited | ( | ||||||||||
Vested | ( | ||||||||||
Unvested at September 30, 2019 | $ |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2020 | $ | ||||||||||
Forfeited | ( | ||||||||||
Unvested at September 30, 2020 | $ |
Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at January 1, 2019 | $ | ||||||||||
Unvested at September 30, 2019 | $ |
September 30, 2020 | |||||
Exercise price | $ | ||||
Expected stock price volatility | |||||
Risk-free interest rate | |||||
Term (years) |
Shares Underlying Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at January 1, 2020 | $ | $ | |||||||||||||||||||||
Granted | — | ||||||||||||||||||||||
Forfeited | ( | — | — | ||||||||||||||||||||
Expired | ( | — | — | ||||||||||||||||||||
Outstanding at September 30, 2020 | $ | $ | |||||||||||||||||||||
Exercisable at September 30, 2020 | $ | $ |
Shares Underlying Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
Outstanding at January 1, 2019 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | — | — | ||||||||||||||||||||
Forfeited | ( | — | — | ||||||||||||||||||||
Outstanding at September 30, 2019 | $ | $ | |||||||||||||||||||||
Exercisable at September 30, 2019 | $ | $ |
Number of Shares | Weighted Average Exercise Price | ||||||||||
Outstanding at January 1, 2020 | $ | ||||||||||
Granted | |||||||||||
Forfeited | ( | ||||||||||
Outstanding at September 30, 2020 | $ | ||||||||||
Exercisable at September 30, 2020 | $ |
Number of Shares | Weighted Average Exercise Price | ||||||||||
Outstanding at January 1, 2019 | $ | ||||||||||
Outstanding at September 30, 2019 | $ | ||||||||||
Exercisable at September 30, 2019 | $ |
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||
Operating leases | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||
Operating lease expense | |||||||||||||||||||||||
Short-term lease rent expense | |||||||||||||||||||||||
Total rent expense | $ | $ | $ | $ | |||||||||||||||||||
Other information | |||||||||||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | $ | |||||||||||||||||||
Right of use assets exchanged for operating lease liabilities | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average remaining lease term – operating leases | |||||||||||||||||||||||
Weighted-average discount rate – operating leases | % | % | % | % |
Year ending December 31, 2020 (remaining) | $ | ||||
Year ending December 31, 2021 | |||||
Year ending December 31, 2022 | |||||
Year ending December 31, 2023 | |||||
Year ending December 31, 2024 | |||||
Total | $ | ||||
Less present value discount | ( | ||||
Operating lease liabilities | $ |
Principal Payments | |||||
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
$ |
For the Three Months Ended September 30, | |||||||||||||||||||||||||||||
2020 | % of Revenue | 2019 | % of Revenue | % Change | |||||||||||||||||||||||||
Net Sales | $ | 15,280 | $ | 15,407 | (0.8) | % | |||||||||||||||||||||||
Cost of Sales | 14,934 | 97.7 | % | 15,424 | 100.1 | % | (3.2) | ||||||||||||||||||||||
Gross Profit (Loss) | 346 | 2.3 | (17) | (0.1) | (2,135.3) | ||||||||||||||||||||||||
Selling and Marketing | 1,669 | 10.9 | 1,827 | 11.9 | (8.6) | ||||||||||||||||||||||||
General and Administrative | 3,622 | 23.7 | 4,623 | 30.0 | (21.7) | ||||||||||||||||||||||||
Research and Product Development | 1,745 | 11.4 | 1,475 | 9.6 | 18.3 | ||||||||||||||||||||||||
Operating Loss | $ | (6,690) | (43.8) | % | $ | (7,942) | (51.5) | % | (15.8) | % |
For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2020 | % of Revenue | 2019 | % of Revenue | % Change | |||||||||||||||||||||||||
Net Sales | $ | 47,033 | $ | 45,812 | 2.7 | % | |||||||||||||||||||||||
Cost of Sales | 44,693 | 95.0 | % | 44,085 | 96.2 | % | 1.4 | ||||||||||||||||||||||
Gross Profit | 2,340 | 5.0 | 1,727 | 3.8 | 35.5 | ||||||||||||||||||||||||
Selling and Marketing | 5,738 | 12.2 | 7,149 | 15.6 | (19.7) | ||||||||||||||||||||||||
General and Administrative | 11,767 | 25.0 | 16,341 | 35.7 | (28.0) | ||||||||||||||||||||||||
Settlement Expense, net of Reimbursement | — | — | 430 | 0.9 | (100.0) | ||||||||||||||||||||||||
Research and Product Development | 5,183 | 11.0 | 4,930 | 10.8 | 5.1 | ||||||||||||||||||||||||
Operating Loss | $ | (20,348) | (43.3) | % | $ | (27,123) | (59.2) | % | (25.0) | % |
EXHIBIT INDEX | ||||||||
Exhibit No. | Description | |||||||
4.1 | ||||||||
4.2 | ||||||||
10.1# | ||||||||
10.2# | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1#** | ||||||||
101.INS* | XBRL Instance Document | |||||||
101.SCH* | XBRL Taxonomy Extension Schema | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Database | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase | |||||||
104* | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in Inline XBRL (included as Exhibit 101) | |||||||
* | Filed herewith | |||||||
#** | Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act | |||||||
# | Indicates management contracts or compensatory plans or arrangements. |
ROCKWELL MEDICAL, INC. | |||||||||||
(Registrant) | |||||||||||
Date: November 9, 2020 | /s/ Russell Ellison | ||||||||||
Russell Ellison Chief Executive Officer (Principal Executive Officer) | |||||||||||
Date: November 9, 2020 | /s/ Russell Skibsted | ||||||||||
Russell Skibsted Chief Financial Officer (Principal Financial Officer) |
Date: | November 9, 2020 | ||||
/s/ Russell Ellison Russell Ellison Chief Executive Officer |
Date: | November 9, 2020 | ||||
/s/ Russell Skibsted Russell Skibsted Chief Financial Officer |
Date: November 9, 2020 | /s/ Russell Ellison | ||||
Russell Ellison Chief Executive Officer | |||||
Date: November 9, 2020 | /s/ Russell Skibsted | ||||
Russell Skibsted Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2020 |
Dec. 31, 2019 |
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Statement of Financial Position [Abstract] | ||
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred shares, shares issued (in shares) | 0 | 0 |
Preferred shares, shares outstanding (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized (in shares) | 170,000,000 | 170,000,000 |
Common shares, shares issued (in shares) | 93,573,165 | 65,378,890 |
Common shares, shares outstanding (in shares) | 93,573,165 | 65,378,890 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Income Statement [Abstract] | ||||
Net Sales | $ 15,280 | $ 15,407 | $ 47,033 | $ 45,812 |
Cost of Sales | 14,934 | 15,424 | 44,693 | 44,085 |
Gross Profit | 346 | (17) | 2,340 | 1,727 |
Selling and Marketing | 1,669 | 1,827 | 5,738 | 7,149 |
General and Administrative | 3,622 | 4,623 | 11,767 | 16,341 |
Settlement Expense | 0 | 0 | 0 | 430 |
Research and Product Development | 1,745 | 1,475 | 5,183 | 4,930 |
Operating Loss | (6,690) | (7,942) | (20,348) | (27,123) |
Other Income (Expense) | ||||
Realized Gain on Investments | 4 | 6 | 8 | 24 |
Warrant Modification Expense | 0 | 0 | (837) | 0 |
Interest Expense | (666) | (16) | (1,289) | (16) |
Interest Income | 2 | 97 | 239 | 289 |
Total Other Income (Expense) | (660) | 87 | (1,879) | 297 |
Net Loss | $ (7,350) | $ (7,855) | $ (22,227) | $ (26,826) |
Basic and diluted net loss per share (in dollars per share) | $ (100) | $ (120) | $ (320) | $ (450) |
Basic and diluted weighted average shares outstanding (in shares) | 71,811,322,000 | 63,796,723,000 | 69,594,167,000 | 59,728,446,000 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (7,350) | $ (7,855) | $ (22,227) | $ (26,826) |
Unrealized Gain (Loss) on Available-for-Sale Debt Instrument Investments | 2 | 6 | (11) | 10 |
Foreign Currency Translation Adjustments | 1 | (1) | 8 | (1) |
Comprehensive Loss | $ (7,347) | $ (7,850) | $ (22,230) | $ (26,817) |
Description of Business |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Rockwell Medical, Inc. and subsidiaries (collectively, “we”, “our”, “us”, or the “Company”), is a biopharmaceutical company dedicated to improving outcomes for patients with iron deficiency and iron-deficiency anemia, with an initial focus on patients with end-stage kidney disease (ESKD) and on dialysis. The Company is focused on developing its proprietary ferric pyrophosphate citrate (“FPC”) therapeutic platform. The first product developed from this platform is Triferic, the first-FDA approved product for the replacement of iron and maintenance of hemoglobin in adult hemodialysis patients. We initiated commercial sales of Triferic Dialysate during the second quarter of 2019 and received approval by the U.S. Food and Drug Administration ("FDA") for the intravenous formulation of Triferic, Triferic AVNU, on March 27, 2020. We plan to leverage our experience with Triferic to develop our FPC platform for iron deficiency and iron deficiency anemia in other disease states. Our lead indication is developing FPC for the treatment of iron deficiency anemia in patients undergoing home infusion therapy. We are also a manufacturer of hemodialysis concentrates for dialysis providers and distributors in the United States and abroad. We supply the domestic market with dialysis concentrates and we also supply dialysis concentrates to distributors serving a number of foreign countries, primarily in the Americas and the Pacific Rim. Our mission is to transform anemia management in a wide variety of disease states across the globe, while improving patients’ lives. Accordingly, we are building the foundation to become a leading medical and commercial organization in the field of iron deficiency. Triferic® is a registered trademark of Rockwell Medical, Inc.
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Liquidity and Capital Resources |
9 Months Ended |
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Sep. 30, 2020 | |
Liquidity and Capital Resources | |
Liquidity and Capital Resources | Liquidity and Capital Resources As of September 30, 2020, the Company had approximately $56.6 million of cash and cash equivalents, $10.7 million of investments available-for-sale, working capital of $65.2 million and an accumulated deficit of $328.7 million. Net cash used in operating activities for the nine months ended September 30, 2020 was approximately $21.1 million. Management evaluated the Company’s ability to continue as going concern for at least the next 12 months from the filing of this report. Based on the currently available working capital, capital raise and debt financing described below, management believes the Company currently has sufficient funds to meet its operating requirements for at least the next twelve months from the date of the filing of this report. In February 2020, the Company sold 3,670,212 shares of its common stock for proceeds of $8.0 million, net of issuance costs. On March 16, 2020, the Company closed a debt financing transaction with net proceeds at closing of approximately $21.2 million, net of fees and expenses (See Note 15 for further detail). On September 23, 2020, the Company sold 23,178,809 shares of its common stock for proceeds of $32.7 million, net of issuance costs (see Note 10 for further detail). During the nine months ended September 30, 2020, the Company sold 1,128,608 shares of its common stock as part of its sales agreement with Cantor Fitzgerald & Co. for proceeds of $2.3 million, net of issuance costs. Approximately $32.3 million remains available for sale under this facility. See Note 10 for further detail. The Company will require additional capital to sustain its operations and make the investments it needs to execute upon its longer-term business plan, including the commercialization of Triferic Dialysate and Triferic AVNU, executing upon our plans for enhancing Triferic's medical capabilities, generating additional data for Triferic and developing Triferic for new therapeutic indications. If the Company is unable to generate sufficient revenue from its existing long-term business plan, the Company will need to obtain additional equity or debt financing. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available on favorable terms, if at all. In addition, the Company is subject to certain covenants and cure provisions under our Loan Agreement with Innovatus. As of the date of this report, the Company believes that it will either be able to satisfy such covenants or, in the event of a breached covenant, exercise cure provisions to avoid an event of default. If we are unable to avoid an event of default, any required repayments could have an adverse effect on our liquidity (See Note 15 for further detail). The COVID-19 pandemic and resulting domestic and global disruptions have adversely affected our business and operations, including, but not limited to, our sales and marketing efforts and our research and development activities, and the operations of third parties upon whom we rely. Quarantines, shelter-in-place, executive and similar government orders and the recent surge in infections domestically may negatively impact our sales and marketing activities, particularly if our sales representatives are unable to interact with current and potential customers to the same extent as before onset of the COVID-19 pandemic. Our international business development activities may also be negatively impacted by COVID-19, especially with the recent surge in infections and resulting quarantines or shelter-in-place orders. Depending on the severity of the impact on our sales and marketing efforts, the timing of our commercial launch of Triferic AVNU could be delayed. The COVID-19 pandemic, the recent domestic and international surge in infections and resulting global disruptions have caused significant volatility in financial and credit markets. We have utilized a range of financing methods to fund our operations in the past; however, current conditions in the financial and credit markets may limit the availability of funding, refinancing or increase the cost of funding. Due to the rapidly evolving nature of the global situation, it is not possible to predict the extent to which these conditions could adversely affect our liquidity and capital resources in the future.
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Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements The accompanying condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States (“U.S.”) of America (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U. S. Securities and Exchange Commission (“SEC”) and on the same basis as the Company prepares its annual audited consolidated financial statements. The condensed consolidated balance sheet at September 30, 2020, condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019, condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2020 and 2019, condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, and condensed consolidated statement of changes in shareholder’s equity for the three and nine months ended September 30, 2020 and 2019 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 for the periods presented. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the year ending December 31, 2020 or for any future interim period. The condensed consolidated balance sheet at December 31, 2019 has been derived from audited financial statements, however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the SEC on Form 10-K on March 17, 2020. The Company’s consolidated subsidiaries consisted of its wholly-owned subsidiaries, Rockwell Transportation, Inc. and Rockwell Medical India Private Limited. The accompanying condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the 2019 financial statements and notes to conform to the 2020 presentation. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Leases The Company accounts for its leases under Accounting Standards Codification (“ASC”) 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Loss Per Share ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”), with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that are then sharing in the earnings of the entity. Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss by the weighted average number of shares outstanding during the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive. The Company has only incurred losses, therefore, basic and diluted net loss per share is the same. Securities that could potentially dilute net income per share in the future that were not included in the computation of diluted loss per share were as follows:
Adoption of Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a review to determine the consequences of the change to its consolidated financial statements and assures that there are sufficient controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260) and Derivatives and Hedging (Topic 815)- Accounting for Certain Financial Instruments with Down Round Features” (“ASU 2017-11”). Equity-linked instruments, such as warrants and convertible instruments may contain down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Under ASU 2017-11, a down round feature will no longer require a freestanding equity-linked instrument (or embedded conversion option) to be classified as a liability that is remeasured at fair value through the income statement (i.e. marked-to-market). However, other features of the equity-linked instrument (or embedded conversion option) must still be evaluated to determine whether liability or equity classification is appropriate. Equity classified instruments are not marked-to-market. For earnings per share ("EPS") reporting, the ASU requires companies to recognize the effect of the down round feature only when it is triggered by treating it as a dividend and as a reduction of income available to common shareholders in basic EPS. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. This standard, which the Company as adopted on January 1, 2020, and did not have a material impact on the Company’s financial position, results of operations or cash flows.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: •Step 1: Identify the contract with the customer •Step 2: Identify the performance obligations in the contract •Step 3: Determine the transaction price •Step 4: Allocate the transaction price to the performance obligations in the contract •Step 5: Recognize revenue when the company satisfies a performance obligation Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight related to contracts with customers are accounted for as a fulfillment cost and are included in cost of sales when control of the goods transfers to the customer. Nature of goods and services The following is a description of principal activities from which the Company generates its revenue. Product sales –The Company accounts for individual products and services separately if they are distinct (i.e., if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any discounts, is allocated between separate products and services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the cost plus margin approach. Drug and dialysis concentrate products are sold directly to dialysis clinics and to wholesale distributors in both domestic and international markets. Distribution and license agreements for which upfront fees are received are evaluated upon execution or modification of the agreement to determine if the agreement creates a separate performance obligation from the underlying product sales. For all existing distribution and license agreements, the distribution and license agreement is not a distinct performance obligation from the product sales. In instances where regulatory approval of the product has not been established and the Company does not have sufficient experience with the foreign regulatory body to conclude that regulatory approval is probable, the revenue for the performance obligation is recognized over the term of the license agreement (over time recognition). Conversely, when regulatory approval already exists or is probable, revenue is recognized at the point in time that control of the product transfers to the customer. The Company received upfront fees under four distribution and license agreements that have been deferred as a contract liability. The amounts received from Wanbang Biopharmaceuticals Co., Ltd. (“Wanbang”) and Sun Pharmaceutical Industries Ltd. ("Sun Pharma") and amounts to be received Jeil Pharmaceutical Co., Ltd. ("Jeil Pharma") are recognized as revenue over the estimated term of the applicable distribution and license agreement as regulatory approval was not received and the Company did not have sufficient experience in China, India and South Korea, respectively, to determine that regulatory approval was probable as of the execution of the agreement. The amounts received from Baxter Healthcare Corporation (“Baxter”), are recognized as revenue at the point in time that the estimated product sales under the agreement occur. For the business under the Company’s distribution agreement with Baxter (the “Baxter Agreement”), and for the majority of the Company’s international customers, the Company recognizes revenue at the shipping point, which is generally the Company’s plant or warehouse. For other business, the Company recognizes revenue based on when the customer takes control or receipt of the product. The amount of revenue recognized is based on the purchase order less returns and adjusted for any rebates, discounts, chargebacks or other amounts paid to customers. There were no such adjustments for the periods reported. Customers typically pay for the product based on customary business practices with payment terms averaging 30 days, while distributor payment terms average 45 days. Disaggregation of revenue Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.
Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
There were no material losses recognized related to any receivables arising from the Company’s contracts with customers for the three and nine months ended September 30, 2020 and 2019. For the three and nine months ended September 30, 2020 and September 30, 2019, the Company did not recognize any material bad-debt expense. There were no material contract assets recorded on the condensed consolidated balance sheet as of September 30, 2020 and December 31, 2019. The Company does not generally accept returns of its concentrate products and no material reserve for returns of concentrate products was established as of September 30, 2020 or December 31, 2019. The contract liabilities primarily relate to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products Transaction price allocated to remaining performance obligations For the three and nine months ended September 30, 2020, revenue recognized from performance obligations related to prior periods was not material. Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, totaled $10.7 million as of September 30, 2020. The amount relates primarily to upfront payments and consideration received from customers that are received in advance of the customer assuming control of the related products. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The Baxter Agreement includes minimum commitments of product sales over the duration of the agreement. Unfulfilled minimum commitments related to the Baxter Agreement are product sales of $7.7 million as of September 30, 2020, which is being amortized ratably through expiration of the Baxter Agreement on October 2, 2024.
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Investments - Available-for-Sale |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments - Available-for-Sale | Investments - Available-for-Sale Investments available-for-sale consisted of the following as of September 30, 2020 and December 31, 2019 (table in thousands):
The fair value of investments available-for-sale are determined using quoted market prices from daily exchange-traded markets based on the closing price as of the balance sheet date and are classified as a Level 1 measurement under ASC 820 Fair Value Measurements. As of September 30, 2020 and December 31, 2019, the amortized cost and estimated fair value of our available-for-sale securities were due within one year.
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Inventory |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory Components of inventory, net of reserves, as of September 30, 2020 and December 31, 2019 are as follows (table in thousands):
As of September 30, 2020, we classified $0.9 million of inventory as non-current, all of which was related to Triferic or the active pharmaceutical ingredient and raw materials for Triferic. As of September 30, 2020, the total Triferic inventory was $3.8 million, against which we had reserved $2.7 million. The $1.1 million net value of Triferic inventory consisted of $0.1 million of Triferic Dialysate finished goods with expiration dates ranging from December 2020 to May 2021, $0.3 million of Triferic API with estimated remaining shelf life extending through 2021, and $0.7 million of raw materials for Triferic with estimated remaining shelf life extending beyond 2025.
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Property And Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment As of September 30, 2020 and December 31, 2019, the Company’s property and equipment consisted of the following (table in thousands):
Depreciation expense for the three months ended September 30, 2020 and 2019 totaled $0.2 million. Depreciation expense for the nine months ended September 30, 2020 and 2019 totaled $0.6 million.
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Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities Accrued liabilities as of September 30, 2020 and December 31, 2019 consisted of the following (table in thousands):
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Deferred Revenue |
9 Months Ended |
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Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | Deferred Revenue In October 2014, the Company entered into the Baxter Agreement with Baxter and received an upfront fee of $20 million. The upfront fee was recorded as deferred revenue and is being recognized based on the proportion of product shipments to Baxter in each period, compared with total expected sales volume over the term of the Baxter Agreement, which expires in October 2024. The Company recognized revenue of approximately $0.5 million and $1.5 million for the three and nine months ended September 30, 2020 and 2019, respectively. Deferred revenue related to the Baxter Agreement totaled $7.7 million as of September 30, 2020 and $9.1 million as of December 31, 2019. If a “Refund Trigger Event” occurs under the Baxter Agreement, we would be obligated to repay a portion of the upfront fee and any paid portion of the facility fee. In the event of a Refund Trigger Event occurring from October 1, 2020 to December 31, 2021, Baxter would be eligible for a 25% refund of the Baxter Agreement’s upfront fee. In addition, if Baxter terminates the Baxter Agreement because Baxter has been enjoined by a court of competent jurisdiction from selling in the United States any product covered by the Baxter Agreement due to a claim of intellectual property infringement or misappropriation relating to such product prior to the end of 2020, Baxter would be eligible for a partial refund of the upfront fee of $5.0 million. In no event does the Baxter Agreement require more than one refund be paid. In 2016, the Company entered into a distribution and license agreement with Wanbang (the "Wanbang Agreement") and received an upfront fee of $4.0 million. The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of approximately $53,000 and $0.2 million for the three and nine months ended September 30, 2020 and 2019, respectively. Deferred revenue related to the Wanbang Agreement totaled $2.8 million as of September 30, 2020 and $3.0 million as of December 31, 2019. On January 14, 2020, the Company entered into license and supply agreements with Sun Pharma (the "Sun Pharma Agreements"), for the rights to commercialize Triferic Dialysate (ferric pyrophosphate citrate) in India. Under the terms of the Sun Pharma Agreements, Sun Pharma will be the exclusive development and commercialization partner for Triferic Dialysate in India, and the Company will supply the product to Sun Pharma. In consideration for the license, the Company received an upfront fee of $0.1 million, and will be eligible for milestone payments and royalties on net sales. A Joint Alliance Committee, comprised of members from the Company and Sun Pharma, will guide the development and execution for Triferic Dialysate in India. Sun Pharma will be responsible for all clinical and regulatory approval, as well as commercialization activities. The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of approximately $2,500 and $7,500 during the three and nine months ended September 30, 2020, respectively. Deferred revenue related to the Sun Pharma Agreement totaled $92,500 as of September 30, 2020. On September 7, 2020, the Company entered into a license and supply agreements with Jeil Pharma (the "Jeil Pharma Agreements"), for the rights to commercialize Triferic Dialysate (ferric pyrophosphate citrate) in South Korea. Under the terms of the Jeil Pharma Agreements, Jeil Pharma will be the exclusive development and commercialization partner for Triferic Dialysate in South Korea, and the Company will supply the product to Jeil Pharma. In consideration for the license, the Company received an upfront fee of $0.2 million, and will be eligible for milestone payments and royalties on net sales. A Joint Alliance Committee, comprised of members from the Company and Jeil Pharma, will guide the development and execution for Triferic Dialysate in South Korea. Jeil Pharma will be responsible for all clinical and regulatory approval, as well as commercialization activities. The upfront fee was recorded as deferred revenue and is being recognized as revenue based on the agreement term. The Company recognized revenue of nil during the three and nine months ended September 30, 2020.
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Stockholders’ Equity |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock As of September 30, 2020 and December 31, 2019, there were 2,000,000 shares of preferred stock, $0.0001 par value per share, authorized and no shares of preferred stock issued or outstanding. Common Stock As of September 30, 2020 and December 31, 2019, there were 170,000,000 shares of common stock, $0.0001 par value per share, authorized and 93,573,165 and 65,378,890 shares issued and outstanding, respectively. Controlled Equity Offering (or "At the Market" Offering) On March 22, 2019, the Company entered into a sales agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may offer and sell from time to time shares of the Company’s common stock through the Agent. The offering and sale of up to $40.0 million of the shares has been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the Company’s registration statement on Form S-3 (File No. 333-227363), which was originally filed with the SEC on September 14, 2018 and declared effective by the SEC on October 1, 2018, the base prospectus contained within the registration statement, and a prospectus supplement that was filed with the SEC on March 22, 2019. Sales of the shares, if any, pursuant to the Sales Agreement, may be made in sales deemed to be an “at the market" offering as defined in Rule 415(a) of the Securities Act, including sales made directly through the Nasdaq Global Market or on any other existing trading market for the Company’s common stock. The Company intends to use the proceeds from the offering for working capital and other general corporate purposes. The Company may suspend or terminate the Sales Agreement at any time. During the year ended December 31, 2019, the Company sold 1,840,443 of shares of its common stock pursuant to the Sales Agreement for gross proceeds of $5,383,079, at a weighted average selling price of approximately $2.92. The Company paid $309,479 in commissions and offering fees related to the sale of the common stock. For the nine months ended September 30, 2020, the Company sold 1,128,608 of shares of its common stock pursuant to the Sales Agreement for gross proceeds of $2,325,478, at a weighted average selling price of approximately $2.06. The Company paid $63,000 in commissions and offering fees related to the sale of common stock. Approximately $32.3 million remains available for sale under this facility. We are not required to sell any shares at any time during the term of the facility. Our ability to sell common stock under the facility may be limited by several factors including, among other things, the trading volume of our common stock and certain black-out periods that we may impose upon the facility, among other things. Public Offering of Common Stock On February 4, 2020, the Company entered into an underwriting agreement with Cantor Fitzgerald & Co., as underwriter, pursuant to which the Company agreed to issue and sell an aggregate of up to 3,670,212 shares of its common stock, which included 478,723 optional shares that may be sold pursuant to an over-allotment option granted to the underwriters. On February 6, 2020, the Company closed the sale of 3,191,489 shares of its common stock at the public offering price of $2.22 per share (the "Offering"). On February 19, 2020, the underwriter exercised its over-allotment option to purchase an additional 478,723 shares at a price of $2.22 per share, which closed on February 21, 2020. The Company raised a total of $8.0 million, net of issuance costs of $0.1 million, relating to the sale of the common stock in the Offering. The Offering was made pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-227363), which was previously filed with the SEC. On September 23, 2020, the Company entered into a Securities Purchase Agreement (the “2020 Purchase Agreement”) with certain purchasers named therein, pursuant to which the Company agreed to issue and sell to several institutional and accredited investors in a registered direct offering, 21,818,544 shares of common stock and warrants to purchase up to 23,178,509 shares of common stock (the “Warrants”) at a combined purchase price equal to $1.51 per share. Each Warrant is exercisable for one share of common stock at an exercise price of $1.80 per share. The Warrants are immediately exercisable and will expire on September 25, 2022. The Company also offered to certain purchasers pre-funded warrants to purchase up to an aggregate of 1,360,265 shares of common stock (the “Pre-Funded Warrants”), in lieu of shares of common stock. The purchase price of each Pre-Funded Warrant is equal to the price at which a share of common stock is sold to the public in the offering, minus $0.001, and the exercise price of each Pre-Funded Warrant is $0.001 per share. The Pre-Funded Warrants were exercised in conjunction with the issuance of common stock under the Securities Purchase Agreement. The Company received gross proceeds of approximately $35.0 million in connection with the offering, before deducting placement agent fees and related offering expenses of approximately $2.3 million. A holder (together with its affiliates) may not exercise any portion of the Warrant to the extent that the holder would own more than 9.99% (or, at the holder’s option upon issuance, 4.99%) of the Company’s outstanding common stock immediately after exercise, as such percentage ownership is determined in accordance with the terms of the Warrant or Pre-Funded Warrant. The Company agreed to pay H.C. Wainwright & Co., LLC (the "Placement Agent") a cash fee of 6.0% of the aggregate gross proceeds raised in the offering, minus $420,000 payable by the Company to a financial advisory firm for services related to the offering. In addition, the Company agreed to pay the Placement Agent (i) 6.0% of the aggregate gross proceeds to be received, if any, from the cash exercise of any Warrants through December 25, 2021 and (ii) 4.0% of the aggregate gross proceeds to be received, if any, from the cash exercise of any Warrants subsequent to December 25, 2021. The Company also agreed to pay the Placement Agent non-accountable expenses of $50,000 as well as $12,900 for the clearing fees of the Placement Agent in connection with the offering. The Company has accounted for the common stock for the 2020 Purchase Agreement as equity on the accompanying consolidated balance sheets as of September 30, 2020. The amount allocated to common stock was $26.1 million. This allocation is equal to the total proceeds of $35.0 million less the amount allocated to Warrants of $8.9 million and is also net of the direct and incremental costs associated with the 2020 Purchase Agreement of $2.3 million. The Black-Scholes pricing model was used to calculate the value of Warrants relating to the 2020 Purchase Agreement.
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2020 and 2019 as follows (table in thousands):
Restricted Stock A summary of the Company’s restricted stock awards during the nine months ended September 30, 2020 is as follows:
A summary of the Company’s restricted stock awards during the nine months ended September 30, 2019 is as follows:
The fair value of restricted stock awards are measured based on their fair value on the date of grant and amortized over the vesting period of 20 months. As of September 30, 2020, unvested restricted stock awards of 146,800 were related to performance-based awards. Service-Based Restricted Stock Units A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2020 is as follows:
A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2019 is as follows:
The fair value of service based restricted stock units are measured based on their fair value on the date of grant and amortized over the vesting period. The vesting periods range from 1 to 3 years. Stock-based compensation expense of nil and $0.2 million was recognized during the three and nine months ended September 30, 2020, respectively. Stock-based compensation expense of $0.5 million and $1.3 million was recognized during the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, the unrecognized stock-based compensation expense was $0.3 million, which is expected to be recognized over an estimated weighted average remaining term of less than 1 year. Included in the forfeited service-based restricted stock units are 96,541 and 55,556 units related to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020 and the former Chief Financial Officer on July 3, 2020, respectively. These forfeited awards reduced stock-based compensation expense by $0.4 million. Performance-Based Restricted Stock Units A summary of the Company’s performance-based restricted stock units during the nine months ended September 30, 2020 is as follows:
A summary of the Company’s performance-based restricted stock units during the nine months ended September 30, 2019 is as follows:
Stock-based compensation expense recognized for performance-based restricted stock units was ($0.1) million and ($1.1) million during the three and nine months ended September 30, 2020 and ($0.3) million and $0.5 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, there was no unrecognized stock-based compensation expense related to performance-based restricted stock units. The forfeited performance-based restricted stock awards of 988,958 is due to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020 and the resignation of the Company's former Chief Financial Officer effective July 3, 2020. These forfeited awards reduced stock-based compensation expense for the three and nine months ended September 30, 2020 by $0.1 million and $1.4 million, respectively. Service-Based Stock Options The fair value of the service-based stock options granted for the nine months ended September 30, 2020 were based on the following assumptions:
A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2020 is as follows:
A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2019 is as follows:
The aggregate intrinsic value in the table above is calculated as the difference between the closing price of our common stock and the exercise price of the stock options that had strike prices below the closing price. During the nine months ended September 30, 2020, the Company granted stock options to purchase up to 2,252,344 shares of common stock to certain employees. During the nine months ended September 30, 2020, 440,026 shares were forfeited. Forfeitures are recorded in the period of occurrence; compensation expense is adjusted accordingly. Stock-based compensation expense recognized for service-based stock options was $0.2 million and $1.0 million for the three and nine months ended September 30, 2020, respectively. Stock-based compensation expense recognized for service-based stock options was $0.6 million and $1.8 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, total stock-based compensation expense related to unvested options not yet recognized totaled approximately $2.8 million, which is expected to be recognized over an estimated weighted average remaining term of 2.4 years. Included in the forfeited service-based stock options are 129,375 unvested options related to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020 and 222,222 unvested options related to the resignation of the Company's former Chief Financial Officer effective July 3, 2020. These forfeited awards reduced stock-based compensation expense by $0.5 million. Included in the expired service-based stock options are 3,783,335 options related to the settlement with the former Chief Executive Officer, Robert Chioini, former Chief Financial Officer, Thomas Klema, and a former and then current director. See Note 14 for further details. Performance-Based Stock Options A summary of the performance-based stock options for the nine months ended September 30, 2020 is as follows:
A summary of the performance-based stock options for the nine months ended September 30, 2019 is as follows:
Stock-based compensation expense recognized for performance-based stock options was $0.1 million and ($0.4) million for the three and nine months ended September 30, 2020. Stock-based compensation expense recognized for performance-based stock options was $0.1 million and $0.4 million during the three and nine months ended September 30, 2019. As of September 30, 2020, the unrecognized stock-based compensation expense related to unvested performance-based stock options was $0.4 million. The forfeited unvested performance-based stock options of 388,125 is due to the resignation of the Company's former President and Chief Executive Officer on April 17, 2020. These forfeited options reduced stock-based compensation expense by $0.7 million.
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Product License Agreements The Company is a party to a Licensing Agreement with Charak, LLC ("Charak") dated January 7, 2002 (the "2002 Agreement") that grants the Company exclusive worldwide rights to certain patents and information related to our Triferic® product. On October 7, 2018, the Company entered into a Master Services and IP Agreement (the “Charak MSA”) with Charak and Dr. Ajay Gupta, who serves as Executive Vice President and Chief Scientific Officer of the Company. Pursuant to the MSA, the parties entered into three additional agreements described below related to the license of certain soluble ferric pyrophosphate (“SFP”) intellectual property owned by Charak, as well as the Employment Agreement (defined below). The Charak MSA provided for a payment of $1.0 million to Dr. Gupta, payable in four quarterly installments of $250,000 each on October 15, 2018, January 15, 2019, April 15, 2019 and July 15, 2019, and reimbursement for certain legal fees incurred in connection with the Charak MSA. The Company paid all four of the quarterly installments totaling $1.0 million and accrued $0.1 million for the reimbursement of certain legal expenses during the year ended December 31, 2019. As of September 30, 2020, the Company has fulfilled its reimbursement obligation of certain legal expenses and accrued $0.1 million relating to certain IP reimbursement expenses and certain sublicense royalty fees as a related party payable on the condensed consolidated balance sheet. Pursuant to the Charak MSA, the aforementioned parties entered into an Amendment, dated as of October 7, 2018 (the “Charak Amendment”), to the 2002 Agreement, under which Charak granted the Company an exclusive, worldwide, non-transferable license to commercialize SFP for the treatment of patients with renal failure. The Charak Amendment amends the royalty payments due to Charak under the 2002 Agreement such that the Company is liable to pay Charak royalties on net sales by the Company of products developed under the license, which includes the Company’s Triferic® product, at a specified rate until December 31, 2021 and thereafter at a reduced rate from January 1, 2022 until February 1, 2034. Additionally, the Company shall pay Charak a percentage of any sublicense income during the term of the agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sub-licensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and be no less than a lower rate of the net sales of the licensed products by the sub-licensee in jurisdictions where there exists no valid claim, on a country-by-country basis. Also pursuant to the Charak MSA, the Company and Charak entered into a Commercialization and Technology License Agreement I.V. Triferic® (now Triferic AVNU), dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sub-licensable, royalty-bearing license to SFP for the purpose of commercializing certain intravenous-delivered products incorporating SFP for the treatment of iron disorders worldwide for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. The Company is liable to pay Charak royalties on net sales by the Company of products developed under the license at a specified rate until December 31, 2021. From January 1, 2022 until February 1, 2034, the Company is liable to pay Charak a base royalty at a reduced rate on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sub-licensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sub-licensee in jurisdictions where there exists no valid claim, on a country-by-country basis. Also pursuant to the Charak MSA, the Company and Charak entered into a Technology License Agreement TPN Triferic®, dated as of October 7, 2018 (the “TPN Agreement”), pursuant to which Charak granted the Company an exclusive, sublicensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain parenteral nutritional ("TPN”) products incorporating SFP. The license grant under the TPN Agreement continues for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent. During the term of the TPN Agreement, the Company is liable to pay Charak a base royalty on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis. The Company shall also pay to Charak a percentage of any sublicense income received during the term of the TPN Agreement, which amount shall not be less than a minimum royalty on net sales of the licensed products by the sub-licensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sub-licensee in jurisdictions where there exists no valid claim, on a country-by-country basis. The transaction was accounted for as an asset acquisition pursuant to ASU 2017-1, Business Combinations (Topic 805), Clarifying the Definition of a Business, as the majority of the fair value of the assets acquired was concentrated in a group of similar assets, and the acquired assets did not have outputs or employees. The assets acquired under the Charak MSA include a license of SFP. Because SFP has not yet received regulatory approval, the $1.1 million purchase price paid and accrued for these assets has been expensed in the Company’s statement of operations for the year ended December 31, 2018. In addition, because the potential milestone payments are not yet considered probable, no milestone payments have been accrued at September 30, 2020.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We lease our production facilities and administrative offices as well as certain equipment used in our operations including leases on transportation equipment used in the delivery of our products. The lease terms range from monthly to five years. We occupy a 51,000 square foot facility and a 17,500 square foot facility in Wixom, Michigan under a lease expiring in August 2021. We also occupy two other manufacturing facilities, a 51,000 square foot facility in Grapevine, Texas under a lease expiring in December 2020, and a 57,000 square foot facility in Greer, South Carolina under a lease expiring February 2023. In addition, we occupy a 1,408 square foot office space in Greer, South Carolina under a lease expiring April 2021. Finally, we executed a lease for 4,100 square feet of office space in Hackensack, New Jersey with a lease term beginning on April 1, 2019 and expiring on July 1, 2024. At September 30, 2020, the Company had operating lease liabilities of $2.2 million and right-of-use assets of $2.1 million, which are included in the consolidated balance sheet. The following summarizes quantitative information about the Company’s operating leases (table in thousands):
Future minimum rental payments under operating lease agreements are as follows (in thousands):
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Demand Notice In February 2020, the Company received a letter from a supplier relating to a supply agreement entered into with the Company in 2015. The supplier alleged the Company did not meet certain annual minimums under the supply agreement, and has requested $3.0 million in penalties, plus payment of the cost for certain raw materials. While the Company believed it had several defenses to the supplier's claim, the Company and the supplier negotiated an amicable resolution of the dispute. On July 31, 2020, the Company and the supplier entered into a settlement agreement, which released the Company from any penalties relating to annual minimums under the 2015 agreement, established new minimums under an amended supply agreement and required the Company to pay for certain raw materials with 50% of the cost to be paid upon execution of the settlement agreement and the remaining 50% to be paid no later than December 31, 2020. As of September 30, 2020, the Company has purchased 50% of the required raw materials under the settlement agreement. Litigation SEC Investigation As a follow up to certain prior inquiries, the Company received a subpoena from the SEC during the Company’s quarter ended September 30, 2018 requesting, among other things, certain information and documents relating to the status of the Company’s request to the Centers for Medicare & Medicaid Services (the "CMS") for separate reimbursement status for Triferic Dialysate, the Company’s reserving methodology for expiring Triferic inventory, and the basis for the Board’s termination of the former Chief Executive Officer, Robert Chioini, and former Chief Financial Officer, Thomas Klema, in 2018. The Company is cooperating with the SEC and is responding to the SEC’s requests for documents and information. Shareholder Class Action Lawsuits On July 27, 2018, Plaintiff Ah Kit Too filed a putative class action lawsuit in the United States District Court in the Eastern District of New York against the Company and former officers, Robert Chioini and Thomas Klema (the "Too Complaint"). The Too Complaint is a federal securities class action purportedly brought on behalf of a class consisting of all persons and entities, other than Defendants, who purchased or otherwise acquired the publicly traded securities of the Company between March 16, 2018 and June 26, 2018. The Too Complaint alleges that the Company and Messrs. Chioini and Klema violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, the Too Complaint alleges that defendants filed reports with the SEC that contained purported inaccurate and misleading statements regarding the potential for the Company’s drug, Triferic, to quality for separate reimbursement status by the CMS. On September 4, 2018, Plaintiff Robert Spock filed a similar putative class action lawsuit in the United States District Court in the Eastern District of New York against the Company and Messrs. Chioini and Klema (the "Spock Complaint"). The Spock Complaint is a federal securities class action purportedly brought on behalf of a class consisting of persons who purchased the Company’s securities between November 8, 2017 and June 26, 2018. This complaint alleges that the Company and Messrs. Chioini and Klema violated the Exchange Act in that the Company was aware the CMS would not pursue the Company’s proposal for separate reimbursement for Triferic; misstated reserves in the Company’s quarterly report for the first quarter of 2018; had a material weakness its internal controls over financial reporting, which rendered those controls ineffective; Mr. Chioini withheld material information regarding Triferic from the Company’s auditor, corporate counsel, and independent directors of the Board; and, as a result of these alleged issues, statements about the Company’s business were materially false and misleading. On September 25, 2018, four Company stockholders filed motions to appoint lead plaintiffs, lead counsel, and to consolidate the Ah Kit Too v. Rockwell securities class action with the Spock v. Rockwell securities class action. On October 10, 2018, the court issued an order consolidating the two actions, appointing co-lead plaintiffs and co-lead counsel. On December 10, 2018, lead Plaintiffs filed a consolidated amended complaint, which included the same allegations as the initial complaints and asserted claims on behalf of a putative class consisting of person who purchased the Company’s securities between November 8, 2017 and June 26, 2018. On February 18, 2019, the Company answered the consolidated amended complaint. On August 7, 2019, all parties to the class action entered into a settlement of the consolidated class action. Pursuant to the terms and conditions of the settlement agreement, the Company will pay the Plaintiffs $3.7 million (the “Settlement Amount") in exchange for a full release of all liability as to all defendants. This resulted in a settlement expense of approximately $0.4 million for the year ended December 31, 2019. Of the Settlement Amount, the Company contributed approximately $0.1 million, which represented the remaining retention amount under the Company’s director and officer liability insurance policy as of September 30, 2020. The remainder of the settlement amount was funded by the Company’s director and officer insurance carrier. The settlement was approved by the court on February 26, 2020. Shareholder Derivative Actions Plaintiff Bill Le Clair filed a Verified Stockholder Derivative Complaint on April 23, 2019 in Case No. 1:19-cv-02373, and Plaintiff John Post filed a Verified Stockholder Derivative Complaint on May 10, 2019 in Case No. 1:19-cv-02774 (the “Derivative Complaints”) in the United States District Court in the Eastern District of New York, purportedly on behalf of the Company (as nominal defendant) and against certain of the Company’s current and former directors (the “Individual Defendants”). The Derivative Complaints assert causes of actions against the Individual Defendants for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The Derivative Complaints allege the Individual Defendants breached duties by, among other things, permitting alleged misstatements to be made in public filings regarding the status of separate reimbursement for Triferic from CMS, the adequacy of the Company's reserves and internal controls. The Derivative Complaints demand a jury trial, seeking monetary damages, corporate governance and internal procedure reform, injunctive relief on the Individual Directors’ trading activities, restitution, and attorneys’ fees. The cases were consolidated. The Company tendered the above shareholder derivative actions to its director and officer insurance carrier(s) for defense and indemnity under its applicable insurance policies. On May 18, 2020, the Company, the Individual Defendants and the Plaintiffs (the "Settling Parties") entered into a formal Stipulation of Settlement, which memorializes the terms of the Settling Parties' settlement of the Derivative Complaints. A hearing occurred before the court on August 10, 2020 and the court issued a final order approving the settlement. The Company's director and officer insurance carrier has funded the settlement on behalf of the Company.
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Loans and Security Agreement |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Security Agreement | Loan and Security Agreement On March 16, 2020, Rockwell Medical, Inc. and Rockwell Transportation, Inc., as Borrowers, entered into a Loan and Security Agreement (the "Loan Agreement") with Innovatus Life Sciences Lending Fund I, LP ("Innovatus"), as collateral agent and the lenders party thereto, pursuant to which Innovatus, as a lender, agreed to make certain term loans to the Company in the aggregate principal amount of up to $35.0 million (the "Term Loans"). Funding of the first $22.5 million tranche was completed on March 16, 2020. The Company is no longer eligible to draw on a second tranche of $5.0 million, which was tied to the achievement of certain milestones by a specific date. The Company may be eligible to draw on a third tranche of $7.5 million upon the achievement of certain additional milestones, including the achievement of certain Triferic sales thresholds. Net draw down proceeds were $21.2 million with closing costs of $1.3 million. The Company is entitled to make interest-only payments for thirty months, or up to thirty-six months if certain conditions are met. The Term Loans will mature on March 16, 2025, and will bear interest at the greater of (i) Prime Rate (as defined in the Loan Agreement) and (ii) 4.75%, plus 4.00% with an initial interest rate of 8.75% per annum and an effective interest rate of 10.9%. The Company has the option, under certain circumstances, to add 1.00% of such interest rate amount to the then outstanding principal balance in lieu of paying such amount in cash. For the three and nine months ended September 30, 2020, interest expense amounted to $0.7 million and $1.3 million, respectively. The Loan Agreement is secured by all assets of the Company and Rockwell Transportation, Inc. Proceeds will be used for working capital purposes. The Loan Agreement contains customary representations and warranties and covenants, subject to customary carve outs, and includes financial covenants related to liquidity and trailing twelve months sales of Triferic, with the latter beginning with the period ending December 31, 2020. We cannot assure you that we can maintain compliance with the covenants under our Loan Agreement, which may result in an event of default. Our ability to comply with these covenants may be adversely affected by events beyond our control. For example, the Loan Agreement contains certain financial covenants relating to sales and, as a result of the ongoing COVID-19 pandemic and its effect on our sales activities, among other factors, we may not be able to satisfy such covenants in the future. Based on our annualized Triferic sales through September 30, 2020, we may not satisfy this covenant as of December 31, 2020. If we are unable to comply with the covenants under our Loan Agreement, we intend to pursue all available cure options in order to regain compliance. However, we may not be able to mutually agree with Innovatus on appropriate remedies to cure a breach of a covenant, which could give rise to an event of default. If we are unable to avoid an event of default, any required repayments could have an adverse effect on our liquidity. As of September 30, 2020, the Company is in compliance with all the reporting and financial covenants. In connection with each funding of the Term Loans, the Company is required to issue to Innovatus a warrant (the “Warrants”) to purchase a number of shares of the Company’s common stock equal to 3.5% of the principal amount of the relevant Term Loan funded divided by the exercise price, which will be based on the lower of (i) the volume weighted average closing price of the Company’s stock for the 5-trading day period ending on the last trading day immediately preceding the execution of the Loan Agreement or (ii) the closing price on the last trading day immediately preceding the execution of the Loan Agreement (or for the second and third tranches only at the lower of (i) $1.65 per share or (ii) the volume weighted average closing price of the Company’s stock for the 5-trading day period ending on the last trading day immediately preceding the relevant Term Loan funding). The Warrants may be exercised on a cashless basis and are immediately exercisable through the seventh anniversary of the applicable funding date. The number of shares of common stock for which each Warrant is exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in such Warrant. In connection with the first tranche of the Term Loans, the Company issued a Warrant to Innovatus, exercisable for an aggregate of 477,273 shares of the Company’s common stock at an exercise price of $1.65 per share. The Company evaluated the warrant under ASC 470, Debt, and recognized an additional debt discount of approximately $0.5 million based on the relative fair value of the base instruments and warrants. The Company calculated the fair value of the warrant using the Black-Scholes model. As of September 30, 2020, the outstanding balance of the Term Loan was $20.9 million, net of unamortized issuance costs and unaccreted discount of $1.6 million. The following table reflects the schedule of principal payments on the Term Loan as of September 30, 2020 (in thousands):
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Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the 2019 financial statements and notes to conform to the 2020 presentation.
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Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
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Leases | Leases The Company accounts for its leases under Accounting Standards Codification (“ASC”) 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. Variable lease expenses, if any, are recorded when incurred. In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.
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Loss Per Share | Loss Per Share ASC 260, Earnings Per Share, requires dual presentation of basic and diluted earnings per share (“EPS”), with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that are then sharing in the earnings of the entity. Basic net loss per share of common stock excludes dilution and is computed by dividing the net loss by the weighted average number of shares outstanding during the period. Diluted net loss per share of common stock reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity unless inclusion of such shares would be anti-dilutive. The Company has only incurred losses, therefore, basic and diluted net loss per share is the same.
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Adoption of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a review to determine the consequences of the change to its consolidated financial statements and assures that there are sufficient controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260) and Derivatives and Hedging (Topic 815)- Accounting for Certain Financial Instruments with Down Round Features” (“ASU 2017-11”). Equity-linked instruments, such as warrants and convertible instruments may contain down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Under ASU 2017-11, a down round feature will no longer require a freestanding equity-linked instrument (or embedded conversion option) to be classified as a liability that is remeasured at fair value through the income statement (i.e. marked-to-market). However, other features of the equity-linked instrument (or embedded conversion option) must still be evaluated to determine whether liability or equity classification is appropriate. Equity classified instruments are not marked-to-market. For earnings per share ("EPS") reporting, the ASU requires companies to recognize the effect of the down round feature only when it is triggered by treating it as a dividend and as a reduction of income available to common shareholders in basic EPS. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. This standard, which the Company as adopted on January 1, 2020, and did not have a material impact on the Company’s financial position, results of operations or cash flows.
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Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of potentially dilutive securities | Securities that could potentially dilute net income per share in the future that were not included in the computation of diluted loss per share were as follows:
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Revenue Recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | Revenue is disaggregated by primary geographical market, major product line, and timing of revenue recognition.
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Contract balances | The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
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Investments - Available-for-Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments available for sale | Investments available-for-sale consisted of the following as of September 30, 2020 and December 31, 2019 (table in thousands):
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Inventory (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule components of inventory | Components of inventory, net of reserves, as of September 30, 2020 and December 31, 2019 are as follows (table in thousands):
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Property And Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of major classes of property and equipment, stated at cost | As of September 30, 2020 and December 31, 2019, the Company’s property and equipment consisted of the following (table in thousands):
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Accrued Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accrued liabilities | Accrued liabilities as of September 30, 2020 and December 31, 2019 consisted of the following (table in thousands):
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of total stock-based compensation expense | The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2020 and 2019 as follows (table in thousands):
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Schedule of restricted stock award | A summary of the Company’s restricted stock awards during the nine months ended September 30, 2020 is as follows:
A summary of the Company’s restricted stock awards during the nine months ended September 30, 2019 is as follows:
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Restricted stock units - service based awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted stock award | A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2020 is as follows:
A summary of the Company’s service-based restricted stock units during the nine months ended September 30, 2019 is as follows:
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Restricted stock units - performance based awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted stock award | A summary of the Company’s performance-based restricted stock units during the nine months ended September 30, 2020 is as follows:
A summary of the Company’s performance-based restricted stock units during the nine months ended September 30, 2019 is as follows:
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Stock option awards - service based awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock option assumptions | The fair value of the service-based stock options granted for the nine months ended September 30, 2020 were based on the following assumptions:
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Schedule of stock options activity | A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2020 is as follows:
A summary of the Company’s service-based stock option activity for the nine months ended September 30, 2019 is as follows:
|
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Stock option awards - performance based awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock options activity | A summary of the performance-based stock options for the nine months ended September 30, 2020 is as follows:
A summary of the performance-based stock options for the nine months ended September 30, 2019 is as follows:
|
Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of operating leases | The following summarizes quantitative information about the Company’s operating leases (table in thousands):
|
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Future minimum rental payments under operating leases | Future minimum rental payments under operating lease agreements are as follows (in thousands):
|
Loans and Security Agreement (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of principal payments on term loan | The following table reflects the schedule of principal payments on the Term Loan as of September 30, 2020 (in thousands):
|
Liquidity and Capital Resources (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 23, 2020 |
Mar. 16, 2020 |
Feb. 29, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Liquidity and Capital Resources | ||||||
Cash and cash equivalents | $ 56,614 | $ 11,794 | ||||
Investments available-for-sale | 10,702 | 14,250 | ||||
Working capital net | 65,200 | |||||
Accumulated deficit | 328,743 | $ 306,516 | ||||
Net cash used in operating activities | $ 21,072 | $ 21,954 | ||||
Common shares sold (in shares) | 23,178,809 | 3,670,212 | 1,128,608 | |||
Proceeds from issuance of common shares, net of issuance costs | $ 32,700 | $ 8,000 | $ 2,300 | |||
Net draw down proceeds | $ 21,200 | |||||
Remaining amount available for sale | $ 32,300 |
Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Loss Per Share (Details) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation (in shares) | 33,501,260 | 12,412,135 |
Options to purchase common stock | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation (in shares) | 6,682,192 | 8,170,382 |
Unvested restricted stock awards | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation (in shares) | 146,800 | 146,800 |
Unvested restricted stock units | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation (in shares) | 245,405 | 1,324,172 |
Warrants to purchase common stock | ||
Net Earnings per Share | ||
Securities excluded from diluted loss per share calculation (in shares) | 26,426,863 | 2,770,781 |
Revenue Recognition - Nature of Goods and Services (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
agreement
| |
Revenue from Contract with Customer [Abstract] | |
Number of distribution and license agreements | 4 |
Customers average payment term | 30 days |
Distributors average payment term | 45 days |
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Receivables, which are included in "Trade and other receivables" | $ 4,129 | $ 4,203 |
Contract liabilities | $ 10,738 | $ 12,076 |
Revenue Recognition - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Revenue Recognition [Line Items] | |||||
Impairment losses | $ 0 | $ 0 | $ 0 | $ 0 | |
Contract assets | 0 | 0 | $ 0 | ||
Revenue performance obligation | 10,700,000 | 10,700,000 | |||
Concentrate Products | |||||
Revenue Recognition [Line Items] | |||||
Reserve for returns | 0 | 0 | $ 0 | ||
Baxter Healthcare Organization | |||||
Revenue Recognition [Line Items] | |||||
Revenue performance obligation | $ 7,700,000 | $ 7,700,000 |
Investments - Available-for-Sale (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Amortized Cost | $ 10,679 | $ 14,238 |
Unrealized Gain | 3 | 13 |
Unrealized Loss | (1) | (1) |
Accrued Interest Income | 21 | 0 |
Fair Value | $ 10,702 | $ 14,250 |
Inventory (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory [Line Items] | ||
Raw Materials | $ 2,794 | $ 2,471 |
Work in Process | 329 | 185 |
Finished Goods | 1,613 | 1,432 |
Total | 4,736 | 4,088 |
Inventory, noncurrent | 859 | 441 |
Inventory, net | 3,877 | $ 3,647 |
Triferic Inventory | ||
Inventory [Line Items] | ||
Raw Materials | 700 | |
Inventory, noncurrent | 900 | |
Inventory, gross | 3,800 | |
Inventory, reserve | 2,700 | |
Inventory, net | 1,100 | |
Triferic Dialysate | ||
Inventory [Line Items] | ||
Finished Goods | 100 | |
Triferic API | ||
Inventory [Line Items] | ||
Inventory, net | $ 300 |
Property And Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Property and equipment | |||||
Gross property and equipment | $ 9,105 | $ 9,105 | $ 8,298 | ||
Accumulated Depreciation | (6,320) | (6,320) | (5,865) | ||
Property and Equipment, net | 2,785 | 2,785 | 2,433 | ||
Depreciation expense | 200 | $ 200 | 600 | $ 600 | |
Leasehold Improvements | |||||
Property and equipment | |||||
Gross property and equipment | 1,176 | 1,176 | 1,162 | ||
Machinery and Equipment | |||||
Property and equipment | |||||
Gross property and equipment | 5,454 | 5,454 | 4,673 | ||
Information Technology & Office Equipment | |||||
Property and equipment | |||||
Gross property and equipment | 1,822 | 1,822 | 1,810 | ||
Laboratory Equipment | |||||
Property and equipment | |||||
Gross property and equipment | $ 653 | $ 653 | $ 653 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued Research & Development Expense | $ 258 | $ 283 |
Accrued Compensation and Benefits | 2,584 | 1,018 |
Accrued Legal Expenses | 172 | 182 |
Accrued Marketing Expenses | 100 | 61 |
Other Accrued Liabilities | 1,854 | 2,974 |
Total Accrued Liabilities | $ 4,968 | $ 4,518 |
Stock-Based Compensation - Restricted Stock Awards (Details) - $ / shares |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
|
Unvested restricted stock awards | ||||
Number of Shares | ||||
Unvested, number of shares (in shares) | 146,800 | 146,800 | 146,800 | 146,800 |
Weighted Average Grant Date Fair Value | ||||
Unvested, weighted average grant-date fair value (in dollars per share) | $ 5.70 | $ 5.70 | $ 5.70 | $ 5.70 |
Vesting period | 20 months | |||
Restricted stock awards - performance based | ||||
Number of Shares | ||||
Unvested, number of shares (in shares) | 146,800 |
Stock-Based Compensation - Service Based Stock Options - Fair value assumptions (Details) - Stock option awards - service based awards |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected stock price volatility, minimum | 68.20% |
Expected stock price volatility, maximum | 75.00% |
Risk-free interest rate, minimum | 0.31% |
Risk-free interest rate, maximum | 1.65% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price (in dollars per share) | $ 1.17 |
Term (years) | 5 years 6 months |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price (in dollars per share) | $ 2.90 |
Term (years) | 6 years |
Related Party Transactions (Details) |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Oct. 07, 2018
USD ($)
agreement
installment
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2020
USD ($)
|
Jul. 15, 2019
USD ($)
|
Apr. 15, 2019
USD ($)
|
Jan. 15, 2019
USD ($)
|
Oct. 15, 2018
USD ($)
|
|
Related Party Transaction [Line Items] | ||||||||
Number of additional agreements | agreement | 3 | |||||||
Related party transactions, accrued reimbursement of IP expenses and sublicense royalty fees | $ 100,000 | |||||||
Master services and IP agreements | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments to acquire assets | $ 1,100,000 | |||||||
Milestone payments | $ 0 | |||||||
Executive vice president and chief scientific officer | ||||||||
Related Party Transaction [Line Items] | ||||||||
Total amount due | $ 1,000,000.0 | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||
Number of quarterly installment payments | installment | 4 | |||||||
Installment paid | $ 1,000,000.0 | |||||||
Related party transactions, accrued reimbursement of legal expenses | $ 100,000 |
Leases - Narrative (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
ft²
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ | $ 2,194 | |
Operating lease, right of use assets | $ | $ 2,099 | $ 3,213 |
Grapevine, Texas | ||
Lessee, Lease, Description [Line Items] | ||
Facility sqft. | 51,000 | |
Hackensack, New Jersey | ||
Lessee, Lease, Description [Line Items] | ||
Facility sqft. | 4,100 | |
Lease facility one | Wixom, Michigan | ||
Lessee, Lease, Description [Line Items] | ||
Facility sqft. | 51,000 | |
Lease facility one | Greer, South Carolina | ||
Lessee, Lease, Description [Line Items] | ||
Facility sqft. | 57,000 | |
Lease facility two | Wixom, Michigan | ||
Lessee, Lease, Description [Line Items] | ||
Facility sqft. | 17,500 | |
Lease facility two | Greer, South Carolina | ||
Lessee, Lease, Description [Line Items] | ||
Facility sqft. | 1,408 | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease term | 5 years |
Leases - Summary of Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 382 | $ 532 | $ 1,228 | $ 1,592 |
Variable lease cost | 90 | 90 | 403 | 258 |
Operating lease expense | 472 | 622 | 1,631 | 1,850 |
Short-term lease rent expense | 4 | 4 | 12 | 12 |
Total rent expense | 476 | 626 | 1,643 | 1,862 |
Operating cash flows from operating leases | 393 | 494 | 1,248 | 1,532 |
Right of use assets exchanged for operating lease liabilities | $ 0 | $ 136 | $ 0 | $ 4,442 |
Weighted-average remaining lease term – operating leases | 2 years 3 months 18 days | 1 year 9 months 18 days | 2 years 3 months 18 days | 1 year 9 months 18 days |
Weighted-average discount rate – operating leases | 6.80% | 6.80% | 6.80% | 6.80% |
Leases - Future Minimum Rental Payments Under Operating Leases (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
Year ending December 31, 2020 (remaining) | $ 387 |
Year ending December 31, 2021 | 1,055 |
Year ending December 31, 2022 | 592 |
Year ending December 31, 2023 | 234 |
Year ending December 31, 2024 | 98 |
Total | 2,366 |
Less present value discount | (172) |
Operating lease liabilities | $ 2,194 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2020 |
Aug. 07, 2019 |
Feb. 29, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Loss Contingencies [Line Items] | |||||||||
Amount of penalties sought from supplier | $ 3,000 | ||||||||
Percentage of raw materials to be paid | 50.00% | ||||||||
Percentage of raw materials paid | 50.00% | 50.00% | |||||||
Settlement expense | $ 0 | $ 0 | $ 0 | $ 430 | $ 400 | ||||
Settlement agreement with all parties | |||||||||
Loss Contingencies [Line Items] | |||||||||
Litigation settlement amount | $ 3,700 | ||||||||
Settlement expense | $ 100 | ||||||||
Forecast | |||||||||
Loss Contingencies [Line Items] | |||||||||
Percentage of raw materials to be paid | 50.00% |
Loans and Security Agreement - Schedule of Principal Payments on Term Loan (Details) - Term loan - Term loan $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2020 | $ 0 |
2021 | 0 |
2022 | 2,250 |
2023 | 9,000 |
2024 | 9,000 |
2025 | 2,250 |
Principal Payments | $ 22,500 |
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