Anthera Pharmaceuticals, Inc. (“the Company”) is a biopharmaceutical company focused on advancing the development and commercialization of innovative medicines that benefit patients with unmet medical needs. The Company currently has two compounds in development, Sollpura and blisibimod. The Company licensed Sollpura from Eli Lilly & Co (“Eli Lilly”) in July 2014. Sollpura is a novel non-porcine investigational Pancreatic Enzyme Replacement Therapy (“PERT”) intended for the treatment of patients with Exocrine Pancreatic Insufficiency (“EPI”), often seen in patients with cystic fibrosis and other conditions. The Company licensed blisibimod from Amgen, Inc. (“Amgen”) in December 2007. Blisibimod targets B-cell activating factor or (“BAFF”) which has been shown to be elevated in a variety of B-cell mediated autoimmune diseases, including Immunoglobulin A nephropathy, or IgA nephropathy, systemic lupus erythematosus (“SLE”), or lupus, lupus nephritis, and others.
The Company’s planned principal operations are acquiring product and technology rights, raising capital and performing research and development activities. The Company is currently conducting research and development activities to treat autoimmune diseases and EPI. The Company’s activities are subject to significant risks and uncertainties. Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent on future events, including, among other things, its ability to access potential markets; secure financing; develop a customer base; attract, retain and motivate qualified personnel; and develop strategic alliances.
Since inception in 2004, the Company has funded its operations through equity offerings, private placements of convertible debt, debt financing, equity investment and cost reimbursement from a former collaborative partner, Zenyaku Kogyo Co., Ltd. (“Zenyaku”), and a research award from Cystic Fibrosis Foundation Therapeutics Incorporated ("CFFT"). On April 21, 2016, the Company entered into an At Market Issuance Sales Agreement (“ATM Agreement”) with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) to create an at-the-market equity program under which the Company from time to time may offer and sell shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $25 million through H.C. Wainwright, as agent, which was amended and reduced to $23 million on March 14, 2017.
In September 2016, the Company entered into a subscription agreement with certain institutional investors pursuant to which it sold 17,000 units for a purchase price of $1,000 per unit, with each unit consisting of one share of the Company’s Series X convertible preferred stock, which are convertible into shares of the Company’s common stock, and warrants to purchase up to a number of shares of common stock equal to 25% of the number of shares of common stock issuable upon conversion of the of Series X convertible preferred stock, in a registered direct offering. The offering resulted in gross proceeds of $17.0 million.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or GAAP.
The Company has evaluated events and transactions subsequent to the balance sheet date and has disclosed all events or transactions that occurred subsequent to the balance sheet date but prior to filing this Annual Report on Form 10-K that would require recognition or disclosure in the Consolidated Financial Statements.
2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Revenue Recognition
During 2015, the Company had a collaboration with Zenyaku Kogyo Co., Ltd. (“Zenyaku”) which provided for various types of payments from Zenyaku, including development milestones, sales milestone, royalty, and reimbursement for a portion of the Company’s internal and external costs. All payments from Zenyaku are nonrefundable. The collaborative arrangement was on a best-efforts basis, did not require scientific achievement as a performance obligation and provided for payment to be made when costs were incurred or services were performed. The collaboration was terminated on January 7, 2016 pursuant to a termination notice from Zenyaku to the Company.
With respect to the collaborative arrangement with Zenyaku, the Company recognized revenue in accordance with FASB Accounting Standards Codification, or ASC 605 “
Revenue Recognition
”, subtopic ASC 605-25 “
Revenue with Multiple Element Arrangements
” and subtopic ASC 605-28 “
Revenue Recognition-Milestone Method
”, which provide accounting guidance for revenue recognition for arrangements with multiple deliverables and guidance on defining the milestone and determining when the use of the milestone method of revenue recognition for research and development transactions is appropriate, respectively. For multiple-element arrangements, each deliverable within a multiple deliverable revenue arrangement is accounted for as a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.
The deliverables under the Zenyaku agreement had been determined to be a single unit of accounting and as such any license fees received were recorded as deferred revenue and recognized ratably over the term of the estimated performance period under the agreement, which was the product development period. As a result of an early termination of the Zenyaku agreement, the Company revised the amortization period of its deferred revenue to correspond with the shortened collaboration period in the third quarter of 2015 and had fully amortized its deferred revenue as of January 7, 2016.
For the collaborative research activities, the Company was entitled to reimbursement from Zenyaku for its internal personnel cost at a pre-determined full time equivalent (“FTE”) rate. Revenue related to FTE services was recognized as research services were performed over the related performance periods. The Company was required to perform research and development activities as specified in the collaboration agreement. The payments received were not refundable and were based on a contractual reimbursement rate per FTE working on the project. Reimbursement for FTE costs was recorded as collaborative revenue as incurred.
Use of Estimates
The preparation of these consolidated financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including critical accounting policies or estimates related to clinical trial accruals, tax provision, stock-based compensation, warrant liabilities, and computation of beneficial conversion features. The Company bases its estimates on historical experience and on various other market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates.
Financial Instruments with Characteristics of Both Equity and Liabilities
The Company has issued certain financial instruments, including warrants to purchase common stock, which have the characteristics of both liability and equity. Financial instruments such as warrants that are evaluated to be classified as liabilities are fair valued upon issuance and are remeasured at fair value at subsequent reporting periods with the resulting change in fair value recorded in other income/(expense). The fair value of warrants is estimated using the valuation models that require the input of subjective assumptions including stock price volatility and expected life. As of December 31, 2016, all warrants have been reclassified from liability to equity.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with an original maturity or remaining maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of cash currencies and money market funds, for which the carrying amounts are reasonable estimates of fair value. Cash equivalents are recognized at fair value.
Property and Equipment—Net
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed over the estimated useful lives of the respective assets, which range from three to five years, using the straight-line method. Repairs and maintenance costs are expensed as incurred. Leasehold improvements are stated at cost and amortized using the straight-line method over the term of the lease or the life of the related asset, whichever is shorter.
Long-Lived Assets
The Company’s long-lived assets and other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Through December 31, 2016, the Company had not experienced impairment losses on its long-lived assets.
Accrued Clinical Studies
Expenses related to clinical studies are based on estimates of the services received and efforts expended pursuant to contracts with many research institutions, clinical research organizations and other service providers that conduct and manage clinical studies on our behalf. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Generally, these agreements set forth the scope of work to be performed at a fixed fee or unit price. Payments under the contracts are mainly driven by time and materials incurred by these service providers. Expenses related to clinical studies are generally accrued based on time and materials incurred by the service providers and in accordance with the contracts. This process involves reviewing open contracts and purchase orders, communicating with applicable personnel to identify services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The majority of service providers invoice at least monthly in arrears for services performed. The Company periodically confirms the accuracy of estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued clinical expenses include:
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•
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fees paid to Contract Research Organizations, or CROs, in connection with clinical studies;
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•
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fees paid to investigative sites in connection with clinical studies;
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•
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fees paid to contract manufacturers in connection with the production of clinical study materials; and
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•
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fees paid to vendors in connection with preclinical development activities.
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Research and Development Costs
Research and development expenses consist of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by CROs, materials and supplies, licenses and fees, and overhead allocations consisting of various administrative and facilities related costs. Clinical study expenses are further separated into two main categories: clinical development and pharmaceutical development. Clinical development costs include costs for Phase 1, 2 and 3 clinical studies. Pharmaceutical development costs consist of expenses incurred in connection with manufacturing campaigns, product formulation and chemical analysis.
The Company charges research and development costs, including clinical study costs, to expense when incurred. Clinical study costs are a significant component of research and development expenses. All of the Company’s clinical studies are performed by third-party CROs. The Company accrues costs for clinical studies performed by CROs based on patient enrollment activities and adjusts the estimates, if required, based upon the Company’s ongoing review of the level of effort and costs actually incurred by the CROs. The Company monitors levels of performance under each significant contract, including the extent of patient enrollment and other activities through communications with the CROs, and adjusts the estimates, if required, on a monthly basis so that clinical expenses reflect the actual effort expended by each CRO.
All material CRO contracts are terminable by the Company upon written notice and the Company is generally only liable for actual effort expended by the CROs and certain noncancelable expenses incurred at any point of termination.
Income Taxes
The Company accounts for income taxes in accordance with the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.
Segments
The Company operates in only one segment. Management uses cash flow as the primary measure to manage its business and does not segment its business for internal reporting or decision-making. The Company’s long-lived tangible assets consist of mainly machinery purchased by the Company and installed by its contract manufacturing vendors. The machinery are used for all of the Company’s product manufacturing campaigns.
Stock-Based Compensation
The Company uses the Black-Scholes option pricing model as the method for determining the estimated fair value for all stock-based awards, including employee stock options, and rights to purchase shares under the Company’s Employee Stock Purchase Plan, and recognizes the costs in its consolidated financial statements over the employees’ requisite service period. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards, including the option’s expected term and the price volatility of the underlying stock. Additionally, the Company is required to include an estimate of the number of awards that will be forfeited in calculating compensation costs, which are recognized over the requisite service period of the awards on a straight-line basis.
Expected Term
—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method, which is computed as the arithmetic mean of weighted vested period and contractual life.
Expected Volatility
—Expected volatility is estimated using the Company’s historical stock prices.
Expected Dividend
—The Black-Scholes option pricing model calls for a single expected dividend yield as an input and the Company has never paid dividends and has no plans to pay dividends.
Risk-Free Interest Rate
—The risk-free interest rate used in the Black-Scholes option pricing method is based on the U.S. Treasury zero-coupon issues in effect at the time of grant for periods corresponding with the expected term of option.
Estimated Forfeitures
—The estimated forfeiture rate is determined based on the Company’s historical forfeiture rates to date. The Company monitors actual forfeitures and periodically updates the estimate.
Equity instruments issued to nonemployees are recorded at their fair value as determined in accordance with guidance provided by the Financial Accounting Standard Board (“FASB”) and are periodically revalued as the equity instruments vest and recognized as expense over the related service period.
Recent Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09,
Revenue from Contracts with Customers
(ASC Topic 606). The standards update outlines a single comprehensive model for entities to utilize to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that will be received in exchange for the goods and services. Additional disclosures will also be required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In 2016, the FASB issued accounting standards updates to address implementation issues and to clarify the guidance for identifying performance obligations, licenses and determining if a company is the principal or agent in a revenue arrangement. In August 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
, which deferred the effective date of ASU 2014-09. The mandatory adoption date of ASC 606 for the Company is now January 1, 2018. There are two methods of adoption allowed, either a “full” retrospective adoption or a “modified” retrospective adoption. The Company expects to adopt the standard on a modified retrospective basis applying the new rules to all contract existing at January 1, 2018, with an adjustment for the cumulative effect of all changes recognized in beginning retained earnings.
Given that the Company is not currently generating revenue and most likely will not be generating revenue at the date of adoption, the adoption of this guidance will not materially impact our consolidated financial statements.
.
In September 2014, the FASB issued Accounting Standards Update No. 2014-15
, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as Going Concern
(“ASU 2014-15”). ASU 2014-15 defines when and how companies are required to disclose going concern uncertainties, which must be evaluated each interim and annual period. Specifically, the ASU requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the financial statements are issued (or available to be issued). If substantial doubt exists, certain disclosures are required; the extent of those disclosures depends on an evaluation of management’s plans (if any) to mitigate the going concern uncertainty. The guidance is effective for fiscal years ending after December 15, 2016 and for interim periods within that fiscal year. The Company has adopted this guidance during the year ended December 31, 2016.
In November 2015, the FASB issued guidance on the classification of deferred taxes, ASU No. 2015-17 (“ASU 2015-17”),
Balance Sheet Classification of Deferred Taxes.
ASU 2015-17 eliminates the guidance in Topic 740,
Income Taxes
, that required an entity to separate deferred tax liabilities and assets between current and noncurrent amounts in a classified balance sheet. The amendments require that all deferred tax liabilities and assets of the same tax jurisdiction or a tax filing group, as well as any related valuation allowance, be offset and presented as a single amount in a classified balance sheet. The amendments are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted as of the beginning of any interim period or annual reporting period. The Company adopted this guidance during the year ended December 31, 2016.
In February 2016, the FASB issued ASU No. 2016-02
Leases
(Topic 842). ASU 2016-02 impacts any entity that enters into a lease with some specified scope exceptions. This new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The guidance updates and supersedes Topic 840, Leases. For public entities, ASU 2016-02 is effective for fiscal years, and interim periods with those years, beginning after December 15, 2018, and early adoption is permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We do not expect the adoption of this standard to have a material impact on our financial statements.
In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, although early adoption is permitted. The Company continues to evaluate ASU 2016-09 and at the current time has not quantified the effects adoption of the new standard will have on its financial statements.
In March 2015, the Company received a research award of up to $3 million from the CFFT for the Company's development of Sollpura. The Company retains the right to develop and commercialize Sollpura and will owe royalties to CFFT on net sales of any drug candidate approved and commercialized under the collaboration. The funding is disbursed by CFFT to the Company upon the Company’s achievement of milestones specified in the award agreement. At its discretion, the Company may choose to fund a particular stage of the Sollpura development plan without CFFT funds. Any CFFT funds not expended on the development program of Sollpura must be returned to CFFT and, upon such return, the amounts of such returned funds will not be included as part of the research award for the purpose of calculating royalties or other amounts owed by the Company to CFFT. To the extent CFFT provides or makes available any information, expertise, know-how or other intellectual property related to cystic fibrosis or the treatment, prevention or cure there-of (“CFFT Know-How”) to the Company, CFFT grants to the Company a non-exclusive, transferrable, sublicensable, worldwide rights and license under all of CFFT’s rights in such CFFT Know-How to assist the Company to research, develop, commercialize, make or have made, use, sell, have sold, offer for sale, import, export and otherwise exploit the product.
In consideration for CFFT’s research award and any licenses of intellectual property granted by CFFT, the Company agreed to pay royalties to CFFT as follows: i) a one-time royalty in an amount equal to five times the actual award, payable in three installments between the first and second anniversaries of the first commercial sale of a product; ii) a one-time royalty in an amount equal to the actual award after net product sales reaches $100 million; and iii) in the event of a license, sale or other transfer of the product or a change of control transaction prior to the commercial sale of the product, a milestone payment equal to three times the actual award.
For the year ended December 31, 2016, the Company recognized $0.3 million of research award from CFFT in connection with achieving certain milestones specified in the award agreement. The amount has been recognized as a component of operating expense, which offsets total operating expense.
4.
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FAIR VALUE OF INSTRUMENTS
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Pursuant to the accounting guidance for fair value measurement and its subsequent updates, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a hierarchy for inputs used in measuring fair value that minimizes the use of unobservable inputs by requiring the use of observable market data when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on active market data. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.
The fair value hierarchy is broken down into the three input levels summarized below:
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Level 1
—Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by us at the reporting date. Examples of assets and liabilities utilizing Level 1 inputs are certain money market funds, U.S. Treasuries and trading securities with quoted prices on active markets.
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•
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Level 2
—Valuations based on inputs other than the quoted prices in active markets that are observable either directly or indirectly in active markets. Examples of assets and liabilities utilizing Level 2 inputs are U.S. government agency bonds, corporate bonds, commercial paper, certificates of deposit and over-the-counter derivatives.
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•
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Level 3
—Valuations based on unobservable inputs in which there are little or no market data, which requires the Company to develop its own assumptions.
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The following tables present the Company’s fair value hierarchy for all its financial assets (including those in cash and cash equivalents), in thousands, by major security type measured at fair value on a recurring basis as of December 31, 2016 and 2015 (in thousands):
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December 31, 2016
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Estimated
Fair Value
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Level 1
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Level 2
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Level 3
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Assets:
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Money market funds
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$
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19,416
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$
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19,416
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$
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—
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$
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—
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December 31, 2015
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Estimated
Fair Value
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Level 1
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Level 2
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Level 3
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Assets:
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Money market funds
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$
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45,156
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$
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45,156
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$
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—
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$
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—
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The Company used quoted market prices to determine the fair value of cash equivalents, which consist of money market funds and therefore these are classified in Level 1 of the fair value hierarchy. There were no transfers between Level 1, Level 2 or Level 3 for the year ended December 31, 2016.
5
.
WARRANT LIABILITY
Pursuant to the subscription agreement for the sale of convertible preferred stock entered in September 2016, the Company issued common stock warrants to the institutional investors. Each warrant has an exercise price equal to 120% of the conversion price of the Series X convertible preferred stock. The warrants are exercisable after March 13, 2017 and expire on September 13, 2019. The Company accounted for the warrants under
ASC Topic 815,
Derivatives and Hedging
(“ASC 815”). The fair value of the warrants are measured and recorded as a liability because the strike price and number of shares underlying the warrants were unknown upon issuance. At the end of each reporting period, the changes in fair value during the period are recorded as a component of other income (expense) in the consolidated statement of operations.
The initial fair value of the liability associated with these warrants was $3.7 million. On November 16, 2016, five days f
ollowing the announcement of the Company’s
CHABLIS-SC1 clinical study
, the conversion price of the Series X convertible preferred stock became fixed. As a result, the warrant exercise price was fixed at $2.36 and the number of shares underlying the warrants was fixed at 2,158,236.
The Company remeasured the fair value of the warrants at $1.9 million as of November 16, 2016 and recorded the reduction in fair value subsequent to the issuance date of $1.7 million as part of non-operating income in its consolidated statements of operations. In addition, as the exercise price became fixed, the warrant liability was reclassified to additional paid-in capital.
The following table summarizes the change of warrant liability (in thousands):
Fair value upon issuance on September 14, 2016
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$
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3,678
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Change in fair value through November 16, 2016
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(1,744
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)
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Balance reclassified to additional paid-in capital
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$
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1,934
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The exercise price and number of shares of common stock underlying the warrants were not determinable upon issuance and as such the estimated fair value was determined by using the Monte Carlo simulation model on September 14, 2016. On November 16, 2016, the Company estimated the fair value of the warrants using the Black-Scholes valuation model as the exercise price and number of shares of common stock underlying the warrants were fixed. Inputs used in the valuation on each date were as follows:
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November 16,
2016
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September 14,
2016
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Common stock price
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$
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1.89
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$
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3.20
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Exercise price
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$
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2.36
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$
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2.95
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Expected Volatility
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84
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%
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120
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%
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Dividend Yield
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0
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%
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0
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%
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Risk-Free Interest Rate
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1.22
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%
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0.90
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%
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Expected Term (years)
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2.82
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3
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For the fair value determination on November 16, 2016, the Company computed the expected volatility based on daily pricing observations for a period that corresponds to the expected term of the warrants. For the fair value determination on September 14, 2016, the Company determined the expected volatility based on both historical and implied volatilities. Historical volatility was computed using daily pricing observations for a period that corresponds to the expected term of the warrants while implied volatility was computed using publicly traded options of the Company as well as the Company’s peer companies. The Company believes this method produces an estimate that is representative of its expectations of future volatility over the expected term of these warrants. The expected term for both valuation dates are based on the remaining contractual term of the warrants. The risk-free interest rates are the U.S. Treasury bond rate as of the valuation dates.
See Footnote 15 – “Subsequent Event” for warrants issued after December 31, 2016 and before the date of this report.
6.
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PROPERTY AND EQUIPMENT
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Property and equipment are comprised of the following (in thousands):
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December 31,
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2016
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2015
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Laboratory equipment
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$
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2,013
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$
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1,312
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Computer and software
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115
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50
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Office furniture and fixture
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140
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140
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Leasehold improvements
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206
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206
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Total property and equipment
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2,474
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1,708
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Less accumulated depreciation and amortization
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(1,711
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)
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(1,445
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)
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Property and equipment, net
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$
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763
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$
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263
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For the years ended December 31, 2016, 2015, and 2014, the Company recorded $266,000, $285,000, and $344,000 respectively, in depreciation and amortization expense.
7.
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COLLABORATIVE ARRANGEMENT
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Zenyaku Kogyo Co., Ltd.
In December 2014, the Company entered into an exclusive license agreement with Zenyaku (“Zenyaku Agreement”) for the development and commercialization of blisibimod in Japan and potentially other countries throughout Asia, while the Company retained full development and commercialization rights of blisibimod for all other global territories including North America and the European Union.
Under the terms of the Zenyaku Agreement, the Company had the right to receive an upfront and forgivable loan of $7.0 million, milestone payments of up to $22.0 million contingent upon the achievement of certain regulatory and commercial sales milestones, and up to $15.0 million in sales of the Company’s common stock at a purchase price equal to 1.3 times the volume weighted average price of the Company’s common stock for 20 trading days prior to the delivery of the closing notice (the “Premium Purchase Price”). Not all the conditions required to secure the forgivable loan were met and therefore, the Company had not exercised its right to receive the loan from Zenyaku. During 2015, the Company had exercised its right with respect to $11.0 million of the $15.0 million in equity puts to Zenyaku, of which $9.0 million was received through the issuance of 2,946,810 shares of common stock and the Company does not expect to receive the remaining $2.0 million.
Under the terms of the Zenyaku Agreement, Zenyaku was responsible for all development, marketing and commercialization costs in Japan and would reimburse Anthera for i) 100% of blisibimod development cost in Japan for IgA nephropathy; ii) 25% of global blisibimod development cost outside of Japan for IgA nephropathy; iii) a percentage of Anthera’s personnel costs at a pre-determined full-time equivalent (“FTE”) rate and iv) exclusive purchase of blisibimod clinical drug supplies at cost and blisibimod commercial drug products from the Company at a premium to the Company’s manufacturing cost.
In September 2015, Zenyaku provided the Company a notice of its intent to terminate the Zenyaku Agreement, effective January 7, 2016 (“Termination Notice”). The termination was “at will” and the Termination Notice alleged no breach of the Zenyaku Agreement by the Company. There were no termination penalties incurred by the Company in connection with the early termination of the Zenyaku Agreement by Zenyaku. No patients had been enrolled in any blisibimod clinical studies in the Zenyaku territory and Zenyaku. The Company regained global rights of blisibimod on January 7, 2016. As a result of the Termination Notice, the Company changed the amortization period of its deferred revenue and has fully amortized its deferred revenue as of January 7, 2016.
8.
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COMMITMENTS AND CONTINGENCIES
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Leases
The Company leases its main operating facility in Hayward, California. The lease is for approximately 14,000 square feet and the lease agreement will expire in September 2017. In April 2016, the Company leased its second operating facility in Pleasanton, California. The lease is for approximately 1,200 square feet and the lease agreement will expire in May 2019. For the years ended December 31, 2016, 2015 and 2014, the Company recognized $195,000, $222,000 and $244,000, respectively, in rental expense.
As of December 31, 2016, future minimum lease payments under non-cancellable operating leases were as follows (in thousands):
2017
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$
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209
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|
2018
|
|
|
33
|
|
2019
|
|
|
14
|
|
Total
|
|
$
|
256
|
|
Other Commitments
In December 2007, the Company and Amgen entered into a worldwide, exclusive license agreement (the “Amgen Agreement”) to develop and commercialize blisibimod in any indication, including for the treatment of systemic lupus erythematosus (“lupus”). Under the terms of the Amgen Agreement, the Company paid a nonrefundable, upfront license fee of $6.0 million. As there was no future alternative use for the technology, the Company expensed the license fee in research and development expenses during 2007. Under the terms of the Amgen Agreement, the Company is obligated to make additional milestone payments to Amgen of up to $33.0 million upon the achievement of certain development and regulatory milestones. The Company is also obligated to pay tiered royalties on future net sales of products, ranging from the high single digits to the low double digits, which are developed and approved as defined by this collaboration. The Company’s royalty obligations as to a particular licensed product will be payable, on a country-by-country and licensed product-by-licensed product basis, for the longer of (a) the date of expiration of the last to expire valid claim within the licensed patents that covers the manufacture, use or sale, offer to sell, or import of such licensed product by the Company or a sublicense in such country or (b) 10 years after the first commercial sale of the applicable licensed product in the applicable country.
In connection with the collaborative arrangement with Zenyaku pursuant to the Zenyaku Agreement, the Company amended the Amgen Agreement in November 2014 to (i) adjust certain royalty and milestone payment obligations payable to Amgen in light of the collaboration between Anthera and Zenyaku and (ii) provide that the sublicense granted by Anthera to Zenyaku shall survive the termination of the Amgen Agreement. Under this amendment, Anthera also agreed to grant Amgen that number of shares of its common stock equal $1.0 million divided by the volume weighted average price of the Company’s common stock for 20 trading days prior to issuance. The Company issued 420,751 shares of common stock to Amgen at $2.3767 per share on January 28, 2015, pursuant to a subscription agreement with Amgen, with the
consideration paid by Amgen in the form of a waiver of a fee otherwise payable to Amgen under the Amgen Agreement. The Company accrued $1.0 million of license fees as research and development expense with a corresponding current liability in the year ended December 31, 2014.
On July 11, 2014, the Company and Eli Lilly and Company (“Eli Lilly”) entered into a worldwide, exclusive license agreement (the “Lilly Agreement”), to develop and commercialize Sollpura, a Phase 3 novel investigational Pancreatic Enzyme Replacement Therapy (“PERT”), for the treatment of patients with Exocrine Pancreatic Insufficiency, or EPI, often seen in patients with cystic fibrosis and other conditions. Under the terms of the Lilly Agreement, the Company was not required to make any up-front payment but is obligated to make milestone payments of up to up to $33.5 million for capsule products and $9.5 million for reformulated products upon the achievement of certain regulatory and commercial sales milestones, none of which have been achieved as of December 31, 2016. In addition, after sales of the licensed products exceed an aggregate of $100.0 million in the United States, the Company is obligated to pay tiered royalties on future net sales of products, ranging from the single digits to the mid-teens, that are developed and approved as defined in the Lilly Agreement. The Company’s royalty obligations as to a particular licensed product will be payable, on a licensed product-by-licensed product basis, for the longer of (a) the date of expiration of the last to expire valid claim within the licensed patents that covers the manufacture, use or sale, offer to sell, or import of such licensed product by the Company or a sublicense in such country, or (b) 12 years after the first commercial sale of the applicable licensed product in the applicable country.
See Note 3 – “Research Award” for discussion of commitments and contingencies associated with the research award received from the CFFT.
Litigation
On February 13, 2017, a complaint was filed in the United States District Court for the Northern District of California captioned Brian Clevlen v. Anthera Pharmaceuticals, Inc., et al., Case No. 3:17-cv-715, on behalf of a putative class of the Company’s stockholders against the Company and certain of its current and former officers. The complaint asserts claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of all stockholders that purchased the Company’s common stock between February 10, 2015 and December 27, 2016. The complaint alleges that the Company made false or misleading statements and/or omissions with respect to the CHABLIS-SC1 trial and SOLUTION study. The complaint seeks unspecified damages, interest, attorneys’ fees, costs, and such other relief at the Court may deem just and proper. The Company intends to vigorously defend itself against the allegations in the action.
The outcome of the legal proceeding is inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. No provision for loss nor disclosure is required in relation to this action because a reasonably possible loss or range of losses cannot be estimated.
9.
|
STOCKHOLDERS’ EQUITY (DEFICIT)
|
Preferred Stock
The Company
has
authorized 5,000,000 shares of $0.001 par value preferred stock. The Company’s Board of Directors is authorized to designate the terms and conditions of any preferred stock issued by the Company without further action by the common stockholders. The Company designated 17,000 shares of its authorized and unissued preferred stock as Series X convertible preferred stock and filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series X Convertible Preferred Stock with the Delaware Secretary of State. As of December 31, 2016, there were 9,499 shares of Series X Convertible Preferred Stock issued and outstanding, of which 487 shares were contingently redeemable.
In September, 2016, the Company entered into a subscription agreement with certain institutional investors pursuant to which it sold 17,000 (“Initial Tranche”) Series X units for a purchase price of $1,000 per unit in a registered direct offering. Each unit consists of one share of Series X Convertible Preferred Stock and a warrant to purchase 126.96 shares of common stock. The conversion price for the Series X Convertible Preferred Stock became fixed on November 16, 2016 at $1.9692 per share, which represented the VWAP of the Company’s common stock over the five full trading days following the date of the Company’s initial public announcement of topline and/or efficacy data from the CHABLIS-SC1 study on November 10, 2016. The registered direct offering resulted in gross proceeds of $17.0 million. The holders of Series X Convertible Preferred Stock do not have any voting rights nor the right to elect any members to the board of directors. The Series X Convertible Preferred Stock has a contingent redemption clause. The Company is not required to issue any shares of common stock upon conversion of
any shares of Series X Convertible Preferred Stock to the extent that (i) the aggregate issuance of common stock will be greater than 8,385,828 shares or 19.99% of the total outstanding shares of the Company (the “Threshold Amount”) and (ii) the conversion has not been approved by the Company’s stockholders in accordance with the stockholder approval requirements of Nasdaq Marketplace Rule 5635(d) (a “Blocked Conversion”). In the event that a Blocked Conversion occurs after April 30, 2017, the holders of shares of Series X Stock who are not able to convert their Series X Convertible Preferred Stock in full because of the Blocked Conversion shall have the right to require the Company to redeem any or all of the Series X Convertible Preferred Stock that is ineligible for conversion at a redemption price equal to the product of: (x) the number of their shares underlying the to-be-redeemed Series X Convertible Preferred Stock, multiplied by (y) the two-day volume weighted average price of the Company’s common stock prior to the date of delivery of such notice of redemption. Based on a conversion price of $1.9692 per share, on November 16, 2016 the date the number of shares subject to redemption was fixed, the Series X Convertible Preferred Stock were convertible into 8,632,947 shares of common stock, which exceeds the Threshold Amount by 247,119 shares of common stock or 487 shares of Series X Convertible Preferred Stock. As of December 31, 2016, 7,501 shares of Series X Convertible Preferred Stock had been converted into 3,809,160 shares of common stock and no warrants had been exercised.
The subscription agreement also provides that the investors have the right, but not the obligation, to make additional investments as follows:
within 20 trading days following the Company’s initial public announcement of top-line data from the Company’s ongoing SOLUTION study (Phase 3 study evaluating the efficacy and safety of Sollpura in subjects with cystic fibrosis-related exocrine pancreatic insufficiency), the investors may purchase up to 28,330 (“Second Tranche”) shares of
Series X Convertible Preferred Stock
at a purchase price of $1,000 per share for an aggregate purchase price of $28.3 million (“Additional Investment”). The terms of the Series X-1 Convertible Preferred Stock are identical to the Series X Convertible Preferred Stock, except as follows: t
he conversion price for the Series X-1 Convertible Preferred Stock will be equal to the lower of: (a) 75% of the five-day VWAP of the Company’s common stock over the five full trading days following the Company’s initial public announcement of topline clinical efficacy and safety data from the SOLUTION clinical study, or (b) 175% of the conversion price for the Series X Convertible Preferred Stock, or $3.45; the Series X-1 Convertible Preferred Stock do not include any contingent redemption features.
The top-line data from the SOLUTION study was announced on December 27, 2016.
No further investments were made by the investors and the right for Additional Investment expired on January 26, 2017.
The Company allocated the proceeds from the financing amongst the Series X Convertible Preferred Shares, the warrants to purchase shares of common stock, and the investors’ rights to purchase shares of Series X-1 Convertible Preferred Stock. The accounting for each component on issuance and through December 31, 2016 is as follows:
|
·
|
Series X Convertible Preferred Stock
– Due to the contingent redemption feature related to NASDAQ conversion limits that could result in a potential redemption for cash, the Company initially classified the 17,000 shares of Series X Convertible Preferred Stock in the mezzanine section (between equity and liabilities) on the date of issuance. The Company recorded the residual value of these shares at $9.6 million, which is net of allocation of $3.7 million to the fair value of the warrants to purchase common stock and $3.7 million to the relative fair value of the rights to purchase Series X-1 Convertible Preferred Stock on the date of issuance. On November 16, 2016,
the conversion price became fixed at $1.9692 and therefore, the Series X Convertible Preferred Stock is convertible into 8,632,947 shares of common stock,
which exceeded the aggregate number of common stock permitted for conversion by 247,119 shares or 487 shares of Series X Convertible Preferred Stock. Therefore, the 487 shares of Series X Convertible Preferred Stock remained contingently redeemable on November 16, 2016 and shareholders approval will be required for the conversion of these shares; the remaining 16,513 shares of Series X Convertible Preferred Stock ceased to be redeemable and were reclassified from the mezzanine section to equity.
|
|
·
|
Warrants to Purchase Common Stock
– The Company determined
that, on the date of issuance, the
warrants were not considered indexed to its own stock because the underlying instruments were not “fixed-for-fixed” and therefore, the warrants should be accounted for as derivatives. The warrants were initially measured at fair value at inception of $3.7 million and recorded as a liability with a corresponding entry to Series X Convertible Preferred Stock. On November 16, 2016, the Company remeasured the fair value of the warrants when the exercise price for the warrants became fixed and recorded the change in fair value as part of other income/expense in the Company’s statement of operation. The fair value of the Company’s warrant liability is discussed in Note 5. The number of shares of common stock underlying the warrants also became fixed on November 16, 2016 and therefore, the related warrant liability of $1.9 million was reclassified as stockholders’ equity.
|
|
·
|
Rights to Purchase Series X-1 Convertible Preferred Stock
– The Company determined that the investors’ rights to purchase future shares of Series X-1 Convertible Preferred Stock was a freestanding instrument on issuance. The instrument is treated as equity due to the permanent equity classification of the underlying Series X-1 Convertible Preferred Stock. The right was allocated based on its relative fair value of $3.7 million to the proceeds of the Series X Convertible Preferred Stock and recorded as part of permanent equity. Subsequent to issuance, the Company determined that investors’ right to purchase future shares of Series X-1 Convertible Preferred Stock would not be exercised. As such, the Company reclassified $3.6 million to the Series X shares in permanent equity. At December 31, 2016, no amount remained associated with the Tranche Right. The following table summarizes the assumptions used in the Monte Carlo simulation model to determine the fair value of the option related to the rights to purchase Series X-1 Convertible Preferred Stock on the date of issuance:
|
Common stock price
|
|
$
|
3.20
|
|
Initial Series X Convertible Preferred Stock conversion price
|
|
$
|
2.95
|
|
Expected volatility based on blended historical and implied volatilities
|
|
|
120
|
%
|
Dividend yield
|
|
|
0
|
%
|
Risk-free interest rate
|
|
|
0.90
|
%
|
Expected term (years)
|
|
|
3
|
|
|
·
|
Beneficial Conversion Feature
– Because the conversion price of the shares of Series X Convertible Preferred Stock was less than the fair value of the Company’s common stock at the date of issuance, the in-the-money conversion feature (Beneficial Conversion Feature, or BCF) requires separate financial statement recognition and is measured at the intrinsic value (i.e., the amount of the increase in value that preferred stockholders would realize upon conversion based on the value of the conversion shares on the issuance date). The initial BCF of $8.8 million was recorded as a discount to the Contingently Redeemable Series X Convertible Preferred Stock in mezzanine and was immediately accreted as a deemed preferred stock dividend and, accordingly, an adjustment to net loss to arrive at net loss applicable to common stockholders. The BCF was reassessed on November 16, 2016 when the conversion price of the Series X shares became fixed and resulted in an additional $0.8 million being recorded as a reduction to the Series X Convertible Preferred Stock in permanent equity. No deemed dividend was recorded as the shares were no longer redeemable.
|
|
·
|
Conversion of Series X Convertible Preferred Stock
– On December 7, 2016, pursuant to a conversion notice received from one of the holders of the Series X Convertible Preferred Stock, the Company converted 7,501 shares of Series X Convertible Preferred Stock into 3,809,160 shares of common stock, leaving a balance of 9,499 shares of Series X Convertible Preferred Stock outstanding as of December 31, 2016. The conversion was reflected as a reduction in Series X Convertible Preferred Stock in permanent equity. The unamortized discount was recognized as a deemed dividend of $2.1 million in connection with the conversion of the Series X Convertible Preferred Stock,
|
As of December 31, 2016, 487 shares of Series X Convertible Preferred Stock were contingently redeemable. The redemption value is dependent on the 2-day VWAP of the Company’s common stock on the date of conversion. As the estimated redemption value as of December 31, 2016 approximated the carrying value, no adjustment was made to the carrying value
Common Stock
In March 2016, we filed a universal shelf registration statement with the SEC on Form S-3 (File No. 333-210166) for the proposed offering from time to time of up to $100.0 million of our securities, including common stock, preferred stock, debt securities and/or warrants. On April 21, 2016, we registered $25.0 million under the registration statement for the H.C. Wainwright ATM Agreement. On March 14, 2017, we amended the H.C. Wainwright ATM Agreement and reduced the amount registered under the registration statement to $23 million. On April 27, 2016, we registered $14.4 million under the registration statement for the LPC Purchase Agreement. On March 12, 2017, upon the expiration of the LPC Purchase Agreement, $13.4 million of unused amount became available under the registration statement. On September 8, 2016, we registered $22.1 million under the registration statement for a subscription agreement with certain institutional investors for the sale of convertible preferred stock and issuance of warrants in a registered direct offering. On March 14, 2017, we entered into an equity underwriting agreement H.C. Wainwright, pursuant to which we agreed to issue and sell an aggregate of 30,000,000 shares of our common stock and warrants to purchase an aggregate of 60,000,000 shares of our common stock for gross proceeds of $15 million. Under the terms of the underwriter agreement, we granted the underwriter a 30-day option to purchase an additional 4,500,000 shares of common stock and/or warrants to purchase up to an additional 9,000,000 shares of common stock. In connection with the registered direct offering of common stock and warrants, we registered $53.5 million under the registration statement. As of the date of this report, there is a balance of $0.4 million available for future issuance under the registration statement
On April 21, 2016, the Company entered into an at-the-market sales agreement with H.C. Wainwright (the “H.C. Wainwright ATM Agreement”) under which the Company from time to time may offer and sell shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $25.0 million through H.C. Wainwright, as agent. On March 14, 2017, the Company amended the H.C. Wainwright ATM Agreement and reduced the amount of aggregate offering price to $23.0 million. For the year ended December 31, 2016, the Company sold $2.7 million in shares of common stock pursuant to the H.C. Wainwright ATM Agreement, leaving a balance of $20.3 million available for future sale pursuant to the H.C. Wainwright ATM Agreement as of the date of this report.
On March 12, 2015, the Company executed an equity purchase agreement with LPC, pursuant to which the Company has the right, but not the obligation, to sell to LPC up to an aggregate of $10.0 million in shares of common stock over a period of two years. In July 2015, the Company amended the equity purchase agreement to reduce the amount available for purchase to $6.0 million. On April 27, 2016, the Company amended the equity purchase agreement and increased the amount of common stock available for purchase to $15.0 million. As of December 31, 2016, the Company sold approximately $1.6 million in shares of common stock pursuant to the equity purchase agreement. In connection with the sale of shares to LPC, for the year ended December 31, 2016, the Company issued 24,829 shares to LPC as commitment fee pursuant to the equity purchase agreement. The equity purchase agreement expired on March 12, 2017.
Based on the requirements of Form S-3, however, there are certain factors, such as volume of trading in the Company’s common stock and stock price, which may limit the amount that can be raised in a short period of time through Purchase Agreement and registration statements described above.
At December 31, 2016, the Company had reserved the following shares for future issuance:
Convertible Series X preferred stock
|
|
|
4,576,668
|
|
Common stock options outstanding
|
|
|
5,996,024
|
|
Common stock warrants outstanding
|
|
|
2,198,414
|
|
Common stock options available for future grant under stock option plan
|
|
|
472,676
|
|
Common stock available for future grant under ESPP plan
|
|
|
68,677
|
|
Total
|
|
|
13,312,459
|
|
Warrants
In connection with a venture debt executed in March 2011, the Company issued a seven-year warrant to the lender for the purchase of 40,178 shares of the Company’s common stock at an exercise price of $48.00 per share. The warrant was immediately exercisable and expires in March 2018. As of December 31, 2016, the warrant remained outstanding and exercisable.
In connection with the issuance of Series X convertible preferred stock in September 2016, the Company issued warrants to certain institutional investors to purchase shares of the Company’s common stock. On November 16, 2016, the exercise price and number of shares of common stock underlying the warrants became fixed at $2.36 and 2,158,236, respectively. The warrants are exercisable at any time and from time to time after March 13, 2017, and will expire on September 13, 2019. As of December 31, 2016, the warrants remained outstanding but not exercisable.
Option Plan
On March 25, 2013, the Company’s board of directors adopted the 2013 Stock Option and Incentive Plan (the “2013 Plan”), which was also approved by the Company’s stockholders at its annual general meeting on May 16, 2013. The Company initially reserved 1,750,000 shares of its common stock for the issuance of awards under the 2013 Plan, plus all shares remaining available for grant under the Company’s 2010 Stock Option and Incentive Plan (the “2010 Plan), plus any additional shares returned under the 2010 Plan or 2013 Plan as a result of the cancellation, forfeiture or other termination (other than by exercise) of awards issued pursuant to the 2010 Plan or 2013 Plan, subject in all cases to adjustment including reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock. In May 2015, the Company’s shareholders approved an increase of 1,790,818 shares to the 2013 Plan pool. In April 2016, the Company’s shareholders approved an increase of 1,600,000 shares to the 2013 Plan pool. Of the shares of common stock reserved for issuance under the 2013 Plan, no more than 750,000 shares will be issued to any individual participant as incentive options, non-qualified options or stock appreciation rights during any calendar year. The 2013 Plan permits the granting of incentive and non-statutory stock options, restricted and unrestricted stock awards, restricted stock units, stock appreciation rights, performance share awards, cash-based awards and dividend equivalent rights to eligible employees, directors and consultants. The option exercise price of an option granted under the 2013 Plan may not be less than 100% of the fair market value of a share of the Company’s common stock on the date the stock option is granted. Options granted under the 2013 Plan have a maximum term of 10 years and generally vest over four years. In addition, in the case of certain large stockholders, the minimum exercise price of incentive options must equal 110% of fair market value on the date of grant and the maximum term is limited to five years. Subject to overall Plan limitations, the maximum aggregate number of shares of common stock that may be issued in the form of incentive options shall not exceed 6,250,000 shares of common stock.
The following table summarizes stock option activity for 2014, 2015 and 2016:
|
|
Number of
Options
|
|
|
Weighted-
Average
Exercise
Price
|
|
|
Weighted-
Average
Remaining
Contractual
Life in
Years
|
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|
Balance at December 31, 2013
|
|
|
1,997,075
|
|
|
$
|
5.21
|
|
|
|
9.11
|
|
|
$
|
48
|
|
Options granted
|
|
|
1,389,743
|
|
|
$
|
2.00
|
|
|
|
|
|
|
|
|
|
Options exercised
|
|
|
(2,000
|
)
|
|
$
|
2.08
|
|
|
|
|
|
|
|
|
|
Options cancelled/forfeited
|
|
|
(362,849
|
)
|
|
$
|
5.78
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014
|
|
|
3,021,969
|
|
|
$
|
3.67
|
|
|
|
8.92
|
|
|
$
|
0
|
|
Options granted
|
|
|
1,392,499
|
|
|
$
|
7.10
|
|
|
|
|
|
|
|
|
|
Options exercised
|
|
|
(80,218
|
)
|
|
$
|
3.73
|
|
|
|
|
|
|
|
|
|
Options cancelled/forfeited
|
|
|
(78,269
|
)
|
|
$
|
4.01
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015
|
|
|
4,255,981
|
|
|
$
|
4.79
|
|
|
|
8.44
|
|
|
$
|
4,330
|
|
Options granted
|
|
|
2,960,142
|
|
|
$
|
3.27
|
|
|
|
|
|
|
|
|
|
Options exercised
|
|
|
(116,773
|
)
|
|
$
|
2.20
|
|
|
|
|
|
|
|
|
|
Option forfeited
|
|
|
(440,000
|
)
|
|
$
|
9.48
|
|
|
|
|
|
|
|
|
|
Options cancelled
|
|
|
(663,326
|
)
|
|
$
|
5.06
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016
|
|
|
5,996,024
|
|
|
$
|
3.73
|
|
|
|
8.19
|
|
|
$
|
0
|
|
Ending vested at December 31, 2016
|
|
|
2,602,023
|
|
|
$
|
4.11
|
|
|
|
7.20
|
|
|
$
|
0
|
|
Vested and expected to vest at December 31, 2016
|
|
|
5,575,887
|
|
|
$
|
3.76
|
|
|
|
8.12
|
|
|
$
|
0
|
|
As of December 31, 2016, there were 472,676 shares available for grant under the 2013 Plan.
The assumptions used in the Black-Scholes option-pricing model to value stock options are as follows:
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Expected Volatility
|
|
|
98
|
%
|
|
|
94
|
%
|
|
|
91
|
%
|
Dividend Yield
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Risk-Free Interest Rate
|
|
|
1.51
|
%
|
|
|
1.70
|
%
|
|
|
1.60
|
%
|
Expected Term (years)
|
|
|
5.90
|
|
|
|
5.92
|
|
|
|
5.22
|
|
Weighted-average fair value per option
|
|
$
|
2.53
|
|
|
$
|
5.40
|
|
|
$
|
1.35
|
|
The intrinsic value of stock options represents the difference between the exercise price of stock options and the market price of our stock on that day for all in-the-money options. Additional information related to our stock options is summarized below (in thousands except per share information):
|
Years Ended December 31,
|
|
|
2016
|
|
2015
|
|
2014
|
|
Intrinsic value of options exercised
|
|
$
|
177
|
|
|
$
|
140
|
|
|
$
|
3
|
|
Proceeds received from the exercise of stock options
|
|
$
|
257
|
|
|
$
|
299
|
|
|
$
|
4
|
|
There was $6.8 million of total unrecognized compensation expense as of December 31, 2016. The unrecognized compensation expense will be amortized on a straight-line basis over a weighted-average remaining period of 2.54 years.
Information about stock options outstanding, vested and exercisable as of December 31, 2016, was as follows:
|
|
Options Outstanding
|
|
|
Options Vested & Exercisable
|
|
Range of Exercise Price
|
|
Number of Shares
|
|
|
Weighted-Average
Remaining
Contractual Life
(In Years)
|
|
|
Number of Shares
|
|
|
Weighted-Average
Remaining
Contractual Life
(In Years)
|
|
$ 1.47 - $2.86
|
|
|
1,461,031
|
|
|
|
8.22
|
|
|
|
653,306
|
|
|
|
7.41
|
|
$ 2.89 - $4.61
|
|
|
2,821,394
|
|
|
|
9.09
|
|
|
|
676,873
|
|
|
|
8.47
|
|
$ 4.75 - $9.48
|
|
|
1,665,132
|
|
|
|
6.72
|
|
|
|
1,236,294
|
|
|
|
6.48
|
|
$ 10.72 - $33.52
|
|
|
45,092
|
|
|
|
5.35
|
|
|
|
32,175
|
|
|
|
4.05
|
|
$ 65.36 - $65.36
|
|
|
3,375
|
|
|
|
4.50
|
|
|
|
3,375
|
|
|
|
4.50
|
|
Total
|
|
|
5,996,024
|
|
|
|
8.19
|
|
|
|
2,602,023
|
|
|
|
7.20
|
|
2010 Employee Stock Purchase Plan
Effective July 2010, under the terms of the ESPP, eligible employees of the Company may authorize the Company to deduct amounts from their compensation, which amounts are used to enable the employees to purchase shares of the Company’s common stock. The Company initially reserved 12,500 shares of common stock for issuance thereunder plus on January 1, 2011 and each January 1 thereafter, the number of shares of stock reserved and available for issuance under the Plan shall be cumulatively increased by the lesser of (i) one percent (1%) of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or (ii) 31,250 shares of common stock. During the year ended December 31, 2016, 2015 and 2014, 18,502, 60,444 and 25,000 shares were issued pursuant to the purchase of common stock by our employees under the ESPP, respectively. As of December 31, 2016, there were 68,677 shares available for grant under the 2010 Employee Stock Purchase Plan.
Under the ESPP, eligible employees of the Company may authorize the Company to deduct amounts from their compensation, which amounts are used to enable the employees to purchase shares of the Company’s common stock. The purchase price per share is 85% of the fair market value of the common stock as of the first date or the ending date of the applicable semi-annual purchase period, whichever is less (the “Look-Back Provision”). The 15% discount and the Look-Back Provision make the ESPP compensatory. The Black-Scholes option pricing model was used to value the employee stock purchase rights. For the years ended December 31, 2016, 2015 and 2014, the following weighted-average assumptions were used in the valuation of the stock purchase rights:
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Expected Volatility
|
|
|
97
|
%
|
|
|
82
|
%
|
|
|
41
|
%
|
Dividend Yield
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Risk-Free Interest Rate
|
|
|
0.38
|
%
|
|
|
0.08
|
%
|
|
|
0.05
|
%
|
Expected Term (years)
|
|
|
0.50
|
|
|
|
0.50
|
|
|
|
0.50
|
|
Weighted-average grant date fair value per right
|
|
$
|
1.50
|
|
|
$
|
1.04
|
|
|
$
|
1.04
|
|
Stock-Based Compensation Expense
Total stock-based compensation expense, including expense recorded for the ESPP, was as follows (in thousands):
|
|
Years Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Research and development
|
|
$
|
1,795
|
|
|
$
|
1,453
|
|
|
$
|
825
|
|
General and administrative
(1)
|
|
|
4,944
|
|
|
|
2,088
|
|
|
|
1,350
|
|
Total employee stock-based compensation
|
|
$
|
6,739
|
|
|
$
|
3,541
|
|
|
$
|
2,175
|
|
|
(1)
|
Included in general and administrative expense was approximately $1.5 million in stock-based compensation associated with the cancellation of options by a former employee in December 2016.
|
11. NET LOSS PER SHARE
Basic net loss attributable to common stockholders per share is computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding. The computation of diluted Earnings Per Share, or EPS, is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. In addition, in computing the dilutive effect of convertible securities, the numerator is adjusted to add back any convertible preferred dividends and the after-tax amount of interest recognized in the period associated with any convertible debt. The numerator also is adjusted for any other changes in income or loss that would result from the assumed conversion of those potential common shares, such as profit-sharing expenses. Diluted EPS is identical to basic EPS since common equivalent shares are excluded from the calculation, as their effect is anti-dilutive.
The following table summarizes the Company’s calculation of net loss per common share (in thousands except share and per share amounts):
|
|
Year Ended December 31
,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(55,523
|
)
|
|
$
|
(35,220
|
)
|
|
$
|
(29,604
|
)
|
Deemed dividend attributable to preferred stock
|
|
|
(10,914
|
)
|
|
|
—
|
|
|
|
—
|
|
Net loss applicable to common stockholders
|
|
$
|
(66,437
|
)
|
|
$
|
(35,220
|
)
|
|
$
|
(29,604
|
)
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
41,310,269
|
|
|
|
35,631,237
|
|
|
|
21,776,269
|
|
Basic and diluted net loss per share
|
|
$
|
(1.61
|
)
|
|
$
|
(0.99
|
)
|
|
$
|
(1.36
|
)
|
The following outstanding potentially dilutive securities were excluded from the computation of diluted net loss per share, as the effect of including them would have been antidilutive:
|
|
Year Ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Total options to purchase common stock
|
|
|
5,996,024
|
|
|
|
4,255,981
|
|
|
|
3,021,969
|
|
Total warrants to purchase common stock
|
|
|
2,198,414
|
|
|
|
40,178
|
|
|
|
556,838
|
|
Series X convertible preferred stock
|
|
|
4,576,668
|
|
|
|
—
|
|
|
|
—
|
|
Total restricted stock units
|
|
|
—
|
|
|
|
—
|
|
|
|
937
|
|
Total
|
|
|
12,771,106
|
|
|
|
4,296,159
|
|
|
|
3,579,744
|
|
12.
|
EMPLOYEE BENEFIT PLAN
|
The Company maintains a defined contribution 401(k) plan, or the 401(k) Plan. Employee contributions are voluntary and are determined on an individual basis, limited by the maximum amounts allowable under federal tax regulations. Prior to 2011, the Company had not made any contributions to the 401(k) Plan. In December 2012, the Company amended its 401(k) plan to provide for non-elective employer contribution at the Company’s discretion. During the years ended December 31, 2016, 2015 and 2014, the Company contributed approximately $264,000, $284,000 and $185,000, respectively, in non-elective employer contribution into the employees’ 401(k) accounts.
The Company’s loss before provision for income taxes during the years ended December 31, 2016, 2015 and 2014, was a domestic loss of $66.4 million, $35.2 million and $29.6 million, respectively.
The Company has incurred net operating losses since inception. The Company has not reflected any benefit of such net operating loss carryforwards in the accompanying consolidated financial statements and has established a full valuation allowance against its deferred tax assets.
The components of the provision for income taxes during the years ended December 31, 2016, 2015 and 2014 are as follows (in thousands):
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Current:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
Foreign
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total current
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(20,942
|
)
|
|
|
(11,080
|
)
|
|
|
(9,046
|
)
|
State
|
|
|
8,936
|
|
|
|
(3,250
|
)
|
|
|
(2,689
|
)
|
Foreign
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total deferred
|
|
|
(12,006
|
)
|
|
|
(14,330
|
)
|
|
|
(11,735
|
)
|
Valuation allowance
|
|
|
12,006
|
|
|
|
14,330
|
|
|
|
11,735
|
|
Total provision for income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.
The significant components of the Company’s deferred tax assets for the years ended December 31, 2016 and 2015 are as follows (in thousands):
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
Deferred tax assets:
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
44,909
|
|
|
$
|
37,576
|
|
Tax credits
|
|
|
4,084
|
|
|
|
3,023
|
|
Intangible assets
|
|
|
1,470
|
|
|
|
2,033
|
|
Capitalized R&D
|
|
|
40,297
|
|
|
|
35,514
|
|
Other
|
|
|
1,677
|
|
|
|
2,285
|
|
Total deferred tax assets
|
|
|
92,437
|
|
|
|
80,431
|
|
Deferred tax liabilities
|
|
|
—
|
|
|
|
—
|
|
Valuation allowance
|
|
|
(92,437
|
)
|
|
|
(80,431
|
)
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
The reconciliation between the Company’s effective tax rate on income (loss) from continuing operations and the statutory tax rates for the years ended December 2016, 2015, and 2014 is as follows:
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
Statutory rate
|
|
|
34
|
%
|
|
|
34
|
%
|
|
|
34
|
%
|
State tax
|
|
|
(9
|
)%
|
|
|
6
|
%
|
|
|
6
|
%
|
Tax credit
|
|
|
1
|
%
|
|
|
2
|
%
|
|
|
1
|
%
|
Deemed dividend and warrant liability revaluation
|
|
|
(4
|
)%
|
|
|
—
|
%
|
|
|
—
|
%
|
Stock based compensation
|
|
|
(4
|
)%
|
|
|
(1
|
)%
|
|
|
(1
|
)%
|
Valuation allowance
|
|
|
(18
|
)%
|
|
|
(41
|
)%
|
|
|
(40
|
)%
|
Effective tax rates
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Tax benefits of net operating losses, temporary differences and credit carryforwards are recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s history of operating losses, management believes that the deferred tax assets arising from the above-mentioned future tax benefits are currently not likely to be realized and, accordingly, has provided a full valuation allowance. The net valuation allowance increased by $12.0 million in 2016, $14.3 million in 2015, and $11.7 million in 2014.
The amount of the valuation allowance for deferred tax assets associated with excess tax deductions from stock-based compensation arrangements that would be allocated to contributed capital if the future tax benefits are subsequently recognized is $0.3 million.
Net operating losses and tax return credit carryforwards as of December 31, 2016, are as follows (in thousands):
|
|
Amount
|
|
Expiration Years
|
Net operating losses—federal
|
|
$
|
117,090
|
|
Beginning 2024
|
Net operating losses—state
|
|
$
|
89,251
|
|
Beginning 2017
|
Tax return credits—federal
|
|
$
|
2,342
|
|
Beginning 2032
|
Tax return credits—state
|
|
$
|
2,640
|
|
Do not expire
|
Utilization of the domestic NOL and tax credit forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. In general, an “ownership change,” as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the NOL or tax credit carryforwards before utilization.
As of December 31, 2016, the Company had unrecognized tax benefits of $1.7 million, all of which would not currently affect the Company’s effective tax rate if recognized due to the Company’s deferred tax assets being fully offset by a valuation allowance. The Company did not anticipate any significant change to the unrecognized tax benefit balance as of December 31, 2016. A reconciliation of unrecognized tax benefits is as follows (in thousands):
|
|
Amount
|
|
Balance as of December 31, 2013
|
|
|
828
|
|
Additions based on tax positions related to prior year
|
|
|
—
|
|
Additions based on tax positions related to current year
|
|
|
171
|
|
Balance as of December 31, 2014
|
|
$
|
999
|
|
Additions based on tax positions related to prior year
|
|
|
—
|
|
Additions based on tax positions related to current year
|
|
|
269
|
|
Balance as of December 31, 2015
|
|
$
|
1,268
|
|
Deductions based on tax positions related to prior year
|
|
|
(27
|
)
|
Additions based on tax positions related to current year
|
|
|
420
|
|
Balance as of December 31, 2016
|
|
$
|
1,661
|
|
The Company would classify interest and penalties related to uncertain tax positions in income tax expense, if applicable. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2016. The tax years 2004 through 2016 remain open to examination by one or more major taxing jurisdictions to which the Company is subject.
The Company does not anticipate that total unrecognized net tax benefits will significantly change prior to the end of 2017.
14.
|
SUMMARIZED QUARTERLY UNAUDITED FINANCIAL DATA
|
Quarterly results were as follows (in thousands, except per share data):
|
|
Quarter Ended
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collaborative revenue
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total revenues
|
|
|
145
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
9,624
|
|
|
$
|
11,966
|
|
|
$
|
14,096
|
|
|
$
|
10,825
|
|
General and administrative
|
|
|
2,238
|
|
|
|
2,576
|
|
|
|
2,504
|
|
|
|
3,754
|
|
Research award
|
|
|
—
|
|
|
|
(261
|
)
|
|
|
—
|
|
|
|
—
|
|
LOSS FROM OPERATIONS
|
|
|
(
11,717
|
)
|
|
|
(14,281
|
)
|
|
|
(
16,600
|
)
|
|
|
(14,579
|
)
|
Other income (expense)
|
|
|
(9
|
)
|
|
|
(
53
|
)
|
|
|
(47
|
)
|
|
|
19
|
|
Change in fair value of warrant liability
|
|
|
—
|
|
|
|
—
|
|
|
|
169
|
|
|
|
1,575
|
|
NET LOSS
|
|
$
|
(
11,726
|
)
|
|
$
|
(
14,334
|
)
|
|
$
|
(
16,478
|
)
|
|
$
|
(12,985
|
)
|
Deemed dividend attributable to preferred
stock
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,807
|
)
|
|
|
(2,107
|
)
|
Net loss applicable to common stockholders
|
|
|
(11,726
|
)
|
|
|
(14,334
|
)
|
|
|
(25,285
|
)
|
|
|
(15,092
|
)
|
Net loss per share—basic and diluted
|
|
$
|
(0.29
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(0.36
|
)
|
Shares used in computing basic and diluted
net loss per share
|
|
|
40,049,895
|
|
|
|
41,032,544
|
|
|
|
41,682,669
|
|
|
|
42,459,248
|
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
September 30,
|
|
|
December 31,
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue
|
|
$
|
49
|
|
|
$
|
146
|
|
|
$
|
548
|
|
|
$
|
1,819
|
|
Collaborative revenue
|
|
|
196
|
|
|
|
143
|
|
|
|
185
|
|
|
|
99
|
|
Total revenues
|
|
|
245
|
|
|
|
289
|
|
|
|
733
|
|
|
|
1,918
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
5,995
|
|
|
$
|
8,539
|
|
|
$
|
10,359
|
|
|
$
|
8,605
|
|
General and administrative
|
|
|
1,907
|
|
|
|
1,696
|
|
|
|
2,091
|
|
|
|
1,874
|
|
Research award
|
|
|
—
|
|
|
|
(1,100
|
)
|
|
|
(367
|
)
|
|
|
(1,171
|
)
|
LOSS FROM OPERATIONS
|
|
|
(
7,657
|
)
|
|
|
(8,846
|
)
|
|
|
(
11,350
|
)
|
|
|
(
7,390
|
)
|
Other income (expense)
|
|
|
(3
|
)
|
|
|
(
49
|
)
|
|
|
24
|
|
|
|
51
|
|
NET LOSS
|
|
$
|
(
7,660
|
)
|
|
$
|
(
8,895
|
)
|
|
$
|
(
11,326
|
)
|
|
$
|
(7,339
|
)
|
Net loss per share—basic and diluted
|
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.18
|
)
|
Shares used in computing basic and
diluted net loss per share
|
|
|
27,595,081
|
|
|
|
35,817,794
|
|
|
|
39,241,738
|
|
|
|
39,947,036
|
|
15.
SUBSEQUENT EVENTS
On January 27, 2017, a purchase right provided to certain investors to make additional investments (see Note 9) became expired and unexercised.
On January 5 and 30, 2017, the Company received conversion notices from holders of Series X Convertible Preferred Stock and converted 9,012 shares of Series X Convertible Preferred Stock into 4,576,349 shares of common stock.
On March 14, 2017, the Company entered into an underwriting agreement with H.C. Wainwright, pursuant to which we agreed to issue and sell an aggregate of 30,000,000 shares of its common stock and warrants (the “Tranche 1 Warrants” and the “Tranche 2 Warrants”) to purchase an aggregate of 60,000,000 shares of its common stock for gross proceeds of $15 million. Each Tranche 1 and Tranche 2 Warrant has an exercise price of $0.55 and $0.50 per share, respectively. The Tranche 1 and Tranche 2 Warrants will become exercisable on any day on or after the date that the Company has sufficient authorized shares of common stock. The Tranche 1 Warrant will expire five years following the Exercisable Date and the Tranche 2 Warrant will expire six months following the Exercisable Date. The shares of common stock and accompanying warrants were immediately separable. Under the terms of the underwriter agreement, we granted the underwriter a 30-day option to purchase an additional 4,500,000 shares of common stock and/or warrants to purchase up to an additional 9,000,000 shares of common stock. The financing transaction is expected to close on March 17, 2017, subject to satisfaction of customary closing condition.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ANTHERA PHARMACEUTICALS, INC.
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By:
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/s/ Craig Thompson
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Craig Thompson
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Chief Executive Officer
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(Principal Executive Officer)
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Dated: March 16, 2017
POWER OF ATTORNEY
We, the undersigned officers and directors of Anthera Pharmaceuticals, Inc., hereby severally constitute and appoint Craig Thompson and May Liu, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him or her and in his or her name, place and stead, and in any and all capacities, to sign for us and in our names in the capacities indicated below any and all amendments to this report, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
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Title
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Date
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/s/ Craig Thompson
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Chief Executive Officer and Director (Principal Executive Officer)
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March 16, 2017
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Craig Thompson
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/s/ May Liu
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Senior Vice President, Finance and Administration (Principal
Accounting Officer)
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March 16, 2017
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May Liu
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/s/ Paul F. Truex
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Chairman of the Board of Directors
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March 16, 2017
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Paul F. Truex
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/s/ Christopher S. Henney
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Director
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March 16, 2017
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Christopher S. Henney
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/s/ Brian R. Mueller
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Director
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March 16, 2017
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Brian R. Mueller
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/s/ Steven B. Engle
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Director
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March 16, 2017
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Steven B. Engle
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/s/ David E. Thompson
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Director
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March 16, 2017
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David E. Thompson
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/s/ Brent V. Furse
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Director
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March 16, 2017
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Brent V. Furse
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/
s/ Philip T. Sager
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Director
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March 16, 2017
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Philip T. Sager
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Exhibit Index
Number
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Description
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3.1
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Fifth Amended and Restated Certificate of Incorporation(1)
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3.2
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Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation filed October 12, 2012(2)
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3.3
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Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation filed July 12, 2013 and effective July 15, 2013(3)
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3.5
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Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series X Convertible Preferred Stock filed on September 15, 2016 (5)
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3.6
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Form of Certificate of Designation of Preferences, Rights and Limitations of Series X-1 Convertible Preferred Stock filed on September 12, 2016(6)
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3.7
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Amended and Restated Bylaws, as amended on May 21, 2015(7)
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4.1
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Specimen certificate evidencing shares of common stock(8)
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4.2
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Specimen Series X Convertible Preferred Stock certificate(9)
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4.3
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Form of Warrant sold pursuant to that Securities Purchase Agreement, among the Company and the purchasers thereto, dated September 20, 2010(10)
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4.4
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Form of Warrant Agreement dated as of March 25, 2011(11)
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4.5
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Form of Warrant sold pursuant to that Subscription Agreement, among the Company and the purchasers thereto, dated September 6, 2016(12)
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#10.1
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2005 Equity Incentive Plan and form agreements thereunder(13)
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#10.2
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Amended and Restated 2010 Stock Option and Incentive Plan(14)
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#10.3
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Certificate of Amendment to Amended and Restated 2010 Stock Option and Incentive Plan(15)
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#10.4
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Form of Non-Qualified Stock Option Agreement for Company Employees Under the Anthera Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(16)
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#10.5
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Form of Non-Qualified Stock Option Agreement for Non-Employee Directors Under the Anthera Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(16)
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#10.6
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Form of Incentive Stock Option Agreement Under the Anthera Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(16)
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#10.7
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Form of Restricted Stock Award Agreement Under the Anthera Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(16)
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#10.8
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Restricted Stock Unit Award Agreement Under the Anthera Pharmaceuticals, Inc. 2010 Stock Option and Incentive Plan(17)
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#10.9
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2010 Employee Stock Purchase Plan(18)
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#10.10
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Amendment No. 1 to 2010 Employee Stock Purchase Plan(19)
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#10.11
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Amendment No. 2 to 2010 Employee Stock Purchase Plan(20)
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#10.12
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2013 Stock Option and Incentive Plan(21)
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#10.13
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Form of Non-Qualified Stock Option Agreement for Company Employees Under the 2013 Stock Option and Incentive Plan(22)
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#10.14
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Form of Non-Qualified Stock Option Agreement for Non-Employees Directors Under the 2013 Stock Option and Incentive Plan(22)
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#10.15
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Form of Incentive Stock Option Agreement Under the 2013 Stock Option and Incentive Plan(22)
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#10.16
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Form of Restricted Stock Award Agreement Under the 2013 Stock Option and Incentive Plan(22)
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#10.17
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Form of Restricted Stock Unit Award Agreement Under the 2013 Stock Option and Incentive Plan(22)
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#10.18
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Form of Amended and Restated Indemnification Agreement(23)
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#10.19
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Form of Amended and Restated Change in Control Agreement(24)
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#10.20
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Form of Amended and Restated Severance Benefits Agreement(25)
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+10.21
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License Agreement between Amgen Inc. and the Company, dated as of December 18, 2007(26)
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10.22
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Amendment No. 1 to License Agreement between Amgen Inc. and the Company, dated as of October 16, 2009(27)
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+10.23
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Amendment No. 2 to License Agreement between Amgen Inc. and the Company, dated as of November 26, 2014(28)
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10.24
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Form of Securities Purchase Agreement, among the Company and the purchasers thereto, dated September 20, 2010(29)
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10.25
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Lease by and between the Company and MEPT Mount Eden LLC, dated as of May 4, 2011(30)
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10.26
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Lease Amendment by and between the Company and MEPT Mount Eden LLC, dated as of November 13, 2013(31)
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+10.27
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License Agreement between the Company and Eli Lilly, dated as of July 11, 2014(32)
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+10.28
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Collaboration and License Agreement between the Company and Zenyaku Kogyo Co., Ltd., dated as of December 11, 2014(33)
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+10.29
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Stock Purchase Agreement between the Company and Zenyaku Kogyo Co., Ltd., dated as of December 11, 2014(34)
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+10.30
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Subscription Agreement between the Company and Zenyaku Kogyo Co., Ltd., dated as of January 27, 2015(35)
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+10.31
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Subscription Agreement between the Company and Amgen Inc., dated as of January 27, 2015(36)
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+10.32
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Subscription Agreement between the Company and Zenyaku Kogyo Co., Ltd., dated as of August 14, 2015 (37)
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#10.33
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Deferred Compensation Election Form by and between the Company and Paul Truex, effective as of December 28, 2015 (38)
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#10.34
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Employment Offer Letter between the Company and Mr. Craig Thompson, dated as of December 4, 2015 (39)
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#10.35
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Employment Agreement, by and between the Company and Mr. Paul Truex, dated as of January 25, 2016 (40)
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#10.36
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Employment Agreement, by and between the Company and Mr. Craig Thompson, dated as of January 25, 2016 (41)
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#10.37
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Employment Agreement, by and between the Company and Dr. Colin Hislop, dated as of January 25, 2016 (42)
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#10.38
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Employment Agreement, by and between the Company and Ms. Klara Dickinson-Eason, dated as of January 25, 2016 (43)
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#10.39
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Employment Agreement, by and between the Company and Dr. Chuck Olson, dated as of January 25, 2016 (44)
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#10.40
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Employment Agreement, by and between the Company and Ms. May Liu, dated as of January 25, 2016 (45)
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#10.41
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Employment Offer Letter, by and between the Company and Dr. James Pennington, dated as of April 1, 2016 (46)
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#10.42
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Employment Offer Letter, by and between the Company and Dr. William Shanahan, dated as of April 25, 2016 (47)
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#10.43
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Amended and Restated Employment Offer Letter, by and between the Company and Mr. Craig Thompson, dated as of December 6, 2016 (filed herewith)
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10.41
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Stock Purchase Agreement between the Company and Lincoln Park Capital Fund, LLC, dated as of March 12, 2015 (48)
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10.42
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Amendment to the Stock Purchase Agreement between the Company and Lincoln Park Capital Fund LLC, dated as of July 8, 2015 (49)
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10.43
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Amendment to the Stock Purchase Agreement between the Company and Lincoln Park Capital Fund LLC, dated as of April 27, 2016 (50)
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10.44
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At Market Issuance Sales Agreement, dated April 21, 2016, between Anthera Pharmaceuticals, Inc. and H.C. Wainwright & Co., LLC (51)
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10.45
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Subscription Agreement, dated September 6, 2016, between Anthera Pharmaceuticals, Inc. and purchasers affiliated with Biotechnology Value Fund, L.P. and Rock Springs Capital Master Fund LP (filed as Exhibit 10.1 to the registrant's Form 8-K filed with the SEC on September 12, 2016 and incorporated herein by reference)(52)
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14.1
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Code of Ethics (53)
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21.1
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Subsidiaries of Anthera Pharmaceuticals, Inc.(54)
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23.1
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Consent of BDO USA LLP, independent registered public accounting firm
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24.1
|
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Power of Attorney (included on signature page hereto)
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|
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31.1
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
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31.2
|
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Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
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32.1
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Certification of Principal Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32.2
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Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant Section 906 of the Sarbanes-Oxley Act of 2002
|
+
|
Certain provisions of this Exhibit have been omitted pursuant to a request for confidential treatment.
|
#
|
Indicates management contract or compensatory plan, contract or agreement.
|
(1)
|
Filed as Exhibit 3.6 to the registrant’s Registration Statement on Form S-1/A (File No. 333-161930), filed with the SEC on February 3, 2010 and incorporated herein by reference.
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(2)
|
Filed as the same numbered exhibit to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 26, 2013 and incorporated herein by reference.
|
(3)
|
Filed as Exhibit 3.1 to the registrant Current Report on Form 8-K, filed with the SEC on July 16, 2013 and incorporated herein by reference.
|
(
4)
|
Filed as Exhibit 3.1 to the registrant Current Report on Form 8-K, filed with the SEC on September 12, 2016 and incorporated herein by reference.
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(5)
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Filed as Exhibit 3.1 to the registrant's Form 8-K filed with the SEC on September 15, 2016 and incorporated herein by reference.
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(6)
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Filed as Exhibit 3.2 to the registrant Current Report on Form 8-K, filed with the SEC on September 12, 2016 and incorporated herein by reference.
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(7)
|
Filed as Exhibit 3.4 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 10, 2015 and incorporated herein by reference.
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(8)
|
Filed as the same numbered exhibit to the registrant’s Amendment No. 3 to Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on January 29, 2010 and incorporated herein by reference.
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(9)
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Filed as Exhibit 4.2 to the registrant’s Current Report on Form 8-K, filed with the SEC on September 12, 2016 and incorporated herein by reference.
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(10)
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Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on September 22, 2010 and incorporated herein by reference.
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(11)
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Filed as Exhibit 10.2 to the registrant’s Current Report on Form 8-K, filed with the SEC on March 29, 2011 and incorporated herein by reference.
|
(12)
|
Filed as Exhibit 4.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on September 6, 2016 and incorporated herein by reference.
|
(13)
|
Filed as the same numbered exhibit to the registrant’s Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on September 15, 2009 and incorporated herein by reference.
|
(14)
|
Filed as Appendix A to the registrant’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on June 8, 2010 and incorporated herein by reference.
|
(15)
|
Filed as Exhibit 10.2 to registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 12, 2011 and incorporated herein by reference.
|
(16)
|
Filed as Exhibit 10.2 to the registrant’s Amendment No. 4 to Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on February 3, 2010 and incorporated herein by reference.
|
(17)
|
Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 14, 2010 and incorporated herein by reference.
|
(18)
|
Filed as Appendix B to the registrant’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on June 8, 2010 and incorporated herein by reference.
|
(19)
|
Filed as Exhibit 10.42 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 7, 2011 and incorporated herein by reference.
|
(20)
|
Filed as Exhibit 10.34 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 26, 2013 and incorporated herein by reference.
|
(21)
|
Filed as Annex B to the registrants Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 5, 2013 and incorporated herein by reference.
|
(22)
|
Filed as the same numbered exhibit to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 28, 2014 and incorporated herein by reference.
|
(23)
|
Filed as Exhibit 10.3 to the registrant’s Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on September 15, 2009 and incorporated herein by reference.
|
(24)
|
Filed as the Exhibit 10.4 to the registrant’s Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on October 19, 2009 and incorporated herein by reference.
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(25)
|
Filed as the Exhibit 10.5 to the registrant’s Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on October 19, 2009 and incorporated herein by reference.
|
(26)
|
Filed as Exhibit 10.10 to the registrant’s Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on September 15, 2009 and incorporated herein by reference.
|
(27)
|
Filed as Exhibit 10.18 to the registrant’s Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-161930), filed with the SEC on October 19, 2009 and incorporated herein by reference.
|
(28)
|
Filed as Exhibit 10.23 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 16, 2015, and incorporated herein by reference.
|
(29)
|
Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on September 22, 2010 and incorporated herein by reference.
|
(30)
|
Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 13, 2011, and incorporated herein by reference.
|
(31)
|
Filed as Exhibit 10.27 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 28, 2014, and incorporated herein by reference.
|
(32)
|
Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q/A, filed with the SEC on December 12, 2014 and incorporated herein by reference
|
(33)
|
Filed as Exhibit 10.33 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 16, 2015 and incorporated herein by reference
|
(34)
|
Filed as Exhibit 10.34 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 16, 2015 and incorporated herein by reference
|
(35)
|
Filed as Exhibit 10.35 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 16, 2015 and incorporated herein by reference
|
(36)
|
Filed as Exhibit 10.36 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 16, 2015 and incorporated herein by reference
|
|
|
(37)
|
Filed as Exhibit 10.32 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(38)
|
Filed as Exhibit 10.33 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(39)
|
Filed as Exhibit 10.34 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(40)
|
Filed as Exhibit 10.35 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(41)
|
Filed as Exhibit 10.36 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(42)
|
Filed as Exhibit 10.37 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(43)
|
Filed as Exhibit 10.38 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(44)
|
Filed as Exhibit 10.39 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
|
|
(45)
|
Filed as Exhibit 10.40 to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2016 and incorporated herein by reference
|
(46)
|
Filed as Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2016 and incorporated herein by reference
|
|
|
(47)
|
Filed as Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 7, 2016 and incorporated herein by reference
|
(48)
|
Filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on March 16, 2015 (dated March 12, 2015) and incorporated herein by reference
|
|
|
(49)
|
Filed as Exhibit 10.1 to the registrant's Form 8-K, filed with the SEC on April 27, 2016 and incorporated herein by reference
|
|
|
(50)
|
Filed as Exhibit 10.1 to the registrant's Form 8-K, filed with the SEC on April 21, 2016 and incorporated herein by reference
|
|
|
(51)
|
Filed as the same numbered exhibit to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 7, 2011 and incorporated herein by reference
|
|
|
(52)
|
Filed as Exhibit 10.1 to the registrant’s Form 8-K filed with the SEC on September 12, 2016 and incorporated herein by reference.
|
|
|
(53)
|
Filed as the same numbered exhibit to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 7, 2011 and incorporated herein by reference
|
|
|
(54)
|
Filed as the same numbered exhibit to the registrant’s Annual Report on Form 10-K, filed with the SEC on March 14, 2012 and incorporated herein by reference
|
ITEM 16. FORM 10-K SUMMARY
None.