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Organization and Basis of Presentation
12 Months Ended
Dec. 31, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Organization and Basis of Presentation

1. Organization and Basis of Presentation

Evoke Pharma, Inc. (the “Company”) was incorporated in the state of Delaware in January 2007. The Company is a publicly-held specialty pharmaceutical company focused primarily on the development of drugs to treat gastroenterological disorders and disease.

Since its inception, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure, and has not realized revenues from its planned principal operations. The Company does not anticipate realizing revenues for the foreseeable future. The Company’s activities are subject to the significant risks and uncertainties associated with any specialty pharmaceutical company that has substantial expenditures for research and development, including funding its operations.

Clinical Trial Results

On July 18, 2016, the Company announced topline results from its Phase 3 clinical trial that evaluated the efficacy and safety of Gimoti™ (formerly known as EVK-001) in women with symptoms associated with diabetic gastroparesis. In this study, Gimoti did not achieve its primary endpoint of symptom improvement at Week 4.

In December 2016, the Company announced the completion of a second pre-NDA meeting with the U.S. Food and Drug Administration (“FDA”), in which FDA agreed that a comparative exposure pharmacokinetic (“PK”) trial was acceptable as a basis for submission of a Gimoti new drug application (“NDA”). The comparative exposure PK trial will serve as a portion of the full 505(b)(2) data package to include prior efficacy and safety data developed by the Company and FDA’s prior findings of safety and efficacy for the Listed Drug, Reglan Tablets.  The Company expects to begin and complete the comparative exposure PK trial in the second half of 2017, followed by a potential NDA submission in late 2017 or early 2018.

To confirm the results of the Phase 2b trial in male subjects, the FDA agreed that the Company could conduct a separate companion trial in men.  FDA recommended that the trials be conducted in parallel and when the Phase 3 study in women was complete, the Company could conduct an interim analysis on the male trial to determine whether or not it would be futile to continue to full enrollment. During November 2016, the Company determined the trial showed futility so that, even if the trial had fully been enrolled, the results would not have differed. As the Company anticipated at the beginning of the trial, based on the prior Phase 2b data, the results showed no statistical significant efficacy in men and the safety profile for Gimoti was favorable compared to placebo with good tolerability.

Sales of Common Stock and Warrants

On July 25, 2016 and August 3, 2016, the Company completed registered direct offerings of an aggregate of 5,048,632 shares of common stock for gross proceeds of $14.5 million.  Concurrently in private placements, for each share of common stock purchased by an investor, such investor received from the Company an unregistered warrant to purchase shares of common stock. In addition, on February 22, 2017, the Company completed the sale of 2,413,793 shares of the Company’s common stock in an underwritten public offering and on March 3, 2017, the underwriter of the offering exercised its option to purchase an additional 362,068 shares of the Company’s common stock.  Gross proceeds from this offering were $8.0 million.  See Note 6 for further description.

Repayment of Debt

On August 4, 2016, the Company repaid in full the entire $4.5 million of outstanding principal and interest under the Loan and Security Agreement, dated as of May 28, 2014, as amended (the “Loan Agreement”), between the Company, as borrower, and Square 1 Bank, a division of Pacific Western Bank (“Square 1”), as lender.  In connection with such repayment, the Loan Agreement was terminated, and all security, liens or other encumbrances on assets of the Company were released.  See Note 3 for further description.

Going Concern

Despite the Company ending 2016 with approximately $9.0 million, and raising $8.0 million from the sale of common stock in February and March 2017, the Company’s plan to fund additional clinical development, including the comparative exposure PK trial, pre-approval and pre-commercialization activities, including marketing and manufacturing of Gimoti and completion of a planned NDA submission, and support its general and administrative costs to support operations, the Company anticipates continuing its trend of having losses from operations and believes that there is substantial doubt about its ability to continue as a going concern within one year after the financial statements are issued.  

The determination of going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  In its report on the Company’s financial statements for the year ended December 31, 2016, the Company’s independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding the Company’s ability to continue as a going concern.  

The Company has experienced significant losses since its inception, including net losses of $10.7 million and $12.1 million for the years ended December 31, 2016 and 2015, respectively.  As of December 31, 2016, the Company had an accumulated deficit of $58.8 million. The Company’s net losses may fluctuate significantly from quarter to quarter and year to year.

The Company expects to continue to incur net losses for the foreseeable future until such time, if ever, that it can generate significant revenues from the sale of Gimoti.  The Company believes that its current cash and cash equivalents will be sufficient to meet estimated working capital requirements and fund operations through at least February 2018.  The Company will need to raise additional debt or equity financing to fund future operations.  The can be no assurance that additional financing will be available when needed to on acceptable terms.  If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, financial condition and future prospects.