10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

◻TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36177

GlycoMimetics, Inc.

(Exact name of registrant as specified in its charter)

Delaware	06-1686563
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
9708 Medical Center Drive Rockville, Maryland	20850
(Address of principal executive offices)	(Zip Code)

(240) 243-1201

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ◻

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer	◻	Accelerated filer	☒
Non-accelerated filer	◻  (Do not check if a smaller reporting company)	Smaller reporting company	◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  ◻    No   ☒

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of the close of business on May 2, 2016 was 19,350,322.

GLYCOMIMETICS, INC.

INDEX TO FORM 10-Q

	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015	3
Unaudited Statements of Operations and Comprehensive Loss for the three months ended March 31, 2016 and 2015	4
Unaudited Statements of Cash Flows for the three months ended March 31, 2016 and 2015	5
Notes to Unaudited Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures about Market Risk	25
Item 4. Controls and Procedures	25
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	25
Item 1A. Risk Factors	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 6. Exhibits	27
Signatures	28

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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

GLYCOMIMETICS, INC.

Balance Sheets

	March 31,		December 31,
	2016		2015
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	38,830,110	$	46,802,560
Prepaid expenses and other current assets		683,365		441,810
Total current assets		39,513,475		47,244,370
Property and equipment, net		491,414		521,378
Prepaid research and development expenses		696,531		696,531
Total assets	$	40,701,420	$	48,462,279
Liabilities & stockholders’ equity
Current liabilities:
Accounts payable	$	1,622,594	$	564,235
Accrued bonuses		276,005		1,037,112
Accrued expenses		3,784,712		6,145,631
Total current liabilities		5,683,311		7,746,978
Deferred rent		250,143		243,647
Total liabilities		5,933,454		7,990,625
Stockholders’ equity:
Preferred Stock; $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2016 and December 31, 2015		—		—
Common stock; $0.001 par value; 100,000,000 shares authorized, 19,280,690 shares issued and outstanding at March 31, 2016; 100,000,000 shares authorized, 19,050,204 shares issued and outstanding at December 31, 2015		19,279		19,049
Additional paid-in capital		129,470,138		127,619,078
Accumulated deficit		(94,721,451)		(87,166,473)
Total stockholders’ equity		34,767,966		40,471,654
Total liabilities and stockholders’ equity	$	40,701,420	$	48,462,279

The accompanying notes are an integral part of the unaudited financial statements.

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GLYCOMIMETICS, INC.

Unaudited Statements of Operations and Comprehensive Loss

	Three Months Ended March 31,
	2016		2015
Revenue	$	—	$	—
Costs and expenses:
Research and development expense		5,518,722		5,207,730
General and administrative expense		2,056,353		1,904,963
Total costs and expenses		7,575,075		7,112,693
Loss from operations		(7,575,075)		(7,112,693)
Other income		20,097		3,564
Net loss and comprehensive loss	$	(7,554,978)	$	(7,109,129)
Basic and diluted net loss per common share	$	(0.40)	$	(0.37)
Basic and diluted weighted average number of common shares		19,071,838		18,961,531

The accompanying notes are an integral part of the unaudited financial statements.

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GLYCOMIMETICS, INC.

Unaudited Statements of Cash Flows

	Three Months Ended March 31,
	2016		2015
Operating activities
Net loss	$	(7,554,978)	$	(7,109,129)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		47,234		44,245
Stock-based compensation expense		727,547		587,514
Changes in assets and liabilities:
Prepaid expenses and other current assets		(241,555)		139,169
Accounts payable		1,007,159		299,464
Accrued expenses		(3,221,593)		(2,637,283)
Deferred rent		6,496		(29,047)
Net cash used in operating activities		(9,229,690)		(8,705,067)
Investing activities
Purchases of property and equipment		(17,270)		(2,339)
Net cash used in investing activities		(17,270)		(2,339)
Financing activities
Proceeds from issuance of common stock, net of issuance costs		1,238,619		—
Proceeds from exercise of stock options		35,891		75,377
Net cash provided by financing activities		1,274,510		75,377
Net change in cash and cash equivalents		(7,972,450)		(8,632,029)
Cash and cash equivalents, beginning of period		46,802,560		55,198,923
Cash and cash equivalents, end of period	$	38,830,110	$	46,566,894
Supplemental disclosure of non-cash investing activities:
Property asset acquisition included in accounts payable	$	—	$	10,000
Supplemental disclosure of non-cash financing activities:
Issuance costs associated with the at-the-market financing included in accounts payable and accrued expenses	$	150,767	$	—

The accompanying notes are an integral part of the unaudited financial statements.

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GLYCOMIMETICS, INC.

Notes to Unaudited Financial Statements

1. Description of the Business

GlycoMimetics, Inc. (the Company), a Delaware corporation headquartered in Rockville, Maryland, was incorporated on April 4, 2003 and commenced operations on May 21, 2003. The Company is a clinical stage biotechnology company focused on the discovery and development of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role. Glycomimetics are molecules that mimic the structure of carbohydrates involved in important biological processes. Using its expertise in carbohydrate chemistry and knowledge of carbohydrate biology, the Company is developing a pipeline of proprietary glycomimetics that inhibit disease-related functions of carbohydrates, such as the roles they play in inflammation, cancer and infection.

The Company’s executive personnel have devoted substantially all of their time to date to the planning and organization of the Company, the process of hiring scientists, initiating research and development programs and securing adequate capital for anticipated growth and operations. The Company has not commercialized any of its drug candidates or commenced commercial operations. The Company is subject to a number of risks similar to those of other companies in similar development stages, including dependence on key individuals, the need to develop commercially viable drugs, competition from other companies, many of whom are larger and better capitalized, and the need to obtain adequate additional financing to fund the development of its drug candidates. The Company has incurred significant operating losses since inception and has relied on its ability to fund its operations through private and public equity financings, and management expects operating losses and negative operating cash flows to continue for the foreseeable future. As the Company continues to incur losses, profitability will be dependent upon the successful development, approval, and commercialization of its drug candidates and achieving a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional public or private equity or debt offerings and may seek additional capital through arrangements with strategic partners or from other sources.

2. Significant Accounting Policies

Basis of Accounting

The accompanying financial statements were prepared based on the accrual method of accounting in accordance with U.S. generally accepted accounting principles (GAAP).

Unaudited Financial Statements

The accompanying balance sheet as of March 31, 2016 and statements of operations and comprehensive loss for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015 are unaudited. These unaudited financial statements have been prepared in accordance with the rules and regulations for the United States Securities and Exchange Commission (the SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. These financial statements should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2015 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of March 31, 2016, the results of operations for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015. The December 31, 2015 balance sheet included herein was derived from audited financial statements, but does not include all disclosures including notes required by GAAP for complete annual financial statements. The financial data and other information disclosed in these notes to the financial statements related to the three months ended March 31, 2016 and 2015 are unaudited. Interim results are not necessarily indicative of results for an entire year.

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Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ from those estimates, management does not believe that such differences would be material.

Fair Value Measurements

The Company had no assets or liabilities that were measured using quoted prices for similar assets and liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of March 31, 2016 and December 31, 2015. The carrying value of cash held in money market funds of approximately $36.5 million and $45.5 million as of March 31, 2016 and December 31, 2015, respectively, is included in cash and cash equivalents and approximates market values based on quoted market prices (Level 1 inputs).

Concentration of Credit Risk

Credit risk represents the risk that the Company would incur a loss if counterparties failed to perform pursuant to the terms of their agreements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents consist of certificates of deposit and money market funds with major financial institutions in the United States. These deposits and funds may be redeemed upon demand and, therefore, bear minimal risk. The Company does not anticipate any losses on such balances.

Revenue Recognition

From time to time, the Company is awarded reimbursement contracts for services and development grant contracts with government and non-government entities and philanthropic organizations. Under these contracts, the Company typically is reimbursed for the costs in connection with specific development activities. The Company recognizes revenue to the extent of costs incurred in connection with performance under such grant arrangements.

The Company has entered into a collaborative research and development agreement with Pfizer. The agreement is in the form of a license agreement. The agreement called for a nonrefundable up-front payment and milestone payments upon achieving significant milestone events. The agreement also contemplates royalty payments on future sales of an approved product. There are no performance, cancellation, termination, or refund provisions in the arrangement that contain material financial consequences to the Company.

The primary deliverable under this arrangement is an exclusive worldwide license to the Company’s rivipansel compound, but the arrangement also includes deliverables related to research and preclinical development activities to be performed by the Company on Pfizer’s behalf.

Collaborative research and development agreements can provide for one or more of up-front license fees, research payments, and milestone payments. Agreements with multiple components (deliverables or items) are evaluated according to the provisions of Accounting Standards Codification (ASC) 605-25, Revenue Recognition—Multiple-Element Arrangements, to determine whether the deliverables can be separated into more than one unit of accounting. An item can generally be considered a separate unit of accounting if all of the following criteria are met: (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) if the arrangement includes a general right of return relative to the delivered item(s) then delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on selling price hierarchy. The selling price hierarchy for each deliverable is based on (i) vendor-specific objective evidence (VSOE), if available; (ii) third-party evidence (TPE) of selling price if VSOE is not available; or (iii) an estimated selling price, if neither VSOE nor TPE is available. Management was not able to establish VSOE or TPE for separate unit deliverables, as the Company does not have a history of entering such arrangements or selling the individual deliverables within such arrangements separately. In addition, there may be significant differentiation in these arrangements, which indicates that

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comparable third-party pricing may not be available. Management determined that the selling price for the deliverables within the Pfizer collaboration agreement should be determined using its best estimate of selling price. The process of determining the best estimate of selling price involved significant judgment on the Company’s part and included consideration of multiple factors such as estimated direct expenses, other costs, and available clinical development data.

Pursuant to ASC 605-25, each required deliverable under the Pfizer collaboration agreement is evaluated to determine whether it qualifies as a separate unit of accounting. Factors considered in this determination include the research capabilities of Pfizer, the proprietary nature of the license and know-how, and the availability of the Company’s glycomimetics technology research expertise in the general marketplace. Based on all relevant facts and circumstances and, most significantly, on the proprietary nature of the Company’s technology and the related proprietary nature of the Company’s research services, management concluded that stand-alone value does not exist for the license, and therefore, the license is not a separate unit of accounting under the agreement and will be combined with the research and development services (including participation on a joint steering committee).

As such, the $22.5 million up-front payment received was recognized as revenue over the expected development period through March 2013. The determination of the length of the period over which to defer revenue and the methodology by which to recognize the related revenues is subject to judgment and estimation. Consistent with the research plan developed by and agreed to by both parties, management estimated that the research activities and participation on the joint steering committees would occur over a 1.5-year period. Revenues associated with the up-front license fee are recognized over this period using a straight-line method, which is consistent with expected completion of the research services. The research services were completed in March 2013, consistent with the expected development period.

Pursuant to ASC 605-28, Revenue Recognition—Milestone Method, at the inception of agreements that include milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. In making this assessment, the Company evaluates factors such as scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the agreement.

Non-refundable development and regulatory milestones that are expected to be achieved as a result of the Company’s efforts during the period of substantial involvement are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Milestones that are not considered substantive because the Company does not contribute effort to the achievement of such milestones are generally achieved after the period of substantial involvement and are recognized as revenue upon achievement of the milestone, as there are no undelivered elements remaining and no continuing performance obligation, assuming all other revenue recognition criteria are met. In May 2014, the Company recognized $15.0 million in revenue as a result of the first non-refundable milestone payment received from Pfizer. In June 2015, the Company recognized $20.0 million in revenue as a result of Pfizer dosing the first patient in the Phase 3 clinical trial of rivipansel, which triggered the second non-refundable milestone payment.

Accrued Liabilities

The Company is required to estimate accrued liabilities as part of the process of preparing its financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date. Accrued liabilities include professional service fees, such as for lawyers and accountants, contract service fees, such as those under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, and fees to contract manufacturers in conjunction with the production of clinical materials. Pursuant to the Company’s assessment of the services that have been performed, the Company recognizes

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these expenses as the services are provided. Such assessments include: (i) an evaluation by the project manager of the work that has been completed during the period; (ii) measurement of progress prepared internally and/or provided by the third-party service provider; (iii) analyses of data that justify the progress; and (iv) the Company’s judgment.

Research and Development Costs

Except for payments made in advance of services, research and development costs are expensed as incurred. For payments made in advance, the Company recognizes research and development expense as the services are rendered. Research and development costs primarily consist of salaries and related expenses for personnel, laboratory supplies and raw materials, sponsored research, depreciation of laboratory facilities and leasehold improvements, and utilities costs related to research space. Other research and development expenses include fees paid to consultants and outside service providers.

Stock-Based Compensation

Stock-based payments are accounted for in accordance with the provisions of ASC 718, Compensation—Stock Compensation. The fair value of stock-based payments is estimated, on the date of grant, using the Black-Scholes-Merton model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the option.

The Company has elected to use the Black-Scholes-Merton option pricing model to value any options granted. The Company will reconsider use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that prevent their value from being reasonably estimated using this model.

A discussion of management’s methodology for developing some of the assumptions used in the valuation model follows:

Expected Dividend Yield—The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

Expected Volatility—Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company does not maintain an internal market for its shares, and prior to its initial public offering the shares were not traded publicly. The Company utilizes the historical volatilities of a peer group (e.g., several public entities of similar size, complexity, and stage of development) to determine its expected volatility.

Risk-Free Interest Rate—This is the U.S. Treasury rate for the week of each option grant during the year, having a term that most closely resembles the expected life of the option.

Expected Term—This is a period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of 10 years. The Company estimates the expected life of the option term to be 6.25 years. The Company uses a simplified method to calculate the average expected term.

Expected Forfeiture Rate—The forfeiture rate is the estimated percentage of options granted that is expected to be forfeited or canceled on an annual basis before becoming fully vested. The Company estimates the forfeiture rate based on turnover data with further consideration given to the class of the employees to whom the options were granted.

Equity instruments issued to nonemployees are accounted for under the provisions of ASC 718, Compensation—Stock Compensation, and ASC 505-50, Equity—Equity-Based Payments to Non-Employees. Accordingly, the estimated fair value of the equity instrument is recorded on the earlier of the performance commitment date or the date the services are completed and are marked to market during the service period.

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Net Loss Per Common Share

Basic net loss per common share is determined by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock options, restricted stock units and warrants.

Basic and diluted net loss per common share is computed as follows:

	Three Months Ended March 31,
	2016		2015
Net loss	$	(7,554,978)	$	(7,109,129)
Basic and diluted net loss per common share	$	(0.40)	$	(0.37)
Basic and diluted weighted average common shares outstanding		19,071,838		18,961,531

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:

	Three Months Ended March 31,
	2016	2015
Warrants	578,687	590,595
Stock options and restricted stock units	2,755,089	2,232,835

Comprehensive Loss

Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the three months ended March 31, 2016 and 2015, the Company’s net loss equals comprehensive loss and, accordingly, no additional disclosure is presented.

Recently Issued Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-02, Leases (Topic 842).  The final guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption will be permitted.  The Company is currently evaluating the effect the new standard will have on the Company.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.  The ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in financial statements including the income tax effects of share-based payments, minimum statutory withholding requirements and forfeitures. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It will also allow an employer to repurchase more of an employee’s shares than the current standard for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption will be permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the effect the new standard will have on the Company.

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3. Prepaid Expenses and Other Current Assets

The following is a summary of the Company’s prepaid expenses and other current assets:

	March 31,		December 31,
	2016		2015
Prepaid expenses	$	617,698	$	393,857
Other receivables		58,758		38,683
Deposits		6,909		9,270
Prepaid expenses and other current assets	$	683,365	$	441,810

4. Property and Equipment

Property and equipment, net consists of the following:

	March 31,		December 31,
	2016		2015
Furniture and fixtures	$	230,987	$	230,987
Laboratory equipment		982,856		965,586
Office equipment		9,723		9,723
Computer equipment		181,053		181,053
Leasehold improvements		36,128		36,128
Property and equipment		1,440,747		1,423,477
Less accumulated depreciation		(949,333)		(902,099)
Property and equipment, net	$	491,414	$	521,378

Depreciation expense was $47,234 and $44,245 for the three months ended March 31, 2016 and 2015, respectively.

5. Accrued Expenses

The following is a summary of the Company’s accrued expenses:

	March 31,		December 31,
	2016		2015
Accrued research and development expenses	$	2,747,683	$	3,423,220
Accrued license and milestone fees		—		2,000,000
Accrued consulting and other professional fees		391,346		242,227
Other accrued expenses		358,512		281,152
Accrued employee benefits		284,546		195,442
Accrued franchise and other taxes		2,625		3,590
Accrued expenses	$	3,784,712	$	6,145,631

6. Operating Leases

The Company leases office and research space in Rockville, Maryland under an eight-year operating lease (the Lease) that is subject to escalation clauses. The Company has the right to sublease or assign all or a portion of the premises, subject to the conditions set forth in the Lease. The Lease may be terminated early by either the landlord or the Company in certain circumstances.  In connection with this lease arrangement, the Company received rent abatement as a lease incentive. The rent abatement has been recognized as deferred rent that is being adjusted on a straight-line basis over the term of the lease. Deferred rent related to the Lease was $250,143 and $243,647 at March 31, 2016 and December 31, 2015, respectively. Total rent expense under the Company’s operating leases was $158,371 and $96,399 for the three months ended March 31, 2016 and 2015, respectively.

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In March 2016, the Company amended the Lease (the Lease Amendment) to lease additional space. The Company’s lease of the additional space commences on the earlier of June 1, 2016, the day the work described in the Lease Amendment is substantially complete or the day the Company commences operations in the additional space. The Lease Amendment provides for a rent abatement, a tenant improvement allowance and is subject to the escalation clause which will be recognized as deferred rent.  The Company will also pay a security deposit of $52,320 to be held until the end of the expiration or termination of Company’s obligations under the Lease.  The term of the Lease Amendment will continue through October 31, 2023, the same date as for the premises originally leased under the Lease, subject to the Company’s renewal option set forth in the Lease.  The Company’s one-time option to terminate the Lease effective as of October 31, 2020 will also apply to the additional space.

Future minimum lease payments under the Lease, as amended by the Lease Amendment, as of March 31, 2016 are as follows:

YEAR	AMOUNT
2016	$	562,798
2017		941,822
2018		965,368
2019		989,502
2020		1,014,239
After 2020		3,011,849
Total	$	7,485,578

7. Stockholders’ Equity

At-The-Market Equity Offering

On March 1, 2016, the Company entered into an at-the-market sales agreement with Cowen and Company, LLC to sell the Company’s securities under a shelf registration statement filed in March 2015. On March 28, 2016, the Company issued and sold 206,500 shares of common stock under the at-the-market sales agreement.  The shares were sold at a weighted average price per share of $6.299, for aggregate gross proceeds of $1.3 million. The net offering proceeds to the Company were $1.1 million after deducting related expenses, including commissions of $0.2 million. For the period from April 1, 2016 through May 2, 2016, the Company sold an additional 142,177 shares for net proceeds of $864,756 after deducting commissions.

2003 Stock Incentive Plan

The 2003 Stock Incentive Plan (the 2003 Plan) provided for the grant of incentives and nonqualified stock options and restricted stock awards. The exercise price for incentive stock options must be at least equal to the fair value of the common stock on the grant date. Unless otherwise stated in a stock option agreement, 25% of the shares subject to an option grant will vest upon the first anniversary of the vesting start date and thereafter at the rate of one forty-eighth of the option shares per month as of the first day of each month after the first anniversary. Upon termination of employment by reasons other than death, cause, or disability, any vested options shall terminate 60 days after the termination date. Stock options terminate 10 years from the date of grant. The 2003 Plan expired on May 21, 2013.

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A summary of the Company’s stock option activity under the 2003 Plan for the three months ended March 31, 2016 is as follows:

				WEIGHTED-AVERAGE
		WEIGHTED-		REMAINING	AGGREGATE
	OUTSTANDING	AVERAGE		CONTRACTUAL TERM	INTRINSIC VALUE
	OPTIONS	EXERCISE PRICE		(YEARS)	(IN THOUSANDS)
Outstanding as of December 31, 2015	758,187	$	1.27	4.2
Options exercised	(23,986)		1.50
Options forfeited	—		—
Outstanding as of March 31, 2016	734,201		1.26	4.0	$	3,451
Vested or expected to vest as of March 31, 2016	734,066		1.26	4.0	$	3,450
Exercisable as of March 31, 2016	729,317		1.25	3.9	$	3,435

As of March 31, 2016, there was $9,648 of total unrecognized compensation expense related to unvested options under the 2003 Plan that will be recognized over a weighted-average period less than one year. Total intrinsic value of the options exercised during the three months ended March 31, 2016 and 2015 was $75,093 and $473,016, respectively and total cash received for options exercised was $35,891 and $75,377 during the three months ending March 31, 2016 and 2015, respectively. The total fair value of shares underlying options which vested in the three months ended March 31, 2016 and 2015 was $7,412 and $13,785, respectively.

2013 Equity Incentive Plan

The Company’s board of directors adopted, and its stockholders approved, its 2013 Equity Incentive Plan (the 2013 Plan). The 2013 Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to the Company’s employees and its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to its employees, including officers, consultants and directors. The 2013 Plan also provides for the grant of performance cash awards to the Company’s employees, consultants and directors. Unless otherwise stated in a stock option agreement, 25% of the shares subject to an option grant will typically vest upon the first anniversary of the vesting start date and thereafter at the rate of one forty-eighth of the option shares per month as of the first day of each month after the first anniversary. Upon termination of employment by reasons other than death, cause, or disability, any vested options will terminate 90 days after the termination date, unless otherwise set forth in a stock option agreement. Stock options generally terminate 10 years from the date of grant.

Authorized Shares

The maximum number of shares of common stock that initially could be issued under the 2013 Plan was  1,000,000 shares, plus any shares subject to stock options or similar awards granted under the 2003 Plan that expire or terminate without having been exercised in full or are forfeited to or repurchased by the Company. The number of shares of common stock reserved for issuance under the 2013 Plan automatically increases on January 1 of each year until January 1, 2023, by 3% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. The maximum number of shares that may be issued pursuant to exercise of incentive stock options under the 2013 Plan is 20,000,000. As of January 1, 2016, the number of shares of common stock that may be issued under the 2013 Plan was automatically increased by 571,506 shares, representing 3% of the total number of shares of common stock outstanding on December 31, 2015, increasing the number of shares of common stock available for issuance under the 2013 Plan to 2,139,701 shares.

Shares issued under the 2013 Plan may be authorized but unissued or reacquired shares of common stock. Shares subject to stock awards granted under the 2013 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2013 Plan. Additionally, shares issued pursuant to stock awards under the 2013 Plan that the Company repurchases or that are

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forfeited, as well as shares reacquired by the Company as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2013 Plan.

A summary of the Company’s stock option activity under the 2013 Plan for the three months ended March 31, 2016 is as follows:

				WEIGHTED-AVERAGE
ccc		WEIGHTED-		REMAINING	AGGREGATE
	OUTSTANDING	AVERAGE		CONTRACTUAL TERM	INTRINSIC VALUE
	OPTIONS	EXERCISE PRICE		(YEARS)	(IN THOUSANDS)
Outstanding as of December 31, 2015	1,470,338	$	8.26	8.5
Options granted	528,800		5.11
Options exercised	—		—
Options forfeited	—		—
Outstanding as of March 31, 2016	1,999,138		7.43	8.6	$	449
Vested or expected to vest as of March 31, 2016	1,988,448		7.43	8.6	$	444
Exercisable as of March 31, 2016	615,819		8.32	8.1	$	—

The weighted-average fair value of the options granted during the three months ended March 31, 2016 and 2015 was $3.21 per share and $5.10 per share, respectively, applying the Black-Scholes-Merton option pricing model utilizing the following weighted-average assumptions:

	Three Months Ended	Three Months Ended
	March 31, 2016	March 31, 2015
Expected term (years)	6.25	6.25
Expected volatility	68.36%	82.08%
Risk-free interest rate	1.74%	1.68%
Expected dividend yield	0%	0%

As of March 31, 2016, there was $6,154,795 of total unrecognized compensation expense related to unvested options under the 2013 Plan that will be recognized over a weighted-average period of approximately 2.6 years. The total fair value of shares underlying options which vested in the three months ended March 31, 2016 and 2015 was $1,056,200 and $1,252,769, respectively.

A restricted stock unit (RSU) is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs with service conditions (service RSUs) that vest in three equal annual installments provided that the employee remains employed with the Company. As of March 31, 2016, there was $89,604 of unrecognized compensation costs related to unvested service RSUs.

The following is a summary of RSU activity under the 2013 Plan for the three months ended March 31, 2016:

			WEIGHTED-AVERAGE
		NUMBER	GRANT DATE
	OF SHARES			FAIR VALUE
Unvested at December 31, 2015		4,833	$	7.62
Granted		14,500		4.61
Forfeited		—		—
Vested		—		—
Unvested at March 31, 2016		19,333		5.36

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Stock-based compensation expense was classified on the statement of operations as follows for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016		2015
Research and development expense	$	253,282	$	202,907
General and administrative expense		474,265		384,607
Total stock-based compensation expense	$	727,547	$	587,514

8. Income Taxes

The Company has not recorded any tax provision or benefit for the three months ended March 31, 2016 and 2015. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefit from deductible temporary differences, net operating loss carryforwards and research and development credits is not more-likely-than-not to be realized at March 31, 2016 and December 31, 2015.

9. Research and License Agreements

In October 2011, the Company and Pfizer entered into a licensing agreement (the Pfizer Agreement) that provides Pfizer an exclusive worldwide license to rivipansel for vaso-occlusive crisis associated with sickle cell disease and for other diseases for which the drug candidate may be developed. The Company was responsible for completion of the Phase 2 clinical trial, after which Pfizer assumed all further development and commercialization responsibilities. Upon execution of the Pfizer Agreement, the Company received an up-front payment of $22.5 million. The Pfizer Agreement also provides for potential milestone payments of up to $115.0 million upon the achievement of specified development milestones, including the dosing of the first patients in Phase 3 clinical trials for up to two indications and the first commercial sale of a licensed product in the United States and selected European countries for up to two indications; potential milestone payments of up to $70.0 million upon the achievement of specified regulatory milestones, including the acceptance of our filings for regulatory approval by regulatory authorities in the United States and Europe for up to two indications; and potential milestone payments of up to $135.0 million upon the achievement of specified levels of annual net sales of licensed products. Pfizer has the right to terminate the Agreement by giving prior written notice.

The Company has determined that each potential future clinical, development and regulatory milestone is substantive. Although sales-based milestones are not considered substantive, they are still recognized upon achievement of the milestone (assuming all other revenue recognition criteria have been met) because there are no undelivered elements that would preclude revenue recognition at that time. The Company is also eligible to receive royalties on future sales contingent upon annual net sales thresholds. In addition, the Company and Pfizer have formed a joint steering committee that will oversee and coordinate activities as set forth in the research program. The $22.5 million up-front payment was recognized over a period of 1.5 years. In May 2014, Pfizer made a $15.0 million non-refundable milestone payment to the Company, which was recognized as revenue by the Company in May 2014 when earned.  In June 2015, Pfizer dosed the first patient in the Phase 3 clinical trial of rivipansel, which triggered a non-refundable milestone payment to the Company of $20.0 million, which the Company recognized as revenue in June 2015.

In February 2004, the Company entered into a research services agreement (the Research Agreement) with the University of Basel (the University) for biological evaluation of selectin antagonists. Certain patents covering the rivipansel compound are subject to provisions of the Research Agreement. Under the terms of the Research Agreement, the Company will owe to the University 10% of all future milestone and royalty payments received from Pfizer with respect to rivipansel.  As of December 31, 2015, a $2.0 million milestone license fee was recorded as an accrued liability representing 10% of the $20.0 million non-refundable milestone payment that the Company received from Pfizer in 2015.  The accrued liability of $2.0 million was paid in February 2016.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” or similar expressions, or the negative of such words or phrases, are intended to identify “forward-looking statements.” We have based these forward-looking statements on our current expectations and projections about future events. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those below and elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K, particularly in Part I – Item 1A, “Risk Factors,” and our other filings with the Securities and Exchange Commission. Statements made herein are as of the date of the filing of this Form 10-Q with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim, any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and related notes for the year ended December 31, 2015, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2016.

Overview

We are a clinical stage biotechnology company focused on the discovery and development of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role. Glycomimetics are molecules that mimic the structure of carbohydrates involved in important biological processes. Using our expertise in carbohydrate chemistry and knowledge of carbohydrate biology, we are developing a pipeline of proprietary glycomimetics that inhibit disease-related functions of carbohydrates, such as the roles they play in inflammation, cancer and infection. We believe this represents an innovative approach to drug discovery to treat a wide range of diseases.

We are focusing our initial efforts on drug candidates for rare diseases that we believe will qualify for orphan drug designation. We are developing our lead drug candidate, rivipansel, for the treatment of vaso-occlusive crisis, or VOC, one of the most severe complications of sickle cell disease. Rivipansel has received both orphan drug designation and fast track designation from the U.S. Food and Drug Administration, or FDA, for the treatment of VOC. In October 2011, we entered into a license agreement with Pfizer under which we were responsible for the clinical development of rivipansel through the completion of a Phase 2 clinical trial. Following our completion of the Phase 2 clinical trial in April 2013, Pfizer is now responsible for all further clinical development, regulatory approval and potential commercialization of rivipansel for all indications and Pfizer has commercial rights to rivipansel worldwide.

In July 2014, Pfizer reached an agreement with the FDA under a special protocol assessment, or SPA, for the Phase 3 clinical trial.  Pfizer enrolled the first patient in this Phase 3 clinical trial in June 2015. The Phase 3 trial, entitled “RESET” (Rivipansel: Evaluating Safety, Efficacy and Time to Discharge),  is assessing the efficacy and safety of rivipansel for the treatment of VOC in patients hospitalized with sickle cell disease.  Pfizer intends to enroll at least 350 subjects with sickle cell disease, aged six and older who are hospitalized for VOC, in this Phase 3, multicenter, randomized, double-blind, placebo-controlled, parallel-group trial, and will evaluate the efficacy and safety of treatment with rivipansel. Trial participants must be receiving treatment with intravenous, or IV, opioids for their VOC and must be able to receive the first dose of rivipansel within 24 hours of initiation of intravenous opioid therapy. The primary endpoint for the trial will be time to readiness-for-discharge. Key secondary endpoints will include time to discharge, cumulative IV opioid consumption and time to discontinuation of IV opioids.

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Building on our experience with rivipansel, we are developing a pipeline of other glycomimetic drug candidates. Our second most advanced drug candidate, GMI-1271, is a specific E-selectin inhibitor, which we are developing to be used in combination with chemotherapy to treat patients with either acute myeloid leukemia, or AML, or multiple myeloma, or MM, both of which are life-threatening hematologic cancers, and potentially other hematologic cancers as well. GMI-1271 received orphan drug designation from the FDA in May 2015.

We have initiated a multinational, Phase 1/2, open-label trial of GMI-1271 as an adjunct to standard chemotherapy in patients with AML. This trial in males and females with AML is being conducted at a number of academic institutions in the United States, Ireland and Australia. The trial consists of two parts. In the Phase 1 portion, escalation testing will be performed to determine a recommended GMI-1271 dose in combination with standard chemotherapy. In the Phase 2 portion, dose-expansion testing will be conducted to obtain additional safety and efficacy data in defined sub-populations of AML.

We are also collaborating with the University of Michigan to evaluate GMI-1271 as a potential new class of anticoagulant to treat persons at risk for venous thromboembolic disease, a serious blood-clotting disorder. The University of Michigan began dosing healthy volunteers in a Phase 1 clinical trial of GMI-1271 in December 2014. The Phase 1 clinical trial is a randomized, partially blinded, active placebo-controlled trial for which we completed initial enrollment in October 2015. The trial design has subsequently been amended to include a multiple ascending dose portion, which was fully enrolled as of March 2016 and all subjects have completed dosing.  As a follow-up to the multiple ascending dose study, the University of Michigan is launching a Phase 1/2 study to evaluate the safety, tolerability and efficacy of GMI-1271 in patients with calf-level deep vein thrombosis. This study is targeted to begin in the second quarter of 2016 and complete enrollment in the fourth quarter of 2016. 

We are also developing a pipeline of other preclinical drug candidates based on our expertise in carbohydrate chemistry. We have designed a family of small molecule drug candidates that simultaneously inhibit both E-selectin and CXCR4, a chemokine receptor. Since E-selectin and CXCR4 are both adhesion molecules that keep cancer cells in the bone marrow, we believe that targeting both E-selectin and CXCR4 with a single compound could improve efficacy in the treatment of cancers that affect the bone marrow such as AML and MM, as compared to targeting CXCR4 alone. We are currently evaluating one of these compounds, GMI-1359, for clinical development and anticipate filing an IND in the third quarter of 2016. 

We commenced operations in 2003, and our operations to date have been limited to organizing and staffing our company, business planning, raising capital, developing our glycomimetics platform, identifying potential drug candidates, undertaking preclinical studies and conducting clinical trials of rivipansel and GMI-1271. To date, we have financed our operations primarily through private placements of our securities, upfront and milestone payments under our collaboration with Pfizer, the net proceeds from our IPO in January 2014 and net proceeds from our at-the-market facility with Cowen and Company LLC, or Cowen. We have no approved drugs currently available for sale, and substantially all of our revenue to date has been revenue from the upfront and milestone payments from Pfizer, although we have received nominal amounts of revenue under research grants. Prior to our IPO, we raised an aggregate of $86.6 million to fund our operations, of which $22.5 million was an upfront payment under our collaboration with Pfizer and $64.1 million was from the sale of our convertible promissory notes and convertible preferred stock. The IPO provided us with net proceeds of $57.2 million, and we received a non-refundable milestone payment from Pfizer in May 2014 of $15.0 million. In August 2015, we received another non-refundable milestone payment from Pfizer of $20.0 million following the dosing of the first patient in the Phase 3 clinical trial of rivipansel.

Since inception, we have incurred significant operating losses. Although we have generated cumulative revenue of $58.6 million since our inception through March 31, 2016, primarily consisting of the $22.5 million upfront payment from Pfizer in 2011, the $15.0 million non-refundable milestone payment in May 2014 and the $20.0 million non-refundable milestone payment in August 2015, we had an accumulated deficit of $94.7 million as of March 31, 2016, and we expect to continue to incur significant expenses and operating losses over at least the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials, the receipt of milestone payments, if any, under our collaboration with Pfizer, and our expenditures on other research and development activities. We anticipate that our expenses will increase substantially as we:

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· initiate and conduct our planned clinical trials of GMI-1271 and GMI-1359;

· continue the research and development of our other drug candidates;

· seek to discover and develop additional drug candidates;

· seek regulatory approvals for any drug candidates other than rivipansel that successfully complete clinical trials;

· ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any drug candidates other than rivipansel for which we may obtain regulatory approval;

· maintain, expand and protect our intellectual property portfolio;

· hire additional clinical, quality control and scientific personnel; and

· add operational, financial and management information systems and personnel, including personnel to support our drug development and potential future commercialization efforts.

To fund further operations, we will need to raise capital. We may obtain additional financing in the future through the issuance of our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. 

We may not be able to raise additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed could compromise our ability to execute on our business plan. Although it is difficult to predict future liquidity requirements, we believe that our existing cash and cash equivalents, together with interest thereon, will be sufficient to fund our operations through the first quarter of 2017. However, our ability to successfully transition to profitability will be dependent upon achieving a level of revenues adequate to support our cost structure. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Our Collaboration with Pfizer

In October 2011, we entered into the license agreement with Pfizer under which we granted Pfizer an exclusive worldwide license to develop and commercialize products containing rivipansel for all fields and uses. The license also covers specified back-up compounds along with modifications of and improvements to rivipansel that meet defined chemical properties. Pfizer is required to use commercially reasonable efforts, at its expense, to develop, obtain regulatory approval for and commercialize rivipansel for sickle cell disease in the United States. Under the terms of the agreement, we received a $22.5 million upfront payment. We are also eligible to earn potential milestone payments of up to $115.0 million upon the achievement of specified development milestones, including the dosing of the first patients in Phase 3 clinical trials for up to two indications and the first commercial sale of a licensed product in the United States and selected European countries for up to two indications, up to $70.0 million upon the achievement of specified regulatory milestones, including the acceptance of our filings for regulatory approval by regulatory authorities in the United States and Europe for up to two indications, and up to $135.0 million upon the achievement of specified levels of annual net sales of licensed products. We are also eligible to receive tiered royalties for each licensed product, with percentages ranging from the low double digits to the low teens, based on net sales worldwide, subject to reductions in specified circumstances.

The first potential milestone payment under the Pfizer agreement was $35.0 million upon the initiation of dosing of the first patient in a Phase 3 clinical trial of rivipansel by Pfizer. Under the collaboration, Pfizer made a $15.0 million non-refundable milestone payment to us in May 2014, which we recognized as revenue in May 2014, when earned, and the dosing of the first patient in the Phase 3 clinical trial in June 2015 triggered the remaining $20.0 million milestone payment to us.  We recorded the $20.0 million milestone payment as revenue in June 2015.

We have a research services agreement with the University of Basel, or the University, under which University personnel have performed research services for us on an as-requested basis since 2004. The agreement includes one-year

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research terms, and we have no affirmative obligation to purchase any minimum amount of services in any year beyond what we commit to at the beginning of each term, if any. For the research terms ended in February 2015 and 2016, we paid the University approximately $200,000 and $100,000, respectively. As part of the original consideration for entering into this agreement, we granted to the University the right to receive payments from us under specified circumstances. If we receive any future milestone payments or royalties from Pfizer with respect to rivipansel, we have agreed to pay 10% of those amounts to the University. As of December 31, 2015, we have recorded a $2.0 million liability to the University based upon the $20.0 million non-refundable milestone payment from Pfizer.  In February 2016, we paid the $2.0 million accrued liability to the University.  During the three months ended March 31, 2016, there were no additional milestone payments recorded in our statements of operations.

Critical Accounting Policies and Significant Judgments and Estimates

There have been no material changes in our critical accounting policies, estimates and judgments during the three months ended March 31, 2016 compared to the disclosures in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2015.

Components of Operating Results

Revenue

To date, we have not generated any revenue from the sale of our drug candidates and do not expect to generate any revenue from the sale of drugs in the near future. Substantially all of our revenue recognized to date has consisted of the upfront and milestone payments under our agreement with Pfizer.

Since our inception, we have also recognized a nominal amount of revenue under research grant contracts, generally to the extent of our costs incurred in connection with specific research or development activities.

Research and Development

Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits for full-time research and development employees, facilities expenses, overhead expenses, cost of laboratory supplies, clinical trial and related clinical manufacturing expenses, fees paid to contract research organizations and other consultants and other outside expenses. Other preclinical research and platform programs include activities related to exploratory efforts, target validation, lead optimization for our earlier programs and our proprietary glycomimetics platform.

To date, our research and development expenses have related primarily to the development of rivipansel and our other drug candidates. In April 2013, when we completed our Phase 2 clinical trial of rivipansel, all further clinical development obligations associated with rivipansel shifted to Pfizer.

We do not currently utilize a formal time allocation system to capture expenses on a project-by-project basis because we are organized and record expense by functional department and our employees may allocate time to more than one development project. Accordingly, we only allocate a portion of our research and development expenses by functional area and by drug candidate.

Research and development costs are expensed as incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

Research and development activities are central to our business model. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials. We expect our research and development expenses to increase over the next several years as we seek to progress GMI-1271, GMI-1359 and our other drug candidates through clinical development. However, it is difficult to determine with certainty the duration and completion costs of our current

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or future preclinical studies and clinical trials of our drug candidates, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our drug candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our drug candidates.

The duration, costs and timing of clinical trials and development of our drug candidates will depend on a variety of factors that include:

· per patient trial costs;

· the number of patients that participate in the trials;

· the number of sites included in the trials;

· the countries in which the trial is conducted;

· the length of time required to enroll eligible patients;

· the number of doses that patients receive;

· the drop-out or discontinuation rates of patients;

· potential additional safety monitoring or other studies requested by regulatory agencies;

· the duration of patient follow-up; and

· the safety and efficacy profile of the drug candidate.

In addition, the probability of success for each drug candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability. We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each drug candidate, as well as an assessment of each drug candidate’s commercial potential.

General and Administrative

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, business development and human resources functions. Other significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting and consulting services. We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities.

Other Income

Other income consists of interest income earned on our cash and cash equivalents.

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Results of Operations for the Three Months Ended March 31, 2016 and 2015

The following table sets forth our results of operations for the three ended March 31, 2016 and 2015:

	Three Months Ended March 31,				Period-to-Period
(in thousands)	2016		2015		Change
Revenue	$	—	$	—	$	—
Costs and expenses:
Research and development expense		5,519		5,208		311
General and administrative expense		2,056		1,905		151
Total costs and expenses		7,575		7,113		462
Loss from operations		(7,575)		(7,113)		(462)
Other income		20		4		16
Net loss and comprehensive loss	$	(7,555)	$	(7,109)	$	(446)

Research and Development Expense

The following table summarizes our research and development expense by functional area for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,				Period-to-Period
(in thousands)	2016		2015		Change
Clinical development	$	1,515	$	699	$	816
Manufacturing and formulation		1,398		2,121		(723)
Contract research services, consulting and other costs		447		528		(81)
Laboratory costs		376		302		74
Personnel-related		1,530		1,355		175
Stock-based compensation		253		203		50
Research and development expense	$	5,519	$	5,208	$	311

During the three months ended March 31, 2016, our research and development expense increased by $311,000 compared to the same period in 2015, reflecting an increase of 6%. The change in research and development expense was primarily attributable to an increase in the costs associated with the clinical trials for GMI-1271 offset by a decrease in expenses related to manufacturing and process development for GMI-1271. In addition, the preclinical development of GMI-1359, our next drug candidate, resulted in increased expenses in manufacturing and for toxicology studies required to support a potential IND filing. Personnel related fees increased by $175,000 for the three months ended March 31, 2016 compared to March 31, 2015 primarily attributable to an increased number of research and development employees to support our current programs.

The following table summarizes our research and development expense by drug candidate for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,				Period-to-Period
(in thousands)	2016		2015		Change
GMI-1271	$	2,069	$	2,789	$	(720)
GMI-1359		1,055		209		846
GMI-1051		—		21		(21)
Other research and development		612		631		(19)
Personnel-related and stock-based compensation		1,783		1,558		225
Research and development expense	$	5,519	$	5,208	$	311

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General and Administrative Expense

The following table summarizes the components of our general and administrative expense for the three months ended March 31, 2016 and 2015:

	Three Months Ended  March 31,				Period-to-Period
(in thousands)	2016		2015		Change
Personnel-related	$	695	$	594	$	101
Stock-based compensation		474		385		89
Legal, consulting and other professional expenses		739		802		(63)
Other		148		124		24
General and administrative expense	$	2,056	$	1,905	$	151

During the three months ended March 31, 2016, our general and administrative expense increased by $151,000 compared to the same period in 2015, reflecting an increase of 8%. The increases in general and administrative expense were primarily attributable to personnel-related and stock-based compensation expense due to a small incremental headcount increase in 2016 and due to the stock option and RSU awards granted in the first quarter of 2016.

Liquidity and Capital Resources

Sources of Liquidity

We have financed our operations primarily through the private placements of our capital stock, our IPO and upfront and milestone payments from Pfizer. As of March 31, 2016, we had $38.8 million in cash and cash equivalents.

We are potentially eligible to earn a significant amount of milestone payments and royalties under our agreement with Pfizer. Our ability to earn these payments and their timing is dependent upon the outcome of Pfizer’s activities and is uncertain at this time.

On March 1, 2016, we entered into an at-the-market sales agreement with Cowen, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $40 million through Cowen acting as our sales agent. Also on March 1, 2016, we filed a prospectus supplement offering up to $19 million of shares of our common stock in accordance with the sales agreement.  We will be required to file another prospectus supplement in the event that we want to offer more than $19 million in shares of our common stock pursuant to the sales agreement.  Between March 1, 2016 and the date of this report, we have sold an aggregate of 348,677 shares of our common stock under the at-the-market agreement, for net proceeds of $2.0 million.

Funding Requirements

Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, laboratory and related supplies, clinical costs, legal and other regulatory expenses and general overhead costs.

The successful development of any of our drug candidates is highly uncertain. As such, at this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of GMI-1271 or our other drug candidates. We are also unable to predict when, if ever, material net cash inflows will commence from rivipansel or GMI-1271. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

· successful enrollment in, and completion of, clinical trials;

· receipt of marketing approvals from applicable regulatory authorities;

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· establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

· obtaining and maintaining patent and trade secret protection and regulatory exclusivity for drug candidates; and

· launching commercial sales of drugs, if and when approved, whether alone or in collaboration with others.

A change in the outcome of any of these variables with respect to the development of any of our drug candidates would significantly change the costs and timing associated with the development of that drug candidate. Because our drug candidates are in various stages of clinical and preclinical development and the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our drug candidates or whether, or when, we may achieve profitability. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity or debt financings and collaboration arrangements, including our existing collaboration with Pfizer. Except for Pfizer’s obligation to make milestone payments under our agreement with them, we will not have any committed external source of liquidity.

To the extent that we raise additional capital through the future sale of equity or debt, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. If we raise additional funds through the issuance of convertible debt securities, these securities could contain covenants that would restrict our operations.

We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, or at all. If we raise additional funds through collaboration arrangements in the future, we may have to relinquish valuable rights to our drug candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.

Outlook

Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that our existing cash and cash equivalents as of March 31, 2016 will enable us to fund our operating expenses and capital expenditure requirements through the first quarter of 2017. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials is uncertain.

Cash Flows

The following is a summary of cash flows for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
(in thousands)	2016		2015
Net cash provided by (used in):
Operating activities	$	(9,230)	$	(8,705)
Investing activities		(17)		(2)
Financing activities		1,275		75
Net change in cash and cash equivalents	$	(7,972)	$	(8,632)

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2016 includes the costs associated with the advancement of the GMI-1271 and GMI-1359 development programs. In addition, the $2.0 million milestone license fee due to the University of Basel and accrued as a liability as of December 31, 2015 was paid during this period. Net

23

cash used in operating activities for the three months ended March 31, 2015 included the manufacturing costs and clinical expenses for the initiation of the Phase 1/2 clinical trial of GMI-1271.  In addition, the $1.5 million milestone due to the University of Basel as of December 31, 2014 was paid during the three months ending March 31, 2015.

Investing Activities

There were no material investing activities in the three months ended March 31, 2016 and 2015.

Financing Activities

Net cash provided by financing activities during the three months ended March 31, 2016 is comprised primarily of the net proceeds from at-the-market sales under our sales agreement with Cowen.  Net cash provided by financing activities during the three months ended March 31, 2015 reflects the receipt of cash upon the exercise of stock options.

Contractual Obligations

As of March 31, 2016, our significant contractual obligations consisted solely of rent obligations under a non-cancelable lease for our current office space in Rockville, Maryland, which has a term through October 2023.

The following table depicts our obligations under this lease as of March 31, 2016.

	Payments Due by Period
													After
	Total		2016		2017		2018		2019		2020		2020
	(In thousands)
Operating lease	$	7,486	$	563	$	942	$	965	$	990	$	1,014	$	3,012

The foregoing table does not include various agreements that we have entered into for services with third-party vendors, including agreements to conduct clinical trials, to manufacture products, and for consulting and other contracted services due to the cancelable nature of the services. We accrue the costs of these agreements based on estimates of work completed to date.

The contractual obligations table does not include any potential future payments we may be required to make under our research agreement with the University of Basel, under which we have agreed to pay 10% of any future milestone payments or royalties we may receive from Pfizer with respect to rivipansel. Due to the uncertainty of the achievement and timing of the events requiring payment under that agreement, the amounts to be paid by us cannot be determined as of the date of this report.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2016, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

JOBS Act

In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period, and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

24

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The market risk inherent in our financial instruments and in our financial position represents the potential loss arising from adverse changes in interest rates. As of March 31, 2016 and December 31, 2015, we had cash and cash equivalents of $38.8 million and $46.8 million, respectively. We generally hold our cash in interest-bearing money market accounts. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Due to the short-term maturities of our cash equivalents and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Security and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2016, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of such date at the reasonable assurance level.

(b) Changes in Internal Controls Over Financial Reporting

There have not been any changes in our internal controls over financial reporting during our fiscal quarter ended March 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.

25

Item 1A. Risk Factors

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Our risk factors as of the date of this quarterly report on Form 10-Q have not changed materially from those described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission on February 29, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Sales of Unregistered Securities

None.

(b) Use of Proceeds from Public Offering of Common Stock

On January 9, 2014, our Registration Statement on Form S-1, as amended (File No. 333-191567) was declared effective in connection with our initial public offering, pursuant to which we sold 8,050,000 shares of our common stock, including the full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $8.00 per share. The offering closed on January 15, 2014, and, as a result, we received net proceeds of $57.2 million (after underwriters’ discounts and commissions of $4.5 million and additional offering related costs of $2.7 million). The joint managing underwriters of the offering were Jefferies LLC and Barclays Capital Inc.

No expenses incurred by us in connection with our initial public offering were paid directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities, or (iii) any of our affiliates, other than payments in the ordinary course of business to officers for salaries and to non-employee directors as compensation for board or board committee service.

There has been no material change in the planned use of proceeds from our initial public offering from that described in the final prospectus filed by us with the Securities and Exchange Commission on January 10, 2014.

26

Item 6. Exhibits

Exhibit No.	Document
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on January 15, 2014).
3.2	Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on January 15, 2014).
4.1	Specimen stock certificate evidencing shares of Common Stock (incorporated herein by reference to Exhibit 4.2 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-191567), filed with the Commission on October 31, 2013).
10.1	Sales Agreement, dated March 1, 2016, by and between the Registrant and Cowen and Company, LLC (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on March 1, 2016).
10.2	First Amendment to Lease, dated March 24, 2016, by and between the Registrant and BMR-Medical Center Drive LLC (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on March 29, 2016).
31.1*	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act.
31.2*	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act.
32.1**	Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*     Filed herewith

**   These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GLYCOMIMETICS, INC.
Date: May 4, 2016	By:	/s/ Brian M. Hahn
		Brian M. Hahn
		Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial Officer)

28

Exhibit Index

Exhibit No.	Document
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on January 15, 2014).
3.2	Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on January 15, 2014).
4.1	Specimen stock certificate evidencing shares of Common Stock (incorporated herein by reference to Exhibit 4.2 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-191567), filed with the Commission on October 31, 2013).
10.1	Sales Agreement, dated March 1, 2016, by and between the Registrant and Cowen and Company, LLC (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on March 1, 2016).
10.2	First Amendment to Lease, dated March 24, 2016, by and between the Registrant and BMR-Medical Center Drive LLC (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the Commission on March 29, 2016).
31.1*	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act.
31.2*	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act.
32.1**	Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*     Filed herewith

**   These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

29

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rachel K. King, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2016 of GlycoMimetics, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2016

/s/ Rachel K. King

Rachel K. King

Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian M. Hahn, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2016 of GlycoMimetics, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2016

/s/ Brian M. Hahn

Brian M. Hahn

Chief Financial Officer

(principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Rachel K. King, Chief Executive Officer of GlycoMimetics, Inc. (the “Company”), and Brian M. Hahn, Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2016, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 4th day of May, 2016.

/s/ Rachel K. King	/s/ Brian M. Hahn
Rachel K. King	Brian M. Hahn
Chief Executive Officer	Chief Financial Officer

*This certification accompanies the Periodic Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of GlycoMimetics, Inc. under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Periodic Report), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	GLYC
Entity Registrant Name	GLYCOMIMETICS INC
Entity Central Index Key	0001253689
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		19,350,322

XML

Balance Sheets - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 38,830,110	$ 46,802,560
Prepaid expenses and other current assets	683,365	441,810
Total current assets	39,513,475	47,244,370
Property and equipment, net	491,414	521,378
Prepaid research and development expenses	696,531	696,531
Total assets	40,701,420	48,462,279
Current liabilities:
Accounts payable	1,622,594	564,235
Accrued bonuses	276,005	1,037,112
Accrued expenses	3,784,712	6,145,631
Total current liabilities	5,683,311	7,746,978
Deferred rent	250,143	243,647
Total liabilities	5,933,454	7,990,625
Stockholders' equity:
Common stock; $0.001 par value; 100,000,000 shares authorized, 19,280,690 shares issued and outstanding at March 31, 2016; 100,000,000 shares authorized, 19,050,204 shares issued and outstanding at December 31, 2015	19,279	19,049
Additional paid-in capital	129,470,138	127,619,078
Accumulated deficit	(94,721,451)	(87,166,473)
Total stockholders' equity	34,767,966	40,471,654
Total liabilities and stockholders' equity	$ 40,701,420	$ 48,462,279

XML

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Balance Sheets
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	19,280,690	19,050,204
Common stock, shares outstanding	19,280,690	19,050,204

XML

Statements of Operations and Comprehensive (Loss) Income - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Costs and expenses:
Research and development expense	$ 5,518,722	$ 5,207,730
General and administrative expense	2,056,353	1,904,963
Total costs and expenses	7,575,075	7,112,693
Loss from operations	(7,575,075)	(7,112,693)
Other income	20,097	3,564
Net loss and comprehensive loss	$ (7,554,978)	$ (7,109,129)
Basic and diluted net loss per common share (in dollars per share)	$ (0.40)	$ (0.37)
Basic and diluted weighted average number of common shares (in shares)	19,071,838	18,961,531

XML

Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities
Net loss	$ (7,554,978)	$ (7,109,129)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	47,234	44,245
Stock-based compensation expense	727,547	587,514
Changes in assets and liabilities
Prepaid expenses and other current assets	(241,555)	139,169
Accounts payable	1,007,159	299,464
Accrued expenses	(3,221,593)	(2,637,283)
Deferred rent	6,496	(29,047)
Net cash used in operating activities	(9,229,690)	(8,705,067)
Investing activities
Purchases of property and equipment	(17,270)	(2,339)
Net cash used in investing activities	(17,270)	(2,339)
Financing activities
Proceeds from issuance of common stock, net of issuance costs	1,238,619
Proceeds from exercise of stock options	35,891	75,377
Net cash provided by financing activities	1,274,510	75,377
Net change in cash and cash equivalents	(7,972,450)	(8,632,029)
Cash and cash equivalents, beginning of period	46,802,560	55,198,923
Cash and cash equivalents, end of period	38,830,110	46,566,894
Supplemental disclosure of non-cash investing activities:
Property asset acquisition included in accounts payable		$ 10,000
Supplemental disclosure of non-cash financing activities:
Issuance costs associated with the at-the-market financing included in accounts payable and accrued expenses	$ 150,767

XML

Description of the Business

3 Months Ended

Mar. 31, 2016

Description of the Business

Description of the Business

GLYCOMIMETICS, INC.

Notes to Unaudited Financial Statements

1. Description of the Business

GlycoMimetics, Inc. (the Company), a Delaware corporation headquartered in Rockville, Maryland, was incorporated on April 4, 2003 and commenced operations on May 21, 2003. The Company is a clinical stage biotechnology company focused on the discovery and development of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role. Glycomimetics are molecules that mimic the structure of carbohydrates involved in important biological processes. Using its expertise in carbohydrate chemistry and knowledge of carbohydrate biology, the Company is developing a pipeline of proprietary glycomimetics that inhibit disease-related functions of carbohydrates, such as the roles they play in inflammation, cancer and infection.

The Company’s executive personnel have devoted substantially all of their time to date to the planning and organization of the Company, the process of hiring scientists, initiating research and development programs and securing adequate capital for anticipated growth and operations. The Company has not commercialized any of its drug candidates or commenced commercial operations. The Company is subject to a number of risks similar to those of other companies in similar development stages, including dependence on key individuals, the need to develop commercially viable drugs, competition from other companies, many of whom are larger and better capitalized, and the need to obtain adequate additional financing to fund the development of its drug candidates. The Company has incurred significant operating losses since inception and has relied on its ability to fund its operations through private and public equity financings, and management expects operating losses and negative operating cash flows to continue for the foreseeable future. As the Company continues to incur losses, profitability will be dependent upon the successful development, approval, and commercialization of its drug candidates and achieving a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional public or private equity or debt offerings and may seek additional capital through arrangements with strategic partners or from other sources.  

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Significant Accounting Policies

Basis of Accounting

The accompanying financial statements were prepared based on the accrual method of accounting in accordance with U.S. generally accepted accounting principles (GAAP).

Unaudited Financial Statements

The accompanying balance sheet as of March 31, 2016 and statements of operations and comprehensive loss for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015 are unaudited. These unaudited financial statements have been prepared in accordance with the rules and regulations for the United States Securities and Exchange Commission (the SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. These financial statements should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2015 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of March 31, 2016, the results of operations for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015. The December 31, 2015 balance sheet included herein was derived from audited financial statements, but does not include all disclosures including notes required by GAAP for complete annual financial statements. The financial data and other information disclosed in these notes to the financial statements related to the three months ended March 31, 2016 and 2015 are unaudited. Interim results are not necessarily indicative of results for an entire year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ from those estimates, management does not believe that such differences would be material.

Fair Value Measurements

The Company had no assets or liabilities that were measured using quoted prices for similar assets and liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of March 31, 2016 and December 31, 2015. The carrying value of cash held in money market funds of approximately $36.5 million and $45.5 million as of March 31, 2016 and December 31, 2015, respectively, is included in cash and cash equivalents and approximates market values based on quoted market prices (Level 1 inputs).

Concentration of Credit Risk

Credit risk represents the risk that the Company would incur a loss if counterparties failed to perform pursuant to the terms of their agreements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents consist of certificates of deposit and money market funds with major financial institutions in the United States. These deposits and funds may be redeemed upon demand and, therefore, bear minimal risk. The Company does not anticipate any losses on such balances.

Revenue Recognition

From time to time, the Company is awarded reimbursement contracts for services and development grant contracts with government and non-government entities and philanthropic organizations. Under these contracts, the Company typically is reimbursed for the costs in connection with specific development activities. The Company recognizes revenue to the extent of costs incurred in connection with performance under such grant arrangements.

The Company has entered into a collaborative research and development agreement with Pfizer. The agreement is in the form of a license agreement. The agreement called for a nonrefundable up-front payment and milestone payments upon achieving significant milestone events. The agreement also contemplates royalty payments on future sales of an approved product. There are no performance, cancellation, termination, or refund provisions in the arrangement that contain material financial consequences to the Company.

The primary deliverable under this arrangement is an exclusive worldwide license to the Company’s rivipansel compound, but the arrangement also includes deliverables related to research and preclinical development activities to be performed by the Company on Pfizer’s behalf.

Collaborative research and development agreements can provide for one or more of up-front license fees, research payments, and milestone payments. Agreements with multiple components (deliverables or items) are evaluated according to the provisions of Accounting Standards Codification (ASC) 605-25, Revenue Recognition—Multiple-Element Arrangements, to determine whether the deliverables can be separated into more than one unit of accounting. An item can generally be considered a separate unit of accounting if all of the following criteria are met: (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) if the arrangement includes a general right of return relative to the delivered item(s) then delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on selling price hierarchy. The selling price hierarchy for each deliverable is based on (i) vendor-specific objective evidence (VSOE), if available; (ii) third-party evidence (TPE) of selling price if VSOE is not available; or (iii) an estimated selling price, if neither VSOE nor TPE is available. Management was not able to establish VSOE or TPE for separate unit deliverables, as the Company does not have a history of entering such arrangements or selling the individual deliverables within such arrangements separately. In addition, there may be significant differentiation in these arrangements, which indicates that comparable third-party pricing may not be available. Management determined that the selling price for the deliverables within the Pfizer collaboration agreement should be determined using its best estimate of selling price. The process of determining the best estimate of selling price involved significant judgment on the Company’s part and included consideration of multiple factors such as estimated direct expenses, other costs, and available clinical development data.

Pursuant to ASC 605-25, each required deliverable under the Pfizer collaboration agreement is evaluated to determine whether it qualifies as a separate unit of accounting. Factors considered in this determination include the research capabilities of Pfizer, the proprietary nature of the license and know-how, and the availability of the Company’s glycomimetics technology research expertise in the general marketplace. Based on all relevant facts and circumstances and, most significantly, on the proprietary nature of the Company’s technology and the related proprietary nature of the Company’s research services, management concluded that stand-alone value does not exist for the license, and therefore, the license is not a separate unit of accounting under the agreement and will be combined with the research and development services (including participation on a joint steering committee).

As such, the $22.5 million up-front payment received was recognized as revenue over the expected development period through March 2013. The determination of the length of the period over which to defer revenue and the methodology by which to recognize the related revenues is subject to judgment and estimation. Consistent with the research plan developed by and agreed to by both parties, management estimated that the research activities and participation on the joint steering committees would occur over a 1.5-year period. Revenues associated with the up-front license fee are recognized over this period using a straight-line method, which is consistent with expected completion of the research services. The research services were completed in March 2013, consistent with the expected development period.

Pursuant to ASC 605-28, Revenue Recognition—Milestone Method, at the inception of agreements that include milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. In making this assessment, the Company evaluates factors such as scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the agreement.

Non-refundable development and regulatory milestones that are expected to be achieved as a result of the Company’s efforts during the period of substantial involvement are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Milestones that are not considered substantive because the Company does not contribute effort to the achievement of such milestones are generally achieved after the period of substantial involvement and are recognized as revenue upon achievement of the milestone, as there are no undelivered elements remaining and no continuing performance obligation, assuming all other revenue recognition criteria are met. In May 2014, the Company recognized $15.0 million in revenue as a result of the first non-refundable milestone payment received from Pfizer. In June 2015, the Company recognized $20.0 million in revenue as a result of Pfizer dosing the first patient in the Phase 3 clinical trial of rivipansel, which triggered the second non-refundable milestone payment.  

Accrued Liabilities

The Company is required to estimate accrued liabilities as part of the process of preparing its financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date. Accrued liabilities include professional service fees, such as for lawyers and accountants, contract service fees, such as those under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, and fees to contract manufacturers in conjunction with the production of clinical materials. Pursuant to the Company’s assessment of the services that have been performed, the Company recognizes these expenses as the services are provided. Such assessments include: (i) an evaluation by the project manager of the work that has been completed during the period; (ii) measurement of progress prepared internally and/or provided by the third-party service provider; (iii) analyses of data that justify the progress; and (iv) the Company’s judgment.

Research and Development Costs

Except for payments made in advance of services, research and development costs are expensed as incurred. For payments made in advance, the Company recognizes research and development expense as the services are rendered. Research and development costs primarily consist of salaries and related expenses for personnel, laboratory supplies and raw materials, sponsored research, depreciation of laboratory facilities and leasehold improvements, and utilities costs related to research space. Other research and development expenses include fees paid to consultants and outside service providers.

Stock-Based Compensation

Stock-based payments are accounted for in accordance with the provisions of ASC 718, Compensation—Stock Compensation. The fair value of stock-based payments is estimated, on the date of grant, using the Black-Scholes-Merton model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the option.

The Company has elected to use the Black-Scholes-Merton option pricing model to value any options granted. The Company will reconsider use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that prevent their value from being reasonably estimated using this model.

A discussion of management’s methodology for developing some of the assumptions used in the valuation model follows:

Expected Dividend Yield—The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

Expected Volatility—Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company does not maintain an internal market for its shares, and prior to its initial public offering the shares were not traded publicly. The Company utilizes the historical volatilities of a peer group (e.g., several public entities of similar size, complexity, and stage of development) to determine its expected volatility.

Risk-Free Interest Rate—This is the U.S. Treasury rate for the week of each option grant during the year, having a term that most closely resembles the expected life of the option.

Expected Term—This is a period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of 10 years. The Company estimates the expected life of the option term to be 6.25 years. The Company uses a simplified method to calculate the average expected term.

Expected Forfeiture Rate—The forfeiture rate is the estimated percentage of options granted that is expected to be forfeited or canceled on an annual basis before becoming fully vested. The Company estimates the forfeiture rate based on turnover data with further consideration given to the class of the employees to whom the options were granted.

Equity instruments issued to nonemployees are accounted for under the provisions of ASC 718, Compensation—Stock Compensation, and ASC 505-50, Equity—Equity-Based Payments to Non-Employees. Accordingly, the estimated fair value of the equity instrument is recorded on the earlier of the performance commitment date or the date the services are completed and are marked to market during the service period.

Net Loss Per Common Share

Basic net loss per common share is determined by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock options, restricted stock units and warrants.

Basic and diluted net loss per common share is computed as follows:

	Three Months Ended March 31,
	2016		2015
Net loss	$	(7,554,978)	$	(7,109,129)
Basic and diluted net loss per common share	$	(0.40)	$	(0.37)
Basic and diluted weighted average common shares outstanding		19,071,838		18,961,531

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:

	Three Months Ended March 31,
	2016	2015
Warrants	578,687	590,595
Stock options and restricted stock units	2,755,089	2,232,835

Comprehensive Loss

Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the three months ended March 31, 2016 and 2015, the Company’s net loss equals comprehensive loss and, accordingly, no additional disclosure is presented.

Recently Issued Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-02, Leases (Topic 842).  The final guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption will be permitted.  The Company is currently evaluating the effect the new standard will have on the Company.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.  The ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in financial statements including the income tax effects of share-based payments, minimum statutory withholding requirements and forfeitures. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It will also allow an employer to repurchase more of an employee’s shares than the current standard for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption will be permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the effect the new standard will have on the Company.

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Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2016

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

3. Prepaid Expenses and Other Current Assets

The following is a summary of the Company’s prepaid expenses and other current assets:

	March 31,		December 31,
	2016		2015
Prepaid expenses	$	617,698	$	393,857
Other receivables		58,758		38,683
Deposits		6,909		9,270
Prepaid expenses and other current assets	$	683,365	$	441,810

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Property and Equipment

3 Months Ended

Mar. 31, 2016

Property and Equipment

Property and Equipment

4. Property and Equipment

Property and equipment, net consists of the following:

	March 31,		December 31,
	2016		2015
Furniture and fixtures	$	230,987	$	230,987
Laboratory equipment		982,856		965,586
Office equipment		9,723		9,723
Computer equipment		181,053		181,053
Leasehold improvements		36,128		36,128
Property and equipment		1,440,747		1,423,477
Less accumulated depreciation		(949,333)		(902,099)
Property and equipment, net	$	491,414	$	521,378

Depreciation expense was $47,234 and $44,245 for the three months ended March 31, 2016 and 2015, respectively.

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Accrued Expenses

3 Months Ended

Mar. 31, 2016

Accrued Expenses

Accrued Expenses

5. Accrued Expenses

The following is a summary of the Company’s accrued expenses:

	March 31,		December 31,
	2016		2015
Accrued research and development expenses	$	2,747,683	$	3,423,220
Accrued license and milestone fees		—		2,000,000
Accrued consulting and other professional fees		391,346		242,227
Other accrued expenses		358,512		281,152
Accrued employee benefits		284,546		195,442
Accrued franchise and other taxes		2,625		3,590
Accrued expenses	$	3,784,712	$	6,145,631

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Operating Leases

3 Months Ended

Mar. 31, 2016

Operating Leases

Operating Leases

6. Operating Leases

The Company leases office and research space in Rockville, Maryland under an eight-year operating lease (the Lease) that is subject to escalation clauses. The Company has the right to sublease or assign all or a portion of the premises, subject to the conditions set forth in the Lease. The Lease may be terminated early by either the landlord or the Company in certain circumstances.  In connection with this lease arrangement, the Company received rent abatement as a lease incentive. The rent abatement has been recognized as deferred rent that is being adjusted on a straight-line basis over the term of the lease. Deferred rent related to the Lease was $250,143 and $243,647 at March 31, 2016 and December 31, 2015, respectively. Total rent expense under the Company’s operating leases was $158,371 and $96,399 for the three months ended March 31, 2016 and 2015, respectively.

In March 2016, the Company amended the Lease (the Lease Amendment) to lease additional space. The Company’s lease of the additional space commences on the earlier of June 1, 2016, the day the work described in the Lease Amendment is substantially complete or the day the Company commences operations in the additional space. The Lease Amendment provides for a rent abatement, a tenant improvement allowance and is subject to the escalation clause which will be recognized as deferred rent.  The Company will also pay a security deposit of $52,320 to be held until the end of the expiration or termination of Company’s obligations under the Lease.  The term of the Lease Amendment will continue through October 31, 2023, the same date as for the premises originally leased under the Lease, subject to the Company’s renewal option set forth in the Lease.  The Company’s one-time option to terminate the Lease effective as of October 31, 2020 will also apply to the additional space.

Future minimum lease payments under the Lease, as amended by the Lease Amendment, as of March 31, 2016 are as follows:

YEAR	AMOUNT
2016	$	562,798
2017		941,822
2018		965,368
2019		989,502
2020		1,014,239
After 2020		3,011,849
Total	$	7,485,578

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Stockholders' Equity - 10Q

3 Months Ended

Mar. 31, 2016

Stockholders' Equity

Compensation related costs

7. Stockholders’ Equity

At-The-Market Equity Offering

On March 1, 2016, the Company entered into an at-the-market sales agreement with Cowen and Company, LLC to sell the Company’s securities under a shelf registration statement filed in March 2015. On March 28, 2016, the Company issued and sold 206,500 shares of common stock under the at-the-market sales agreement.  The shares were sold at a weighted average price per share of $6.299, for aggregate gross proceeds of $1.3 million. The net offering proceeds to the Company were $1.1 million after deducting related expenses, including commissions of $0.2 million. For the period from April 1, 2016 through May 2, 2016, the Company sold an additional 142,177 shares for net proceeds of $864,756 after deducting commissions.

2003 Stock Incentive Plan

The 2003 Stock Incentive Plan (the 2003 Plan) provided for the grant of incentives and nonqualified stock options and restricted stock awards. The exercise price for incentive stock options must be at least equal to the fair value of the common stock on the grant date. Unless otherwise stated in a stock option agreement, 25% of the shares subject to an option grant will vest upon the first anniversary of the vesting start date and thereafter at the rate of one forty-eighth of the option shares per month as of the first day of each month after the first anniversary. Upon termination of employment by reasons other than death, cause, or disability, any vested options shall terminate 60 days after the termination date. Stock options terminate 10 years from the date of grant. The 2003 Plan expired on May 21, 2013.

A summary of the Company’s stock option activity under the 2003 Plan for the three months ended March 31, 2016 is as follows:

				WEIGHTED-AVERAGE
		WEIGHTED-		REMAINING	AGGREGATE
	OUTSTANDING	AVERAGE		CONTRACTUAL TERM	INTRINSIC VALUE
	OPTIONS	EXERCISE PRICE		(YEARS)	(IN THOUSANDS)
Outstanding as of December 31, 2015	758,187	$	1.27	4.2
Options exercised	(23,986)		1.50
Options forfeited	—		—
Outstanding as of March 31, 2016	734,201		1.26	4.0	$	3,451
Vested or expected to vest as of March 31, 2016	734,066		1.26	4.0	$	3,450
Exercisable as of March 31, 2016	729,317		1.25	3.9	$	3,435

As of March 31, 2016, there was $9,648 of total unrecognized compensation expense related to unvested options under the 2003 Plan that will be recognized over a weighted-average period less than one year. Total intrinsic value of the options exercised during the three months ended March 31, 2016 and 2015 was $75,093 and $473,016, respectively and total cash received for options exercised was $35,891 and $75,377 during the three months ending March 31, 2016 and 2015, respectively. The total fair value of shares underlying options which vested in the three months ended March 31, 2016 and 2015 was $7,412 and $13,785, respectively.

2013 Equity Incentive Plan

The Company’s board of directors adopted, and its stockholders approved, its 2013 Equity Incentive Plan (the 2013 Plan). The 2013 Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to the Company’s employees and its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to its employees, including officers, consultants and directors. The 2013 Plan also provides for the grant of performance cash awards to the Company’s employees, consultants and directors. Unless otherwise stated in a stock option agreement, 25% of the shares subject to an option grant will typically vest upon the first anniversary of the vesting start date and thereafter at the rate of one forty-eighth of the option shares per month as of the first day of each month after the first anniversary. Upon termination of employment by reasons other than death, cause, or disability, any vested options will terminate 90 days after the termination date, unless otherwise set forth in a stock option agreement. Stock options generally terminate 10 years from the date of grant.

Authorized Shares

The maximum number of shares of common stock that initially could be issued under the 2013 Plan was1,000,000 shares, plus any shares subject to stock options or similar awards granted under the 2003 Plan that expire or terminate without having been exercised in full or are forfeited to or repurchased by the Company. The number of shares of common stock reserved for issuance under the 2013 Plan automatically increases on January 1 of each year until January 1, 2023, by 3% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. The maximum number of shares that may be issued pursuant to exercise of incentive stock options under the 2013 Plan is 20,000,000. As of January 1, 2016, the number of shares of common stock that may be issued under the 2013 Plan was automatically increased by 571,506 shares, representing 3% of the total number of shares of common stock outstanding on December 31, 2015, increasing the number of shares of common stock available for issuance under the 2013 Plan to 2,139,701 shares.

Shares issued under the 2013 Plan may be authorized but unissued or reacquired shares of common stock. Shares subject to stock awards granted under the 2013 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2013 Plan. Additionally, shares issued pursuant to stock awards under the 2013 Plan that the Company repurchases or that are forfeited, as well as shares reacquired by the Company as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2013 Plan.

A summary of the Company’s stock option activity under the 2013 Plan for the three months ended March 31, 2016 is as follows:

				WEIGHTED-AVERAGE
ccc		WEIGHTED-		REMAINING	AGGREGATE
	OUTSTANDING	AVERAGE		CONTRACTUAL TERM	INTRINSIC VALUE
	OPTIONS	EXERCISE PRICE		(YEARS)	(IN THOUSANDS)
Outstanding as of December 31, 2015	1,470,338	$	8.26	8.5
Options granted	528,800		5.11
Options exercised	—		—
Options forfeited	—		—
Outstanding as of March 31, 2016	1,999,138		7.43	8.6	$	449
Vested or expected to vest as of March 31, 2016	1,988,448		7.43	8.6	$	444
Exercisable as of March 31, 2016	615,819		8.32	8.1	$	—

The weighted-average fair value of the options granted during the three months ended March 31, 2016 and 2015 was $3.21 per share and $5.10 per share, respectively, applying the Black-Scholes-Merton option pricing model utilizing the following weighted-average assumptions:

	Three Months Ended	Three Months Ended
	March 31, 2016	March 31, 2015
Expected term (years)	6.25	6.25
Expected volatility	68.36%	82.08%
Risk-free interest rate	1.74%	1.68%
Expected dividend yield	0%	0%

As of March 31, 2016, there was $6,154,795 of total unrecognized compensation expense related to unvested options under the 2013 Plan that will be recognized over a weighted-average period of approximately 2.6 years. The total fair value of shares underlying options which vested in the three months ended March 31, 2016 and 2015 was $1,056,200 and $1,252,769, respectively.

A restricted stock unit (RSU) is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs with service conditions (service RSUs) that vest in three equal annual installments provided that the employee remains employed with the Company. As of March 31, 2016, there was $89,604 of unrecognized compensation costs related to unvested service RSUs.

The following is a summary of RSU activity under the 2013 Plan for the three months ended March 31, 2016:

			WEIGHTED-AVERAGE
		NUMBER	GRANT DATE
	OF SHARES			FAIR VALUE
Unvested at December 31, 2015		4,833	$	7.62
Granted		14,500		4.61
Forfeited		—		—
Vested		—		—
Unvested at March 31, 2016		19,333		5.36

Stock-based compensation expense was classified on the statement of operations as follows for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016		2015
Research and development expense	$	253,282	$	202,907
General and administrative expense		474,265		384,607
Total stock-based compensation expense	$	727,547	$	587,514

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Taxes

Income Taxes

8. Income Taxes

The Company has not recorded any tax provision or benefit for the three months ended March 31, 2016 and 2015. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefit from deductible temporary differences, net operating loss carryforwards and research and development credits is not more-likely-than-not to be realized at March 31, 2016 and December 31, 2015.

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Research and License Agreements

3 Months Ended

Mar. 31, 2016

Research and License Agreements

Research and License Agreements

9. Research and License Agreements

In October 2011, the Company and Pfizer entered into a licensing agreement (the Pfizer Agreement) that provides Pfizer an exclusive worldwide license to rivipansel for vaso-occlusive crisis associated with sickle cell disease and for other diseases for which the drug candidate may be developed. The Company was responsible for completion of the Phase 2 clinical trial, after which Pfizer assumed all further development and commercialization responsibilities. Upon execution of the Pfizer Agreement, the Company received an up-front payment of $22.5 million. The Pfizer Agreement also provides for potential milestone payments of up to $115.0 million upon the achievement of specified development milestones, including the dosing of the first patients in Phase 3 clinical trials for up to two indications and the first commercial sale of a licensed product in the United States and selected European countries for up to two indications; potential milestone payments of up to $70.0 million upon the achievement of specified regulatory milestones, including the acceptance of our filings for regulatory approval by regulatory authorities in the United States and Europe for up to two indications; and potential milestone payments of up to $135.0 million upon the achievement of specified levels of annual net sales of licensed products. Pfizer has the right to terminate the Agreement by giving prior written notice.

The Company has determined that each potential future clinical, development and regulatory milestone is substantive. Although sales-based milestones are not considered substantive, they are still recognized upon achievement of the milestone (assuming all other revenue recognition criteria have been met) because there are no undelivered elements that would preclude revenue recognition at that time. The Company is also eligible to receive royalties on future sales contingent upon annual net sales thresholds. In addition, the Company and Pfizer have formed a joint steering committee that will oversee and coordinate activities as set forth in the research program. The $22.5 million up-front payment was recognized over a period of 1.5 years. In May 2014, Pfizer made a $15.0 million non-refundable milestone payment to the Company, which was recognized as revenue by the Company in May 2014 when earned.  In June 2015, Pfizer dosed the first patient in the Phase 3 clinical trial of rivipansel, which triggered a non-refundable milestone payment to the Company of $20.0 million, which the Company recognized as revenue in June 2015.

In February 2004, the Company entered into a research services agreement (the Research Agreement) with the University of Basel (the University) for biological evaluation of selectin antagonists. Certain patents covering the rivipansel compound are subject to provisions of the Research Agreement. Under the terms of the Research Agreement, the Company will owe to the University 10% of all future milestone and royalty payments received from Pfizer with respect to rivipansel.  As of December 31, 2015, a $2.0 million milestone license fee was recorded as an accrued liability representing 10% of the $20.0 million non-refundable milestone payment that the Company received from Pfizer in 2015.  The accrued liability of $2.0 million was paid in February 2016.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Summary of Significant Accounting Policies

Basis of Accounting

Basis of Accounting

The accompanying financial statements were prepared based on the accrual method of accounting in accordance with U.S. generally accepted accounting principles (GAAP).

Unaudited interim financial statements

Unaudited Financial Statements

The accompanying balance sheet as of March 31, 2016 and statements of operations and comprehensive loss for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015 are unaudited. These unaudited financial statements have been prepared in accordance with the rules and regulations for the United States Securities and Exchange Commission (the SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. These financial statements should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2015 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2016. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of March 31, 2016, the results of operations for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015. The December 31, 2015 balance sheet included herein was derived from audited financial statements, but does not include all disclosures including notes required by GAAP for complete annual financial statements. The financial data and other information disclosed in these notes to the financial statements related to the three months ended March 31, 2016 and 2015 are unaudited. Interim results are not necessarily indicative of results for an entire year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ from those estimates, management does not believe that such differences would be material.

Fair Value Measurements

Fair Value Measurements

The Company had no assets or liabilities that were measured using quoted prices for similar assets and liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of March 31, 2016 and December 31, 2015. The carrying value of cash held in money market funds of approximately $36.5 million and $45.5 million as of March 31, 2016 and December 31, 2015, respectively, is included in cash and cash equivalents and approximates market values based on quoted market prices (Level 1 inputs).

Concentration of Credit Risk

Concentration of Credit Risk

Credit risk represents the risk that the Company would incur a loss if counterparties failed to perform pursuant to the terms of their agreements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents consist of certificates of deposit and money market funds with major financial institutions in the United States. These deposits and funds may be redeemed upon demand and, therefore, bear minimal risk. The Company does not anticipate any losses on such balances.

Revenue Recognition

Revenue Recognition

From time to time, the Company is awarded reimbursement contracts for services and development grant contracts with government and non-government entities and philanthropic organizations. Under these contracts, the Company typically is reimbursed for the costs in connection with specific development activities. The Company recognizes revenue to the extent of costs incurred in connection with performance under such grant arrangements.

The Company has entered into a collaborative research and development agreement with Pfizer. The agreement is in the form of a license agreement. The agreement called for a nonrefundable up-front payment and milestone payments upon achieving significant milestone events. The agreement also contemplates royalty payments on future sales of an approved product. There are no performance, cancellation, termination, or refund provisions in the arrangement that contain material financial consequences to the Company.

The primary deliverable under this arrangement is an exclusive worldwide license to the Company’s rivipansel compound, but the arrangement also includes deliverables related to research and preclinical development activities to be performed by the Company on Pfizer’s behalf.

Collaborative research and development agreements can provide for one or more of up-front license fees, research payments, and milestone payments. Agreements with multiple components (deliverables or items) are evaluated according to the provisions of Accounting Standards Codification (ASC) 605-25, Revenue Recognition—Multiple-Element Arrangements, to determine whether the deliverables can be separated into more than one unit of accounting. An item can generally be considered a separate unit of accounting if all of the following criteria are met: (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) if the arrangement includes a general right of return relative to the delivered item(s) then delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on selling price hierarchy. The selling price hierarchy for each deliverable is based on (i) vendor-specific objective evidence (VSOE), if available; (ii) third-party evidence (TPE) of selling price if VSOE is not available; or (iii) an estimated selling price, if neither VSOE nor TPE is available. Management was not able to establish VSOE or TPE for separate unit deliverables, as the Company does not have a history of entering such arrangements or selling the individual deliverables within such arrangements separately. In addition, there may be significant differentiation in these arrangements, which indicates that comparable third-party pricing may not be available. Management determined that the selling price for the deliverables within the Pfizer collaboration agreement should be determined using its best estimate of selling price. The process of determining the best estimate of selling price involved significant judgment on the Company’s part and included consideration of multiple factors such as estimated direct expenses, other costs, and available clinical development data.

Pursuant to ASC 605-25, each required deliverable under the Pfizer collaboration agreement is evaluated to determine whether it qualifies as a separate unit of accounting. Factors considered in this determination include the research capabilities of Pfizer, the proprietary nature of the license and know-how, and the availability of the Company’s glycomimetics technology research expertise in the general marketplace. Based on all relevant facts and circumstances and, most significantly, on the proprietary nature of the Company’s technology and the related proprietary nature of the Company’s research services, management concluded that stand-alone value does not exist for the license, and therefore, the license is not a separate unit of accounting under the agreement and will be combined with the research and development services (including participation on a joint steering committee).

As such, the $22.5 million up-front payment received was recognized as revenue over the expected development period through March 2013. The determination of the length of the period over which to defer revenue and the methodology by which to recognize the related revenues is subject to judgment and estimation. Consistent with the research plan developed by and agreed to by both parties, management estimated that the research activities and participation on the joint steering committees would occur over a 1.5-year period. Revenues associated with the up-front license fee are recognized over this period using a straight-line method, which is consistent with expected completion of the research services. The research services were completed in March 2013, consistent with the expected development period.

Pursuant to ASC 605-28, Revenue Recognition—Milestone Method, at the inception of agreements that include milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. In making this assessment, the Company evaluates factors such as scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the agreement.

Non-refundable development and regulatory milestones that are expected to be achieved as a result of the Company’s efforts during the period of substantial involvement are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Milestones that are not considered substantive because the Company does not contribute effort to the achievement of such milestones are generally achieved after the period of substantial involvement and are recognized as revenue upon achievement of the milestone, as there are no undelivered elements remaining and no continuing performance obligation, assuming all other revenue recognition criteria are met. In May 2014, the Company recognized $15.0 million in revenue as a result of the first non-refundable milestone payment received from Pfizer. In June 2015, the Company recognized $20.0 million in revenue as a result of Pfizer dosing the first patient in the Phase 3 clinical trial of rivipansel, which triggered the second non-refundable milestone payment.

Accrued Liabilities

Accrued Liabilities

The Company is required to estimate accrued liabilities as part of the process of preparing its financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date. Accrued liabilities include professional service fees, such as for lawyers and accountants, contract service fees, such as those under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, and fees to contract manufacturers in conjunction with the production of clinical materials. Pursuant to the Company’s assessment of the services that have been performed, the Company recognizes these expenses as the services are provided. Such assessments include: (i) an evaluation by the project manager of the work that has been completed during the period; (ii) measurement of progress prepared internally and/or provided by the third-party service provider; (iii) analyses of data that justify the progress; and (iv) the Company’s judgment.

Research and Development Costs

Research and Development Costs

Except for payments made in advance of services, research and development costs are expensed as incurred. For payments made in advance, the Company recognizes research and development expense as the services are rendered. Research and development costs primarily consist of salaries and related expenses for personnel, laboratory supplies and raw materials, sponsored research, depreciation of laboratory facilities and leasehold improvements, and utilities costs related to research space. Other research and development expenses include fees paid to consultants and outside service providers.

Stock-Based Compensation

Stock-Based Compensation

Stock-based payments are accounted for in accordance with the provisions of ASC 718, Compensation—Stock Compensation. The fair value of stock-based payments is estimated, on the date of grant, using the Black-Scholes-Merton model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the option.

The Company has elected to use the Black-Scholes-Merton option pricing model to value any options granted. The Company will reconsider use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that prevent their value from being reasonably estimated using this model.

A discussion of management’s methodology for developing some of the assumptions used in the valuation model follows:

Expected Dividend Yield—The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

Expected Volatility—Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company does not maintain an internal market for its shares, and prior to its initial public offering the shares were not traded publicly. The Company utilizes the historical volatilities of a peer group (e.g., several public entities of similar size, complexity, and stage of development) to determine its expected volatility.

Risk-Free Interest Rate—This is the U.S. Treasury rate for the week of each option grant during the year, having a term that most closely resembles the expected life of the option.

Expected Term—This is a period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of 10 years. The Company estimates the expected life of the option term to be 6.25 years. The Company uses a simplified method to calculate the average expected term.

Expected Forfeiture Rate—The forfeiture rate is the estimated percentage of options granted that is expected to be forfeited or canceled on an annual basis before becoming fully vested. The Company estimates the forfeiture rate based on turnover data with further consideration given to the class of the employees to whom the options were granted.

Equity instruments issued to nonemployees are accounted for under the provisions of ASC 718, Compensation—Stock Compensation, and ASC 505-50, Equity—Equity-Based Payments to Non-Employees. Accordingly, the estimated fair value of the equity instrument is recorded on the earlier of the performance commitment date or the date the services are completed and are marked to market during the service period.

Net Loss Per Common Share

Net Loss Per Common Share

Basic net loss per common share is determined by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock options, restricted stock units and warrants.

Basic and diluted net loss per common share is computed as follows:

	Three Months Ended March 31,
	2016		2015
Net loss	$	(7,554,978)	$	(7,109,129)
Basic and diluted net loss per common share	$	(0.40)	$	(0.37)
Basic and diluted weighted average common shares outstanding		19,071,838		18,961,531

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:

	Three Months Ended March 31,
	2016	2015
Warrants	578,687	590,595
Stock options and restricted stock units	2,755,089	2,232,835

Comprehensive Loss

Comprehensive Loss

Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the three months ended March 31, 2016 and 2015, the Company’s net loss equals comprehensive loss and, accordingly, no additional disclosure is presented.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-02, Leases (Topic 842).  The final guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. This standard is effective for annual reporting periods beginning after December 15, 2018. Early adoption will be permitted.  The Company is currently evaluating the effect the new standard will have on the Company.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.  The ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in financial statements including the income tax effects of share-based payments, minimum statutory withholding requirements and forfeitures. The new guidance will require all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. It will also allow an employer to repurchase more of an employee’s shares than the current standard for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. This ASU is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption will be permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. The Company is currently evaluating the effect the new standard will have on the Company.

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Significant Accounting Policies - 10-Q (Tables)

3 Months Ended

Mar. 31, 2016

Net Loss Per Share of Common Stock

Computation of Basic and Diluted Earnings Per Share

Basic and diluted net loss per common share is computed as follows:

	Three Months Ended March 31,
	2016		2015
Net loss	$	(7,554,978)	$	(7,109,129)
Basic and diluted net loss per common share	$	(0.40)	$	(0.37)
Basic and diluted weighted average common shares outstanding		19,071,838		18,961,531

Potentially Dilutive Securities Outstanding

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:

	Three Months Ended March 31,
	2016	2015
Warrants	578,687	590,595
Stock options and restricted stock units	2,755,089	2,232,835

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Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2016

Prepaid Expenses and Other Current Assets

Summary of Prepaid Expenses and Other Current Assets

The following is a summary of the Company’s prepaid expenses and other current assets:

	March 31,		December 31,
	2016		2015
Prepaid expenses	$	617,698	$	393,857
Other receivables		58,758		38,683
Deposits		6,909		9,270
Prepaid expenses and other current assets	$	683,365	$	441,810

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Property and Equipment

Summary of Property and Equipment, Net

Property and equipment, net consists of the following:

	March 31,		December 31,
	2016		2015
Furniture and fixtures	$	230,987	$	230,987
Laboratory equipment		982,856		965,586
Office equipment		9,723		9,723
Computer equipment		181,053		181,053
Leasehold improvements		36,128		36,128
Property and equipment		1,440,747		1,423,477
Less accumulated depreciation		(949,333)		(902,099)
Property and equipment, net	$	491,414	$	521,378

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Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2016

Accrued Expenses

Summary of Accrued Expenses

	March 31,		December 31,
	2016		2015
Accrued research and development expenses	$	2,747,683	$	3,423,220
Accrued license and milestone fees		—		2,000,000
Accrued consulting and other professional fees		391,346		242,227
Other accrued expenses		358,512		281,152
Accrued employee benefits		284,546		195,442
Accrued franchise and other taxes		2,625		3,590
Accrued expenses	$	3,784,712	$	6,145,631

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Stockholders Equity (Tables) (Imported)

3 Months Ended

Mar. 31, 2016

Stock-Based Compensation Expense

Stock-based compensation expense was classified on the statement of operations as follows for the three months ended March 31, 2016 and 2015:

	Three Months Ended March 31,
	2016		2015
Research and development expense	$	253,282	$	202,907
General and administrative expense		474,265		384,607
Total stock-based compensation expense	$	727,547	$	587,514

2003 Stock Incentive Plan

Company's Stock Option Activity

A summary of the Company’s stock option activity under the 2003 Plan for the three months ended March 31, 2016 is as follows:

				WEIGHTED-AVERAGE
		WEIGHTED-		REMAINING	AGGREGATE
	OUTSTANDING	AVERAGE		CONTRACTUAL TERM	INTRINSIC VALUE
	OPTIONS	EXERCISE PRICE		(YEARS)	(IN THOUSANDS)
Outstanding as of December 31, 2015	758,187	$	1.27	4.2
Options exercised	(23,986)		1.50
Options forfeited	—		—
Outstanding as of March 31, 2016	734,201		1.26	4.0	$	3,451
Vested or expected to vest as of March 31, 2016	734,066		1.26	4.0	$	3,450
Exercisable as of March 31, 2016	729,317		1.25	3.9	$	3,435

2013 Equity Incentive Plan

Company's Stock Option Activity

A summary of the Company’s stock option activity under the 2013 Plan for the three months ended March 31, 2016 is as follows:

				WEIGHTED-AVERAGE
ccc		WEIGHTED-		REMAINING	AGGREGATE
	OUTSTANDING	AVERAGE		CONTRACTUAL TERM	INTRINSIC VALUE
	OPTIONS	EXERCISE PRICE		(YEARS)	(IN THOUSANDS)
Outstanding as of December 31, 2015	1,470,338	$	8.26	8.5
Options granted	528,800		5.11
Options exercised	—		—
Options forfeited	—		—
Outstanding as of March 31, 2016	1,999,138		7.43	8.6	$	449
Vested or expected to vest as of March 31, 2016	1,988,448		7.43	8.6	$	444
Exercisable as of March 31, 2016	615,819		8.32	8.1	$	—

Weighted-Average Fair Value of Options Granted

	Three Months Ended	Three Months Ended
	March 31, 2016	March 31, 2015
Expected term (years)	6.25	6.25
Expected volatility	68.36%	82.08%
Risk-free interest rate	1.74%	1.68%
Expected dividend yield	0%	0%

Summary of RSU Activity

The following is a summary of RSU activity under the 2013 Plan for the three months ended March 31, 2016:

			WEIGHTED-AVERAGE
		NUMBER	GRANT DATE
	OF SHARES			FAIR VALUE
Unvested at December 31, 2015		4,833	$	7.62
Granted		14,500		4.61
Forfeited		—		—
Vested		—		—
Unvested at March 31, 2016		19,333		5.36

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Summary of Significant Accounting Policies - 10-Q (Details) - USD ($)	1 Months Ended		3 Months Ended		18 Months Ended
	Jun. 30, 2015	May. 31, 2014	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2013	Dec. 31, 2015
Schedule Of Accounting Policies [Line Items]
Carrying value of cash held in money market fund			$ 36,500,000			$ 45,500,000
Share Based Compensation Abstract
Expected term (years)			6 years 3 months	6 years 3 months
Net Loss Per Common Share
Net loss			$ (7,554,978)	$ (7,109,129)
Basic and diluted net loss per common share (in dollars per share)			$ (0.40)	$ (0.37)
Basic and diluted weighted average common shares outstanding			19,071,838	18,961,531
Pfizer License Agreement [Member]
Revenue Recognition [Abstract]
Revenue	$ 20,000,000	$ 15,000,000
Pfizer License Agreement [Member] | Up-Front Payment Arrangement [Member]
Revenue Recognition [Abstract]
Up-front payment received recognized as revenue					$ 22,500,000
Joint steering committees period					1 year 6 months
Maximum
Share Based Compensation Abstract
Expiration period			10 years
Warrants [Member]
Net Loss Per Common Share
Anti-dilutive securities			578,687	590,595
Stock Options and Restricted Stock Units [Member]
Net Loss Per Common Share
Anti-dilutive securities			2,755,089	2,232,835

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Prepaid Expenses and Other Current Assets - Summary of Prepaid Expenses and Other Current Assets (Detail) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Prepaid Expenses and Other Current Assets
Prepaid expenses	$ 617,698	$ 393,857
Other receivables	58,758	38,683
Deposits	6,909	9,270
Prepaid expenses and other current assets	$ 683,365	$ 441,810

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Property and Equipment - Summary of Property and Equipment (Detail) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment	$ 1,440,747	$ 1,423,477
Less accumulated depreciation	(949,333)	(902,099)
Property and equipment, net	491,414	521,378
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	230,987	230,987
Laboratory Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	982,856	965,586
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	9,723	9,723
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	181,053	181,053
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 36,128	$ 36,128

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Property and Equipment - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Property and Equipment
Depreciation of property and equipment	$ 47,234	$ 44,245

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Accrued Expenses - Summary of Accrued Expenses (Detail) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Accrued Expenses
Accrued research and development expenses	$ 2,747,683	$ 3,423,220
Accrued license and milestone fees		2,000,000
Accrued consulting and other professional fees	391,346	242,227
Other accrued expenses	358,512	281,152
Accrued employee benefits	284,546	195,442
Accrued franchise and other taxes	2,625	3,590
Accrued expenses	$ 3,784,712	$ 6,145,631

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Operating Leases - 10Q (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Deferred rent related to lease	$ 250,143		$ 243,647
Operating leases, rent expense	158,371	$ 96,399
Security deposit	52,320
Operating Leases Future Minimum Payments Due Abstract
April 2016 - December 2016	562,798
2017	941,822
2018	965,368
2019	989,502
2020	1,014,239
After 2020	3,011,849
Total	$ 7,485,578
Rockville [Member]
Period of operating lease	8 years

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Stockholders' Equity - Additional Information (Detail) - USD ($)				1 Months Ended	3 Months Ended
	Mar. 31, 2016	Mar. 28, 2016	Jan. 01, 2016	May. 02, 2016	Mar. 31, 2016	Mar. 31, 2015
Equity offering
Stock Issued During Period, Shares, New Issues		206,500
Weighted average price per share issued		$ 6.299
Proceeds from Issuance of Common Stock		$ 1,300,000
Net proceeds from stock issuance and sale		1,100,000			$ 1,238,619
Stock issuance expenses including commissions		$ 200,000
Subsequent Event
Equity offering
Stock Issued During Period, Shares, New Issues				142,177
Net proceeds from stock issuance and sale				$ 864,756
Maximum
Incentive plans
Expiration period					10 years
2003 Stock Incentive Plan
Incentive plans
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage					25.00%
Period of vested options shall terminate after termination date					60 days
Expiration period					10 years
Unrecognized compensation expense related to unvested options yet has not been recognized	$ 9,648				$ 9,648
Period for unrecognized compensation expense related to unvested options yet has not been recognized	1 year
Share based compensation arrangement by share-based payment award options exercises in period, total intrinsic value					75,093	$ 473,016
Fair value of shares vested					7,412	13,785
Cash proceeds from exercise of stock options					$ 35,891	75,377
2013 Equity Incentive Plan
Incentive plans
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage					25.00%
Period of vested options shall terminate after termination date					90 days
Expiration period					10 years
Unrecognized compensation expense related to unvested options yet has not been recognized	$ 6,154,795				$ 6,154,795
Period for unrecognized compensation expense related to unvested options yet has not been recognized					2 years 7 months 6 days
Fair value of shares vested					$ 1,056,200	$ 1,252,769
Shares of common stock reserved for issuance, percentage increase					3.00%
Maximum number of shares that may be issued pursuant to exercise of incentive stock	20,000,000				20,000,000
Weighted-average fair value of the options granted					$ 3.21	$ 5.10
Common Stock | 2013 Equity Incentive Plan
Incentive plans
Common stock authorized under 2013 plan			2,139,701
Shares of common stock reserved for issuance, percentage increase			3.00%
Increase in number of shares of common stock			571,506
Common Stock | 2013 Equity Incentive Plan | Maximum
Incentive plans
Common stock authorized under 2013 plan	1,000,000				1,000,000

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Stockholders' Equity - Company's Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
2003 Stock Incentive Plan
Stock option activity
Outstanding Options, Beginning balance	758,187
Outstanding Options, exercised	(23,986)
Outstanding Options, Ending balance	734,201	758,187
Vested or expected to vest outstanding options	734,066
Exercisable outstanding options	729,317
Weighted-Average Exercise price, Outstanding Beginning balance	$ 1.27
Weighted-Average Exercise price, Options exercised	1.50
Weighted-Average Exercise price, Outstanding Ending balance	1.26	$ 1.27
Weighted-Average Exercise price, Vested or expected to vest	1.26
Weighted-Average Exercise price, Exercisable	$ 1.25
Weighted-Average Remaining Contractual Term	4 years	4 years 2 months 12 days
Weighted-Average Remaining Contractual Term, Exercisable	3 years 10 months 24 days
Weighted-Average Remaining Contractual Term, Vested or expected to vest	4 years
Aggregate Intrinsic Value, Outstanding Ending balance	$ 3,451
Aggregate Intrinsic Value, Vested or expected to vest	3,450
Aggregate Intrinsic Value, Exercisable	$ 3,435
2013 Equity Incentive Plan
Stock option activity
Outstanding Options, Beginning balance	1,470,338
Outstanding Options, granted	528,800
Outstanding Options, Ending balance	1,999,138	1,470,338
Vested or expected to vest outstanding options	1,988,448
Exercisable outstanding options	615,819
Weighted-Average Exercise price, Outstanding Beginning balance	$ 8.26
Weighted-Average Exercise price, Options granted	5.11
Weighted-Average Exercise price, Outstanding Ending balance	7.43	$ 8.26
Weighted-Average Exercise price, Vested or expected to vest	7.43
Weighted-Average Exercise price, Exercisable	$ 8.32
Weighted-Average Remaining Contractual Term	8 years 7 months 6 days	8 years 6 months
Weighted-Average Remaining Contractual Term, Exercisable	8 years 1 month 6 days
Weighted-Average Remaining Contractual Term, Vested or expected to vest	8 years 7 months 6 days
Aggregate Intrinsic Value, Outstanding Ending balance	$ 449
Aggregate Intrinsic Value, Vested or expected to vest	$ 444

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Stockholders' Equity - Weighted-Average assumptions (Detail)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Weighted-average assumptions
Expected term (years)	6 years 3 months	6 years 3 months
Expected volatility	68.36%	82.08%
Risk-free interest rate	1.74%	1.68%
Expected dividend yield	0.00%	0.00%

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Stockholders' Equity - Summary of RSU Activity (Detail) - RSU [Member] - 2013 Equity Incentive Plan	3 Months Ended
	Mar. 31, 2016 USD ($) installment $ / shares shares
Restricted Stock Units information
Unrecognized compensation expense related to unvested service RSUs | $	$ 89,604
Number of vesting installments | installment	3
RSU activity
Number of Shares Unvested, Beginning balance | shares	4,833
Number of Shares, Granted | shares	14,500
Number of Shares, Forfeited | shares	0
Number of Shares, Vested | shares	0
Number of Shares Unvested, Ending balance | shares	19,333
Weighted Average Grant Date Fair Value Unvested , Beginning balance | $ / shares	$ 7.62
Weighted Average Grant Date Fair Value , Granted | $ / shares	4.61
Weighted Average Grant Date Fair Value , Forfeited | $ / shares	0.00
Weighted Average Grant Date Fair Value , Vested | $ / shares	0.00
Weighted Average Grant Date Fair Value Unvested, Ending balance | $ / shares	$ 5.36

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Stockholders' Equity - Stock-Based Compensation Expense (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock-based compensation expense
Total stock-based compensation expense	$ 727,547	$ 587,514
Research and Development
Stock-based compensation expense
Total stock-based compensation expense	253,282	202,907
General and Administrative Expense
Stock-based compensation expense
Total stock-based compensation expense	$ 474,265	$ 384,607

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Research and License Agreements - Additional Information (Detail) - USD ($)	1 Months Ended				3 Months Ended		18 Months Ended
	Feb. 29, 2016	Jun. 30, 2015	May. 31, 2014	Oct. 31, 2011	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2013	Dec. 31, 2015
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Milestone license fees recorded								$ 2,000,000
Accrued liability paid for research agreement	$ 2,000,000
Research and development expenses					$ 5,518,722	$ 5,207,730
University Of Basel Agreement [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Percentage of obligations payable for all future milestone and royalty payments received with respect to rivipansel					10.00%
Milestone license fees recorded								2,000,000
Pfizer License Agreement [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Non-refundable payment against milestone payment								$ 20,000,000
Potential milestone payments upon the achievement of specified development milestones				$ 115,000,000
Potential milestone payments upon the achievement of specified regulatory milestones				70,000,000
Potential milestone payments upon the achievement specified levels of annual net sales of licensed products				135,000,000
Payment made on execution of milestone agreement				$ 22,500,000
Period of up-front payment					1 year 6 months
Revenue		$ 20,000,000	$ 15,000,000
Pfizer License Agreement [Member] | Up-Front Payment Arrangement [Member]
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Amount received and recognized as revenue							$ 22,500,000