10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38293

SCPHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

Delaware	46-5184075
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2400 District Avenue, Suite 310

Burlington, Massachusetts 01803

(Address of principal executive office) (Zip Code)

Registrant’s telephone number, including area code: (617) 517-0730

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒     No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001	SCPH	The Nasdaq Global Select Market

As of May 7, 2019, the Registrant had 18,580,430 common shares, $0.0001 par value per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

• the timing or likelihood of approval by the FDA of our regulatory filings for FUROSCIX^® using our next generation delivery device;

• the timing or likelihood of other regulatory filings and approvals, including any approval to market and sell subcutaneous ceftriaxone;

• the outcome of any bridging studies, clinical trials or human factors studies that may be required by the FDA for approval of any of our product candidates;

• the commercialization, marketing and manufacturing of FUROSCIX or any other of our product candidates, if approved;

• the pricing and reimbursement of FUROSCIX or any other of our product candidates, if approved;

• the rate and degree of market acceptance and clinical utility of FUROSCIX or any other of our product candidates for which we receive marketing approval;

• the initiation, timing, progress and results of our research and development programs, including subcutaneous ceftriaxone and future preclinical and clinical studies;

• our ability to advance any other product candidates into, and successfully complete, clinical studies and obtain regulatory approval for them;

• our ability to identify additional product candidates;

• the implementation of our strategic plans for our business, product candidates and technology;

• the scope of protection we are able to establish and maintain for intellectual property rights covering FUROSCIX or any other of our product candidates and technology;

• estimates of our expenses, future revenues, capital requirements and our needs for additional financing;

• our ability to manufacture, or the ability of third parties to deliver, sufficient quantities of components and drug product for commercialization of FUROSCIX or any other of our product candidates;

• our ability to maintain and establish collaborations;

• our financial performance;

• developments relating to our competitors and our industry, including the impact of government regulation; and

• other risks and uncertainties, including those listed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Item 1A, “Risk Factors” and elsewhere our Annual Report on Form 10-K for the year ended December 31, 2018. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, then actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

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SCPHARMACEUTICALS INC.

INDEX

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of December 31, 2018 and March 31, 2019	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2018 and March 31, 2019	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2018 and March 31, 2019	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2018 and March 31, 2019	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
Exhibit Index		19
Signatures		20

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PART I — FINANCIAL INFORMATION

SCPHARMACEUTICALS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	December 31,			March 31,
	2018			2019
Assets
Current assets
Cash and cash equivalents	$	89,478		$	83,378
Prepaid expenses		1,757			1,770
VAT receivable		479			494
Other current assets		179			169
Total current assets		91,893			85,811
Restricted cash		182			182
Property and equipment, net		164			154
Right-of-use lease assets - operating, net		1,506			1,427
Deposits and other assets		10			13
Total assets	$	93,755		$	87,587
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	587		$	221
Accrued expenses		2,922			5,474
Term loan, short term		2,811			4,035
Current portion of lease obligation - operating		353			366
Total current liabilities		6,673			10,096
Term loan, long term		6,826			5,649
Long term lease obligation - operating		1,353			1,255
Other liabilities		159			189
Total liabilities		15,011			17,189
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized and no shares    issued and outstanding		-			-
Common stock, $0.0001 par value; 150,000,000 shares authorized as of    March 31, 2019; 18,569,289 and 18,580,430 shares issued and outstanding    as of December 31, 2018 and March 31, 2019, respectively		2			2
Additional paid-in capital		175,201			175,574
Accumulated deficit		(96,459	)		(105,178	)
Total stockholders’ equity		78,744			70,398
Total liabilities and stockholders’ equity	$	93,755		$	87,587

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SCPHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2018			2019
Operating expenses:
Research and development	$	4,048		$	6,524
General and administrative		4,651			2,323
Total operating expenses		8,699			8,847
Loss from operations		(8,699	)		(8,847	)
Other expense		(42	)		(8	)
Interest income		351			490
Interest expense		(342	)		(354	)
Net loss and comprehensive loss	$	(8,732	)	$	(8,719	)
Net loss per share — basic and diluted	$	(0.47	)	$	(0.47	)
Weighted average common shares outstanding — basic and diluted		18,535,432			18,575,726

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SCPHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)

	COMMON STOCK				ADDITIONAL					TOTAL
	SHARES		AMOUNT		PAID-IN CAPITAL		ACCUMULATED DEFICIT			STOCKHOLDERS’ EQUITY
At December 31, 2018		18,569,289	$	2	$	175,201	$	(96,459	)	$	78,744
Net loss		—		—		—		(8,719	)		(8,719	)
Issuance of common stock upon exercise    of stock options		11,141		—		18		—			18
Stock-based compensation		—		—		355		—			355
At March 31, 2019		18,580,430	$	2	$	175,574	$	(105,178	)	$	70,398
At December 31, 2017		18,534,240	$	2	$	173,011	$	(67,016	)	$	105,997
Net loss		—		—		—		(8,732	)		(8,732	)
Issuance of common stock upon exercise    of stock options		7,606		—		56		—			56
Vesting of restricted stock		366				1					1
Stock-based compensation		—		—		622		—			622
At March 31, 2018		18,542,212	$	2	$	173,690	$	(75,748	)	$	97,944

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SCPHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2018			2019
Cash flows from operating activities
Net loss	$	(8,732	)	$	(8,719	)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation expense		10			10
Amortization expense - right-of-use leased assets - operating		71			79
Stock-based compensation		622			355
Non-cash interest expense		90			80
Changes in operating assets and liabilities
Prepaid expenses and other assets		(703	)		(19	)
Accounts payable, accrued expenses and other liabilities		(432	)		2,096
Net cash used in operating activities		(9,074	)		(6,118	)
Cash flows from financing activities
Proceeds from the exercise of vested stock options		56			18
Net cash provided by financing activities		56			18
Net decrease in cash, cash equivalents and restricted cash		(9,018	)		(6,100	)
Cash, cash equivalents and restricted cash at beginning of period		118,480			89,660
Cash, cash equivalents and restricted cash at end of period	$	109,462		$	83,560
Supplemental cash flow information
Interest paid	$	252		$	274
Taxes paid	$	70		$	166

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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SCPHARMACEUTICALS INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Basis of Presentation

Description of Business

scPharmaceuticals LLC was formed as a Limited Liability Company under the laws of the State of Delaware on February 19, 2013. On March 24, 2014, scPharmaceuticals LLC was converted to a Delaware corporation and changed its name to scPharmaceuticals Inc. (“the Company”). The Company is a pharmaceutical company focused on developing and commercializing products that have the potential to transform the way therapy is delivered, advance patient care and reduce healthcare costs. The Company’s proprietary platform is designed to enable the subcutaneous administration of therapies that have previously been limited to intravenous, or IV, delivery. The Company’s headquarters and primary place of business is Burlington, Massachusetts.

On January 9, 2019, the Company held a Type C meeting with the Food and Drug Administration, or FDA, to discuss the dose delivery validation protocol. At the Type C meeting, the FDA informed the Company that the FDA did not agree that the Company’s proposed dose validation study was adequate, and an agreement was not reached during the Type C meeting. In January 2019, management implemented a restructuring plan to reduce operating costs and better align its workforce with the needs of its business. Under this restructuring plan, the Company reduced its workforce by approximately 43%, to 13 employees. The Company recorded a charge of $1.3 million during the three months ended March 31, 2019 related to the restructuring plan, which included severance, benefits and related costs. The Company recorded $852,000 and $426,000 in research and development expenses and general and administrative expenses related to the restructuring, respectively. The Company paid $341,000 of these costs during the three months ended March 31, 2019 and expects to pay $578,000 and $289,000 in the second and third quarters of 2019, respectively. The remainder of the restructuring charge consists of a non-cash charge of $70,000 related to the modification of stock options (Note 6). As of March 31, 2019, the Company had a balance of $867,000 in accrued expenses related to severance benefits, and related costs associated with the restructuring plan.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiary, scPharmaceuticals Securities Corporation. Certain information and disclosures normally included in financial statements in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 21, 2019. The Company has determined that it operates in one segment.

The accompanying condensed consolidated balance sheet as of March 31, 2019, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2019, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2018 and 2019 and condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2019 are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the Company’s audited annual financial statements and include, in the opinion of management, adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The operating results for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full year ending December 31, 2019.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported periods. Actual results could differ from those estimates.

5

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consists of bank deposits, certificates of deposit and money market accounts with financial institutions. Cash equivalents are carried at cost which approximates fair value due to their short-term nature and which the Company believes do not have a material exposure to credit risk. The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. The Company’s cash and cash equivalent accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

As of March 31, 2019, the Company classified $182,000 as restricted cash related to a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate office facilities (Note 9). Cash, cash equivalents and restricted cash consists of the following:

	December 31, 2018		March 31, 2019
Cash and cash equivalents	$	89,478	$	83,378
Restricted cash		182		182
Cash, cash equivalents and restricted cash	$	89,660	$	83,560

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets, current portion of lease obligations, and long term lease obligations on the Company’s balance sheets.  

ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Income Taxes

The Company accounts for income taxes in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recorded to reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. A valuation allowance is required to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that some 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. The tax benefits recorded 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 uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. At March 31, 2019, the Company had no such accruals.

Recently Issued Accounting Standards

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies fair value disclosure requirements, specifically around level transfers and valuation of Level 3 assets and liabilities. ASU 2018-13 is effective for financial statements issued for annual and interim periods beginning after December 15, 2019 for all entities. Early adoption of all or part of ASU No. 2018-13 is permitted. The Company does not expect ASU 2018-13 to have a material impact on its financial statements.

6

3. Net Loss per Share

Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except share and per share data):

	Three Months Ended March 31,
	2018			2019
Net loss and comprehensive loss	$	(8,732	)	$	(8,719	)
Weighted-average shares used in computing net loss per share		18,535,432			18,575,726
Net loss per share, basic and diluted	$	(0.47	)	$	(0.47	)

The Company’s potentially dilutive securities, which include stock options and convertible preferred stock, 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 is 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.

	Three Months Ended March 31,
	2018		2019
Stock options to purchase common stock		1,748,617		1,409,325
Unvested restricted stock		122		160,900
Total		1,748,739		1,570,225

4. Property and Equipment

Purchased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			March 31, 2019
Office equipment	5 years	$	10		$	10
Office furniture	7 years		116			116
Computer equipment	3 years		8			8
Leasehold improvements	Life of lease		95			95
			229			229
Less: Accumulated depreciation			(65	)		(75	)
Property and equipment, net		$	164		$	154

Depreciation expense for the three months ended March 31, 2018 and March 31, 2019 was $10,000 and $10,000, respectively.

Leased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			March 31, 2019
Right-of-use lease assets - operating	Lease term	$	2,024		$	2,024
Less: Accumulated amortization			(518	)		(597	)
Right-of-use lease assets - operating, net		$	1,506		$	1,427

Amortization expense for the three months ended March 31, 2018 and March 31, 2019 was $71,000 and $79,000, respectively.

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5. Accrued Expenses

Accrued expenses consist of (in thousands):

	December 31, 2018		March 31, 2019
Contract research and development	$	1,492	$	2,252
Unrecoverable component costs		—		1,711
Severance costs		133		890
Employee compensation and related costs		727		327
Consulting and professional service fees		356		192
State taxes		165		54
Other		49		48
Total accrued expenses	$	2,922	$	5,474

6. Stock-Based Compensation

Stock Options

The Company’s 2017 Stock Option and Incentive Plan (the “2017 Stock Plan”) became effective in November 2017, upon the closing of the Company’s initial public offering and will expire in October 2027. Under the 2017 Stock Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”) and other stock-based awards. The Company’s 2014 Stock Incentive Plan (the “2014 Stock Plan”) was terminated in November 2017 upon the completion of the Company’s initial public offering and no further options were granted under the 2014 Stock Plan. At March 31, 2019, there were 861,782 options outstanding under the 2014 Plan.  

As of March 31, 2019, there were 2,914,161 shares of the Company’s common stock authorized for issuance under the 2017 Stock Plan.

At March 31, 2019, there were 2,436,605 options available for issuance under the 2017 Stock Plan and 547,543 options outstanding. Options granted under the 2017 Plan have a term of ten years. Vesting of options under the 2017 Stock Plan is determined by the board of directors, but is generally over one to four-year terms.

The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended March 31,
	2018		2019
Risk-free interest rate	2.42%-2.74%		2.51%
Expected dividend yield	0%		0%
Expected life	5.5-7.0 years		6.0 years
Expected volatility	83%-86%		74%
Weighted-average grant date fair value	$	9.44	$	2.14

The following table summarizes information about stock option activity during the three months ended March 31, 2019 (in thousands, except share and per share data):

	NUMBER OF SHARES			WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Outstanding, December 31, 2018		1,588,306		$	6.75
Granted		84,500			3.25
Exercised		(11,141	)		1.66
Forfeited		(252,340	)		8.55
Outstanding, March 31, 2019		1,409,325		$	6.25	8.24	$	40
Vested and exercisable, March 31, 2019		705,041		$	6.30	7.71	$	40
Vested and expected to vest, March 31, 2019		1,251,190		$	6.32	8.14	$	40

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The following table summarizes information about RSU activity during the three months ended March 31, 2019:

	RSUs		AVERAGE GRANT DATE FAIR VALUE (IN DOLLARS PER SHARE)
Outstanding, December 31, 2018		—	$	—
Granted		160,900		1.43
Vested		—		—
Forfeited		—		—
RSUs outstanding at March 31, 2019		160,900	$	1.43

Unrecognized compensation expense related to unvested options as of March 31, 2019 was $2.2 million and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 2.4 years. Unrecognized compensation expense related to unvested RSUs as of March 31, 2019 was $122,000 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 2.1 years.

Duringthe three months ended March 31, 2019, as part of the restructuring plan (Note 1), the Company extended the exercise period to one year for 51,673 vested options and for two years for 85,432 vested options of those affected, with a weighted average exercise price of $8.30,and recorded incremental stock-based compensation expense of $70,000.

The Company recorded stock-based compensation expense in the following expense categories of its accompanying condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2019 (in thousands):

	Three Months Ended March 31,
	2018		2019
Research and development	$	186	$	68
General and administrative		436		287
Total	$	622	$	355

7. Fair Value of Financial Instruments

The Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic, Fair Value Measurements and Disclosures (“ASC 820”), provides a fair value hierarchy, which classifies fair value measurements based on the inputs used in measuring fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and observable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

9

The carrying values of the Company’s cash and restricted cash, prepaid expenses, value added tax, or VAT, receivable and deposits approximate their fair values due to their short-term nature. The carrying value of the Company’s loan payable was considered a reasonable estimate of fair value because the Company’s interest rate is near current market rates for instruments with similar characteristics.  

The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy. The following table summarizes the Company’s money market funds as of March 31, 2019 (in thousands):

	TOTAL		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Cash equivalents	$	75,708	$	75,708	$	—	$	—
Total cash equivalents	$	75,708	$	75,708	$	—	$	—

8. Term Loan

In May 2017, the Company entered into a loan and security agreement (the “2017 Loan Agreement”), with Solar Capital Ltd. and Silicon Valley Bank for $10.0 million. The 2017 Loan Agreement has a maturity date of May 1, 2021. Debt issuance costs for the 2017 Loan Agreement will be amortized to interest expense over the remaining term of the 2017 Loan Agreement using the effective-interest method.

The interest rate under the 2017 Loan Agreement is LIBOR plus 8.45%. The initial interest-only period was until November 30, 2018, followed by a 30-month principal and interest period. The First Amendment to the Loan and Security Agreement, entered into in November 2018, extended the interest-only period, which currently runs through May 2019. If and when certain conditions are met, the interest-only period may be extended to August or November 2019. The rate at March 31, 2019 was 10.93188%. Pursuant to the 2017 Loan Agreement, the Company provided a first priority security interest in all existing and after-acquired assets, excluding intellectual property, owned by the Company.

As of March 31, 2019, unpaid borrowings under the 2017 Loan Agreement totaled $10.0 million. For the three months ended March 31, 2019, the Company recorded $50,000 related to the amortization of debt discount associated with the 2017 Loan Agreement. For the three months ended March 31, 2018 the Company recorded $69,000 related to the amortization of debt discount associated with the 2017 Loan Agreement.

The 2017 Loan Agreement allows the Company to voluntarily prepay all (but not less than all) of the outstanding principal at any time. A prepayment premium of 1% would be assessed on the outstanding principal. A final payment fee of $250,000 is due upon the earlier to occur of the maturity date or prepayment of such borrowings. The final payment fee was increased to $325,000 in the First Amendment to the 2017 Loan Agreement. For the three months ended March 31, 2019, the Company recorded $30,000 related to the amortization of the final payment fee associated with the 2017 Loan Agreement. For the three months ended March 31, 2018, the Company recorded $21,000 related to the amortization of the final payment fee associated with the 2017 Loan Agreement.

In an event of default under the 2017 Loan Agreement, the interest rate will be increased by 5% and the balance under the loan may become immediately due and payable at the option of the lenders.

The 2017 Loan Agreement includes restrictions on, among other things, the Company’s ability to incur additional indebtedness, change the name or location of the Company’s business, merge with or acquire other entities, pay dividends or make other distributions to holders of its capital stock, make certain investments, engage in transactions with affiliates, create liens, sell assets or pay subordinated debt.

Total term loan and unamortized debt discount balances are as follows (in thousands):

	March 31, 2019
Face value	$	10,000
Less: discount		(316	)
Total	$	9,684
Less: current portion		(4,035	)
Total	$	5,649

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As of March 31, 2019, future principal payments due under the 2017 Loan Agreement are as follows (in thousands):

Year ended:
December 31, 2019	$	2,917
December 31, 2020		5,000
December 31, 2021		2,083
Total	$	10,000

9. Commitments and Contingencies

Operating Leases

The Company leases office facilities and equipment under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2022 and do not include renewal options.

Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally also include real estate taxes and common area maintenance (“CAM”) charges in the annual rental payments.

Pursuant to the terms of its lease agreement for the Company’s headquarters, the Company obtained a letter of credit in the amount of approximately $182,000 as security on the lease obligation. The letter of credit is listed as restricted cash on the Company’s consolidated balance sheets.

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of March 31, 2019 (in thousands):

Year ended:
December 31, 2019	$	386
December 31, 2020		528
December 31, 2021		537
December 31, 2022		496
Total minimum lease payments		1,947
Less imputed interest		(326	)
Total	$	1,621

	Three Months Ended March 31,
	2018			2019
Lease cost:
Operating lease cost	$	119		$	125
Short-term lease cost		2			2
Sublease income		-			(13	)
Total lease cost	$	121		$	114
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	97		$	127
Operating cash flows from operating leases	$	21		$	(6	)
Weighted-average remaining lease term - operating leases	4.7 years			3.7 years
Weighted-average discount rate - operating leases		10.1	%		10.1	%

In February 2018, the Company signed a sublease agreement for its facility located in Lexington, Massachusetts. The lease commenced on April 1, 2018 and has an initial term of three years with an extension term through December 2022.

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.

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Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Due to the discontinuation of use of the sc2Wear Infusor, the Company has received notice of termination costs related to the program. The Company has accrued all costs for which it believes it is contractually liable. However, certain of the Company’s vendors have claimed or billed for additional costs for which the Company believes it is not obligated. At this time, the Company is not able to determine if it will incur any additional material costs as a result of such dispute. Depending on the timing and outcome of the dispute, and based on the Company’s position regarding the termination of the program, the Company currently estimates that additional termination costs, if any, could range from $0 to $3,000,000. 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and the results of operations should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”) filed with the Securities and Exchange Commission on March 21, 2019. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section in our Annual Report and in this Quarterly Report, our actual results could differ materially from the results described in or implied by, the forward-looking statements contained in the following discussion and analysis.

OVERVIEW

We are a pharmaceutical company focused on developing and commercializing products that have the potential to transform the way therapy is delivered, advance patient care and reduce healthcare costs. Our proprietary platform is designed to enable the subcutaneous administration of therapies that have previously been limited to intravenous, or IV, delivery. By moving delivery away from the high-cost healthcare settings typically required for IV administration, we believe our technology reduces overall healthcare costs and advances the quality and convenience of care. Our lead product candidate, FUROSCIX, consists of our novel, buffered formulation of furosemide delivered via an on-body infusor and is under development for treatment of congestion in patients with worsening heart failure who display reduced responsiveness to oral diuretics and do not require hospitalization.

We filed a new drug application, or NDA, for FUROSCIX, with the U.S. Food and Drug Administration, or FDA, in August 2017. On June 11, 2018, we received a Complete Response Letter, or CRL, from the FDA for our NDA, which indicated that, among other things, certain device modifications to our infusor were required. Based on the outcome of our interactions with the FDA, including clarification on an additional dose validation study and proposed device modifications necessary to advance FUROSCIX using the existing delivery technology, we have decided to discontinue use of the sc2Wear Infusor, and transition to our next generation device developed in partnership with West Pharmaceutical Services, Inc., or West, using its proprietary, wearable, SmartDose^® drug delivery system.

We have funded our operations from inception through March 31, 2019 primarily through the sale of shares of our common stock in our initial public offering and, prior to that, through the private placement of our preferred stock and the incurrence of debt. We do not have any products approved for sale and have not generated any revenue from product sales.

As of March 31, 2019, we had an accumulated deficit of $105.2 million. We expect to continue to incur net losses for the foreseeable future as we develop the infrastructure to commercialize our products, if approved, in the United States, including building our sales and marketing organization, continue research and development efforts, scale-up manufacturing, and seek regulatory approval for new product candidates and product enhancements. We will need additional funding to pay expenses relating to our operating activities, including selling, general and administrative expenses and research and development expenses. Adequate funding may not be available to us on acceptable terms, or at all. Our failure to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on our business, results of operations and financial condition.

COMPONENTS OF OUR RESULTS OF OPERATIONS

Research and Development Expenses

Research and development, or R&D, expenses consist of the cost of engineering, clinical trials, regulatory and medical affairs and quality assurance associated with developing our proprietary technology and product candidates. R&D expenses consist primarily of:

• employee-related expenses, including salaries, benefits, travel expense and stock-based compensation expense;

• cost of outside consultants who assist with technology development, regulatory affairs, clinical trials and medical affairs, and quality assurance;

• cost of clinical trial activities performed by third parties; and

• cost of facilities and supplies used for internal research and development and clinical activities.

We expense R&D costs as incurred. Given the emphasis to date on our lead product candidate FUROSCIX, our R&D expenses have not been allocated on a program-specific basis. In the future, we expect R&D expenses to increase in absolute dollars as we continue to develop new products and enhance existing products and technologies. We anticipate that our expenses will increase significantly as we:

• pursue regulatory approval of FUROSCIX incorporating the SmartDose drug delivery system;

• continue to advance our pipeline programs beyond FUROSCIX;

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• continue our current research and development activity;

• seek to identify additional research programs and additional product candidates;

• initiate preclinical testing and clinical trials for any product candidates we identify and develop, maintain, expand and protect our intellectual property portfolio; and

• hire additional research, clinical and scientific personnel.

General and Administrative Expenses

General and administrative, or G&A, expenses consist of employee-related expenses, including salaries, benefits, travel expense and stock-based compensation expense for personnel in executive, finance, commercial, human resources, facility operations and administrative functions. Other G&A expenses include pre-approval promotional activities, marketing, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and allocated facilities-related expenses.

If we receive FDA approval for FUROSCIX incorporating the next generation SmartDose drug delivery system, we anticipate that our G&A expenses will increase as we continue to build our corporate and commercial infrastructure to support the development and commercial launch of FUROSCIX in the United States.

Results of Operations

Comparison of Three Months Ended March 31, 2018 and 2019

The following table summarizes our results of operations for the three months ended March 31, 2018 and 2019 (in thousands):

	Three Months Ended March 31,						Increase
	2018			2019			(Decrease)
Operating expenses:
Research and development	$	4,048		$	6,524		$	2,476
General and administrative		4,651			2,323			(2,328	)
Total operating expenses		8,699			8,847			148
Loss from operations		(8,699	)		(8,847	)		148
Other expense		(42	)		(8	)		(34	)
Interest income		351			490			139
Interest expense		(342	)		(354	)		12
Net loss	$	(8,732	)	$	(8,719	)	$	(13	)

Research and development expenses. R&D expenses were $6.5 million for the three months ended March 31, 2019, compared to $4.0 million for the three months ended March 31, 2018. The increase of $2.5 million was primarily attributable to $0.9 million in severance costs, a $1.1 million increase in device development costs and $1.7 million in materials related to the sc2Wear Infusor. The increase was partially offset by a $0.7 million decrease in employee-related costs and a $0.5 million decrease in supplies and contract services for clinical and medical affairs.

General and administrative expenses. G&A expenses were $2.3 million for the three months ended March 31, 2019, compared to $4.7 million for the three months ended March 31, 2018. The decrease of $2.3 million was primarily attributable to a $1.1 million decrease in costs related to commercial preparation, a $1.4 million decrease in employee-related costs and a decrease of $0.2 million in legal costs. The decrease was partially offset by $0.4 million in severance costs.

Other expense. Other expense was $8,000 for the three months ended March 31, 2019, compared to other expense of $42,000 for the three months ended March 31, 2018. The decrease in expense of $34,000 was primarily attributable to foreign exchange losses due to activity denominated in foreign currency combined with foreign currency fluctuations.

Interest income. Interest income was $0.5 million for the three months ended March 31, 2019, compared to $0.4 million for the three months ended March 31, 2018. The increase of $0.1 million was primarily attributable to higher returns due to money market fund holdings.

Interest expense. Interest expense increased $12,000 from the three months ended March 31, 2018 to $0.4 million for the three months ended March 31, 2019. This increase was attributable to increased rates on the $10.0 million loan entered into in May 2017 with Solar Capital Ltd. and Silicon Valley Bank.

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LIQUIDITY AND CAPITAL RESOURCES

Overview

We have funded our operations from inception through March 31, 2019 primarily through the sale of shares of our common stock in our initial public offering and, prior to that, through the private placement of our preferred stock and the incurrence of debt. As of March 31, 2019, we had received net cash proceeds of $92.7 million from our initial public offering, $56.7 million from sales of our preferred stock and $13.5 million in net proceeds from convertible notes payable. Additionally, in May 2017 we incurred $10.0 million of debt under our loan and security agreement with Solar Capital Ltd. and Silicon Valley Bank. As of March 31, 2019, we had cash and restricted cash of $83.6 million.

We expect to incur substantial additional expenditures in the near future to support ongoing activities and our plans to obtain regulatory approval for FUROSCIX incorporating the next generation SmartDose drug delivery system. We believe our existing unrestricted cash is sufficient to fund our operations through at least the next 12 months from the date of this quarterly report. We expect our costs and expenses to increase in the futures as we prepare for and, if approved, commence U.S. commercialization of FUROSCIX, including the development of a direct sales force, and as we continue to make substantial expenditures on research and development, including to increase our manufacturing capacity and for conducting clinical trials of our product candidates. Additionally, we will incur additional costs as a result of operating as a public company. Our future capital requirements will depend on many factors, including:

• the time and expense required to refile an NDA for FUROSCIX incorporating the next generation SmartDose drug delivery system;

• the potential FDA approval of FUROSCIX;

• the costs and expenses of establishing our U.S. sales and marketing infrastructure;

• the degree of success we experience in commercializing FUROSCIX, if approved;

• the revenue generated by sales of FUROSCIX, if approved and other products that may be approved;

• the pricing and reimbursement of FUROSCIX, if approved and of other product candidates that may be approved;

• the costs, timing and outcomes of clinical trials and regulatory reviews associated with our product candidates;

• the emergence of competing or complementary technological developments;

• the extent to which FUROSCIX, if approved, is adopted by the healthcare community;

• the number and types of future products we develop and commercialize;

• the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; and

• the extent and scope of our general and administrative expenses.

Additional financing may not be available on a timely basis on terms acceptable to us, or at all. We may raise funds in equity, royalty-based or debt financings or enter into additional credit facilities in order to access funds for our capital needs. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we raise additional funds through royalty-based financing arrangements, we will likely agree to relinquish rights to potentially valuable future revenue streams and may agree to covenants that restrict our operations or strategic flexibility. Any debt financing obtained by us in the future would cause us to incur additional debt service expenses and could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and pursue business opportunities. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may terminate or delay the development of one or more of our products, delay clinical trials necessary to market our products, or delay establishment or expansion of sales and marketing capabilities or other activities necessary to commercialize our products.

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CASH FLOWS

The following table summarizes our sources and uses of cash for each of the periods presented:

	Three Months Ended March 31,
(in thousands)	2018			2019
Net cash (used in) provided by:
Operating activities	$	(9,074	)	$	(6,118	)
Financing activities		56			18
Net decrease in cash and restricted cash	$	(9,018	)	$	(6,100	)

Net Cash Used in Operating Activities

During the three months ended March 31, 2019, net cash used in operating activities was $6.1 million, consisting primarily of a net loss of $8.7 million. This was offset by non-cash charges of $0.5 million and a decrease in net operating assets of $2.1 million. The non-cash charges primarily consisted of depreciation, amortization related to our right of use leased assets, stock-based compensation expense and non-cash interest expense related to amortization of debt discount associated with the 2017 Loan Agreement. The decrease in net operating assets related to accrued expenses for device development costs and materials.

During the three months ended March 31, 2018, net cash used in operating activities was $9.1 million, consisting primarily of a net loss of $8.7 million and an increase in net operating assets of $1.1 million, offset by non-cash charges of $0.8 million. The increase in net operating assets primarily consisted of prepayments for device development and clinical trials and increased receivables for Value Added Tax. The non-cash charges primarily consisted of depreciation, amortization related to our right of use leased assets, stock-based compensation expense and non-cash interest expense related to amortization of debt discount associated with the 2017 Loan Agreement.

Net Cash Provided by Financing Activities

During the three months ended March 31, 2019, net cash provided by financing activities was $18,000, consisting primarily of stock option exercises.

During the three months ended March 31, 2018, net cash provided by financing activities was $56,000, consisting primarily of stock option exercises.

OFF-BALANCE SHEET ARRANGEMENTS

We currently have no off-balance sheet arrangements.

CONTRACTUAL OBLIGATIONS

There were no material changes in our commitments under contractual obligations, as disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

JOBS ACT ACCOUNTING ELECTION

In April 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was enacted. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to avail ourselves of this extended transition period and, as a result, we adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. This election is irrevocable.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks related to changes in foreign currency exchange rates and interest rates.

We contract with vendors in foreign countries. As such, we have exposure to adverse changes in exchange rates of foreign currencies, principally the Swiss franc and the Euro, associated with our foreign transactions. We believe this exposure to be immaterial. We currently do not hedge against this exposure to fluctuations in exchange rates.

Our exposure to market risk also relates to interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. As of March 31, 2019, our aggregate outstanding indebtedness was $10.0 million, which bears interest at the rate equal to LIBOR plus 8.45%. Due to the short-term duration and variable rate of our indebtedness, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our debt instruments.

Item 4. Controls and Procedures.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. Based on that evaluation of our disclosure controls and procedures as of March 31, 2019, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

There were no changes in our internal control over financial reporting during the three months ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. Information regarding risk factors appears in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 21, 2019. There have been no material changes from the risk factors previously disclosed in that Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

18

EXHIBIT INDEX

Exhibit Number	Description
10.1	Separation Agreement, by and between the registrant and Troy Ignelzi, dated January 28, 2019.(1)
10.2*†	Development Agreement, by and between the registrant and West Pharmaceutical Services, Inc., dated January 28, 2019.
31.1*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

(1) Previously filed as an exhibit to the Company’s Current Report on Form 8-K filed on January 29, 2019.

† Certain portions of this exhibit, marked by [***], have been omitted as the Company has determined (i) the omitted information is not material and (ii) the omitted information would likely cause competitive harm to the Company if publicly disclosed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SCPHARMACEUTICALS INC.
Date: May 8, 2019	By:	/s/ John H. Tucker
		John H. Tucker
		President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

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EX-10.2

SmartDose– Development Agreement  P19-0005-01

Exhibit 10.2

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

scPharmaceuticals(“scPharma”) at 2400 District Avenue, Suite 310, Burlington, MA 01803 and West Pharmaceutical Services, Inc. (“West”), with an address of 530 Herman O. West Drive, Exton, Pennsylvania 19341, wish to enter into an agreement for the development of a custom, single use SmartDose Gen II 10mL device (“Device”) for use with scPharma’s selected pipeline drug(s), Furoscix® pursuant to the terms and conditions of this Development Agreement (“Agreement”).

Once signed by both scPharma and West (together, the "Parties"), this proposal shall serve as the binding development agreement (the "Agreement") between the Parties.

In the event that scPharma's specific product device requirements change or its project plans are revised, West and scPharma will discuss appropriate changes to this Agreement, which shall be effective upon the parties' execution of an amended version of this Agreement.  

Development Program

The scope of this development agreement sets forth the activities required to use the SmartDose® Gen II 10mL wearable platform technology as a containment and on body delivery system for ScPharma Drug Product (“Compound”) (the SmartDose device hereafter referred to as the “Device” and the Device combined with the active ingredient is the “Product”). The scope of work includes development of the Device to accommodate effective delivery of Compound. West will also establish manufacturing capacity to support both the clinical supply and early commercial production of the Product.

The parties agree to the terms of the exclusivity grant, as set forth in Appendix A hereto, which is incorporated by reference herein.

During the development phase (hereinafter “Phase I”), West will perform all work as defined and agreed upon by ScPharma and West and set forth below. In addition, the filling process at the delivery volume will be verified:

• Upon ScPharma’s Approval, the project will be moved to the clinical supply phase (hereinafter “Phase II”). The activities for this phase are also detailed below.

• West will make every effort to deliver Phase I in accordance with the timeline set forth below, or as further agreed to by the parties.

Phase I: Development Phase

This Phase I will include Milestones 1 through 6 (see Table 1 below).

• If all requirements are met successfully, at the end of this phase, West will move after scPharma approval  to Phase II for build of clinical and early commercial supply.

• The West committed timelines below for Phase II are dependent on ScPharma commitment and CMO selection and assume that all tasks in Phase I are performed without delay or change in project scope.

Phase II: Production Readiness – Clinical Build and Early Commercial Supply

ACTIVE/99260008.3  

 

SmartDose– Development Agreement  P19-0005-01

 

Industrialization or 'Production Readiness – Clinical Build Ready’ is required to transition from Device development to clinical production and supply of the Product. Key activities – and related capital investments – during this phase include device injection mold tooling, device assembly equipment, fluid path assembly equipment, primary container molding and assembly, container secondary packaging, piston molding. Activities undertaken during this phase to establish production capacity include, but are not limited to the following:

• Establishment of Requirements for Mold Tooling and Assembly Equipment

• Vendor Selection and Qualification of External Suppliers

• Qualification of Production Area

• Installation, Debug, and Process Development

• Establishment of Manufacturing Documentation

• Personnel Training

• Process Validation

• As part of West’s investment in the SmartDose platform technology, West is committed to establish manufacturing capacity to support the growing demand of its pharma partners. Customer’s forecasted demand as stipulated in the RFQ is well considered, and the parties will engage into a Supply Agreement to ensure Customer’s evolving forecasts are met by leveraging our global manufacturing footprint.

Phase I – Product Development Phase

TABLE 1

No.	Milestone	High-level Activities and Deliverables (in BOLD)	Estimated Completion Time Per Milestone (in months)(After DA Sign-off)	Milestone payments (See Appendix C for details)
1	DA Execution Project Kick-Off & Planning	[***]	[***]	[***]
2	Technical Feasibility Review Summary	[***]	[***]	[***]
3	Design Inputs Review Summary	[***]	[***]	[***]
4	Design Outputs - Preliminary Build and Engineering Test	[***]	[***]	[***]

Page 2 of 14 Confidential

SmartDose– Development Agreement  P19-0005-01

 

No.	Milestone	High-level Activities and Deliverables (in BOLD)	Estimated Completion Time Per Milestone (in months)(After DA Sign-off)	Milestone payments (See Appendix C for details)
5	System Verification (DVT)	[***]	[***]	[***]
6	HF Support/Regulatory	[***]	[***]	[***]

NOTE: Combination Product Primary, Secondary, and Tertiary Packaging is under assessment by the development team, as discussed.

• Packaging design for primary and secondary packaging plus pallet configuration.

• Device Primary Packaging – [***] ‐ West to design

• Device Secondary Packaging – [***] – West to design along with multi-pack shipper box

• Device Tertiary Packaging – [***] – West to design

• Shipping validation, Pallet and shipper configurations ([***])

Timing and Costs of the above packaging design for primary and secondary packaging plus pallet configuration is not included at this time as part of this Agreement. Final pricing will be updated through an amendment to this Agreement

Phase II Production Readiness – Clinical and Early Commercial Build

TABLE 2

No.	Milestone	High-level Activities and Deliverables (in BOLD)	Costs
6	Production Readiness – Clinical Build Ready	[***]	[***]
TOTAL COST FOR PHASE I & II			$5,150,000

Development and Timeline Assumptions

This section lists assumptions for all device configurations around the development and industrialization of the Product.

• Assumes a start date of T0 – When this Agreement has been executed by both parties

• See Appendix D for start times and parallel activities to compress timelines.

• Each milestone builds upon the other. A delay in one may have a knock-on affect to another.

• [***]

• [***]

• [***]

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• Design Verification will be completed with Compound

• West will support fill/finish technical feasibility as a separate service not included in this agreement.

• [***] after scPharma’s requirements are established for product attributes such as visual cues and branding colors, West will update and provide a requirements document

• To allow Compound and Placebo into Israel, the Israeli Ministry of Health requires the MSDS, Safety Review (with report) and packaging information. [***]

• [***]

• Tolerance analysis / Design for Manufacturing – [***]

• Test method development and validation including support for scPharma’s test method development – Platform specific for Customer’s Compound

• If the drug risk is different than that assumed by West for our platform this may add time to development

• Proposal development charges include Devices that will be used for internal (West) use only

• [***]

• The Parties agree they will mutually revise this scope of work in the event Customer proposes additional requirements not captured in the request-for-proposal and/or West cannot reasonably complete one of the activities herein

• Customer and West will need to agree on requirements associated with accelerated aging and storage conditions. [***]

• [***]

• Device Master File (MAF) will be available for scPharma’s reference

• Drug Master File(s) will be available for scPharma’s  reference

• The design will incorporate existing West Intellectual Property

• Design verification including but not limited to

o [***]

• No part of this feasibility and development work grants exclusivity or IP on any resulting designs, except as explicitly set forth in Appendix A.

• West can provide Product Analysis / Complaint support which can be quoted separately  

• West reserves the right to re-assess the proposal for additional requirements not captured in the request-for-proposal.

• West will perform Combination Product Design Verification (if a design input is different to West’s)

• West will perform Combination Product Use‐By‐Date (Shelf Life)

• Combination Product Environmental Studies (if real drug product is used for DVT testing, we can assess West ownership as part of DVT, if mimic/placebo solution is used, Customer will need to supplement the DVT testing with real drug product)

scPharma’s  Responsibilities during Phase I:

• Placebo/ Drug Product Safety Informatician (e.g. MSDS) – prior to any shipment

• User Requirements Specifications (URS)

• Hazard Identification Document for the Drug Product

• Filling vendor selection

• Filling process validation

• Production equivalent filled and labeled containers for DVT to West

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• Combination product clinical product packaging vendor selection and applicable qualification

• Drug/API formulation and compatibility

• Drug stability testing in CCS and in device

• Combination Product Design Validation

• Combination Product HFE file, including required documentations (e.g., URS, Use FMEA) and Human Factors Studies (Formative and Summative)

• Combination Product configuration shipping studies

• Combination Product Labeling, including IFU

• Primary Drug Container – CZ Systems provided by West, Drug Filling/Sterility responsibility Customer/Filler

• Combination Product Registration and Certification

• Combination Product clinical training units and the clinical training of users/clinicians.

Note: West can support Customer through different studies and requirements, such as CCS, Environmental studies, Labeling and IFU, based on experience and internal capabilities (West Analytical Services etc.). However, the final responsibility lies with the ScPharma.

Agreement Notes and Assumptions

1.1. Estimates represent the amount of time West will need to generate the deliverables. They do not include ScPharma decision making or approval time.  Should these reviews or approvals result in significant project delays; West reserves the right to review the costs and timelines associated with remaining project phases. If a portion of any phase needs to be repeated, appropriate charges will apply based on the scope of the required work.

1.2. This agreement constitutes the entire agreement between the parties with respect to the subject matter described herein and supersedes all previous agreements between the parties and all terms in any printed forms exchanged or which may be exchanged in the future.  This agreement may only be modified by a writing executed by authorized representatives of each party hereto.

1.3. West warrants that the services provided hereunder shall be performed in a good, competent and workpersonlike manner. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. If West breaches the foregoing warranty, West will reperform such services or, at West's option, provide a credit for the amount paid for same.  THE PROVISIONS OF THIS SECTION SET FORTH CUSTOMER's EXCLUSIVE REMEDY AND WEST'S SOLE LIABILITY ON ANY CLAIM, WHETHER IN TORT OR CONTRACT, AND IN NO EVENT SHALL WEST BE LIABLE FOR ANY OTHER DAMAGE, COST, EXPENSE OR LIABILITY OF ANY KIND WHATSOEVER, WHETHER DIRECT OR INDIRECT, INCLUDING WITHOUT LIMITATION, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING FOR ANY REASON.  IN NO EVENT SHALL CUSTOMER BE LIABLE TO WEST FOR ANY AMOUNT OF DAMAGES IN EXCESS OF THE TOTAL AMOUNTS PAYABLE BY SCPHARMA TO WEST UNDER THIS AGREEMENT OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY SORT, INCLUDING ANY CLAIMS FOR LOST PROFITS.

1.4. For the sake of clarity, any “units” to be provided under this Agreement are being supplied only for evaluation purposes in the context of stability and testing to be designed and carried out by ScPharma.  West makes no representations regarding the quality, suitability, or

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performance of any units, except as specifically set forth in above in Note 1.3  ScPharma assumes full responsibility for evaluation of the suitability of any products and assumes all risk and responsibility in connection with any such products.  No units will be supplied by West other than any such units specifically contemplated hereunder unless an additional written agreement is put in place between the parties.

1.5. “I.P.” means [***].

1.6. Each party (the “Recipient”) agrees, both during and subsequent to the term of this Agreement, not to disclose to others or use for its own benefit or the benefit of others, any information (including I.P.) of the other party (the “Discloser”), which is communicated to the Recipient in writing and specifically identified as “CONFIDENTIAL” or which  by its nature would reasonably be understood to be confidential, except that the Recipient shall not be prevented from using or disclosing such information which (i) is or becomes generally known in the trade or business which is now practiced by the Discloser, or other becomes publicly known through no wrongful act of the Recipient; or (ii) was in possession of or available to the Recipient or is rightfully received by the Recipient from a third party without restriction and without breach of this Agreement; or (iii) is approved for release by written authorization by the Discloser. Such I.P. may be disclosed without breaching this Agreement if such I.P. is required to be disclosed by a court or judicial or governmental authority of competent jurisdiction or by any applicable law, rule or regulation and, in such event, only after the Recipient provides prompt written notice to the Discloser so as to enable the Discloser to resist any such required disclosure and/or to obtain suitable protection regarding such required disclosure.

1.7. This Development Agreement will enter into force on the date on which it is signed by both parties (the “Effective Date”) and will remain effective until full completion of the activities described in this Development Agreement, unless earlier terminated by any of the Parties (the “Term”). Either party may terminate this Development Agreement for a material breach by the other Party of this Development Agreement if such breach remains uncured for forty-five (45) days after such first party delivers written notice of such breach to the breaching party.  ScPharma may terminate this Development Agreement at any time by serving fifteen days written notice to West. In case of earlier termination, ScPharma shall only pay for the payments set forth in Appendix A, and those milestones already completed and, in the event of milestones already initiated by West but not finalized, ScPharma will pay for duly evidenced expenses (which shall never exceed the relevant milestone amount).

1.8. This proposal is valid until [***].

By signing this commitment to proceed, scPharma ScPharmaacknowledges that a formal Purchase Order will be issued as outlined in this  Agreement to cover all aspects of the development project. Activities will commence upon receipt of ScPharma Purchase Order and fully executed Development Agreement.

Acknowledged and agreed to by:

ScPharma

/s/ John Tucker________                  _________January 28, 2019____

SignatureDate

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WEST

/s/ Eric Resnick________                   __________ January 28, 2019____

SignatureDate

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Appendix A: Exclusivity Grant

• During the Term of this Agreement (but in no event for longer than [***] from the effective date of this Agreement), and subject to the terms set forth below in this Appendix A, West shall not develop any SmartDose device or other wearable device for use with any loop diuretic drug product indicated in adults for the treatment of edema associated with congestive heart failure in the Territory (“Exclusivity Grant”).   “Territory” is defined as the United States regulated market; however, ScPharma will have an option to extend the Territory of the Exclusivity Grant to global non-US markets, as further described below.  

• The Exclusivity Grant is subject to the following terms:

o scPharma shall pay West [***] (the “Exclusivity Fee”) on the following schedule:  

▪ [***] up-front in 2019 due at signing of the Agreement

▪ [***] on [***]

▪ [***] on [***] or at completion of the Agreement deliverables, whichever comes first.  

o The Exclusivity Fee includes five million US dollars for US market exclusivity and one million US dollars for ScPharma’s option to extend the Territory of the Exclusivity Grant to cover the global non-US regulated markets (the “Non-US Option”).  

• Should scPharma choose to exercise the Non-US Option, then they shall pay West an additional two-milllion US dollars ($2,000,000) at the time of option execution.  The period to exercise this Non-US Option will expire in [***] from the effective date of this Agreement or at the conclusion of the final deliverable in this  Agreement, whichever comes first.

• In addition to the payments set forth above, scPharma will pay the following amounts if either of these events occur: (1) scPharma will pay an additional [***] if West successfully completes the Development Agreement and scPharma does not continue with West as their sole device and container partner for the Industrial and Commercial Phases of scPharma's drug product candidate, Furoscix®; or (2) scPharma will pay an additional [***] if scPharma terminates this Agreement prior to their [***] exclusivity payment.

• All payments described in this Appendix A are non-refundable.

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Appendix B: SmartDose® Platform Specifications

	[***]	[***]
[***]	[***]	[***]
	[***]	[***]
	[***]	[***]
	[***]	[***]
	[***]	[***]
	[***]	[***]
	[***]	[***]
	[***]	[***]
[***]	[***]	[***]
	[***]	[***]
	[***]	[***]
[***]	[***]	[***]
	[***]	[***]
[***]	[***]	[***]
[***]	[***]	[***]
	[***]	[***]
	[***]	[***]
	[***]	[***]

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Appendix C: Products, Services and Pricing

In consideration of West’s performance of the Services as set forth in this Agreement, ScPharma shall pay West a total amount not to exceed Five Million  US Dollars ($5,150,000). Any changes to the pricing, payments schedules, and/or total payment amount shall only be effective upon execution by the Parties of a written and signed amendment to this Agreement.  ScPharma will make payments to West within thirty days of receipt of an undisputed invoice and in accordance with the following:

a. ScPharma shall make a one-time, up-front payment of [***] to West, at the Commencement of Program, as per TABLE 1 above. Remaining milestone payments are due at the completion of the deliverables as specified in TABLE 1.

b. Upon ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestones, ScPharma will pay West amount as identified in TABLE 1.

c. For Products (or product components) required for over and above testing and use during Phase I and Phase II under this Agreement, ScPharma will provide to West such orders in writing.  Pricing of such Product will be in accordance with TABLE 3 herein. Upon ScPharma’s receipt of Product as requested, ScPharma shall pay West the total amount due under a separate ScPharma Purchase Order, with reference to this Agreement.

Fee Schedule

a. ScPharma shall make a one-time, up-front payment of [***] to West.

b. Upon ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestone 3, ScPharma will pay West [***].

c. Upon ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestone 4, ScPharma will pay West [***].

d. Upon ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestone 5a, ScPharma will pay West [***].

e. Upon ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestone 5b, ScPharma will pay West [***].

f. Upon NDA submission for the combination drug/device product but no less than six months following ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestone 6, ScPharma will pay West [***].

g. Upon ScPharma’s receipt and acceptance of the applicable Deliverables associated with West’s completion of Milestone Milestone 7, ScPharma will pay West [***].

Milestone	Deliverables	Compensation
Phase I & II
1	Up-front payment(T0)	[***]
3	Design Input review summary	[***]
4	Design Output Review	[***]

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5a	Initiation of Design Verification Testing	[***]
5b	Competion of DV Testing	[***]
6	Regulatory support	[***]
7	Clinical Readiness and supply of Product	[***]
Total Compensation		$5,150,000.00

Table 3:Development Phase Component Pricing

	Device	Cartridge	Piston
Item Number	[***]	[***]	[***]
Item Description	[***]	[***]	[***]
Pricing/Unit	[***]	[***]	[***]

• EX-Works [***]

• Standardlead-time is[***] days.

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Appendix D: Timelines

[***]

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Appendix E: Customer Input

TABLE 4: Deliverables/Timelines, [***]

No	Gen II 10mL
	ScPharma Requirement	Customer Quantities	Customer Timeline
1	[***]	[***]	[***]
2	[***]	[***]	[***]
3	[***]	[***]	[***]
4	[***]	[***]	[***]
5	[***]	[***]	[***]
6	[***]	[***]	[***]
7	[***]	[***]	[***]
8	[***]	[***]	[***]
9	[***]	[***]	[***]
10	[***]	[***]	[***]
11	[***]	[***]	[***]

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Appendix F: Optional Services

Table 5

No.	Service Package	Description	Price
1	Call Center Device Training	[***]	[***]
2	Failure Investigation Training	[***]	[***]

Page 14 of 14 Confidential

EX-31.1

Exhibit 31.1

Certification

I, John H. Tucker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2019 of SCPHARMACEUTICALS INC.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2019	/s/ John H. Tucker
	John H. Tucker
	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of scPharmaceuticals Inc. (the “Company”) for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John H. Tucker, President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to my knowledge:

1) the Report which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 8, 2019	/s/ John H. Tucker
	John H. Tucker
	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 07, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	SCPH
Entity Registrant Name	SCPHARMACEUTICALS INC.
Entity Central Index Key	0001604950
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		18,580,430

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 83,378	$ 89,478
Prepaid expenses	1,770	1,757
VAT receivable	494	479
Other current assets	169	179
Total current assets	85,811	91,893
Restricted cash	182	182
Property and equipment, net	154	164
Right-of-use lease assets - operating, net	1,427	1,506
Deposits and other assets	13	10
Total assets	87,587	93,755
Current liabilities
Accounts payable	221	587
Accrued expenses	5,474	2,922
Term loan, short term	4,035	2,811
Current portion of lease obligation - operating	366	353
Total current liabilities	10,096	6,673
Term loan, long term	5,649	6,826
Long term lease obligation - operating	1,255	1,353
Other liabilities	189	159
Total liabilities	17,189	15,011
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized and no shares issued and outstanding
Common stock, $0.0001 par value; 150,000,000 shares authorized as of March 31, 2019; 18,569,289 and 18,580,430 shares issued and outstanding as of December 31, 2018 and March 31, 2019, respectively	2	2
Additional paid-in capital	175,574	175,201
Accumulated deficit	(105,178)	(96,459)
Total stockholders’ equity	70,398	78,744
Total liabilities and stockholders’ equity	$ 87,587	$ 93,755

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001
Common stock, shares authorized	150,000,000
Common stock, shares issued	18,580,430	18,569,289
Common stock, shares outstanding	18,580,430	18,569,289

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating expenses:
Research and development	$ 6,524	$ 4,048
General and administrative	2,323	4,651
Total operating expenses	8,847	8,699
Loss from operations	(8,847)	(8,699)
Other expense	(8)	(42)
Interest income	490	351
Interest expense	(354)	(342)
Net loss and comprehensive loss	$ (8,719)	$ (8,732)
Net loss per share — basic and diluted	$ (0.47)	$ (0.47)
Weighted average common shares outstanding — basic and diluted	18,575,726	18,535,432

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning Balance at Dec. 31, 2017	$ 105,997	$ 2	$ 173,011	$ (67,016)
Beginning Balance, Shares at Dec. 31, 2017		18,534,240
Net loss	(8,732)			(8,732)
Issuance of common stock upon exercise of stock options	56		56
Issuance of common stock upon exercise of stock options, Shares		7,606
Vesting of restricted stock	1		1
Vesting of restricted stock, Shares		366
Stock-based compensation	622		622
Ending Balance at Mar. 31, 2018	97,944	$ 2	173,690	(75,748)
Ending Balance, Shares at Mar. 31, 2018		18,542,212
Beginning Balance at Dec. 31, 2018	78,744	$ 2	175,201	(96,459)
Beginning Balance, Shares at Dec. 31, 2018		18,569,289
Net loss	(8,719)			(8,719)
Issuance of common stock upon exercise of stock options	$ 18		18
Issuance of common stock upon exercise of stock options, Shares	11,141	11,141
Stock-based compensation	$ 355		355
Ending Balance at Mar. 31, 2019	$ 70,398	$ 2	$ 175,574	$ (105,178)
Ending Balance, Shares at Mar. 31, 2019		18,580,430

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net loss	$ (8,719,000)	$ (8,732,000)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation expense	10,000	10,000
Amortization expense - right-of-use leased assets - operating	79,000	71,000
Stock-based compensation	355,000	622,000
Non-cash interest expense	80,000	90,000
Changes in operating assets and liabilities
Prepaid expenses and other assets	(19,000)	(703,000)
Accounts payable, accrued expenses and other liabilities	2,096,000	(432,000)
Net cash used in operating activities	(6,118,000)	(9,074,000)
Cash flows from financing activities
Proceeds from the exercise of vested stock options	18,000	56,000
Net cash provided by financing activities	18,000	56,000
Net decrease in cash, cash equivalents and restricted cash	(6,100,000)	(9,018,000)
Cash, cash equivalents and restricted cash at beginning of period	89,660,000	118,480,000
Cash, cash equivalents and restricted cash at end of period	83,560,000	109,462,000
Supplemental cash flow information
Interest paid	274,000	252,000
Taxes paid	$ 166,000	$ 70,000

XML

Description of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

Description of Business

scPharmaceuticals LLC was formed as a Limited Liability Company under the laws of the State of Delaware on February 19, 2013. On March 24, 2014, scPharmaceuticals LLC was converted to a Delaware corporation and changed its name to scPharmaceuticals Inc. (“the Company”). The Company is a pharmaceutical company focused on developing and commercializing products that have the potential to transform the way therapy is delivered, advance patient care and reduce healthcare costs. The Company’s proprietary platform is designed to enable the subcutaneous administration of therapies that have previously been limited to intravenous, or IV, delivery. The Company’s headquarters and primary place of business is Burlington, Massachusetts.

On January 9, 2019, the Company held a Type C meeting with the Food and Drug Administration, or FDA, to discuss the dose delivery validation protocol. At the Type C meeting, the FDA informed the Company that the FDA did not agree that the Company’s proposed dose validation study was adequate, and an agreement was not reached during the Type C meeting. In January 2019, management implemented a restructuring plan to reduce operating costs and better align its workforce with the needs of its business. Under this restructuring plan, the Company reduced its workforce by approximately 43%, to 13 employees. The Company recorded a charge of $1.3 million during the three months ended March 31, 2019 related to the restructuring plan, which included severance, benefits and related costs. The Company recorded $852,000 and $426,000 in research and development expenses and general and administrative expenses related to the restructuring, respectively. The Company paid $341,000 of these costs during the three months ended March 31, 2019 and expects to pay $578,000 and $289,000 in the second and third quarters of 2019, respectively. The remainder of the restructuring charge consists of a non-cash charge of $70,000 related to the modification of stock options (Note 6). As of March 31, 2019, the Company had a balance of $867,000 in accrued expenses related to severance benefits, and related costs associated with the restructuring plan.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiary, scPharmaceuticals Securities Corporation. Certain information and disclosures normally included in financial statements in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 21, 2019. The Company has determined that it operates in one segment.

The accompanying condensed consolidated balance sheet as of March 31, 2019, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2019, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2018 and 2019 and condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2019 are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the Company’s audited annual financial statements and include, in the opinion of management, adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. The operating results for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full year ending December 31, 2019.

XML

Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported periods. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consists of bank deposits, certificates of deposit and money market accounts with financial institutions. Cash equivalents are carried at cost which approximates fair value due to their short-term nature and which the Company believes do not have a material exposure to credit risk. The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. The Company’s cash and cash equivalent accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

As of March 31, 2019, the Company classified $182,000 as restricted cash related to a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate office facilities (Note 9). Cash, cash equivalents and restricted cash consists of the following:

	December 31, 2018		March 31, 2019
Cash and cash equivalents	$	89,478	$	83,378
Restricted cash		182		182
Cash, cash equivalents and restricted cash	$	89,660	$	83,560

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets, current portion of lease obligations, and long term lease obligations on the Company’s balance sheets.  

ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Income Taxes

The Company accounts for income taxes in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recorded to reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. A valuation allowance is required to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that some 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. The tax benefits recorded 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 uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. At March 31, 2019, the Company had no such accruals.

Recently Issued Accounting Standards

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies fair value disclosure requirements, specifically around level transfers and valuation of Level 3 assets and liabilities. ASU 2018-13 is effective for financial statements issued for annual and interim periods beginning after December 15, 2019 for all entities. Early adoption of all or part of ASU No. 2018-13 is permitted. The Company does not expect ASU 2018-13 to have a material impact on its financial statements.

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Net Loss per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Net Loss per Share

3. Net Loss per Share

Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except share and per share data):

	Three Months Ended March 31,
	2018			2019
Net loss and comprehensive loss	$	(8,732	)	$	(8,719	)
Weighted-average shares used in computing net loss per share		18,535,432			18,575,726
Net loss per share, basic and diluted	$	(0.47	)	$	(0.47	)

The Company’s potentially dilutive securities, which include stock options and convertible preferred stock, 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 is 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.

	Three Months Ended March 31,
	2018		2019
Stock options to purchase common stock		1,748,617		1,409,325
Unvested restricted stock		122		160,900
Total		1,748,739		1,570,225

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Property and Equipment

3 Months Ended

Mar. 31, 2019

Property Plant And Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Purchased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			March 31, 2019
Office equipment	5 years	$	10		$	10
Office furniture	7 years		116			116
Computer equipment	3 years		8			8
Leasehold improvements	Life of lease		95			95
			229			229
Less: Accumulated depreciation			(65	)		(75	)
Property and equipment, net		$	164		$	154

Depreciation expense for the three months ended March 31, 2018 and March 31, 2019 was $10,000 and $10,000, respectively.

Leased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			March 31, 2019
Right-of-use lease assets - operating	Lease term	$	2,024		$	2,024
Less: Accumulated amortization			(518	)		(597	)
Right-of-use lease assets - operating, net		$	1,506		$	1,427

Amortization expense for the three months ended March 31, 2018 and March 31, 2019 was $71,000 and $79,000, respectively.

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Accrued Expenses

3 Months Ended

Mar. 31, 2019

Accruals [Abstract]

Accrued Expenses

5. Accrued Expenses

Accrued expenses consist of (in thousands):

	December 31, 2018		March 31, 2019
Contract research and development	$	1,492	$	2,252
Unrecoverable component costs		—		1,711
Severance costs		133		890
Employee compensation and related costs		727		327
Consulting and professional service fees		356		192
State taxes		165		54
Other		49		48
Total accrued expenses	$	2,922	$	5,474

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

6. Stock-Based Compensation

Stock Options

The Company’s 2017 Stock Option and Incentive Plan (the “2017 Stock Plan”) became effective in November 2017, upon the closing of the Company’s initial public offering and will expire in October 2027. Under the 2017 Stock Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units (“RSUs”) and other stock-based awards. The Company’s 2014 Stock Incentive Plan (the “2014 Stock Plan”) was terminated in November 2017 upon the completion of the Company’s initial public offering and no further options were granted under the 2014 Stock Plan. At March 31, 2019, there were 861,782 options outstanding under the 2014 Plan.  

As of March 31, 2019, there were 2,914,161 shares of the Company’s common stock authorized for issuance under the 2017 Stock Plan.

At March 31, 2019, there were 2,436,605 options available for issuance under the 2017 Stock Plan and 547,543 options outstanding. Options granted under the 2017 Plan have a term of ten years. Vesting of options under the 2017 Stock Plan is determined by the board of directors, but is generally over one to four-year terms.

The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended March 31,
	2018		2019
Risk-free interest rate	2.42%-2.74%		2.51%
Expected dividend yield	0%		0%
Expected life	5.5-7.0 years		6.0 years
Expected volatility	83%-86%		74%
Weighted-average grant date fair value	$	9.44	$	2.14

The following table summarizes information about stock option activity during the three months ended March 31, 2019 (in thousands, except share and per share data):

	NUMBER OF SHARES			WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Outstanding, December 31, 2018		1,588,306		$	6.75
Granted		84,500			3.25
Exercised		(11,141	)		1.66
Forfeited		(252,340	)		8.55
Outstanding, March 31, 2019		1,409,325		$	6.25	8.24	$	40
Vested and exercisable, March 31, 2019		705,041		$	6.30	7.71	$	40
Vested and expected to vest, March 31, 2019		1,251,190		$	6.32	8.14	$	40

The following table summarizes information about RSU activity during the three months ended March 31, 2019:

	RSUs		AVERAGE GRANT DATE FAIR VALUE (IN DOLLARS PER SHARE)
Outstanding, December 31, 2018		—	$	—
Granted		160,900		1.43
Vested		—		—
Forfeited		—		—
RSUs outstanding at March 31, 2019		160,900	$	1.43

Unrecognized compensation expense related to unvested options as of March 31, 2019 was $2.2 million and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 2.4 years. Unrecognized compensation expense related to unvested RSUs as of March 31, 2019 was $122,000 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 2.1 years.

Duringthe three months ended March 31, 2019, as part of the restructuring plan (Note 1), the Company extended the exercise period to one year for 51,673 vested options and for two years for 85,432 vested options of those affected, with a weighted average exercise price of $8.30,and recorded incremental stock-based compensation expense of $70,000.

The Company recorded stock-based compensation expense in the following expense categories of its accompanying condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2019 (in thousands):

	Three Months Ended March 31,
	2018		2019
Research and development	$	186	$	68
General and administrative		436		287
Total	$	622	$	355

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

The Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic, Fair Value Measurements and Disclosures (“ASC 820”), provides a fair value hierarchy, which classifies fair value measurements based on the inputs used in measuring fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and observable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values of the Company’s cash and restricted cash, prepaid expenses, value added tax, or VAT, receivable and deposits approximate their fair values due to their short-term nature. The carrying value of the Company’s loan payable was considered a reasonable estimate of fair value because the Company’s interest rate is near current market rates for instruments with similar characteristics.  

The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy. The following table summarizes the Company’s money market funds as of March 31, 2019 (in thousands):

	TOTAL		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Cash equivalents	$	75,708	$	75,708	$	—	$	—
Total cash equivalents	$	75,708	$	75,708	$	—	$	—

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Term Loan

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Term Loan

8. Term Loan

In May 2017, the Company entered into a loan and security agreement (the “2017 Loan Agreement”), with Solar Capital Ltd. and Silicon Valley Bank for $10.0 million. The 2017 Loan Agreement has a maturity date of May 1, 2021. Debt issuance costs for the 2017 Loan Agreement will be amortized to interest expense over the remaining term of the 2017 Loan Agreement using the effective-interest method.

The interest rate under the 2017 Loan Agreement is LIBOR plus 8.45%. The initial interest-only period was until November 30, 2018, followed by a 30-month principal and interest period. The First Amendment to the Loan and Security Agreement, entered into in November 2018, extended the interest-only period, which currently runs through May 2019. If and when certain conditions are met, the interest-only period may be extended to August or November 2019. The rate at March 31, 2019 was 10.93188%. Pursuant to the 2017 Loan Agreement, the Company provided a first priority security interest in all existing and after-acquired assets, excluding intellectual property, owned by the Company.

As of March 31, 2019, unpaid borrowings under the 2017 Loan Agreement totaled $10.0 million. For the three months ended March 31, 2019, the Company recorded $50,000 related to the amortization of debt discount associated with the 2017 Loan Agreement. For the three months ended March 31, 2018 the Company recorded $69,000 related to the amortization of debt discount associated with the 2017 Loan Agreement.

The 2017 Loan Agreement allows the Company to voluntarily prepay all (but not less than all) of the outstanding principal at any time. A prepayment premium of 1% would be assessed on the outstanding principal. A final payment fee of $250,000 is due upon the earlier to occur of the maturity date or prepayment of such borrowings. The final payment fee was increased to $325,000 in the First Amendment to the 2017 Loan Agreement. For the three months ended March 31, 2019, the Company recorded $30,000 related to the amortization of the final payment fee associated with the 2017 Loan Agreement. For the three months ended March 31, 2018, the Company recorded $21,000 related to the amortization of the final payment fee associated with the 2017 Loan Agreement.

In an event of default under the 2017 Loan Agreement, the interest rate will be increased by 5% and the balance under the loan may become immediately due and payable at the option of the lenders.

The 2017 Loan Agreement includes restrictions on, among other things, the Company’s ability to incur additional indebtedness, change the name or location of the Company’s business, merge with or acquire other entities, pay dividends or make other distributions to holders of its capital stock, make certain investments, engage in transactions with affiliates, create liens, sell assets or pay subordinated debt.

Total term loan and unamortized debt discount balances are as follows (in thousands):

	March 31, 2019
Face value	$	10,000
Less: discount		(316	)
Total	$	9,684
Less: current portion		(4,035	)
Total	$	5,649

As of March 31, 2019, future principal payments due under the 2017 Loan Agreement are as follows (in thousands):

Year ended:
December 31, 2019	$	2,917
December 31, 2020		5,000
December 31, 2021		2,083
Total	$	10,000

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Operating Leases

The Company leases office facilities and equipment under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2022 and do not include renewal options.

Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally also include real estate taxes and common area maintenance (“CAM”) charges in the annual rental payments.

Pursuant to the terms of its lease agreement for the Company’s headquarters, the Company obtained a letter of credit in the amount of approximately $182,000 as security on the lease obligation. The letter of credit is listed as restricted cash on the Company’s consolidated balance sheets.

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of March 31, 2019 (in thousands):

Year ended:
December 31, 2019	$	386
December 31, 2020		528
December 31, 2021		537
December 31, 2022		496
Total minimum lease payments		1,947
Less imputed interest		(326	)
Total	$	1,621

	Three Months Ended March 31,
	2018			2019
Lease cost:
Operating lease cost	$	119		$	125
Short-term lease cost		2			2
Sublease income		-			(13	)
Total lease cost	$	121		$	114
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	97		$	127
Operating cash flows from operating leases	$	21		$	(6	)
Weighted-average remaining lease term - operating leases	4.7 years			3.7 years
Weighted-average discount rate - operating leases		10.1	%		10.1	%

In February 2018, the Company signed a sublease agreement for its facility located in Lexington, Massachusetts. The lease commenced on April 1, 2018 and has an initial term of three years with an extension term through December 2022.

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Due to the discontinuation of use of the sc2Wear Infusor, the Company has received notice of termination costs related to the program. The Company has accrued all costs for which it believes it is contractually liable. However, certain of the Company’s vendors have claimed or billed for additional costs for which the Company believes it is not obligated. At this time, the Company is not able to determine if it will incur any additional material costs as a result of such dispute. Depending on the timing and outcome of the dispute, and based on the Company’s position regarding the termination of the program, the Company currently estimates that additional termination costs, if any, could range from $0 to $3,000,000. 

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported periods. Actual results could differ from those estimates.

Cash Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consists of bank deposits, certificates of deposit and money market accounts with financial institutions. Cash equivalents are carried at cost which approximates fair value due to their short-term nature and which the Company believes do not have a material exposure to credit risk. The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. The Company’s cash and cash equivalent accounts, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

As of March 31, 2019, the Company classified $182,000 as restricted cash related to a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate office facilities (Note 9). Cash, cash equivalents and restricted cash consists of the following:

	December 31, 2018		March 31, 2019
Cash and cash equivalents	$	89,478	$	83,378
Restricted cash		182		182
Cash, cash equivalents and restricted cash	$	89,660	$	83,560

Leases

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) lease assets, current portion of lease obligations, and long term lease obligations on the Company’s balance sheets.  

ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recorded to reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. A valuation allowance is required to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that some 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. The tax benefits recorded 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 uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense. At March 31, 2019, the Company had no such accruals.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies fair value disclosure requirements, specifically around level transfers and valuation of Level 3 assets and liabilities. ASU 2018-13 is effective for financial statements issued for annual and interim periods beginning after December 15, 2019 for all entities. Early adoption of all or part of ASU No. 2018-13 is permitted. The Company does not expect ASU 2018-13 to have a material impact on its financial statements.

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Schedule of Cash, Cash Equivalents and Restricted Cash

As of March 31, 2019, the Company classified $182,000 as restricted cash related to a letter of credit issued as a security deposit in connection with the Company’s lease of its corporate office facilities (Note 9). Cash, cash equivalents and restricted cash consists of the following:

	December 31, 2018		March 31, 2019
Cash and cash equivalents	$	89,478	$	83,378
Restricted cash		182		182
Cash, cash equivalents and restricted cash	$	89,660	$	83,560

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Net Loss per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Loss Per Share of Common Stock

The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except share and per share data):

	Three Months Ended March 31,
	2018			2019
Net loss and comprehensive loss	$	(8,732	)	$	(8,719	)
Weighted-average shares used in computing net loss per share		18,535,432			18,575,726
Net loss per share, basic and diluted	$	(0.47	)	$	(0.47	)

Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share

The Company’s potentially dilutive securities, which include stock options and convertible preferred stock, 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 is 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.

	Three Months Ended March 31,
	2018		2019
Stock options to purchase common stock		1,748,617		1,409,325
Unvested restricted stock		122		160,900
Total		1,748,739		1,570,225

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2019

Property Plant And Equipment [Abstract]

Schedule of Purchased Property and Equipment

Purchased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			March 31, 2019
Office equipment	5 years	$	10		$	10
Office furniture	7 years		116			116
Computer equipment	3 years		8			8
Leasehold improvements	Life of lease		95			95
			229			229
Less: Accumulated depreciation			(65	)		(75	)
Property and equipment, net		$	164		$	154

Schedule of Leased Property and Equipment

Leased property and equipment consist of the following (dollars in thousands):

	ESTIMATED USEFUL LIFE	December 31, 2018			March 31, 2019
Right-of-use lease assets - operating	Lease term	$	2,024		$	2,024
Less: Accumulated amortization			(518	)		(597	)
Right-of-use lease assets - operating, net		$	1,506		$	1,427

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Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2019

Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consist of (in thousands):

	December 31, 2018		March 31, 2019
Contract research and development	$	1,492	$	2,252
Unrecoverable component costs		—		1,711
Severance costs		133		890
Employee compensation and related costs		727		327
Consulting and professional service fees		356		192
State taxes		165		54
Other		49		48
Total accrued expenses	$	2,922	$	5,474

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Estimated Fair Value of Options Valuation Assumptions

The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended March 31,
	2018		2019
Risk-free interest rate	2.42%-2.74%		2.51%
Expected dividend yield	0%		0%
Expected life	5.5-7.0 years		6.0 years
Expected volatility	83%-86%		74%
Weighted-average grant date fair value	$	9.44	$	2.14

Summary of Information about Stock Option Activity

The following table summarizes information about stock option activity during the three months ended March 31, 2019 (in thousands, except share and per share data):

	NUMBER OF SHARES			WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM	AGGREGATE INTRINSIC VALUE
Outstanding, December 31, 2018		1,588,306		$	6.75
Granted		84,500			3.25
Exercised		(11,141	)		1.66
Forfeited		(252,340	)		8.55
Outstanding, March 31, 2019		1,409,325		$	6.25	8.24	$	40
Vested and exercisable, March 31, 2019		705,041		$	6.30	7.71	$	40
Vested and expected to vest, March 31, 2019		1,251,190		$	6.32	8.14	$	40

Schedule of RSU Activity

The following table summarizes information about RSU activity during the three months ended March 31, 2019:

	RSUs		AVERAGE GRANT DATE FAIR VALUE (IN DOLLARS PER SHARE)
Outstanding, December 31, 2018		—	$	—
Granted		160,900		1.43
Vested		—		—
Forfeited		—		—
RSUs outstanding at March 31, 2019		160,900	$	1.43

Summary of Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories of its accompanying condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2018 and 2019 (in thousands):

	Three Months Ended March 31,
	2018		2019
Research and development	$	186	$	68
General and administrative		436		287
Total	$	622	$	355

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Summary of Money Market Funds

The Company’s cash equivalents are classified within Level 1 of the fair value hierarchy. The following table summarizes the Company’s money market funds as of March 31, 2019 (in thousands):

	TOTAL		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Cash equivalents	$	75,708	$	75,708	$	—	$	—
Total cash equivalents	$	75,708	$	75,708	$	—	$	—

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Term Loan (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Total Term Loan and Unamortized Debt Discount

Total term loan and unamortized debt discount balances are as follows (in thousands):

	March 31, 2019
Face value	$	10,000
Less: discount		(316	)
Total	$	9,684
Less: current portion		(4,035	)
Total	$	5,649

Schedule of Future Principal Payments Due

As of March 31, 2019, future principal payments due under the 2017 Loan Agreement are as follows (in thousands):

Year ended:
December 31, 2019	$	2,917
December 31, 2020		5,000
December 31, 2021		2,083
Total	$	10,000

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Schedule of Maturity Analysis of Annual Undiscounted Cash Flows of Operating Lease Liabilities

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of March 31, 2019 (in thousands):

Year ended:
December 31, 2019	$	386
December 31, 2020		528
December 31, 2021		537
December 31, 2022		496
Total minimum lease payments		1,947
Less imputed interest		(326	)
Total	$	1,621

Schedule of Lease Cost and Other Information of Operating Lease Liabilities

	Three Months Ended March 31,
	2018			2019
Lease cost:
Operating lease cost	$	119		$	125
Short-term lease cost		2			2
Sublease income		-			(13	)
Total lease cost	$	121		$	114
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	97		$	127
Operating cash flows from operating leases	$	21		$	(6	)
Weighted-average remaining lease term - operating leases	4.7 years			3.7 years
Weighted-average discount rate - operating leases		10.1	%		10.1	%

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Description of Business and Basis of Presentation - Additional Information (Details)	1 Months Ended	3 Months Ended
	Jan. 31, 2019 Employee	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Restructuring charges				$ 1,300,000
Approximate percentage of workforce reductions	43.00%
Number of positions remaining | Employee	13
Restructuring cost paid				341,000
Non-cash charge related to modification of stock options				70,000
Severance, benefits, and related costs				867,000
Scenario, Forecast
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Restructuring cost paid		$ 289,000	$ 578,000
Research and Development
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Restructuring charges				852,000
General and Administrative
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Restructuring charges				$ 426,000

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Significant Accounting Policies - Additional Information (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Schedule Of Accounting Policies [Line Items]
Restricted cash	$ 182,000	$ 182,000
Potential interest and penalties associated with uncertain tax positions, accruals	0
Letter of Credit
Schedule Of Accounting Policies [Line Items]
Restricted cash	$ 182,000

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Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 83,378	$ 89,478
Restricted cash	182	182
Cash, cash equivalents and restricted cash	$ 83,560	$ 89,660	$ 109,462	$ 118,480

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Net Loss per Share - Computation of Basic and Diluted Net Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net loss and comprehensive loss	$ (8,719)	$ (8,732)
Weighted-average shares used in computing net loss per share	18,575,726	18,535,432
Net loss per share, basic and diluted	$ (0.47)	$ (0.47)

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Net Loss per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	1,570,225	1,748,739
Stock Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	1,409,325	1,748,617
Unvested Restricted Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from calculation of diluted net loss per share	160,900	122

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Property and Equipment - Schedule of Purchased Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
ESTIMATED USEFUL LIFE	Lease term
Property and equipment, gross	$ 229	$ 229
Less: Accumulated depreciation	(75)	(65)
Property and equipment, net	$ 154	164
Office Equipment
Property Plant And Equipment [Line Items]
ESTIMATED USEFUL LIFE	5 years
Property and equipment, gross	$ 10	10
Office Furniture
Property Plant And Equipment [Line Items]
ESTIMATED USEFUL LIFE	7 years
Property and equipment, gross	$ 116	116
Computer Equipment
Property Plant And Equipment [Line Items]
ESTIMATED USEFUL LIFE	3 years
Property and equipment, gross	$ 8	8
Leasehold Improvements
Property Plant And Equipment [Line Items]
ESTIMATED USEFUL LIFE	Life of lease
Property and equipment, gross	$ 95	$ 95

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Property and Equipment - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Property Plant And Equipment [Abstract]
Depreciation expense	$ 10,000	$ 10,000
Amortization expense	$ 79,000	$ 71,000

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Property and Equipment - Schedule of Leased Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Property Plant And Equipment [Abstract]
Right-of-use lease assets - operating	$ 2,024	$ 2,024
Less: Accumulated amortization	(597)	(518)
Right-of-use lease assets - operating, net	$ 1,427	$ 1,506
ESTIMATED USEFUL LIFE	Lease term

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Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accruals [Abstract]
Contract research and development	$ 2,252	$ 1,492
Unrecoverable component costs	1,711
Severance costs	890	133
Employee compensation and related costs	327	727
Consulting and professional service fees	192	356
State taxes	54	165
Other	48	49
Total accrued expenses	$ 5,474	$ 2,922

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Stock-Based Compensation - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Additional options granted	84,500
Stock option, number of shares outstanding	1,409,325	1,588,306
Unrecognized compensation expense	$ 2,200,000
Recognition period (in years)	2 years 4 months 24 days
Weighted average exercise price for vested options	$ 8.30
Incremental stock-based compensation expense	$ 70,000
Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option vesting term	1 year
Number of options vested	51,673
Tranche Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option vesting term	2 years
Number of options vested	85,432
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 122,000
Recognition period (in years)	2 years 1 month 6 days
2017 Stock Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option and incentive plan effective date	Nov. 30, 2017
Stock option and incentive plan expiration date	Oct. 31, 2027
Stock option, number of shares outstanding	547,543
Number of common shares authorized for issuance	2,914,161
Stock options, available for issuance	2,436,605
Term of option granted	10 years
2017 Stock Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option vesting term	1 year
2017 Stock Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option vesting term	4 years
2014 Stock Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option and incentive plan expiration date	Nov. 30, 2017
Additional options granted	0
Stock option, number of shares outstanding	861,782

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Stock-Based Compensation - Schedule of Estimated Fair Value of Options Valuation Assumptions (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate	2.51%
Risk-free interest rate, minimum		2.42%
Risk-free interest rate, maximum		2.74%
Expected dividend yield	0.00%	0.00%
Expected life	6 years
Expected volatility	74.00%
Expected volatility, minimum		83.00%
Expected volatility, maximum		86.00%
Weighted-average grant date fair value	$ 2.14	$ 9.44
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life		5 years 6 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life		7 years

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Stock-Based Compensation - Summary of Information about Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
NUMBER OF SHARES
Number of shares outstanding, beginning balance | shares	1,588,306
Additional options granted | shares	84,500
Number of shares exercised | shares	(11,141)
Number of shares forfeited | shares	(252,340)
Number of shares outstanding, ending balance | shares	1,409,325
Vested and exercisable, ending balance | shares	705,041
Vested and expected to vest, ending balance | shares	1,251,190
WEIGHTED-AVERAGE EXERCISE PRICE
Weighted average exercise prices, outstanding beginning balance | $ / shares	$ 6.75
Weighted average exercise prices, granted | $ / shares	3.25
Weighted average exercise prices, exercised | $ / shares	1.66
Weighted average exercise prices, forfeited | $ / shares	8.55
Weighted average exercise prices, outstanding ending balance | $ / shares	6.25
Weighted average exercise prices, vested and exercisable ending balance | $ / shares	6.30
Weighted average exercise prices, vested and expected to vest ending balance | $ / shares	$ 6.32
WEIGHTED-AVERAGE REMAINING CONTRACTUAL TERM
Weighted average remaining contractual term, outstanding	8 years 2 months 26 days
Weighted average remaining contractual term, vested and exercisable	7 years 8 months 15 days
Weighted average remaining contractual term, vested and expected to vest	8 years 1 month 20 days
AGGREGATE INTRINSIC VALUE
Aggregate intrinsic value, outstanding ending balance | $	$ 40
Aggregate intrinsic value, vested and exercisable ending balance | $	40
Aggregate intrinsic value, vested and expected to vest ending balance | $	$ 40

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Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
RSUs Outstanding, December 31, 2018 | shares	0
RSUs Granted | shares	160,900
RSUs outstanding at March 31, 2019 | shares	160,900
AVERAGE GRANT DATE FAIR VALUE, Outstanding, December 31, 2018 | $ / shares	$ 0
AVERAGE GRANT DATE FAIR VALUE, Granted | $ / shares	1.43
AVERAGE GRANT DATE FAIR VALUE, RSUs outstanding at March 31, 2019 | $ / shares	$ 1.43

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Stock-Based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 355	$ 622
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	68	186
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 287	$ 436

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Fair Value of Financial Instruments - Summary of Money Market Funds (Details) - Fair Value, Measurements, Nonrecurring $ in Thousands	Mar. 31, 2019 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Cash equivalents	$ 75,708
Quoted Prices in Active Markets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Cash equivalents	75,708
Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Cash equivalents	75,708
Money Market Funds | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Cash equivalents	$ 75,708

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Term Loan - Additional Information (Details) - Solar Capital Ltd. and Silicon Valley Bank - USD ($)	1 Months Ended		3 Months Ended
	Nov. 30, 2018	May 31, 2017	Mar. 31, 2019	Mar. 31, 2018
2017 Loan Agreement
Debt Instrument [Line Items]
Loan and security agreement, amount		$ 10,000,000
Loan agreement, maturity date		May 01, 2021
Unpaid borrowings			$ 10,000,000
Amortization of debt discount			$ 50,000	$ 69,000
Prepayment premium thereafter			1.00%
Final payment fee			$ 250,000
Amortization of final payment fee			$ 30,000	$ 21,000
Increase in interest rate on default			5.00%
2017 Loan Agreement | Libor
Debt Instrument [Line Items]
Basis spread on variable base rate		8.45%
First Amendment to Loan and Security Agreement
Debt Instrument [Line Items]
Basis spread on variable base rate			10.93188%
Final payment fee	$ 325,000

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Term Loan - Schedule of Total Term Loan and Unamortized Debt Discount (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Less: current portion	$ (4,035)	$ (2,811)
Term loan, long term	5,649	$ 6,826
2017 Loan Agreement | Solar Capital Ltd. and Silicon Valley Bank
Debt Instrument [Line Items]
Face value	10,000
Less: discount	(316)
Total	9,684
Less: current portion	(4,035)
Term loan, long term	$ 5,649

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Term Loan - Schedule of Future Principal Payments Due (Details) - 2017 Loan Agreement - Solar Capital Ltd. and Silicon Valley Bank $ in Thousands	Mar. 31, 2019 USD ($)
Debt Instrument [Line Items]
December 31, 2019	$ 2,917
December 31, 2020	5,000
December 31, 2021	2,083
Total	$ 10,000

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Commitments and Contingencies - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 28, 2018	Mar. 31, 2019	Dec. 31, 2018
Commitments And Contingencies [Line Items]
Operating leases expire		2022
Restricted cash		$ 182,000	$ 182,000
Short-term lease asset		1,427,000	1,506,000
Short-term lease liability		366,000	$ 353,000
Operating sublease term	3 years
Minimum
Commitments And Contingencies [Line Items]
Estimated additional termination costs		0
Maximum
Commitments And Contingencies [Line Items]
Estimated additional termination costs		3,000,000
Short-term Leases Recognized on Straight-line Basis
Commitments And Contingencies [Line Items]
Short-term lease asset		0
Short-term lease liability		0
Letter of Credit
Commitments And Contingencies [Line Items]
Restricted cash		182,000
Letter of Credit | Lease Agreement Require Standby Letter of Credit
Commitments And Contingencies [Line Items]
Restricted cash		$ 182,000

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Commitments and Contingencies - Schedule of Maturity Analysis of Annual Undiscounted Cash Flows of Operating Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Year ended:
December 31, 2019	$ 386
December 31, 2020	528
December 31, 2021	537
December 31, 2022	496
Total minimum lease payments	1,947
Less imputed interest	(326)
Total	$ 1,621

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Commitments and Contingencies - Schedule of Lease Cost and Other Information of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Lease cost:
Operating lease cost	$ 125	$ 119
Short-term lease cost	2	2
Sublease income	(13)
Total lease cost	114	121
Other information
Cash paid for amounts included in the measurement of lease liabilities	127	97
Operating cash flows from operating leases	$ (6)	$ 21
Weighted-average remaining lease term - operating leases	3 years 8 months 12 days	4 years 8 months 12 days
Weighted-average discount rate - operating leases	10.10%	10.10%