x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 26-2025616 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
245 First Street, Suite 1800 Cambridge, MA | 02142 |
(Address of principal executive offices) | (Zip code) |
Large Accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | x |
Emerging growth company | x |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. |
• | our expected future loss and accumulated deficit levels; |
• | our projected financial position and estimated cash burn rate; |
• | our estimates regarding expenses, future revenues, capital requirements and needs for, and ability to obtain, additional financing; |
• | our ability to continue as a going concern; |
• | our need to raise substantial additional capital to fund our operations; |
• | the potential impairment of our goodwill and our indefinite-lived intangible assets; |
• | the effect of recent changes in our senior management team on our business; |
• | the success, cost and timing of our pre-clinical studies and clinical trials in the United States, Canada and in other foreign jurisdictions; |
• | the potential that results of pre-clinical studies and clinical trials indicate our product candidates are unsafe or ineffective; |
• | our dependence on third parties, including contract research organizations, or CROs, in the conduct of our pre-clinical studies and clinical trials; |
• | the difficulties and expenses associated with obtaining and maintaining regulatory approval of our product candidates and companion diagnostics, if any, in the United States, Canada and in other foreign jurisdictions, and the labeling under any approval we may obtain; |
• | our plans and ability to develop and commercialize our product candidates; |
• | our ability to achieve certain future regulatory, development and commercialization milestones under our license agreement, which we refer to as the License Agreement, with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., or collectively, Roche; |
• | market acceptance of our product candidates, the size and growth of the potential markets for our product candidates, and our ability to serve those markets; |
• | obtaining and maintaining intellectual property protection for our product candidates and our proprietary technology; |
• | the successful development of our commercialization capabilities, including sales and marketing capabilities; and |
• | the success of competing therapies and products that are or become available. |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 19,688 | $ | 14,680 | |||
Prepaid expenses and other current assets | 638 | 301 | |||||
Total current assets | 20,326 | 14,981 | |||||
Property and equipment, net | 473 | 522 | |||||
Restricted cash | 10 | 10 | |||||
Intangible assets | 46,400 | 46,400 | |||||
Goodwill | 13,064 | 13,064 | |||||
Other assets | 19 | 120 | |||||
Total assets | $ | 80,292 | $ | 75,097 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,393 | $ | 907 | |||
Accrued expenses | 3,853 | 3,813 | |||||
Total current liabilities | 5,246 | 4,720 | |||||
Other liabilities | 260 | 215 | |||||
Deferred tax liability | 12,528 | 12,528 | |||||
Contingent consideration | 38,400 | 39,600 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.001 par value per share; 5,000,000 shares authorized at March 31, 2018 and December 31, 2017 and no shares issued and outstanding at March 31, 2018 and December 31, 2017 | — | — | |||||
Common stock, $0.001 par value per share; 200,000,000 shares authorized at March 31, 2018 and December 31, 2017 and 43,105,466 and 34,702,565 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 43 | 35 | |||||
Additional paid-in capital | 180,109 | 170,330 | |||||
Accumulated deficit | (156,294 | ) | (152,331 | ) | |||
Total stockholders’ equity | 23,858 | 18,034 | |||||
Total liabilities and stockholders’ equity | $ | 80,292 | $ | 75,097 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue: | |||||||
License revenue | — | 425 | |||||
Total revenue | — | 425 | |||||
Operating expenses: | |||||||
Research and development | 3,255 | 2,874 | |||||
General and administrative | 1,952 | 2,213 | |||||
(Gain) Loss from change in fair value of contingent consideration | (1,200 | ) | 1,500 | ||||
Total operating expenses | 4,007 | 6,587 | |||||
Loss from operations | (4,007 | ) | (6,162 | ) | |||
Other income: | |||||||
Other income, net | 44 | 101 | |||||
Total other income, net | 44 | 101 | |||||
Net loss and comprehensive loss | $ | (3,963 | ) | $ | (6,061 | ) | |
Net loss per share — basic and diluted | $ | (0.11 | ) | $ | (0.25 | ) | |
Weighted-average number of common shares used in net loss per share — basic and diluted | 35,674 | 24,610 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Operating activities | |||||||
Net loss | $ | (3,963 | ) | $ | (6,061 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 49 | 82 | |||||
Stock-based compensation expense | 401 | 244 | |||||
Change in fair value of warrant liability | — | (3 | ) | ||||
Loss from change in fair value of contingent consideration | (1,200 | ) | 1,500 | ||||
Gain on sale of equipment | (5 | ) | (76 | ) | |||
Changes in operating assets and liabilities: | |||||||
Prepaid expenses and other assets | (236 | ) | (127 | ) | |||
Accounts payable | 486 | (453 | ) | ||||
Accrued expenses and other liabilities | 85 | 123 | |||||
Deferred revenue | — | (425 | ) | ||||
Due to related party | — | 1 | |||||
Net cash used in operating activities | (4,383 | ) | (5,195 | ) | |||
Investing activities | |||||||
Sales of equipment | 5 | 76 | |||||
Net cash provided by investing activities | 5 | 76 | |||||
Financing activities | |||||||
Proceeds from exercise of common stock options | — | 40 | |||||
Proceeds from issuance of common stock and common stock warrants, net of issuance costs | 9,376 | — | |||||
Proceeds from sale of common stock pursuant to ESPP | 10 | 5 | |||||
Net cash provided by financing activities | 9,386 | 45 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 5,008 | (5,074 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 14,690 | 25,352 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 19,698 | $ | 20,278 | |||
Supplemental non-cash investing and financing activities |
Description | March 31, 2018 | Active Markets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 19,688 | $ | 19,688 | $ | — | $ | — | |||||||
Restricted cash | 10 | 10 | — | — | |||||||||||
Total assets | $ | 19,698 | $ | 19,698 | $ | — | $ | — | |||||||
Liabilities: | |||||||||||||||
Contingent consideration | 38,400 | — | — | 38,400 | |||||||||||
Total liabilities | $ | 38,400 | $ | — | $ | — | $ | 38,400 |
Description | December 31, 2017 | Active Markets (Level 1) | Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | |||||||||||
Assets: | |||||||||||||||
Cash and cash equivalents | $ | 14,680 | $ | 14,680 | $ | — | $ | — | |||||||
Restricted cash | 10 | 10 | — | — | |||||||||||
Total assets | $ | 14,690 | $ | 14,690 | $ | — | $ | — | |||||||
Liabilities: | |||||||||||||||
Contingent consideration | 39,600 | — | — | 39,600 | |||||||||||
Total liabilities | $ | 39,600 | $ | — | $ | — | $ | 39,600 |
Beginning balance, December 31, 2017 | $ | 39,600 | |
Gain from change in fair value of contingent consideration | (1,200 | ) | |
Ending balance, March 31, 2018 | $ | 38,400 |
March 31, 2018 | December 31, 2017 | ||||||
Development costs | $ | 2,650 | $ | 2,581 | |||
Employee compensation (including reduction in workforce) | 896 | 735 | |||||
Professional fees | 237 | 463 | |||||
Other | 70 | 34 | |||||
$ | 3,853 | $ | 3,813 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Stock options | $ | 375 | $ | 187 | |||
Restricted stock | 23 | 51 | |||||
Restricted stock units | — | 3 | |||||
Employee stock purchase plan | 3 | 3 | |||||
$ | 401 | $ | 244 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Research and development expense | $ | 165 | $ | 40 | |||
General and administrative expense | 236 | 204 | |||||
$ | 401 | $ | 244 |
Shares | Weighted-Average Exercise Price | |||||
Outstanding at December 31, 2017 | 2,695,796 | $ | 3.16 | |||
Granted | 102,500 | 0.93 | ||||
Exercised | — | — | ||||
Cancelled or forfeited | (150,292 | ) | 2.20 | |||
Outstanding at March 31, 2018 | 2,648,004 | $ | 3.13 | |||
Exercisable at March 31, 2018 | 1,580,060 | $ | 3.79 | |||
Vested and expected to vest at March 31, 2018(1) | 2,586,804 | $ | 3.16 |
(1) | Represents the number of vested stock options, plus the number of unvested stock options expected to vest. The Company adopted ASU 2016-09 as of January 1, 2017 and records forfeitures as they occur. |
Restricted Stock | Weighted-Average Grant Date Fair Value | |||||
Unvested at December 31, 2017 | 4,430 | $ | 11.43 | |||
Vested | (4,430 | ) | 11.43 | |||
Unvested at March 31, 2018 | — |
Three Months Ended March 31, | |||||
2018 | 2017 | ||||
Stock options | 2,648,004 | 1,717,181 | |||
Unvested restricted stock | — | 17,720 | |||
Common stock warrants | 17,602,350 | 926,840 | |||
20,250,354 | 2,661,741 |
Balance as of January 1, 2017 | $ | 111 | |
Payments | (53 | ) | |
Balance as of March 31, 2018 | $ | 58 |
March 31, | December 31, | |||||
2018 | 2017 | |||||
Cash and cash equivalents | 19,688 | $ | 14,680 | |||
Restricted cash | 10 | 10 | ||||
Total cash, cash equivalents and restricted cash | 19,698 | 14,690 |
• | the scope, initiation, progress, timing, costs and results of pre-clinical development and laboratory testing and clinical trials for our product candidates; |
• | our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing and distribution arrangements for our product candidates; |
• | the costs and timing of the implementation of commercial-scale manufacturing activities; |
• | the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; |
• | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; |
• | our obligation to make milestone, royalty and other payments to third party licensors under our licensing agreements; |
• | the extent to which we in-license or acquire rights to other products, product candidates or technologies; |
• | the outcome, timing and cost of regulatory review by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities, including Health Canada, to require that we perform more studies or clinical trials than those that we currently expect; |
• | our ability to achieve certain future regulatory, development and commercialization milestones under the License Agreement with Roche; |
• | the effect of competing technological and market developments; and |
• | the revenue, if any, received from commercial sales of any product candidates for which we receive regulatory approval. |
• | employee-related expenses, including salaries, benefits, travel and stock-based compensation expense; |
• | expenses incurred under agreements with contract research organizations, or CROs, and investigative sites that conduct our clinical trials; |
• | expenses associated with developing manufacturing capabilities and manufacturing clinical study materials; |
• | facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies; and |
• | expenses associated with pre-clinical and regulatory activities. |
• | the scope, progress, outcome and costs of our clinical trials and other research and development activities; |
• | the efficacy and potential advantages of our product candidates compared to alternative treatments, including any standard of care; |
• | the market acceptance of our product candidates; |
• | the cost and timing of the implementation of commercial-scale manufacturing of our product candidates; |
• | obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights; |
• | significant and changing government regulation; and |
• | the timing, receipt and terms of any marketing approvals. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Programs: | |||||||
Vicinium, for the treatment of high-grade NMIBC (1) | $ | 1,922 | $ | 1,519 | |||
Vicinium, for the treatment of SCCHN (2) | — | 27 | |||||
VB6-845d (2) | — | 72 | |||||
Total direct program expenses | 1,922 | 1,618 | |||||
Personnel and other expenses: | |||||||
Employee and contractor-related expenses | 965 | 855 | |||||
Platform-related lab expenses | 63 | 127 | |||||
Facility expenses | 95 | 91 | |||||
Other expenses | 210 | 183 | |||||
Total personnel and other expenses | 1,333 | 1,256 | |||||
Total research and development expenses | $ | 3,255 | $ | 2,874 |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
(in thousands) | |||||||||||
Revenue: | |||||||||||
Collaboration revenue | $ | — | $ | — | $ | — | |||||
License revenue | — | 425 | (425 | ) | |||||||
Total revenue | — | 425 | (425 | ) | |||||||
Operating expenses: | |||||||||||
Research and development | 3,255 | 2,874 | 381 | ||||||||
General and administrative | 1,952 | 2,213 | (261 | ) | |||||||
(Gain) Loss from change in fair value of contingent consideration | (1,200 | ) | 1,500 | (2,700 | ) | ||||||
Total operating expenses | 4,007 | 6,587 | (2,580 | ) | |||||||
(Loss) income from operations | (4,007 | ) | (6,162 | ) | 2,155 | ||||||
Other income (expense), net | 44 | 101 | (57 | ) | |||||||
Net (loss) income and comprehensive (loss) income | $ | (3,963 | ) | $ | (6,061 | ) | $ | 2,098 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Net cash (used in) provided by : | |||||||
Operating activities | $ | (4,383 | ) | $ | (5,195 | ) | |
Investing activities | 5 | 76 | |||||
Financing activities | 9,386 | 45 | |||||
Net decrease in cash and cash equivalents | $ | 5,008 | $ | (5,074 | ) |
• | continue our Phase 3 clinical trial for Vicinium for the treatment of high-grade NMIBC; |
• | incur research and pre-clinical and clinical development of our other product candidates; |
• | seek to discover and develop additional product candidates; |
• | in-license or acquire the rights to other products, product candidates or technologies; |
• | seek marketing approvals for any product candidates that successfully complete clinical trials; |
• | establish sales, marketing and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; |
• | maintain, expand and protect our intellectual property portfolio; |
• | add equipment and physical infrastructure to support our research and development; |
• | hire additional clinical, quality control, scientific and management personnel; and |
• | expand our operational, financial and management systems and personnel. |
• | the scope, initiation, progress, timing, costs and results of pre-clinical development and laboratory testing of our pre-clinical product candidates; |
• | our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing and distribution arrangements for our product candidates; |
• | the costs and timing of the implementation of commercial-scale manufacturing activities; |
• | the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; |
• | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; |
• | our obligation to make milestone, royalty and other payments to third party licensors under our licensing agreements; |
• | the extent to which we in-license or acquire rights to other products, product candidates or technologies; |
• | the outcome, timing and cost of regulatory review by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities, including Health Canada, to require that we perform more studies than those that we currently expect; |
• | our ability to achieve certain future regulatory, development and commercialization milestones under the License Agreement with Roche; |
• | the effect of competing technological and market developments; and |
• | the revenue, if any, received from commercial sales of any product candidates for which we receive regulatory approval. |
Item 1A. | Risk Factors |
Exhibit No. | Description | |
4.1 | ||
10.1 | ||
10.2 | ||
31.1* | ||
31.2* | ||
32.1* | ||
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 | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Filed herewith. |
ELEVEN BIOTHERAPEUTICS, INC. | ||
By: | /s/ Stephen A. Hurly | |
Stephen A. Hurly | ||
President and Chief Executive Officer | ||
(Principal Executive Officer and Duly Authorized Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Eleven Biotherapeutics, Inc.; |
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 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 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. |
/s/ Stephen A. Hurly |
Stephen A. Hurly |
President and Chief Executive Officer |
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Eleven Biotherapeutics, Inc.; |
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 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 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. |
/s/ Richard F. Fitzgerald |
Richard F. Fitzgerald |
Chief Financial Officer |
(Principal Financial Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Stephen A. Hurly |
Stephen A. Hurly |
President and Chief Executive Officer |
(Principal Executive Officer) |
/s/ Richard F. Fitzgerald |
Richard F. Fitzgerald |
Chief Financial Officer |
(Principal Financial Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
May 10, 2018 |
|
Document And Entity Information [Abstract] | ||
Trading Symbol | EBIO | |
Entity Registrant Name | Eleven Biotherapeutics, Inc. | |
Entity Central Index Key | 0001485003 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 48,390,072 |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 43,105,466 | 34,702,565 |
Common stock, shares outstanding (in shares) | 43,105,466 | 34,702,565 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Revenue: | ||
License revenue | $ 0 | $ 425 |
Total revenue | 0 | 425 |
Operating expenses: | ||
Research and development | 3,255 | 2,874 |
General and administrative | 1,952 | 2,213 |
(Gain) Loss from change in fair value of contingent consideration | (1,200) | 1,500 |
Total operating expenses | 4,007 | 6,587 |
Loss from operations | (4,007) | (6,162) |
Other income: | ||
Other income, net | 44 | 101 |
Total other income, net | 44 | 101 |
Net loss and comprehensive loss | $ (3,963) | $ (6,061) |
Net loss per share — basic and diluted (in dollars per share) | $ (0.11) | $ (0.25) |
Weighted-average number of common shares used in net loss per share- basic and diluted (in shares) | 35,674 | 24,610 |
Organization and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Eleven Biotherapeutics, Inc. (the “Company”), a Delaware corporation, is a biologics oncology company focused primarily on designing, engineering and developing targeted next generation antibody drug conjugates ("ADC"s). The Company's next generation ADCs are single protein therapeutics composed of targeting moieties genetically fused via linker domains to cytotoxic protein payloads that are produced through the Company's proprietary one-step manufacturing process. The Company targets tumor cell surface antigens that allow for rapid internalization into the targeted cancer cell while also having limited expression on normal cells. The Company has designed its next generation ADCs to overcome the fundamental efficacy and safety challenges inherent in existing ADCs, where a payload is chemically attached to a targeting antibody. Basis of presentation The condensed consolidated financial statements as of March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and 2017 and the related information contained within the notes to the condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting standards applicable to interim financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position as of March 31, 2018 and its results of operations and its cash flows for the three months ended March 31, 2018 and 2017. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three-month periods are also unaudited. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other future annual or interim period. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 that was filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018 (the "2017 Form 10-K"). The condensed consolidated financial statements include the accounts of Eleven Biotherapeutics, Inc., its wholly owned subsidiary, Viventia Bio Inc. ("Viventia"), and its indirect subsidiaries, Viventia Bio USA Inc. and Viventia Biotech (EU) Limited. All inter-company transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles. The functional currency of Viventia Bio Inc., Viventia Bio USA Inc. and Viventia Biotech (EU) Limited is the U.S. dollar. Liquidity The Company has financed its operations to date primarily through debt and equity offerings and collaboration and licensing arrangements. As of March 31, 2018, the Company had cash and cash equivalents totaling $19.7 million, net working capital of $15.1 million and an accumulated deficit of $156.3 million. On March 23, 2018, the Company raised approximately $9.0 million of net proceeds from the sale of 7,968,128 shares of common stock at a price of $1.13 per share in a registered direct offering and the sale of common stock purchase warrants to purchase 7,968,128 shares of common stock at a price of $0.125 for each warrant to purchase one share of common stock in a concurrent private placement (collectively, the “March 2018 Financing”). Subject to certain ownership limitations, the common stock purchase warrants issued in the March 2018 Financing were exercisable immediately upon issuance at an exercise price equal to $1.20 per share of common stock, subject to adjustments as provided under the terms of such common stock purchase warrants. The common stock purchase warrants are exercisable for five years from March 23, 2018. In addition, between April 1, 2018 and May 10, 2018, the Company received proceeds of $4.2 million from the issuance of 5.2 million shares of common stock due to the exercise of common stock purchase warrants issued in connection with its underwritten public offering in November 2017 ("November 2017 Financing"). Management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans must have been approved by the Company’s board of directors ("Board") before the date that the financial statements are issued. The future success of the Company is dependent on its ability to develop its product candidates and ultimately upon its ability to attain profitable operations. The Company is subject to a number of risks similar to other early-stage life science companies, including, but not limited to, successful discovery and development of its product candidates, raising additional capital with favorable terms, development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company’s products. The successful discovery and development of product candidates requires substantial working capital which may not be available to the Company on favorable terms or not at all. To date, the Company has no revenue from product sales and management expects continuing operating losses in the future. As of March 31, 2018, the Company had available cash and cash equivalents of $19.7 million, which it believes, together with the additional $4.2 million of proceeds received between April 1, 2018 and May 10, 2018 from the issuance of 5.2 million shares of common stock due to the exercise of common stock purchase warrants issued in the November 2017 Financing, is not sufficient to fund the Company’s current operating plan for twelve months from the date of issuance of these financial statements. Management expects to seek additional funds through equity or debt financings or through additional collaboration, licensing transactions or other sources. The Company may be unable to obtain equity or debt financings or enter into additional collaboration or licensing transactions and, if necessary, the Company will be required to implement cost reduction strategies. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
Significant Accounting Policies and Recent Accounting Pronouncements |
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Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Recent Accounting Pronouncements | Significant Accounting Policies and Recent Accounting Pronouncements Recently adopted accounting standards In May 2014, the FASB issued ASU No. 2014-09, codified as Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard was effective on January 1, 2018 and the Company adopted this standard using the modified retrospective approach. As a result of this adoption, no amounts were recorded as a cumulative effect adjustment to accumulated deficit as of January 1, 2018. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). This update clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. ASU 2017-09 is effective as of January 1, 2018. The adoption of this guidance did not have an impact on the Company's financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018. Upon adoption of ASU 2016-18, the Company applied the retrospective transition method for each period presented and included $10,000 of restricted cash in the beginning-of-period and end-of-period cash, cash equivalents and restricted cash balance reflected in the condensed consolidated statement of cash flows for the three months ended March 31, 2017. A reconciliation of cash, cash equivalents and restricted cash for each period presented is provided in note 9 to the condensed consolidated financial statements. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 34% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. In December 2017, the SEC issued guidance under SAB No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. As of March 31, 2018, the Company had not yet completed its accounting for all of the tax effects of the enactment of the Act. Recently issued accounting pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 addresses the financial reporting of leasing transactions. Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of operations and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company has not yet completed the analysis of how adopting this guidance will affect its consolidated financial statements. Critical accounting policies There have been no material changes to the critical accounting polices recently disclosed in the 2017 Form 10-K other than the adoption of ASU 2014-09 and related updates which are codified as ASC 606. The Company enters into collaboration agreements with strategic partners for the development and commercialization of product candidates which are within the scope of ASC 606. Under these agreements, the Company license rights to certain of the Company’s product candidates and may complete other performance obligations, such as the deliver of drug product or research and development services. The terms of these arrangements typically include payment of non-refundable upfront fees, milestone payments, and royalties on net sales of licensed products and may also contain additional payment provisions. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract, (ii) determination of whether the promised goods or services are performance obligations included whether they are distinct in the context of the contact, (iii) measurement of the transaction price, including the constraint on variable consideration, (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenue when the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company’s contracts include development and regulatory milestone payments which are assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. At the end of each reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue in the period of adjustment. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any consideration related to sales-based royalty revenue resulting from any of the Company’s collaboration arrangements. The Company allocates the transaction price based on the estimated stand-alone selling price of each of the performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value. The Company determines the fair value of the common stock warrants and contingent consideration using Level 3 inputs. The following table summarizes the assets and liabilities measured at fair value on a recurring basis at March 31, 2018 (in thousands):
The following table summarizes the assets and liabilities measured at fair value on a recurring basis at December 31, 2017 (in thousands):
Contingent consideration In 2016, the Company acquired Viventia Bio, Inc. ("Viventia") through the issuance of common stock and contingent consideration (the "Acquisition"). The Company has valued the acquired assets and liabilities based on their estimated fair values as of September 20, 2016 and finalized its purchase accounting for the Acquisition during the third quarter of 2017. The contingent consideration relates to amounts potentially payable to Viventia's shareholders pursuant to the terms of the share purchase agreement. Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates on an on-going basis as additional data impacting the assumptions is obtained. Future changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the condensed consolidated statements of operations and comprehensive loss. Contingent consideration may change significantly as development progresses and additional data are obtained, impacting the Company’s assumptions regarding probabilities of successful achievement of related milestones used to estimate the fair value of the liability and the timing in which they are expected to be achieved. In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques could result in materially different fair value estimates. The following table sets forth a summary of changes in the fair value of the Company's contingent consideration liability (in thousands):
The fair value of the Company’s contingent consideration was determined using probabilities of successful achievement of regulatory milestones and commercial sales, the period in which these milestones and sales are expected to be achieved ranging from 2020 to 2033, the level of commercial sales of Vicinium, and discount rates ranging from 8.3% to 10.5% as of December 31, 2017 and 9.1% to 10.5% as of March 31, 2018. Significant changes in any of these assumptions would result in a significantly higher or lower fair value measurement. There have been no changes to the valuation methods utilized during the three months ended March 31, 2018. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between levels during the three months ended March 31, 2018. |
License Agreement with Roche |
3 Months Ended |
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Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
License Agreement with Roche | License Agreement with Roche On June 10, 2016, the Company entered into the License Agreement with F. Hoffmann-La Roche and Hoffmann La-Roche Inc. (collectively, "Roche"), which became effective on August 16, 2016 (the "License Agreement"). Under the License Agreement, the Company granted Roche an exclusive, worldwide license, including the right to sublicense, to its patent rights and know-how related to the Company’s monoclonal antibody EBI-031 or any other IL-6 antagonist anti-IL-6 monoclonal antibody, to make, have made, use, have used, register, have registered, sell, have sold, offer for sale, import and export any product containing such an antibody or any companion diagnostic used to predict or monitor response to treatment with such a product (collectively, the “Licensed Intellectual Property”). During 2016, the Company received an upfront license fee of $7.5 million and a milestone payment of $22.5 million. The Company is entitled to receive up to $240.0 million in additional consideration upon the achievement of specified regulatory, development and commercial milestones. Specifically, an aggregate amount of up to $175.0 million is payable to the Company for the achievement of specified milestones with respect to the first indication: $50.0 million in development milestones, $50.0 million in regulatory milestones and $75.0 million in commercialization milestones. Additional amounts of up to $65.0 million are payable upon the achievement of specified development and regulatory milestones in a second indication. In addition, the Company is entitled to receive royalty payments in accordance with a tiered royalty rate scale, with rates ranging from 7.5% to 15% for net sales of potential future products containing EBI-031 and up to 50% of these rates for net sales of potential future products containing other IL-6 compounds, with each of the royalties subject to reduction under certain circumstances and to buy-out options. The License Agreement is subject to the provisions of ASC 606, which was adopted effective January 1, 2018 utilizing a modified retrospective method. The Company concluded that all performance obligations had been achieved as of the adoption date and therefore the full transaction price was considered earned. The transaction price was determined to be the $30.0 million received in 2016. Additional consideration to be paid to the Company upon the achievement of certain milestones will be included if it is expected that the amounts will be received and the amounts would not be subject to a constraint. As of the date of the adoption, no amounts were expected to be received from the achievement of any milestones due to the nature of the milestones and the development status of the product candidates at the time of the adoption. As a result, there were no amounts required to be recorded as a cumulative adoption adjustment as the consideration recognized under ASC 606 was consistent with the amounts recognized under the previous accounting literature. As of March 31, 2018, the Company concluded that there would be no adjustments to the transaction price as the Company continued to not expect any amounts to be received from any milestones within the License Agreement. This is due to the nature of the milestones and the development status of the product candidates at the time of the adoption. As a result, no revenue was recognized during the three-month period ended March 31, 2018 as all performance obligations had been previously achieved and there was no change in the transaction price during the period. No revenue would have been recognized under the previous accounting literature during the three month period ended March 31, 2018 as no milestones were achieved in the period, which was the revenue recognition criteria under the previous accounting literature. |
Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following (in thousands):
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Share-Based Payments |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payments | Share-Based Payments Pursuant to the terms of the Company's 2014 Stock Incentive Plan (the "2014 Plan"), the number of shares authorized for issuance automatically increases on the first day of each fiscal year. On January 1, 2018, the number of shares reserved for issuance under the 2014 Plan increased by 1,388,103 shares. As of March 31, 2018, the total number of shares of common stock available for issuance under the 2014 Plan was 2,594,634. The Company also maintains the Eleven Biotherapeutics, Inc. 2009 Stock Incentive Plan, as amended and restated, and the 2014 Employee Stock Purchase Plan ("2014 ESPP"). Stock-Based Compensation Expense Stock-based compensation expense by award type was as follows (in thousands):
The Company allocated stock-based compensation expense as follows in the condensed consolidated statements of operations and comprehensive loss (in thousands):
At March 31, 2018, there was $1.0 million of total unrecognized compensation expense related to unvested stock options and shares issued pursuant to the Company's 2014 ESPP. This unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.40 years. Stock Options A summary of the stock option activity is presented below:
During the fourth quarter of 2017, the Company issued stock option awards to certain employees which contained performance vesting conditions. Certain of the vesting milestones were achieved during the fourth quarter 2017 and the expense related to these awards was recognized in full during the period. Certain other performance conditions had previously not been considered probable of vesting and therefore no expense was recognized. During the first quarter of 2018, these conditions were deemed probable of occurring and the expense for these awards has been recognized over the estimated vesting period. Restricted Stock From time to time, upon approval by the Board, certain employees, directors and advisors have been granted restricted shares of common stock. A summary of the restricted stock is presented below:
Employee Stock Purchase Plan On March 14, 2018, the Company issued and sold 9,565 shares of its common stock pursuant to the 2014 ESPP at a purchase price of $0.98 per share. The Company has estimated the number of shares to be issued at the end of the current offering period and recognizes expense over the requisite service period. |
Net (Loss) Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income Per Share | Net (Loss) Income Per Share Basic net (loss) income per share is calculated by dividing net (loss) income by the weighted-average shares outstanding during the period, without consideration for common stock equivalents. Diluted net (loss) income per share is calculated by adjusting weighted-average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net (loss) income per share calculation, stock options, unvested restricted stock, and common stock warrants are considered to be common stock equivalents. The following common stock equivalents were excluded from the calculation of diluted net (loss) income per share for the periods indicated because including them would have had an anti-dilutive effect or the exercise prices were greater than the average market price of the common shares.
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Reduction in Workforce |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||
Reduction in Workforce | Reduction in Workforce In 2017, the Board approved a strategic restructuring of the Company to eliminate a portion of the Company’s workforce and recorded restructuring costs, including severance and benefits in accordance with the Company's severance benefit plan, and recorded an accrued liability of $0.1 million as of December 31, 2017. The Company paid $0.1 million in severance costs during the three month ending March 31, 2018. The table below provides a roll-forward of the reduction in workforce liability (in thousands):
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Cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):
Amounts included in restricted cash represent cash held to collateralize a credit limit with Silicon Valley Bank of $10,000 as of March 31, 2018 and December 31, 2017, respectively. |
Subsequent Event |
3 Months Ended |
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Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event The Company has evaluated, for potential recognition and disclosure, events that occurred prior to the date at which the condensed consolidated financial statements were issued. On April 9, 2018, the Company granted 970,900 stock options at an exercise price of $1.50. From April 1, 2018 through May 10, 2018, the Company received approximately $4.2 million of net proceeds from the issuance of 5.2 million shares of common stock due to the exercise of common stock purchase warrants issued in connection with the Company's November 2017 Financing. |
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) |
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Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The condensed consolidated financial statements as of March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and 2017 and the related information contained within the notes to the condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting standards applicable to interim financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position as of March 31, 2018 and its results of operations and its cash flows for the three months ended March 31, 2018 and 2017. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three-month periods are also unaudited. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other future annual or interim period. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 that was filed with the Securities and Exchange Commission (“SEC”) on April 2, 2018 (the "2017 Form 10-K"). The condensed consolidated financial statements include the accounts of Eleven Biotherapeutics, Inc., its wholly owned subsidiary, Viventia Bio Inc. ("Viventia"), and its indirect subsidiaries, Viventia Bio USA Inc. and Viventia Biotech (EU) Limited. All inter-company transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles. The functional currency of Viventia Bio Inc., Viventia Bio USA Inc. and Viventia Biotech (EU) Limited is the U.S. dollar. |
Recently adopted accounting standards and Recently issued accounting standards | Recently adopted accounting standards In May 2014, the FASB issued ASU No. 2014-09, codified as Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard was effective on January 1, 2018 and the Company adopted this standard using the modified retrospective approach. As a result of this adoption, no amounts were recorded as a cumulative effect adjustment to accumulated deficit as of January 1, 2018. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting ("ASU 2017-09"). This update clarifies the changes to terms or conditions of a share-based payment award that require an entity to apply modification accounting. ASU 2017-09 is effective as of January 1, 2018. The adoption of this guidance did not have an impact on the Company's financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018. Upon adoption of ASU 2016-18, the Company applied the retrospective transition method for each period presented and included $10,000 of restricted cash in the beginning-of-period and end-of-period cash, cash equivalents and restricted cash balance reflected in the condensed consolidated statement of cash flows for the three months ended March 31, 2017. A reconciliation of cash, cash equivalents and restricted cash for each period presented is provided in note 9 to the condensed consolidated financial statements. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 34% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. In December 2017, the SEC issued guidance under SAB No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act directing taxpayers to consider the impact of the U.S. legislation as “provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. As of March 31, 2018, the Company had not yet completed its accounting for all of the tax effects of the enactment of the Act. Recently issued accounting pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 addresses the financial reporting of leasing transactions. Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of operations and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company has not yet completed the analysis of how adopting this guidance will affect its consolidated financial statements. Critical accounting policies There have been no material changes to the critical accounting polices recently disclosed in the 2017 Form 10-K other than the adoption of ASU 2014-09 and related updates which are codified as ASC 606. The Company enters into collaboration agreements with strategic partners for the development and commercialization of product candidates which are within the scope of ASC 606. Under these agreements, the Company license rights to certain of the Company’s product candidates and may complete other performance obligations, such as the deliver of drug product or research and development services. The terms of these arrangements typically include payment of non-refundable upfront fees, milestone payments, and royalties on net sales of licensed products and may also contain additional payment provisions. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract, (ii) determination of whether the promised goods or services are performance obligations included whether they are distinct in the context of the contact, (iii) measurement of the transaction price, including the constraint on variable consideration, (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenue when the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. The consideration may include fixed consideration or variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company’s contracts include development and regulatory milestone payments which are assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. At the end of each reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue in the period of adjustment. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any consideration related to sales-based royalty revenue resulting from any of the Company’s collaboration arrangements. The Company allocates the transaction price based on the estimated stand-alone selling price of each of the performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. |
Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the assets and liabilities measured at fair value on a recurring basis at March 31, 2018 (in thousands):
The following table summarizes the assets and liabilities measured at fair value on a recurring basis at December 31, 2017 (in thousands):
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Summary of Contingent Consideration Obligations | The following table sets forth a summary of changes in the fair value of the Company's contingent consideration liability (in thousands):
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Accrued Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accrued Expenses | Accrued expenses consisted of the following (in thousands):
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Share-Based Payments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock-Based Compensation Expense | Stock-based compensation expense by award type was as follows (in thousands):
The Company allocated stock-based compensation expense as follows in the condensed consolidated statements of operations and comprehensive loss (in thousands):
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Summary of Stock Option Activity and Related Information | A summary of the stock option activity is presented below:
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Summary of Restricted Stock | A summary of the restricted stock is presented below:
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Net (Loss) Income Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities | The following common stock equivalents were excluded from the calculation of diluted net (loss) income per share for the periods indicated because including them would have had an anti-dilutive effect or the exercise prices were greater than the average market price of the common shares.
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Reduction in Workforce (Tables) |
3 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||
Reduction in Workforce Liability | The table below provides a roll-forward of the reduction in workforce liability (in thousands):
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Cash, cash equivalents and restricted cash (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands):
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Organization and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Mar. 23, 2018 |
May 10, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 19,688 | $ 14,680 | ||
Net working capital | 15,100 | |||
Accumulated deficit | $ 156,294 | $ 152,331 | ||
Subsidiary, Sale of Stock [Line Items] | ||||
Net proceeds from sale of stock | $ 9,000 | |||
Number of shares sold (in shares) | 7,968,128 | |||
Price per share (in usd per share) | $ 1.13 | |||
Number of warrant sold (in shares) | 7,968,128 | |||
Warrant price per unit (usd per unit) | $ 0.125 | |||
Share of stock for each warrant (in shares) | 1 | |||
Exercise price of warrants (usd per share) | $ 1.20 | |||
Expiration period | 5 years | |||
Subsequent Event | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrant sold (in shares) | 5,200,000 | |||
Proceeds from exercise of warrants | $ 4,200 |
Significant Accounting Policies and Recent Accounting Pronouncements - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Restricted cash | $ 10 | $ 10 |
Accounting Standards Update 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Restricted cash | $ 10 |
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Contingent Consideration (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance, December 31, 2017 | $ 38,400 | $ 39,600 |
Ending balance, March 31, 2018 | 38,400 | |
Unobservable Inputs (Level 3) | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance, December 31, 2017 | 38,400 | $ 39,600 |
Gain from change in fair value of contingent consideration | (1,200) | |
Ending balance, March 31, 2018 | $ 38,400 |
Fair Value of Financial Instruments - Additional Information (Details) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Minimum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Discount rate (in percentage) | 9.10% | 8.30% |
Maximum | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Discount rate (in percentage) | 10.50% | 10.50% |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Development costs | $ 2,650 | $ 2,581 |
Employee compensation (including reduction in workforce) | 896 | 735 |
Professional fees | 237 | 463 |
Other | 70 | 34 |
Total accrued expenses | $ 3,853 | $ 3,813 |
Share-Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 14, 2018 |
Jan. 01, 2018 |
Mar. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 1.0 | ||
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in number of shares reserved for future issuance (in shares) | 1,388,103 | ||
Shares available for issuance (in shares) | 2,594,634 | ||
2014 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expected to be recognized over a weighted-average period (in years) | 2 years 4 months 24 days | ||
Employee stock purchase plan issued during period (in shares) | 9,565 | ||
Purchase price of shares authorized (in USD per share) | $ 0.98 |
Share-Based Payments - Summary of Stock Option Activity (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2018
$ / shares
shares
| |
Shares | |
Outstanding at beginning of period (in shares) | shares | 2,695,796 |
Granted (in shares) | shares | 102,500 |
Exercised (in shares) | shares | 0 |
Cancelled or forfeited (in shares) | shares | (150,292) |
Outstanding at end of period (in shares) | shares | 2,648,004 |
Exercisable at end of period (in shares) | shares | 1,580,060 |
Vested and expected to vest at end of period (in shares) | shares | 2,586,804 |
Weighted-Average Exercise Price | |
Outstanding at beginning of period (in USD per share) | $ / shares | $ 3.16 |
Granted (in USD per share) | $ / shares | 0.93 |
Exercised (in USD per share) | $ / shares | 0.00 |
Cancelled or forfeited (in USD per share) | $ / shares | 2.20 |
Outstanding at end of period (in USD per share) | $ / shares | 3.13 |
Exercisable at end of period (in USD per share) | $ / shares | 3.79 |
Vested and expected to vest at end of period (in USD per share) | $ / shares | $ 3.16 |
Share-Based Payments - Summary of Restricted Stock (Detail) - Restricted stock |
3 Months Ended |
---|---|
Mar. 31, 2018
$ / shares
shares
| |
Restricted Stock Units | |
Unvested at beginning of period (in shares) | shares | 4,430 |
Vested (in shares) | shares | (4,430) |
Unvested at end of period (in shares) | shares | 0 |
Weighted-Average Grant Date Fair Value | |
Unvested at beginning of period (in usd per share) | $ / shares | $ 11.43 |
Vested (in usd per share) | $ / shares | 11.43 |
Unvested at end of period (in USD per share) | $ / shares |
Reduction in Workforce (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Restructuring and Related Activities [Abstract] | ||
Expected cost | $ 100 | |
Severance costs paid | $ 100 | |
Restructuring Reserve | ||
Balance as of January 1, 2017 | 111 | |
Payments | (53) | |
Balance as of March 31, 2018 | $ 58 |
Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 19,688 | $ 14,680 | ||
Restricted cash | 10 | 10 | ||
Total cash, cash equivalents and restricted cash | $ 19,698 | $ 14,690 | $ 20,278 | $ 25,352 |
Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Apr. 09, 2018 |
May 10, 2018 |
Mar. 31, 2018 |
Mar. 23, 2018 |
|
Subsequent Event [Line Items] | ||||
Options granted (in shares) | 102,500 | |||
Exercise price of options granted (in USD per share) | $ 0.93 | |||
Number of warrant sold (in shares) | 7,968,128 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Options granted (in shares) | 970,900 | |||
Exercise price of options granted (in USD per share) | $ 1.50 | |||
Proceeds from exercise of warrants | $ 4.2 | |||
Number of warrant sold (in shares) | 5,200,000 |
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