Liquidity and Capital Resources
Sources of Liquidity
We do not expect to generate significant revenue from product sales
unless and until we or a potential future licensee or collaborator
obtains marketing approval for, and commercializes, one or more of
our current or potential future product candidates (other than
elobixibat as a treatment for chronic constipation in Japan), which
we do not expect to occur until at least 2021, if at all. We
anticipate that we will continue to generate losses for the
foreseeable future, and we expect the losses to increase as we
continue the development of and seek regulatory approvals for our
product candidates. We are subject to all of the risks applicable
to the development of new pharmaceutical products and may encounter
unforeseen expenses, difficulties, complications, delays and other
unknown factors that may harm our business. We expect that we will
need substantial additional funding to complete development of and
potentially commercialize our product candidates.
Our operations have historically been financed primarily through
issuances of equity or convertible debt, upfront fees paid upon
entering into license agreements, payments received upon the
achievement of specified milestone events under license agreements,
grants and venture debt borrowings and the HCR royalty monetization
transactions. Our primary uses of capital are, and we expect will
continue to be, personnel-related costs, third party expenses
associated with our research and development programs, including
the conduct of clinical trials, and manufacturing-related costs for
our product candidates.
As of June 30, 2020, our cash and cash equivalents were
approximately $152.0 million.
During the first quarter of 2018, following the Japanese MHLW’s
approval of elobixibat for the treatment of chronic constipation in
January 2018, we received a $44.5 million payment, net of
certain transaction expenses, from HCR under our RIAA.
Additionally, this approval triggered a milestone payment to us
from EA Pharma of $11.2 million. As of June 30, 2020, we have
received approximately $49.9 million in upfront and milestone
payments from EA Pharma under a license agreement for the
development and commercialization of elobixibat in specified
countries in Asia. We are eligible to receive additional
amounts of up to $4.7 million under the amended agreement, if a
specified regulatory event is achieved for elobixibat.
In January 2018, we completed an underwritten public offering
of 2,265,500 shares of our common stock for net proceeds of
approximately $69.9 million. Subsequently, in February 2018,
we sold 728,862 shares of our common stock for net proceeds of
approximately $24.2 million pursuant to an at-the-market offering
program Sales Agreement that we entered into with Cowen in
October 2017. This agreement terminated on March 6, 2019.
In March 2019, we entered into a new sales agreement, with respect
to an at-the-market offering program under which we may offer and
sell, from time to time at our sole discretion, shares of our
common stock having an aggregate offering price of up to $50.0
million. Subsequently, in May 2019, we sold 637,367 shares of our
common stock for net proceeds of approximately $20.8 million
pursuant to the sales agreement. This agreement terminated on May
7, 2020.
In addition, in February 2020, we completed an underwritten public
offering of 2,190,750 shares of our common stock under our
universal shelf registration statement for net proceeds of
approximately $43.0 million.
On May 7, 2020, we filed a new
universal shelf registration on Form S-3 with the SEC, which was
declared effective on May 18, 2020, pursuant to which we registered
for sale up to $200.0 million of any combination of our common
stock, preferred stock, debt securities, warrants, rights and/or
units from time to time and at prices and on terms that we may
determine. On May 6, 2020, we also entered into a new sales
agreement, with respect to an at-the-market offering program under
which we may offer and sell, from time to time at our sole
discretion, shares of our common stock having an aggregate offering
price of up to $50.0 million. As of June 30, 2020, $200.0 million
of securities remained available for issuance under our universal
shelf registration statement, including $50.0 million available for
sale under our sales agreement.
On June 8, 2020, we entered into a Loan and Security Agreement with
the several banks and other financial institutions or entities from
time to time parties to the Loan and Security Agreement, as
lenders, or collectively referred