Restructuring Charges

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring Charges

10. Restructuring Charges

Restructuring charges incurred during the nine months ended September 30, 2015 primarily consist of severance and other post-termination benefit costs resulting from the cost reduction program implemented by the Company in January 2015. These activities primarily consisted of 20% reduction of the Company’s workforce.  Restructuring charges incurred during the three months ended December 31, 2015 primarily relate to a board-approved restructuring plan announced in November 2015 to reduce costs and extend the cash runway in order to allow the Company to evaluate strategic alternatives. As part of the restructuring plan, the Company elected to exercise its right to prepay the Loan and Security Agreement and paid MidCap Financial $6.6 million in full settlement of the remaining outstanding principal balance, accrued interest, the exit fee and a reduced prepayment fee of 1%.  In addition, the Company undertook a reduction in force that eliminated the positions of 17 employees or more than 60% of the Company’s workforce.

Per ASC 420-10-05-1, Exit or Disposal Cost Obligations, include, but are not limited to, involuntary termination benefits provided to employees under the terms of a one-time benefit arrangement that, in substance, is not an ongoing benefit arrangement or a deferred compensation contract, and certain contract termination costs. Restructuring costs are expensed during the period in which the Company determines it will incur those costs and all requirements of accrual are met.

A summary of the activity is presented below:

(in thousands)	Contracttermination costs - R&D			Salaries and benefits - R&D			Salaries and benefits - G&A			Total
Balance as of December 31, 2014	$	1,185		$	—		$	—		$	1,185
Accrued		—			522			82			604
Paid		(479	)		(257	)		—			(736	)
Balance as of March 31, 2015		706			265			82			1,053
Accrued		—			57			122			179
Paid		(135	)		(142	)		—			(277	)
Balance as of June 30, 2015		571			180			204			955
Accrued		—			—			—			—
Adjustments		(78	)		—			—			(78	)
Paid		(493	)		(148	)		(136	)		(777	)
Balance as of September 30, 2015		—			32			68			100
Accrued		—			588			807			1,395
Paid		—			(620	)		(864	)		(1,484	)
Balance as of December 31,2015		—			—			11			11
Accrued		—			—			—			—
Paid		—			—			—			—
Balance as of March 31, 2016	$	—		$	—		$	11		$	11

As disclosed in Note 9, during the three months ended March 31, 2015, in addition to the restructuring charges in the table above, the Company recorded charges of $389,000 and $414,000 related to the fair value of stock options that were modified due to executive retirement and restructuring activities, and classified $420,000 and $383,000 as General and administrative expenses and Research and development expenses, respectively.   During the three months ended March 31, 2016 the Company did not record any such charges.