QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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1 |
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Item 1. |
1 |
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1 |
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2 |
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3 |
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4 |
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6 |
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7 |
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Item 2. |
18 |
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Item 3. |
26 |
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Item 4. |
26 |
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27 |
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Item 1. |
27 |
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Item 1A. |
27 |
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Item 2. |
27 |
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Item 3. |
27 |
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Item 4. |
27 |
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Item 5. |
27 |
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Item 6. |
27 |
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28 |
Item 1. |
FINANCIAL STATEMENTS |
June 30, 2019 |
December 31, 2018 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ | |
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Investment securities, available-for-sale |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Right of use assets, net |
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— |
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Deferred tax asset, net |
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Other assets |
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Total assets |
$ |
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$ | |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
$ |
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$ | |
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Accrued and other current liabilities |
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Lease liabilities, short-term |
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— |
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Accrued employee benefits |
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Total current liabilities |
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Deferred rent |
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Lease liabilities |
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— |
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Total liabilities |
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Stockholders’ equity: |
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Common stock, $ par value: |
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Additional paid-in capital |
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|
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Accumulated deficit |
( |
) |
( |
) | ||||
Accumulated comprehensive gain/(loss) |
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( |
) | |||||
Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
|
$ | |
||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenues |
$ |
$ | — |
$ |
— |
$ | — |
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Costs and expenses: |
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Research and development |
||||||||||||||||
General and administrative |
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Total costs and expenses |
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Loss from operations |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Interest income |
||||||||||||||||
Loss before provision for income taxes |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Income tax expense |
||||||||||||||||
Net loss |
$ |
( |
) |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||
Net loss per common share: |
||||||||||||||||
Basic & Diluted |
$ |
( |
) |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||
Weighted average number of common shares: |
||||||||||||||||
Basic & Diluted |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
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Net loss |
$ |
( |
) |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||
Other comprehensive income/(loss): |
||||||||||||||||
Unrealized gain/(loss) on investment securities |
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|
|
( |
) | |||||||||||
Comprehensive loss |
$ |
( |
) |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance at March 31, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
Exercise of stock options and issuances of restricted stock |
|
|
|
— |
— |
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||||||||||||||||||
Stock issued for services |
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— |
|
— |
— |
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||||||||||||||||||
Share-based compensation |
— |
— |
|
— |
— |
|
||||||||||||||||||
Net loss |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
|
|
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Balance at June 30, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Comprehensive Loss |
Total Stockholders’ Equity |
|||||||||||||||||||||
Shares |
Amount |
||||||||||||||||||||||||
Balance at December 31, 2017 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Exercise of stock options and issuances of restricted stock |
|
|
|
— |
— |
|
|||||||||||||||||||
Stock issued for services |
|
— |
|
— |
— |
|
|||||||||||||||||||
Share-based compensation |
— |
— |
|
— |
— |
|
|||||||||||||||||||
Net loss |
— |
— |
— |
( |
) | — |
( |
) | |||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||
Balance at June 30, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Comprehensive Loss |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance at March 31, 2019 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||||
Exercise of stock options and issuances of restricted stock |
|
|
|
— |
— |
|
||||||||||||||||||
Stock issued for services |
|
|
|
— |
— |
|
||||||||||||||||||
Share-based compensation |
— |
— |
|
— |
— |
|
||||||||||||||||||
Net loss |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
|
|
||||||||||||||||||
Balance at June 30, 2019 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
||||||||||||
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Comprehensive Loss |
Total Stockholders’ Equity |
|||||||||||||||||||||
Shares |
Amount |
||||||||||||||||||||||||
Balance at December 31, 2018 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||||||||
Exercise of stock options and issuances of restricted stock |
|
|
|
— |
— |
|
|||||||||||||||||||
Stock issued for services |
|
|
|
— |
— |
|
|||||||||||||||||||
Share-based compensation |
— |
— |
|
— |
— |
|
|||||||||||||||||||
Net loss |
— |
— |
— |
( |
) |
— |
( |
) | |||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
|
|
|||||||||||||||||||
Balance at June 30, 2019 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||||||||
Six Months Ended June 30, |
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2019 |
2018 |
|||||||
Cash flows used in operating activities |
||||||||
Net loss |
$ |
( |
) |
$ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
||||||||
Share-based compensation |
||||||||
Stock issued for services |
||||||||
Amortization of premiums and discounts on investment securities, net |
( |
) |
( |
) | ||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses and other assets |
( |
) | ||||||
Accounts payable |
( |
) |
( |
) | ||||
Accrued liabilities and other |
||||||||
Deferred rent |
— |
( |
) | |||||
Net cash used in operating activities |
( |
) |
( |
) | ||||
Cash flows provided by investing activities |
||||||||
Purchases of investments |
( |
) |
( |
) | ||||
Maturities of investments |
||||||||
Purchases of property and equipment |
( |
) |
( |
) | ||||
Net cash provided by investing activities |
||||||||
Cash flows provided by financing activities |
||||||||
Proceeds from exercise of stock options |
||||||||
Net cash provided by financing activities |
||||||||
Net increase in cash and cash equivalents |
||||||||
Cash and cash equivalents at beginning of period |
||||||||
Cash and cash equivalents at end of period |
$ |
$ | ||||||
Non-cash investing and financing activities |
||||||||
Right of use assets under operating leases |
$ | $ | — |
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June 30, 2019 |
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Amortized Cost |
Unrealized Gains |
Unrealized (Losses) |
Estimated Fair Value |
|||||||||||||
(Unaudited) |
||||||||||||||||
U.S. Government Agency Securities |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
Certificates of Deposit |
— |
— |
||||||||||||||
Commercial Paper |
( |
) | ||||||||||||||
Corporate Notes/Bonds |
( |
) | ||||||||||||||
$ | $ | $ | ( |
) | $ | 193,537 |
||||||||||
December 31, 2018 |
||||||||||||||||
Amortized Cost |
Unrealized Gains |
Unrealized (Losses) |
Estimated Fair Value |
|||||||||||||
U.S. Government Agency Securities |
$ | $ | $ | ( |
) | $ | ||||||||||
FDIC Certificates of Deposit (1) |
— |
— |
||||||||||||||
Certificates of Deposit |
— |
— |
||||||||||||||
Commercial Paper |
— |
( |
) | |||||||||||||
Corporate Notes/Bonds |
( |
) | ||||||||||||||
$ | $ | $ | ( |
) | $ | 292,583 |
||||||||||
(1) | “FDIC Certificates of Deposit” consist of deposits that are less than $ |
• | Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. |
• | Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. |
• | Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity—e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. |
Fair Value Measurements at Reporting Date Using |
||||||||||||||||
June 30, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Money Market Funds |
$ | $ | $ | — |
$ | — |
||||||||||
U.S. Government Agency Securities |
— |
— |
||||||||||||||
FDIC Certificates of Deposit |
— |
— |
— |
— |
||||||||||||
Certificates of Deposit |
— |
— |
||||||||||||||
Commercial Paper |
— |
— |
||||||||||||||
Corporate Notes/Bonds |
— |
— |
||||||||||||||
$ | $ | $ | $ | — |
||||||||||||
Fair Value Measurements at Reporting Date Using |
||||||||||||||||
December 31, 2018 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Money Market Funds |
$ | $ | $ | — |
$ | — |
||||||||||
U.S. Government Agency Securities |
— |
— |
||||||||||||||
FDIC Certificates of Deposit |
— |
— |
||||||||||||||
Certificates of Deposit |
— |
— |
||||||||||||||
Commercial Paper |
— |
— |
||||||||||||||
Corporate Notes/Bonds |
— |
— |
||||||||||||||
$ | $ | $ | $ | — |
||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
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Stock options |
|
|
|
|
||||||||||||
RSUs |
|
|
|
|
||||||||||||
TSR RSUs |
|
|
|
|
June 30, 2019 |
December 31, 2018 |
|||||||
Computer equipment |
$ |
|
$ | |
||||
Furniture and fixtures |
|
|
||||||
Scientific equipment |
|
|
||||||
Leasehold improvements |
|
|
||||||
|
|
|||||||
Less accumulated depreciation |
( |
) |
( |
) | ||||
$ |
|
$ | |
|||||
Six months December 31, 2019 |
$ | |||
Year ended December 31, 2020 |
||||
Year ended December 31, 2021 |
||||
Year ended December 31, 2022 |
||||
Year ended December 31, 2023 |
||||
Thereafter |
||||
Total |
||||
Less: Present value discount |
( |
) | ||
Total Lease liability |
$ | |||
Less: current portion |
( |
) | ||
Long-term lease liabilities |
$ | |||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Research and development |
$ |
$ |
$ |
$ | ||||||||||||
General and administrative |
||||||||||||||||
Total share-based compensation expense |
$ |
$ | $ |
$ |
||||||||||||
2019 |
2018 |
|||||||
Dividend yield |
||||||||
Expected volatility |
||||||||
Weighted-average risk-free interest rate |
||||||||
Expected term (in years) |
Number of Shares |
Weighted-Average Exercise Price |
Weighted-Average Contractual Life |
||||||||||
Outstanding at December 31, 2018 |
$ | |||||||||||
Options granted |
$ | |||||||||||
Options exercised |
( |
) | $ | |||||||||
Options canceled or expired |
( |
) | $ | |||||||||
Outstanding at June 30, 2019 |
$ | |||||||||||
Vested or expected to vest at June 30, 2019 |
$ | |||||||||||
Exercisable at June 30, 2019 |
$ | |||||||||||
Number of Shares |
Weighted-Average Grant Date Fair Value Per Share |
|||||||
Outstanding at December 31, 2018 |
$ | |||||||
RSU’s granted in 2019 |
$ | |||||||
RSU’s vested in 2019 |
( |
) | $ | |||||
RSU’s cancelled in 2019 |
( |
) | $ | |||||
Outstanding at June 30, 2019 |
$ | |||||||
Number of Shares |
Weighted-Average Grant Date Fair Value Per Share |
|||||||
Outstanding at December 31, 2018 |
$ | |||||||
RSU’s granted in 2019 |
— |
$ | — |
|||||
RSU’s cancelled in 2019 |
( |
) | $ | |||||
Outstanding at June 30, 2019 |
$ | |||||||
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | internal recurring costs, such as costs relating to labor and fringe benefits, materials, supplies, facilities and maintenance; and |
• | fees paid to external parties who provide us with contract services, such as pre-clinical testing, manufacturing and related testing, clinical trial activities and license milestone payments. |
• | salaries and related benefit costs; |
• | patent, legal, professional and pre-commercialization costs; and |
• | office and facilities overhead. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
(Unaudited) |
(Unaudited) |
|||||||||||||||
Revenues |
$ |
— |
$ | — |
$ |
— |
$ | — |
||||||||
Expenses |
||||||||||||||||
Research and development |
23,728 |
32,439 |
48,719 |
63,142 |
||||||||||||
General and administrative |
15,443 |
6,729 |
27,148 |
13,110 |
||||||||||||
Total costs and expenses |
39,171 |
39,168 |
75,867 |
76,252 |
||||||||||||
Loss from operations |
(39,171 |
) |
(39,168 |
) | (75,867 |
) |
(76,252 |
) | ||||||||
Interest income |
1,732 |
1,794 |
3,592 |
3,398 |
||||||||||||
Income tax expense |
(2 |
) |
(2 |
) | (2 |
) |
(2 |
) | ||||||||
Net loss |
$ |
(37,441 |
) |
$ | (37,376 |
) | $ |
(72,277 |
) |
$ | (72,856 |
) | ||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
External costs |
16,127 |
27,287 |
33,930 |
51,016 |
||||||||||||
Internal costs |
7,601 |
5,152 |
14,789 |
12,126 |
||||||||||||
Total research and development expenses |
$ |
23,728 |
$ | 32,439 |
$ |
48,719 |
$ | 63,142 |
||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Lumateperone costs |
14,350 |
20,082 |
21,767 |
38,165 |
||||||||||||
Manufacturing costs |
5,999 |
5,837 |
11,859 |
12,639 |
||||||||||||
Stock based compensation |
2,354 |
1,878 |
4,762 |
3,796 |
||||||||||||
Other projects and overhead |
1,025 |
4,642 |
10,331 |
8,542 |
||||||||||||
Total research and development expenses |
$ |
23,728 |
$ | 32,439 |
$ |
48,719 |
$ | 63,142 |
||||||||
• | completion of extensive pre-clinical laboratory tests, animal studies, and formulation studies in accordance with the FDA’s Good Laboratory Practice, or GLP, regulations; |
• | submission to the FDA of an Investigational New Drug application, or IND, for human clinical testing, which must become effective before human clinical trials may begin; |
• | performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the drug for each proposed indication; |
• | submission to the FDA of a New Drug Application, or NDA, after completion of all clinical trials; |
• | satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices, or cGMPs; |
• | satisfactory completion of FDA inspections of clinical trial sites to assure that data supporting the safety and effectiveness of product candidates has been generated in compliance with Good Clinical Practices; and |
• | FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States. |
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Item 4. |
CONTROLS AND PROCEDURES |
Item 1. |
LEGAL PROCEEDINGS |
Item 1A. |
RISK FACTORS |
Item 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Item 3. |
DEFAULTS UPON SENIOR SECURITIES |
Item 4. |
MINE SAFETY DISCLOSURES |
Item 5. |
OTHER INFORMATION |
Item 6. |
EXHIBITS |
Exhibit Number |
Exhibit Description |
Filed Herewith |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File/ Reg. Number |
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31.1 |
X |
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31.2 |
X |
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32 |
X |
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101 |
The following materials from the Registrant’s Quarterly Report on Form 10-Q |
X |
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104 |
The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL (included within the Exhibit 101 attachment). |
X |
INTRA-CELLULAR THERAPIES, INC. | ||||||
Date: August 7, 2019 |
By: |
/s/ Sharon Mates, Ph.D. | ||||
Sharon Mates, Ph.D. | ||||||
Chairman, President and Chief Executive Officer | ||||||
Date: August 7, 2019 |
By: |
/s/ Lawrence J. Hineline | ||||
Lawrence J. Hineline | ||||||
Senior Vice President of Finance and Chief Financial Officer |