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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2017	Jul. 31, 2017
Document and Entity Information
Entity Registrant Name	Kala Pharmaceuticals, Inc.
Entity Central Index Key	0001479419
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		24,227,050
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2

CONDENSED BALANCE SHEETS - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash	$ 26,350,000	$ 45,472,000
Prepaid expenses and other current assets	1,544,000	154,000
Total current assets	27,894,000	45,626,000
Property and equipment, net	563,000	594,000
Restricted cash	134,000	109,000
Total assets	28,591,000	46,329,000
Current liabilities:
Current portion of long-term debt	2,222,000	556,000
Accounts payable	1,325,000	997,000
Accrued expenses	4,303,000	3,993,000
Total current liabilities	7,850,000	5,546,000
Long-term liabilities:
Long-term debt - less current portion	7,488,000	9,098,000
Warrant liability	2,260,000	1,039,000
Other long-term liabilities	21,000	17,000
Total long-term liabilities	9,769,000	10,154,000
Total liabilities	17,619,000	15,700,000
Commitments and Contingencies (Note 13)	0	0
Stockholders' deficit:
Common stock	1,000	1,000
Additional paid-in capital	5,485,000	4,374,000
Accumulated deficit	(112,905,000)	(92,137,000)
Total stockholders’ deficit	(107,419,000)	(87,762,000)
Total liabilities, convertible preferred stock and stockholders' deficit	28,591,000	46,329,000
Series Seed convertible preferred stock
Long-term liabilities:
Convertible preferred stock	11,065,000	11,065,000
Series A convertible preferred stock
Long-term liabilities:
Convertible preferred stock	10,736,000	10,736,000
Series B convertible preferred stock
Long-term liabilities:
Convertible preferred stock	22,185,000	22,185,000
Series B-1 convertible preferred stock
Long-term liabilities:
Convertible preferred stock	6,885,000	6,885,000
Series C convertible preferred stock
Long-term liabilities:
Convertible preferred stock	$ 67,520,000	$ 67,520,000

CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	110,251,951	110,251,951
Common stock, shares issued	1,181,429	1,181,429
Common stock, shares outstanding	1,181,429	1,181,429
Convertible preferred stock.
Convertible preferred stock, authorized	170,336,260	170,336,260
Series Seed convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	11,323,209	11,323,209
Convertible preferred stock, shares issued	11,243,209	11,243,209
Convertible preferred stock, shares outstanding	11,243,209	11,243,209
Convertible preferred stock, liquidation value	$ 11,243	$ 11,243
Series A convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	9,583,432	9,583,432
Convertible preferred stock, shares issued	9,583,432	9,583,432
Convertible preferred stock, shares outstanding	9,583,432	9,583,432
Convertible preferred stock, liquidation value	$ 11,500	$ 11,500
Series B convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	16,597,221	16,597,221
Convertible preferred stock, shares issued	15,624,999	15,624,999
Convertible preferred stock, shares outstanding	15,624,999	15,624,999
Convertible preferred stock, liquidation value	$ 22,500	$ 22,500
Series B-1 convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	4,629,629	4,629,629
Convertible preferred stock, shares issued	4,629,629	4,629,629
Convertible preferred stock, shares outstanding	4,629,629	4,629,629
Convertible preferred stock, liquidation value	$ 7,000	$ 7,000
Series C convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	43,034,639	43,034,639
Convertible preferred stock, shares issued	42,782,688	42,782,688
Convertible preferred stock, shares outstanding	42,782,688	42,782,688
Convertible preferred stock, liquidation value	$ 67,922	$ 67,922

CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Operating expenses:
Research and development	$ 8,071	$ 5,950	$ 16,110	$ 9,861
General and administrative	1,559	3,700	3,091	4,865
Total operating expenses	9,630	9,650	19,201	14,726
Loss from operations	(9,630)	(9,650)	(19,201)	(14,726)
Other income (expense):
Interest income	37	30	83	30
Interest expense	(208)	(186)	(406)	(380)
Change in fair value of warrant liability	(1,185)	(47)	(1,221)	(29)
Total other income (expense)	(1,356)	(203)	(1,544)	(379)
Net loss attributable to common stockholders—basic and diluted	$ (10,986)	$ (9,853)	$ (20,745)	$ (15,105)
Net loss per share attributable to common stockholders—basic and diluted	$ (9.30)	$ (8.34)	$ (17.56)	$ (12.79)
Weighted average shares outstanding—basic and diluted	1,181,429	1,181,429	1,181,429	1,181,429

CONDENSED STATEMENTS OF CASH FLOWS $ in Thousands	6 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS $ in Thousands	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)
Cash flows from operating activities:
Net loss	$ (20,745)	$ (15,105)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	140	147
Change in fair value of warrant liability	1,221	29
Amortization of debt discount and debt issuance costs	56	52
Write-off of deferred offering costs		1,789
Stock-based compensation	1,089	1,193
Increase (decrease) in cash from:
Prepaid expenses and other current assets	(148)	(48)
Accounts payable	192	951
Accrued expenses	(13)	(866)
Other long-term liabilities	4	(18)
Net cash used in operating activities	(18,204)	(11,876)
Cash flows from investing activities:
Purchases of property and equipment	(109)	(46)
Restricted cash	(25)
Net cash used in investing activities	(134)	(46)
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock		67,922
Payment of Series C issuance costs		(401)
Payment of deferred offering costs	(784)	(283)
Net cash (used in) provided by financing activities	(784)	67,238
Net (decrease) increase in cash	(19,122)	55,316
Cash at beginning of period	45,472	5,759
Cash at end of period	26,350	61,075
Supplemental disclosure of non-cash investing and financing activities:
Deferred offering costs included in accounts payable and accruals	458
Cash paid for interest	$ 348	$ 329

NATURE OF BUSINESS AND BASIS OF PRESENTATION	6 Months Ended
NATURE OF BUSINESS AND BASIS OF PRESENTATION	Jun. 30, 2017
NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS AND BASIS OF PRESENTATION	1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business—Kala Pharmaceuticals, Inc. (the “Company”) was incorporated on July 7, 2009, and is a biopharmaceutical company focused on the development and commercialization of therapies using its proprietary nanoparticle‑based Mucus Penetrating Particles, or MPP, technology, with an initial focus on the treatment of eye diseases. KPI‑121, the Company’s lead program, consists of topically applied MPP nanosuspensions of loteprednol etabonate, or LE, a corticosteroid designed for ocular applications. Under its KPI‑121 program, the Company has two product candidates in Phase 3 development, one for the indications of the treatment of post‑operative inflammation and pain following ocular surgery and one for the temporary relief of the signs and symptoms of dry eye disease. The Company is also evaluating compounds in its topically applied MPP receptor Tyrosine Kinase Inhibitor program, or rTKI program, that inhibit the vascular endothelial growth factor, or VEGF, pathway, for the potential treatment of a number of retinal diseases. The Company is engaged in research and development activities, raising capital and recruiting skilled personnel. The Company is subject to a number of risks similar to those of other companies conducting high‑risk, early‑stage research and development of pharmaceutical product candidates. Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies and the technical risks associated with the successful research, development and marketing of its product candidates. The Company’s success is dependent upon its ability to raise additional capital in order to fund ongoing research and development, obtain regulatory approval of its product candidates, successfully commercialize its products, generate revenue, meet its obligations, and, ultimately, attain profitable operations. On July 19, 2017, the Company’s registration statement on Form S‑1 (File No. 333-218936) relating to the initial public offering (“IPO”) of its common stock became effective and on July 25, 2017, the IPO closed. Pursuant to the IPO, the Company issued and sold 6,900,000 shares of common stock at a public offering price of $15.00 per share, which included 900,000 shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $94.9 million after deducting underwriting discounts and commissions of $7.2 million and offering costs incurred in 2017 of $1.4 million. The shares began trading on the NASDAQ Global Select Market on July 20, 2017. Upon the closing of the IPO, all of the Company’s outstanding shares of convertible preferred stock automatically converted into 16,101,970 shares of common stock at the applicable conversion ratio then in effect and all of the Company’s outstanding warrants to purchase preferred stock automatically converted into warrants to purchase 202,020 shares of common stock. Unaudited Interim Financial Information The condensed financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2016, and notes thereto, included in the Company’s final prospectus for the IPO filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) on July 20, 2017 (the “Prospectus”). Reverse Stock Split—On July 7, 2017, the Company effected a one-for-5.2083 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for the Company’s convertible preferred stock. The par value per share and authorized shares of common and convertible preferred stock were not adjusted as a result of the reverse stock split. All common stock and common stock per share amounts within the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. Automatic Conversion of Preferred Stock – On July 7, 2017, the Company effected an amendment to its Amended and Restated Certificated of the Incorporation, as amended. This amendment eliminated the minimum price per share of Common Stock for an underwritten public offering that would result in the automatic conversion of all outstanding shares of the Company’s Series Seed, Series A, Series B, Series B‑1 and Series C Preferred Stock.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Jun. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expense, and related disclosures. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Estimates relied upon in preparing these financial statements relate to, but are not limited to, the fair value of common stock, preferred stock, warrants, stock compensation, accrued expenses and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Actual results may differ from these estimates under different assumptions or conditions. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Prospectus. There have been no material changes to the significant accounting policies during the period ended June 30, 2017. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09” or “Topic 718”), which simplifies share‑based payment accounting through a variety of amendments. The standard is effective for annual periods beginning after December 15, 2016 and for interim periods within those fiscal years. The changes resulting from the adoption of this standard impact the accounting for income taxes, accounting for forfeitures, statutory tax withholding and the presentation of statutory tax withholding on the statement of cash flows. The Company adopted this standard on January 1, 2017. Under guidance within ASU 2016‑09, excess tax benefits and deficiencies are to be recognized as income tax expense or benefit in the statement of operations in the period in which they occur rather than as an increase or decrease in stockholders’ equity (deficit). Since the Company maintains a full valuation allowance on its net deferred tax asset, there was no net impact to its accumulated deficit or its net loss resulting from the adoption of this standard. Also under the guidance in ASU 2016‑09, an entity may elect to account for forfeitures as they occur or continue to estimate the total number of awards that are vested or expected to vest. The Company elected to account for forfeitures as they occur and applied the accounting change on a modified retrospective basis as a cumulative effect adjustment to accumulated deficit as of the date of adoption, January 1, 2017. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or statement of cash flows. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight‑line basis over the term of the lease, respectively. A lessee is also required to record a right‑of‑use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016‑02 (ASC Topic 842) supersedes the previous leases standard, ASC 840, Leases. The standard is effective for public entities for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑02 will have on its financial statements. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (“ASU 2016‑15”), to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. ASU 2016-15 should be applied restrospectively and early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact that the adoption of ASU 2016‑15, but believes its adoption will not have a material impact on its statement of cash flows. In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows Restricted Cash (“ASU 2016‑18”). This new standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and requires retrospective application. The Company does not believe that the adoption of ASU 2016‑18 will have a material impact on its financial statements and related disclosures. In May 2017, the FASB issued ASU Update No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in ASU 2017-09 are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that ASU 2017-09 will have on the Company’s balance sheets, results of operations and statements of cash flows. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for, including adoption in an interim period. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2017

PREPAID EXPENSES AND OTHER CURRENT ASSETS

PREPAID EXPENSES AND OTHER CURRENT ASSETS

3. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30,		December 31,
	2017		2016

Rent	$	61	$	58
Insurance		65		55
Deferred offering costs		1,242		—
Other		176		41
Prepaid expenses and other current assets	$	1,544	$	154

ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2017

ACCRUED EXPENSES

ACCRUED EXPENSES

4. ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):


	June 30,		December 31,
	2017		2016

Development costs	$	2,948	$	2,280
Compensation and benefits		950		1,480
Professional fees		33		171
Deferred offering costs		323		—
Other		49		62
Accrued expenses	$	4,303	$	3,993

DEBT

6 Months Ended

Jun. 30, 2017

DEBT

DEBT

5. DEBT

2014 Debt Facility

In November 2014, the Company entered into a venture debt facility (“2014 Debt Facility”) for a total loan commitment of $10.0 million. On October 13, 2016, the Company entered into the First Amendment. The First Amendment reaffirmed the initial commitment to a total of $10.0 million of funding (“Term Loan A”) and increased the Company’s total borrowing capacity by an additional $10.0 million (“Term Loan B” and together with Term Loan A, “Term Loans”). Under the terms of the facility, the borrowings accrued interest at an annual rate equal to the greater of (i) 3.00% above the Prime Rate then in effect, or (ii) 6.25%. The interest rate was 6.50% as of December 31, 2016 and 7.00% as of June 30, 2017. The unpaid principal balance under the 2014 Debt Facility was $10.0 million as of June 30, 2017 and December 31, 2016. The unamortized discount was $290,000 and $346,000 as of June 30, 2017 and December 31, 2016, respectively. During the three months ended June 30, 2017 and 2016, the Company recognized interest expense of $208,000 and $186,000, respectively, which consisted of amortization of the debt discount of $28,000 and $22,000 and the contractual coupon interest of $180,000 and $164,000, respectively. During the six months ended June 30, 2017 and 2016, the Company recognized interest expense of $406,000 and $380,000, respectively, which consisted of amortization of the debt discount of $56,000 and $52,000 and the contractual coupon interest of $350,000 and $328,000, respectively.

In connection with the 2014 Debt Facility and the initial borrowing of $5.0 million under Term Loan A, the Company issued warrants to the lender to purchase 138,889 shares of Series B Preferred Stock at an exercise price of $1.44 per share (the “2014 Warrants”). During 2015 the Company borrowed an additional $5.0 million under Term Loan A and the number of exercisable shares underlying the 2014 Warrants increased to 277,778 shares. Upon executing the First Amendment, the Company issued warrants to purchase up to 251,951 shares of Series C Preferred Stock at an exercise price of $1.59 per share (the “2016 Warrants”). Consistent with the warrants issued under the original 2014 Debt Facility, the number of shares of Series C Preferred Stock that become exercisable increases in proportion to the amount of Term Loan B borrowings. The 2016 Warrants were not exercisable into shares as of the First Amendment date or June 30, 2017, as the Company had not borrowed under the Term B Loan during 2016 or the six months ended June 30, 2017.

Upon issuance of the 2014 Warrants and 2016 Warrants, the Company estimated the fair value of the warrants using the Black‑Scholes option‑pricing model (see Note 6), and recorded the estimated fair value of the warrants as a liability separate from the loan balance, resulting in additional debt discount included within long‑term debt that is amortized to interest expense over the term of the loan using the effective interest method. The initial fair value of the 2014 Warrants and 2016 Warrants was $140,000 and $225,000, respectively. The warrants are subsequently re‑measured to fair value at every reporting date with changes in fair value recorded in the statement of operations as a component of other income (expense), as the shares underlying the warrants are exercisable into contingently redeemable shares.

As of June 30, 2017 and December 31, 2016, the estimated fair value of the warrant liability associated with the original 2014 Debt Facility was $533,000 and $274,000, respectively, and the estimated fair value of the warrant liability associated with the First Amendment was $504,000 and $263,000, respectively.

The future annual principal payments due under the 2014 Debt Facility as of June 30, 2017 are as follows (in thousands):


Years Ending December 31,
2017	$	556
2018		3,333
2019		3,333
2020		2,778
Total	$	10,000

PREFERRED STOCK WARRANTS

6 Months Ended

Jun. 30, 2017

PREFERRED STOCK WARRANTS

PREFERRED STOCK WARRANTS

6. PREFERRED STOCK WARRANTS

In addition to the warrants issued in connection with the 2014 Debt Facility and the First Amendment, the Company has issued warrants in connection with debt transactions that were completed prior to 2014, all of which are classified as liabilities and are remeasured at fair value at each reporting period, as the warrants are exercisable into contingently redeemable shares. The following table summarizes the warrants outstanding at each of the dates identified:


					Shares Exercisable at
		Exercise		Expiration	June 30,	December 31,
Issued	Exercisable for	Price		Date	2017	2016
2011 and 2012	Series Seed Preferred Stock	$	1.00	July 2019	80,000	80,000
2013	Series B Preferred Stock	$	1.44	April 2021	694,444	694,444
2014	Series B Preferred Stock	$	1.44	November 2024	277,778	277,778
2016	Series C Preferred Stock	$	1.59	October 2026	—	—	(1)

(1)

As of June 30, 2017 and as of December 31, 2016, warrants outstanding to acquire Series C Preferred Stock were not exercisable into shares of Series C Preferred Stock; however, only upon draw down of Term Loan B, the warrants will become exercisable into a maximum of 251,951 shares of Series C Preferred Stock.

(1)

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2017

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

Certain assets and liabilities are carried at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•Level 1—Quoted prices in active markets for identical assets or liabilities.

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value osf the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s preferred stock warrant liability is carried at fair value determined according to the fair value hierarchy and classified as a Level 3 measurement. The carrying value of accounts payable and accrued expenses approximate their fair value due to the short‑term nature of these assets and liabilities. Management believes that the Company’s long‑term debt (See Note 5) bears interest at the prevailing market rate for instruments with similar characteristics and, accordingly, the carrying value of long‑term debt, including the current portion, also approximates its fair value. The fair value of the outstanding debt was estimated using a discounted cash flow analysis based on current market interest rates for debt issuances with similar remaining years to maturity, adjusted for credit risk, which represents a Level 3 measurement.

The Company’s preferred stock warrants associated with the issuances of the 2014 Debt Facility and the First Amendment, as well as debt transactions entered into prior to 2014, are recorded at fair value. The assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016, and the input categories associated with those assets and liabilities are as follows (in thousands):


			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Carrying Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2016
2011 and 2012 Series Seed Warrants	$	39	$	—	$	—	$	39
2013 Series B Warrants		463		—		—		463
2014 Series B Warrants		274		—		—		274
2016 Series C Warrants		263		—		—		263
Total warrant liability	$	1,039	$	—	$	—	$	1,039

June 30, 2017
2011 and 2012 Series Seed Warrants	$	116	$	—	$	—	$	116
2013 Series B Warrants		1,107		—		—		1,107
2014 Series B Warrants		533		—		—		533
2016 Series C Warrants		504		—		—		504
Total warrant liability	$	2,260	$	—	$	—	$	2,260

The Company has classified the value of the warrants as Level 3 measurements within the fair value hierarchy because the fair value is derived using significant unobservable inputs, which include the estimated volatility, the estimated fair value of the underlying preferred stock, and to the extent that the number of exercisable shares underlying the warrants are adjustable based on the amount of the Term Loans drawn down, the probability that the Company will draw down on the debt facility.

The following table provides a summary of changes in the fair value of the Company’s derivative liability, which is included as a component of other (income) expense (in thousands):


		Three Months Ended
		June 30,
	2017		2016
	Warrant		Warrant
	Liability		Liability

Fair value - March 31,	$	1,075	$	918
Change in fair value of warrant liability		1,185		47
Fair value - June 30,	$	2,260	$	965


		Six Months Ended
		June 30,
	2017		2016
	Warrant		Warrant
	Liability		Liability

Fair value - December 31,	$	1,039	$	936
Change in fair value of warrant liability		1,221		29
Fair value - June 30,	$	2,260	$	965

The Company determined the fair values of the warrants, using the Black‑Scholes option‑pricing model using the following assumptions:


	2011 and
	2012 Series			2013			2014
	Seed			Series B			Series B			Series C
	Warrants			Warrants			Warrants			Warrants

December 31, 2016
Volatility		100.00	%		87.00	%		114.00	%		58.30	%
Risk-free interest rate		1.30	%		1.80	%		2.30	%		2.40	%
Estimated fair value of underlying shares	$	0.89		$	1.11		$	1.11			1.54
Remaining contractual term (years)		2.6			4.3			7.9			9.8
Expected dividend yield		—	%		—	%		—	%		—	%


June 30, 2017
Volatility		63.20	%		84.20	%		87.40	%		88.30	%
Risk-free interest rate		1.40	%		1.70	%		2.20	%		2.30	%
Estimated fair value of underlying shares	$	2.30		$	2.30		$	2.30		$	2.30
Remaining contractual term (years)		2.1			3.8			7.4			9.3
Expected dividend yield		—	%		—	%		—	%		—	%

For purposes of determining the fair value of the warrants to purchase Series C Preferred Stock, the Company estimated that there is a 100% probability that it will draw down on the remaining $10.0 million available under the 2014 Debt Facility, and as such, assumed that the warrants will be exercisable into the maximum number of shares stipulated in the First Amendment. With respect to the aggregate warrant liabilities recorded as of June 30, 2017 and 2016, a change in the assumptions regarding estimated volatility and/or the estimated fair value of the preferred stock could have a significant impact on the resulting fair values of the warrant liabilities.

- Definition

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

+ References + Details

CONVERTIBLE PREFERRED STOCK

6 Months Ended

Jun. 30, 2017

CONVERTIBLE PREFERRED STOCK

CONVERTIBLE PREFERRED STOCK

8. CONVERTIBLE PREFERRED STOCK

Preferred stock consisted of the following as of June 30, 2017 and December 31, 2016 (in thousands, except share amounts):


								Common
								Stock
			Shares Issued					Issuable
	Designated		and	Liquidation		Carrying		Upon
	Shares	Issuance Dates	Outstanding	Value		Value		Conversion (1)
Series Seed	11,323,209	December 2009	2,000,001
		October 2010	2,000,003
		February 2012	7,243,205
			11,243,209		$ 11,243		$ 11,065	2,158,708
Series A	9,583,432	February 2013	4,791,716
		July 2013	4,791,716
			9,583,432		$ 11,500		$ 10,736	1,840,029
Series B	16,597,221	April 2014	15,624,999		$ 22,500		$ 22,185	3,000,017
Series B-1	4,629,629	August 2015	4,629,629		$ 7,000		$ 6,885	888,894
Series C	43,034,639	April 2016	42,782,688		$ 67,922		$ 67,520	8,214,322

(1)

No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Company. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.

On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of the Convertible Preferred Stock converted into 16,101,970 shares of the Company’s common stock.

Series Seed Convertible Preferred Stock

In December 2009, the Company issued an aggregate of 2,000,001 shares of Series Seed Preferred Stock for gross proceeds of $2.0 million or $1.00 per share. In October 2010, the Company issued an aggregate of 2,000,003 shares of Series Seed Preferred Stock to existing investors for gross proceeds of $2.0 million or $1.00 per share. In February 2012, the Company issued an aggregate of 7,243,205 shares of Series Seed Preferred Stock to existing and new investors, which included 6,150,000 shares for gross proceeds of $6.2 million and 1,093,205 shares converted from convertible debt of $1.0 million principal and $93,000 accrued interest. Costs incurred in connection with each of the individual issuances of Series Seed Preferred Stock were $124,000, $39,000 and $15,000 respectively, which have been recorded as a reduction to the carrying amount of the Series Seed Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series Seed Convertible Stock converted into 2,158,708 shares of the Company’s common stock.

Series A Convertible Preferred Stock

In February 2013, the Company issued 4,791,716 shares of Series A Preferred Stock, at a purchase price of $1.20 per share for gross proceeds of $5.8 million.

Additionally, in accordance with the terms of the Series A Preferred Stock Purchase Agreement, investors were granted the right to purchase up to an additional 4,791,716 shares of Series A Preferred Stock, at a price of $1.20 per share, upon the Company meeting certain milestone criteria by December 31, 2013, approval of the Board and approval of the investors holding a majority of the outstanding shares of Series A Preferred Stock.

In June 2013, the Board approved waiving one of the milestone events provided for in the Series A Preferred Stock Purchase Agreement. Accordingly, the second tranche of Series A Preferred Stock closed on July 15, 2013 and the Company issued 4,791,716 shares of Series A Preferred Stock for gross proceeds of $5.8 million, or $1.20 per share. Costs incurred in connection with the issuance of the Series A Preferred Stock were $93,000, which have been recorded as a reduction in the carrying amount of the Series A Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series A Convertible Stock converted into 1,840,029 shares of the Company’s common stock.

Series B Convertible Preferred Stock

In April 2014, the Company issued 15,624,999 shares of Series B Preferred Stock for gross proceeds of $22.5 million or $1.44 per share which included conversion of the outstanding principal and interest on the 2013 Notes (See Note 7) of $5.1 million, which converted into 3,562,785 shares of Series B Preferred Stock pursuant to the terms of the Notes. Costs incurred in connection with the issuance of the Series B Preferred Stock were $315,000, which have been recorded as a reduction in the carrying amount of the Series B Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series B Convertible Stock converted into 3,000,017 shares of the Company’s common stock.

Series B‑1 Convertible Preferred Stock

On August 17, 2015, the Company issued 4,629,629 shares of Series B‑1 Senior Convertible Preferred Stock (“Series B‑1 Preferred Stock”) for gross proceeds of $7.0 million or $1.512 per share. Costs incurred in connection with the issuance of the Series B‑1 Preferred Stock were $115,000, which have been recorded as a reduction in the carrying amount of the Series B‑1 Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series B-1 Convertible Stock converted into 888,894 shares of the Company’s common stock.

Series C Convertible Preferred Stock

On April 5, 2016, the Company issued 42,782,688 shares of Series C Preferred Stock for gross proceeds of $67.9 million or $1.5876 per share. Costs incurred in connection with the issuance of the Series C Preferred Stock were $402,000, which have been recorded as a reduction in the carrying amount of the Series C Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series C Convertible Stock converted into 8,214,322 shares of the Company’s common stock.

Treatment of Preferred Stock Generally

The rights, preferences, and privileges of the Series Seed, Series A, Series B, Series B-1 and Series C (collectively the “Preferred Stock”) are included in the Prospectus. There were no changes to the rights, preferences, and privileges of the Preferred Stock during the six months ended June 30, 2017.

As described in Note 1, on July 7, 2017, the Company effected an amendment to its Amended and Restated Certificated of the Incorporation, as amended. This amendment eliminated the minimum price per share of Common Stock for an underwritten public offering that would result in the automatic conversion of all outstanding shares of the Company’s Series Seed, Series A, Series B, Series B‑1 and Series C Preferred Stock.

As described in Note 1, on July 7, 2017, the Company effected a one-for-5.2083 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for the Company’s convertible preferred stock.

COMMON STOCK

6 Months Ended

Jun. 30, 2017

COMMON STOCK

COMMON STOCK

9. COMMON STOCK

The Company was authorized to issue up to 110,251,951 shares of common stock with a $0.001 par value per share as of June 30, 2017 and December 31, 2016, respectively. As of June 30, 2017 and December 31, 2016, the Company had 1,181,429 shares of common stock issued and outstanding.

The rights, preferences, and privileges of the Company’s common stock are included in the Prospectus. There were no changes to the rights, preferences, and privileges of the common stock during the six months ended June 30, 2017.

Reserved Shares—As of June 30, 2017 and December 31, 2016, the Company has reserved the following shares of common stock for potential conversion of the outstanding convertible preferred stock, convertible preferred stock issuable upon exercise of rights under warrants and exercise of stock options:


	June 30,	December 31,
	2017	2016

Convertible preferred stock	16,101,970	16,101,970
2013 Warrant rights to acquire Series B Preferred Stock	133,327	133,327
2014 Warrant rights to acquire Series B Preferred Stock	53,333	53,333
2016 Warrant rights to acquire Series C Preferred Stock (1)	48,374	48,374
2011 Warrant rights to acquire Series Seed Preferred Stock	15,360	15,360
2009 stock option plan	3,533,726	3,533,726
Total	19,886,090	19,886,090

(1)

As of June 30, 2017 and December 31, 2016, warrants outstanding to acquire Series C Preferred Stock were not exercisable into shares of Series C Preferred Stock; however, upon draw down of Term Loan B, the warrants will become exercisable into a maximum of 251,951 shares of Series C Preferred Stock, which represents a maximum of 48,374 potential common shares upon conversion of the Series C Preferred Stock into shares of common stock.

(1)

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2017

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

10. STOCK‑BASED COMPENSATION

Stock Incentive Plan—On December 11, 2009, the Board adopted the 2009 Employee, Director and Consultant Equity Incentive Plan (the “2009 Plan”) for the issuance of common stock and stock options to employees, officers, directors, consultants, and advisors. As of June 30, 2017 and December 31, 2016, the Board had authorized, 3,711,949 shares and 3,711,949 shares, respectively, of common stock to be issued under the 2009 Plan. Under the 2009 Plan, the Board determined the number of shares of common stock to be granted pursuant to the awards, as well as the exercise price and terms of such awards. The exercise price of incentive stock options cannot be less than the fair value of the common stock on the date of grant.

Stock options awarded under the 2009 Plan expire 10 years after the grant date, unless the Board sets a shorter term. Options granted under the plan generally vest over a four‑year period. As of June 30, 2017 and December 31, 2016, there were 241,548 shares and 338,256 shares, respectively, of common stock available for future grant under the 2009 Plan. On July 19, 2017, the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) became effective and no further stock options or other awards will be made under the 2009 Plan. The 241,548 shares of common stock that remained available for grant under the 2009 Plan will be available for grant under the 2017 Plan. In addition, any shares of common stock subject to awards under the 2009 Plan that expire, terminate, or are otherwise surrendered, cancelled, forfeited or repurchased without having been fully exercised or resulting in any common stock being issued will become available for issuance under the 2017 Plan, up to a specified number of shares. Upon the exercise of stock options, the Company issues new shares of common stock. The Company does not hold any treasury shares.

Stock Options—In determining the exercise prices for options granted, the Board has considered the fair value of the common stock as of the measurement date. The fair value of the common stock has been determined by the Board based on a variety of factors, including the Company’s financial position, the status of development efforts within the Company, the composition and ability of the current scientific and management teams, the current climate in the market place, the illiquid nature of the Company’s common stock, arm’s‑length sale of the Company’s preferred stock, the effect of the rights and preferences of the preferred stockholders, and the prospects of a liquidity event, among others.

The Company has granted 86,056 stock options which contain performance‑based vesting criteria. These criteria are milestone events that are specific to the Company’s corporate goals. Stock‑based compensation expense associated with performance‑based stock options are recognized if the achievement of the performance condition is considered probable using management’s best estimates. These milestones have not been deemed probable as of June 30, 2017 and December 31, 2016. As of the six months ended June 30, 2017 and 2016, unrecognized compensation expense related to the performance‑based awards was $25,000 and $35,000, respectively.

The Company granted 4,224 and 0 stock options to non‑employees for the three months ended June 30, 2017 and 2016, respectively and 4,224 and 0 stock options for the six months ended June 30, 2017 and 2016, respectively. During the three months ended June 30, 2017 and 2016, the Company recognized $22,000 and $15,000, respectively, in stock compensation expense related to non‑employees. During the six months ended June 30, 2017 and 2016, the Company recognized $37,000, and $28,000, respectively, in stock compensation expense related to non‑employees.

A portion of the unvested stock options will vest upon the sale of all or substantially all of the stock or assets of the Company.

A summary of option activity for employee and non‑employee awards under the 2009 Plan for the six months ended June 30, 2017 is as follows (in thousands, except share and per share amounts):


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(Years)
Outstanding at January 1,2016	1,546,155	$	3.17	8.7	$	1,691
Granted	1,649,314		3.33
Outstanding at December 31, 2016	3,195,469	$	3.26	8.6	$	1,200
Granted	103,013		3.86
Forfeited	(6,305)		3.33
Outstanding at June 30, 2017	3,292,177	$	3.27	8.2	$	28,676
Vested and expected to vest at December 31, 2016	2,899,032	$	3.23	8.6	$	1,141
Options exercisable at December 31, 2016	1,035,928	$	2.89	8.0	$	823
Vested and expected to vest at June 30, 2017	3,290,704	$	3.27	8.2	$	28,662
Options exercisable at June 30, 2017	1,507,793	$	3.04	7.9	$	13,480

The Company records stock‑based compensation related to stock options granted at fair value. The Company utilizes the Black‑Scholes option‑pricing model to estimate the fair value of stock option grants and to determine the related compensation expense. The assumptions used in calculating the fair value of stock‑based payment awards represent management’s best estimates. The assumptions used in determining fair value of the stock options granted in the six months ended June 30, 2017 and 2016 are as follows:


	Six Months Ended June 30,
	2017	2016

Expected volatility	103% - 122%	108% - 110%
Risk-free interest rate	1.81% - 2.29%	1.21% - 1.29%
Expected dividend yield	0%	0%
Expected term (in years)	5.04 - 9.82	5.62 - 6.18

The Company derived the risk‑free interest rate assumption from the U.S. Treasury rates for U.S. Treasury zero‑coupon bonds with maturities similar to those of the expected term of the awards being valued. The Company based the assumed dividend yield on its expectation of not paying dividends in the foreseeable future. The Company calculated the weighted‑average expected term of options using the simplified method, as the Company lacks relevant historical data due to the Company’s limited operating experience. The estimated volatility is based upon the historical volatility of comparable companies with publicly available share prices. The impact of forfeitures on compensation expense are recorded as they occur.

The weighted average grant‑date fair value of options granted during the three and six months ended June 30, 2017 and 2016 was $3.86 and $3.34, respectively. There were 103,013 and 1,501,127 options granted during the six months ended June 30, 2017 and 2016, respectively. The fair value is being expensed over the vesting period of the options on a straight‑line basis as the services are being provided. The Company has recorded aggregate stock‑based compensation expense related to the issuance of stock option awards of $567,000 and $868,000, respectively, during the three months ended June 30, 2017 and 2016, and $1.1 million and $1.2 million during the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, there was $5.0 million of unrecognized compensation cost related to the stock options granted under the 2009 Plan, which is expected to be expensed over a weighted‑average period of 2.38 years.

Stock-based Compensation Expenses—Stock‑based compensation expense was classified in the statements of operations as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016


Research and development	$	205	$	74	$	392	$	129
General and administrative		362		794		697		1,064
Total	$	567	$	868	$	1,089	$	1,193

INCOME TAXES	6 Months Ended
INCOME TAXES	Jun. 30, 2017
INCOME TAXES
INCOME TAXES	11. INCOME TAXES The Company did not record a provision or benefit for income taxes during the three and six months ended June 30, 2017 and 2016. The Company continues to maintain a valuation allowance for its U.S. federal and state deferred tax assets. The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Management reevaluates the positive and negative evidence at each reporting period. Realization of the future tax benefits is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Under the provisions of Section 382 of the Internal Revenue Code of 1986, certain substantial changes in the Company’s ownership, including a sale of the Company, or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards, which could be used annually to offset future taxable income. The Company files its corporate income tax returns in the United States and Massachusetts, California, Kentucky, Pennsylvania, New York, Texas and New Hampshire. All tax years since the date of incorporation remain open to examination by the major taxing jurisdictions (state and federal) to which the Company is subject, as carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service (“IRS”) or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other jurisdictions for any tax year. As of June 30, 2017 and 2016, the Company had no uncertain tax positions. The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense, of which no interest or penalties were recorded for the six months ended June 30, 2017 and 2016.

NET LOSS PER COMMON SHARE

6 Months Ended

Jun. 30, 2017

NET LOSS PER COMMON SHARE

NET LOSS PER COMMON SHARE

12. NET LOSS PER COMMON SHARE

Net Loss per Share—Basic and diluted net loss per share attributable to common stockholders were calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016

Numerator:
Net loss attributable to common stockholders	$	(10,986)	$	(9,853)	$	(20,745)	$	(15,105)

Denominator:
Weighted average shares outstanding—basic and diluted		1,181,429		1,181,429		1,181,429		1,181,429

Net loss per share attributable to common stockholders—basic and diluted	$	(9.30)	$	(8.34)	$	(17.56)	$	(12.79)

The Company’s potential dilutive securities, which include stock options, warrants to purchase preferred stock and convertible preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders are the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti‑dilutive effect:


	June 30,
	2017		2016

Convertible preferred stock (as converted to common stock)		16,101,970		16,101,970
Options to purchase common stock		3,292,177		3,047,285
Preferred stock warrants (1)		250,394		250,394
		19,644,541		19,399,649

(1)

Warrants outstanding as of June 30, 2017 and 2016, respectively include warrants to purchase Series C Preferred Stock for which the underlying shares included above of 48,374 are only exercisable upon the Company’s draw down of the full amount of Term Loan B of $10.0 million.

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2017

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES.

13. COMMITMENTS AND CONTINGENCIES

Leases—The Company entered into a three‑year lease agreement for its new headquarters on September 30, 2013, with a commencement date of February 1, 2014. As part of the terms of the lease agreement, the landlord agreed to fund certain improvements to the Company’s facility. The amount funded by the landlord was $78,000 and has been recorded as a liability which is being amortized as a reduction of rent expense over the term of the lease.

On June 30, 2016, the lease was amended to extend the term from January 31, 2017 to January 31, 2019. In connection with the lease agreement, the Company issued a letter of credit to the landlord for $84,000. The Company secured the letter of credit using restricted cash for the full amount of the letter. The restricted cash as June 30, 2017 is included in other noncurrent assets in the accompanying balance sheets.

Total rent expense for the lease, which is recorded on a straight‑line basis, for the three months ended June 30, 2017 and 2016 was $97,000 and $80,000, respectively and six months ended June 30, 2017 and 2016 was $193,000 and $159,000, respectively.

Future minimum commitments due under these non-cancelable operating lease agreements as of June 30, 2017 are as follows (in thousands):


Years Ending December 31,
2017 (remaining six months)	$	198
2018		410
2019		34
Total minimum lease payments	$	642

License Agreement—In 2009, the Company entered into an exclusive license agreement with The Johns Hopkins University (“JHU”), as amended in November 2012, May 2014, August 2014 and October 2014, which licensed to the Company a portfolio of specified patent rights and remains in full force and effect. Pursuant to the terms of the agreement, as amended, the Company agreed to pay an initial license fee, minimum annual payments beginning in 2017, certain development and commercial milestone payments, royalties on product sales and reimburse all or a portion of the costs associated with the preparation, filing, prosecution and maintenance of the agreed‑upon patents and patent applications to JHU (“Prosecution Costs”).

After 2016 and until the first commercial sale of product, the minimum annual payment will be $38,000. If the Company achieves the first commercial sale of the product in the United States, European Union, or Japan, the annual minimum payment will increase to $113,000. The Company is obligated to pay JHU low single‑digit running royalties based upon a percentage of net sales of the licensed products. The Company also has an obligation to pay JHU certain one‑time development and commercial milestone payments.

The Company recorded research and development expenses related to the JHU agreement of $0 and $40,000, respectively, for the three months ended June 30, 2017 and 2016 and $10,000 and $49,000, respectively, for the six months ended June 30, 2017 and 2016.

In 2015, the Company entered into a non‑exclusive license agreement with Massachusetts Eye and Ear Infirmary (“MEEI”), which licensed to the Company a certain questionnaire called “Symptom Assessment in Dry Eye” for use in clinical trials. Pursuant to the terms of the agreement, the Company agreed to pay an initial license fee of $10,000. Beginning in 2016, the Company was also obligated to pay an annual payment of $5,000. The agreement terminates in 2018.

Litigation—The Company is not currently subject to any material legal proceedings.

Guarantees and Indemnifications—The Company’s Certificate of Incorporation authorizes the Company to indemnify and advance expenses to its officers and directors and agents to the fullest extent permitted by law. The Company leases office space under a non‑cancelable operating lease. Under the lease the Company is required to indemnify the landlord against claims, actions, or damages incurred in connection with, among other items, the Company’s occupancy and use of the premises.

The Company’s equity agreements and certain other arrangements include standard indemnifications against claims, actions, or other matters that may arise in connection with these arrangements.

As of June 30, 2017, the Company had not experienced any losses related to these indemnification obligations, and no claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and has no amount accrued related to these contingencies. The Company does not expect these indemnifications to have a material adverse effect on these financial statements.

SUBSEQUENT EVENTS	6 Months Ended
SUBSEQUENT EVENTS	Jun. 30, 2017
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS Automatic Conversion of Preferred Stock On July 1, 2017, the Board of Directors of the Company (the “Board”) approved a further amendment to the Company’s Amended and Restated Certificated of the Incorporation, as amended to eliminate the minimum price per share of Common Stock for an underwritten public offering that would result in the automatic conversion of all outstanding shares of the Company’s Series Seed, Series A, Series B, Series B‑1 and Series C Preferred Stock. This amendment became effective on July 7, 2017. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of the Convertible Preferred Stock converted into 16,101,970 shares of the Company’s common stock and all of the Company’s outstanding warrants to purchase preferred stock automatically converted into warrants to purchase 202,020 shares of common stock. Reverse Stock Split On July 7, 2017, the Company effected a one‑for‑5.2083 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for the Company’s Convertible Preferred Stock. The par value per share and authorized shares of common and convertible preferred stock were not adjusted as a result of the reverse stock split. Accordingly, all share and per share amounts within the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. 2017 Equity Incentive Plan On July 5, 2017, the Company’s stockholders approved the 2017 Plan, which became effective on July 19, 2017. The 2017 Plan provides for the grant of incentive stock options, non‑qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock‑based awards for the purchase of that number of shares of Common Stock equal to the sum of (i) 1,786,883 shares of Common Stock, (ii) such additional number of shares of Common Stock (up to 3,533,757 as is equal to the sum of (x) 241,548, which was the number of shares of Common Stock reserved for issuance under the 2009 Plan that remained available for issuance under the 2009 Plan on July 19, 2017 and (y) the number of shares of Common Stock subject to awards granted under the 2009 Plan which awards expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right (subject, in the case of incentive stock options to any limitations of the Internal Revenue Code), and (iii) an annual increase to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2018 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2027, equal to the least of (a) 3,573,766 shares of Common Stock, (b) 4% of the number of outstanding shares of Common Stock on such date or (c) an amount determined by the Board. 2017 Employee Stock Purchase Plan On July 5, 2017, the Company’s stockholders approved the 2017 Employee Stock Purchase Plan (the “2017 ESPP”), which became effective on July 19, 2017. Under the 2017 ESPP the Company may issue up to an aggregate of (i) 223,341 shares of Common Stock, plus (ii) an annual increase to be added on the first day of each fiscal year, commencing on January 1, 20l9 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2029, equal to the least of (a) 893,441 shares of Common Stock, (b) 1% of the outstanding shares on such date and (c) an amount determined by the Board. Initial Public Offering On July 25, 2017, the Company completed its IPO in which it issued and sold 6,900,000 shares of its common stock at a price per share of $15.00, including 900,000 shares of common stock pursuant to the underwriters’ option to purchase additional shares. The Company received net proceeds of $94.9 million after deducting underwriting discounts and commissions of $7.2 million and offering costs incurred in 2017 of $1.4 million. Upon the closing of the IPO, all the outstanding shares of convertible preferred stock converted by their terms into 16,101,970 shares of common stock.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates	Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expense, and related disclosures. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Estimates relied upon in preparing these financial statements relate to, but are not limited to, the fair value of common stock, preferred stock, warrants, stock compensation, accrued expenses and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Actual results may differ from these estimates under different assumptions or conditions.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09” or “Topic 718”), which simplifies share‑based payment accounting through a variety of amendments. The standard is effective for annual periods beginning after December 15, 2016 and for interim periods within those fiscal years. The changes resulting from the adoption of this standard impact the accounting for income taxes, accounting for forfeitures, statutory tax withholding and the presentation of statutory tax withholding on the statement of cash flows. The Company adopted this standard on January 1, 2017. Under guidance within ASU 2016‑09, excess tax benefits and deficiencies are to be recognized as income tax expense or benefit in the statement of operations in the period in which they occur rather than as an increase or decrease in stockholders’ equity (deficit). Since the Company maintains a full valuation allowance on its net deferred tax asset, there was no net impact to its accumulated deficit or its net loss resulting from the adoption of this standard. Also under the guidance in ASU 2016‑09, an entity may elect to account for forfeitures as they occur or continue to estimate the total number of awards that are vested or expected to vest. The Company elected to account for forfeitures as they occur and applied the accounting change on a modified retrospective basis as a cumulative effect adjustment to accumulated deficit as of the date of adoption, January 1, 2017. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or statement of cash flows. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight‑line basis over the term of the lease, respectively. A lessee is also required to record a right‑of‑use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016‑02 (ASC Topic 842) supersedes the previous leases standard, ASC 840, Leases. The standard is effective for public entities for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑02 will have on its financial statements. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (“ASU 2016‑15”), to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. ASU 2016-15 should be applied restrospectively and early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact that the adoption of ASU 2016‑15, but believes its adoption will not have a material impact on its statement of cash flows. In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows Restricted Cash (“ASU 2016‑18”). This new standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and requires retrospective application. The Company does not believe that the adoption of ASU 2016‑18 will have a material impact on its financial statements and related disclosures. In May 2017, the FASB issued ASU Update No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in ASU 2017-09 are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that ASU 2017-09 will have on the Company’s balance sheets, results of operations and statements of cash flows. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for, including adoption in an interim period. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures.

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

6 Months Ended

Jun. 30, 2017

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):


	June 30,		December 31,
	2017		2016

Rent	$	61	$	58
Insurance		65		55
Deferred offering costs		1,242		—
Other		176		41
Prepaid expenses and other current assets	$	1,544	$	154

ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2017

ACCRUED EXPENSES

Schedule of accrued expenses

Accrued expenses consist of the following (in thousands):


	June 30,		December 31,
	2017		2016

Development costs	$	2,948	$	2,280
Compensation and benefits		950		1,480
Professional fees		33		171
Deferred offering costs		323		—
Other		49		62
Accrued expenses	$	4,303	$	3,993

DEBT (Tables)

6 Months Ended

Jun. 30, 2017

DEBT

Schedule of maturities of long-term debt

The future annual principal payments due under the 2014 Debt Facility as of June 30, 2017 are as follows (in thousands):


Years Ending December 31,
2017	$	556
2018		3,333
2019		3,333
2020		2,778
Total	$	10,000

PREFERRED STOCK WARRANTS (Tables)

6 Months Ended

Jun. 30, 2017

PREFERRED STOCK WARRANTS

Schedule of outstanding warrants

					Shares Exercisable at
		Exercise		Expiration	June 30,	December 31,
Issued	Exercisable for	Price		Date	2017	2016
2011 and 2012	Series Seed Preferred Stock	$	1.00	July 2019	80,000	80,000
2013	Series B Preferred Stock	$	1.44	April 2021	694,444	694,444
2014	Series B Preferred Stock	$	1.44	November 2024	277,778	277,778
2016	Series C Preferred Stock	$	1.59	October 2026	—	—	(1)

(1)

- Definition

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

+ References + Details

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2017

FAIR VALUE OF FINANCIAL INSTRUMENTS

Schedule of assets and liabilities measured at fair value on a recurring basis

The assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016, and the input categories associated with those assets and liabilities are as follows (in thousands):


			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Carrying Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2016
2011 and 2012 Series Seed Warrants	$	39	$	—	$	—	$	39
2013 Series B Warrants		463		—		—		463
2014 Series B Warrants		274		—		—		274
2016 Series C Warrants		263		—		—		263
Total warrant liability	$	1,039	$	—	$	—	$	1,039

June 30, 2017
2011 and 2012 Series Seed Warrants	$	116	$	—	$	—	$	116
2013 Series B Warrants		1,107		—		—		1,107
2014 Series B Warrants		533		—		—		533
2016 Series C Warrants		504		—		—		504
Total warrant liability	$	2,260	$	—	$	—	$	2,260

Schedule of changes in Level 3 fair value measurements

The following table provides a summary of changes in the fair value of the Company’s derivative liability, which is included as a component of other (income) expense (in thousands):


		Three Months Ended
		June 30,
	2017		2016
	Warrant		Warrant
	Liability		Liability

Fair value - March 31,	$	1,075	$	918
Change in fair value of warrant liability		1,185		47
Fair value - June 30,	$	2,260	$	965


		Six Months Ended
		June 30,
	2017		2016
	Warrant		Warrant
	Liability		Liability

Fair value - December 31,	$	1,039	$	936
Change in fair value of warrant liability		1,221		29
Fair value - June 30,	$	2,260	$	965

Schedule of fair values of warrants, using the Black Scholes option pricing model


	2011 and
	2012 Series			2013			2014
	Seed			Series B			Series B			Series C
	Warrants			Warrants			Warrants			Warrants

December 31, 2016
Volatility		100.00	%		87.00	%		114.00	%		58.30	%
Risk-free interest rate		1.30	%		1.80	%		2.30	%		2.40	%
Estimated fair value of underlying shares	$	0.89		$	1.11		$	1.11			1.54
Remaining contractual term (years)		2.6			4.3			7.9			9.8
Expected dividend yield		—	%		—	%		—	%		—	%


June 30, 2017
Volatility		63.20	%		84.20	%		87.40	%		88.30	%
Risk-free interest rate		1.40	%		1.70	%		2.20	%		2.30	%
Estimated fair value of underlying shares	$	2.30		$	2.30		$	2.30		$	2.30
Remaining contractual term (years)		2.1			3.8			7.4			9.3
Expected dividend yield		—	%		—	%		—	%		—	%

CONVERTIBLE PREFERRED STOCK (Tables)

6 Months Ended

Jun. 30, 2017

CONVERTIBLE PREFERRED STOCK

Schedule of preferred stock

Preferred stock consisted of the following as of June 30, 2017 and December 31, 2016 (in thousands, except share amounts):


								Common
								Stock
			Shares Issued					Issuable
	Designated		and	Liquidation		Carrying		Upon
	Shares	Issuance Dates	Outstanding	Value		Value		Conversion (1)
Series Seed	11,323,209	December 2009	2,000,001
		October 2010	2,000,003
		February 2012	7,243,205
			11,243,209		$ 11,243		$ 11,065	2,158,708
Series A	9,583,432	February 2013	4,791,716
		July 2013	4,791,716
			9,583,432		$ 11,500		$ 10,736	1,840,029
Series B	16,597,221	April 2014	15,624,999		$ 22,500		$ 22,185	3,000,017
Series B-1	4,629,629	August 2015	4,629,629		$ 7,000		$ 6,885	888,894
Series C	43,034,639	April 2016	42,782,688		$ 67,922		$ 67,520	8,214,322

(1)

COMMON STOCK (Tables)

6 Months Ended

Jun. 30, 2017

COMMON STOCK

Schedule of reserved common stock shares for potential conversion of outstanding convertible preferred stock

	June 30,	December 31,
	2017	2016

Convertible preferred stock	16,101,970	16,101,970
2013 Warrant rights to acquire Series B Preferred Stock	133,327	133,327
2014 Warrant rights to acquire Series B Preferred Stock	53,333	53,333
2016 Warrant rights to acquire Series C Preferred Stock (1)	48,374	48,374
2011 Warrant rights to acquire Series Seed Preferred Stock	15,360	15,360
2009 stock option plan	3,533,726	3,533,726
Total	19,886,090	19,886,090

(1)

STOCK‑BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2017

STOCK-BASED COMPENSATION

Summary of option activity for employee and non employee awards

A summary of option activity for employee and non‑employee awards under the 2009 Plan for the six months ended June 30, 2017 is as follows (in thousands, except share and per share amounts):


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(Years)
Outstanding at January 1,2016	1,546,155	$	3.17	8.7	$	1,691
Granted	1,649,314		3.33
Outstanding at December 31, 2016	3,195,469	$	3.26	8.6	$	1,200
Granted	103,013		3.86
Forfeited	(6,305)		3.33
Outstanding at June 30, 2017	3,292,177	$	3.27	8.2	$	28,676
Vested and expected to vest at December 31, 2016	2,899,032	$	3.23	8.6	$	1,141
Options exercisable at December 31, 2016	1,035,928	$	2.89	8.0	$	823
Vested and expected to vest at June 30, 2017	3,290,704	$	3.27	8.2	$	28,662
Options exercisable at June 30, 2017	1,507,793	$	3.04	7.9	$	13,480

Schedule of assumptions used in determining fair value of the stock options granted


	Six Months Ended June 30,
	2017	2016

Expected volatility	103% - 122%	108% - 110%
Risk-free interest rate	1.81% - 2.29%	1.21% - 1.29%
Expected dividend yield	0%	0%
Expected term (in years)	5.04 - 9.82	5.62 - 6.18

Schedule of stock based compensation expense

Stock-based Compensation Expenses—Stock‑based compensation expense was classified in the statements of operations as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016


Research and development	$	205	$	74	$	392	$	129
General and administrative		362		794		697		1,064
Total	$	567	$	868	$	1,089	$	1,193

NET LOSS PER COMMON SHARE (Tables)

6 Months Ended

Jun. 30, 2017

NET LOSS PER COMMON SHARE

Schedule of computation of basic and diluted net loss per share

Net Loss per Share—Basic and diluted net loss per share attributable to common stockholders were calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016

Numerator:
Net loss attributable to common stockholders	$	(10,986)	$	(9,853)	$	(20,745)	$	(15,105)

Denominator:
Weighted average shares outstanding—basic and diluted		1,181,429		1,181,429		1,181,429		1,181,429

Net loss per share attributable to common stockholders—basic and diluted	$	(9.30)	$	(8.34)	$	(17.56)	$	(12.79)

Schedule of outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti-dilutive


	June 30,
	2017		2016

Convertible preferred stock (as converted to common stock)		16,101,970		16,101,970
Options to purchase common stock		3,292,177		3,047,285
Preferred stock warrants (1)		250,394		250,394
		19,644,541		19,399,649

(1)

COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2017

COMMITMENTS AND CONTINGENCIES.

Schedule of future minimum commitments

Future minimum commitments due under these non-cancelable operating lease agreements as of June 30, 2017 are as follows (in thousands):


Years Ending December 31,
2017 (remaining six months)	$	198
2018		410
2019		34
Total minimum lease payments	$	642

NATURE OF BUSINESS AND BASIS OF PRESENTATION - Nature of Business (Details) $ / shares in Units, $ in Millions			6 Months Ended	7 Months Ended
	Jul. 25, 2017 USD ($) $ / shares shares	Jul. 07, 2017	Jun. 30, 2017 product	Jul. 25, 2017 USD ($) $ / shares shares
Initial Public Offering
Number of product candidates \| product			2
Subsequent Event
Initial Public Offering
Common stock shares issued	16,101,970
Reverse Stock Split
Reverse stock split		0.1920
IPO \| Subsequent Event
Initial Public Offering
Issuance of stock (in shares)	6,900,000
Share price (in dollars per share) \| $ / shares	$ 15.00			$ 15.00
Net proceeds \| $	$ 94.9
Underwriter's option \| Subsequent Event
Initial Public Offering
Issuance of stock (in shares)	900,000
Share price (in dollars per share) \| $ / shares	$ 15.00			$ 15.00
Underwriting discounts and commissions \| $	$ 7.2
Offering costs \| $				$ 1.4
Post-operative inflammation product
Initial Public Offering
Number of product candidates \| product			1
Signs and symptoms of dry eye disease product
Initial Public Offering
Number of product candidates \| product			1
Common stock. \| Subsequent Event
Initial Public Offering
Shares warrants may purchase	202,020			202,020

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Rent	$ 61	$ 58
Insurance	65	55
Deferred offering costs	1,242
Other	176	41
Prepaid expenses and other current assets	$ 1,544	$ 154

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ACCRUED EXPENSES
Development costs	$ 2,948	$ 2,280
Compensation and benefits	950	1,480
Professional fees	33	171
Deferred offering costs	323
Other	49	62
Accrued expenses	$ 4,303	$ 3,993

DEBT (Details) - USD ($)		2 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
DEBT (Details) - USD ($)	Oct. 13, 2016	Dec. 31, 2014	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2016	Nov. 30, 2014
Debt instruments
Interest expense			$ 208,000	$ 186,000	$ 406,000	$ 380,000
2014 Series B Warrants
Debt instruments
Fair value of warrants			533,000		533,000			$ 274,000	$ 140,000
2016 Series C Warrants
Debt instruments
Fair value of warrants	$ 225,000		$ 504,000		$ 504,000			$ 263,000
2014 Debt Facility
Debt instruments
Total loan commitment									$ 10,000,000
Additional borrowing capacity	$ 10,000,000
Interest rate (as a percent)	6.25%		7.00%		7.00%			6.50%
Unpaid principal balance			$ 10,000,000		$ 10,000,000			$ 10,000,000
Unamortized discount			290,000		290,000			$ 346,000
Interest expense			208,000	186,000	406,000	380,000
Amortization of debt discount			28,000	22,000	56,000	52,000
Contractual coupon interest			180,000	$ 164,000	350,000	$ 328,000
2014 Debt Facility \| Prime Rate
Debt instruments
Variable rate of interest	3.00%
Term Loan A
Debt instruments
Total loan commitment	$ 10,000,000
Proceeds from borrowing		$ 5,000,000					$ 5,000,000
Term Loan B
Debt instruments
Total loan commitment			$ 10,000,000		$ 10,000,000
Series B convertible preferred stock \| 2014 Series B Warrants
Debt instruments
Exercise Price			$ 1.44		$ 1.44
Series B convertible preferred stock \| Term Loan A \| 2014 Series B Warrants
Debt instruments
Shares warrants may purchase		138,889					277,778
Exercise Price		$ 1.44
Series C convertible preferred stock \| 2016 Series C Warrants
Debt instruments
Exercise Price			$ 1.59		$ 1.59
Series C convertible preferred stock \| Term Loan B \| 2016 Series C Warrants
Debt instruments
Exercise Price	$ 1.59
Series C convertible preferred stock \| Term Loan B \| 2016 Series C Warrants \| Maximum
Debt instruments
Shares warrants may purchase	251,951		251,951		251,951			251,951

DEBT - Future annual principal payments (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Maturities of long-term debt
2017	$ 556
2018	3,333
2019	3,333
2020	2,778
Total	$ 10,000

PREFERRED STOCK WARRANTS (Details) - USD ($)	6 Months Ended	12 Months Ended
PREFERRED STOCK WARRANTS (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Oct. 13, 2016
Series Seed convertible preferred stock \| 2011 and 2012 Series Seed Warrants
Preferred stock warrants
Exercise Price	$ 1.00
Shares Exercisable	$ 80,000	$ 80,000
Series B convertible preferred stock \| 2013 Series B Warrants
Preferred stock warrants
Exercise Price	$ 1.44
Shares Exercisable	$ 694,444	694,444
Series B convertible preferred stock \| 2014 Series B Warrants
Preferred stock warrants
Exercise Price	$ 1.44
Shares Exercisable	$ 277,778	$ 277,778
Series C convertible preferred stock \| 2016 Series C Warrants
Preferred stock warrants
Exercise Price	$ 1.59
Series C convertible preferred stock \| 2016 Series C Warrants \| Term Loan B
Preferred stock warrants
Exercise Price			$ 1.59
Series C convertible preferred stock \| 2016 Series C Warrants \| Term Loan B \| Maximum
Preferred stock warrants
Shares warrants may purchase	251,951	251,951	251,951

FAIR VALUE OF FINANCIAL INSTRUMENTS - Assets and Liabilities measured at fair value (Details) (Imported) - Recurring - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Significant Unobservable Inputs
Warrant Liability	$ 2,260	$ 1,039
Carrying Value
Warrant Liability	2,260	1,039
2011 and 2012 Series Seed Warrants \| Significant Unobservable Inputs
Warrant Liability	116	39
2011 and 2012 Series Seed Warrants \| Carrying Value
Warrant Liability	116	39
2013 Series B Warrants \| Significant Unobservable Inputs
Warrant Liability	1,107	463
2013 Series B Warrants \| Carrying Value
Warrant Liability	1,107	463
2014 Series B Warrants \| Significant Unobservable Inputs
Warrant Liability	533	274
2014 Series B Warrants \| Carrying Value
Warrant Liability	533	274
2016 Series C Warrants \| Significant Unobservable Inputs
Warrant Liability	504	263
2016 Series C Warrants \| Carrying Value
Warrant Liability	$ 504	$ 263

FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair values of the warrants, using the Black‑Scholes option‑pricing model (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Fair Value Measurements
Percentage of probability	100.00%
Remaining borrowing capacity	$ 10.0
2011 and 2012 Series Seed Warrants
Fair Value Measurements
Volatility	63.20%	100.00%
Risk-free interest rate	1.40%	1.30%
Estimated fair value of underlying shares	$ 2.30	$ 0.89
Remaining contractual term	2 years 1 month 6 days	2 years 7 months 6 days
2013 Series B Warrants
Fair Value Measurements
Volatility	84.20%	87.00%
Risk-free interest rate	1.70%	1.80%
Estimated fair value of underlying shares	$ 2.30	$ 1.11
Remaining contractual term	3 years 9 months 18 days	4 years 3 months 18 days
2014 Series B Warrants
Fair Value Measurements
Volatility	87.40%	114.00%
Risk-free interest rate	2.20%	2.30%
Estimated fair value of underlying shares	$ 2.30	$ 1.11
Remaining contractual term	7 years 4 months 24 days	7 years 10 months 24 days
2016 Series C Warrants
Fair Value Measurements
Volatility	88.30%	58.30%
Risk-free interest rate	2.30%	2.40%
Estimated fair value of underlying shares	$ 2.30	$ 1.54
Remaining contractual term	9 years 3 months 18 days	9 years 9 months 18 days

FAIR VALUE OF FINANCIAL INSTRUMENTS - Derivative liability (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)
Balance at beginning of period	$ 1,075	$ 918	$ 1,039	$ 936
Change in fair value of warrant liability	1,185	47	1,221	29
Balance at end of period	$ 2,260	$ 965	$ 2,260	$ 965

CONVERTIBLE PREFERRED STOCK - Shares issued (Details) - USD ($) $ in Thousands	Jul. 25, 2017	Jun. 30, 2017	Dec. 31, 2016	Apr. 05, 2016	Aug. 17, 2015	Apr. 30, 2014	Jul. 15, 2013	Feb. 28, 2013	Feb. 29, 2012	Oct. 31, 2010	Dec. 31, 2009
Series Seed convertible preferred stock
Temporary Equity
Designated Shares		11,323,209	11,323,209
Shares Issued		11,243,209	11,243,209
Shares Outstanding		11,243,209	11,243,209
Liquidation Value		$ 11,243	$ 11,243
Carrying Value		$ 11,065	$ 11,065
Common Stock Issuable Upon Conversion		2,158,708	2,158,708
Common stock shares issued	2,158,708
Series Seed convertible preferred stock \| December 2009
Temporary Equity
Shares Issued		2,000,001	2,000,001								2,000,001
Shares Outstanding		2,000,001	2,000,001
Series Seed convertible preferred stock \| October 2010
Temporary Equity
Shares Issued		2,000,003	2,000,003							2,000,003
Shares Outstanding		2,000,003	2,000,003
Series Seed convertible preferred stock \| February 2012
Temporary Equity
Shares Issued		7,243,205	7,243,205						7,243,205
Shares Outstanding		7,243,205	7,243,205
Series A convertible preferred stock
Temporary Equity
Designated Shares		9,583,432	9,583,432
Shares Issued		9,583,432	9,583,432
Shares Outstanding		9,583,432	9,583,432
Liquidation Value		$ 11,500	$ 11,500
Carrying Value		$ 10,736	$ 10,736
Common Stock Issuable Upon Conversion		1,840,029	1,840,029
Common stock shares issued	1,840,029
Series A convertible preferred stock \| February 2013
Temporary Equity
Shares Issued		4,791,716	4,791,716					4,791,716
Shares Outstanding		4,791,716	4,791,716
Series A convertible preferred stock \| July 2013
Temporary Equity
Shares Issued		4,791,716	4,791,716				4,791,716
Shares Outstanding		4,791,716	4,791,716
Series B convertible preferred stock
Temporary Equity
Designated Shares		16,597,221	16,597,221
Shares Issued		15,624,999	15,624,999
Shares Outstanding		15,624,999	15,624,999
Liquidation Value		$ 22,500	$ 22,500
Carrying Value		$ 22,185	$ 22,185
Common stock shares issued	3,000,017
Series B convertible preferred stock \| April 2014
Temporary Equity
Designated Shares		16,597,221	16,597,221
Shares Issued		15,624,999	15,624,999			15,624,999
Shares Outstanding		15,624,999	15,624,999
Liquidation Value		$ 22,500	$ 22,500
Carrying Value		$ 22,185	$ 22,185
Common Stock Issuable Upon Conversion		3,000,017	3,000,017
Series B-1 convertible preferred stock
Temporary Equity
Common stock shares issued	888,894
Series B-1 convertible preferred stock \| August 2015
Temporary Equity
Designated Shares		4,629,629	4,629,629
Shares Issued		4,629,629	4,629,629		4,629,629
Shares Outstanding		4,629,629	4,629,629
Liquidation Value		$ 7,000	$ 7,000
Carrying Value		$ 6,885	$ 6,885
Common Stock Issuable Upon Conversion		888,894	888,894
Series C convertible preferred stock
Temporary Equity
Designated Shares		43,034,639	43,034,639
Shares Issued		42,782,688	42,782,688
Shares Outstanding		42,782,688	42,782,688
Liquidation Value		$ 67,922	$ 67,922
Carrying Value		$ 67,520	$ 67,520
Common stock shares issued	8,214,322
Series C convertible preferred stock \| April 2016
Temporary Equity
Designated Shares		43,034,639	43,034,639
Shares Issued		42,782,688	42,782,688	42,782,688
Shares Outstanding		42,782,688	42,782,688
Liquidation Value		$ 67,922	$ 67,922
Carrying Value		$ 67,520	$ 67,520
Common Stock Issuable Upon Conversion		8,214,322	8,214,322
Subsequent Event
Temporary Equity
Common stock shares issued	16,101,970

CONVERTIBLE PREFERRED STOCK - Shares converted (Details)						1 Months Ended						12 Months Ended
	Jul. 25, 2017 shares	Jul. 07, 2017	Apr. 05, 2016 USD ($) $ / shares shares	Aug. 17, 2015 USD ($) $ / shares shares	Jul. 15, 2013 USD ($) $ / shares shares	Apr. 30, 2014 USD ($) $ / shares shares	Jun. 30, 2013 item	Feb. 28, 2013 USD ($) $ / shares shares	Feb. 29, 2012 USD ($) shares	Oct. 31, 2010 USD ($) $ / shares shares	Dec. 31, 2009 USD ($) $ / shares shares	Dec. 31, 2013 $ / shares shares	Jun. 30, 2017 shares	Dec. 31, 2016 shares
Series Seed convertible preferred stock
Temporary equity
Shares Issued													11,243,209	11,243,209
Issuance cost \| $									$ 15,000	$ 39,000	$ 124,000
Common stock shares issued	2,158,708
Series A convertible preferred stock
Temporary equity
Shares Issued													9,583,432	9,583,432
Share price (in dollars per share) \| $ / shares												$ 1.20
Additional shares available for purchase												4,791,716
Issuance cost \| $					$ 93,000
Number of milestones approved by the board \| item							1
Common stock shares issued	1,840,029
Series B convertible preferred stock
Temporary equity
Shares Issued													15,624,999	15,624,999
Common stock shares issued	3,000,017
Series B-1 convertible preferred stock
Temporary equity
Common stock shares issued	888,894
Series C convertible preferred stock
Temporary equity
Shares Issued													42,782,688	42,782,688
Common stock shares issued	8,214,322
December 2009 \| Series Seed convertible preferred stock
Temporary equity
Shares Issued											2,000,001		2,000,001	2,000,001
Gross proceeds \| $											$ 2,000,000
Share price (in dollars per share) \| $ / shares											$ 1.00
October 2010 \| Series Seed convertible preferred stock
Temporary equity
Shares Issued										2,000,003			2,000,003	2,000,003
Gross proceeds \| $										$ 2,000,000
Share price (in dollars per share) \| $ / shares										$ 1.00
February 2012 \| Series Seed convertible preferred stock
Temporary equity
Shares Issued									7,243,205				7,243,205	7,243,205
Gross proceeds \| $									$ 6,200,000
Shares issued upon conversion (in shares)									6,150,000
Shares issued upon conversion of convertible debt (in shares)									1,093,205
Face amount \| $									$ 1,000,000
Accrued interest \| $									$ 93,000
February 2013 \| Series A convertible preferred stock
Temporary equity
Shares Issued								4,791,716					4,791,716	4,791,716
Gross proceeds \| $								$ 5,800,000
Share price (in dollars per share) \| $ / shares								$ 1.20
July 2013 \| Series A convertible preferred stock
Temporary equity
Shares Issued					4,791,716								4,791,716	4,791,716
Gross proceeds \| $					$ 5,800,000
Share price (in dollars per share) \| $ / shares					$ 1.20
April 2014 \| Series B convertible preferred stock
Temporary equity
Shares Issued						15,624,999							15,624,999	15,624,999
Gross proceeds \| $						$ 22,500,000
Share price (in dollars per share) \| $ / shares						$ 1.44
Shares issued upon conversion (in shares)						3,562,785
Shares issued upon conversion of convertible debt \| $						$ 5,100,000
Issuance cost \| $						$ 315,000,000
August 2015 \| Series B-1 convertible preferred stock
Temporary equity
Shares Issued				4,629,629									4,629,629	4,629,629
Gross proceeds \| $				$ 7,000,000
Share price (in dollars per share) \| $ / shares				$ 1.512
Issuance cost \| $				$ 115,000
April 2016 \| Series C convertible preferred stock
Temporary equity
Shares Issued			42,782,688										42,782,688	42,782,688
Gross proceeds \| $			$ 67,900,000
Share price (in dollars per share) \| $ / shares			$ 1.5876
Issuance cost \| $			$ 402,000,000
Subsequent Event
Temporary equity
Common stock shares issued	16,101,970
Reverse stock split		0.1920

COMMON STOCK (Details) - $ / shares	Jun. 30, 2017	Dec. 31, 2016	Oct. 13, 2016	Jun. 30, 2016
Common stock
Common stock, authorized	110,251,951	110,251,951
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	1,181,429	1,181,429
Common stock, shares outstanding	1,181,429	1,181,429
Common stock shares reserved for future issuance	19,886,090	19,886,090
Employee and Non-Employee Stock Options
Common stock
Common stock shares reserved for future issuance	3,533,726	3,533,726
2013 Series B Warrants
Common stock
Common stock shares reserved for future issuance	133,327	133,327
2014 Series B Warrants
Common stock
Common stock shares reserved for future issuance	53,333	53,333
2016 Series C Warrants
Common stock
Common stock shares reserved for future issuance	48,374	48,374
2011 Warrant rights to acquire Series Seed Preferred Stock
Common stock
Common stock shares reserved for future issuance	15,360	15,360
Convertible preferred stock.
Common stock
Common stock shares reserved for future issuance	16,101,970	16,101,970
Maximum
Common stock
Common stock, authorized	110,251,951
Term Loan B \| Common stock. \| 2016 Series C Warrants
Common stock
Potential common shares upon conversion	48,374			48,374
Term Loan B \| Maximum \| Series C convertible preferred stock \| 2016 Series C Warrants
Common stock
Shares warrants may purchase	251,951	251,951	251,951
Term Loan B \| Maximum \| Common stock. \| 2016 Series C Warrants
Common stock
Potential common shares upon conversion	48,374	48,374

STOCK-BASED COMPENSATION (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended	18 Months Ended
STOCK-BASED COMPENSATION (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Jun. 30, 2017
Share-based compensation
Common stock available for future grant	19,886,090		19,886,090		19,886,090	19,886,090
Options granted			103,013	1,501,127
Stock based compensation expense	$ 567,000	$ 868,000	$ 1,089,000	$ 1,193,000
Employee and Non-Employee Stock Options
Share-based compensation
Common stock available for future grant	3,533,726		3,533,726		3,533,726	3,533,726
Stock based compensation expense	$ 567,000	$ 868,000	$ 1,100,000	$ 1,200,000
Employee and Non-Employee Stock Options \| Non-employees
Share-based compensation
Options granted	4,224	0	4,224	0
Stock based compensation expense	$ 22,000	$ 15,000	$ 37,000	$ 28,000
Performance Stock Options
Share-based compensation
Options granted						86,056
Unrecognized compensation expense	$ 25,000	$ 35,000	$ 25,000	$ 35,000		$ 25,000
2009 Plan
Share-based compensation
Shares Authorized	3,711,949		3,711,949		3,711,949	3,711,949
Common stock available for future grant	241,548		241,548		338,256	241,548
Options granted			103,013		1,649,314
Unrecognized compensation expense	$ 5,000,000		$ 5,000,000			$ 5,000,000
2009 Plan \| Employee and Non-Employee Stock Options
Share-based compensation
Options Expiry Term						10 years
Vesting Period			4 years

STOCK‑BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended		18 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2017
Number of Shares
Granted (in shares)	103,013	1,501,127
2009 Plan
Number of Shares
Outstanding at the beginning of the period (in shares)	3,195,469	1,546,155	1,546,155		1,546,155
Granted (in shares)	103,013		1,649,314
Forfeited	(6,305)
Outstanding at the end of the period (in shares)	3,292,177		3,195,469	1,546,155	3,292,177
Vested and expected to vest (in shares)	3,290,704		2,899,032		3,290,704
Options exercisable (in shares)	1,507,793		1,035,928		1,507,793
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 3.26	$ 3.17	$ 3.17		$ 3.17
Granted (in dollars per share)	3.86		3.33
Forfeited	3.33
Outstanding at the end of the period (in dollars per share)	3.27		3.26	$ 3.17	3.27
Vested and expected to vest (in dollars per share )	3.27		3.23		3.27
Options exercisable (in dollars per shares)	$ 3.04		$ 2.89		$ 3.04
Weighted Average Remaining Contractual Term
Weighted average period	8 years 2 months 12 days		8 years 7 months 6 days	8 years 8 months 12 days
Vested and expected to vest	8 years 2 months 12 days		8 years 7 months 6 days
Options exercisable	7 years 10 months 24 days		8 years
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 1,200	$ 1,691	$ 1,691		$ 1,691
Outstanding at the end of the period (in dollars)	28,676		1,200	$ 1,691	28,676
Vested and expected to vest (in dollars)	28,662		1,141		28,662
Options exercisable (in dollars)	$ 13,480		$ 823		$ 13,480

STOCK‑BASED COMPENSATION - Fair Value Assumptions (Details) - Employee and Non-Employee Stock Options	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
Expected volatility (minimum)	103.00%	108.00%
Expected volatility (maximum)	122.00%	110.00%
Risk-free interest rate (minimum)	1.81%	1.21%
Risk-free interest rate (maximum)	2.29%	1.29%
Expected dividend yield	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
Expected term (in years)	5 years 15 days	5 years 7 months 13 days
Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
Expected term (in years)	9 years 9 months 26 days	6 years 2 months 5 days

STOCK-BASED COMPENSATION - Other (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Share-based compensation
Weighted average grant date fair value of options granted			$ 3.86	$ 3.34
Options granted			103,013	1,501,127
Stock based compensation expense	$ 567	$ 868	$ 1,089	$ 1,193
2009 Plan
Share-based compensation
Options granted			103,013		1,649,314
Unrecognized compensation expense	$ 5,000		$ 5,000
Weighted average expense recognition period			2 years 4 months 17 days

STOCK‑BASED COMPENSATION - Stock‑based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based compensation
Stock based compensation expense	$ 567	$ 868	$ 1,089	$ 1,193
Research and development
Share-based compensation
Stock based compensation expense	205	74	392	129
General and administrative
Share-based compensation
Stock based compensation expense	$ 362	$ 794	$ 697	$ 1,064

INCOME TAXES (Details) - USD ($)	6 Months Ended
INCOME TAXES (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
INCOME TAXES
Uncertain tax positions	$ 0	$ 0
Interest or penalties recorded	$ 0	$ 0

NET LOSS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator:
Net loss attributable to common stockholders	$ (10,986)	$ (9,853)	$ (20,745)	$ (15,105)
Denominator:
Weighted average shares outstanding—basic and diluted	1,181,429	1,181,429	1,181,429	1,181,429
Net loss per share attributable to common stockholders—basic and diluted	$ (9.30)	$ (8.34)	$ (17.56)	$ (12.79)

NET LOSS PER COMMON SHARE - Antidilutive securities (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares)	19,644,541	19,399,649
Term Loan B
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Total loan commitment	$ 10.0
Convertible preferred stock.
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares)	16,101,970	16,101,970
Stock Options
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares)	3,292,177	3,047,285
Preferred stock warrants.
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares)	250,394	250,394
Common stock. \| Term Loan B \| 2016 Series C Warrants
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Potential common shares upon conversion	48,374	48,374
Common stock. \| Term Loan B \| 2016 Series C Warrants \| Maximum
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Potential common shares upon conversion	48,374		48,374

COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($)		3 Months Ended		6 Months Ended
	Sep. 30, 2013	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Leases
Lease term	3 years
Amount funded by landlord	$ 78,000
Total rent expense		$ 97,000	$ 80,000	$ 193,000	$ 159,000
Letter of Credit
Leases
Face amount			$ 84,000		$ 84,000

COMMITMENTS AND CONTINGENCIES - Future minimum obligations (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Minimum obligations due under its license agreements
2017 (remaining six months)	$ 198
2018	410
2019	34
Total minimum license payments	$ 642

COMMITMENTS AND CONTINGENCIES - License Agreement (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Contingencies
Research and development expenses	$ 8,071,000	$ 5,950,000	$ 16,110,000	$ 9,861,000
The Johns Hopkins University (“JHU”)
Contingencies
Minimum annual payment			38,000
License fee , if the company achieves the first commercial sale			113,000
Research and development expenses	$ 0	$ 40,000	$ 10,000	$ 49,000
Massachusetts Eye and Ear Infirmary (“MEEI”)
Contingencies
Initial payment of license fee						$ 10,000
Annual license fee					$ 5,000

COMMITMENTS AND CONTINGENCIES - Guarantees and Indemnifications (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
Indemnification obligations
Indemnification obligations	$ 0	$ 0	$ 0
Accrued Contingencies	$ 0	$ 0	$ 0

SUBSEQUENT EVENTS - Incentive Plan and ESPP (Details)	Jul. 25, 2017 shares	Jul. 07, 2017	Jul. 05, 2017 shares	Jun. 30, 2017 shares	Dec. 31, 2016 shares	Dec. 31, 2015 shares
Subsequent Events
Common stock available for future grant				19,886,090	19,886,090
Subsequent Event
Subsequent Events
Common stock shares issued	16,101,970
Reverse stock split		0.1920
2009 Plan
Subsequent Events
Number of shares authorized				3,711,949	3,711,949
Number of shares outstanding				3,292,177	3,195,469	1,546,155
Common stock available for future grant				241,548	338,256
2009 Plan \| Subsequent Event
Subsequent Events
Common stock available for future grant			241,548
2009 Plan \| Subsequent Event \| Maximum
Subsequent Events
Number of shares outstanding			3,533,757
2017 Equity Incentive Plan \| Subsequent Event
Subsequent Events
Number of shares authorized			1,786,883
Number of shares available for future issuance			3,573,766
Cumulative increase in number of shares issuable (as a percent)			4.00%
2017 Employee Stock Purchase Plan \| Subsequent Event
Subsequent Events
Number of shares authorized			223,341
Common stock available for future grant			893,441
Cumulative increase in number of shares issuable (as a percent)			1.00%
Common stock. \| Subsequent Event
Subsequent Events
Shares warrants may purchase	202,020

SUBSEQUENT EVENTS - Reverse Stock Split and IPO (Details) - Subsequent Event $ / shares in Units, $ in Millions		7 Months Ended
	Jul. 25, 2017 USD ($) $ / shares shares	Jul. 25, 2017 USD ($) $ / shares
Subsequent Events
Common stock shares issued \| shares	16,101,970
IPO
Subsequent Events
Issuance of stock (in shares) \| shares	6,900,000
Share price (in dollars per share) \| $ / shares	$ 15.00	$ 15.00
Net proceeds \| $	$ 94.9
Underwriter's option
Subsequent Events
Issuance of stock (in shares) \| shares	900,000
Share price (in dollars per share) \| $ / shares	$ 15.00	$ 15.00
Underwriting discounts and commissions \| $	$ 7.2
Offering costs \| $		$ 1.4