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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 15, 2019	Jun. 29, 2018
Document and Entity Information
Entity Registrant Name	IDERA PHARMACEUTICALS, INC.
Trading Symbol	IDRA
Entity Central Index Key	0000861838
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 199.8
Entity Common Stock, Shares Outstanding		27,620,102
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 71,431	$ 112,629
Prepaid expenses and other current assets	1,376	3,992
Total current assets	72,807	116,621
Property and equipment, net	207	1,472
Other assets	9	324
Total assets	73,023	118,417
Current liabilities:
Accounts payable	1,134	1,334
Accrued expenses	7,884	8,000
Note payable		209
Deferred revenue		566
Total current liabilities	9,018	10,109
Other liabilities	11	613
Total liabilities	9,029	10,722
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock, $0.001 par value, Authorized — 70,000 shares; Issued and outstanding — 27,188 and 24,453 shares at December 31, 2018 and December 31, 2017, respectively	27	24
Additional paid-in capital	728,342	712,165
Accumulated deficit	(664,375)	(604,494)
Total stockholders' equity	63,994	107,695
Total liabilities and stockholders' equity	73,023	118,417
Series A Preferred Stock
Stockholders' equity:
Preferred stock, $0.01 par value, Authorized — 5,000 shares: Series A convertible preferred stock; Designated — 1,500 shares, Issued and outstanding — 1 share

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	70,000,000	70,000,000
Common stock, shares issued	27,188,000	24,453,000
Common stock, shares outstanding	27,188,000	24,453,000
Series A Preferred Stock
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares designated	1,500,000	1,500,000
Preferred stock, shares issued	1,000	1,000
Preferred stock, shares outstanding	1,000	1,000

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Alliance revenue	$ 662	$ 902	$ 16,199
Operating expenses:
Research and development	41,841	50,653	39,824
General and administrative	15,420	15,588	15,132
Merger-related costs, net	1,245	1,128
Restructuring costs	3,112
Total operating expenses	61,618	67,369	54,956
Loss from operations	(60,956)	(66,467)	(38,757)
Other income (expense):
Interest income	1,089	574	415
Interest expense	(11)	(50)	(80)
Foreign currency exchange (loss) gain	(3)	(41)	33
Net loss	$ (59,881)	$ (65,984)	$ (38,389)
Net loss per share applicable to common stockholders - basic and diluted (Note 16)	$ (2.25)	$ (3.35)	$ (2.41)
Weighted-average number of common shares used in computing net loss per share applicable to common stockholders - basic and diluted	26,601	19,675	15,950
Comprehensive loss:
Net loss	$ (59,881)	$ (65,984)	$ (38,389)
Unrealized gain on available-for-sale securities		17	117
Total other comprehensive income		17	117
Comprehensive loss	$ (59,881)	$ (65,967)	$ (38,272)

CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive (Loss)/Income	Total
Beginning balance at Dec. 31, 2015	$ 15	$ 583,782	$ (500,081)	$ (134)	$ 83,582
Beginning balance, shares at Dec. 31, 2015	15,158
Sale of common stock and warrants, net of issuance costs	$ 3	48,845			48,848
Sale of common stock and warrants, net of issuance costs, shares	3,278
Issuance of common stock under employee stock purchase plan		172			172
Issuance of common stock under employee stock purchase plan, shares	15
Issuance of common stock upon exercise of common stock options and warrants		2,000			2,000
Issuance of common stock upon exercise of common stock options and warrants, shares	171
Issuance of common stock for services		172			172
Issuance of common stock for services, shares	11
Stock-based compensation		6,847			6,847
Unrealized gain (loss) on marketable securities				117	117
Net loss			(38,389)		(38,389)
Ending balance at Dec. 31, 2016	$ 18	641,818	(538,470)	(17)	103,349
Ending balance, shares at Dec. 31, 2016	18,633
Cumulative effect from adoption of new accounting standard (Note 2)		40	(40)
Sale of common stock and warrants, net of issuance costs	$ 5	53,741			53,746
Sale of common stock and warrants, net of issuance costs, shares	4,792
Issuance of common stock under employee stock purchase plan		253			253
Issuance of common stock under employee stock purchase plan, shares	22
Issuance of common stock upon exercise of common stock options and warrants	$ 1	5,443			5,444
Issuance of common stock upon exercise of common stock options and warrants, shares	996
Issuance of common stock for services		150			150
Issuance of common stock for services, shares	10
Stock-based compensation		10,720			10,720
Unrealized gain (loss) on marketable securities				$ 17	17
Net loss			(65,984)		(65,984)
Ending balance at Dec. 31, 2017	$ 24	712,165	(604,494)		$ 107,695
Ending balance, shares at Dec. 31, 2017	24,453				24,453
Issuance of common stock under employee stock purchase plan		243			$ 243
Issuance of common stock under employee stock purchase plan, shares	25
Issuance of common stock upon exercise of common stock options and warrants	$ 3	10,163			10,166
Issuance of common stock upon exercise of common stock options and warrants, shares	2,702
Issuance of common stock for services		97			97
Issuance of common stock for services, shares	8
Stock-based compensation		5,674			5,674
Net loss			(59,881)		(59,881)
Ending balance at Dec. 31, 2018	$ 27	$ 728,342	$ (664,375)		$ 63,994
Ending balance, shares at Dec. 31, 2018	27,188				27,188

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash Flows from Operating Activities:
Net loss	$ (59,881)	$ (65,984)	$ (38,389)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	5,674	10,720	6,847
Issuance of common stock for services rendered	97	150	172
Accretion of discounts and premiums on investments		94	566
Depreciation and amortization expense	432	746	656
Loss on disposal or impairment of property and equipment	477		4
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	2,717	(1,962)	1,064
Accounts payable, accrued expenses, and other liabilities	(866)	1,674	1,988
Deferred revenue	(566)	(697)	(1,111)
Net cash used in operating activities	(51,916)	(55,259)	(28,203)
Cash Flows from Investing Activities:
Purchases of available-for-sale securities			(2,946)
Proceeds from maturity of available-for-sale securities		28,270	32,746
Proceeds from sale of available-for-sale securities			1,974
Proceeds from the sale of property and equipment	290
Purchases of property and equipment	(75)	(206)	(408)
Net cash provided by investing activities	215	28,064	31,366
Cash Flows from Financing Activities:
Proceeds from equity financings, net of issuance costs		53,763	49,014
Proceeds from employee stock purchases	243	253	172
Proceeds from exercise of common stock options and warrants	10,166	5,444	2,000
Payments on note payable	(209)	(292)	(261)
Payments on capital leases	(8)	(11)	(7)
Net cash provided by financing activities	10,192	59,157	50,918
Net increase (decrease) in cash, cash equivalents and restricted cash	(41,509)	31,962	54,081
Cash, cash equivalents and restricted cash, beginning of period	112,940	80,978	26,897
Cash, cash equivalents and restricted cash, end of period	$ 71,431	$ 112,940	$ 80,978

Business and Organization	12 Months Ended
Business and Organization	Dec. 31, 2018
Business and Organization
Business and Organization	Note 1. Business and Organization Business Overview Idera Pharmaceuticals, Inc. (“Idera” or the “Company”), a Delaware corporation, is a clinical-stage biopharmaceutical company with a business strategy focused on the clinical development, and ultimately the commercialization, of drug candidates for both oncology and rare disease indications characterized by small, well-defined patient populations with serious unmet medical needs. The Company’s current focus is on its Toll-like receptor, or TLR, agonist, tilsotolimod (IMO-2125), for oncology. The Company believes it can develop and commercialize targeted therapies on its own. To the extent the Company seeks to develop drug candidates for broader disease indications, it has entered into and may explore additional collaborative alliances to support development and commercialization. Agreement and Plan of Merger On January 21, 2018, the Company, BioCryst Pharmaceuticals, Inc., a Delaware corporation (“BioCryst”), Nautilus Holdco, Inc., a Delaware corporation and a direct, wholly owned subsidiary of BioCryst (“Holdco”), Island Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Holdco, and Boat Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Holdco, entered into an Agreement and Plan of Merger (the “Merger Agreement”). The board of directors of each of Idera and BioCryst unanimously approved the Merger Agreement and the transactions contemplated thereby and the required regulatory approvals were received. However, the proposed merger was subject to approval by the stockholders of Idera and BioCryst, and satisfaction of other customary closing conditions, as specified in the Merger Agreement. At a special meeting of BioCryst stockholders held on July 10, 2018, BioCryst’s stockholders voted against the adoption of the Merger Agreement. Following such vote and in accordance with the terms of the Merger Agreement, BioCryst terminated the Merger Agreement. In accordance with the Merger Agreement, BioCryst paid the Company a fixed expense reimbursement amount of $6 million in July 2018 in connection with the termination of the Merger Agreement. The fixed expense reimbursement amount is included in “Merger-related costs, net” in the accompanying statements of operations. Liquidity and Financial Condition As of December 31, 2018, the Company had an accumulated deficit of $664.4 million and a cash and cash equivalents balance of $71.4 million. The Company expects to incur substantial operating losses in future periods and will require additional capital as it seeks to advance tilsotolimod and any future drug candidates through development to commercialization. The Company does not expect to generate product revenue, sales-based milestones or royalties until the Company successfully completes development of and obtains marketing approval for tilsotolimod or other future drug candidates, either alone or in collaboration with third parties, which the Company expects will take a number of years. In order to commercialize tilsotolimod and any future drug candidates, the Company needs to complete clinical development and comply with comprehensive regulatory requirements. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biotechnology industry, such as uncertainty of clinical trial outcomes, uncertainty of additional funding and history of operating losses. The Company believes, based on management’s current operating plan, that its existing balance of cash and cash equivalents on hand as of December 31, 2018, plus cash received from the ATM Agreement (Note 7) through February 2019 and cash received from interest income throughout the period, is sufficient to enable the Company to continue as a going concern through the one-year period subsequent to the filing date of this Annual Report on Form 10-K. Further, management has concluded that it is probable that management’s plans can be effectively implemented and will mitigate the relevant conditions that raise substantial doubt about the Company’s ability to continue as a going concern while not impeding the advancement of its drug development. These plans may also include the possible deferral of certain operating expenses unless additional capital is received. The Company has and will continue to evaluate available alternatives to extend its operations beyond this date. Note 1. Business and Organization (Continued) Reverse Stock Split As further described in Note 7, on July 27, 2018, the Company effected a 1-for-8 reverse stock split of the Company's outstanding shares of common stock, as authorized at a special meeting of stockholders on June 20, 2018. All share and per share amounts of common stock, options and warrants in the accompanying financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the reverse stock split.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Reclassifications

The prior year financial statements contain certain reclassifications to the results of operations for the year ended December 31, 2017 to conform to the presentation for the year ended December 31, 2018. Merger-related costs of approximately $1.1 million were reclassified from general and administrative expenses to merger-related costs, net for the year ended December 31, 2017.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgements, and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosure of contingencies in the accompanying Financial Statements and these Notes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. On an ongoing basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ materially from those estimates.

Segment Information

Operating segments are defined as components of an enterprise in which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assessing performance. The Company views its operations and manages its business as one operating segment, which is the business of developing novel therapeutics for oncology and rare diseases.

Financial Instruments

The fair value of the Company’s financial instruments is determined and disclosed in accordance with the three-tier fair value hierarchy specified in Note 3. The Company is required to disclose the estimated fair values of its financial instruments. As of December 31, 2018, the Company’s financial instruments consisted of cash, cash equivalents, and accounts receivable. As of December 31, 2017, the Company’s financial instruments consisted of cash, cash equivalents, accounts receivable and a note payable. The estimated fair values of these financial instruments approximate their carrying values as of December 31, 2018 and 2017. As of December 31, 2018, the Company did not have any derivatives, hedging instruments or other similar financial instruments.

Note 2. Summary of Significant Accounting Policies (Continued)

Concentration of Credit Risk

Financial instruments that subject the Company to credit risk primarily consist of cash, cash equivalents and investments. The Company’s credit risk is managed by investing in highly rated money market instruments, certificates of deposit, corporate bonds, commercial paper and debt securities. Due to these factors, no significant additional credit risk is believed by management to be inherent in the Company’s assets. As of December 31, 2018, all of the Company’s cash and cash equivalents were held at one financial institution.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of 90 days or less when purchased to be “cash equivalents.” Cash and cash equivalents at December 31, 2018 consisted of cash, commercial paper and a money market fund. Cash and cash equivalents at December 31, 2017 consisted of cash and two money market funds.

Restricted Cash

As part of the Company’s prior lease arrangement for its office and laboratory facility in Cambridge, Massachusetts, the Company was required to restrict cash held in a certificate of deposit securing a line of credit for the lessor. The restricted cash amounted to $0.3 million and was recorded in “Other assets” as of December 31, 2017 in the accompanying balance sheets. In July 2018, the Company terminated the lease agreement, effective September 30, 2018, in connection with restructuring activities which are more fully described in Note 10. Accordingly, the Company is no longer required to restrict cash for this purpose as it has satisfied all obligations under the lease agreement, including payment of a $0.2 million lease termination fee which is included in “Restructuring costs” in the accompanying statements of operations.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows:


	December 31,
(In thousands)	2018		2017
Cash and cash equivalents	$	71,431	$	112,629
Restricted cash		—		311
Cash, cash equivalents and restricted cash	$	71,431	$	112,940

Property and Equipment

Property and equipment is carried at acquisition cost less accumulated depreciation, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-Lived Assets" below. The cost of normal, recurring, or periodic repairs and maintenance activities related to property and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits.

Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the related assets. Laboratory and other equipment are depreciated over three to five years. Leasehold improvements are amortized over the remaining lease term or the related useful life, if shorter.

When an asset is disposed of, the associated cost and accumulated depreciation is removed from the related accounts on the Company's balance sheet with any resulting gain or loss included in the Company's statement of operations.

Note 2. Summary of Significant Accounting Policies (Continued)

Impairment of Long-Lived Assets

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10-35, Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets and identifiable finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable (i.e. impaired). Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value (less costs to sell for assets to be disposed of) as estimated using one of the following approaches: income, cost and/or market. Fair value using the income approach is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value utilizing the cost approach is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount.

Revenue Recognition

Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. Under this method, the Company recognizes the cumulative effect of initially adopting ASC Topic 606, if any, as an adjustment to the opening balance of retained earnings. Additionally, under this method of adoption, the Company applies the guidance to all incomplete contracts in scope as of the date of initial application. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments.

In accordance with ASC Topic 606, the Company 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 revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, it performs the following five steps:

(i)

identify the contract(s) with a customer;

(ii)

identify the performance obligations in the contract;

(iii)

determine the transaction price;

(iv)

allocate the transaction price to the performance obligations in the contract; and

(v)

recognize revenue when (or as) the entity satisfies a performance obligation.

The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion.

Note 2. Summary of Significant Accounting Policies (Continued)

Alliance Revenues

The Company’s revenues have primarily been generated through collaborative research, development and/or commercialization agreements. The terms of these agreements may include payment to the Company of one or more of the following: nonrefundable, up-front license fees; research, development and commercial milestone payments; and other contingent payments due based on the activities of the counterparty or the reimbursement by licensees of costs associated with patent maintenance. Each of these types of revenue are recorded as Alliance revenues in the Company’s statements of operations.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps:

(i)

identification of the promised goods or services in the contract;

(ii)

determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(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 (or as) the Company satisfies each performance obligation.

See Note 9, “Collaboration and License Agreements” for additional details regarding the Company’s collaboration arrangements.

As part of the accounting for these arrangements, the Company allocates the transaction price to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling price may be, but is not presumed to be, the contract price. In determining the allocation, the Company maximizes the use of observable inputs. When the stand-alone selling price of a good or service is not directly observable, the Company estimates the stand-alone selling price for each performance obligation using assumptions that require judgment. Acceptable estimation methods include, but are not limited to: (i) the adjusted market assessment approach, (ii) the expected cost plus margin approach, and (iii) the residual approach (when the stand-alone selling price is not directly observable and is either highly variable or uncertain). In order for the residual approach to be used, the Company must demonstrate that (a) there are observable stand-alone selling prices for one or more of the performance obligations and (b) one of the two criteria in ASC 606-10-32-34(c)(1) and (2) is met. The residual approach cannot be used if it would result in a stand-alone selling price of zero for a performance obligation as a performance obligation, by definition, has value on a stand-alone basis.

An option in a contract to acquire additional goods or services gives rise to a performance obligation only if the option provides a material right to the customer that it would not receive without entering into that contract. Factors that the Company considers in evaluating whether an option represents a material right include, but are not limited to: (i) the overall objective of the arrangement, (ii) the benefit the collaborator might obtain from the arrangement without exercising the option, (iii) the cost to exercise the option (e.g. priced at a significant and incremental discount) and (iv) the likelihood that the option will be exercised. With respect to options determined to be performance obligations, the Company recognizes revenue when those future goods or services are transferred or when the options expire.

Note 2. Summary of Significant Accounting Policies (Continued)

The Company’s revenue arrangements may include the following:

Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates whether each milestone is considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent 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 Alliance revenues and earnings in the period of adjustment.

Research and Development Activities: If the Company is entitled to reimbursement from its collaborators for specified research and development activities or the reimbursement of costs associated with patent maintenance, the Company determines whether such funding would result in Alliance revenues or an offset to research and development expenses. Reimbursement of patent maintenance costs are recognized during the period in which the related expenses are incurred as Alliance revenues in the Company’s statements of operations.

Royalties: If the Company is entitled to receive sales-based royalties from its collaborator, 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, provided the reported sales are reliably measurable, 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 royalty revenue resulting from any of its collaboration and license arrangements.

Manufacturing Supply and Research Services: Arrangements that include a promise for future supply of drug substance, drug product or research services at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the licensee exercises these options, any additional payments are recorded in Alliance revenues when the licensee obtains control of the goods, which is upon delivery, or as the services are performed.

The Company receives payments from its licensees based on schedules established in each contract. Upfront payments and fees are recorded as deferred revenue upon receipt, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.

Note 2. Summary of Significant Accounting Policies (Continued)

Research and Development Expenses

All research and development expenses are expensed as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including drug development trials and studies, drug manufacturing, laboratory supplies, external research, payroll including stock-based compensation and overhead. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are accepted by the Company or the services are performed. As of December 31, 2018 and 2017, the Company recorded approximately $0.6 million and $2.6 million as prepaid research and development, respectively, which is included within prepaid expenses and other current assets in the accompanying balance sheets.

Stock-Based Compensation

The Company accounts for stock-based compensation using ASC 718, Compensation – Stock Compensation (“ASC 718”), or ASC 505-50, Equity – Equity Based Payments to Non-Employees, as applicable. The Company accounts for stock-based awards to employees and non-employee directors using the fair value based method to determine compensation expense for all arrangements where shares of stock or equity instruments are issued for compensation. In addition, the Company accounts for stock-based compensation to other non-employees in accordance with the accounting guidance for equity instruments that are issued to entities or persons other than employees.

The Company recognizes all share-based payments to employees and directors as expense in the statements of operations and comprehensive loss based on their fair values. The Company records compensation expense over an award’s requisite service period, or vesting period, based on the award’s fair value at the date of grant. Vesting is generally four years for employees and one year for directors. The Company uses a Black-Scholes option-pricing model to determine the fair value of each option grant as of the date of grant for expense incurred. The Black-Scholes option pricing model requires inputs for risk-free interest rate, dividend yield, expected stock price volatility and expected term of the options. The value of the award that is ultimately expected to vest based on the achievement of a performance condition (i.e., service period) is recognized as expense on a straight-line basis over the requisite service period. See Note 11, “Stock-based Compensation” for additional details.

Prior to the adoption of Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), ASC 718 required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. However, ASU 2016-09 allows an entity to elect as an accounting policy upon adoption either to continue to estimate the total number of awards for which the requisite service period will not be rendered or to account for forfeitures when they occur. In connection with the adoption of this ASU in the first quarter of 2017, the Company made an accounting policy election to account for forfeitures as they occur and applied this change in accounting policy on a modified retrospective basis, resulting in less than a $0.1 million reduction in Additional paid-in capital and an increase in Accumulated deficit as of January 1, 2017, to reflect the cumulative effect of previously estimated forfeitures. See the caption “Cumulative effect from adoption of new accounting standard” within the accompanying statements of stockholders’ equity.

Merger-related Costs, net

Merger-related costs, net includes amounts related to the transactions contemplated under the Merger Agreement, which was terminated in July 2018, as more fully described in Note 1. The line item includes charges incurred for transaction and integration-related professional fees, employee retention costs, and other incremental costs directly related to the potential merger. These costs were offset by the $6 million termination fee, which was received by the Company in July 2018.

Note 2. Summary of Significant Accounting Policies (Continued)

Restructuring Costs

Restructuring charges are primarily comprised of severance costs related to workforce reductions, contract termination and wind-down costs and asset impairments. In accordance with ASC 420, Exit or Disposal Cost Obligations, the Company recognizes restructuring charges when the liability has been incurred, except for one-time employee termination benefits that are incurred over time. Generally, one-time employee termination benefits (i.e. severance costs) are accrued at the date management has committed to a plan of termination and employees have been notified of their termination dates and expected severance payments. Other costs will be recorded as incurred. Asset impairment charges have been, and will be, recognized when management has concluded that the assets have been impaired in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets, or other applicable authoritative guidance. See Note 10 for additional details.

Income Taxes

An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by a net operating loss carryover. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

In the event the Company is charged interest or penalties related to income tax matters, the Company would record such interest as interest expense and would record such penalties as other expense in the Statements of Operations. No such charges have been incurred by the Company. For each of the years ended December 31, 2018, 2017 and 2016, the Company had no uncertain tax positions. See Note 13, “Income Taxes” for additional details.

Net Loss per Common Share applicable to Common Stockholders

Basic and diluted net loss per common share applicable to common stockholders is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share applicable to common stockholders is the same as basic net loss per common share applicable to common stockholders for each of the three years in the period ended December 31, 2018 as the effects of the Company’s potential common stock equivalents are antidilutive (see Note 16).

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) for the years ended December 31, 2018, 2017 and 2016 is comprised of reported net income (loss) and any change in net unrealized gains and losses on investments in available-for-sale securities during each year, which is included in “Accumulated other comprehensive income” on the accompanying balance sheets. As of December 31, 2018 and 2017, the Company held no investments in available-for-sale securities. In accordance with ASC Topic 220, Comprehensive Income, the Company has elected to present the components of net income and other comprehensive income as one continuous statement.

Note 2. Summary of Significant Accounting Policies (Continued)

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was subsequently amended by several other ASU’s related to Topic 606 to, among other things, defer the effective date and clarify various aspects of the new revenue guidance including principal versus agent considerations, identifying performance obligations, and licensing, and include other improvements and practical expedients (as amended, “ASU 2014-09”). The Company adopted ASU 2014-09 in the first quarter of 2018 using the modified retrospective transition method. See “Revenue Recognition” above. To date, the Company has derived substantially all of its revenues from a limited number of license and collaboration agreements. The consideration the Company is eligible to receive under these agreements includes upfront payments, research and development funding, contingent revenues in the form of commercial and development milestones and option payments and royalties. Each of the Company’s license and collaboration agreements has unique terms and was evaluated separately under Topic 606. With respect to its license and collaboration agreements with Vivelix Pharmaceuticals, Ltd. (“Vivelix”) and GlaxoSmithKline Intellectual Property Development Limited (“GSK”), there was no material impact to Alliance revenues for any of the years presented upon adoption of Topic 606. Additionally, there were no revisions to any balance sheet components of Alliance revenues such as accounts receivable and deferred revenues or beginning retained earnings as a result of the adoption of the modified retrospective method. The primary impact on the Company’s financial statements was that revised or additional disclosures were made with respect to revenues and cash flows arising from contracts with customers, which are included in Notes 8 and 9.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted ASU 2016-01 in the first quarter of 2018. The adoption of this new standard did not have a material impact on the Company’s financial position or results of operations.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) — Restricted Cash (“ASU 2016-18”). The amendments in ASU 2016-18 require 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 and restricted cash equivalents. Accordingly, amounts generally described as restricted cash or 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. The Company adopted ASU 2016-18 in the first quarter of 2018, and the guidance has been retrospectively applied to all periods presented. The total of the Company’s cash, cash equivalents and restricted cash is described earlier in this Note 2.

Recently Issued (Not Yet Adopted) Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires organizations that lease assets, with lease terms of more than 12 months, to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Consistent with GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet, ASU No. 2016-02 will require both types of leases to be recognized on the balance sheet. This guidance is applicable to the Company's fiscal year beginning January 1, 2019 and the Company will adopt ASU 2016-02 in the first quarter of 2019 using the alternative modified retrospective transition method, which allows the Company to apply the new lease standard to the beginning of the 2019 period and does not require adjusting comparative period financial information. Additionally, the Company intends to elect the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and is evaluating the other practical expedients available under the guidance. While the Company continues to assess the effects of adoption, it believes the most significant effects relate to the recognition of a right-of-use asset and corresponding liability on its balance sheet, primarily related to the existing operating lease, as well as new disclosure with regards to the Company’s leasing activities. The expected impact of adopting ASU 2016-02 is not expected to be material.

Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Fair Value Measurements

Fair Value Measurements

Note 3. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company applies the guidance in ASC 820, Fair Value Measurement, to account for financial assets and liabilities measured on a recurring basis. Fair value is measured at 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 three categories:

Level 1: 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 term of the asset or liability;

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 1, 2 and 3 during the years ended December 31, 2018, 2017 and 2016.

The table below presents the assets and liabilities measured and recorded in the financial statements at fair value on a recurring basis at December 31, 2018 and 2017 categorized by the level of inputs used in the valuation of each asset and liability.



	December 31, 2018
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Money market funds	$	61,177	$	61,177	$	—	$	—
Other cash equivalents – commercial paper		1,808		—		1,808		—
Total assets	$	62,985	$	61,177	$	1,808	$	—
Total liabilities	$	—	$	—	$	—	$	—


	December 31, 2017
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Money market funds	$	66,183	$	66,183	$	—	$	—
Total assets	$	66,183	$	66,183	$	—	$	—
Total liabilities	$	—	$	—	$	—	$	—

The Level 1 assets consist of money market funds, which are actively traded daily. The Level 2 assets consist of commercial paper whose fair value may not represent actual transactions of identical securities. The fair value of commercial paper is generally determined based on the relationship between the investment’s discount rate and the discount rates of the same issuer’s commercial paper available in the market which may not be actively traded daily. Since these fair values may not be based upon actual transactions of identical securities, they are classified as Level 2.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment

12 Months Ended

Dec. 31, 2018

Property and Equipment

Property and Equipment

Note 4. Property and Equipment

At December 31, 2018 and 2017, net property and equipment at cost consisted of the following:


	December 31,		December 31,
(In thousands)	2018		2017
Leasehold improvements	$	104	$	671
Laboratory equipment and other		767		5,261
Total property and equipment, at cost		871		5,932
Less: Accumulated depreciation and amortization		664		4,460
Property and equipment, net	$	207	$	1,472

Depreciation and amortization expense on Property and equipment was approximately $0.4 million, $0.7 million and $0.6 million in 2018, 2017 and 2016, respectively. See Note 17, “Supplemental Disclosure of Cash Flow Information” for information related to non-cash property additions.

During the year ended December 31, 2018, the Company recorded asset impairments related to its property equipment in the amount of $0.5 million in connection with restructuring activities more fully described in Note 10. No impairment charges were recognized during the years ended December 31, 2017 and 2016.

Accrued Expenses

12 Months Ended

Dec. 31, 2018

Accrued Expenses

Accrued Expenses

Note 5. Accrued Expenses

At December 31, 2018 and 2017, accrued expenses consisted of the following:


	December 31,		December 31,
(In thousands)	2018		2017
Payroll and related costs	$	1,962	$	3,108
Clinical and nonclinical trial expenses		3,958		3,495
Professional and consulting fees		605		1,317
Restructuring expenses		1,147		—
Other		212		80
Total accrued expenses	$	7,884	$	8,000

Included in accrued Payroll and related costs as of December 31, 2018 is the remaining $0.7 million of salary continuation severance benefits to be paid in equal installments through October 31, 2019 to former executives. As of December 31, 2017, the current portion, or $0.6 million, of the remaining $0.9 million of such salary continuation severance benefits is included in accrued Payroll and related costs. The long-term portion of $0.3 million is included within Other liabilities in the Company’s balance sheet as of December 31, 2017.

Note Payable	12 Months Ended
Note Payable	Dec. 31, 2018
Note Payable
Note Payable	Note 6. Note Payable On September 30, 2014, the Company executed a loan and security agreement with Oxford Finance LLC (“Oxford”). Under the agreement, Oxford committed to lend the Company up to an aggregate principal amount of $3 million, through December 31, 2015, in one or more advances each of which is to be evidenced by a promissory note. The Company received total advances of $0.9 million under the loan and security agreement during the draw down period. The Company’s obligations to Oxford were secured by the specific laboratory, manufacturing, office or computer equipment financed under the agreement. Each equipment advance included interest at a fixed interest rate equal to the greater of 7.50% per annum and 7.27% plus the three-month U.S. Libor Rate per annum, set at the time of funding. The principal amount of each equipment advance was repaid in 36 monthly installments commencing on the applicable amortization date, which was July 1, 2015 for any equipment advance made on or before June 30, 2015. Monthly installments payable prior to July 1, 2015 consisted of interest only and monthly installments payable on or after July 1, 2015 consisted of principal and accrued interest. In June 2018, the Company satisfied its obligations under the note payable, including payment of a final payment in an amount equal to 5.7% of the aggregate advanced amount under each equipment advance which was accrued as interest expense over the term of each equipment advance using the effective interest method. As of December 31, 2017, the total outstanding balance of the note payable to Oxford in the amount of $0.2 million is classified in Current portion of note payable within the accompanying balance sheet.

Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Stockholders' Equity

Stockholders' Equity

Note 7. Stockholders’ Equity

Preferred Stock

The Restated Certificate of Incorporation, as amended, of the Company permits its board of directors to issue up to 5,000,000 shares of preferred stock, par value $0.01 per share, in one or more series, to designate the number of shares constituting such series, and fix by resolution, the powers, privileges, preferences and relative, optional or special rights thereof, including liquidation preferences and dividends, and conversion and redemption rights of each such series. As of December 31, 2018, the Company has designated 1,500,000 shares as Series A convertible preferred stock.

Series A Convertible Preferred Stock. The dividends on the Series A convertible preferred stock are payable semi-annually in arrears at the rate of 1% per annum, at the election of the Company, either in cash or additional duly designated, fully paid and nonassessable shares of Series A preferred stock. In the event of liquidation, dissolution or winding up of the Company, after payment of debts and other liabilities of the Company, the holders of the Series A convertible preferred stock then outstanding will be entitled to a distribution of $1 per share out of any assets available to shareholders. The Series A convertible preferred stock is non-voting. All remaining shares of Series A preferred stock rank as to payment upon the occurrence of any liquidation event senior to the common stock. Shares of Series A convertible preferred stock are convertible, in whole or in part, at the option of the holder into fully paid and nonassessable shares of common stock at $272.00 per share, subject to adjustment. As of December 31, 2018 and 2017, there were 655 shares of Series A convertible preferred stock outstanding.

Common Stock

On June 20, 2018, the Company's stockholders approved an amendment to the Company's Restated Certificate of Incorporation, as amended, to effect a reverse stock split of the Company's outstanding shares of common stock at a ratio within a range from 1-for-4 to 1-for-8 and set the number of authorized shares of the Company’s common stock at a number determined by calculating the product of 280,000,000 (previous number of authorized shares) multiplied by two times (2x) the reverse stock split ratio. On July 27, 2018, the Company implemented a 1-for-8 reverse split of its issued and outstanding shares of common stock (the “Reverse Split”), and set the number of its authorized shares of common stock to 70,000,000. The Reverse Split became effective on July 27, 2018 at 5:00 p.m., Eastern Time, and the Company’s common stock began trading on the Nasdaq Capital Market on a Reverse Split-adjusted basis at the opening of trading on July 30, 2018. As of a result of the Reverse Split, every eight shares of the Company’s issued and outstanding common stock were combined into one share of its common stock, except to the extent that the Reverse Split resulted in any of the Company’s stockholders owning a fractional share, which was settled in cash. In connection with the Reverse Split, there was no change in the nominal par value per share of $0.001. The Reverse Split did not change the number of authorized shares or par value of the Company’s preferred stock.

Common Stock Authorized

As of December 31, 2018, the Company had 70,000,000 shares of common stock authorized of which 7,063,444 shares of common stock were reserved for the issuance upon the exercise of outstanding warrants and options to purchase common stock, the conversion of Series A convertible preferred stock, shares available for grant under the Company’s 2013 Stock Incentive Plan and shares available for purchase under the Company’s 2017 Employee Stock Purchase Plan.

Put Shares

Pursuant to the terms of a unit purchase agreement dated as of May 5, 1998, the Company issued and sold a total of 149,960 shares of common stock (the “Put Shares”) at a price of $128.00 per share. Under the terms of the unit purchase agreement, the initial purchasers (the “Put Holders”) of the Put Shares have the right (the “Put Right”) to require the Company to repurchase the Put Shares. The Put Right may not be exercised by any Put Holder unless: (1) the Company liquidates, dissolves or winds up its affairs pursuant to applicable bankruptcy law, whether voluntarily or involuntarily; (2) all of the Company’s indebtedness and obligations, including without

Note 7. Stockholders’ Equity (Continued)

limitation the indebtedness under the Company’s then outstanding notes, has been paid in full; and (3) all rights of the holders of any series or class of capital stock ranking prior and senior to the common stock with respect to liquidation, including without limitation the Series A convertible preferred stock, have been satisfied in full. The Company may terminate the Put Right upon written notice to the Put Holders if the closing sales price of its common stock exceeds $256.00 per share for the twenty consecutive trading days prior to the date of notice of termination. Because the Put Right is not transferable, in the event that a Put Holder has transferred Put Shares since May 5, 1998, the Put Right with respect to those shares has terminated. As a consequence of the Put Right, in the event the Company is liquidated, holders of shares of common stock that do not have Put Rights with respect to such shares may receive smaller distributions per share upon the liquidation than if there were no Put Rights outstanding.

As of December 31, 2018, the Company has repurchased or received documentation of the transfer of 49,993 Put Shares and 4,472 of the Put Shares continued to be held in the name of Put Holders. The Company cannot determine at this time what portion of the Put Rights of the remaining 95,494 Put Shares have terminated.

Equity Financings

"At-The-Market" Equity Program

In November 2018, the Company entered into a Equity Distribution Agreement (the “ATM Agreement”) with JMP Securities LLC (“JMP”) pursuant to which the Company may issue and sell shares of its common stock, $0.001 par value per share, having an aggregate offering price of up to $50.0 million (the “Shares”) through JMP as its agent.

Subject to the terms and conditions of the Agreement, JMP will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions, by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or if specified by the Company, by any other method permitted by law, including but not limited to in negotiated transactions. The Company has no obligation to sell any of the Shares, and the Company or JMP may at any time suspend sales under the ATM Agreement or terminate the ATM Agreement. JMP is entitled to a fixed commission of 3.0% of the gross proceeds from Shares sold. Through December 31, 2018, no Shares had been sold pursuant to the ATM Agreement.

October 2017 Follow-on Underwritten Public Offering

On October 30, 2017, the Company closed a follow-on underwritten public offering, in which it sold 4,166,666 shares of common stock at a price to the public of $12.00 per share for aggregate gross proceeds of $50.0 million (“2017 Offering”). On November 1, 2017, the Company sold an additional 625,000 shares of common stock pursuant to the exercise in full of the underwriters’ 30-day option to purchase additional shares of the Company’s common stock at the public offering price less the underwriting discount. The net proceeds to the Company from the 2017 Offering, including the exercise by the underwriters of their option to purchase additional shares and after deducting underwriters’ discounts and commissions and other offering costs and expenses, were approximately $53.7 million. Baker Brothers, which is affiliated with two of the Company’s directors, participated in the 2017 Offering and purchased 1,000,000 shares of the Company’s common stock at the price offered to the public.

Note 7. Stockholders’ Equity (Continued)

October 2016 Follow-on Underwritten Public Offering

On October 13, 2016, the Company closed a follow-on underwritten public offering, in which it sold 3,125,000 shares of common stock at a price to the public of $16.00 per share for aggregate gross proceeds of $50.0 million. On October 28, 2016, the Company sold an additional 153,155 shares of common stock pursuant to the underwriters’ 30-day option to purchase additional shares at the public offering price less the underwriting discount. The net proceeds to the Company from the offering, including the exercise by the underwriters of their option to purchase additional shares and after deducting underwriters’ discounts and commissions and other offering costs and expenses, were approximately $48.8 million. Investment funds affiliated with Baker Brothers and Pillar Invest Corporation, two of the Company’s principal stockholders, and certain members of the Company’s board of directors, purchased a total of 640,625 shares in this offering at the price offered to the public.

Common Stock Warrants

In connection with various financing transactions, the Company has issued warrants to purchase shares of the Company’s common stock. The Company accounts for common stock warrants as equity instruments, derivative liabilities, or liabilities, depending on the specific terms of the warrant agreement. As of December 31, 2018 and 2017, all of the Company’s outstanding common stock warrants were equity-classified.

The following table summarizes outstanding warrants to purchase shares of the Company’s common stock as of December 31, 2018 and 2017:


	Number of Shares
	December 31,	December 31,	Weighted-Average
Description	2018	2017	Exercise Price		Expiration Date
Issued in May 2013 financing	—	2,700,791		$ 3.76	May 2018
Issued in May 2013 financing (pre-funded)	1,977,041	1,977,041		$ 0.08	May 2020
Issued in September 2013 financing (pre-funded)	521,997	521,997		$ 0.08	Sep 2020
Issued in February 2014 financing (pre-funded)	269,844	269,844		$ 0.08	Feb 2021
Total	2,768,882	5,469,673

The table below is a summary of the Company's warrant activity for the year ended December 31, 2018.


	Number of	Weighted-Average
	Warrants	Exercise Price
Outstanding at December 31, 2017	5,469,673	$	1.90
Issued	—		—
Exercised (1)	(2,700,791)		3.76
Expired	—		—
Outstanding at December 31, 2018	2,768,882	$	0.08

(1)

During the year ended December 31, 2018, certain related parties exercised warrants as more fully described in Note 15.

Alliance Revenue

12 Months Ended

Dec. 31, 2018

Alliance Revenue

Alliance Revenue

Note 8. Alliance Revenue

Alliance revenue for the years ended December 31, 2018, 2017 and 2016 represents revenue from contracts with customers accounted for in accordance with ASC Topic 606, which the Company adopted in the first quarter of 2018, as more fully described in Note 2. There was no impact to Alliance revenue previously recognized by the Company as a result of the adoption of ASC Topic 606.

For the years ended December 31, 2018, 2017 and 2016, Alliance revenue in the accompanying statements of operations and comprehensive loss is comprised of the following:


(In thousands)	2018		2017		2016
GSK collaboration (1)	$	517	$	863		1,111
Vivelix collaboration (2)		56		14	$	15,000
Other (3)		89		25		88
Total Alliance revenue	$	662	$	902	$	16,199

(1)

For all periods presented, revenue recognized primarily relates to the amortization of the deferred up-front payment received at inception of the Company’s collaboration and license agreement with GSK Agreement, as more fully described in Note 9. Revenue recognized for the year ended December 31, 2017 also includes an additional $0.1 million related to additional research services provided in connection with the collaboration and license agreement with GSK.

(2)

For each of the years ended December 31, 2018 and 2017, revenue recognized relates to services provided under the research program provided for under the Company’s exclusive license and collaboration agreement with Vivelix, as more fully described in Note 8. Revenue recognized for the year ended December 31, 2016 relates to the upfront, nonrefundable payment received in connection with the execution of the Vivelix agreement.

(3)

For all periods presented, revenue recognized relates to collaborations which are not material to the Company’s current operations nor expected to be material in the future, including reimbursements by licensees of costs associated with patent maintenance.

The following table presents changes in the Company’s contract assets and liabilities during the years ended December 31, 2018 and 2017:


	Year ended December 31, 2018
(In thousands)	Beginning		Additions		Deductions		Ending
Contract assets	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue	$	566	$	—	$	(566)	$	—


	Year ended December 31, 2017
(In thousands)	Beginning		Additions		Deductions		Ending
Contract assets	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue	$	1,263	$	50	$	(747)	$	566

During each of the years months ended December 31, 2018 and 2017, the Company recognized Alliance revenues of $0.6 million and $0.7 million, respectively, as a result of changes in the contract liability balances associated with its contracts with customers. Revenue recognized during each of the years ended December 31, 2018 and 2017 were included in the contract liability at the beginning of each respective period.

See Note 9 for additional details regarding the Company’s collaboration arrangements.

Collaboration and License Agreements	12 Months Ended
Collaboration and License Agreements	Dec. 31, 2018
Collaboration and License Agreements
Collaboration and License Agreements	Note 9. Collaboration and License Agreements Collaboration with Vivelix In November 2016, the Company entered into an exclusive license and collaboration agreement with Vivelix pursuant to which the Company granted Vivelix worldwide rights to develop and market IMO-9200, an antagonist of TLR7, TLR8, and TLR9, for non-malignant gastrointestinal disorders (the “GI Field” or “Field” as defined in the Vivelix Agreement), and certain back-up compounds to IMO-9200 (the “Vivelix Agreement”). The Company was previously developing IMO-9200 for potential use in selected autoimmune disease indications. However, the Company determined not to proceed with internal development of IMO-9200 because the large autoimmune disease indications for which IMO-9200 had been developed did not fit within the strategic focus of the Company. Under the terms of the Vivelix Agreement, Vivelix is solely responsible for the development and commercialization of IMO-9200 and any designated back-up compounds. In connection with the Vivelix Agreement, Idera also transferred certain drug material to Vivelix for Vivelix’s use in its development activities. Pursuant to the Vivelix Agreement, Vivelix could request that the Company create, characterize and perform research on back-up compounds (the “Research Program”). Such activity was to be mutually agreed upon and moderated by the Joint Research Committee (“JRC”) established under the Vivelix Agreement. The research period commenced with the execution of the agreement and may last for up to three years. As a result of the Company’s decision to wind-down its discovery operations as described in Note 10, in July 2018, the Company informed Vivelix that no additional research projects will be undertaken by the Company. Vivelix has certain rights under the agreement whereby it may exercise (i) the right of first refusal to develop and commercialize products in any available field (“Right of First Refusal”), (ii) the right of first negotiation to obtain an exclusive license for any compound controlled by Idera that has activity in the field of inflammatory bowel disease (“Right of First Negotiation”) and (iii) the right to request an expanded Field beyond the GI Field (“Expanded Field Option”). Under the terms of the Vivelix Agreement, the Company received an upfront, non-refundable fee of $15 million. In addition, the Company will be eligible for future IMO-9200 related development, regulatory and sales milestone payments totaling up to $140 million, including development and regulatory milestones totaling up to $65 million and sales milestones totaling up to $75 million, and escalating royalties ranging from the mid single-digits to low double-digits of global net sales, which percentages are subject to reduction under agreed upon circumstances. As it relates to back-up compounds, including certain compounds controlled by the Company as of the effective date of the Vivelix Agreement and/or those created at Vivelix’s request under the Research Program, the Company will be eligible for related designation payments and development, regulatory and sales milestone payments totaling up to $52.5 million, including development and regulatory milestones totaling up to $35 million and sales milestones totaling up to $17.5 million and escalating royalties ranging from the mid single-digits to low double-digits of global net sales, which percentages are subject to reduction under agreed upon circumstances. Under the terms of the agreement, the Company has performed research services, as requested by Vivelix and at Vivelix’s expense. As of December 31, 2018, Vivelix has not designated any back-up compounds subject to the Research Program. At the effective date of the Vivelix Agreement, Baker Bros. Advisors LP and certain of its affiliated funds (collectively “Baker Brothers”) beneficially owned approximately 7.0% of the Company’s outstanding common stock and affiliates of Baker Brothers constituted two of the four directors on the board of directors of Vivelix and two of the seven directors on the board of directors of the Company. However, the boards of the Company and Vivelix share no individual common board members. See Note 15 for information on related parties of the Company as of December 31, 2018. Subsequent to December 31, 2018, the Company and Vivelix mutually agreed to terminate the Vivelix Agreement on March 4, 2019. Accordingly, the Company is no longer eligible to receive any future milestone or royalty-based payments and all rights previously granted to Vivelix with respect to IMO-9200 and certain back-up compounds to IMO-9200 revert back to the Company. Note 9. Collaboration and License Agreements (Continued) Accounting Analysis under ASC 606 In evaluating the Vivelix Agreement in accordance with ASC Topic 606, the Company concluded that the contract counterparty, Vivelix, is a customer. The Company identified the following performance obligations as of the inception of agreement: (i) a research and commercialization license for IMO-9200 and back-up compounds to IMO-9200 (the “IMO-9200 License”) and (ii) drug materials transferred, which were both deemed to be distinct. The Company determined that participation in the JRC was immaterial in the context of the contract. Consistent with the guidance under ASC 606-10-25-16A, the Company disregarded immaterial promised goods and services when determining performance obligations. The Company concluded that the IMO-9200 License was distinct within the context of the contract (i.e. separately identifiable) because it has stand-alone value from other promised goods and services as Vivelix could benefit from the IMO-9200 License on a stand-alone basis and sell the compound in the market without any additional involvement or participation from Idera. Additionally, Idera has no further obligations related to the IMO-9200 License. In the event that Vivelix does not make a designated compound payment, the license to back-up compounds reverts back to Idera at the end of the research term at no cost or payment by either party. The services provided under the Research Program relate to the back-up compounds and Vivelix would be able to conduct research and development activities with external third parties, as IMO-9200 is at an advanced enough stage where Idera’s expertise would not be required. Accordingly, the IMO-9200 License is a separate performance obligation. The Company concluded that the drug materials transferred identified at the inception are also distinct within the context of the contract (i.e. separately identifiable) because they have standalone value from other promised goods and services based on their nature. Accordingly, the drug materials transferred are a separate performance obligation. Allocable arrangement consideration at inception of the Vivelix Agreement was comprised of the up-front payment of $15 million. The $15 million was allocated based on the relative stand-alone selling prices of each performance obligation. Allocated revenue associated with the IMO-9200 License was recognized at the inception of the Vivelix Agreement in the fourth quarter of 2016 as Vivelix was granted an exclusive, perpetual license to develop and commercialize IMO-9200 and certain back-up compounds to IMO-9200, subject to certain designation milestone and royalty payments, and the performance obligations of Idera under the agreement were extinguished at that point. Allocable revenue associated with drug materials transferred shortly after the inception of the agreement was recognized upon delivery, also in the fourth quarter of 2016. At inception of the contract, the transaction price included only the $15.0 million up-front consideration received. None of the development and commercialization milestones were included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Similarly, other variable consideration related to services that may be provided under the Research Program and back-up compound designation payments were fully constrained. Any consideration related to sales-based royalties will be recognized when the related sales occur, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, as such sales were determined to relate predominantly to the license granted to Vivelix and therefore have also been excluded from the transaction price. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The up-front payment of $15 million was recognized as revenue during the fourth quarter of 2016. Revenue associated with goods and services provided to Vivelix under the Research Program have been immaterial to date and such revenue is recognized as the related performance obligations under each research project are satisfied. See Note 8 for details on revenue recognized in connection with the Company’s collaboration with Vivelix for each of the years ended December 31, 2018, 2017 and 2016. Note 9. Collaboration and License Agreements (Continued) Collaboration with GSK In November 2015, the Company entered into a collaboration and license agreement with GSK to license, research, develop and commercialize pharmaceutical compounds from the Company’s nucleic acid chemistry technology for the treatment of selected targets in renal disease (the “GSK Agreement”). The initial collaboration term is currently anticipated to last between two and four years. In connection with the GSK Agreement, GSK identified an initial target for the Company to attempt to identify a potential population of development candidates to address such target under a mutually agreed upon research plan, which was estimated to take 36 months to complete. From the population of identified development candidates, GSK may designate one development candidate in its sole discretion to move forward into clinical development. If GSK designates a development candidate, GSK would be solely responsible for the development and commercialization activities for that designated development candidate. The GSK Agreement also provided GSK with the option to select up to two additional targets at any time during the first two years of the GSK agreement, for further research under mutually agreed upon research plans. Upon selecting additional targets, GSK then had the option to designate one development candidate for each additional target, at which time GSK would have sole responsibility to develop and commercialize each such designated development candidate. GSK did not select any additional targets for research through expiry of the option period. In accordance with the GSK Agreement, a Joint Steering Committee (“JSC”) was formed with equal representation from Idera and GSK. The responsibilities of the JSC, include, but are not limited to monitoring the progress of the collaboration, reviewing research plans and dealing with disputes that may arise between the parties. If a dispute cannot be resolved by the JSC, GSK has final decision-making authority. Under the terms of the GSK Agreement, the Company received a $2.5 million upfront, non-refundable, non-creditable cash payment upon the execution of the GSK Agreement. Additionally, the Company was eligible to receive a total of up to approximately $100 million in license, research, clinical development and commercialization milestone payments, of which $9 million of these milestone payments would have been payable by GSK upon the identification of the additional targets, the completion of current and future research plans and the designation of development candidates and $89 million would have been payable by GSK upon the achievement of clinical milestones and commercial milestones. As a result of GSK not selecting additional targets during the two-year option period, the Company is now only eligible to receive a total of up to approximately $20 million in license, research, clinical development and commercialization milestone payments, of which $1 million would be payable by GSK upon the designation of a development candidate from the initial target and $17 million would be payable by GSK upon the achievement of clinical milestones and commercial milestones. In addition, the Company is eligible to receive royalty payments based on sales of licensed products following commercialization at varying rates of up to 5% percent on annual net sales, as defined in the GSK Agreement. Accounting Analysis under ASC 606 In evaluating the GSK Agreement in accordance with ASC Topic 606, the Company concluded that the contract counterparty, GSK, is a customer. The Company identified the following performance obligations as of the inception of the agreement: (i) research services, combined with the license for Idera’s proprietary technology related to the initial target (collectively, the “Collaboration License and Research Services”) and (ii) daily options to extend the Collaboration License and Research Services. The Company determined that participation in the JSC and materials transferred were deemed immaterial in the context of the contract. Consistent with the guidance under ASC 606-10-25-16A, the Company disregarded immaterial promised goods and services when determining performance obligations. Note 9. Collaboration and License Agreements (Continued) The Company concluded that the research services related to the initial target and collaboration license to the Company’s proprietary technology related to the initial target were not capable of being distinct as the collaboration license related to the initial target is highly interdependent upon the research services to be provided related to the initial target. As it relates to the assessment of standalone value, the Company determined that GSK cannot fully exploit the value of the collaboration license without receipt of the research services from the Company. The research services involve unique skills and specialized expertise, particularly as it relates to the Company’s proprietary technology, which is not available in the marketplace. Accordingly, GSK must obtain the research services from the Company which significantly limits the ability for GSK to utilize the collaboration license for its intended purpose on a standalone basis. Similarly, the Company concluded that the daily option to extend the collaboration license and the daily option to extend the research services were also highly interdependent as the license has no value to GSK without the accompanying research services using the Company’s proprietary technology. Accordingly, the Collaboration License and Research Services were determined to represent a single performance obligation and the daily options to extend the Collaboration License and Research Services were determined to represent a single performance obligation. Factors considered in this determination included, among other things, the capabilities of the collaborator, whether any other vendor sells the item separately, whether the value of the deliverable is dependent on the other elements in the arrangement, whether there are other vendors that can provide the items and if the customer could use the item for its intended purpose without the other deliverables in the arrangement. Allocable arrangement consideration at inception of the GSK Agreement consisted of the up-front payment of $2.5 million. The $2.5 million was allocated based on the relative stand-alone selling prices of each performance obligation, calculated based on the expected period of time over which the initial license term will be in place, as well as the expected period of time over which the optional renewals occur. The Company will recognize the consideration allocated to the Collaboration License and Research Services over time as GSK is receiving the benefit of the Company’s expertise and know-how on an on-going basis as the research progresses towards the goal of the development candidate designation for the initial target. The exercise of the daily options to extend the Collaboration License and Research Services are treated as a continuation of the contract and allocated consideration is recognized point-in-time upon commencement of each daily exercise. At inception of the contract, the transaction price included only the $2.5 million up-front consideration received. None of the development and commercialization milestones were included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including that receipt of the milestones is outside the control of the Company and contingent upon success in future clinical trials and the licensee’s efforts. Any consideration related to sales-based royalties will be recognized when the related sales occur, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, as such sales were determined to relate predominantly to the license granted to GSK and therefore have also been excluded from the transaction price. The Company re-evaluates the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. The up-front payment of $2.5 million was recorded as deferred revenue in the Company’s balance sheet upon receipt and was recognized as revenue on a straight-line basis over the estimated 36-month research plan period, which approximated the timing in which performance obligations are satisfied. See Note 8 for details on revenue recognized in connection with the Company’s collaboration with GSK for each of the years ended December 31, 2018, 2017 and 2016. Note 9. Collaboration and License Agreements (Continued) Collaboration with Abbott Molecular Inc. In May 2014, the Company entered into a development and commercialization agreement with Abbott Molecular, Inc. (“Abbott Molecular”) for the development of an in vitro companion diagnostic for use in the Company’s clinical development programs to treat certain genetically defined forms of B-cell lymphoma with IMO-8400, the Company’s TLR antagonist lead drug candidate. The agreement provides for the development and subsequent commercialization by Abbott Molecular of a companion diagnostic test utilizing polymerase chain reaction technology to identify with high sensitivity and specificity the presence in tumor biopsy samples of the oncogenic mutation referred to scientifically as MYD88 L265P. Under the agreement, Abbott Molecular is primarily responsible for developing and obtaining regulatory approvals for the companion diagnostic in accordance with an agreed development plan and regulatory plan and for making the companion diagnostic test commercially available in accordance with an agreed commercialization plan. Abbott Molecular will retain all proceeds from commercialization of the companion diagnostic test. Subject to the terms of the agreement, the Company will pay Abbott Molecular fees and fund Abbott Molecular’s development of the companion diagnostic test in an approximate aggregate amount of $6.7 million over an approximately five-year development period, which includes clinical trial site costs and Abbott Molecular’s costs of preparation and filing fees for regulatory submissions for the companion diagnostic with the U.S. Food and Drug Administration. This amount is subject to increase if Abbott Molecular incurs additional expenses in order to meet unexpected material requirements or obligations not included in the agreement or if the Company is required to conduct additional or different clinical trials which result in Abbott Molecular incurring additional costs. The Company incurred approximately $0.4 million, $0.8 million and $0.4 million in expenses under the Abbott Molecular agreement during the years ended December 31, 2018, 2017 and 2016, respectively. In September 2016, the Company suspended internal clinical development of IMO-8400 for B-cell lymphomas. However, the Company has maintained its relationship with Abbott under the agreement as the Company may explore potential collaborative alliances to support the development of IMO-8400 for B-cell lymphomas.

Restructuring Costs

12 Months Ended

Dec. 31, 2018

Restructuring Costs

Restructuring Costs

Note 10. Restructuring Costs

In July 2018, the Company determined to wind-down its discovery operations, reduce the workforce in Cambridge, Massachusetts that supports such operations, and close its Cambridge facility. In connection with the reduction-in-workforce, 18 positions are being eliminated, primarily in the area of discovery, representing approximately 40% of the Company’s employees. Of the 18 positions being eliminated, 15 were effective July 31, 2018 with the remaining expected to be eliminated by the second quarter of 2019.

Restructuring-related charges for the year ended December 31, 2018 totaled $3.1 million and were comprised of (i) one-time termination costs in connection with the reduction in workforce, including severance, benefits and related costs, of approximately $2.6 million; (ii) contract termination costs of approximately $0.2 million in connection with the early lease termination for the Cambridge facility, as further discussed below; and (iii) non-cash asset impairments of approximately $0.7 million, which includes $0.5 million of fixed asset impairments and $0.2 million in write-offs of facility-related prepaid expenses; offset by (iv) a non-cash gain of approximately $0.4 million related to the write-off of the remaining deferred rent liability associated with the Cambridge facility lease.


(in thousands)	Employee Severance and Benefits		Contract Termination Costs		Asset Impairments		Total
Accrued restructuring balance as of December 31, 2017	$	—	$	—	$	—	$	—
Charges incurred (1)		2,635		225		674		3,534
Cash payments		(1,380)		(225)		—		(1,605)
Non-cash settlements		(24)		—		(674)		(698)
Adjustments		(84)		—		—		(84)
Accrued restructuring balance as of December 31, 2018	$	1,147	$	—	$	—	$	1,147

(1)

Excludes $0.4 million gain due to the write-off of the remaining deferred rent liability associated with the termination of the Cambridge, Massachusetts facility lease.

Note 10. Restructuring Costs (Continued)

As of December 31, 2018, the entire accrued restructuring balance is classified as a current liability and included in “Accrued expenses” in the accompanying balance sheets. See Note 5.

In connection with the closing of its Cambridge facility, on July 27, 2018, the Company entered into a termination agreement with the landlord terminating the lease agreement, dated October 31, 2006, as amended, between the Company and the landlord effective September 30, 2018. The Company leased its facility at 167 Sidney Street in Cambridge under the lease agreement. Under the terms of the termination agreement, the Company has agreed to pay an early termination fee of $0.2 million. The Company recorded a charge for the $0.2 million early termination fee and a non-cash gain of $0.4 million due to the write-off of the remaining deferred rent liability associated with the lease in the third quarter of 2018. The Company completed the consolidation of its operations to its Exton, Pennsylvania location in the third quarter of 2018.

Stock-based Compensation

12 Months Ended

Dec. 31, 2018

Stock-based Compensation

Stock-based Compensation

Note 11. Stock-based Compensation

As of December 31, 2018, the only equity compensation plans from which the Company may currently issue new awards are the Company’s 2013 Stock Incentive Plan (as amended to date, the “2013 Plan”) and 2017 Employee Stock Purchase Plan (the “2017 ESPP”), each as more fully described below.

Equity Incentive Plans

2013 Stock Incentive Plan

The Company's board of directors adopted the 2013 Plan, which was approved by the Company’s stockholders effective July 26, 2013. The 2013 Plan is intended to further align the interests of the Company and its stockholders with its employees, including its officers, non-employee directors, consultants and advisers by providing equity-based incentives. The 2013 Plan allows for the issuance of up to such number of shares of the Company’s common stock as equal to (a) 3,153,057 shares of common stock; plus (b) such additional number of shares of common stock (up to 868,372 shares) as is equal to the sum of the number of shares of common stock subject to awards granted under the Company’s 2005 Stock Incentive Plan (the “2005 Plan”) or the Company’s 2008 Stock Incentive Plan (the “2008 Plan” and, together with the 2005 Plan, the “Existing Plans”) which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (subject, however, in the case of Incentive Stock Options to any limitations of the Internal Revenue Code).

Under the 2013 Plan, the Company may grant options to purchase common stock, stock appreciation rights, restricted stock awards and other forms of stock-based compensation. Stock options generally vest over one to four years, and expire no later than 10 years from the date of grant. The maximum number of shares of common stock with respect to which awards may be granted to any participant under the plan is 187,500 per calendar year. The compensation committee of the board of directors has the authority to select the employees to whom options are granted and determine the terms of each option, including (i) the number of shares of common stock subject to the option; (ii) when the option becomes exercisable, which generally may be no earlier than the first anniversary of the date of grant; (iii) the option exercise price, which must be at least 100% of the fair market value of the common stock as of the date of grant; and (iv) the duration of the option, which may not exceed 10 years. Stock options may not be re-priced without shareholder approval. Discretionary awards to non-employee directors are granted and administered by a committee comprised of independent directors. As of December 31, 2018, options to purchase a total of 2,446,534 shares of common stock were outstanding and up to 957,496 shares of common stock remain available for grant under the 2013 Plan.

The Company is no longer granting stock options or other awards pursuant to the share-based compensation plans that were utilized prior to the approval of the 2013 Plan, including the Existing Plans. Under these earlier plans, stock options generally vested over three to four years and expired no later than 10 years from the date of grant. As of December 31, 2018, options to purchase a total of 464,247 shares of common stock were outstanding under these earlier plans.

Note 11. Stock-based Compensation (Continued)

In addition, as of December 31, 2018, non-statutory stock options to purchase an aggregate of 393,750 shares of common stock were outstanding that were issued outside of the 2013 Plan to certain employees in 2017, 2015 and 2014 pursuant to the Nasdaq inducement grant exception as a material component of new hires’ employment compensation.

Employee Stock Purchase Plans

1995 Employee Stock Purchase Plan

The Company’s 1995 Employee Stock Purchase Plan (the “1995 ESPP”), as amended, provided for the issuance of up to 62,500 shares of common stock to participating employees of the Company or its subsidiaries. The 1995 ESPP was terminated effective August 31, 2017 as a result of the adoption by the Company’s board of directors and approval of shareholders of the 2017 Employee Stock Purchase Plan (the “2017 ESPP”), as described below.

2017 Employee Stock Purchase Plan

The Company’s board of directors adopted the 2017 ESPP which was approved by the Company’s stockholders and became effective June 7, 2017. The 2017 ESPP provides for the issuance of up to 62,500 shares of common stock to participating employees of the Company or its subsidiaries. Participation is limited to employees that would not own 5% or more of the total combined voting power or value of the stock of the Company after the grant. As of December 31, 2017, 32,294 shares remained available for issuance.

Stock Purchase Plan Administration

The 1995 ESPP provided for and 2017 ESPP provides for offerings to employees to purchase common stock with offerings beginning on dates determined by the compensation committee of the board of directors or on the first business day thereafter. Each offering begins a “plan period” during which payroll deductions are to be made and held for the purchase of common stock at the end of the plan period. The compensation committee may, at its discretion, choose a plan period of 12 months or less for subsequent offerings and/or choose a different commencement date for offerings. During each plan period participating employees may elect to have a portion of their compensation, ranging from 1% to 10% of compensation as defined by the plan, withheld and used for the purchase of common stock at the end of each plan period. The purchase price is equal to 85% of the lower of the fair market value of a share of common stock on the first trading date of each plan period or the fair market value of a share of common stock on the last trading day of the plan period, and is limited by participant to $25,000 in fair value of common stock per year as well as other quarterly plan limitations as defined by each plan.

For the years ended December 31, 2018, 2017 and 2016, the Company issued 24,824, 21,869 and 15,182 shares of common stock, respectively, under the Company’s employee stock purchase plans and recognized $0.1 million, $0.2 million and less than $0.1 million, respectively, in related stock-based compensation expense.

Accounting for Stock-based Compensation

The Company recognizes non-cash compensation expense for stock-based awards under the Company’s equity incentive plans over an award’s requisite service period, or vesting period, using the straight-line attribution method, based on their grant date fair value, determined using the Black-Scholes option-pricing model. The fair value of the discounted purchases made under the Company’s 2015 and 2017 ESPP is calculated using the Black-Scholes option-pricing model. The fair value of the look-back provision plus the 15% discount is recognized as compensation expense over each plan period.

Note 11. Stock-based Compensation (Continued)

Total stock-based compensation expense attributable to stock-based payments made to employees and directors and employee stock purchases included in operating expenses in the Company's statements of operations for the years ended December 31, 2018, 2017 and 2016 was as follows:


(in thousands)	2018		2017		2016
Stock-based compensation:
Research and development
Employee Stock Purchase Plans	$	71	$	96	$	53
Equity Incentive Plans		1,780		6,398		2,666
	$	1,851	$	6,494	$	2,719
General and administrative
Employee Stock Purchase Plans	$	48	$	63	$	50
Equity Incentive Plans		3,751		4,163		4,078
	$	3,799	$	4,226	$	4,128
Restructuring costs
Employee Stock Purchase Plans	$	24		—		—
	$	24		—		—
Total stock-based compensation expense	$	5,674	$	10,720	$	6,847

The 2017 charge to research and development expense includes approximately $4.3 million of additional stock-based compensation recognized as a result of modifications to previously issued stock option awards in connection with the resignation of an executive.

During the years ended December 31, 2018, 2017 and 2016, the weighted average fair market value of stock options granted was $7.00, $8.08 and $14.00, respectively.

Assumptions Used in Determining Fair Value of Stock Options

Inherent in the Black-Scholes option-pricing model are the following assumptions:

Volatility. The Company estimates stock price volatility based on the Company’s historical stock price performance over a period of time that matches the expected term of the stock options.

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption.

Expected term. The expected term of stock options granted is based on an estimate of when options will be exercised or cancelled in the future.

Dividend rate. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.

Forfeitures. The Company accounts for forfeitures when they occur. Ultimately, the actual expense recognized over the vesting period will be for only those shares that vest. See Note 2.

The fair value of each option award at the date of grant was estimated using the Black-Scholes option pricing model. All options granted during the three years in the period ended December 31, 2018 were granted at exercise prices equal to the fair market value of the common stock on the dates of grant.

Note 11. Stock-based Compensation (Continued)

The following weighted average assumptions apply to the options to purchase 1,136,874, 527,039 and 418,281 shares of common stock granted to employees and directors during the years ended December 31, 2018, 2017 and 2016, respectively:




	2018		2017		2016
Average risk-free interest rate		2.5%		1.7%		1.4%
Expected dividend yield		—		—		—
Expected lives (years)		3.7		4.0		4.2
Expected volatility		74%		86%		93%
Weighted average exercise price (per share)	$	12.63	$	12.96	$	21.12

Stock Option Activity

The following table summarizes stock option activity for the year ended December 31, 2018.


($ in thousands, except per share data)	Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2017	2,675,184	$	23.52	6.5	$	5,805
Granted	1,136,874		12.63
Exercised	(858)		12.77
Forfeited	(279,444)		18.15
Expired	(227,225)		49.58
Outstanding at December 31, 2018 (1)	3,304,531	$	18.41	6.6	$	—
Exercisable at December 31, 2018	1,976,059	$	21.88	5.0	$	—

(1)

Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition.

The fair value of options that vested during 2018, 2017 and 2016 amounted to $6.0 million, $7.3 million and $6.9 million, respectively. As of December 31, 2018, there was $7.3 million of unrecognized compensation cost related to unvested options, which the Company expects to recognize over a weighted average period of 2.6 years.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

Commitments and Contingencies

Note 12. Commitments and Contingencies

Lease Commitments

As of December 31, 2018, the Company’s leased assets consisted of its office headquarters in Exton, Pennsylvania. Prior to the September 30, 2018 termination date, the Company also leased a facility in Cambridge, Massachusetts. During 2018, 2017 and 2016, rent expense, including real estate taxes, was $1.7 million, $2.4 million and $1.9 million, respectively. The leases are classified as operating leases.

Future minimum commitments as of December 31, 2018 under the Company’s lease agreements are approximately:



December 31,	Operating Leases
	(In thousands)
2019	$	209
2020		89
2021 and thereafter		—
	$	298

Note 12. Commitments and Contingencies (Continued)

The Company entered into the Exton facility lease on April 1, 2015 and amended it on September 23, 2015 to include additional space. The Exton facility lease term ends on May 31, 2020 subject to a three-year renewal option exercisable by the Company.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Taxes

Income Taxes

Note 13. Income Taxes

In December 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law. Among other things, the TCJA permanently lowers the corporate federal income tax rate to 21% from the existing maximum rate of 35%, effective for tax years including or commencing January 1, 2018. As a result of the reduction of the corporate federal income tax rate to 21%, GAAP required companies to revalue their deferred tax assets and deferred tax liabilities as of the date of enactment, with the resulting tax effects accounted for in the reporting period of enactment. This revaluation resulted in a provision of $27.6 million to income tax expense and a corresponding reduction in the valuation allowance for the year ended December 31, 2017. As a result, there was no impact to the Company’s statement of operations and comprehensive loss for the year ended December 31, 2017 as a result of reduction in tax rates.

The Company’s preliminary estimate of the TCJA and the remeasurement of its deferred tax assets and liabilities was subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the TCJA, changes to certain estimates and the filing of the Company’s tax returns. The final determination of the TCJA and the remeasurement of the Company’s deferred assets and liabilities was completed during 2018, within one year from the enactment of the TCJA, as additional information became available. For the year ended December 31, 2018, there were no changes to management’s analysis of the effects of TCJA originally performed as of December 31, 2017.

Certain provisions from the Tax Reform Act of 1986 were not impacted by TCJA, such as those limiting the amount of net operating loss carryforwards (“NOLs”) and tax credit carryforwards that companies may utilize in any one year in the event of cumulative changes in ownership over a three-year period in excess of 50%. The Company has completed several financings since the effective date of the Tax Reform Act of 1986, which as of December 31, 2018, have resulted in ownership changes in excess of 50% that will significantly limit the Company’s ability to utilize its NOL and tax credit carryforwards. In December 2017, the Company completed a study which determined that a cumulative three-year ownership change in excess of 50% had occurred in February 2015. The 2017 and 2016 federal and state NOLs, tax credit carryforwards and related deferred tax assets shown below have been adjusted to reflect the ownership change limitations that resulted from this study. As no study has been completed subsequent to 2017, additional ownership change limitations may result from ownership changes that occurred after February 2015, or may occur in the future.

As of December 31, 2018, the Company had cumulative federal and state NOLs of approximately $253.8 million and $263.5 million available to reduce federal and state taxable income, respectively. As a result of TCJA, federal net operating losses incurred for taxable years beginning after January 1, 2018 have an unlimited carryforward period, but can only be utilized to offset 80% of taxable income in future taxable periods. Of the $253.8 million of federal NOLs, $56.4 million have an unlimited carryforward and the remaining NOLs are still subject to expiration through 2037. During the current year, $3.0 million of federal NOLs expired unused and 2032 will be the next year in which federal NOLs will expire should they remain unused. State NOLs are still subject to expiration according to the laws of each respective jurisdiction. The Company files state tax returns in Massachusetts and Pennsylvania whereby both jurisdictions impose a 20-year carryforward period. All $263.5 million of state NOLs expire through 2038, with the first year of expiration being 2032 for $21.0 million of Massachusetts NOLs. In addition, at December 31, 2018, the Company had cumulative federal and state tax credit carryforwards of $17.0 million and $1.9 million, respectively, available to reduce federal and state income taxes, respectively, which expire through 2038 and 2033, respectively, for federal and state purposes.

Note 13. Income Taxes (Continued)

As of December 31, 2018 and 2017, the components of the deferred tax assets are approximately as follows:


	2018		2017
	(In thousands)
Operating loss carryforwards	$	70,509	$	53,276
Tax credit carryforwards		18,514		14,099
Other		8,627		7,552
Total deferred tax assets		97,650		74,927
Valuation allowance		(97,650)		(74,927)
Net deferred tax assets	$	—	$	—

The Company has provided a full valuation allowance for its deferred tax asset due to the uncertainty surrounding the ability to realize these assets.

The difference between the U.S. federal corporate tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016 is as follows:


	2018		2017		2016
Expected federal income tax rate	(21.0)	%	(34.0)	%	(34.0)	%
Expiring credits and NOLs	1.0		—		—
Change in valuation allowance	37.9		0.9		42.2
Federal and state credits	(7.4)		(6.9)		(9.9)
State income taxes, net of federal benefit	(9.7)		(3.7)		(3.7)
Permanent differences	0.5		2.4		3.5
Rate change related to TCJA	—		41.9		—
Other	(1.3)		(0.6)		1.9
Effective tax rate	0.0	%	0.0	%	0.0	%

The Company applies ASC 740-10, Accounting for Uncertainty in Income Taxes, an interpretation of ASC 740. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. The Company had no unrecognized tax benefits resulting from uncertain tax positions at December 31, 2018 and 2017.

The Company has not, as of yet, conducted a study of its research and development credit carryforwards. Such a study might result in an adjustment to the Company’s research and development credit carryforwards, however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position under ASC 740-10. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the statements of operations and comprehensive loss if an adjustment was required.

The Company files income tax returns in the U.S. federal, Massachusetts and Pennsylvania jurisdictions. The Company is no longer subject to tax examinations for years before 2015, except to the extent that it utilizes NOLs or tax credit carryforwards that originated before 2015. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company has not incurred any interest or penalties. In the event that the Company is assessed interest or penalties at some point in the future, they will be classified in the statements of operations and comprehensive loss as general and administrative expense.

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2018
Employee Benefit Plan
Employee Benefit Plan	Note 14. Employee Benefit Plan The Company has an employee benefit plan under Section 401(k) of the Internal Revenue Code. The plan allows employees to make contributions up to a specified percentage of their compensation. Under the plan, the Company matches a portion of the employees’ contributions up to a defined maximum. The Company has historically contributed up to 3% of employee base salary, by matching 50% of the first 6% of annual base salary contributed by each employee. Effective August 2018, the Company began contributing up to 5% of employee base salary, by matching 100% of the first 5% of annual base salary contributed by each employee. Approximately $0.2 million, $0.3 million and $0.3 million of 401(k) benefits were charged to operating expenses during 2018, 2017 and 2016, respectively.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2018
Related Party Transactions
Related Party Transactions	Note 15. Related Party Transactions Overview of Related Parties Youssef El Zein, a member of the Company’s board of directors until his resignation in October 2017, is a director and controlling stockholder of Pillar Invest Corporation (“Pillar Invest”), which is the general partner of Pillar Pharmaceuticals I, L.P. (“Pillar I”), Pillar Pharmaceuticals II, L.P. (“Pillar II”), Pillar Pharmaceuticals III, L.P. (“Pillar III”), Pillar Pharmaceuticals IV, L.P. (“Pillar IV”) and Pillar Pharmaceuticals V, L.P. (“Pillar V”) and limited partner of Pillar I, Pillar II, Pillar III, Pillar IV and Pillar V. Entities affiliated with Pillar Invest and Participations Besancon (“Besancon”), an investment fund advised by Pillar Invest having no affiliation with Mr. El Zein, Pillar I, Pillar II, Pillar III, Pillar IV, Pillar V or Pillar Invest (collectively, the “Pillar Investment Entities”), own approximately 9% of the Company's common stock as of December 31, 2018. Julian C. Baker, a member of the Company’s board of directors until his resignation in September 2018, is a principal of Baker Bros. Advisors LP. Baker Bros. Advisors LP, and certain of its affiliated funds, owned approximately 18% of the Company's common stock as of December 31, 2018. Additionally, one of the Company’s directors, Kelvin M. Neu, is an employee of Baker Bros. Advisors LP as of December 31, 2018. Pillar Investment Entities During 2018, Besancon exercised warrants to purchase 150,000 shares of the Company’s common stock at an exercise price of $3.76 per share for a total exercise price of approximately $0.6 million. During 2017, Pillar II exercised 629,257 warrants to purchase shares of the Company’s common stock at a total exercise price of approximately $3.5 million and Besancon exercised 364,752 warrants to purchase shares of the Company’s common stock at a total exercise price of approximately $1.9 million. The warrant exercise prices had been established at the time that the warrants were purchased. During 2016, Pillar I exercised 171,250 warrants to purchase shares of the Company’s common stock at a total exercise price of approximately $2 million. The warrant exercise prices had been established at the time that the warrants were purchased. Additionally during 2016, investment funds affiliated with Pillar Invest Corporation purchased shares of the Company’s common stock in connection with the 2016 Offering as more fully described in Note 7. Baker Brothers During 2018, Baker Brothers exercised warrants to purchase 2,700,791 shares of the Company’s common stock at an exercise price of $3.76 per share for a total exercise price of approximately $9.5 million. During 2017 and 2016, Baker Brothers purchased shares of the Company’s common stock in connection with underwritten public offerings of shares of the Company’s common stock as more fully described in Note 7. As of December 31, 2018, Baker Brothers held pre-funded warrants to purchase up to 2,768,882 shares of the Company’s common stock at an exercise price of $0.08 per share. Note 15. Related Party Transactions (Continued) Board Fees Paid in Stock Pursuant to the Company’s director compensation program, in lieu of director board and committee fees of approximately $0.1 million, $0.1 million, and $0.2 million incurred during the years ended December 31, 2018, 2017 and 2016, respectively, the Company issued 13,654, 7,867 and 12,654 shares of common stock, respectively, to certain of its directors. Director board and committee fees are paid in arrears and the number of shares issued was calculated based on the market closing price of the Company’s common stock on the issuance date.

Net Loss per Common Share	12 Months Ended
Net Loss per Common Share	Dec. 31, 2018
Net Loss per Common Share
Net Loss per Common Share	Note 16. Net Loss per Common Share Basic and diluted net loss per common share applicable to common stockholders is calculated by dividing net loss applicable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock option awards, common stock warrants and convertible preferred stock, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. For the years ended December 31, 2018, 2017 and 2016, diluted net loss per common share applicable to common stockholders was the same as basic net loss per common share applicable to common stockholders as the effects of the Company’s potential common stock equivalents are antidilutive. Total antidilutive securities that were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect, were 6,075,339, 8,145,188 and 8,714,113 as of December 31, 2018, 2017 and 2016, respectively, and consisted of stock options, preferred stock and warrants.

Supplemental Disclosure of Cash Flow Information

12 Months Ended

Dec. 31, 2018

Supplemental Disclosure of Cash Flow Information

Supplemental Disclosure of Cash Flow Information

Note 17. Supplemental Disclosure of Cash Flow Information

Supplemental disclosure of cash flow information for the periods presented is as follows:


	Year Ended December 31,
	2018		2017		2016
	(In thousands)
Supplemental disclosure of cash flow information:
Cash paid for interest	$	9	$	42	$	72
Supplemental disclosure of non-cash financing and investing activities:
Non-cash property additions	$	—	$	150	$	425
Accrued financing transaction costs	$	101	$	17	$	166

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2018
Subsequent Events.
Subsequent Events	18. Subsequent Events The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. "At-The-Market" Equity Program During the period January 1, 2019 through March 6, 2019, the Company sold 425,610 Shares pursuant to the ATM Agreement, as more fully described in Note 7, resulting in net proceeds after deduction of commissions and other offering expenses of $1.3 million. 18. Subsequent Events (Continued) Common Stock Purchase Agreement On March 4, 2019, the Company entered into a Purchase Agreement with Lincoln Park Capital Fund, LLC (“Investor”), pursuant to which, upon the terms and subject to the conditions and limitations set forth therein, Investor has committed to purchase an aggregate of $35 million of shares of Company common stock from time to time at the Company’s sole discretion (the “Purchase Agreement”). As consideration for entering into the Purchase Agreement, the Company issued 269,749 shares of Company common stock to Investor as a commitment fee (the Commitment Shares”). The Company did not receive any cash proceeds from the issuance of the Commitment Shares. Additionally, no shares were sold to Investor under the Purchase Agreement through March 6, 2019. Collaboration with Vivelix On March 4, 2019, the Company and Vivelix mutually agreed to terminate the Vivelix Agreement, as more fully described in Note 9.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

Reclassifications

Use of Estimates

Segment Information

Financial Instruments

Concentration of Credit Risk

Cash and Cash Equivalents

Restricted Cash


	December 31,
(In thousands)	2018		2017
Cash and cash equivalents	$	71,431	$	112,629
Restricted cash		—		311
Cash, cash equivalents and restricted cash	$	71,431	$	112,940

Property and Equipment

Impairment of Long-Lived Assets

Revenue Recognition

(i)

identify the contract(s) with a customer;

(ii)

identify the performance obligations in the contract;

(iii)

determine the transaction price;

(iv)

allocate the transaction price to the performance obligations in the contract; and

(v)

recognize revenue when (or as) the entity satisfies a performance obligation.

Note 2. Summary of Significant Accounting Policies (Continued)

Alliance Revenues

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps:

(i)

identification of the promised goods or services in the contract;

(ii)

determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(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 (or as) the Company satisfies each performance obligation.

See Note 9, “Collaboration and License Agreements” for additional details regarding the Company’s collaboration arrangements.

Note 2. Summary of Significant Accounting Policies (Continued)

The Company’s revenue arrangements may include the following:

Merger-related Costs, net

Restructuring Costs

Income Taxes

Net Loss per Common Share applicable to Common Stockholders

Comprehensive Income (Loss)

Research and Development Expenses

Stock-Based Compensation

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Issued (Not Yet Adopted) Accounting Pronouncements

Accounting for Uncertainty in Income Taxes

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies

Schedule of reconciliation of cash, cash equivalents, and restricted cash


	December 31,
(In thousands)	2018		2017
Cash and cash equivalents	$	71,431	$	112,629
Restricted cash		—		311
Cash, cash equivalents and restricted cash	$	71,431	$	112,940

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Measurements

Schedule of assets and liabilities measured and recorded in financial statements at fair value on a recurring basis



	December 31, 2018
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Money market funds	$	61,177	$	61,177	$	—	$	—
Other cash equivalents – commercial paper		1,808		—		1,808		—
Total assets	$	62,985	$	61,177	$	1,808	$	—
Total liabilities	$	—	$	—	$	—	$	—


	December 31, 2017
(In thousands)	Total		Level 1		Level 2		Level 3
Assets
Money market funds	$	66,183	$	66,183	$	—	$	—
Total assets	$	66,183	$	66,183	$	—	$	—
Total liabilities	$	—	$	—	$	—	$	—

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property and Equipment

Schedule of net property and equipment at cost


	December 31,		December 31,
(In thousands)	2018		2017
Leasehold improvements	$	104	$	671
Laboratory equipment and other		767		5,261
Total property and equipment, at cost		871		5,932
Less: Accumulated depreciation and amortization		664		4,460
Property and equipment, net	$	207	$	1,472

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2018

Accrued Expenses

Schedule of accrued expenses


	December 31,		December 31,
(In thousands)	2018		2017
Payroll and related costs	$	1,962	$	3,108
Clinical and nonclinical trial expenses		3,958		3,495
Professional and consulting fees		605		1,317
Restructuring expenses		1,147		—
Other		212		80
Total accrued expenses	$	7,884	$	8,000

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2018

Stockholders' Equity

Schedule of warrants outstanding and exercisable for purchase of common stock


	Number of Shares
	December 31,	December 31,	Weighted-Average
Description	2018	2017	Exercise Price		Expiration Date
Issued in May 2013 financing	—	2,700,791		$ 3.76	May 2018
Issued in May 2013 financing (pre-funded)	1,977,041	1,977,041		$ 0.08	May 2020
Issued in September 2013 financing (pre-funded)	521,997	521,997		$ 0.08	Sep 2020
Issued in February 2014 financing (pre-funded)	269,844	269,844		$ 0.08	Feb 2021
Total	2,768,882	5,469,673

Summary of warrant activity


	Number of	Weighted-Average
	Warrants	Exercise Price
Outstanding at December 31, 2017	5,469,673	$	1.90
Issued	—		—
Exercised (1)	(2,700,791)		3.76
Expired	—		—
Outstanding at December 31, 2018	2,768,882	$	0.08

During the year ended December 31, 2018, certain related parties exercised warrants as more fully described in Note 15.

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Alliance Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Alliance Revenue

Schedule of accompanying statements of operations and comprehensive loss


(In thousands)	2018		2017		2016
GSK collaboration (1)	$	517	$	863		1,111
Vivelix collaboration (2)		56		14	$	15,000
Other (3)		89		25		88
Total Alliance revenue	$	662	$	902	$	16,199

(1)

(2)

(3)

Schedule of changes in the Company’s contract assets and liabilities


	Year ended December 31, 2018
(In thousands)	Beginning		Additions		Deductions		Ending
Contract assets	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue	$	566	$	—	$	(566)	$	—


	Year ended December 31, 2017
(In thousands)	Beginning		Additions		Deductions		Ending
Contract assets	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue	$	1,263	$	50	$	(747)	$	566

Restructuring Costs (Tables)

12 Months Ended

Dec. 31, 2018

Restructuring Costs

Schedule of restructuring costs


(in thousands)	Employee Severance and Benefits		Contract Termination Costs		Asset Impairments		Total
Accrued restructuring balance as of December 31, 2017	$	—	$	—	$	—	$	—
Charges incurred (1)		2,635		225		674		3,534
Cash payments		(1,380)		(225)		—		(1,605)
Non-cash settlements		(24)		—		(674)		(698)
Adjustments		(84)		—		—		(84)
Accrued restructuring balance as of December 31, 2018	$	1,147	$	—	$	—	$	1,147

(1)

Excludes $0.4 million gain due to the write-off of the remaining deferred rent liability associated with the termination of the Cambridge, Massachusetts facility lease.

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Stock-Based Compensation

Schedule of stock-based compensation expense attributable to share-based payments made to employees and directors and included in operating expenses


(in thousands)	2018		2017		2016
Stock-based compensation:
Research and development
Employee Stock Purchase Plans	$	71	$	96	$	53
Equity Incentive Plans		1,780		6,398		2,666
	$	1,851	$	6,494	$	2,719
General and administrative
Employee Stock Purchase Plans	$	48	$	63	$	50
Equity Incentive Plans		3,751		4,163		4,078
	$	3,799	$	4,226	$	4,128
Restructuring costs
Employee Stock Purchase Plans	$	24		—		—
	$	24		—		—
Total stock-based compensation expense	$	5,674	$	10,720	$	6,847

Schedule of weighted average assumptions applied to options




	2018		2017		2016
Average risk-free interest rate		2.5%		1.7%		1.4%
Expected dividend yield		—		—		—
Expected lives (years)		3.7		4.0		4.2
Expected volatility		74%		86%		93%
Weighted average exercise price (per share)	$	12.63	$	12.96	$	21.12

Schedule of information related to outstanding and exercisable options


($ in thousands, except per share data)	Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2017	2,675,184	$	23.52	6.5	$	5,805
Granted	1,136,874		12.63
Exercised	(858)		12.77
Forfeited	(279,444)		18.15
Expired	(227,225)		49.58
Outstanding at December 31, 2018 (1)	3,304,531	$	18.41	6.6	$	—
Exercisable at December 31, 2018	1,976,059	$	21.88	5.0	$	—

(1)

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies

Schedule of future minimum commitments under company lease agreements



December 31,	Operating Leases
	(In thousands)
2019	$	209
2020		89
2021 and thereafter		—
	$	298

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Taxes

Schedule of components of deferred tax assets


	2018		2017
	(In thousands)
Operating loss carryforwards	$	70,509	$	53,276
Tax credit carryforwards		18,514		14,099
Other		8,627		7,552
Total deferred tax assets		97,650		74,927
Valuation allowance		(97,650)		(74,927)
Net deferred tax assets	$	—	$	—

Schedule of difference between U.S. federal corporate tax rate and Company effective tax rate


	2018		2017		2016
Expected federal income tax rate	(21.0)	%	(34.0)	%	(34.0)	%
Expiring credits and NOLs	1.0		—		—
Change in valuation allowance	37.9		0.9		42.2
Federal and state credits	(7.4)		(6.9)		(9.9)
State income taxes, net of federal benefit	(9.7)		(3.7)		(3.7)
Permanent differences	0.5		2.4		3.5
Rate change related to TCJA	—		41.9		—
Other	(1.3)		(0.6)		1.9
Effective tax rate	0.0	%	0.0	%	0.0	%

Supplemental Disclosure of Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2018

Supplemental Disclosure of Cash Flow Information

Schedule of supplemental disclosure of cash flow information


	Year Ended December 31,
	2018		2017		2016
	(In thousands)
Supplemental disclosure of cash flow information:
Cash paid for interest	$	9	$	42	$	72
Supplemental disclosure of non-cash financing and investing activities:
Non-cash property additions	$	—	$	150	$	425
Accrued financing transaction costs	$	101	$	17	$	166

Business and Organization (Details) $ in Thousands		1 Months Ended
Business and Organization (Details) $ in Thousands	Jul. 27, 2018	Jul. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Accumulated deficit			$ 664,375	$ 604,494
Cash and cash equivalents			$ 71,431	$ 112,629
Reverse stock split conversion ratio	0.125
BioCryst
Fixed expense reimbursement		$ 6,000

Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Jul. 31, 2018 USD ($)	Dec. 31, 2018 USD ($) segment Institution	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Accounting Policies
Reclassifications		$ 1,245	$ 1,128
Number of operating segments \| segment		1
Number of financial institutions \| Institution		1
Restricted cash and other assets		$ 9	324
Restructuring Charges		3,112
Cash and cash equivalents		71,431	112,629
Restricted Cash			311
Cash, cash equivalents and restricted cash		71,431	112,940	$ 80,978	$ 26,897
Stock-based compensation		5,674	10,720	6,847
Uncertain tax positions		0	0	$ 0
Prepaid expenses research and development		$ 600	$ 2,600
Practical Expedient, Financing Component		true
Employees
Accounting Policies
Stock options, vesting period		4 years
Board of Director
Accounting Policies
Stock options, vesting period		1 year
Minimum
Accounting Policies
Equipment depreciation period		3 years
Stock options, vesting period		3 years
Maximum
Accounting Policies
Equipment depreciation period		5 years
Stock options, vesting period		4 years
BioCryst
Accounting Policies
Fixed expense reimbursement	$ 6,000
Cambridge, Massachusetts facility operations
Accounting Policies
Restructuring Charges		$ 3,534
Cash payments		1,605
Cambridge, Massachusetts facility operations \| Contract Termination Costs
Accounting Policies
Restructuring Charges		225
Cash payments		$ 225

Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 29, 2016	Dec. 31, 2017
Accounting Standards Update 2016-02 \| Minimum
New Accounting Pronouncements or Change in Accounting Principle
Lease term	12 months
Additional Paid-in Capital
New Accounting Pronouncements or Change in Accounting Principle
Effect of recently adopted accounting pronouncements		$ 40
Accumulated Deficit
New Accounting Pronouncements or Change in Accounting Principle
Effect of recently adopted accounting pronouncements		$ (40)

Fair Value Measurements - Transfers Between Levels (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value Measurements
Fair value of assets transfers from level 1 to level 2	$ 0	$ 0	$ 0
Fair value of assets transfers from level 2 to level 1	0	0	0
Fair value of liabilities transfers from level 1 to level 2	0	0	0
Fair value of liabilities transfers from level 2 to level 1	0	0	0
Fair value of assets transfers into level 3	0	0	0
Fair value of assets transfers out of level 3	0	0	0
Fair value of liabilities transfers into level 3	0	0	0
Fair value of liabilities transfers out of level 3	$ 0	$ 0	$ 0

Fair Value Measurements - Assets and Liabilities at Fair Value on Recurring Basis (Details) - Fair value on a recurring basis - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Assets		$ 66,183
Total Liabilities	$ 62,985
Money market funds
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Money market funds	61,177	66,183
Other cash equivalents – commercial paper
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Other cash equivalents – commercial paper	1,808
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Assets		66,183
Total Liabilities	61,177
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) \| Money market funds
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Money market funds	61,177	$ 66,183
Significant Other Observable Inputs (Level 2)
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Total Liabilities	1,808
Significant Other Observable Inputs (Level 2) \| Other cash equivalents – commercial paper
Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
Other cash equivalents – commercial paper	$ 1,808

Property and Equipment - Net Property and Equipment at Cost (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment
Total property and equipment, at cost	$ 871	$ 5,932
Less: accumulated depreciation and amortization	664	4,460
Property and equipment, net	207	1,472
Leasehold improvements
Property, Plant and Equipment
Total property and equipment, at cost	104	671
Laboratory equipment and other
Property, Plant and Equipment
Total property and equipment, at cost	$ 767	$ 5,261

Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fixed asset impairments	$ 0.5	$ 0.0	$ 0.0
Depreciation and amortization expense on property and equipment	0.4	$ 0.7	$ 0.6
Cambridge, Massachusetts facility operations
Fixed asset impairments	$ 0.5

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Payroll and related costs	$ 1,962	$ 3,108
Clinical and nonclinical trial expenses	3,958	3,495
Professional and consulting fees	605	1,317
Restructuring expenses	1,147
Other	212	80
Total accrued expenses	7,884	8,000
Former Executive
Payroll and related costs	$ 700	600
Salary continuation severance benefits		900
Long-term portion of other liabilities		$ 300

Note Payable (Details) $ in Thousands	12 Months Ended	15 Months Ended
Note Payable (Details) $ in Thousands	Dec. 31, 2018 USD ($) installment	Dec. 31, 2015 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument
Current portion of note payable			$ 209
Advance received under loan and security agreement	$ 900
Oxford
Debt Instrument
Borrowing capacity under the loan and security agreement		$ 3,000
Minimum interest rate		7.50%
Number of debt instrument payments \| installment	36
Final payment of additional interest as a percentage of aggregate amount advanced	5.70%
Current portion of note payable			$ 200
Oxford \| Three months US LIBOR
Debt Instrument
Basis spread on fixed interest rate set at time of advance		7.27%
Description of interest rate	three-month U.S. Libor Rate

Stockholders' Equity - Preferred Stock (Details) - Series A Preferred Stock - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Class of Stock
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares designated	1,500,000	1,500,000
Annual percentage of dividend of preferred stock	1.00%
Preferred stock, shares outstanding	1,000	1,000
Series A preferred stock liquidation preference per share	$ 1
Series A Preferred stock conversion price per share	$ 272.00
Preferred stock, shares issued	1,000	1,000

Stockholders' Equity - Reverse Stock Split (Details)	Jul. 27, 2018 shares	Jun. 20, 2018 shares	Dec. 31, 2018 $ / shares shares	Nov. 30, 2018 $ / shares	Dec. 31, 2017 $ / shares shares
Class of Warrant or Right
Common stock, shares authorized		280,000,000	70,000,000		70,000,000
Reverse stock split conversion ratio	0.125
Multiplier used for the reverse stock split ratio		2
Number of shares to be exchange in the reverse stock split	8
Number of shares received in the reverse stock split	1
Common stock, par value \| $ / shares			$ 0.001		$ 0.001
Minimum
Class of Warrant or Right
Reverse stock split conversion ratio		0.25
Maximum
Class of Warrant or Right
Reverse stock split conversion ratio		0.125
"At-The-Market" Equity Program \| Common Stock
Class of Warrant or Right
Common stock, par value \| $ / shares				$ 0.001

Stockholders' Equity - Common Stock (Details) $ / shares in Units, $ in Millions						1 Months Ended	12 Months Ended
	Nov. 01, 2017 USD ($) shares	Oct. 30, 2017 USD ($) person $ / shares shares	Oct. 28, 2016 USD ($) person shares	Oct. 13, 2016 USD ($) $ / shares shares	May 05, 1998 $ / shares shares	Nov. 30, 2018 USD ($)	Dec. 31, 2018 $ / shares shares	Dec. 31, 2017 shares	Dec. 31, 2016 shares	Jun. 20, 2018 shares
Class of Stock
Common stock, shares authorized							70,000,000	70,000,000		280,000,000
Common stock, shares reserved for future issuance							7,063,444
Common Stock
Class of Stock
Stock issued (in shares)	625,000	4,166,666	153,155	3,125,000	149,960		25,000	22,000	15,000
Sale price of common shares subject to the liquidation put \| $ / shares					$ 128.00
Minimum closing sales price of common stock to issue termination notice to put holders \| $ / shares							$ 256.00
Price exceeds on number of days							20 days
Liquidation put shares no longer held by original holders							49,993
Shares held by put holders							4,472
Put Rights outstanding							0
Remaining shares of common stock subject to the liquidation put							95,494
Number of days underwriters have to purchase additional shares	30 days		30 days
Net proceeds from offering of common stock \| $	$ 53.7		$ 48.8
Stock price (in dollars per share) \| $ / shares		$ 12.00		$ 16.00
Gross proceeds from offering of common stock \| $		$ 50.0		$ 50.0
Common Stock \| Investor
Class of Stock
Number of people \| person			2
Common Stock \| Investor \| Board of Director
Class of Stock
Stock issued (in shares)			640,625
Common Stock \| Baker Bros. Advisors LP
Class of Stock
Stock issued (in shares)		1,000,000
Number of people \| person		2
"At-The-Market" Equity Program
Class of Stock
Percentage of fixed commission expense of gross proceeds of shares sold in ATM agreement						3.00%
"At-The-Market" Equity Program \| Common Stock
Class of Stock
Stock issued (in shares)							0
Net proceeds from offering of common stock \| $						$ 50.0

Stockholders' Equity - Common Stock Warrants (Details) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Class of Warrant or Right
Number of Warrants	2,768,882	5,469,673
Warrant exercise price per share	$ 0.08	$ 1.90
Expiration Date - May 2018
Class of Warrant or Right
Number of Warrants		2,700,791
Warrant exercise price per share		$ 3.76
Expiration Date - May 2020
Class of Warrant or Right
Number of Warrants	1,977,041	1,977,041
Warrant exercise price per share	$ 0.08	$ 0.08
Expiration Date - September 2020
Class of Warrant or Right
Number of Warrants	521,997	521,997
Warrant exercise price per share	$ 0.08	$ 0.08
Expiration Date - February 2021
Class of Warrant or Right
Number of Warrants	269,844	269,844
Warrant exercise price per share	$ 0.08	$ 0.08

Stockholders' Equity - Common Stock Warrant Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Class of Warrant or Right
Outstanding warrants, beginning of period	5,469,673
Outstanding warrants, end of period	2,768,882
Warrant exercise price per share	$ 0.08	$ 1.90
Expiration Date - November 2017
Class of Warrant or Right
Exercised (1)	(2,700,791)
Warrant exercise price per share	$ 3.76

Alliance Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
Alliance Revenue (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Alliance Revenue
Alliance revenue	$ 662	$ 902	$ 16,199
Gsk Collaboration
Alliance Revenue
Alliance revenue	517	863	1,111
Vivelix Collaboration
Alliance Revenue
Alliance revenue	56	14	15,000
Other
Alliance Revenue
Alliance revenue	$ 89	25	$ 88
Additional Research Services
Alliance Revenue
Deferred revenue recognized during the period		$ 100

Alliance Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Alliance Revenue
Contract liabilities, beginning of period	$ 566	$ 1,263
Additions		50
Deductions	$ (566)	(747)
Contract liabilities, end of period		$ 566

Collaboration and License Agreements (Details) $ in Thousands	1 Months Ended			3 Months Ended	12 Months Ended
	Nov. 30, 2016 USD ($) director	Nov. 30, 2015 USD ($) person	May 31, 2014 USD ($)	Jun. 30, 2017	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Deferred revenue						$ 566
Number of board director seats held \| director	2
Total number of board of director seats \| director	7
Number of common board of directors \| director	0
Expenses					$ 61,618	67,369	$ 54,956
Baker Bros. Advisors LP
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Common stock ownership percentage under the collaboration agreement	7.00%
Abbott Molecular
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Research period			5 years
Paid or expects to pay for external development expenses			$ 6,700
Expenses					$ 400	$ 800	$ 400
Vivelix
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Number of board director seats held \| director	2
Total number of board of director seats \| director	4
Number of common board of directors \| director	0
Research period	3 years
Vivelix \| Up-front Payment Arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Upfront payment received under collaboration agreement	$ 15,000
Vivelix \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	140,000
Vivelix \| Maximum \| Back-up compounds
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	52,500
Vivelix \| Maximum \| Development and Regulatory Milestones
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	65,000
Vivelix \| Maximum \| Development and Regulatory Milestones \| Back-up compounds
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	35,000
Vivelix \| Maximum \| Sales Milestones
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	75,000
Vivelix \| Maximum \| Sales Milestones \| Back-up compounds
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments	$ 17,500
GSK Agreement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Number of optional additional targets \| person		2
Number of development candidates \| person		1
Maximum royalty percentage on net sales					5.00%
Research period		36 months
Revised, increased research period				36 months
GSK Agreement \| Up-front Payment Arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Upfront payment received under collaboration agreement		$ 2,500
GSK Agreement \| License, Research, Clinical Development and Commercialization
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments		100,000			$ 20,000
GSK Agreement \| Research and Development Plans and Designation of Development Candidates
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments		9,000			1,000
GSK Agreement \| Clinical and Commercial Milestones
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payments		$ 89,000			$ 17,000
GSK Agreement \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Anticipated initial collaboration term		4 years
GSK Agreement \| Minimum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Anticipated initial collaboration term		2 years

Restructuring Costs (Details) $ in Thousands	1 Months Ended	12 Months Ended
Restructuring Costs (Details) $ in Thousands	Jul. 31, 2018 employee	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Restructuring costs
Restructuring Charges		$ 3,112
Fixed asset impairments		500	$ 0	$ 0
Long-term portion of restructuring accrual		11	$ 613
Cambridge, Massachusetts facility operations
Restructuring costs
Number of positions eliminated \| employee	18
Percentage of positions eliminated	40.00%
Number of positions eliminated since inception \| employee	15
Restructuring Charges		3,534
Fixed asset impairments		500
Non-cash gain due to write-off of remaining deferred rent liability		$ 400

Restructuring Costs - Accrual Rollforward (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Restructuring costs
Charges incurred (1)	$ 3,112
Cambridge, Massachusetts facility operations
Restructuring costs
Charges incurred (1)	3,534
Cash payments	(1,605)
Non-cash settlements	(698)
Adjustments	(84)
Accrued restructuring balance, end of period	1,147
Cambridge, Massachusetts facility operations \| Employee Severance and Benefits
Restructuring costs
Charges incurred (1)	2,635
Cash payments	(1,380)
Non-cash settlements	(24)
Adjustments	(84)
Accrued restructuring balance, end of period	1,147
Cambridge, Massachusetts facility operations \| Contract Termination Costs
Restructuring costs
Charges incurred (1)	225
Cash payments	(225)
Cambridge, Massachusetts facility operations \| Asset Impairments
Restructuring costs
Charges incurred (1)	674
Non-cash settlements	$ (674)

Stock-Based Compensation - Equity Incentive Plans (Details) - shares		12 Months Ended
	Jul. 26, 2013	Dec. 31, 2018	Dec. 31, 2017
Class of Stock
Common stock, shares reserved for future issuance		7,063,444
Minimum option exercise price as a percentage of market value of common stock		100.00%
Common stock options outstanding		3,304,531	2,675,184
Options outstanding under earlier plans		464,247
Grant of inducement stock option		393,750
2013 Stock Incentive Plan
Class of Stock
Maximum number of additional common shares	868,372
Maximum number of shares that may be granted to any one individual in single year		187,500
Common stock options outstanding		2,446,534
Common shares available for grant	3,153,057	957,496
Minimum
Class of Stock
Stock options, vesting period		3 years
Minimum \| 2013 Stock Incentive Plan
Class of Stock
Stock options, vesting period		1 year
Maximum
Class of Stock
Stock options, vesting period		4 years
Stock options, expiration period		10 years
Maximum \| 2013 Stock Incentive Plan
Class of Stock
Stock options, vesting period		4 years
Stock options, expiration period		10 years

Stock-Based Compensation - Employee Stock Purchase Plans (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
1995 Employee Stock Purchase Plan \| Maximum
Class of Stock
Common stock shares authorized for issuance under stock purchase plan	62,500
2017 Employee Stock Purchase Plan
Class of Stock
Maximum percentage of total combined voting power or value of the stock of the Company after the grant		5.00%
Common shares available for grant		32,294
2017 Employee Stock Purchase Plan \| Maximum
Class of Stock
Common stock shares authorized for issuance under stock purchase plan		62,500
Employee Stock Purchase Plans
Class of Stock
Minimum percentage in payroll of deduction base salary to acquire shares of common stock	1.00%
Maximum percentage in payroll of deduction base salary to acquire shares of common stock	10.00%
Percentage of fair market value of common stock for the ESPP option price	85.00%
Annual maximum a participant may purchase under the employee stock purchase plan	$ 25,000
Common stock share issued	24,824	21,869	15,182
Defined Contribution Plan, Cost		$ 100,000	$ 200,000
Employee Stock Purchase Plans \| Maximum
Class of Stock
Subsequent offering period as established by the compensation committee	12 months
Defined Contribution Plan, Cost				$ 100,000

Stock-Based Compensation - Accounting for Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of share-based compensation expense	15.00%
Weighted average grant date fair value of options granted during the period (per share)	$ 7.00	$ 8.08	$ 14.00
Stock-based compensation	$ 5,674	$ 10,720	$ 6,847
Research and development
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	1,851	6,494	2,719
Research and development \| Former Executive
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation		4,300
Research and development \| Employee Stock Purchase Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	71	96	53
Research and development \| Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	1,780	6,398	2,666
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	3,799	4,226	4,128
General and administrative \| Employee Stock Purchase Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	48	63	50
General and administrative \| Equity Incentive Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	3,751	$ 4,163	$ 4,078
Restructuring costs
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	24
Restructuring costs \| Employee Stock Purchase Plans
Share-based Compensation Arrangement by Share-based Payment Award
Stock-based compensation	$ 24

Stock-Based Compensation - Assumptions Used in Determining Fair Value of Stock Options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Options to purchase common stock granted to employees and directors	1,136,874
Average risk free interest rate	2.50%	1.70%	1.40%
Dividend rate	0.00%
Expected lives (years)	3 years 8 months 12 days	4 years	4 years 2 months 12 days
Expected volatility	74.00%	86.00%	93.00%
Weighted average exercise price of options granted during the period (per share)	$ 12.63	$ 12.96	$ 21.12

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stockholders' Equity
Options, Outstanding, Beginning Balance	2,675,184
Granted	1,136,874	527,039	418,281
Exercised	(858)
Forfeited	(279,444)
Expired	(227,225)
Options, Outstanding, Ending Balance	3,304,531	2,675,184
Exercisable, Ending Balance	1,976,059
Weighted Average Exercise Price, Beginning Balance	$ 23.52
Granted, Weighted Average Exercise Price	12.63	$ 12.96	$ 21.12
Exercised, Weighted Average Exercise Price	12.77
Forfeited, Weighted Average Exercise Price	18.15
Expired, Weighted Average Exercise Price	49.58
Weighted Average Exercise Price, Ending Balance	18.41	$ 23.52
Exercisable, Weighted Average Exercise Price	$ 21.88
Outstanding, Ending balance, Weighted Average Remaining Contractual Term	6 years 7 months 6 days	6 years 6 months
Exercisable Ending Balance, Weighted Average Remaining Contractual Term	5 years
Outstanding, Intrinsic Value, Ending Balance		$ 5,805
Fair value of options, vested	$ 6,000	$ 7,300	$ 6,900
Unrecognized compensation cost related to nonvested stock-based compensation	$ 7,300
Weighted average remaining period over which unrecognized compensation expense will be recognized	2 years 7 months 6 days

Commitments and Contingencies - Rent Expense and Lease Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Lease Commitments
Rent expense, including real estate taxes	$ 1.7	$ 2.4	$ 1.9
Exton Facility
Lease Commitments
Term of lease commitment (years)	3 years

Commitments and Contingencies - Future Minimum Commitments Under Lease Agreements (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Commitments and Contingencies
2019	$ 209
2020	89
Total	$ 298

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
TCJA of 2017 provisional income tax expense		$ 27,600
Period over which NOL and tax credit carryforward limitations are applied	1 year
Period of cumulative changes in ownership	3 years
Cumulative changes in ownership	50.00%
Unrecognized tax benefits from uncertain tax	$ 0	$ 0	$ 0
Period over which material changes in unrecognized tax positions are not expected	12 months
Federal
Income Taxes
Cumulative net operating loss carryforwards	$ 253,800
Percentage of taxable income that can be used to offset future taxable periods as a result of the TCJA	80.00%
Unlimited carryforward	$ 56,400
Expired and unused tax credit carryforward	3,000
Tax credit carryforwards	17,000
State
Income Taxes
Cumulative net operating loss carryforwards	263,500
Tax credit carryforwards	$ 1,900
State \| Massachusetts
Income Taxes
Carryforward term	20 years
Potential amount that may expire in a future period	$ 21,000
State \| Pennsylvania
Income Taxes
Carryforward term	20 years

Income Taxes - Components of the Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Operating loss carryforwards	$ 70,509	$ 53,276
Tax credit carryforwards	18,514	14,099
Other	8,627	7,552
Deferred Tax Assets, Gross	97,650	74,927
Valuation allowance	$ (97,650)	$ (74,927)

Income Taxes - Difference Between U.S. Federal Corporate Tax Rate and Company's Effective Tax Rate (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Expected federal income tax rate	(21.00%)	(34.00%)	(34.00%)
Expiring credits and NOLs	1.00%
Change in valuation allowance	37.90%	0.90%	42.20%
Federal and state credits	(7.40%)	(6.90%)	(9.90%)
State income taxes, net of federal benefit	(9.70%)	(3.70%)	(3.70%)
Permanent differences	0.50%	2.40%	3.50%
Rate change related to TCJA		41.90%
Other	(1.30%)	(0.60%)	1.90%
Effective tax rate	0.00%	0.00%	0.00%
Maximum
Expected federal income tax rate		(35.00%)

Employee Benefit Plan (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Millions	Aug. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Benefit Plan
Maximum employer match as a percentage of base pay	5.00%	3.00%
Percentage the employer matches of employee contributions	100.00%	50.00%
Portion of the employee's base salary that the Company matches	5.00%	6.00%
Employer matching contributions to the plan		$ 0.2	$ 0.3	$ 0.3

Related Party Transactions - Overview of Related Parties (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Related Party Transactions
Number of Warrants	2,768,882	5,469,673
Exercise price of warrants	$ 0.08	$ 1.90
Common stock issued in lieu of board fees	13,654	7,867	12,654
Proceeds from issuance of common stock in lieu of director board and committee fees	$ 0.1	$ 0.1	$ 0.2
Common Stock \| Board of Director
Related Party Transactions
Ownership percentage	18.00%
Pillar I
Related Party Transactions
Number of warrants exercised			171,250
Proceeds from exercise of warrants			$ 2.0
Pillar II
Related Party Transactions
Number of warrants exercised		629,257
Proceeds from exercise of warrants		$ 3.5
Pillar Investment Entities \| Common Stock
Related Party Transactions
Ownership percentage	9.00%
Besancon
Related Party Transactions
Number of warrants exercised		364,752
Proceeds from exercise of warrants	$ 0.6	$ 1.9
Exercise price of warrants	$ 3.76
Shares issued on exercise of warrants during the period	150,000
Baker Bros. Advisors LP
Related Party Transactions
Number of warrants exercised	2,700,791
Proceeds from exercise of warrants	$ 9.5
Exercise price of warrants	$ 3.76
Baker Bros. Advisors LP \| Pre-funded Warrants
Related Party Transactions
Number of Warrants	2,768,882
Exercise price of warrants	$ 0.08

Net Loss per Common Share (Details) - shares	12 Months Ended
Net Loss per Common Share (Details) - shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net Loss per Common Share
Total antidilutive securities	6,075,339	8,145,188	8,714,113

Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Supplemental disclosure of cash flow information:
Cash paid for interest	$ 9	$ 42	$ 72
Supplemental disclosure of non-cash financing and investing activities:
Non-cash property additions		150	425
Accrued financing transaction costs	$ 101	$ 17	$ 166

Subsequent Events (Details) - Subsequent Events - USD ($) $ in Millions		3 Months Ended
	Mar. 04, 2019	Mar. 31, 2019	Mar. 06, 2019
"At-The-Market" Equity Program
Subsequent Events
Issuance of common stock (in shares)		425,610
Net proceeds from offering of common stock		$ 1.3
Lincoln Park Capital Fund, LLC (“Investor”)
Subsequent Events
Issuance of common stock (in shares)	269,749
Value of shares investor has committed to purchase from time to time at Company’s sole discretion	$ 35.0
Shares issued			0