QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer ☐ | Accelerated filer | ☐ | ||||||
Smaller reporting company | ||||||||
Emerging growth company |
September 30, 2023 | December 31, 2022 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders' deficit | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Short term debt, net | |||||||||||
Total current liabilities | |||||||||||
Warrant liability | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders' deficit: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' deficit | ( | ( | |||||||||
Total liabilities and stockholders' deficit | $ | $ | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, 2023 | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Net product revenues | $ | $ | $ | $ | |||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of product sales | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other (income) expense: | |||||||||||||||||||||||
Unrealized (gain) loss on fair value of warrants | ( | ||||||||||||||||||||||
Interest income | ( | ( | ( | ( | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Foreign currency (gains) loss | ( | ( | |||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share of common stock, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average common shares outstanding, basic and diluted | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, 2023 | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustment | ( | ||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | — | |||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units and exercise of options | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock units and exercise of options | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrant liability | ( | ||||||||||
Amortization of debt discount and issuance costs | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | |||||||||||
Prepaid expenses and other assets | |||||||||||
Inventory | |||||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other liabilities | ( | ( | |||||||||
Cash used in operating activities | ( | ( | |||||||||
Investing activities: | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Proceeds from the exercise of stock options | |||||||||||
Proceeds from issuance of common stock under employee stock purchase plan | |||||||||||
Cash paid for financing costs | ( | ||||||||||
Cash provided by financing activities | |||||||||||
Effects of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | |||||||||||
Supplemental disclosure of noncash activities: | |||||||||||
Fixed asset purchases within accounts payable and accrued expenses | $ | $ | |||||||||
Recognition of right-of-use assets and lease liabilities | $ | $ |
September 30, | |||||||||||
2023 | 2022 | ||||||||||
Stock options | |||||||||||
Restricted stock units | |||||||||||
Common stock warrants | |||||||||||
Employee stock purchase plan | |||||||||||
Total |
September 30, 2023 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Warrant Liability | $ | $ | $ | $ | |||||||||||||||||||
Total Liabilities | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Warrant Liability | $ | $ | $ | $ | |||||||||||||||||||
Total Liabilities | $ | $ | $ | $ |
Warrant Liability | |||||
Balance, December 31, 2022 | $ | ||||
Warrants issued | |||||
Change in fair value of liability | ( | ||||
Balance, September 30, 2023 | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Stock price | $ | $ | |||||||||
Strike price | $ | $ | |||||||||
Expected volatility | % | % | |||||||||
Risk-free interest rate | % | % | |||||||||
Expected dividend yield | % | % | |||||||||
Expected life (years) | |||||||||||
Fair value per warrant | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Total inventory | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Computer equipment and software | $ | $ | |||||||||
Furniture and fixtures | |||||||||||
Machinery and equipment | |||||||||||
Leasehold improvements | |||||||||||
Construction in process | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
$ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Accrued expenses: | |||||||||||
Selling, general and administrative expenses | $ | $ | |||||||||
Research and development expenses | |||||||||||
Payroll expenses | |||||||||||
Product revenue allowances | |||||||||||
Other | |||||||||||
Total accrued expenses | |||||||||||
Other current liabilities: | |||||||||||
Lease liability | |||||||||||
Total other current liabilities | |||||||||||
Total accrued expenses and other current liabilities | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Face amount | $ | $ | |||||||||
Front end fees | ( | ( | |||||||||
Debt issuance costs | ( | ( | |||||||||
Back end fees | |||||||||||
Debt, net | $ | $ | |||||||||
Number of Shares | Classification | Exercise Price Per Share | Expiration Date | |||||||||||||||||
Equity | $ | November 15, 2024 | ||||||||||||||||||
Liability | $ | November 23, 2027 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cost of product sales | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
$ | $ | $ | $ |
Shares | Weighted average exercise price per share | Weighted average remaining contractual life | |||||||||||||||
Outstanding at December 31, 2022 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Exercised | |||||||||||||||||
Expired | ( | ||||||||||||||||
Forfeited | ( | ||||||||||||||||
Outstanding at September 30, 2023 | $ | ||||||||||||||||
Exercisable at September 30, 2023 | $ | ||||||||||||||||
Shares | |||||
Balance at December 31, 2022 | |||||
Granted | |||||
Vested and settled | ( | ||||
Expired/forfeited/canceled | ( | ||||
Balance at September 30, 2023 | |||||
Expected to vest at September 30, 2023 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Risk free interest rate | % | % | |||||||||
Expected term (in years) | |||||||||||
Expected volatility | % | % | |||||||||
Annual dividend yield | % | % |
Three Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Revenues: | |||||||||||
Net product revenues | $ | 19,823 | $ | 20,078 | |||||||
Total revenues | 19,823 | 20,078 | |||||||||
Costs and expenses: | |||||||||||
Cost of product sales | 2,225 | 2,125 | |||||||||
Research and development | 1,281 | 3,267 | |||||||||
Selling, general and administrative | 18,011 | 25,486 | |||||||||
Total operating expenses | 21,517 | 30,878 | |||||||||
Loss from operations | (1,694) | (10,800) | |||||||||
Other (income) expense: | |||||||||||
Interest expense | 4,395 | 4,159 | |||||||||
Other (income) expense | 3,205 | (5) | |||||||||
Total other (income) expense | 7,600 | 4,154 | |||||||||
Net loss | $ | (9,294) | $ | (14,954) |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Revenues: | |||||||||||
Net product revenues | $ | 51,122 | $ | 55,420 | |||||||
Total revenues | 51,122 | 55,420 | |||||||||
Costs and expenses: | |||||||||||
Cost of product sales | 6,502 | 6,282 | |||||||||
Research and development | 4,017 | 12,339 | |||||||||
Selling, general and administrative | 60,839 | 84,339 | |||||||||
Total operating expenses | 71,358 | 102,960 | |||||||||
Loss from operations | (20,236) | (47,540) | |||||||||
Other (income) expense: | |||||||||||
Interest expense | 12,462 | 12,147 | |||||||||
Other income | (7,182) | (3) | |||||||||
Total other (income) expense | 5,280 | 12,144 | |||||||||
Net loss | $ | (25,516) | $ | (59,684) |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net cash used in operating activities | $ | (27,440) | $ | (49,971) | ||||||||||
Net cash used in investing activities | (255) | (60) | ||||||||||||
Net cash provided by financing activities | 296 | 649 | ||||||||||||
Effects of exchange rates on cash and cash equivalents | — | (12) | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (27,399) | $ | (49,394) |
Exhibit Number | Exhibit Description | ||||||||||||||||
3.1 | |||||||||||||||||
3.2 | |||||||||||||||||
3.3 | |||||||||||||||||
31.1 | * | ||||||||||||||||
31.2 | * | ||||||||||||||||
32.1 | ** | ||||||||||||||||
32.2 | ** | ||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
OPTINOSE, INC. | |||||||||||||||||||||||
Date: | November 9, 2023 | By: | /s/ ANTHONY J. KRICK | ||||||||||||||||||||
Name: | Anthony J. Krick | ||||||||||||||||||||||
Title: | Vice President, Finance & Chief Accounting Officer | ||||||||||||||||||||||
(Principal Financial and Accounting Officer) |
Date: | November 9, 2023 | /s/ Ramy A. Mahmoud Ramy A. Mahmoud Chief Executive Officer (Principal Executive Officer) |
Date: | November 9, 2023 | /s/ Anthony J. Krick Anthony J. Krick Chief Accounting Officer (Principal Financial and Accounting Officer) |
1. | the Quarterly Report on Form 10-Q of the Company for the period ending September 30, 2023 (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 for the periods presented therein. |
Date: | November 9, 2023 | /s/ Ramy A. Mahmoud Ramy A. Mahmoud Chief Executive Officer (Principal Executive Officer) |
1. | the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2023 (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 for the periods presented therein. |
Date: | November 9, 2023 | /s/ Anthony J. Krick Anthony J. Krick Chief Accounting Officer (Principal Financial and Accounting Officer) |
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Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 350,000,000 | 200,000,000 |
Shares issued (in shares) | 112,311,983 | 111,492,761 |
Shares outstanding (in shares) | 112,311,983 | 111,492,761 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Revenues: | ||||
Total revenues | $ 19,823 | $ 20,078 | $ 51,122 | $ 55,420 |
Costs and expenses: | ||||
Cost of product sales | 2,225 | 2,125 | 6,502 | 6,282 |
Research and development | 1,281 | 3,267 | 4,017 | 12,339 |
Selling, general and administrative | 18,011 | 25,486 | 60,839 | 84,339 |
Total operating expenses | 21,517 | 30,878 | 71,358 | 102,960 |
Loss from operations | (1,694) | (10,800) | (20,236) | (47,540) |
Other (income) expense: | ||||
Unrealized (gain) loss on fair value of warrants | 3,200 | 0 | (7,190) | 0 |
Interest income | (545) | (48) | (1,974) | (218) |
Interest expense | 4,940 | 4,207 | 14,436 | 12,365 |
Foreign currency (gains) loss | 5 | (5) | 8 | (3) |
Net loss | $ (9,294) | $ (14,954) | $ (25,516) | $ (59,684) |
Net loss per share of common stock — basic (in USD per share) | $ (0.08) | $ (0.18) | $ (0.23) | $ (0.72) |
Net loss per share of common stock, diluted (usd per share) | $ (0.08) | $ (0.18) | $ (0.23) | $ (0.72) |
Weighted average common shares outstanding, basic (in shares) | 112,230,155 | 83,320,704 | 111,996,456 | 82,846,868 |
Weighted average common shares outstanding-diluted (in shares) | 112,230,155 | 83,320,704 | 111,996,456 | 82,846,868 |
Net product revenues | ||||
Revenues: | ||||
Total revenues | $ 19,823 | $ 20,078 | $ 51,122 | $ 55,420 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (9,294) | $ (14,954) | $ (25,516) | $ (59,684) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 0 | 0 | 0 | (3) |
Comprehensive loss | $ (9,294) | $ (14,954) | $ (25,516) | $ (59,687) |
Organization and Description of Business |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business OptiNose, Inc. (the Company) was incorporated in Delaware in May 2010 (inception) and has facilities in Yardley, Pennsylvania and Ewing, New Jersey. The Company's predecessor entity, OptiNose AS, was formed under the laws of Norway in September 2000. In 2010, OptiNose AS became a wholly-owned subsidiary of the Company as part of an internal reorganization. During 2022, the Company's board of directors approved the liquidation of OptiNose AS and OptiNose UK, which is expected to be completed in 2023, in order to simplify the corporate structure. The Company is a specialty pharmaceutical company focused on the development and commercialization of products for patients treated by ear, nose and throat (ENT) and allergy specialists. The Company's first commercial product, XHANCE® (fluticasone propionate) nasal spray, 93 microgram (mcg), is a therapeutic utilizing the Company's proprietary Exhalation Delivery System (EDS) that delivers a topically-acting corticosteroid for the treatment of chronic rhinosinusitis with nasal polyps and, if approved, chronic rhinosinusitis without nasal polyps (commonly referred to as chronic sinusitis). XHANCE was approved by the United States (US) Food and Drug Administration (FDA) in September 2017 for the treatment of nasal polyps in patients 18 years of age or older. XHANCE was made widely available through commercial channels in April 2018. In January 2023, the indication statement for XHANCE was changed from “for the treatment of nasal polyps” to “for the treatment of chronic rhinosinusitis with nasal polyps” to reflect current FDA labeling terminology and not based on new XHANCE clinical trial data. In February 2023, the Company submitted a prior approval efficacy supplement (sNDA) to the FDA to support the approval of a new indication for XHANCE for the treatment of chronic rhinosinusitis.
|
Liquidity |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Liquidity Since inception, the Company's operations have focused on organization and staffing, business planning, raising capital, establishing an intellectual property portfolio, conducting preclinical studies and clinical trials, pursuing regulatory approvals and commercializing XHANCE in the US. As of September 30, 2023, the Company had cash and cash equivalents of $66,845 and a working capital deficiency of $65,361. The Company is subject to a number of risks similar to other life sciences companies, including successful discovery, development and commercialization of its products and product candidates, raising additional capital, the development by its competitors of new technological innovations, protection of proprietary technology and market acceptance of the Company's products. The Company has incurred recurring net losses since inception and has accumulated a deficit of $710,408 as of September 30, 2023. The Company entered into a Note Purchase Agreement (the Note Purchase Agreement) on September 12, 2019 with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of the BioPharma Credit Funds (BioPharma) which was subsequently amended on August 13, 2020, March 2, 2021, November 16, 2021, August 10, 2022, and November 9, 2022. On November 23, 2022, the Company amended and restated the Note Purchase Agreement (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, the financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were modified (See Note 8). The principal balance outstanding under the A&R Note Purchase Agreement was $130,000 at September 30, 2023. The Company's continuation as a going concern is dependent on its ability to maintain compliance with its covenants under the A&R Note Purchase Agreement, including minimum trailing twelve-month consolidated XHANCE net sales and royalties the Company is required to achieve commencing with the trailing twelve months ending March 31, 2024 and its ability to generate sufficient cash flows from operations to meet its obligations and/or obtain additional capital through equity or debt financings, partnerships, collaborations, or other sources, as may be required. The A&R Note Purchase Agreement includes events of default, in certain cases subject to customary periods to cure, following which Pharmakon may accelerate all amounts outstanding pursuant to the A&R Note Purchase Agreement. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The A&R Note Purchase Agreement also requires the Company to maintain at all times a minimum of $30,000 of cash and cash equivalents. The Company believes that it is probable that its existing cash and cash equivalents will not be adequate to fund its operations and maintain at least $30,000 of cash and cash equivalents as required under the A&R Note Purchase Agreement for at least twelve-months following the filing of this Form 10-Q, which will constitute a default of the liquidity financial covenant under the A&R Note Purchase Agreement if the Company is unable to obtain additional capital or obtain a waiver or modification to this liquidity covenant prior to falling below such $30,000 threshold. The Company also believes it is probable that it will not achieve the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds under the A&R Note Purchase Agreement for the initial period ending March 31, 2024, which will constitute a default under the A&R Note Purchase Agreement if the Company is unable to obtain a modification or waiver of such minimum consolidated XHANCE net sales and royalties thresholds. Further, the A&R Note Purchase Agreement includes a requirement that the report and opinion on the consolidated financial statements commencing with the year ending December 31, 2023, not be subject to any statement as to “going concern” (subject to certain exceptions). In addition, the consolidated financial statements commencing with the quarter ended March 31, 2024, shall also not be subject to any statement as to “going concern” (subject to certain exceptions). The Company has concluded that it is unlikely that it will be able comply with these provisions in 2024. Failure to comply with these provisions would also constitute an event of default under the A&R Note Purchase Agreement. In the event of any of the foregoing defaults, the holders of the Pharmakon Senior Secured Notes may elect to accelerate the repayment of all unpaid principal, accrued interest and other amounts due, which may require the Company to delay or curtail its operations until additional funding is received. The terms of the A&R Note Purchase Agreement and the Pharmakon Senior Secured Notes, including applicable covenants, are described in Note 8. Management’s plans to mitigate this risk may include reducing expenses, raising additional capital through equity or debt financings, partnerships, collaborations or other sources, and requesting a modification or waiver of the covenants under the A&R Note Purchase Agreement. However, there can be no assurance that the Company will be successful in reducing expenses, raising additional capital, or obtaining a modification or waiver of the covenants under the A&R Note Purchase Agreement. If the Company is unable to reduce expenses, raise additional capital or obtain a modification or waiver of the covenants under the A&R Note Purchase Agreement, the Company may need to delay or curtail its operations. As a result of these factors, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.
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Basis of Presentation and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited interim consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). In the opinion of management, the accompanying unaudited interim financial statements include all normal and recurring adjustments (which consist primarily of accruals and estimates that impact the financial statements) considered necessary to present fairly the Company's financial position as of September 30, 2023 and its results of operations for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The unaudited interim financial statements, presented herein, do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2022 contained in the Company’s annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 7, 2023. Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Customer and supplier concentration The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers. Five customers represented approximately 73% and 40% of the Company's accounts receivable at September 30, 2023 and 2022, respectively. Five customers represented approximately 50% and 31% of the Company's net product sales for the three months ended September 30, 2023 and 2022, respectively. Five customers represented approximately 40% and 29% of the Company's net product sales for the nine months ended September 30, 2023 and 2022, respectively. The Company purchases XHANCE and its components from several third-party suppliers and manufacturing partners, certain of which are only available through a single source. Although the Company could obtain each of these components from alternative third-party suppliers, it would need to qualify and obtain FDA approval for another supplier as a source for each such component. The Company has initiated the process of qualifying an alternate third-party supplier for select components of XHANCE. Alternate third party suppliers of XHANCE components are subject to qualification and approval from the FDA. Fair value of financial instruments The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows: •Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. At September 30, 2023 and 2022, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at September 30, 2023, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At September 30, 2023, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the three and nine months ended September 30, 2023. Net product revenues The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606), which the Company adopted on January 1, 2018. The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following: Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale Net income (loss) per common share Basic net income (loss) per common share is determined by dividing net income (loss) applicable to common stockholders by the weighted average common shares outstanding during the period. For the three and nine months ended September 30, 2023 and 2022, the outstanding Common Stock options, Restricted Stock units, Common Stock warrants and shares to be issued under the Company's 2017 Employee Stock Purchase Plan have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted net loss per share are the same. Diluted net loss per common share for the periods presented do not reflect the following potential common shares, as the effect would be antidilutive:
Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2023 and 2022, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of September 30, 2023 and December 31, 2022, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value MeasurementsAssets and Liabilities Measured at Fair Value on a Recurring Basis The Company applies the guidance in ASC 820, Fair Value Measurements, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The guidance requires that fair value measurements be classified and disclosed in one of the following 3 categories: Level l: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full te1m of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each reporting period. There were no transfers between Level I, 2 and 3 during the three months ended September 30, 2023. The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at September 30, 2023 categorized by the level of inputs used in the valuation of each liability.
Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis Warrant Liability The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):
Assumptions Used in Determining Fair Value of Liability-Classified Warrants The Company issued warrants to purchase 30,268,000 shares of Common Stock at a public offering price of $0.01 per warrant (the Warrants). Each Warrant has an exercise price of $2.565 per share of Common Stock and is exercisable until the expiration date, which is the fifth anniversary of the date of issuance (November 23, 2027). After such date, any unexercised Warrants will expire and have no further value. If the Company issues or sells, or is deemed pursuant to the terms of the Warrants to have issued or sold, any shares of Common Stock (which includes, among other things, options and securities convertible into shares of Common Stock), excluding certain issuances defined in the Warrants as "excluded issuances, for a price per share less than the exercise price of the Warrants in effect immediately prior to such issuance or sale or deemed issuance or sale (such event, a dilutive issuance), then immediately after such dilutive issuance the exercise price then in effect of the Warrants shall be reduced to the price of the shares of Common Stock issued or sold or deemed to be issued or sold in the dilutive issuance in the manner set forth in the Warrant. A holder of Warrants will not have the right to exercise any portion of a Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or on election of such holder, prior to the issuance of any Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants; provided, however, such holder may increase or decrease such percentage to any other percentage not in excess of 19.00%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company. Pursuant to the terms of the Warrant, the Company could be required to settle the Warrants in cash in the event of a "fundamental transaction" as defined in the Warrant (which includes, among other things, an acquisition of the Company) and, as a result, the Warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company utilizes a Monte Carlo simulation valuation model which incorporates assumptions as to the stock price volatility, the expected life of the warrants, a risk-free interest rate, as well as timing and probability of equity financing. The Company values the warrant liability at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs.The inputs and values were as follows:
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Inventory |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | InventoryInventory consisted of the following:
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Property and Equipment |
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Property and Equipment | Property and Equipment Property and equipment, net, consisted of the following:
Depreciation expense was $102 and $144 for the three months ended September 30, 2023 and 2022, respectively. Depreciation expense was $281 and $399 for the nine months ended September 30, 2023 and 2022, respectively. In addition, depreciation expense of $608 was charged to inventory as of September 30, 2023, which represents depreciation expense related to equipment involved in the manufacturing process.
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Accrued Expenses and Other Current Liabilities |
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Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilities consisted of:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt On September 12, 2019 (the Closing Date), the Company entered into a Note Purchase Agreement with funds managed by Pharmakon Advisors, LP (Pharmakon), the investment manager of BioPharma Credit Funds (BioPharma). The Note Purchase Agreement provided the Company with $130,000 in debt financing, of which $80,000 of senior secured notes (the Pharmakon Senior Secured Notes) was issued on the Closing Date, $30,000 was issued on February 13, 2020 after achieving the $9,000 consolidated XHANCE net sales and royalties threshold for the quarter ended December 31, 2019 and $20,000 was issued on December 1, 2020 after achieving the $14,500 consolidated XHANCE net sales and royalties threshold for the quarter ended September 30, 2020. On November 23, 2022, the Company amended and restated the Note Purchase Agreement, initially entered into on September 12, 2019 and amended through November 9, 2022, among the Company, its subsidiaries, OptiNose US, Inc., OptiNose AS and OptiNose UK, Ltd. and BioPharma Credit PLC, as collateral agent, and the purchasers party thereto from time to time (the A&R Note Purchase Agreement). Pursuant to the A&R Note Purchase Agreement, certain modifications to the affirmative and negative covenants, events of default and other provisions were made, including, without limitation, (i) the requirement for the Company to deliver quarterly and annual financial statements that, commencing with the Company's consolidated financial statements for the year ending December 31, 2023 and subject to certain exceptions, are not subject to a “going concern” statement (the Going Concern Covenant) and (ii) the removal of certain exceptions to the negative covenants which previously permitted the Company to enter into certain transactions without the consent of the holders of the Pharmakon Senior Secured Notes, including permitted acquisitions, swap contracts, convertible bonds and revolving credit facilities. The financial covenants requiring the Company to achieve minimum trailing twelve-month consolidated XHANCE net product sales and royalties were amended to be pushed back to March 31, 2024. The A&R Note Purchase Agreement extended the maturity date of the Pharmakon Senior Secured Notes from September 12, 2024 to June 30, 2027 (New Maturity Date), extended the interest-only period from September 2023 to September 2025, after which principal repayments will commence starting on September 30, 2025 and will be made in eight equal quarterly installments of principal and interest through the New Maturity Date. As part of the A&R Note Purchase Agreement the Pharmakon Senior Secured Notes now bear an amended interest rate through the New Maturity Date equal to the 3-month Secured Overnight Financing Rate (subject to a 2.50% floor), determined as of the date that is two business days prior to the commencement of each quarter, plus 8.50% per annum, which interest rate shall be increased by an additional 3.00% per annum upon the occurrence and during the continuation of any event of default. The Effective Interest Rate as of September 30, 2023 is 13.62%. In conjunction with the A&R Note Purchase Agreement, a modification was made to the “make-whole” premium payment due in connection with any principal prepayments (whether mandatory or voluntary) made prior to the 3-year anniversary of the date of the A&R Note Purchase Agreement. On any such prepayment date, the Company will be required to pay a make-whole premium in the amount of (i) for any prepayment date occurring up until and including the 18-month anniversary of the date of the A&R Note Purchase Agreement, the foregone interest from such prepayment date through the 18-month anniversary of such prepayment date; and (ii) for any prepayment after the 18-month anniversary of the date of the A&R Note Purchase Agreement, the foregone interest from such prepayment date through the 3-year anniversary of the date of the A&R Note Purchase Agreement; provided, however, that in no event shall the amount of all make-whole premium payments exceed $24,000 in the aggregate. As an inducement for the holders of the Pharmakon Senior Secured Notes to enter into the A&R Note Purchase Agreement, the Company is required to pay the holders of the Pharmakon Senior Secured Notes an amendment fee of $3,900 (representing 3.00% of the outstanding principal balance of such notes) due on the New Maturity Date or the earlier repayment of the Pharmakon Senior Secured Notes, which amendment fee shall be (i) reduced to $1,300 in the event that the Company repays the Pharmakon Senior Secured Notes in full prior to the one-year anniversary of the date of the A&R Note Purchase Agreement and (ii) reduced to $2,600 in the event that the Company repays the Pharmakon Senior Secured Notes in full on or after the one-year anniversary of the date of the A&R Note Purchase Agreement and prior to second anniversary of the date of the A&R Note Purchase Agreement. Additionally, the $1,300 fee payable under the Fourth Amendment to the Note Purchase Agreement that the Company entered into on November 9, 2022 will be credited against the amendment fee payable in connection with the A&R Note Purchase Agreement. The Pharmakon Senior Secured Notes are secured by a pledge of substantially all of the assets of the Company and the Guarantors and the A&R Note Purchase Agreement contains affirmative and negative covenants customary for financings of this type, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, repay junior indebtedness, incur a material adverse change and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the A&R Note Purchase Agreement contains financial covenants requiring the Company to maintain certain minimum trailing twelve-month consolidated XHANCE net sales and royalties, tested on a quarterly basis, and to have at least $30,000 of cash and cash equivalents at all times. The A&R Note Purchase Agreement also includes events of default customary for financings of this type, in certain cases subject to customary periods to cure, following which BioPharma may accelerate all amounts outstanding under the Pharmakon Senior Secured Notes. The Company believes that it is probable that it will not achieve the trailing twelve-month minimum consolidated XHANCE net sales and royalties thresholds that it is required to achieve commencing with the period ending March 31, 2024. Additionally, without additional capital, the Company believes that it is probable that it will not be able to maintain at least $30,000 of cash and cash equivalents for at least twelve-months following the filing of this Form 10-Q. In addition, the Company believes that it is unlikely that it will be able to maintain compliance with the Going Concern Covenant in 2024. As a result, in accordance with FASB Accounting Standards Codification 470, the Company has classified all outstanding principal and the payment of additional fees upon maturity as a current liability in the accompanying consolidated balance sheet as of March 31, 2023. The Company recorded interest expense of $4,940 and $4,207 during the three months ended September 30, 2023 and 2022, respectively. The Company recorded interest expense of $14,436 and $12,365 during the nine months ended September 30, 2023 and 2022, respectively. Interest expense included total coupon interest and the amortization of debt issuance costs. The Pharmakon debt balance is comprised of the following:
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Employee Benefit Plans |
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Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit PlansFor US employees, the Company maintains a defined contribution 401(k) retirement plan. As of September 30, 2023, $100 was recorded in accrued liabilities related to the Company match. The Company's contributions are made in cash.The Company also maintains a severance benefit plan for employees that is governed by the Employee Retirement Income Security Act of 1974. The severance benefit plan provides severance benefits to eligible employees who are involuntarily terminated from their jobs for reasons other than cause, disability, or death. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' EquityAs of September 30, 2023, the Company had the following warrants outstanding to purchase shares of Common Stock:
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Stock-based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation The Company recorded stock-based compensation expense related to stock options and shares issued under the Company's 2010 Stock Incentive Plan and 2017 Employee Stock Purchase Plan (2017 Plan) in the following expense categories of its accompanying consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022:
In addition, stock-based compensation expense of $87 was capitalized to inventory as of September 30, 2023, which represents the stock-based compensation expense incurred related to employees involved in the manufacturing process of finished goods and samples. Stock Options The Company issues stock-based awards pursuant to its 2010 Stock Incentive Plan. Effective as of October 12, 2017, the Company's 2010 Stock Incentive Plan was amended and restated (A&R Plan). The Company has issued service-based, performance-based, and market-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Company's board of directors or committee thereof. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones. As of September 30, 2023, all of the performance conditions related to performance-based stock options issued by the Company had been achieved. Market-based options may vest upon the achievement of certain market-based objectives relating to the trading price of the Company's Common Stock. The following table summarizes the activity related to stock option grants to employees and non-employees for the nine months ended September 30, 2023:
During the nine months ended September 30, 2023, stock options to purchase 2,287,677 shares of Common Stock were granted to employees and generally vest over four years. The stock options had an estimated weighted average grant date fair value of $1.14. The grant date fair value of each service-based and performance-based option grant was estimated at the time of grant using the Black-Scholes option-pricing model. The grant date fair value of each market-based stock option grant was estimated at the time of grant using a Monte Carlo simulation. The aggregate intrinsic value of stock options outstanding and stock options exercisable, other than market-based stock options, as of September 30, 2023 was $27 and $0, respectively. At September 30, 2023, the unrecognized compensation cost related to unvested stock options, other than market-based stock options, expected to vest was $4,030. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.69 years. Included in the table above are 959,215 market-based options granted. These options generally become eligible to vest over four years, subject to the achievement of certain market-based objectives relating to the trading price of the Common Stock. Stock-based compensation for these awards is recognized over the derived service period of approximately 2 years. The grant date fair value of each stock option grant, as well as the derived service period for these awards, was estimated at the time of grant using a Monte Carlo simulation. During the nine months ended September 30, 2023, no market-based options vested upon the achievement of certain market-based objectives relating to the trading price of the Company's Common Stock. Included in the table above are 905,500 options granted outside the A&R Plan. The grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4). Restricted Stock Units The Company has issued service-based and performance-based restricted stock units (RSUs). Vesting generally occurs over a period not greater than four years. Vesting of the performance-based RSUs is subject to the achievement of certain milestones in connection with the Company's development programs. The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2023:
During the nine months ended September 30, 2023, the Company granted 1,627,174 RSUs at a weighted-average grant date fair value of $1.86, all of which were service-based RSUs. No performance-based RSUs were granted in the nine months ended September 30, 2023. As of September 30, 2023, the milestone associated with the previously granted performance based-RSUs was achieved. At September 30, 2023, the recognized compensation cost related to vested performance-based RSUs was $1,820. At September 30, 2023, the unrecognized compensation cost related to unvested service-based RSUs expected to vest was $3,570, to be recognized over an estimated weighted-average amortization period of 2.83 years. The unrecognized compensation cost related to unvested performance-based RSUs was $241, which will be recognized over the remaining service period. Included in the table above are 60,000 RSUs granted outside the A&R Plan. The grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq Listing Rule 5635(c)(4). 2017 Employee Stock Purchase Plan Under the 2017 Plan, shares of Common Stock may be purchased by eligible employees who elect to participate in the 2017 Plan at 85% of the lower of the fair market value of Common Stock on the first or last day of designated offering periods. The Company recognized stock-based compensation expense related to the 2017 Plan of $48 and $53 during the three months ended September 30, 2023 and 2022, respectively. The Company recognized stock-based compensation expense related to the 2017 Plan of $125 and $215 during the nine months ended September 30, 2023 and 2022, respectively. The Company calculated the fair value of each option grant and the shares issued under the 2017 Plan on the respective dates of grant using the following weighted average assumptions:
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of estimates | Use of estimates The preparation of the unaudited interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and reported amounts of expenses during the reporting period. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the unaudited interim consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the unaudited interim consolidated financial statements in the period they are determined to be necessary.
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Concentration of credit risk and customer and supplier concentration | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company generally invests its cash in deposits with high credit quality financial institutions. Additionally, the Company performs periodic evaluations of the relative credit standing of these financial institutions. Customer and supplier concentration The Company has exposure to credit risk in accounts receivable from sales of product. XHANCE is sold to wholesale pharmaceutical distributors and preferred pharmacy network (PPN) partners, who, in turn, sell XHANCE to pharmacies, hospitals and other customers.
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Fair value of financial instruments | Fair value of financial instruments The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The FASB accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of the inputs as follows: •Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. •Level 2 — Valuations based on observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. •Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. At September 30, 2023 and 2022, the Company's financial instruments included cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and certain liability classified warrants. The carrying amounts reported in the Company's financial statements for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates their respective fair values because of the short-term nature of these instruments. In addition, at September 30, 2023, the Company believed the carrying value of debt approximates fair value as the interest rates were reflective of the rate the Company could obtain on debt with similar terms and conditions. At September 30, 2023, there were no financial assets or liabilities measured at fair value on a recurring basis other than the liability classified warrants. In November 2022, the Company issued warrants in connection with a public offering. Pursuant to the terms of the warrant agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company and, as a result, the warrants are required to be measured at fair value and reported as liability in the consolidated balance sheet. The Company recorded the fair value of the warrants upon issuance using a Monte Carlo simulation and is required to revalue the warrants at each reporting date with any changes in fair value recorded on our statement of operations. The valuation of the warrants is considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that are both significant to the fair value measurement and unobservable. The change in the fair value of the Level 3 warrants liabilities is reflected in the statement of operations for the three and nine months ended September 30, 2023.
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Net product revenues | Net product revenues The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606), which the Company adopted on January 1, 2018. The Company recognizes revenue from XHANCE sales at the point customers obtain control of the product, which generally occurs upon delivery. The transaction price that is recognized as revenue for products includes an estimate of variable consideration. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. The components of the Company’s variable consideration include the following: Provider Chargebacks and Discounts. Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. These components of variable consideration are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and accounts receivable. Trade Discounts and Allowances. The Company generally provides customers with discounts that include incentive fees which are explicitly stated in the Company’s contracts. These discounts are recorded as a reduction of revenue and accounts receivable in the period in which the related product revenue is recognized. Product Returns. Consistent with industry practice, the Company has a product returns policy that provides customers a right of return for product purchased within a specified period prior to and subsequent to the product’s expiration date. The Company estimates the amount of its product that may be returned and presents this amount as a reduction of revenue in the period the related product revenue is recognized, in addition to establishing a liability. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. Government Rebates. The Company is subject to discount obligations under state Medicaid programs and Medicare. Reserves related to these discount obligations are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company’s liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of the reporting period. Payor Rebates. The Company contracts with certain third-party payors, primarily health insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. These rebates are based on contractual percentages applied to the amount of product prescribed to patients who are covered by the plan or the organization with which it contracts. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. Patient Assistance. Other programs that the Company offers include voluntary co-pay patient assistance programs intended to provide financial assistance to eligible patients with prescription drug co-payments required by payors and coupon programs for cash payors. The calculation of the current liability for this assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. Distribution and Other Fees. The Company pays distribution and other fees to certain customers in connection with the sales of its products. The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale
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Net income (loss) per common share | Net income (loss) per common share Basic net income (loss) per common share is determined by dividing net income (loss) applicable to common stockholders by the weighted average common shares outstanding during the period. For the three and nine months ended September 30, 2023 and 2022, the outstanding Common Stock options, Restricted Stock units, Common Stock warrants and shares to be issued under the Company's 2017 Employee Stock Purchase Plan have been excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted net loss per share are the same.
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Income taxes | Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the nine months ended September 30, 2023 and 2022, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of September 30, 2023 and December 31, 2022, the Company concluded that a full valuation allowance would be necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements.
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Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Shares Excluded From Computation of Net Loss Per Common Share | Diluted net loss per common share for the periods presented do not reflect the following potential common shares, as the effect would be antidilutive:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Liabilities Measured on Recurring Basis | The table below presents the liabilities (in thousands) measured and recorded in the financial statements at fair value on a recurring basis at September 30, 2023 categorized by the level of inputs used in the valuation of each liability.
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Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Inputs Reconciliation | The reconciliation of the Company's warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands):
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Schedule of Significant Unobservable Inputs in Valuation of Warrants |
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Inventory (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory consisted of the following:
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment, net, consisted of the following:
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Accrued Expenses and Other Current Liabilities (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of:
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of A&R Note Purchase Agreement and Long Term Balance | The Pharmakon debt balance is comprised of the following:
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Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warrants Outstanding | As of September 30, 2023, the Company had the following warrants outstanding to purchase shares of Common Stock:
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Stock-based Compensation (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allocated Stock-Based Compensation Expense | The Company recorded stock-based compensation expense related to stock options and shares issued under the Company's 2010 Stock Incentive Plan and 2017 Employee Stock Purchase Plan (2017 Plan) in the following expense categories of its accompanying consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022:
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Schedule of Stock Option Activity | The following table summarizes the activity related to stock option grants to employees and non-employees for the nine months ended September 30, 2023:
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Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activity related to RSUs granted to employees for the nine months ended September 30, 2023:
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Schedule of Fair Value Options using Black-Scholes Pricing Model | The Company calculated the fair value of each option grant and the shares issued under the 2017 Plan on the respective dates of grant using the following weighted average assumptions:
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Liquidity - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Nov. 23, 2022 |
---|---|---|---|
Subsidiary, Sale of Stock | |||
Cash and cash equivalents | $ 66,845 | $ 94,244 | |
Working capital deficiency | (65,361) | ||
Accumulated deficit | (710,408) | $ (684,893) | |
Note Purchase Agreement | |||
Subsidiary, Sale of Stock | |||
Debt covenant, cash and cash equivalents | $ 30,000 | ||
Senior Notes | |||
Subsidiary, Sale of Stock | |||
Principal balance outstanding | 130,000 | ||
Senior Notes | Note Purchase Agreement | |||
Subsidiary, Sale of Stock | |||
Debt covenant, cash and cash equivalents | $ 30,000 | $ 30,000 |
Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Customer Concentration Risk - Five Customers - customer |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounts Receivable | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 73.00% | 40.00% | ||
Number of customers (customer) | 5 | 5 | 5 | 5 |
Sales Revenue, Net | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 50.00% | 31.00% | 40.00% | 29.00% |
Number of customers (customer) | 5 | 5 | 5 | 5 |
Fair Value Measurements - Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Liabilities | ||
Warrant Liability | $ 14,300 | $ 21,490 |
Total Liabilities | 14,300 | 21,490 |
Level 1 | ||
Liabilities | ||
Warrant Liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | ||
Liabilities | ||
Warrant Liability | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 3 | ||
Liabilities | ||
Warrant Liability | 14,300 | 21,490 |
Total Liabilities | $ 14,300 | $ 21,490 |
Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis Using Unobservable Inputs (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Warrant Liability | |
Balance, December 31, 2022 | $ 21,490 |
Warrants issued | 0 |
Change in fair value of liability | (7,190) |
Balance, September 30, 2023 | $ 14,300 |
Fair Value Measurements - Valuation of Warrants (Details) - Monte Carlo Simulation |
Sep. 30, 2023
$ / shares
|
Dec. 31, 2022
$ / shares
|
---|---|---|
Fair Value Measurement Inputs and Valuation Techniques | ||
Expected life (years) | 4 years 1 month 6 days | 4 years 10 months 24 days |
Fair value per warrant (usd per share) | $ 0.47 | $ 0.71 |
Stock price | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Warrants outstanding, measurement input | 1.23 | 1.85 |
Strike price | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Warrants outstanding, measurement input | 2.57 | 2.57 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Warrants outstanding, measurement input | 0.575 | 0.450 |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Warrants outstanding, measurement input | 0.046 | 0.038 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Warrants outstanding, measurement input | 0 | 0 |
Inventory (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,114 | $ 1,691 |
Work-in-process | 3,345 | 5,010 |
Finished goods | 2,584 | 2,742 |
Total inventory | $ 8,043 | $ 9,443 |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment | ||
Property and equipment, gross | $ 5,659 | $ 5,360 |
Less: accumulated depreciation | (4,777) | (4,565) |
Property and equipment, net | 882 | 795 |
Computer equipment and software | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 1,425 | 1,203 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 366 | 366 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 3,144 | 3,067 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 609 | 609 |
Construction in process | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 115 | $ 115 |
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Property, Plant and Equipment | ||||
Depreciation | $ 102 | $ 144 | $ 281 | $ 399 |
Inventory | ||||
Property, Plant and Equipment | ||||
Depreciation | $ 608 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accrued expenses: | ||
Selling, general and administrative expenses | $ 3,914 | $ 3,799 |
Research and development expenses | 619 | 1,298 |
Payroll expenses | 5,798 | 7,888 |
Product revenue allowances | 15,556 | 27,993 |
Other | 2,144 | 1,915 |
Total accrued expenses | 28,031 | 42,893 |
Other current liabilities: | ||
Lease liability | 1,131 | 1,971 |
Total other current liabilities | 1,131 | 1,971 |
Total accrued expenses and other current liabilities | $ 29,162 | $ 44,864 |
Debt - Schedule of Long Term Debt (Details) - Senior Notes - Note Purchase Agreement - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument | ||
Face amount | $ 130,000 | $ 130,000 |
Front end fees | (555) | (666) |
Debt issuance costs | (5,612) | (6,739) |
Back end fees | 5,980 | 5,980 |
Debt, net | $ 129,813 | $ 128,575 |
Employee Benefit Plans (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
Accrued liabilities related to the Company match | $ 100 |
Stockholders' Equity - Warrants Outstanding (Details) |
Sep. 30, 2023
$ / shares
shares
|
---|---|
Warrants Expiring November 15, 2024 | |
Class of Stock | |
Number of warrants outstanding (in shares) | shares | 2,500,000 |
Warrants exercise price (usd per share) | $ / shares | $ 1.60 |
Warrants Expiring November 23, 2027 | |
Class of Stock | |
Number of warrants outstanding (in shares) | shares | 30,268,000 |
Warrants exercise price (usd per share) | $ / shares | $ 2.565 |
Stock-based Compensation - Allocated Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | $ 1,205 | $ 1,950 | $ 4,230 | $ 7,394 |
Cost of product sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | 9 | 10 | 27 | 30 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | 129 | 219 | 410 | 648 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | $ 1,067 | $ 1,721 | $ 3,793 | $ 6,716 |
Stock-based Compensation - Stock Option Activity (Details) - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Shares | ||
Granted (in shares) | 2,287,677 | |
Service Based Stock Options | ||
Shares | ||
Beginning balance (in shares) | 9,364,070 | |
Granted (in shares) | 2,287,677 | |
Exercised (in shares) | 0 | |
Expired (in shares) | (755,801) | |
Forfeited (in shares) | (742,285) | |
Ending balance (in shares) | 10,153,661 | 9,364,070 |
Exercisable (in shares) | 5,868,254 | |
Weighted average exercise price per share | ||
Beginning balance (usd per share) | $ 6.88 | |
Granted (usd per share) | 1.65 | |
Exercised (usd per share) | 0 | |
Expired (usd per share) | 7.76 | |
Forfeited (usd per share) | 2.53 | |
Ending balance (usd per share) | 5.96 | $ 6.88 |
Exercisable (usd per share) | $ 8.93 | |
Weighted average remaining contractual life | ||
Options outstanding, weighted average remaining contractual life | 5 years 8 months 4 days | 6 years 18 days |
Options exercisable, weighted average remaining contractual life | 3 years 6 months 29 days |
Stock-based Compensation - Restricted Stock Units Activity (Details) - Restricted stock units |
9 Months Ended |
---|---|
Sep. 30, 2023
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance (in shares) | 1,477,660 |
Granted (in shares) | 1,627,174 |
Vested and settled (in shares) | (567,915) |
Expired/ forfeited/ canceled (in shares) | (524,367) |
Ending balance (in shares) | 2,012,552 |
Expected to vest at end of period (in shares) | 2,012,552 |
Stock-based Compensation - Black-Scholes pricing model options (Details) - 2017 Employee Stock Purchase Plan |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Risk free interest rate | 0.05% | 0.17% |
Expected term (in years) | 6 months | 6 months |
Expected volatility | 68.13% | 88.13% |
Annual dividend yield | 0.00% | 0.00% |
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