View Filing Data

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Mar. 26, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Kala Pharmaceuticals, Inc.
Entity Central Index Key	0001479419
Trading Symbol	kala
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 0
Entity Common Stock, Shares Outstanding		24,556,094
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash	$ 114,565	$ 45,472
Prepaid expenses and other current assets	648	154
Total current assets	115,213	45,626
Property and equipment, net	786	594
Restricted cash	134	109
Total assets	116,133	46,329
Current liabilities:
Current portion of long-term debt	6,667	556
Accounts payable	1,202	997
Accrued expenses	6,589	3,993
Total current liabilities	14,458	5,546
Long-term liabilities:
Long-term debt - less current portion	11,987	9,098
Warrant liability		1,039
Other long-term liabilities	9	17
Total long-term liabilities	11,996	10,154
Total liabilities	26,454	15,700
Commitments and Contingencies (Note 14)	0	0
Stockholders' equity (deficit):
Preferred stock
Common stock	25	1
Additional paid-in capital	224,025	4,374
Accumulated deficit	(134,371)	(92,137)
Total stockholders’ equity (deficit)	89,679	(87,762)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	116,133	46,329
Series Seed convertible preferred stock
Long-term liabilities:
Convertible preferred stock		11,065
Series A convertible preferred stock
Long-term liabilities:
Warrant liability	0
Convertible preferred stock		10,736
Series B convertible preferred stock
Long-term liabilities:
Warrant liability	0
Convertible preferred stock		22,185
Series B-1 convertible preferred stock
Long-term liabilities:
Convertible preferred stock		6,885
Series C convertible preferred stock
Long-term liabilities:
Warrant liability	$ 0
Convertible preferred stock		$ 67,520

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	5,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	120,000,000	110,251,951
Common stock, shares issued	24,538,309	1,181,429
Common stock, shares outstanding	24,538,309	1,181,429
Convertible preferred stock.
Convertible preferred stock, authorized	0	170,336,260
Series Seed convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	0	11,323,209
Issuance of preferred stock-net of issuance costs (in shares)	0	11,243,209
Convertible preferred stock, shares outstanding	0	11,243,209
Series A convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	0	9,583,432
Issuance of preferred stock-net of issuance costs (in shares)	0	9,583,432
Convertible preferred stock, shares outstanding	0	9,583,432
Series B convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	0	16,597,221
Issuance of preferred stock-net of issuance costs (in shares)	0	15,624,999
Convertible preferred stock, shares outstanding	0	15,624,999
Series B-1 convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	0	4,629,629
Issuance of preferred stock-net of issuance costs (in shares)	0	4,629,629
Convertible preferred stock, shares outstanding	0	4,629,629
Series C convertible preferred stock
Convertible preferred stock, par value	$ 0.001	$ 0.001
Convertible preferred stock, authorized	0	43,034,639
Issuance of preferred stock-net of issuance costs (in shares)	0	42,782,688
Convertible preferred stock, shares outstanding	0	42,782,688

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 0	$ 0	$ 45
Operating expenses:
Research and development	29,008	25,029	11,382
General and administrative	10,867	7,640	4,609
Total operating expenses	39,875	32,669	15,991
Loss from operations	(39,875)	(32,669)	(15,946)
Other income (expense):
Interest income	527	147
Interest expense	(1,019)	(767)	(604)
Change in fair value of warrant liability	(1,844)	122	(132)
Total other income (expense)	(2,336)	(498)	(736)
Net loss attributable to common stockholders	$ (42,211)	$ (33,167)	$ (16,682)
Net loss per share attributable to common stockholders—basic and diluted	$ (6.11)	$ (28.07)	$ (14.89)
Weighted average shares outstanding—basic and diluted	6,903,239	1,181,429	1,120,268

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Series Seed convertible preferred stock	Series A convertible preferred stock	Series B convertible preferred stock	Series B-1 convertible preferred stock	Series C convertible preferred stock	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance as of beginning of period at Dec. 31, 2014	$ 11,065	$ 10,736	$ 22,185
Balance as of beginning of period (in shares) at Dec. 31, 2014	11,243,209	9,583,432	15,624,999
Temporary Equity
Issuance of preferred stock-net of issuance costs				$ 6,885
Balance as of end of period at Dec. 31, 2015	$ 11,065	$ 10,736	$ 22,185	$ 6,885
Balance as of end of period (in shares) at Dec. 31, 2015	11,243,209	9,583,432	15,624,999	4,629,629
Balance as of beginning of period at Dec. 31, 2014						$ 1	$ 1,563	$ (42,288)	$ (40,724)
Balance as of beginning of period (in shares) at Dec. 31, 2014						1,011,629
Stockholders' Equity
Exercise of stock options							104		104
Exercise of stock options (in shares)						169,800
Stock-based compensation							638		638
Net loss								(16,682)	(16,682)
Balance as of end of period at Dec. 31, 2015						$ 1	2,305	(58,970)	(56,664)
Balance as of end of period (in shares) at Dec. 31, 2015						1,181,429
Temporary Equity
Issuance of preferred stock-net of issuance costs (in shares)				4,629,629
Issuance of preferred stock-net of issuance costs					$ 67,520
Balance as of end of period at Dec. 31, 2016	$ 11,065	$ 10,736	$ 22,185	$ 6,885	$ 67,520
Balance as of end of period (in shares) at Dec. 31, 2016	11,243,209	9,583,432	15,624,999	4,629,629	42,782,688
Stockholders' Equity
Stock-based compensation							2,069		2,069
Net loss								(33,167)	(33,167)
Balance as of end of period at Dec. 31, 2016						$ 1	4,374	(92,137)	(87,762)
Balance as of end of period (in shares) at Dec. 31, 2016						1,181,429
Temporary Equity
Issuance of preferred stock-net of issuance costs (in shares)	11,243,209	9,583,432	15,624,999	4,629,629	42,782,688
Conversion of preferred stock upon IPO	$ (11,065)	$ (10,736)	$ (22,185)	$ (6,885)	$ (67,520)
Conversion of preferred stock upon IPO (in shares)	(11,243,209)	(9,583,432)	(15,624,999)	(4,629,629)	(42,782,688)
Balance as of end of period (in shares) at Dec. 31, 2017	0	0	0	0	0
Stockholders' Equity
Cumulative effect of a change in accounting policy							23	(23)
Conversion of preferred stock upon IPO						$ 16	118,375		118,391
Conversion of preferred stock upon IPO (in shares)						16,101,970
Issuance of common stock upon IPO, net of underwriters discount and offering costs						$ 7	93,998		94,005
Issuance of common stock upon IPO, net of underwriters discount and offering costs (in shares)						6,900,000
Reclassification of preferred warrant liability							2,883		2,883
Exercise of warrants							379		379
Exercise of warrants (in shares)						106,576
Exercise of stock options						$ 1	422		423
Exercise of stock options (in shares)						248,334
Stock-based compensation							3,571		3,571
Net loss								(42,211)	(42,211)
Balance as of end of period at Dec. 31, 2017						$ 25	$ 224,025	$ (134,371)	$ 89,679
Balance as of end of period (in shares) at Dec. 31, 2017						24,538,309
Temporary Equity
Issuance of preferred stock-net of issuance costs (in shares)	0	0	0	0	0

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Issuance of common stock upon IPO, net of underwriters discount and offering costs	$ 94,005
Series B-1 convertible preferred stock
Issuance of preferred stock-net of issuance costs			$ 115
Series C convertible preferred stock
Issuance of preferred stock-net of issuance costs		$ 402

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net loss	$ (42,211,000)	$ (33,167,000)	$ (16,682,000)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	287,000	297,000	330,000
Change in fair value of warrant liability	1,844,000	(122,000)	132,000
Amortization of debt discount	111,000	106,000	134,000
Write-off of deferred offering costs		1,789,000
Stock-based compensation	3,571,000	2,069,000	638,000
Loss on disposal of fixed asset			19,000
Increase (decrease) in cash from:
Accounts receivable			36,000
Prepaid expenses and other current assets	(494,000)	(66,000)	34,000
Accounts payable	205,000	(343,000)	911,000
Accrued expenses	2,596,000	2,108,000	(605,000)
Other long-term liabilities	(7,000)	(19,000)	(36,000)
Net cash used in operating activities	(34,098,000)	(27,348,000)	(15,089,000)
Cash flows from investing activities:
Purchases of property and equipment	(480,000)	(153,000)	(252,000)
Net cash used in investing activities	(480,000)	(153,000)	(252,000)
Cash flows from financing activities:
Proceeds from common stock offering, net of underwriters discounts	96,255,000
Payment of common stock offering costs	(2,250,000)
Proceeds from venture debt	10,000,000	1,333,000	5,000,000
Payment of principal on venture debt facility	(1,111,000)	(1,333,000)
Payment of venture debt issuance costs		(23,000)	(3,000)
Payment of deferred offering costs		(283,000)	(1,506,000)
Proceeds from exercise warrants	379,000
Proceeds from exercise of stock options	423,000	0	104,000
Net cash provided by financing activities	103,696,000	67,214,000	10,480,000
Net increase (decrease) in cash and restricted cash	69,118,000	39,713,000	(4,861,000)
Cash and restricted cash at beginning of period	45,581,000	5,868,000	10,729,000
Cash and restricted cash at end of period	114,699,000	45,581,000	5,868,000
Adjustment for restricted cash	(134,000)	(109,000)	(109,000)
Cash at end of period	114,565,000	45,472,000	5,759,000
Supplemental disclosure of non-cash investing and financing activities:
Conversion of convertible preferred stock into common stock	118,391,000
Reclassification of warrants to additional paid-in capital	2,883,000	1,039,000	936,000
Deferred offering costs included in accounts payable and accruals			226,000
Cashless exercise of warrants	411,000
Fair value of warrants issued in connection with venture debt		225,000
Cash paid for interest	$ 863,000	681,000	442,000
Series B-1 convertible preferred stock
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock			7,000,000
Payment of issuance costs			$ (115,000)
Series C convertible preferred stock
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock		67,922,000
Payment of issuance costs		$ (402,000)

Nature of business	12 Months Ended
Nature of business	Dec. 31, 2017
Nature of business
Nature of business	Note 1: Nature of business 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. The Company has applied the MPP technology to lotepredol etabonate, or LE, a corticosteroid designed for ocular applications, resulting in two lead product candidates. These product candidates are INVELTYSTM (KPI‑121 1.0%), for the treatment of inflammation and pain following ocular surgery, for which the U.S. Food and Drug Administration (the “FDA”) has accepted for filing the Company’s New Drug Application, or NDA, and KPI‑121 0.25% for the temporary relief of the signs and symptoms of dry eye disease. The Company is evaluating opportunities for MPP nanosuspensions of LE with less frequent daily dosing regimens for the treatment of inflammation and pain following ocular surgery, for the temporary relief of the signs and symptoms of dry eye disease and for potential chronic treatment 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 brand name INVELTYS has been conditionally approved by the FDA. 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. Initial Public Offering—On July 25, 2017, the Company completed its initial public offering (“IPO”) of common stock pursuant to its registration statement on Form S‑1, as amended (File No. 333‑218936), which was declared effective by the Securities Exchange Commission (the “SEC”) on July 19, 2017. Pursuant to the registration statement, the Company issued and sold 6,900,000 shares of $0.001 par value common stock at an initial offering price of $15.00 per share, which included 900,000 shares of common stock pursuant to the underwriters’ option to purchase additional shares. The Company’s shares began trading on the Nasdaq Global Select Market under the symbol “KALA” on July 20, 2017. Proceeds from the Company’s IPO were approximately $94.0 million after deducting underwriting discounts and commissions of $7.3 million and offering costs of $2.2 million. 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. All of the Company’s outstanding warrants to purchase preferred stock automatically converted into warrants to purchase 202,020 shares of common stock.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2: Summary of Significant Accounting Policies

Principles of consolidation—The accompanying consolidated financial statements include the accounts of Kala Pharmaceuticals, Inc. and its wholly owned subsidiary, Kala Pharmaceuticals Security Corporation, which is a Massachusetts subsidiary created to buy, sell and hold securities. All intercompany transactions and balances have been eliminated.

Basis of Presentation—The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since inception, the Company has not generated revenue from the sale of products and has incurred recurring losses and negative cash flows from operations, including a net loss of $42.2 million, $33.2 million and $16.7 million for the years ended December 31, 2017, 2016 and 2015, respectively, and used cash in operations of $34.1 million, $27.3 million and $15.1 million in the years ended December 31, 2017, 2016, and 2015 respectively. The Company has financed its operations to date primarily through the issuance of common stock, convertible preferred stock, convertible promissory notes and debt. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future. The Company also has debt repayments of $6.7 million due within one year. The Company expects that its cash of $114.6 million as of December 31, 2017 will be sufficient to fund its operating expenses, debt repayments and capital expenditure requirements for at least 12 months from the date these consolidated financial statements were issued. This evaluation is based on relevant conditions and events that are known and reasonably knowable at the date that the consolidated financial statements are issued.

The viability of the Company beyond that point is dependent on its estimated rate of depletion of available capital resources and its ability to raise additional capital to finance its extended operations. There can be no assurance that the Company will be able to generate revenue sufficient to cover its costs or obtain capital on acceptable terms, if at all.

Common Stock Reverse Stock Split and Adjustment to Preferred Stock Conversion Ratios—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 Certificate of 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.

Use of Estimates—The preparation of consolidated 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 consolidated 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.

Cash and Concentration of Credit Risk—Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Restricted Cash—As of December 31, 2017 and 2016, the Company had restricted cash of $134,000 and $109,000, respectively, which represents certificates of deposit serving as collateral for the Company’s credit card and facility leases. This cash is classified as a non-current asset in the accompanying consolidated balance sheets.

Deferred Offering Costs—The Company capitalizes certain legal, professional accounting and other third‑party fees that are directly associated with the offering of its common stock as other current assets until the offering is consummated. After consummation of the offering, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid‑in capital generated as a result of the offering. On September 11, 2015, the Board authorized the Company to confidentially submit a draft registration statement to the Securities and Exchange Commission to sell shares of its common stock to the public. The Company incurred costs of $1.8 million directly related to the proposed offering. During the second quarter of 2016, the Company determined that it was likely its offering would be postponed for a period in excess of 90 days. As a result, in accordance with the Securities and Exchange Commission guidance in Staff Accounting Bulletin Topic 5‑A, Expenses of Offering, the Company expensed the previously deferred offering costs of $1.8 million as general and administrative expenses in the year ended December 31, 2016.

Property and Equipment, net—Property and equipment are recorded at cost. Depreciation is provided using the straight‑line method over the estimated useful lives of the related assets. Depreciation expense is included in research and development and general and administrative expenses. Laboratory equipment is depreciated over five years and office and computer equipment is depreciated over three years. Leasehold improvements are depreciated over the shorter of their useful life or the life of the lease. Major additions and upgrades are capitalized; maintenance and repairs, which do not improve or extend the life of the respective assets, are expensed as incurred. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.

Patent Costs—Costs to secure and defend patents are expensed as incurred and are classified as general and administrative expenses in the Company’s consolidated statements of operations.

Impairment of Long‑Lived Assets—Long‑lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future cash flows. If the undiscounted cash flows are insufficient to recover the carrying value, the assets are recorded at the lesser of the carrying value or fair value. For the years ended December 31, 2017, 2016 and 2015, no impairments were recorded.

Fair Value Measurements—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 of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s preferred stock warrant liability, prior to conversion to common stock warrants, was carried at fair value determined according to the fair value hierarchy described above (See Note 8) 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 6) 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.

Segment Information—Operating segments are identified as components of an enterprise about which separate discrete financial information is made available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The CODM is the Company’s Chief Executive Officer. The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s singular focus is on the development and commercialization of therapeutics using its proprietary nanoparticle‑based Mucus Penetrating Particles technology. All of the Company’s tangible assets are held in the United States. To date, all of the Company’s revenue has been generated in the United States.

Revenue Recognition—Revenue is recognized when the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered and risk of loss has passed; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Deferred revenue is recorded for any amounts received prior to satisfying the revenue recognition criteria. The Company recognized an immaterial amount of revenue during the year ended December 31, 2015, related to the completion of services associated with two feasibility arrangements that were substantially complete as of December 31, 2014. There was no revenue recognized during the years ended December 31, 2017 and 2016, as there were no new revenue arrangements since the completion of the aforementioned feasibility studies.

Research and Development Costs—Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits for full‑time research and development employees, an allocation of facilities expenses, overhead expenses, payments to universities under the Company’s license agreements and other outside expenses. Research and development costs are expensed as incurred. Research and development costs that are paid in advance of performance, including nonrefundable prepayments for goods or services, are deferred and capitalized as a prepaid expense. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

Accrued Expenses—The Company accrues expenses related to development activities performed by third parties based on an evaluation of services received and efforts expended pursuant to the terms of the contractual arrangements. Payments under some of these contracts depend on clinical trial milestones. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of expenses. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual or prepaid expense accordingly.

Stock‑Based Compensation—The Company accounts for all stock‑based payment awards granted to employees and non‑employees as compensation expense at fair value. The Company’s stock‑based payments include stock options and grants of common stock, including common stock subject to vesting. The measurement date for employee awards is the date of grant, and stock‑based compensation costs are recognized as expense over the employees’ requisite service period, which is the vesting period, on a straight‑line basis. The measurement date for nonemployee awards is generally the date the services are completed, resulting in periodic adjustments to stock‑based compensation during the vesting terms for changes in the fair value of the awards. Stock‑based compensation costs for nonemployees are recognized as expense over the vesting period on a straight‑line basis. Stock‑based compensation is classified in the accompanying consolidated statements of operations based on the function to which the related services are provided.

The Company recognizes compensation expense for the portion of awards that have vested. After the adoption of ASU 2016-09, described in further detail below, forfeitures are recorded as they occur.

The fair value of each stock option grant is estimated on the date of grant using the Black‑Scholes option‑pricing model. The assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates. The Company lacks sufficient company‑specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and will continue to do so until it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain‑vanilla” options. The expected term of stock options granted to non‑employees is equal to the contractual term of the option award. The risk‑free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future.

Common Stock Valuation Prior to the IPO—For the years ended December 31, 2016 and 2015 and through the consummation of the IPO, due to the absence of an active market for the Company’s common stock, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately‑Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. In determining the exercise prices for options granted, the Company has considered the estimated fair value of the common stock as of the measurement date. The estimated fair value of the common stock has been determined at each grant date based upon a variety of factors, including the illiquid nature of the common stock, arm’s‑length sales of the Company’s capital stock (including redeemable convertible preferred stock), the effect of the rights and preferences of the preferred shareholders, and the prospects of a liquidity event. Among other factors are the Company’s financial position and historical financial performance, the status of technological developments within the Company’s research, the composition and ability of the current research and management team, an evaluation or benchmark of the Company’s competition, and the current business climate in the marketplace. Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date.

Preferred Stock Warrants—Prior to the completion of the IPO, the Company classified warrants to purchase shares of its Series Seed Preferred Stock, Series A Convertible Preferred Stock (“Series A Preferred Stock”), Series B Preferred Stock, and Series C Preferred Stock as a liability on its consolidated balance sheets as these warrants were free‑standing financial instruments that were exercisable for contingently redeemable shares. The warrants were recorded in long‑term liabilities at fair value, estimated using the Black‑Scholes model, and marked to market at each balance sheet date. The change in carrying value was reported as the change in fair value of warrant liability in the accompanying consolidated statements of operations. The Company continued to adjust the liability for changes in fair value until conversion of the preferred stock warrants to warrants to purchase common stock (see Note 7).

Income Taxes—Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As a result, reserves are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present.

Tax Incentives

The Company recognizes tax incentives when there is reasonable assurance that the Company will comply with the conditions attached to the tax incentive agreement and the tax incentive will be received. The Company evaluates the conditions of each individual tax incentive as of each reporting period to ensure that the Company has reached reasonable assurance of meeting the conditions of each tax incentive agreement and that it is expected that the tax incentive will be received as a result of meeting the necessary conditions. When tax incentives are related to reimbursements for cost of revenues or operating expenses, the tax incentives are recognized as a reduction of the related expense in the consolidated statements of operations when the related expense has been incurred.

The Company records tax incentive receivables in the consolidated balance sheets in prepaid expenses and other current assets or long-term tax incentive receivable, depending on when the amounts are expected to be received from the funding agency. As of December 31, 2017, the Company had recorded no tax incentives.

Net Loss per Share—Basic net loss per share is computed using the weighted‑average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of potential shares of common stock, including the assumed exercise of stock options and warrants. Net loss per share attributable to common stockholders is calculated using the two‑class method, which is an earnings allocation formula that determines net loss per share for the holders of the Company’s common shares and participating securities. The Company’s convertible preferred stock contains participation rights in any dividend paid by the Company and is deemed to be a participating security. Net loss attributable to common stockholders and participating preferred shares are allocated to each share on an as‑converted basis as if all of the earnings for the period had been distributed. The participating securities do not include a contractual obligation to share in losses of the Company and are not included in the calculation of net loss per share in the periods in which a net loss is recorded.

Diluted net loss per share is computed using the more dilutive of (a) the two‑class method or (b) the if converted method. The Company allocates earnings first to preferred stockholders based on dividend rights and then to common and preferred stockholders based on ownership interests. The weighted average number of common shares included in the computation of diluted net loss gives effect to all potentially dilutive common equivalent shares, including outstanding stock options, warrants, preferred stock and the potential issuance of stock upon the conversion of the Company’s convertible notes. Common stock equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued if their effect is anti‑dilutive. When a gain had been recorded pursuant to a change in fair value of the warrant liability during the period, the Company assessed whether the impact of reversing the gain and including the additional securities was dilutive, and if so, adjusted dilutive EPS. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2017, 2016 and 2015.

Comprehensive Loss—Comprehensive loss is equal to net loss for the periods presented.

Recently Adopted Accounting Pronouncements—In March 2016, the FASB issued ASU No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09”), 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 consolidated 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 consolidated 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 assets, 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 consolidated 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 consolidated statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and required retrospective application. The Company elected to early adopt this guidance as of December 31, 2017. The adoption of this standard did not have a material impact on the consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements—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 consolidated balance sheets, results of operations and consolidated statements of cash flows.

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. The Company is currently evaluating the impact of the adoption of ASU 2016‑15, but believes its adoption will have no material impact on its consolidated statement of cash flows.

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 plans to adopt ASU 2016‑02 as of January 1, 2018 and expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and corresponding lease liability.

Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2017

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Note 3: Prepaid Expenses and Other Current Assets

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


	December 31,		December 31,
	2017		2016

Rent	$	—	$	58
Insurance		452		55
Other		196		41
Prepaid expenses and other current assets	$	648	$	154

Property and Equipment, Net

12 Months Ended

Dec. 31, 2017

Property and Equipment, Net

Property and Equipment, Net

Note 4: Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):


	December 31,		December 31,
	2017		2016

Laboratory equipment	$	2,084	$	1,729
Leasehold improvements		114		93
Computer hardware and software		87		54
Office equipment		30		23
Furniture and fixtures		11		11
Property and equipment—at cost		2,326		1,910
Less: Accumulated depreciation		(1,540)		(1,316)
Property and equipment—net	$	786	$	594

Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $287,000, $297,000 and $330,000, respectively.

Accrued Expenses

12 Months Ended

Dec. 31, 2017

Accrued Expenses

Accrued Expenses

Note 5: Accrued Expenses

Accrued expenses consist of the following (in thousands):


	December 31,		December 31,
	2017		2016

Development costs	$	3,054	$	2,280
Compensation and benefits		2,402		1,480
Professional fees		666		171
General and administrative consulting		229		—
Other		238		62
Accrued expenses	$	6,589	$	3,993

Debt

12 Months Ended

Dec. 31, 2017

Debt

Debt

Note 6: 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 a First Amendment to the 2014 Debt Facility the (''First Amendment''), which 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''). On September 28, 2017, the Company drew the additional $10.0 million available under Term Loan B. On November 22, 2017, the Company entered into a Second Amendment to the 2014 Debt Facility to account for the formation of the Company’s wholly-owned subsidiary. Under the terms of the facility, the borrowings accrue interest at an annual rate equal to 3.00% above the Prime Rate then in effect. The interest rate was 7.50% and 6.50% as of December 31, 2017 and 2016, respectively.

The unpaid principal balance under the 2014 Debt Facility was $18.9 million as of December 31, 2017 and $10.0 million as of December 31, 2016. The unamortized discount was $235,000 and $346,000 as of December 31, 2017 and 2016, respectively. The Company recognized interest expense of $1.0 million, $767,000 and $604,000 related to the 2014 Debt Facility during the years ended December 31, 2017, 2016 and 2015, respectively, which consisted of the amortization of the debt discount of $111,000, $106,000 and $134,000, respectively, and contractual coupon interest of $908,000, $661,000 and $470,000, respectively.

The 2014 Debt Facility, as amended, is senior debt and is secured by substantially all of the assets of the Company other than intellectual property. The Company’s ability to pay cash dividends is currently restricted by the terms of the 2014 Debt Facility. In the event the Company is determined to be in default under the 2014 Debt Facility, the outstanding balance accrues interest at five percentage points above the interest rate applicable immediately prior to the occurrence of the event of default and the lender has the right to declare all outstanding principal and interest payable. Under the terms of the 2014 Debt Facility, certain events including but not limited to, the Company’s failure to pay obligations when due, failure to perform obligations under the agreement, insolvency or the occurrence of any circumstance that could reasonably be expected to have a material adverse effect on the Company, constitute events of default.

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 of Series B Preferred Stock or 53,333 shares of common stock at an exercise price of $7.50 per share on an as-converted basis (see Note 9). 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”), or 48,374 shares of common stock at an exercise price of $8.27 per share on an as-converted basis (see Note 9). Consistent with the warrants issued under the original 2014 Debt Facility, the number of shares of Series C Preferred Stock that become exercisable would increase in proportion to the amount of Term Loan B borrowings. Upon the September 28, 2017 draw down of Term B Loan, the 2016 Warrants became exercisable into 48,374 shares of common stock. The 2016 Warrants were not exercisable into shares as of the First Amendment date or December 31, 2016, as the Company had not borrowed under the Term B Loan during 2016.

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 8), 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. Upon the Company's IPO on July 25, 2017, all of the underlying preferred stock warrants were converted into warrants for common stock, and the warrant liability was re-measured to fair value and reclassified to additional paid-in capital.

As of December 31, 2017 and 2016, the estimated fair value of the warrant liability associated with the 2014 Warrants was $0 and $274,000, respectively, and the estimated fair value of the warrant liability associated with the 2016 Warrants was $0 and $263,000.

The future annual principal payments due under the 2014 Debt Facility as of December 31, 2017 were as follows (in thousands):


Years Ending December 31,
2018	$	6,667
2019		6,667
2020		5,555
Total	$	18,889

Warrants

12 Months Ended

Dec. 31, 2017

Warrants

Warrants

Note 7: Warrants

The Company has issued warrants in connection with debt transactions that were completed prior to 2014, all of which are classified as liabilities as of December 31, 2016 and which were re-measured at fair value at each reporting period prior to the reporting period ending December 31, 2017, as the warrants were exercisable into contingently redeemable shares. As of December 31, 2016, warrants outstanding to acquire Series C Preferred Stock were not exercisable into shares of Series C Preferred Stock. As part of the draw down of Term Loan B on September 28, 2017, warrants to acquire 48,374 shares of common stock became exercisable.

The following table summarizes the preferred warrants outstanding at each of the dates identified:


					Shares Exercisable at
		Exercise		Expiration	December 31,		December 31,
Issued	Exercisable for	Price		Date	2017		2016
2011 and 2012	Series Seed Preferred Stock	$	1.00	July 2019	—		80,000	(1)
2013	Series B Preferred Stock	$	1.44	April 2021	—		694,444	(1)
2014	Series B Preferred Stock	$	1.44	November 2024	—		277,778	(1)
2016	Series C Preferred Stock	$	1.59	October 2026	—	(2)	—	(2)

(1)

As of December 31, 2016, the preferred stock warrants to purchase Series Seed Preferred Stock issued in 2011 and 2012, Series B Preferred Stock issued in 2013 and Series B Preferred Stock issued in 2014 were exercisable, and on a converted basis would have represented warrants to purchase common stock of 15,360, 133,327 and 53,333 shares, respectively. As of December 31, 2017 there were no preferred stock warrants outstanding (See Note 1) and all of the underlying preferred stock warrants were converted into warrants for common stock.

(2)

As of December 31, 2016, the preferred stock warrants to purchase Series C Preferred Stock were not exercisable and as of December 31, 2017, there were no preferred stock warrants outstanding (See Note 1). Upon the September 2017 $10.0 million draw down of the Term B Loan, 48,374 warrants became exercisable for 48,374 shares of common stock, which for comparative purposes represents 251,951 shares of Series C Preferred Stock on a pre-converted basis.

The following table summarizes the common stock warrants each exercisable into one share of common stock:


						Shares Exercisable at
		Exercise		Expiration	Exercisable	December 31,
Issued	Original Source	Price		Date	From	2017
2013	Series B Preferred Stock	$	7.50	April 2021	July 2017	82,816
2014	Series B Preferred Stock	$	7.50	November 2024	July 2017	16,000
2016	Series C Preferred Stock	$	8.27	October 2026	September 2017	14,512
						113,328

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2017

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Note 8: Fair Value of Financial Instruments

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. Upon the Company’s IPO on July 25, 2017, all of the underlying preferred stock warrants became exercisable for common stock instead of preferred stock and the fair value of the warrant liability of $2.9 million, as measured immediately prior to the IPO, was charged to additional paid-in capital with the reclassification of the warrants into equity. There was no warrant liability as of December 31, 2017 and, as such, there were no assets and liabilities measured at fair value on a recurring basis as of December 31, 2017. The assets and liabilities measured at fair value on a recurring basis as of 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

The Company has historically 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 included 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 were adjustable based on the amount of the Term Loans drawn down or the probability that the Company would draw down on the debt facility. The Company determined the fair values of the warrants as of December 31, 2016 and on an interim basis immediately prior to conversion of preferred stock and warrants into common stock and warrants exercisable for common stock, using the Black‑Scholes option‑pricing model. The following assumptions were used for the respective measurement date(1):


	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		—	%		—	%		—	%		—	%


Immediately prior to conversion
Volatility		119.00	%		112.00	%		114.00	%		116.00	%
Risk-free interest rate		1.40	%		1.60	%		2.10	%		2.20	%
Estimated fair value of underlying shares	$	13.50		$	13.50		$	13.50		$	13.50
Remaining contractual term (years)		2.0			3.7			7.3			9.2
Expected dividend yield		—	%		—	%		—	%		—	%

(1)

For purposes of determining the fair value of the warrants to purchase Series C Preferred Stock as of December 31, 2016 and immediately prior to conversion, the Company estimated that there was a 100% probability that it would draw down on the remaining $10.0 million available under the 2014 Debt Facility as of the measurement date, and as such, assumed that the warrants would be exercisable into the maximum number of shares stipulated in the First Amendment. With respect to the aggregate warrant liabilities recorded as of December 31, 2016 and immediately prior to conversion, 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.

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


	Year Ended
	December 31,
	2017		2016

Fair value - January 1,	$	1,039	$	936
Fair value of 2016 Warrants upon First Amendment		—		225
Change in fair value of warrant liability		1,844		(122)
Reclassification of preferred warrant liability		(2,883)		—
Fair value - December 31,	$	—	$	1,039

- 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

Preferred Stock

12 Months Ended

Dec. 31, 2017

Preferred Stock

Preferred Stock

Note 9: Preferred Stock

Adjustment to Conversion Ratios

Convertible preferred stock consisted of the following as of 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 were issuable upon conversion of the preferred stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company paid 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 payments for fractional shares would be made upon such conversion was determined on the basis of the total number of shares of preferred stock the holder was at the time converting into common stock and the aggregate number of shares of common stock issuable upon such conversion.

Upon the closing of the Company’s IPO on July 25, 2017, all outstanding shares of convertible preferred stock converted into 16,101,970 shares of the Company’s common stock. Following the closing of the Company’s IPO, the Company is authorized to issue 5.0 million shares of undesignated preferred stock in one or more series. As of December 31, 2017, no shares of preferred stock were issued or outstanding.

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. As such, there were no outstanding shares of Series Seed Convertible Preferred Stock as of December 31, 2017.

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. As such, there were no outstanding shares of Series A Convertible Preferred Stock as of December 31, 2017.

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, 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. As such, there were no outstanding shares of Series B Convertible Preferred Stock as of December 31, 2017.

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. As such, there were no outstanding shares of Series B-1 Convertible Preferred Stock as of December 31, 2017.

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. As such, there were no outstanding shares of Series C Convertible Preferred Stock as of December 31, 2017.

Terms Applicable to Each Series of Preferred Stock

The Series Seed Preferred Stock, Series A Preferred Stock, Series B Preferred Stock, Series B‑1 Preferred Stock and Series C Preferred Stock are classified outside of stockholders’ equity (deficit) because the shares contain certain redemption features that are not solely within the control of the Company.

The rights, preferences, and privileges of the preferred stock were as follows:

Voting—Preferred stockholders were entitled to vote on all matters and are entitled to the number of votes equal to the number of shares of common stock into which each share of preferred stock was then convertible.

Dividends—Preferred stockholders are entitled to receive, when and if declared by the Board out of any funds legally available, dividends at the rate of 8% of the original issue price per share. No such dividends were declared or paid through December 31, 2017.

Liquidation Rights— Prior to the IPO, upon any liquidation, dissolution, or winding‑up of the Company, whether voluntary or involuntary, each holder of the then outstanding Series C Preferred Stock and then Series B Preferred Stock and Series B‑1 Preferred Stock was entitled to distribution, before any distribution of payments is made to holders of Series Seed Preferred Stock or Series A Preferred Stock or common stockholders, an amount equal to the greater of (i) (A) in the case of the Series C Preferred Stock, $1.5876 per share (B) in the case of the Series B Preferred Stock, $1.44 per share and (C) in the case of the Series B‑1 Preferred Stock, $1.512 per share, plus, in each case, any declared but unpaid dividends and (ii) the amount such holder would have received if such holder had converted its shares into common stock immediately prior to such liquidation, dissolution, or winding‑up of the Company. After the payment of the preferential amounts to the holders of the Series C Preferred Stock, then Series B Preferred Stock and the Series B‑1 Preferred Stock, the holders of the Series Seed Preferred Stock and Series A Preferred Stock were entitled to a distribution of an amount equal to the greater of (i) (A) in the case of the Series Seed Preferred Stock $1.00 per share, (B) in the case of the Series A Preferred Stock $1.20 per share, plus, in each case, an amount equal to all declared but unpaid dividends; and (ii) the amount such holder would have received if such holder had converted its shares into common stock immediately prior to such liquidation, dissolution, or winding‑up of the Company.

If there were insufficient assets legally available to make the distribution to the holders of the Series Seed Preferred Stock, Series A Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, and Series C Preferred Stock in full, then the available assets would have been distributed on a pro rata basis, first to the holders of the Series C Preferred Stock and then to Series B Preferred Stock and Series B-1 Preferred Stock, then any remaining assets available will be distributed on a pro rata basis to the holders of the Series Seed Preferred Stock and Series A Preferred Stock. Any remaining assets legally available for distribution after satisfaction of the liquidation preferences of the preferred stock would have been distributed to the holders of common stock on a pro-rata basis based upon the number of shares of common stock held by the common stockholders.

Conversion—Each share of preferred stock was convertible into common stock, at any time, at the option of the holder, at the then applicable conversion rate for each series of preferred stock and subject to adjustment in accordance with anti‑dilution provisions. Following the Company’s reverse stock split on July 7, 2017, each share of preferred stock was convertible into 0.1920 shares of common stock. Each share of preferred stock would automatically convert into common stock at the then applicable conversion rate for each series of preferred stock upon the earlier of (i) the closing of the Company’s first underwritten public offering of its common stock in which the Company receives aggregate gross proceeds of at least $30.0 million, and that is listed on the New York Stock Exchange or Nasdaq Stock Market or (ii) a date specified by vote or written consent of the majority of the outstanding preferred stock. In addition, in the event that any holder of at least 500,000 shares of preferred stock did not participate in a Qualified Financing, as defined in the Company’s Certificate of Incorporation, as restated from time to time (the “Charter”), effective upon the consummation of the Qualified Financing, a portion of the holder’s preferred stock (as determined in accordance with the Charter) would automatically convert into a new series of preferred stock with the conversion price for such new series fixed at the applicable conversion price in effect immediately prior to the consummation of the Qualified Financing, and such conversion price would be subject to any adjustment thereafter.

Common Stock

12 Months Ended

Dec. 31, 2017

Common Stock

Common Stock

Note 10: Common Stock

Common Stock

The Company was authorized to issue up to 120,000,000 and 110,251,951 shares of common stock with a $0.001 par value per share as of December 31, 2017 and 2016, respectively. The Company had 24,538,309 and 1,181,429 shares of common stock issued and outstanding as of December 31, 2017 and 2016, respectively.

Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Each election of directors by our stockholders will be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.

In the event of our liquidation or dissolution, the holders of our common stock are entitled to receive proportionately all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any of our outstanding preferred stock. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

Voting, dividend and liquidation rights of the holders of the common stock is subject to and qualified by the rights, powers and preferences of the holders of the preferred stock.

Voting—Each holder of outstanding shares of common stock shall be entitled to one vote in respect of each share. The holders of outstanding shares of common stock, voting together as a single class, shall be entitled to elect one director. The number of authorized shares of common stock may be increased or decreased by the affirmative vote of a majority of the outstanding shares of common stock and preferred stock voting together as a single class.

Dividends—Subject to the payment in full of all preferential dividends to which the holders of the preferred stock are entitled hereunder, the holders of common stock shall be entitled to receive dividends out of funds legally available therefor at such times and in such amounts as the Board may determine in its sole discretion, with holders of preferred stock and common stock sharing pari passu in such dividends.

Liquidation Rights—Upon any liquidation, after the payment or provision for payment of all debts and liabilities of the Company and all preferential amounts to which the holders of preferred stock are entitled with respect to the distribution of assets in liquidation, the holders of common stock shall be entitled to share ratably in the remaining assets of the Company available for distribution.

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.

Reserved Shares

As of December 31, 2017 and 2016, the Company has reserved 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 as follows (see Note 11):


	December 31,	December 31,
	2017	2016

Convertible preferred stock	—	16,101,970
2013 Warrant rights to acquire Series B Preferred Stock	—	133,327
2014 Warrant rights to acquire Series B Preferred Stock	—	53,333
2016 Warrant rights to acquire Series C Preferred Stock (1)	—	48,374
2011 Warrant rights to acquire Series Seed Preferred Stock	—	15,360
Warrant rights to acquire Common Stock	113,328	—
2009 stock option plan	2,868,449	3,533,726
2017 stock option plan	2,025,633	—
Total	5,007,410	19,886,090

(1)

As of 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 became exercisable for 48,374 shares of common stock, which for comparative purposes represents 251,951 shares of Series C Preferred Stock on a pre-converted basis.

Stock-based Compensation

12 Months Ended

Dec. 31, 2017

Stock-based Compensation

Stock-based Compensation

Note 11: Stock-based Compensation

A summary of option activity for employee and non-employee consultant awards under the 2009 Plan and the 2017 Plan for the year ended December 31, 2017 is as follows:


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(Years)
Outstanding at January 1, 2017	3,195,469	$	3.26	8.6	$	1,200
Granted	973,492		16.88
Exercised	(248,334)		1.70
Forfeited	(181,699)		2.80
Outstanding at December 31, 2017	3,738,928	$	6.93	8.4	$	44,578
Vested at December 31, 2017	3,738,928	$	6.93	8.4	$	44,578
Options exercisable at December 31, 2017	1,692,918	$	3.74	7.8	$	24,963

The assumptions used in determining fair value of the stock options granted in the years ended December 31, 2017, 2016 and 2015 are as follows:


	Year Ended December 31,
	2017	2016	2015
Expected volatility	102% - 122%	106% - 110%	106% - 115%
Risk-free interest rate	1.81% - 2.29%	1.21% - 1.45%	1.49% - 2.24%
Expected dividend yield	0%	0%	0%
Expected term (in years)	5.04 - 9.82	5.62 - 6.18	5.87 - 9.46

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 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 is recorded as they occur.

The weighted average grant-date fair value of options granted during the years ended December 31, 2017, 2016 and 2015 was $13.87, $2.71 and $4.17, 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. As of December 31, 2017, there was $15.4 million of unrecognized compensation cost related to the stock options granted, which is expected to be expensed over a weighted-average period of 3.11 years. Stock-based compensation expense was classified in the consolidated statements of operations as follows (in thousands):


	Year Ended
	December 31,
	2017		2016		2015

Research and development	$	1,267	$	461	$	161
General and administrative		2,304		1,608		477
Total	$	3,571	$	2,069	$	638

The Company received cash proceeds from the exercise of stock options of $423,000, $0 and $104,000 during the years ended December 31, 2017, 2016 and 2015, respectively. The total intrinsic value of options exercised for the year ended December 31, 2017, 2016 and 2015 was $4.7 million, $0 and $552,000, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes

Income Taxes

Note 12: Income Taxes

The Company has had no income tax expense due to operating losses incurred for the years ended December 31, 2017 and 2016. The Company has also not recorded any income tax benefits for the net operating losses incurred in each period due to its uncertainty of realizing a benefit from those items. All of the Company’s losses before income taxes were generated in the United States.

Tax Reform Language Definition—On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; (6) creating the base erosion anti-abuse tax (BEAT), a new minimum tax; (7) creating a new limitation on deductible interest expense; and (8) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	Year Ended
	December 31,
	2017			2016
Federal statutory income tax rate		35.0	%		35.0	%
Effect of:
Change in valuation allowance		3.5			(42.3)
Impact of change in tax laws		(42.5)			—
State income taxes, net of federal benefit		3.9			4.7
Research and development tax credits		3.2			3.1
Other		(3.1)			(0.5)
Effective income tax rate		—	%		—	%

Net deferred tax assets as of December 31, 2017 and 2016 consisted of the following (in thousands):


	December 31,
	2017		2016
Net operating loss carryforwards	$	33,689	$	36,280
Research and development tax credit carryforwards		4,470		2,940
Start-up costs and other		2,024		1,807
Total deferred tax assets		40,183		41,027
Depreciation and amortization		(9)		8
Total deferred tax liabilities		(9)		8
Valuation allowance		(40,174)		(41,035)
Net 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. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2017 and 2016. The valuation allowance decreased by $0.9 million in 2017 due to the tax legislation included in the Tax Act and increased by $14.6 million in 2016 due to an increase in the net operating loss carryforwards and research and development tax credits. Management reevaluates the positive and negative evidence at each reporting period.

At December 31, 2017 and 2016, the Company has federal net operating loss carryforwards of $120.9 million and $85.3 million, respectively, which may be available to offset future federal tax liabilities and expire at various dates beginning in 2030 through 2037. At December 31, 2017 and 2016, the Company has state net operating loss carryforwards of $104.0 million and $80.5 million, respectively, which may be available to offset future state income tax liabilities and expire at various dates beginning in 2030 through 2037. As of December 31, 2017 and 2016, the Company also had federal and state research and development credit carryforwards of approximately $4.5 million and $2.9 million, respectively, which are available to reduce future income taxes, if any, from 2030 through 2037 (federal) and 2025 through 2032 (state).

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, North Carolina, 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 December 31, 2017, 2016 and 2015 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 years ended December 31, 2017, 2016 and 2015.

Net Loss per Share

12 Months Ended

Dec. 31, 2017

Net Loss per Share

Net Loss per Share

Note 13: Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders were calculated as follows (in thousands):


	Year Ended
	December 31,
	2017		2016		2015

Numerator:
Net loss attributable to common stockholders	$	(42,211)	$	(33,167)	$	(16,682)

Denominator:
Weighted average shares outstanding—basic and diluted		6,903,239		1,181,429		1,120,268

Net loss per share attributable to common stockholders—basic and diluted	$	(6.11)	$	(28.07)	$	(14.89)

The Company’s potential dilutive securities, which include stock options, warrants to purchase common stock as of December 31, 2017 and stock options, warrants to purchase preferred stock and convertible preferred stock as of December 31, 2016 and 2015, 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:


	December 31,
	2017		2016		2015

Convertible preferred stock (as converted to common stock)		—		16,101,970	7,887,642
Options to purchase common stock		3,738,928		3,195,469	1,546,155
Stock warrants (1)		113,328		250,394	202,020
		3,852,256		19,547,833	9,635,817

(1)

Stock warrants outstanding as of December 31, 2016 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

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies.

Commitments and Contingencies

Note 14: Commitments and Contingencies

Leases—The Company entered into a three‑year lease agreement for its 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 of December 31, 2017 and 2016 is included in other noncurrent assets in the accompanying consolidated balance sheets. Total rent expense for the lease for the years ended December 31, 2017, 2016 and 2015, which is recorded on a straight‑line basis, was $388,000, $338,000 and $321,000, respectively.

As of December 31, 2017, future minimum commitments due under the lease are as follows (in thousands):


Years Ending December 31,
2018	$	410
2019		34
Total minimum lease payments	$	444

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 $139,000, $169,000 and $152,000 for the years ended December 31, 2017, 2016 and 2015, respectively.

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 its 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.

The Company’s minimum obligations due under its license agreements as of December 31, 2017, are as follows (in thousands):


Year Ended December 31,
2018		43
2019		38
2020		—
Total minimum license payments	$	81

The Company entered into a commercial supply agreement with Catalent Pharma Solutions, LLC to manufacture commercial supplies of INVELTYS and KPI-121 0.25%, with annual minimum purchase requirements. Under the minimum unit purchase requirements, if both INVELTYS and KPI-121 0.25% are approved for commercial sale, the Company has a minimum payment obligation in the first 12-month period of approximately $1.5 million, along with certain fees in connection with validation and stability test services and commercialization ramp-up.

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 December 31, 2017, 2016 and 2015, 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 consolidated financial statements.

Defined Contribution Plan	12 Months Ended
Defined Contribution Plan	Dec. 31, 2017
Defined Contribution Plan
Defined Contribution Plan	Note 15: Defined Contribution Plan The Company has a 401(k) defined contribution plan (the ‘‘401(k) Plan’’) for substantially all of its employees. Eligible employees may make pretax contributions to the 401(k) Plan up to statutory limits. In January 2017, the Board approved a discretionary matching contribution to be made under the 401(k) Plan in an amount equal to 50% of the first 2% of compensation contributed to the 401(k) Plan by each participant. The Company made matching contributions of $83,000 to the 401(k) Plan during for the year ended December 31, 2017.

Related Parties	12 Months Ended
Related Parties	Dec. 31, 2017
Related Parties
Related Parties	Note 16: Related Parties The Company has engaged in the following related‑party transactions: A founder, who is also a stockholder and director, served as a consultant to the Company. The individual is employed by a university, which has no relationship to the Company. For the years ended December 31, 2017, 2016 and 2015 the Company paid the individual $35,000, $60,000 and $60,000, respectively, for the consulting services which are included in research and development expense in the accompanying consolidated statements of operations. Immediately prior to the effectiveness of the Company’s registration statement on Form S-1 for the Company’s IPO in July 2017, the Company terminated the consulting services agreement with the individual.

Selected Quarterly Financial Data

12 Months Ended

Dec. 31, 2017

Selected Quarterly Financial Data

Selected Quarterly Financial Data

Note 17: Selected Quarterly Financial Data

Selected quarterly financial data is as follows (in thousands, except per share data):


	Three months ended
	March 31,		June 30,		September 30,		December 31,
	2016		2016		2016		2016
	(in thousands, except per share data)
Total operating expenses	$	5,076	$	9,650	$	9,747	$	8,196
Total other income (expense)		(176)		(203)		80		(199)
Net loss attributable to common stockholders	$	(5,252)	$	(9,853)	$	(9,667)	$	(8,395)
Net loss per share attributable to common stockholders—basic and diluted	$	(4.45)	$	(8.34)	$	(8.18)	$	(7.11)

	Three months ended
	March 31,		June 30,		September 30,		December 31,
	2017		2017		2017		2017
	(in thousands, except per share data)
Total operating expenses	$	9,571	$	9,630	$	9,534	$	11,140
Total other income (expense)		(188)		(1,356)		(642)		(150)
Net loss attributable to common stockholders	$	(9,759)	$	(10,986)	$	(10,176)		(11,290)
Net loss per share attributable to common stockholders—basic and diluted	$	(8.26)	$	(9.30)	$	(0.56)		(0.46)

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2017
Subsequent Events
Subsequent Events	Note 18: Subsequent Events On February 28, 2018, the Company entered into a Lease Agreement (the “Watertown Lease”) with 480 Arsenal Group LLC (“the Arsenal Group”) for the lease of a portion of the building located at 490 Arsenal Way Watertown, Massachusetts consisting of 66,052 rentable square feet at an initial rate of $53 per square foot and annual increases of 3% for the next 7 years. The initial term of the Watertown Lease is 8 years. The Company expects to occupy the premises by the end of 2018. The Company plans to use the premises as its new corporate headquarters and for research and development. In connection with the Watertown Lease, the Company issued a letter of credit to the Arsenal Group for $2.0 million. The Company secured the letter of credit using restricted cash for the full amount of the letter. On March 15, 2018, the Company entered into a Lease Agreement (the “Waverley Oaks Lease”) with Duffy Associates, LLC for the lease of a portion of the building located at 465 Waverely Oaks Road Suite 301, Waltham, Massachusetts consisting of 6,294 rentable square feet at a rate of $32 per square foot. The term of the Waverley Oaks Lease is one year. The Company plans to use this location for additional corporate offices before moving to its new corporate headquarters in Watertown, MA. On March 29, 2018, the Company entered into a third amendment (“the Third Amendment”) to the 2014 Debt Facility. The Third Amendment reaffirmed the prior commitment of $20 million in funding, or Term Loan A, and extended the interest-only end date for 12 months following the execution of the Third Amendment. In addition, the total borrowing capacity was increased by an additional $5 million (“Term Loan B”) subject to the following conditions: (i) the minimum borrowing amount is $250,000 for each incremental borrowing under Term Loan B; (ii) The Term Loans, once repaid, may not be re‑borrowed; (iii) the Company may prepay the Term Loans subject to the payment of a prepayment fee ranging from 0.3% to 0.9%; and (iv) the commitment to fund Term Loan B is contingent upon the Company receiving FDA approval of INVELTYS. Funding under the Term Loan B commitment is available for 12 months following the execution of the Third Amendment. The maturity date of the 2014 Debt Facility was also extended from October 13, 2020 to March 29, 2022.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Summary of Significant Accounting Policies

Principles of consolidation

Basis of Presentation

Common Stock Reverse Stock Split and Adjustment to Preferred Stock Conversion Ratios

Automatic Conversion of Preferred Stock

Use of Estimates

Cash and Concentration of Credit Risk

Restricted Cash

Deferred Offering Costs

Property and Equipment, net

Patent Costs

Patent Costs—Costs to secure and defend patents are expensed as incurred and are classified as general and administrative expenses in the Company’s consolidated statements of operations.

Impairment of Long-Lived Assets

Fair Value Measurements

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

Segment Information

Revenue Recognition

Research and Development Costs

Accrued Expenses

Stock-Based Compensation

The Company recognizes compensation expense for the portion of awards that have vested. After the adoption of ASU 2016-09, described in further detail below, forfeitures are recorded as they occur.

Common Stock Valuation prior to the IPO

Preferred Stock Warrants

Income Taxes

Tax Incentives

Net Loss per Share

Comprehensive Loss

Comprehensive Loss—Comprehensive loss is equal to net loss for the periods presented.

Recently Adopted and Issued Accounting Pronouncements

Prepaid Expenses and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 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):


	December 31,		December 31,
	2017		2016

Rent	$	—	$	58
Insurance		452		55
Other		196		41
Prepaid expenses and other current assets	$	648	$	154

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2017

Property and Equipment, Net

Schedule of property and equipment, net

Property and equipment, net, consists of the following (in thousands):


	December 31,		December 31,
	2017		2016

Laboratory equipment	$	2,084	$	1,729
Leasehold improvements		114		93
Computer hardware and software		87		54
Office equipment		30		23
Furniture and fixtures		11		11
Property and equipment—at cost		2,326		1,910
Less: Accumulated depreciation		(1,540)		(1,316)
Property and equipment—net	$	786	$	594

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Accrued Expenses

Schedule of accrued expenses

Accrued expenses consist of the following (in thousands):


	December 31,		December 31,
	2017		2016

Development costs	$	3,054	$	2,280
Compensation and benefits		2,402		1,480
Professional fees		666		171
General and administrative consulting		229		—
Other		238		62
Accrued expenses	$	6,589	$	3,993

Debt (Tables)

12 Months Ended

Dec. 31, 2017

Debt

Schedule of maturities of long-term debt

The future annual principal payments due under the 2014 Debt Facility as of December 31, 2017 were as follows (in thousands):


Years Ending December 31,
2018	$	6,667
2019		6,667
2020		5,555
Total	$	18,889

Warrants (Tables)

12 Months Ended

Dec. 31, 2017

Preferred Warrants

Schedule of outstanding warrants


					Shares Exercisable at
		Exercise		Expiration	December 31,		December 31,
Issued	Exercisable for	Price		Date	2017		2016
2011 and 2012	Series Seed Preferred Stock	$	1.00	July 2019	—		80,000	(1)
2013	Series B Preferred Stock	$	1.44	April 2021	—		694,444	(1)
2014	Series B Preferred Stock	$	1.44	November 2024	—		277,778	(1)
2016	Series C Preferred Stock	$	1.59	October 2026	—	(2)	—	(2)

(1)

Common Stock Warrants

Schedule of outstanding warrants


						Shares Exercisable at
		Exercise		Expiration	Exercisable	December 31,
Issued	Original Source	Price		Date	From	2017
2013	Series B Preferred Stock	$	7.50	April 2021	July 2017	82,816
2014	Series B Preferred Stock	$	7.50	November 2024	July 2017	16,000
2016	Series C Preferred Stock	$	8.27	October 2026	September 2017	14,512
						113,328

- 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)

12 Months Ended

Dec. 31, 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 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

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		—	%		—	%		—	%		—	%


Immediately prior to conversion
Volatility		119.00	%		112.00	%		114.00	%		116.00	%
Risk-free interest rate		1.40	%		1.60	%		2.10	%		2.20	%
Estimated fair value of underlying shares	$	13.50		$	13.50		$	13.50		$	13.50
Remaining contractual term (years)		2.0			3.7			7.3			9.2
Expected dividend yield		—	%		—	%		—	%		—	%

(1)

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 warrant liability, which is included as a component of other (income) expense (in thousands):


	Year Ended
	December 31,
	2017		2016

Fair value - January 1,	$	1,039	$	936
Fair value of 2016 Warrants upon First Amendment		—		225
Change in fair value of warrant liability		1,844		(122)
Reclassification of preferred warrant liability		(2,883)		—
Fair value - December 31,	$	—	$	1,039

Preferred Stock (Tables)

12 Months Ended

Dec. 31, 2017

Preferred Stock

Schedule of preferred stock

Convertible preferred stock consisted of the following as of 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)

12 Months Ended

Dec. 31, 2017

Common Stock

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


	December 31,	December 31,
	2017	2016

Convertible preferred stock	—	16,101,970
2013 Warrant rights to acquire Series B Preferred Stock	—	133,327
2014 Warrant rights to acquire Series B Preferred Stock	—	53,333
2016 Warrant rights to acquire Series C Preferred Stock (1)	—	48,374
2011 Warrant rights to acquire Series Seed Preferred Stock	—	15,360
Warrant rights to acquire Common Stock	113,328	—
2009 stock option plan	2,868,449	3,533,726
2017 stock option plan	2,025,633	—
Total	5,007,410	19,886,090

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

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


	Year Ended December 31,
	2017	2016	2015
Expected volatility	102% - 122%	106% - 110%	106% - 115%
Risk-free interest rate	1.81% - 2.29%	1.21% - 1.45%	1.49% - 2.24%
Expected dividend yield	0%	0%	0%
Expected term (in years)	5.04 - 9.82	5.62 - 6.18	5.87 - 9.46

Schedule of stock based compensation expense

Stock-based compensation expense was classified in the consolidated statements of operations as follows (in thousands):


	Year Ended
	December 31,
	2017		2016		2015

Research and development	$	1,267	$	461	$	161
General and administrative		2,304		1,608		477
Total	$	3,571	$	2,069	$	638

2009 Plan

Summary of option activity for employee and non employee awards


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(Years)
Outstanding at January 1, 2017	3,195,469	$	3.26	8.6	$	1,200
Granted	973,492		16.88
Exercised	(248,334)		1.70
Forfeited	(181,699)		2.80
Outstanding at December 31, 2017	3,738,928	$	6.93	8.4	$	44,578
Vested at December 31, 2017	3,738,928	$	6.93	8.4	$	44,578
Options exercisable at December 31, 2017	1,692,918	$	3.74	7.8	$	24,963

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes

Schedule of income tax reconciliation based on federal statutory rate


	Year Ended
	December 31,
	2017			2016
Federal statutory income tax rate		35.0	%		35.0	%
Effect of:
Change in valuation allowance		3.5			(42.3)
Impact of change in tax laws		(42.5)			—
State income taxes, net of federal benefit		3.9			4.7
Research and development tax credits		3.2			3.1
Other		(3.1)			(0.5)
Effective income tax rate		—	%		—	%

Schedule of net deferred tax assets


	December 31,
	2017		2016
Net operating loss carryforwards	$	33,689	$	36,280
Research and development tax credit carryforwards		4,470		2,940
Start-up costs and other		2,024		1,807
Total deferred tax assets		40,183		41,027
Depreciation and amortization		(9)		8
Total deferred tax liabilities		(9)		8
Valuation allowance		(40,174)		(41,035)
Net deferred tax assets	$	—	$	—

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2017

Net Loss per Share

Schedule of computation of basic and diluted net loss per share


	Year Ended
	December 31,
	2017		2016		2015

Numerator:
Net loss attributable to common stockholders	$	(42,211)	$	(33,167)	$	(16,682)

Denominator:
Weighted average shares outstanding—basic and diluted		6,903,239		1,181,429		1,120,268

Net loss per share attributable to common stockholders—basic and diluted	$	(6.11)	$	(28.07)	$	(14.89)

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


	December 31,
	2017		2016		2015

Convertible preferred stock (as converted to common stock)		—		16,101,970	7,887,642
Options to purchase common stock		3,738,928		3,195,469	1,546,155
Stock warrants (1)		113,328		250,394	202,020
		3,852,256		19,547,833	9,635,817

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies.

Schedule of future minimum commitments

As of December 31, 2017, future minimum commitments due under the lease are as follows (in thousands):


Years Ending December 31,
2018	$	410
2019		34
Total minimum lease payments	$	444

Schedule of minimum obligations due

The Company’s minimum obligations due under its license agreements as of December 31, 2017, are as follows (in thousands):


Year Ended December 31,
2018		43
2019		38
2020		—
Total minimum license payments	$	81

Selected Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2017

Selected Quarterly Financial Data

Quarterly Financial Information

Selected quarterly financial data is as follows (in thousands, except per share data):


	Three months ended
	March 31,		June 30,		September 30,		December 31,
	2016		2016		2016		2016
	(in thousands, except per share data)
Total operating expenses	$	5,076	$	9,650	$	9,747	$	8,196
Total other income (expense)		(176)		(203)		80		(199)
Net loss attributable to common stockholders	$	(5,252)	$	(9,853)	$	(9,667)	$	(8,395)
Net loss per share attributable to common stockholders—basic and diluted	$	(4.45)	$	(8.34)	$	(8.18)	$	(7.11)

	Three months ended
	March 31,		June 30,		September 30,		December 31,
	2017		2017		2017		2017
	(in thousands, except per share data)
Total operating expenses	$	9,571	$	9,630	$	9,534	$	11,140
Total other income (expense)		(188)		(1,356)		(642)		(150)
Net loss attributable to common stockholders	$	(9,759)	$	(10,986)	$	(10,176)		(11,290)
Net loss per share attributable to common stockholders—basic and diluted	$	(8.26)	$	(9.30)	$	(0.56)		(0.46)

Nature of business (Details) $ / shares in Units, $ in Thousands		7 Months Ended	12 Months Ended
	Jul. 25, 2017 USD ($) $ / shares shares	Jul. 25, 2017 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) product $ / shares	Dec. 31, 2016 $ / shares
Initial Public Offering
Number of product candidates \| product			2
Common stock, par value \| $ / shares			$ 0.001	$ 0.001
Net proceeds \| $			$ 96,255
Common stock shares issued \| shares	16,101,970
IPO
Initial Public Offering
Issuance of common stock upon IPO, net of underwriters discount and offering costs (in shares) \| shares	6,900,000
Share price (in dollars per share) \| $ / shares	$ 15.00	$ 15.00
Net proceeds \| $	$ 94,000
Underwriter's option
Initial Public Offering
Issuance of common stock upon IPO, net of underwriters discount and offering costs (in shares) \| shares	900,000
Share price (in dollars per share) \| $ / shares	$ 15.00	$ 15.00
Underwriting discounts and commissions \| $	$ 7,300
Offering costs \| $		$ 2,200
Common stock.
Initial Public Offering
Shares warrants may purchase \| shares	202,020	202,020
Common stock. \| IPO
Initial Public Offering
Common stock, par value \| $ / shares	$ 0.001	$ 0.001

Summary of Significant Accounting Policies (Details)		3 Months Ended								12 Months Ended
Summary of Significant Accounting Policies (Details)	Jul. 07, 2017	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($) item
Property and Equipment, net
Net loss attributable to common stockholders		$ (11,290,000)	$ (10,176,000)	$ (10,986,000)	$ (9,759,000)	$ (8,395,000)	$ (9,667,000)	$ (9,853,000)	$ (5,252,000)	$ (42,211,000)	$ (33,167,000)	$ (16,682,000)
Cash used in operations										(34,098,000)	(27,348,000)	(15,089,000)
Debt repayments		6,667,000								6,667,000
Cash		114,699,000				45,581,000				114,699,000	45,581,000	5,868,000	$ 10,729,000
Restricted Cash
Restricted cash		134,000				$ 109,000				134,000	109,000
Deferred Offering Costs
Deferred offering costs expensed											1,800,000
Impairment of Long-Lived Assets
Long-lived asset impairment										0	0	0
Revenue Recognition
Number of feasibility arrangements \| item													2
Revenues										0	$ 0	$ 45,000
Prepaid Expense and Other Assets, Current [Abstract]
Tax incentive receivable		$ 0								$ 0
Reverse Stock Split
Reverse stock split	0.1920
Laboratory equipment
Property and Equipment, net
Useful life (in years)										5 years
Computer hardware and software
Property and Equipment, net
Useful life (in years)										3 years

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Prepaid Expenses and Other Current Assets
Rent		$ 58
Insurance	$ 452	55
Other	196	41
Prepaid expenses and other current assets	$ 648	$ 154

Property and Equipment, Net (Details) - USD ($)	12 Months Ended
Property and Equipment, Net (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and Equipment, net
Property and equipment—at cost	$ 2,326,000	$ 1,910,000
Less: Accumulated depreciation	(1,540,000)	(1,316,000)
Property and equipment—net	786,000	594,000
Depreciation	287,000	297,000	$ 330,000
Laboratory equipment
Property and Equipment, net
Property and equipment—at cost	2,084,000	1,729,000
Leasehold improvements
Property and Equipment, net
Property and equipment—at cost	114,000	93,000
Computer hardware and software
Property and Equipment, net
Property and equipment—at cost	87,000	54,000
Office equipment
Property and Equipment, net
Property and equipment—at cost	30,000	23,000
Furniture and fixtures
Property and Equipment, net
Property and equipment—at cost	$ 11,000	$ 11,000

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accrued Expenses
Development costs	$ 3,054	$ 2,280
Compensation and benefits	2,402	1,480
Professional fees	666	171
General and administrative consulting	229
Other	238	62
Accrued expenses	$ 6,589	$ 3,993

Debt (Details)			2 Months Ended	12 Months Ended
Debt (Details)	Sep. 28, 2017 USD ($) shares	Oct. 13, 2016 USD ($) $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($) $ / shares shares	Jul. 24, 2017 USD ($)	Nov. 30, 2014 USD ($)
Debt instruments
Total loan commitment	$ 10,000,000
Interest expense				$ 1,019,000	$ 767,000	$ 604,000
Term loan				10,000,000	1,333,000	5,000,000
Unpaid balance				18,889,000
Warrant Liability					1,039,000
Shares Exercisable				$ 113,328
Fair value of warrants							$ 2,900,000
2014 Series B Warrants
Debt instruments
Exercise Price \| $ / shares				$ 7.50
Shares Exercisable				$ 16,000
Fair value of warrants				$ 0	274,000			$ 140,000
2016 Series C Warrants
Debt instruments
Exercise Price \| $ / shares				$ 8.27
Shares Exercisable				$ 14,512
Fair value of warrants		$ 225,000		$ 0	$ 263,000
2014 Debt Facility
Debt instruments
Total loan commitment								$ 10,000,000
Additional borrowing capacity		$ 10,000,000
Interest rate (as a percent)				7.50%	6.50%
Unpaid principal balance				$ 18,900,000	$ 10,000,000
Unamortized discount				235,000	346,000
Interest expense				1,000,000	767,000	604,000
Amortization of debt discount				111,000	106,000	134,000
Contractual coupon interest				$ 908,000	661,000	470,000
Percentage points				5
2014 Debt Facility \| Prime Rate
Debt instruments
Variable rate of interest		3.00%
Term Loan A
Debt instruments
Total loan commitment		$ 10,000,000
Amount borrowed						$ 5,000,000
Proceeds from borrowing			$ 5,000,000
Term Loan B
Debt instruments
Total loan commitment					10,000,000
Term loan	$ 10,000,000
Series B convertible preferred stock
Debt instruments
Warrant Liability				$ 0
Shares Exercisable					133,327
Series B convertible preferred stock \| 2014 Series B Warrants
Debt instruments
Exercise Price \| $ / shares				$ 1.44
Series B convertible preferred stock \| Term Loan A \| 2014 Series B Warrants
Debt instruments
Shares warrants may purchase \| shares			138,889			277,778
Exercise Price \| $ / shares			$ 1.44
Series C convertible preferred stock
Debt instruments
Warrant Liability				$ 0
Shares warrants may purchase \| shares	48,374
Shares Exercisable					$ 53,333
Series C convertible preferred stock \| 2016 Series C Warrants
Debt instruments
Exercise Price \| $ / shares				$ 1.59
Series C convertible preferred stock \| Term Loan B
Debt instruments
Shares warrants may purchase \| shares					48,374
Series C convertible preferred stock \| Term Loan B \| 2016 Series C Warrants
Debt instruments
Exercise Price \| $ / shares		$ 1.59
Series C convertible preferred stock \| Term Loan B \| 2016 Series C Warrants \| Maximum
Debt instruments
Shares warrants may purchase \| shares	48,374	251,951
Common Stock
Debt instruments
Shares warrants may purchase \| shares	251,951
Common Stock \| Term Loan A \| 2014 Series B Warrants
Debt instruments
Shares warrants may purchase \| shares						53,333
Exercise Price \| $ / shares						$ 7.50
Common Stock \| Term Loan B \| 2016 Series C Warrants
Debt instruments
Exercise Price \| $ / shares		$ 8.27
Common Stock \| Term Loan B \| 2016 Series C Warrants \| Maximum
Debt instruments
Shares warrants may purchase \| shares		48,374
Shares Exercisable				$ 48,374

Debt - Future annual principal payments (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Maturities of long-term debt
2018	$ 6,667
2019	6,667
2020	5,555
Total	$ 18,889

Warrants (Details) - USD ($)	12 Months Ended
Warrants (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Sep. 28, 2017	Oct. 13, 2016
Preferred stock warrants
Shares Exercisable	$ 113,328
Warrant Liability		$ 1,039,000
Total loan commitment			$ 10,000,000
Term Loan B
Preferred stock warrants
Total loan commitment		$ 10,000,000
2013 Series B Warrants
Preferred stock warrants
Exercise Price	$ 7.50
Shares Exercisable	$ 82,816
2014 Series B Warrants
Preferred stock warrants
Exercise Price	$ 7.50
Shares Exercisable	$ 16,000
2016 Series C Warrants
Preferred stock warrants
Exercise Price	$ 8.27
Shares Exercisable	$ 14,512
2016 Series C Warrants \| Maximum
Preferred stock warrants
Preferred stock warrants outstanding		48,374
Series Seed convertible preferred stock
Preferred stock warrants
Shares Exercisable		$ 15,360
Series Seed convertible preferred stock \| 2011 and 2012 Series Seed Warrants
Preferred stock warrants
Exercise Price	$ 1.00
Preferred stock warrants outstanding		80,000
Series B convertible preferred stock
Preferred stock warrants
Shares Exercisable		$ 133,327
Warrant Liability	$ 0
Series B convertible preferred stock \| 2013 Series B Warrants
Preferred stock warrants
Exercise Price	$ 1.44
Preferred stock warrants outstanding		694,444
Series B convertible preferred stock \| 2014 Series B Warrants
Preferred stock warrants
Exercise Price	$ 1.44
Preferred stock warrants outstanding		277,778
Series C convertible preferred stock
Preferred stock warrants
Shares Exercisable		$ 53,333
Warrant Liability	$ 0
Shares warrants may purchase			48,374
Series C convertible preferred stock \| Term Loan B
Preferred stock warrants
Shares warrants may purchase		48,374
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			48,374	251,951
Common Stock
Preferred stock warrants
Shares warrants may purchase			251,951
Common Stock \| 2016 Series C Warrants \| Term Loan B
Preferred stock warrants
Exercise Price				$ 8.27
Common Stock \| 2016 Series C Warrants \| Term Loan B \| Maximum
Preferred stock warrants
Shares Exercisable	$ 48,374
Shares warrants may purchase				48,374
Preferred stock
Preferred stock warrants
Preferred stock warrants outstanding	0

Fair Value of Financial Instruments - Assets and Liabilities measured at fair value (Details) - USD ($)	Dec. 31, 2017	Jul. 24, 2017	Dec. 31, 2016	Oct. 13, 2016	Nov. 30, 2014
Fair value of warrants liability		$ 2,900,000
Fair value, recurring assets	$ 0
Fair value, recurring liabilities	0
Recurring \| Significant Unobservable Inputs
Warrant Liability			$ 1,039,000
Recurring \| Carrying Value
Warrant Liability			1,039,000
2011 and 2012 Series Seed Warrants \| Recurring \| Significant Unobservable Inputs
Warrant Liability			39,000
2011 and 2012 Series Seed Warrants \| Recurring \| Carrying Value
Warrant Liability			39,000
2013 Series B Warrants \| Recurring \| Significant Unobservable Inputs
Warrant Liability			463,000
2013 Series B Warrants \| Recurring \| Carrying Value
Warrant Liability			463,000
2014 Series B Warrants
Fair value of warrants liability	0		274,000		$ 140,000
2014 Series B Warrants \| Recurring \| Significant Unobservable Inputs
Warrant Liability			274,000
2014 Series B Warrants \| Recurring \| Carrying Value
Warrant Liability			274,000
2016 Series C Warrants
Fair value of warrants liability	$ 0		263,000	$ 225,000
2016 Series C Warrants \| Recurring \| Significant Unobservable Inputs
Warrant Liability			263,000
2016 Series C Warrants \| Recurring \| Carrying Value
Warrant Liability			$ 263,000

Fair Value of Financial Instruments - Fair values of the warrants, using the Black‑Scholes option‑pricing model (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Jul. 19, 2017	Dec. 31, 2016
2014 Debt Facility
Fair Value Measurements
Percentage of probability	100.00%	100.00%
Remaining borrowing capacity	$ 10.0	$ 10.0
2011 and 2012 Series Seed Warrants
Fair Value Measurements
Volatility	119.00%	100.00%
Risk-free interest rate	1.40%	1.30%
Estimated fair value of underlying shares	$ 13.50	$ 0.89
Remaining contractual term	2 years	2 years 7 months 6 days
2013 Series B Warrants
Fair Value Measurements
Volatility	112.00%	87.00%
Risk-free interest rate	1.60%	1.80%
Estimated fair value of underlying shares	$ 13.50	$ 1.11
Remaining contractual term	3 years 8 months 12 days	4 years 3 months 18 days
2014 Series B Warrants
Fair Value Measurements
Volatility	114.00%	114.00%
Risk-free interest rate	2.10%	2.30%
Estimated fair value of underlying shares	$ 13.50	$ 1.11
Remaining contractual term	7 years 3 months 18 days	7 years 10 months 24 days
2016 Series C Warrants
Fair Value Measurements
Volatility	116.00%	58.30%
Risk-free interest rate	2.20%	2.40%
Estimated fair value of underlying shares	$ 13.50	$ 1.54
Remaining contractual term	9 years 2 months 12 days	9 years 9 months 18 days

Fair Value of Financial Instruments - Derivative liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)
Balance at beginning of period	$ 1,039	$ 936
Fair value of 2016 Warrants upon First Amendment		225
Change in fair value of warrant liability	1,844	(122)
Reclassification of preferred warrant liability	(2,883)
Balance at end of period	$ 2,883	$ 1,039

Preferred Stock - Shares issued (Details) $ in Thousands	Jul. 07, 2017	Dec. 31, 2017 shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 USD ($) shares
Reverse Stock Split
Reverse stock split	0.1920
Series Seed convertible preferred stock
Temporary Equity
Designated Shares		0	11,323,209
Shares Issued		0	11,243,209
Shares Outstanding		0	11,243,209	11,243,209	11,243,209
Liquidation Value \| $			$ 11,243
Carrying Value \| $			$ 11,065	$ 11,065	$ 11,065
Common Stock Issuable Upon Conversion			2,158,708
Series Seed convertible preferred stock \| December 2009
Temporary Equity
Designated Shares			11,323,209
Shares Issued			2,000,001
Shares Outstanding			2,000,001
Series Seed convertible preferred stock \| October 2010
Temporary Equity
Shares Issued			2,000,003
Shares Outstanding			2,000,003
Series Seed convertible preferred stock \| February 2012
Temporary Equity
Shares Issued			7,243,205
Shares Outstanding			7,243,205
Series A convertible preferred stock
Temporary Equity
Designated Shares		0	9,583,432
Shares Issued		0	9,583,432
Shares Outstanding		0	9,583,432	9,583,432	9,583,432
Liquidation Value \| $			$ 11,500
Carrying Value \| $			$ 10,736	$ 10,736	$ 10,736
Common Stock Issuable Upon Conversion			1,840,029
Series A convertible preferred stock \| February 2013
Temporary Equity
Designated Shares			9,583,432
Shares Issued			4,791,716
Shares Outstanding			4,791,716
Series A convertible preferred stock \| July 2013
Temporary Equity
Shares Issued			4,791,716
Shares Outstanding			4,791,716
Series B convertible preferred stock
Temporary Equity
Designated Shares		0	16,597,221
Shares Issued		0	15,624,999
Shares Outstanding		0	15,624,999	15,624,999	15,624,999
Carrying Value \| $			$ 22,185	$ 22,185	$ 22,185
Series B convertible preferred stock \| April 2014
Temporary Equity
Designated Shares			16,597,221
Shares Issued			15,624,999
Shares Outstanding			15,624,999
Liquidation Value \| $			$ 22,500
Carrying Value \| $			$ 22,185
Common Stock Issuable Upon Conversion			3,000,017
Series B-1 convertible preferred stock \| August 2015
Temporary Equity
Designated Shares			4,629,629
Shares Issued			4,629,629
Shares Outstanding			4,629,629
Liquidation Value \| $			$ 7,000
Carrying Value \| $			$ 6,885
Common Stock Issuable Upon Conversion			888,894
Series C convertible preferred stock
Temporary Equity
Designated Shares		0	43,034,639
Shares Issued		0	42,782,688
Shares Outstanding		0	42,782,688
Carrying Value \| $			$ 67,520
Series C convertible preferred stock \| April 2016
Temporary Equity
Designated Shares			43,034,639
Shares Issued			42,782,688
Shares Outstanding			42,782,688
Liquidation Value \| $			$ 67,922
Carrying Value \| $			$ 67,520
Common Stock Issuable Upon Conversion			8,214,322

Preferred Stock - Shares converted (Details)						1 Months Ended						12 Months Ended
Preferred Stock - Shares converted (Details)	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, 2017 USD ($) $ / shares shares	Dec. 31, 2013 $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares
Temporary equity
Gross proceeds from shares issued upon conversion \| $												$ 118,391,000
Face amount \| $												$ 84,000
Dividend rate (as a percent)												8.00%
Dividend declared (in dollars per share) \| $ / shares												$ 0.00
Common stock shares issued	16,101,970
Preferred stock, authorized	5,000,000											5,000,000		0
Preferred stock, shares issued												0		0
Preferred stock, shares outstanding												0		0
Warrant Liability \| $														$ 1,039,000
Gross proceeds \| $												$ 30,000,000
Reverse stock split		0.1920
Minimum
Temporary equity
Number of preferred shares												500,000
Convertible preferred stock.
Temporary equity
Common stock shares issued	16,101,970
Reverse stock split		0.1920
Series Seed convertible preferred stock
Temporary equity
Shares Issued												0		11,243,209
Convertible preferred stock par value (in dollars per share) \| $ / shares												$ 0.001		$ 0.001
Shares issued upon conversion of convertible debt \| $									$ 93,000
Issuance cost \| $									$ 15,000		$ 124,000
Liquidation rights (in dollars per share) \| $ / shares												$ 1.00
Common stock shares issued	2,158,708
Series A convertible preferred stock
Temporary equity
Shares Issued												0		9,583,432
Convertible preferred stock par value (in dollars per share) \| $ / shares												$ 0.001		$ 0.001
Issuance cost \| $					$ 93,000
Number of milestones approved by the board \| item							1
Liquidation rights (in dollars per share) \| $ / shares												$ 1.20
Common stock shares issued	1,840,029
Warrant Liability \| $												$ 0
Price per share \| $ / shares								$ 1.20
Series B convertible preferred stock
Temporary equity
Shares Issued												0		15,624,999
Convertible preferred stock par value (in dollars per share) \| $ / shares												$ 0.001		$ 0.001
Issuance cost \| $										$ 39,000
Liquidation rights (in dollars per share) \| $ / shares												$ 1.44
Common stock shares issued	3,000,017
Warrant Liability \| $												$ 0
Series B-1 convertible preferred stock
Temporary equity
Liquidation rights (in dollars per share) \| $ / shares												$ 1.512
Common stock shares issued	888,894
Warrant Liability \| $												$ 0
Series C convertible preferred stock
Temporary equity
Shares Issued												0		42,782,688
Convertible preferred stock par value (in dollars per share) \| $ / shares												$ 0.001		$ 0.001
Liquidation rights (in dollars per share) \| $ / shares												$ 1.5876
Common stock shares issued	8,214,322
Warrant Liability \| $												$ 0
December 2009 \| Series Seed convertible preferred stock
Temporary equity
Shares Issued														2,000,001
Gross proceeds \| $											$ 2,000,000
Convertible preferred stock par value (in dollars per share) \| $ / shares											$ 1.00
Common stock shares issued											2,000,001
October 2010 \| Series Seed convertible preferred stock
Temporary equity
Shares Issued														2,000,003
Common stock shares issued										2,000,003
Price per share \| $ / shares										$ 1.00
Gross proceeds \| $										$ 2,000,000
February 2012 \| Series Seed convertible preferred stock
Temporary equity
Shares Issued														7,243,205
Common stock shares issued									7,243,205
February 2013 \| Series Seed convertible preferred stock
Temporary equity
Shares issued upon conversion (in shares)									6,150,000
Gross proceeds from shares issued upon conversion \| $									$ 6,200,000
Shares issued upon conversion of convertible debt (in shares)									1,093,205
Shares issued upon conversion of convertible debt \| $									$ 1,000,000
February 2013 \| Series A convertible preferred stock
Temporary equity
Shares Issued														4,791,716
Common stock shares issued								4,791,716					4,791,716
Price per share \| $ / shares								$ 1.20					$ 1.20
Gross proceeds \| $								$ 5,800,000
July 2013 \| Series A convertible preferred stock
Temporary equity
Shares Issued														4,791,716
Common stock shares issued					4,791,716
Price per share \| $ / shares					$ 1.20
Gross proceeds \| $					$ 5,800,000
April 2014 \| Series B convertible preferred stock
Temporary equity
Shares Issued														15,624,999
Gross proceeds \| $						$ 22,500,000
Shares issued upon conversion of convertible debt (in shares)						3,562,785
Shares issued upon conversion of convertible debt \| $						$ 315,000
Issuance cost \| $						$ 5,100,000
Common stock shares issued						15,624,999
Price per share \| $ / shares						$ 1.44
August 2015 \| Series B-1 convertible preferred stock
Temporary equity
Shares Issued														4,629,629
Shares issued upon conversion of convertible debt \| $				$ 115,000
Common stock shares issued				4,629,629
Price per share \| $ / shares				$ 1.512
Gross proceeds \| $				$ 7,000,000
April 2016 \| Series C convertible preferred stock
Temporary equity
Shares Issued														42,782,688
Shares issued upon conversion of convertible debt \| $			$ 402,000
Common stock shares issued			42,782,688
Price per share \| $ / shares			$ 1.5876
Gross proceeds \| $			$ 67,900,000

Common Stock (Details)		12 Months Ended
Common Stock (Details)	Jul. 07, 2017	Dec. 31, 2017 director Vote $ / shares shares	Sep. 28, 2017 shares	Jul. 25, 2017 shares	Dec. 31, 2016 $ / shares shares	Oct. 13, 2016 shares
Common stock and preferred stock
Common stock, authorized		120,000,000			110,251,951
Common stock, par value \| $ / shares		$ 0.001			$ 0.001
Common stock, shares issued		24,538,309			1,181,429
Common stock, shares outstanding		24,538,309			1,181,429
Preferred stock, authorized		5,000,000		5,000,000	0
Preferred stock, shares issued		0			0
Preferred stock, shares outstanding		0			0
Number of votes per common share for each outstanding share \| Vote		1
Number of directors granted \| director		1
Reverse stock split	0.1920
Common stock shares reserved for future issuance		5,007,410			19,886,090
2009 stock option plan
Common stock and preferred stock
Common stock shares reserved for future issuance		2,868,449			3,533,726
2017 stock option plan
Common stock and preferred stock
Common stock shares reserved for future issuance		2,025,633
2013 Series B Warrants
Common stock and preferred stock
Common stock shares reserved for future issuance					133,327
2014 Series B Warrants
Common stock and preferred stock
Common stock shares reserved for future issuance					53,333
2016 Series C Warrants
Common stock and preferred stock
Common stock shares reserved for future issuance					48,374
Convertible preferred stock.
Common stock and preferred stock
Reverse stock split	0.1920
Common stock shares reserved for future issuance					16,101,970
Common stock.
Common stock and preferred stock
Number of votes entitled to each share held \| Vote		1
Common stock shares reserved for future issuance		113,328
Shares warrants may purchase				202,020
Common stock. \| 2011 Warrant rights to acquire Series Seed Preferred Stock
Common stock and preferred stock
Common stock shares reserved for future issuance					15,360
Series C convertible preferred stock
Common stock and preferred stock
Shares warrants may purchase			48,374
Maximum \| Stock Options
Common stock and preferred stock
Common stock shares reserved for future issuance					251,951.00
Term Loan B \| Series C convertible preferred stock
Common stock and preferred stock
Shares warrants may purchase					48,374
Term Loan B \| Maximum \| Series C convertible preferred stock \| 2016 Series C Warrants
Common stock and preferred stock
Shares warrants may purchase			48,374			251,951

Stock-based Compensation (Details) - USD ($)	12 Months Ended
Stock-based Compensation (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock-based Compensation
Weighted average grant date fair value of options granted	$ 13.87	$ 2.71	$ 4.17
Unrecognized compensation expense	$ 15,400,000
Stock based compensation expense	$ 3,571,000	$ 2,069,000
Weighted average period	3 years 1 month 10 days
Cash proceeds from the exercise of stock options	$ 423,000	0	$ 104,000
Total intrinsic value of options exercised	$ 4,700,000	$ 0	$ 552,000

Stock-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Weighted Average Remaining Contractual Term
Weighted average period	3 years 1 month 10 days
2009 Plan
Number of Shares
Outstanding at the beginning of the period (in shares)	3,195,469
Granted (in shares)	973,492
Exercised (in shares)	(248,334)
Forfeited	(181,699)
Outstanding at the end of the period (in shares)	3,738,928	3,195,469
Vested and expected to vest (in shares)	3,738,928
Options exercisable (in shares)	1,692,918
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 3.26
Granted (in dollars per share)	16.88
Exercised (in dollars per share)	1.70
Forfeited	2.80
Outstanding at the end of the period (in dollars per share)	6.93	$ 3.26
Vested and expected to vest (in dollars per share )	6.93
Options exercisable (in dollars per shares)	$ 3.74
Weighted Average Remaining Contractual Term
Weighted average period	8 years 4 months 24 days	8 years 7 months 6 days
Vested and expected to vest	8 years 4 months 24 days
Options exercisable	7 years 9 months 18 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 1,200
Outstanding at the end of the period (in dollars)	44,578	$ 1,200
Vested and expected to vest (in dollars)	44,578
Options exercisable (in dollars)	$ 24,963

Stock-based Compensation - Fair Value Assumptions (Details) - Employee and Non-Employee Stock Options	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology
Expected volatility (minimum)	102.00%	106.00%	106.00%
Expected volatility (maximum)	122.00%	110.00%	115.00%
Risk-free interest rate (minimum)	1.81%	1.21%	1.49%
Risk-free interest rate (maximum)	2.29%	1.45%	2.24%
Expected dividend yield	0.00%	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	5 years 10 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	9 years 5 months 16 days

Stock-based Compensation - Stock‑based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based compensation
Stock based compensation expense	$ 3,571	$ 2,069
Research and development
Share-based compensation
Stock based compensation expense	1,267	461	$ 161
General and administrative
Share-based compensation
Stock based compensation expense	$ 2,304	$ 1,608	$ 477

Income Taxes - Reconciliation of the U.S. federal statutory income tax rate (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Federal statutory income tax rate		35.00%	35.00%
Change in valuation allowance		3.50%	(42.30%)
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent		(42.50%)
State income taxes, net of federal benefit		3.90%	4.70%
Research and development tax credits		3.20%	3.10%
Other		(3.10%)	(0.50%)
Forecast
Federal statutory income tax rate	21.00%

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income tax expense	$ 0	$ 0
Change in valuation allowance	(900)	14,600
Uncertain tax positions	0	0	$ 0
Interest or penalties recorded	0	0	$ 0
Federal
Net operating loss carryforwards	120,900	85,300
State
Net operating loss carryforwards	$ 104,000	$ 80,500

Income Taxes - Net deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Net operating loss carryforwards	$ 33,689	$ 36,280
Research and development tax credit carryforwards	4,470	2,940
Start-up costs and other	2,024	1,807
Total deferred tax assets	40,183	41,027
Depreciation and amortization	(9)	8
Total deferred tax liabilities	(9)
Total deferred tax liabilities		8
Valuation allowance	$ (40,174)	$ (41,035)

Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net loss attributable to common stockholders	$ (11,290)	$ (10,176)	$ (10,986)	$ (9,759)	$ (8,395)	$ (9,667)	$ (9,853)	$ (5,252)	$ (42,211)	$ (33,167)	$ (16,682)
Denominator:
Weighted average shares outstanding—basic and diluted									6,903,239	1,181,429	1,120,268
Net loss per share attributable to common stockholders—basic and diluted	$ (0.46)	$ (0.56)	$ (9.30)	$ (8.26)	$ (7.11)	$ (8.18)	$ (8.34)	$ (4.45)	$ (6.11)	$ (28.07)	$ (14.89)

Net Loss per Share - Antidilutive securities (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Sep. 28, 2017
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)	3,852,256	19,547,833	9,635,817
Total loan commitment				$ 10.0
2016 Series C Warrants \| Maximum
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive:
Class of Warrant or Right, Outstanding		48,374
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	7,887,642
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)	3,738,928	3,195,469	1,546,155
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)	113,328	250,394	202,020

Commitments and Contingencies - Leases (Details) - USD ($)		12 Months Ended
	Sep. 30, 2013	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Leases
Lease term	3 years
Amount funded by landlord	$ 78,000
Face amount		$ 84,000
Total rent expense		$ 388,000	$ 338,000	$ 321,000

Commitments and Contingencies - Future minimum commitments (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Future Minimum Lease Payments
2018	$ 410
2019	34
Total minimum lease payments	$ 444

Commitments and Contingencies - License Agreement (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Contingencies
Minimum annual payment	$ 38,000
License fee , if the company achieves the first commercial sale	113,000
Research and development expenses	29,008,000	$ 25,029,000	$ 11,382,000
The Johns Hopkins University (“JHU”)
Contingencies
Research and development expenses	$ 139,000	169,000	152,000
Massachusetts Eye and Ear Infirmary (“MEEI”)
Contingencies
Minimum annual payment			$ 10,000
License fee , if the company achieves the first commercial sale		$ 5,000

Commitments and Contingencies - Future minimum obligations (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Minimum obligations due under its license agreements
2018	$ 43
2019	38
Total minimum license payments	81
Catalent Pharma Solutions LLC
Minimum obligations due under its license agreements
Minimum payment obligation in the first 12-month period	$ 1,500

Commitments and Contingencies - Guarantees and Indemnifications (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Indemnification obligations
Indemnification obligations	$ 0	$ 0	$ 0
Accrued contingencies	$ 0	$ 0	$ 0

Defined Contribution Plan (Details) - USD ($)	1 Months Ended	12 Months Ended
Defined Contribution Plan (Details) - USD ($)	Jan. 31, 2017	Dec. 31, 2017
Defined Contribution Plan
Discretionary matching contribution (as a percent)	50.00%
Percentage of employee's gross compensation matched by employer (as a percent)	2.00%
Matching contribution by employer		$ 83,000

Related Parties (Details) - USD ($)	12 Months Ended
Related Parties (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Company Founder \| Research and development
Related Party Transactions
Amount paid for consultancy services	$ 35,000	$ 60,000	$ 60,000

Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Selected Quarterly Financial Data
Total operating expenses	$ 11,140	$ 9,534	$ 9,630	$ 9,571	$ 8,196	$ 9,747	$ 9,650	$ 5,076	$ 39,875	$ 32,669	$ 15,991
Total other income (expense)	(150)	(642)	(1,356)	(188)	(199)	80	(203)	(176)	(2,336)	(498)	(736)
Net loss attributable to common stockholders	$ (11,290)	$ (10,176)	$ (10,986)	$ (9,759)	$ (8,395)	$ (9,667)	$ (9,853)	$ (5,252)	$ (42,211)	$ (33,167)	$ (16,682)
Net loss per share attributable to common stockholders—basic and diluted	$ (0.46)	$ (0.56)	$ (9.30)	$ (8.26)	$ (7.11)	$ (8.18)	$ (8.34)	$ (4.45)	$ (6.11)	$ (28.07)	$ (14.89)

Subsequent Events (Details)	Mar. 29, 2018 USD ($)	Mar. 15, 2018 USD ($) area	Feb. 28, 2018 USD ($) area	Oct. 13, 2016 USD ($)	Sep. 30, 2013	Dec. 31, 2015 USD ($)
Subsequent Events
Lease term					3 years
Subsequent Event \| Watertown Lease
Subsequent Events
Rentable square feet \| area			66,052
Aggregate base rent due over initial term			$ 53
Annual payment increase (as a percent)			3.00%
Time span over which rent will increase (in years)			7 years
Lease term			8 years
Amount borrowed			$ 2,000,000
Subsequent Event \| Waverley Oaks Lease
Subsequent Events
Rentable square feet \| area		6,294
Aggregate base rent due over initial term		$ 32
Lease term		1 year
2014 Debt Facility
Subsequent Events
Additional borrowing capacity				$ 10,000,000
Term Loan A
Subsequent Events
Amount borrowed						$ 5,000,000
Term Loan A \| Subsequent Event
Subsequent Events
Amount borrowed	$ 20,000,000
Interest-only extension period	12 months
Term Loan B \| Subsequent Event
Subsequent Events
Additional borrowing capacity	$ 5,000,000
Minimum, incremental borrowing capacity	$ 250,000
Funding period under which commitment is available	12 months
Term Loan A and B \| Subsequent Event \| Minimum
Subsequent Events
Prepayment fee	0.30%
Term Loan A and B \| Subsequent Event \| Maximum
Subsequent Events
Prepayment fee	0.90%