Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

11. SUBSEQUENT EVENTS

On January 25, 2021, the Company and Relief entered into an option agreement pursuant to which the Company granted Relief an exclusive option to pursue a potential collaboration and license agreement with the Company for development, regulatory approval and commercialization for ACER-001 for the treatment of UCDs and MSUD. The option agreement provides for a period of time up to June 30, 2021 for the parties to perform additional due diligence and to work toward negotiation and execution of a definitive agreement with respect to the potential collaboration for ACER-001. In consideration for the grant of the exclusivity option, (i), the Company received from Relief an upfront non-refundable payment of $1.0 million , (ii) Relief provided to the Company a 12-month secured loan in the principal amount of $4.0 million, as evidenced by a promissory note the Company issued to Relief, and (iii) the Company granted Relief a security interest in all of its assets to secure performance of the promissory note, as evidenced by a security agreement. The note is repayable in one lump sum within 12 months from issuance and bears interest at a rate equal to 6% per annum. If a definitive agreement with respect to the potential collaboration is not executed by the parties on or before June 30, 2021, the exclusivity option will terminate and the note is repayable by the Company upon maturity. The note contains certain customary events of default (including, but not limited to, default in payment of principal or interest thereunder or a material breach of the security agreement). Under the terms of the proposed collaboration and license agreement, the key terms of which are set forth in the option agreement, if a definitive agreement is executed pursuant to these terms and closed by June 30, 2021, the Company will receive $14.0 million in cash (which can be offset at Relief’s option by the outstanding balance of the $4.0 million loan from Relief to the Company). In addition, Relief will agree to pay up to $20.0 million in U.S. development and commercial launch costs for the UCDs and MSUD indications. Further, the Company will retain development and commercialization rights in the U.S., Canada, Brazil, Turkey and Japan. The companies will split net profits from the Company’s territories 60%:40% in favor of Relief. Relief will also license the rights for the rest of the world, where the Company will receive from Relief a 15% net sales royalty on all revenues received in Relief’s territories. The Company could also receive a total of $6.0 million in milestones based on the first European (EU) marketing approvals for UCDs and MSUD. There can be no assurance, however, that a definitive agreement will be successfully negotiated and executed between the parties on these terms, on other mutually acceptable terms, or at all. Except for the $1.0 million upfront payment to the Company and the $4.0 million 12-month secured loan from Relief to the Company, the remaining proposed terms of the collaboration are not binding and are subject to change as a result of further diligence by Relief and negotiation of a definitive collaboration and license agreement between the parties.

Subsequent to December 31, 2020, during multiple trading days through the date of this report, the Company sold an aggregate of 877,107 shares of common stock under its ATM facility at an average gross sale price of $3.17 per share, resulting in gross proceeds of $2.8 million.

Subsequent to December 31, 2020, through the date of this report, the Company sold 200,000 shares of common stock under its purchase agreement with Lincoln Park at a price of $2.47 per share, resulting in gross proceeds of $0.5 million.